Lattice Semiconductor Corporation (LSCC) Cash Flow Statement

Operating cash flow has run well above net income in most recent quarters, which suggests that reported earnings understate cash generation, partly because of large non-cash charges such as stock-based compensation of $50.3M in 2026Q3. The ratio is distorted in quarters where net income approached zero or turned negative, so investors should weigh the trailing multi-quarter pattern rather than any single period. The durability of this gap depends on whether SBC remains elevated relative to earnings.

The jump in free cash flow from $23.3M in 2025Q1 to $81.3M in 2026Q2 reflects both higher revenue and favorable working capital timing rather than a single structural shift. The margin spread between free cash flow and operating income suggests that depreciation and stock-based compensation are doing much of the work in bridging the two. Investors should monitor whether the 2026Q3 margin normalizes once working capital and SBC effects reverse.

Because LSCC relies on third-party foundries, capex is largely confined to test equipment, tooling, and facilities rather than wafer capacity, which keeps reinvestment needs low. Depreciation of roughly $10-25M per quarter sits close to capex in most periods, suggesting maintenance-level spending rather than heavy growth investment. The lumpiness in capex quarter to quarter warrants monitoring but does not signal a structural capital burden.

The company pays no dividend, so capital return depends entirely on repurchases, which have been episodic and tapered in 2026. Accumulating free cash flow alongside minimal debt suggests optionality for future buybacks, M&A, or reinvestment in the Avant platform. Investors should watch whether management redeploys this cash or allows it to build while SBC continues to dilute shareholders.