Lattice Semiconductor (LSCC) 11 Feb 202019 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. At this time, all participants are in a listen-only mode. I’d like to welcome everyone to the Lattice Semiconductor Fourth Quarter Fiscal Year 2019 Earnings Release Conference Call.

Later, we will conduct a question-and-answer session. [Operator Instructions] A replay will be available approximately two hours after the call today. is number dial-in replay (XXX) XXX-XXXX. The ID conference number is XXXXXXX. The also The Lattice be website will at on accessible replay latticesemi.com.

I’d now Muscha. Rick over call like to Please turn go the to ahead.

are good Sherri and Lattice's CFO. With operator, and Luther, afternoon, you, Lattice's President and me Thank today Jim Anderson, CEO; everyone.

We a of quarter XXXX. business financial review quarter the fourth first will XXXX for and the provide of the and of business outlook

of website our found If the earnings release, you a have at be company not it section on Relations copy our in obtained Investor can press latticesemi.com.

results we statements is during company. documents I the differ the could our documents make would those you in are predictions available, everyone statements the factors important projections remind differ other the currently SEC, our like materially or information regarding contained materially. XX-Qs risk and such of performance We company contain or based and to on actual We wish our including future that refer statements. results conference future to financial events to the These call the today, caution that actual projections forward-looking X-Ks. identify XX-Ks, forward-looking with to that from may may you and cause or files that

will changes call. and material This publicly announced done to at quarter using of this or any a a guidance we the XXXX. be constitutes press call any such for as guidance, includes that If we a call time official company's the conference updates such communicate release first public after forum intend this

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President Let me now turn the call our over Jim and CEO. Anderson, to

Rick, today. you for you, us and our joining call Thank everyone thank on

first dedication. for transforming As I reflect investors as team. on appreciate of I back with supporting we and Lattice. thank our XXXX trajectory. to and especially all our a us Lattice customers, on putting partners deeply my the I'd began want like thank stronger of all Lattice full much also work I your and company to year hard my

more where we headed. While made even progress I'm to-date, we're excited about good

our across refinanced key our and income and example, strategy Highlights increased our interest optimized to optimization as from improvements our XXXX, our product for of basis XX% spending Non-GAAP strategy. we financial pricing our XXX non-GAAP execution significant gross metrics, margin expenses. we our full reduction included expansion as cost reduce year-over-year year of began of year-over-year net points debt

delivered we a our than we cash generation stronger flow on doubled Again, much more operations basis. cash in year-over-year XXXX from as

predictable more the In ahead roadmap. faster, on addition over with our we've delivering stronger our of the product executed Nexus year, of great launch in this schedule. established December and a example past begun products cadence, on financials, the a of platform past being We've to this improvements much a

realize more our work XXXX but months, we the of in of have progress dramatically do potential we've encouraged to XX depth our customers. the as across past the also We're Lattice. Over our full increased engagement strategic with we key much

adoption benefit products XX% we market, revenue both client continue our overview computing communications increased of and and in market provide year-over-year Let In that in business XXXX. our experienced In me now platforms. in used strong server an growth customer from year. we as throughout computing, computing by to the this end the are segment of

prior the increased providing increased from benefiting ASPs by to key versus we're working platforms generation. server future server customers hardware we're servers, in functionality. value add with example, their to rates higher more And security For our closely attach and

in communications to growth build to XG from we the revenue healthy market, progresses expect and In years. out we're benefiting a XXXX continue the XG saw grow We as deployments. revenue wireless coming XG in infrastructure infrastructure over a

Turning automotive the this climate in that and the trade industrial tensions XXXX and challenging only declined market, now despite to revenue impacted X% macroeconomic segment.

factory the to remain the level vision, and believe will for of given serve, content this factor including segment us that autos. in breadth We electronic increasing a of robotics, growth long-term automation, we applications continue embedded

related a applications Turning now with towards softness result solutions value segments. to XX% shift and of other focus multi-year and to profitability our consumer to our the market, both conditions our on differentiate a mix streams market in our revenue enabling Within add where revenue by continued their higher in demand is products. as macroeconomic consumer, XXXX, declined revenue customers

through return highlights our programs some XXXX, Lattice, to eliminated went shift In recent product shortly we concentrated highest an the programs. R&D of where process portfolio R&D strategic low investment now extensive joined most I'll optimization we roadmap our after I return and and execution. late on

half we this years. expect And strategy. the see further In over we XXXX, to product of to started the from coming benefit optimized second of the this benefit

revenue in QX meaningful For and quickly XXXX us production launched our product, QX. of CrossLinkPlus which of example, ahead was for in entered generated schedule

this product to pleased with be to to customer and ramp. continue continue expect We adoption the

roadmap of cadence of ahead example this is December. accelerated schedule the our launch of our platform past Another Nexus

for across significant been customers enables power has for of Nexus reduction platform efficiency, applications. The our which broad a range a power architected

