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| Statement |
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| And we believe Avant is really well positioned in automotive electronics |
| And I was really pleased with the results |
| Annual revenue grew by 12%, marking the third consecutive year of double digit growth |
| Full year non-GAAP gross margin increased 130 basis to a record 70.4% and we delivered 15% year-over-year growth in non-GAAP EPS |
| And in all those types of applications, in all those applications, Lattice has a really great ability to play in those types of applications for a couple of reasons |
| At this point, we expect revenue in the second half of 2024 to be higher than the first half of '24, driven by improving end market conditions as end customer inventory levels normalize as well as new Lattice Nexus and Avant product ramps |
| We are very pleased with the strong revenue growth of Nexus in 2023 as it was a major contributor to the overall company growth |
| We also achieved a record level of design wins with Nexus in 2023 and our Nexus pipeline of opportunities continues to grow |
| So we're really pleased with those results |
| And as we look forward into 2024 and beyond, clearly, we're navigating some near-term macro headwinds, but we continue to be very well positioned for long-term growth with the strongest product portfolio we've ever had in the company's history in a rapidly expanding product portfolio as well |
| For 2023, our full year gross margin at 70.4%, another record year for us |
| In small FPGA, we believe we've gained share over the past years |
| But yes, overall, we viewed the event as a tremendous success and we expect to do another Developers Conference later this year |
| We continue to see strong software adoption at an attach rate of over 50% |
| And we certainly believe that we can grow Avant revenue and gain share in that segment |
| And so I think we've demonstrated the ability to grow revenue consistently in the small FPGA part of the market |
| In summary, I'm pleased with the strong progress in 2023 as we achieved record revenue and gross margin and continue to execute on the biggest product expansion in our company's history |
| While the industry moves through a temporary correction cycle and we experience some short-term cyclic headwinds in our end markets, we continue to be well positioned for growth over the mid and long-term |
| We have the strongest product portfolio in our history and we continue to rapidly expand our product lines and accelerate our customer momentum |
| We are pleased with our full-year 2023 results |
| We drove double-digit revenue growth for the third consecutive year, continued gross margin expansion, and strong profitability |
| We generated a record level of cash from operations, expanded free cash flow margin, increased the cash return to shareholders through share buybacks and completely paid down our outstanding debt balance |
| 2023 was another strong year for Lattice as we expanded our product portfolio and delivered record financial results |
| Revenue growth for the full-year 2023 was driven by double-digit revenue growth in our industrial and automotive end market, representing the fourth consecutive year of double-digit growth in this end market |
| So as that new generation of servers becomes a higher percentage of the overall server shipments throughout this year as it ramps, that's certainly a benefit to us throughout the year |
| I’m very pleased with our strong results in 2023 |
| So we believe that helps us drive greater growth in the future |
| And I would say, overall, the other thing that we look at with Avant is -- just how is it tracking relative to Nexus at the same relative point in time? And if I look at the total Lattice or the total Avant design opportunity pipeline for Avant at the end of last year relative to the same or compared to the same relative point in time for Nexus, it significantly exceeds the Nexus opportunity pipeline, which, again, we just view as another really positive indicator of the future health of Avant |
| And so that's a place where we see great synergy from the acquisition we made a couple of years ago on computer vision software technology used with Lattice devices to gain more Lattice position and growth in industrial applications |
| And the team actually exceeded their design win goal for last year on Avant, which I was quite pleased with |
| Statement |
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| Fourth quarter revenue was $170.6 million, down 11% sequentially from the third quarter and down 3% year-over-year as end market demand softened and end customers reduced their inventory |
| In the industrial and automotive market, although revenue grew 11% year-over-year in Q4, revenue declined 9% sequentially as demand softened across this end market as customers reduced their inventory levels |
| Looking forward, we expect Q1 '24 revenue to be sequentially down from Q4 '23, driven by softer end customer demand across our end markets as end customers rebound to their inventory levels |
| Our Q4 non-GAAP operating margin decreased 240 basis points to 37.8% compared to the prior quarter and was down 230 basis points compared to the year ago quarter |
| And we now expect Americas to be to be down as well as we're starting to see softer demand from some of our North America-based industrial and automotive customers as well |
| Due to the cyclic correction and demand headwinds that we are seeing across all of our end markets, revenue for the first quarter of 2024 is expected to sequentially decline to between $130 million and $150 million |
| In the communications and computing market, revenue declined by 14% sequentially in Q4 as growth in data center computing was offset by weaker in wired and wireless telecommunications, driven by lower wireless infrastructure deployments |
| It's a negative impact on our gross margins |
| As we enter 2024, we are experiencing near-term cyclic softness in our end markets, including customers rebalancing of their inventory levels |
| It's the inventory digestion and rebalancing that I was talking about, as well as our customers are seeing lower demand from their business as well |
| So we saw weakness in European industrials in Q4 as well as European communications customers |
| Our Q4 non-GAAP gross margin declined 20 basis points to 70.4% compared to the prior quarter due to mix and was up 40 basis points compared to the year ago quarter |
| So that Q1 is a combination of those three things: normal seasonality, lower customer demand and then drawing down their inventory levels as well |
| So from a geo-perspective, just kind of how some of the softness, the more recent softness that we've seen has evolved is especially in the industrial auto segment, which is the segment that slowed down most recently for us |
| In industrial and automotive, we started to see those markets impacted really towards the end of Q3 of last year into Q4, and we expect industrial and automotive to be down from Q4 to Q1 |
| But going into the current quarter, Q1, we would expect Asia, Europe to be down again sequentially |
| And -- but that inventory effect that we're seeing in the -- that's dampening demand in the first half of the year, we believe that dissipates into the second half of the year, and we get back to more normal levels of consumption from our customers |
| The initial weakness that we saw towards the end of Q3 of last year, that was really primarily in Asia and in particular, in China |
| It was communications that drove that overall segment down sequentially |
| We believe we're underexposed to that area |
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