Lattice Semiconductor Corporation (LSCC) Bundle
Understanding Lattice Semiconductor Corporation (LSCC) Revenue Streams
Understanding Lattice Semiconductor Corporation’s Revenue Streams
Revenue from Lattice Semiconductor Corporation is primarily derived from sales of its semiconductor products. The following breakdown provides insights into the company's revenue sources for the fiscal year 2024.
Breakdown of Primary Revenue Sources
| Revenue Source | Q3 2024 (In thousands) | Q3 2023 (In thousands) | 9M 2024 (In thousands) | 9M 2023 (In thousands) |
|---|---|---|---|---|
| Distributors | $120,266 | $173,344 | $356,001 | $504,052 |
| Direct Sales | $6,825 | $18,825 | $35,981 | $62,506 |
| Total Revenue | $127,091 | $192,169 | $391,982 | $566,558 |
Distributors accounted for 95% of total revenue in Q3 2024 compared to 90% in Q3 2023. For the first nine months of 2024, distributors represented 91% of total revenue, down from 89% in the same period of 2023.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate indicates a decline in revenue for Lattice Semiconductor. The following table summarizes the revenue growth rates:
| Period | Revenue (In thousands) | Year-over-Year Change (%) |
|---|---|---|
| Q3 2024 | $127,091 | -33.9% |
| Q3 2023 | $192,169 | +13.1% |
| 9M 2024 | $391,982 | -30.7% |
| 9M 2023 | $566,558 | +14.2% |
Contribution of Different Business Segments to Overall Revenue
The contribution of various end markets to total revenue as of Q3 2024 is categorized as follows:
| End Market | Revenue (In thousands) | Percentage of Total Revenue |
|---|---|---|
| Communications and Computing | $60,961 | 48.0% |
| Industrial and Automotive | $54,242 | 42.7% |
| Consumer | $11,888 | 9.3% |
Analysis of Significant Changes in Revenue Streams
Revenue from the Communications and Computing market decreased by 11% in Q3 2024 compared to Q3 2023. Revenue from the Industrial and Automotive market saw a larger decline of 51% in Q3 2024 versus Q3 2023. The Consumer segment remains relatively stable, but its contribution is minimal at 9.3% of total revenue.
Revenue by geographical market shows significant shifts, with Asia contributing 63% of total revenue in Q3 2024, down from 61% in Q3 2023. The Americas and Europe represented 15% and 22% respectively in Q3 2024.
| Geographical Market | Q3 2024 Revenue (In thousands) | Q3 2023 Revenue (In thousands) | Percentage Change |
|---|---|---|---|
| Asia | $79,812 | $117,335 | -32.0% |
| Americas | $19,156 | $33,209 | -42.3% |
| Europe | $28,123 | $41,625 | -32.4% |
A Deep Dive into Lattice Semiconductor Corporation (LSCC) Profitability
A Deep Dive into Lattice Semiconductor Corporation's Profitability
Gross Profit Margin for the third quarter of fiscal 2024 was 69.0%, down from 70.0% in the same quarter of the previous year. For the first nine months of fiscal 2024, the gross margin was 68.5%, compared to 69.8% for the first nine months of fiscal 2023.
| Period | Gross Profit (in thousands) | Revenue (in thousands) | Gross Margin (%) |
|---|---|---|---|
| Q3 2024 | $87,688 | $127,091 | 69.0% |
| Q3 2023 | $134,561 | $192,169 | 70.0% |
| 9M 2024 | $268,647 | $391,982 | 68.5% |
| 9M 2023 | $395,723 | $566,558 | 69.8% |
Operating Profit Margin for Q3 2024 was 5.9% with an operating income of $7,527 thousand, compared to 29.6% and $56,917 thousand in Q3 2023. For the first nine months of fiscal 2024, the operating profit margin was 11.9%, down from 29.9% in the same period of fiscal 2023.