In addition XX% efficiency competitors. power up compared to to better to our

vision. broad as attraction the Nexus our platform. AI in with on performance customer We We're also demonstrated significantly and embedded such better pleased very applications

second targeted build of point software comprehensive on solution to embedded solutions, another announce our February. specific half increase we'll version the in of that launch our launching portfolio. security part of strategy to investments pleased application out we solutions as This first software for remain the vision also is track proof our of Also, late our in I'm the of the be stack XXXX. our for of stack

In accelerated new of summary, progress customers us while company's was our products important our all year an in and made. major for deepened very cadence key we product strengthened pleased the results. the financial in and We've relationships with driving verticals, with I'm XXXX the improvements roadmap,

As executing sustained focused energized our strategy we XXXX, profitability. and is began growth on for our and long-term team

I'll now turn the call to over CFO, Sherri our Luther.

In sheet. Jim. that you, we balance of XXXX, are cash significant delevering record pleased expansion, Thank we generation, a our profit further and delivered

model We we the Day. at continued our to long-term substantial progress financial make communicated Investor toward

a offset X.X% in by year-over-year. communications growth and Revenue decline me fourth automotive achieved of We $XXX.X quarter of industrial our as and sequential but as compute was consumer. up now Let sequentially down X.X% provide results. million, well summary revenue in

in was the margin compared in Gross ago on quarter from the XX.X% a XX.X% GAAP up quarter. fourth and year to basis third XX.X%

increased, gross QX, fourth reduction to XX.X% margin margin compared our XX.X% product prior lower quarter. non-GAAP in in some margin was in revenue of quarter year the ago from the In Our gross to and QX. compared up the offsetting XX.X% IP from

XXXX, For expanded from XXXX. up margin gross to GAAP basis XX%, on the XXX a full year basis points

XXX on full optimization progress points pricing Our XXXX. and year non-GAAP gross as the margin for our demonstrates from in gross margin to we The meaningful XXXX basis execute was strategies. XX.X%, continue cost year improvement product the reduction up

quarter. to basis, $XX.X million operating million expenses third compared were the expenses QX non-GAAP in compared to million a $XX.X GAAP were the in third million On $XX.X operating $XX.X quarter.

expenses of revenue, model. were to revenue. As is In of a SG&A XX% of in with percentage QX, XX% consistent increased approximately revenue our which while approximately operating QX, R&D target XX% was

operating from $XXX.X declined year XX.X% to approximately full expenses XXXX. GAAP for expenses in year million XX.X% $XXX.X million non-GAAP full operating basis, XXXX, XXXX $XXX.X the a million. the For to XXXX in declined On

investments of while product and our focus We target driving support growth to achieve on our in efficiencies continue to opportunities. SG&A pipeline model prioritizing

sequentially with in QX XXXX. flat looks EPS QX

in loss be company. year For per share per GAAP to share. continues increased the a flow XXXX. a of Driving share $X.XX $X.XX basis the per a non-GAAP key from to area to focus improved EPS cash $X.XX full on for $X.XX from per generation of XXXX, share EPS

operations, For delever our cash actively approximately balance than the a year with Investor the Day, cash the generation XXXX, to generated ended our XXXX. the million. doubling in detailed from more of year balance cash sheet. a million At record We $XXX plan $XXX we we full in

we total debt in million $XXX XXXX, payments. made In

a leverage result, defined of in to leverage a at our credit compared as ratio X.X, debt as end non-GAAP ratio now As of the the agreement X is XXXX.

basis. $XX $XXX $XX Let to is X% $XX for on first quarter. of a million Total me non-GAAP now first Revenue margin on plus quarter million be Gross for is expected non-GAAP minus between the million. for review or be outlook the be operating million expenses expected are XX.X% quarter our and expected and first between basis. the to to a XXXX

remain we are our value about front shareholders. us. and As of committed for began expanding additional flow our we opportunities build cash profitability increasing XXXX, our and the to Lattice generation excited in to We

we now Operator, questions. open call can the for

[Operator from question from the line & of Instructions] Anderson Our Dougherty Charlie comes first Company.

