Lattice Semiconductor Corporation (LSCC) Income Statement

The jump from $170.9M to $291.0M over two quarters is large enough to suggest a genuine demand inflection rather than noise, but a single quarter cannot establish durability. The gap between the quarterly surge and the modest TTM growth figure implies that earlier 2025 quarters were soft, so investors should monitor whether the raised guidance is sustained across the next several reporting periods before extrapolating this acceleration.

Gross margins have held in a relatively narrow 61% to 70% band across the ten reported quarters, which points to pricing power consistent with a differentiated low-power FPGA niche rather than commodity exposure. The operating margin has been far more volatile, swinging from -12.2% to 15.6%, indicating that R&D and SG&A spending is the dominant swing factor. Investors should treat the gross margin as the structural anchor and the operating margin as the variable that depends on revenue scale relative to a relatively fixed expense base.

Gross profit increased from $141.3M to $196.1M quarter over quarter, yet operating income increased only marginally, implying that R&D and SG&A expanded nearly in step with revenue. Operating leverage would be confirmed if operating income grew materially faster than gross profit over several consecutive quarters, which the current data does not yet demonstrate. Investors should monitor whether opex growth decelerates relative to revenue in upcoming periods.

R&D has risen from $41.4M in 2024Q4-equivalent periods to $80.3M, a pace that has consistently outrun the scaling of SG&A relative to revenue in several quarters. This level of investment is consistent with maintaining a product roadmap in a niche where design-in cycles are long, though it compresses near-term margins when revenue is volatile. Management's expense discipline will be tested if revenue growth normalizes, since R&D is difficult to cut without jeopardizing future product positioning.

The stability of gross margin through the revenue decline and recovery implies that pricing and product mix held, while the swing in operating profit reflects expense timing and volume absorption. The 2026 quarters show the clearest break from the prior pattern, with two consecutive quarters of strong sequential growth. The lasting impact will depend on whether the Nexus and Avant platforms sustain this volume base beyond the current cycle.