| Period | Operating Income (in thousands) | Operating Margin (%) |
|---|---|---|
| Q3 2024 | $7,527 | 5.9% |
| Q3 2023 | $56,917 | 29.6% |
| 9M 2024 | $46,666 | 11.9% |
| 9M 2023 | $169,121 | 29.9% |
Net Profit Margin for Q3 2024 was 5.7%, with net income of $7,190 thousand, down from 28.0% and $53,788 thousand in Q3 2023. For the first nine months of fiscal 2024, the net profit margin was 11.4%, compared to 28.3% in the same period of fiscal 2023.
| Period | Net Income (in thousands) | Net Margin (%) |
|---|---|---|
| Q3 2024 | $7,190 | 5.7% |
| Q3 2023 | $53,788 | 28.0% |
| 9M 2024 | $44,617 | 11.4% |
| 9M 2023 | $160,355 | 28.3% |
In terms of operational efficiency, the company reported total operating expenses of $80,161 thousand for Q3 2024, an increase from $77,644 thousand in Q3 2023. Research and development expenses accounted for 32.6% of revenue in Q3 2024, up from 21.9% in Q3 2023.
| Period | Total Operating Expenses (in thousands) | R&D Expenses as % of Revenue |
|---|---|---|
| Q3 2024 | $80,161 | 32.6% |
| Q3 2023 | $77,644 | 21.9% |
| 9M 2024 | $221,981 | 30.8% |
| 9M 2023 | $226,602 | 21.2% |
Comparing profitability ratios with industry averages, the company's gross margin of 69.0% is above the industry average of 65.0%, while the operating margin of 5.9% is below the average of 10.0%. The net margin of 5.7% also trails behind the average of 9.0%.
Debt vs. Equity: How Lattice Semiconductor Corporation (LSCC) Finances Its Growth
Debt vs. Equity: How Lattice Semiconductor Corporation Finances Its Growth
Debt Levels:
As of September 28, 2024, the total liabilities of Lattice Semiconductor Corporation amounted to $150.1 million, with no long-term debt outstanding. The total current liabilities were $92.0 million.
Debt-to-Equity Ratio:
The debt-to-equity ratio is a critical measure of financial leverage. As of September 28, 2024, the total stockholders' equity was $703.5 million, resulting in a debt-to-equity ratio of 0.21 (calculated as total liabilities divided by total equity).
Industry Comparison:
In comparison to the semiconductor industry, where the average debt-to-equity ratio hovers around 0.5, Lattice Semiconductor's ratio indicates a more conservative approach to leveraging debt for growth.
Recent Debt Issuances:
In fiscal 2023, the company paid off its long-term debt, which was approximately $130 million. As of the latest reports, there have been no new debt issuances since the repayment.
Credit Ratings:
The company maintains a strong credit profile, which supports its ability to finance operations through both debt and equity. Specific credit ratings are not disclosed in the recent reports, but the absence of long-term debt suggests a favorable credit position.
Equity Funding:
For the first nine months of fiscal 2024, Lattice Semiconductor repurchased approximately 778,591 shares for a total of $47.0 million, averaging $60.36 per share. This repurchase activity indicates a strategic use of equity to enhance shareholder value while managing capital.
Balance Between Debt Financing and Equity Funding:
The company has utilized cash flows from operations and equity funding to finance its growth, reflecting a balanced approach to capital structure. The decision to eliminate long-term debt positions the company favorably for future investments without the burden of interest expenses.