is line Your open. now

guidance. Yes, of congrats solid year. wider little I and really a on wanted my a with quarter. a start last thanks for It's taking questions range to the bit than

you? I’m to So be into with that disruption you that in be or you're coronavirus follow-up. just whether And I've it, to kind a was what what maybe of demand or it I assuming went assuming dealing then speak the could have of you're and side part here going wonder, QX, maybe impacts on side got this

Yes, thanks Yes, Charlie. that's right. exactly

widen slightly. So revenue we guidance range the did the for

slightly. we potential margin And we on to to you range gross widen follow-up, it it would revenue the prudent left be it's those thought quarters, widen And a range, a around the OpEx bit. had Charlie. prior to little just ranges, you're right, coronavirus we the and but related then On just uncertainty and similar

Nexus the end that hope but beginning year. next if couple of Jim, December, months so could revenue maybe, only Yes. know would initial a of kind now year toward by but I to the I you're more to know the I The it's potentially seeing. been maybe of came some you speak you of traction wonder out get here the

going on Just kind so of us how update that's far?

great. Yes,

for new we our to December originally were year. first our execute the their that. Nexus platform the be in work we launch this which launched able year. engineers But was to engineers all I last thank hard launched able ahead And in to know, on to half you Actually, want it about. scheduled again Lattice very schedule of were happy As and of December, of I'm

initial in about December, customer talked very traction strong. been we has As

are got engaged We that access over so part early our or customers program. were Nexus of customers platform. We’ve have with XX the XX that over

And engagement. strong so we’ve quite had

Nexus a from hardware FPGA both I grounds and think rebuild up of platform, software to competitiveness our a is full platform. a really the speaks the that perspective. of

versus competitor is that a in what power We that’s that’s very competitive device And XX% our better efficiency. a the meaningful when we’re to December, the measuring we difference devices, for deal, at first in launched advantage. and big family look customers, big a up

customer XXXX, year. And targeting new we’re of we one half the in plan yes, the We’ve December, quite launched pleased this additional with year throughout Nexus year in the traction. also second of to devices half and – shared so, introduce couple in this first another this a we a device as of

we’re the of ramp you with revenue the be Nexus quite bit XXXX traction, revenue may expect end would see from this mentioned year, for customer year. more say, to Yes, material So would next year, expectations. towards a in then to I and little but we products still this pleased of

you Thank so great. much. Okay,

Yes. Thanks, Charlie.

the line comes next Lipacis Jefferies. Our from Mark of from question

open. Your now line is

Hi, I question. thanks for two. had taking my

looks First quarter. had I fourth pretty solid at it sequentially? comms, on was AMD, like, of it sequential looked like seemed if guess, growth the compute, and I they down the Intel

reconcile was first two. difference to just a the follow-up. I the Then between I question. So trying That’s had the

sequential a Yes, Sure. out year-over-year decline. was to sequentially XX% we full think go growth point think, QX there if to see basis then I QX. QX in that you But was segment decline did and on in I comms grew, QX, the And I year-over-year Thanks, Mark. about from year. XX% QX, will for a compute a that year-over-year.

number actually flat the that computing customers. decline We of QX to QX you saw communications within primarily driven demand in that look portion drop-off the communications. If relatively was by a segment was across segment, of and

the you. applications Okay, helpful. you’ll in kinds that then to the see you success interest? on or Nexus what most think most you the customers And do that’s Where seeing Thank platform, start ramp? as you of are really

Yes, thanks. Great question.

We’re across markets. and seeing traction adoption – customer all to

some nice of consumer, early automation, like We’re industrial robotics, activity access, – customer seeing electronics, automotive comms, industrial around segments. basically our things all compute,

that value traction brings, efficiency. Nexus active. customer or differentiation customers competitive that’s have – The We especially the around power

to relative I earlier, our better efficiency competitors. So XX% mentioned up power to

IoT, at edge when to of IoT you’re across multiple really inference the edge-puting applications, especially, markets, or industrial network. talking about customers That’s compelling the

pretty markets. we’re with customer spread so, And broad to pleased yes, and it’s across the traction multiple different

you. Thank

Next of Baird. from question comes from line Gerra Tristan the

now Your line open. is

good Hi, afternoon.