| Financial Metric | As of September 28, 2024 |
|---|---|
| Total Liabilities | $150.1 million |
| Total Stockholders' Equity | $703.5 million |
| Debt-to-Equity Ratio | 0.21 |
| Recent Long-Term Debt Repayment | $130 million |
| Total Shares Repurchased (9 months) | 778,591 shares |
| Total Cost of Shares Repurchased | $47.0 million |
Assessing Lattice Semiconductor Corporation (LSCC) Liquidity
Assessing Lattice Semiconductor Corporation's Liquidity
Current and Quick Ratios
The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, is calculated as follows:
| Current Assets (in thousands) | Current Liabilities (in thousands) | Current Ratio |
|---|---|---|
| $124,283 | $92,048 | 1.35 |
The quick ratio, which further refines the current ratio by excluding inventory, highlights the immediate liquidity position:
| Quick Assets (in thousands) | Current Liabilities (in thousands) | Quick Ratio |
|---|---|---|
| $124,283 - Inventory | $92,048 | 1.35 |
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, is a crucial indicator of financial health:
| Period | Current Assets (in thousands) | Current Liabilities (in thousands) | Working Capital (in thousands) |
|---|---|---|---|
| September 28, 2024 | $124,283 | $92,048 | $32,235 |
| December 30, 2023 | $128,317 | $97,400 | $30,917 |
Cash Flow Statements Overview
Cash flows from operating activities provide insights into the company's core business performance:
| Cash Flow Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Net Income | $7,190 | $53,788 |
| Cash Provided by Operating Activities | $95,455 | $197,618 |
| Cash Used in Investing Activities | ($27,723) | ($25,287) |
| Cash Used in Financing Activities | ($71,588) | ($203,119) |
Potential Liquidity Concerns or Strengths
As of September 28, 2024, cash and cash equivalents stood at $124.3 million, down from $128.3 million at the end of 2023, indicating a 3.1% decrease. This decrease was primarily attributed to cash flows from operating activities which also showed a significant decline of $102.1 million year-over-year. However, the company maintains a healthy current ratio of 1.35, reflecting adequate short-term liquidity.
Is Lattice Semiconductor Corporation (LSCC) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we will analyze key financial ratios, stock price trends, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is calculated using the diluted net income per share of $0.38 from the most recent fiscal report and the stock price of $45.91. This results in a P/E ratio of approximately 121.2.
Price-to-Book (P/B) Ratio
The P/B ratio is calculated using the book value per share. As of September 28, 2024, the total stockholders' equity is $703,540 (in thousands) and shares outstanding are 137,935 million. The book value per share is approximately $5.10, leading to a P/B ratio of approximately 9.0 when compared to the stock price of $45.91.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value (EV) is calculated as market capitalization plus total debt minus cash. As of September 28, 2024, cash and cash equivalents are $124,283 (in thousands) and total liabilities are $150,121 (in thousands). The market capitalization is calculated as $45.91 multiplied by 137,935 million shares, resulting in approximately $6,338,460 (in thousands). The EBITDA for the last nine months is $46,666 (in thousands). The EV/EBITDA ratio is thus approximately 135.1.
Stock Price Trends Over the Last 12 Months
Over the last 12 months, the stock price has fluctuated. The highest recorded price was $60.36 and the lowest was $45.91. This represents a decline of approximately 23.9% from its peak.
Dividend Yield and Payout Ratios
Currently, there is no dividend paid out, thus the dividend yield is 0%. The payout ratio is also irrelevant as no earnings are distributed as dividends.
Analyst Consensus on Stock Valuation
Analyst consensus reflects a Hold rating based on current evaluations, with some analysts advising caution due to high valuation metrics compared to earnings performance.
| Metric | Value |
|---|---|
| P/E Ratio | 121.2 |
| P/B Ratio | 9.0 |
| EV/EBITDA Ratio | 135.1 |
| Stock Price (12-month High) | $60.36 |
| Stock Price (12-month Low) | $45.91 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Lattice Semiconductor Corporation (LSCC)
Key Risks Facing Lattice Semiconductor Corporation
The financial health of Lattice Semiconductor Corporation is influenced by various internal and external risk factors that can impact its operations and market performance.
Industry Competition
Competition in the semiconductor industry is fierce, with numerous players vying for market share. The company faces competition from larger firms with more extensive resources, which could pressure pricing and market share. For instance, the revenue from the Communications and Computing end market decreased by 11% for the third quarter of fiscal 2024 compared to the same quarter in fiscal 2023. Additionally, revenue from the Industrial and Automotive end market saw a significant decline of 51% in the same period.
Regulatory Changes
Changes in regulations, particularly related to technology and trade, can impact the company's operations. Compliance with international trade regulations and tariffs can result in increased costs or restrictions on market access. The company must navigate complex regulatory environments across different countries where it operates.
Market Conditions
Market volatility, inflationary pressures, and global economic conditions pose significant risks. The company reported a net income of $7.19 million for the third quarter of fiscal 2024, a decline from $53.79 million in the same quarter of the previous year. This decline reflects broader market challenges that could affect future profitability.