your is now the for year. levers close the margin As gross levers also margin XX%. to for And and could gross other outlook fairly before the this ramp you of are margin operating Nexus. about this to What then talk year if

Yes. Thanks, Tristan.

margin, of first So to to I’ll gross that business are XX%. as May a is long-term Day of our on be all, year. our above levels a And you in model gross take last Investor back reminder that just margin

drive very that goal We’re focused that place goal to on towards the have years. coming plans over in and

comes three that we’re improvement say categories. would I margin the that driving gross across

a at was optimization. optimally that’s end XXXX. of we getting fair our strategy We market, – started product in beginning value built pricing First the the the at really of This category would about in the And XXXX. market. pricing for products products. out I really implementing actually our is that say, really pricing and the

that second driving a strategy expecting us in cost forward. add second in product for pretty executing out of to we product reductions. end yield we treadmill That benefit just in Again, And of XXXX, or comprehensive strategy category built moving that about have constant XXXX. we’re XXXX, a early continue And costs. that’s reductions our then of started

mix coming those Day years, growth expecting Those that as comms our as segments the or then industrial and primarily growth at provides of the we’re comes was, naturally and Investor uplift from mix in those shifts. we And over margin and our – is, terms from category shifts to auto segment come computing shared some the segments. towards the gross third segments

over gross the really target. driving XX% that margin time are to those over that So categories we’re three achieve

focus terms instance. on, we for focused And of continue the on operational other then in of to some we’re that things OpEx

Now at we target model. approximately to add our are

So is of for XX% total model OpEx, target our sales.

but XX%. you at of that if little and We’re look R&D we’re underneath add total, a that running target over we’re target of in bit R&D SG&A, within our about a running about at little XX%, our and SG&A

scale And for gradual the over line. So work can do, still the on dollar some increase R&D, reductions, revenue as we we come way continue cost in that’ll to to as from as have SG&A, we grows. direct careful we need well on a better quarters to R&D expect as invest in product coming our

And be that OpEx. want would kind you then year maybe to of Maybe So assuming expect of you terms – to improvements expense. in Sherri, interest to add want comment? some this what on that

Yes.

was is XX.X% in add significantly XXXX, which just in the that’s we ended XXXX, of revenue, I’ll that, with that Before of terms SG&A at year down SG&A quite which from XX%.

you’ll got we notice interest that’s So we also think Operationally, in and SG&A. target progress into I the our work had really for expense interest as down because, mentioned, tier But we’ve some Jim do lots favorability of made. our to QX, to locked lowest debt. rate get level for to QX, more in

in saw of so benefit of QX, quarter that. you And full

you’ll see So lower XXXX into rate. continue benefit from interest that to the

So exciting. that’s pretty

thanks for And any Great, QX end guidance? details. quarter-over-quarter on embed the in trends market your color then

color on Yes, bit of QX guidance. a little

expect comms to QX that, down QX. a would be would be is compute segments. industrial of roughly from typically And the to If expect bit, offset our down we by to consumer to probably bit QX. But and it’s you guidance, that flat seasonally automotive QX mid-point the consumer QX take within we a

Great. Thank you.

Thank you.

of William Alessandra line the Blair. from Vecchi comes question from Next

now line Your open. is

touch just CrossLink on the I to or wanted Congratulations on base CrossLinkPlus. guys. quarter. I specify should platform a Hi, wonderful

looking past, beyond. said I you think you move in how as we was was trending. revenue and How in I the expected contribution really about think that XXXX and had should into just wondering the we how initial QX. there out was adoption

Alex. Thanks, Yes.

recall, year. you in CrossLinkPlus of we So QX if launched product, that last

that in schedule. launch it product then, The to ahead team In launched that, job ramp product actually We And on fact, did able did QX. actually a – was executing engineering did a bit start started to our market customer the pleased revenue quickly. by of amount a very we we another I’m of product that. a that and getting generate to was in ramped ramping into quite that great some in QX, initial engineering great QX meaningful that there were strong and which team demand for job really

ramp with to and for capabilities adoption continue and to traction customer strong that. product that years. product we’ve really unique year into expect unique and It’s nice seen the a this some We a following

same Super. we’re targeting sampling the traction I And think guys side? vein, a server quite are the customers the then you or MachXOXD, samplings initially in been Any of on had sort or few just feedback early on at similar there. and client’s

Yes, so primarily product we’ve server is seen year. mentioned. we’re quite launched progress. that you and as focus last traction the We with on initial that the pleased And side

that production to product a start to into platform. to server expect enter year in meaningful We and this production ramp

about excited we’re that. So

want product server could used of yes, trust. what does also be a platform That on applicable you’re provide of to that devices. basic platform. used And anywhere trust hardware in – That in root be for could networking that a security client root right, or level platforms, That is provide instance, security platform. the beyond is very where hardware you level

we’re those more little on And so bit comment pursuing specifically that, also. applications those for probably, we’re early certainly in but opportunities me as to a well, engaged

Perfect.

had year. was a talked Was this in event, software you’ve new with out bit line I have earlier coming sort curiosity delivering on about vision vision embedded the thoughts? schedule of this went little or expected Was on of than the since stacks you more a products. lastly, your two December been of the ahead Just know guys stack, embedded

or Yes, pushing of Yes, end were embedded pushed was team. was the really it a world world We of it team happens about we February. the ready ahead be at – really two for month the and schedule. embedded to

wanted we yes, basically currently so, embedded we’re out that And schedule the that roll to stack that’s – wanted on. we them software and at world

from was team. of bit ahead it the appreciate which schedule, yes, we So a engineering

it. you much. for That’s so Thank That’s Great. it me.

Alex. Thanks,

from the Next from Cowen. of question Matt comes Ramsay line

open. is now line Your

was the on this Hey, behalf Thanks Buchalter is return and quarters. for couple of last to congrats question growth the It of year-over-year taking Josh on to Matt. results. see the my nice

thinking start target you say away How that demand moving recovery years. Nexus traction those we dependent next versus about out double-digit As new any the much expectations? type of end towards embedded or legacy Thank from portfolio would you. product that’s over on few from is consumer build mix in

call, already Thanks, Yes, Josh. it’s ahead on last that, which year, that remind the the launched trust mentioned we we’ve talked which not we launched applications of couple security Nexus and in root providing I we first like XXXX. then about. that is product servers a of just MachXOXD, important which a CrossLinkPlus, that we you little remember actually products but half that’s that’s would and launched And this platform bit of

time. expect XXXX and revenue in help along products little later in the We come And Nexus would to a drive those beyond.

to that launching to out MachXOXD, this like out business different that that come the we’re we’re year on But in help will the contribute revenue sustainable long-term software rolling growth. model the yes, products the will Nexus And double-digit Nexus, consistent we and as as solidify year, stacks this the certainly, growth future. remain CrossLinkPlus, that that new goal, well products which the low get focused our is

a congrats I some Thanks and the stabilization, as driving of said put say industrial growth? it is of from That’s decent product market they’re – your then And or is you guys growth. peers macro year-over-year guess, how signs would end trend you’re number characterize again. the new you that recovery. guys there heard helpful. seeing, automotive And that you some year-over-year would seeing more of the Thanks. up in it and we traction pretty is

auto same that I segment. as helped look say XXXX. rest Lattice That was macroeconomic our across well. think that, Certainly, slow we down in the of within sector us, by impacted that unique in softness. better than were results a if were other industrial drivers companies Yes, broad-based by we or affected pretty industry. the thanks, That perform the Josh. growth have But bit that would at some do I you

applications. examples Just of industrial applications, industrial robotics, that safety be different number would of as as industrial electronics a some just well automation, automotive

as some market. nice a us and in in there’s that the customer better engagements believe think, over years. and primary growth do this we industrial we And the comms So as growth back wins our coming – bit there over for we than helping Investor perform, market at year, compute long-term as us this are factors is of years. coming have really a mentioned general I last design market the It’s auto that May Day that are well

[Operator comes question from Christopher Susquehanna. from Instructions] line Next of the Rolland

is open. line Your

you long-term for for guys. And was here, But model outlook pretty hit the you everybody. that think build there? for get Thanks, Great. talk products Thanks. kind obviously perhaps about help do XXXX? double-digit The you of to shooting that double-digits XXXX could challenging