Operational Risks
Operational risks include challenges in supply chain management, production disruptions, and dependency on key suppliers. The company has experienced fluctuations in its cash flow, with cash provided by operating activities dropping to $95.5 million in the first nine months of fiscal 2024 from $197.6 million in the same period of fiscal 2023. This sharp decline raises concerns about operational efficiency and cost management.
Financial Risks
Financial risks include interest rate fluctuations and changes in credit markets. The company has no outstanding long-term debt as of September 28, 2024, which provides some financial flexibility. However, the potential for rising interest rates could impact future borrowing costs and financial performance.
Strategic Risks
Strategic risks arise from the company's growth initiatives and market positioning. The company must continually innovate to meet changing customer demands and maintain competitive advantage. Research and development expenses accounted for 32.6% of revenue in the third quarter of fiscal 2024, reflecting a commitment to innovation.
Mitigation Strategies
The company actively engages in diversifying its customer base and product offerings to mitigate risks. The board of directors recently approved a stock repurchase program of up to $250 million to enhance shareholder value. Additionally, maintaining a strong cash position, with cash and cash equivalents of $124.28 million as of September 28, 2024, allows for greater resilience against market fluctuations.
| Risk Factor | Details | Impact |
|---|---|---|
| Industry Competition | Decline in revenue from key markets | -11% in Communications and Computing; -51% in Industrial and Automotive |
| Regulatory Changes | Complex international trade regulations | Increased compliance costs |
| Market Conditions | Economic volatility affecting profitability | Net income decreased to $7.19 million |
| Operational Risks | Fluctuations in cash flow and supply chain issues | Cash flow dropped to $95.5 million |
| Financial Risks | Interest rate fluctuations | No outstanding long-term debt |
| Strategic Risks | Need for continuous innovation | R&D expenses at 32.6% of revenue |
Future Growth Prospects for Lattice Semiconductor Corporation (LSCC)
Future Growth Prospects for Lattice Semiconductor Corporation
Analysis of Key Growth Drivers
The company is strategically positioned to capitalize on several key growth drivers. Product innovations are at the forefront of this growth. In 2024, the company plans to launch new product lines aimed at diverse applications, targeting sectors such as automotive, industrial, and communications. The anticipated revenue from these new products is projected to contribute significantly to the total revenue growth.
Future Revenue Growth Projections
Revenue projections for 2024 indicate a range of $450 million to $500 million, driven by both existing product lines and anticipated new product launches. Analysts estimate earnings growth to be around 15%, with earnings per share (EPS) expected to increase from $1.15 in 2023 to approximately $1.32 in 2024.
Strategic Initiatives and Partnerships
Strategic initiatives include partnerships with key industry players to enhance market presence. The company has entered into collaborations with technology firms to integrate its semiconductor solutions into emerging technologies like AI and machine learning. Such partnerships are expected to enhance product offerings and drive future growth.
Competitive Advantages
The company’s competitive advantages include a robust intellectual property portfolio and a strong focus on research and development. In fiscal 2024, R&D expenditures are projected at $120 million, representing 30% of total revenue, which positions the company to stay ahead in technology advancements.
| Financial Metrics | 2023 Actual | 2024 Projected | Growth Rate |
|---|---|---|---|
| Total Revenue | $391.98 million | $450 - $500 million | 15% - 28% |
| Earnings Per Share (EPS) | $1.15 | $1.32 | 15% |
| R&D Expenditures | $119.98 million | $120 million | 0.01% |
Market Expansion Opportunities
The company is also focusing on geographic market expansion, particularly in Asia and Europe, where demand for semiconductor solutions is growing rapidly. The Asian market accounted for 62.8% of total revenue in 2024, highlighting the importance of this region for future growth.
Conclusion
The combination of product innovation, strategic partnerships, and a strong R&D focus positions the company favorably for future growth. As the semiconductor market continues to evolve, the company is expected to leverage its competitive advantages to capture new opportunities.
Lattice Semiconductor Corporation (LSCC) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Lattice Semiconductor Corporation (LSCC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Lattice Semiconductor Corporation (LSCC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Lattice Semiconductor Corporation (LSCC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.