Yes, I revenue operating that mentioned call, growth, a meeting. gross goals of also put at not the we and as our income we expansion well. margin just but in Chris. around put our we the that model And expansion May as little to financial remain investor Thanks, committed earlier out

the revenue double-digit to growth in we years. out particular, on And growth of so in model was outer the achieve those low we all committed revenue And goals. yes, remain the that focused and put a

and comms wireless out. industrial that as well different number growth it’s a and both to build contributors helping compute, infrastructure perspective computing client Within platforms from product compute, perspective. a market and server from comms perspective, and it’s that a of a From XG market as auto. There’s really drive

across XG a application. expect to over we wireless growth built We’re stages of in area good for be the position multiple And infrastructure coming infrastructure OEMs us. out very years, XG a where the that still early build is in out as that have you

space. some industrial help electronics. products of instance, the the it’s in servers industrial automotive, that year. just MachXOXD some actually product a of automotive then new is platform out and different help wide for and which our And as variety And our are for brand is used segments really I well. things family as CrossLinkPlus used will we in The we’ll computing will that launched this that as members and mentioned new across across this rolling products applications then automation, That those over And drive markets. of FPGA growth those Nexus year earlier, drive the that in past be well, will help drive growth well.

And so those factors a quite of different really growth across there’s markets. number

a Thanks AMD and And one clarification guidance is Intel around clarification as The as had well. and pretty Jim. then compute. question well. strong

follow-up compute then pretty And wondering why to Just to of question, Sherri, getting close point flat? here. a cash was kind at you’re net some

early in of you’re going some color great. So kind about you what the acquisitions? think would guys process it of is too there do sheet, do adjacency? for Or Are FPGA of space dividend? thought tuck-ins have cash? Are to about looking how a with other more Just of that in any you we balance here? that growth – your be or about areas Does terms in you

shabby a cash was But basis, not go And from quarter-to-quarter year-over-year very to year-over-year compute a positive compute don’t QX did fluctuate. is basis. around a comms on the and sequentially, first in why the XX% think take the that But in sequentially I segment on a it ahead year-over-year, QX demand roughly from which opportunity growth, and I right. on flat to will good Chris can QX, seeing grow question to point QX QX Sherri, growth your we’re segment out you from yes, with question. Yes. that

Chris Thanks, question. the Yes. for Sure.

So and yes, million the – X.X. investments a down well. down on as a paid cash of of But the Clearly in we a that. were for paying at focus so having course, quarter, leverage talked of terms investments pretty top that a substantially about of the debt with R&D was net of and the excited about business about QX quite we making obviously debt for $XX ratio in key the

we’ll As any our lowest right locked in look lower the is we’ll go continue the mentioned we’re than QX where in into interest interest of I that forward, now we tier, so cash. rate. it evaluate rate we And that evaluate best move use the use already our we continue continuing cash, in will evaluating our pay looking all whether debt debt. best evaluated we of But uses be cash, continue R&D, other to to of at as our down to lowest all so options, alternative invest and to won’t at forward.

you, Thank guys.

Chris. Thanks,

Next question from Shannon of Craig-Hallum. Richard line the comes from

Your line is now open.

a Thanks space. Hi, well. Jim ask the questions Sherri. on my and I’ll as for Maybe question taking comm

the between wired was there wireless you delve into the on that You talked trends I can and flat quickly about fourth maybe computing Wondering if there. Was in comment know, we’re you in within very your how bucket being kind relative XG can a but of sequentially anyway? and quarter. in pause down. comms early, help going

outs. different comms Richard. I was QX from see a Yes, a decline It QX. sure. to we is sequential and in related and the number XG of was wireline – bit slowdown in pause earlier, across wireless. And build I customers a of or both do across little Yes, Thanks, as mentioned think did it there

in early infrastructure wireless We’re still builds. XG

it can quarter-to-quarter the so And demand. from of be terms in lumpy

position certainly as is a a different XG infrastructure year in quite long-term, Lattice wireless wireless customers. that year-over-year to revenue industry applications said, XG and we XX% the infrastructure XG driver remain we growth of as well infrastructure as at communications for both growth the And number with that That if we control that and was convinced across saw look in over plane have wireless actually the good pleased we contributor the our were we XXXX, computing. full and

think is do we for So us. a multi-year opportunity growth that

Okay. quickly, Is that that to guidance here? XG And to in the this pick just embedded to follow-up on your start do expect for wireless you up Jim. Near-term, see quarter?

that I together, would to we Since over as up QX, expect and to XG also to would beyond it’ll but segments geographies. be contribute wireless mentioned in auto it In would compute, across well. in say rolls really I infrastructure down then expect multiple industrial as as XXXX, be those to be years expect comms, help out multiple in general, growth we build slightly consumer, we Yes. the out, sequentially. XG

more Okay. first there? bit sort be little payroll come? on first structural a those And the and taxes a of that the taxes a had is few similar in question sequentially kind of quarter. kind are the quick – income then Or fourth? actually the increase you questions that OpEx few that for into A income, in or some Sherri, financials. other of Is multiple to expected here quarter up the for non-operating that

Thanks, Richard question. sure. for Yes, the

from and of of So of spending. slightly our the – of example, in some our investment increasing timing to about our for guide OpEx, get target is really R&D closer We’ve our up QX talked model that’s a XX%. for function to

That’s you quarter-over-quarter, R&D look of to thing expect at that. to continue investments make So program that expenses would the so sort expect that’s to timing of would see. I fluctuate how normal and in we will a

rate expense, the of I was tax you terms X%. around at OIE, if look at In tax effective look XXXX, if our think somewhere you

the would a you lower good QX And on interest I as quarter that’s our so at our so way expense, look It’s you full look I what interest and And then forward. going to that’s saw forward. rate could impact model. sort what of going mentioned, of at

all That’s you. perfect. questions me. the Okay, for Thank

Thanks, Richard.

have for Hans last from Rosenblatt. question, And our Mosesmann we

line Your open. is now

are cautiousness said? year. look can If are the follow-up. color have optimistic? level like have solid out you into a we I down same us as or of a some more as XXXX, a Jim, of cycle for Are you give some enter we of guys now And the getting Congrats Thanks. XXXX? your just attitudes you you quarter-to-quarter

Sure.

But rolled beginning the the last we At see end uptick I of in see of of towards into further to think the and one bit of the then weakening to QX. that at automotive. industrial a related end XXXX end QX demand. in is little we to of year, right positive an that sector that started saw of and QX we started

have nice a may may we that’d have And stabilized have was – that and hit so the be that moving there. bottom that improved market indication And may we forward.

see. one happy that’s were we that So to sign

we that, that, the North being being stable say continues And the the I of then looks to strong coronavirus. if markets, the would say general, soft, there. relatively The between But with quite to look kind in in unpredictable but I beyond America Europe us. element across of somewhere kind would Asia market be

market. the kind color that’s give So end you by of I’d

design And what are for very and Nexus other that’s – follow-up, FPGAs coming in for one, against my or you’re solutions are Nexus two you kind considered, helpful, that then since December months of past of in wins? terms Yes, designs Thanks. up displacing Jim. the being you

I Yes. say some against would going like Thanks, Hans. we’re and for microcontrollers. up FPGA it’s competitors, applications things in classic but instance, both some cases

in initial two And The significant pretty better launch And we devices. able so XX% efficiency launched primary Nexus advantage. our some real versus to efficiency efficiency measured bring the our power power versus December, FPGA we’re showed competitors. were our to we at against competitor event time competitors, measuring that comparisons up device we a power

the be been can processing, used the algorithms. for inference customer power level, us useful engage in there but to really customers has we for been helps power then our the also has and at where intelligence strong an in against has artificial when or other parallel our FPGAs momentum a MCU parallel advantages in And efficiency advantage data benefit efficiency FPGA very programmed maybe is applications, it helps, competitors. big that our typically some past that given certainly which So, pass good

been good of we’ve inference very very, algorithms, processing per demonstrate able to And that’s especially and us good performance performance applications. to the displace microcontroller So watt. helped

we’re and of so And would of both traction those kind competitive versus seeing competitors. footing good types I good say,

Okay. Great. you. Thank

Thanks, Hans.

Mr. for concludes Jim call would and Anderson closing remarks. Ladies over that and gentlemen, session. like to today’s I CEO, now Q&A Lattice’s hand to the President

operator for Thank today. Yes. us you you, on everybody our and joining thank call

year dedication. and the was our again, fronts for execution, and customer for with Lattice. financial relationships team So XXXX we all work product to significant across I’d thank And summary, certainly results. like hard made roadmap, their strong Lattice in progress our improvements a And many our in

team, value. believe of early results to as execute achieve in the we see we say, continue progress. that build that are call. and support want to our shareholder of as look forward to starting what and our today’s Lattice continued I strategy still appreciate But concludes We’re the you your to updating on Operator, work. we stages hard Lattice we remind the I often can

today’s wonderful your you have and day. gentlemen, and for Thank a this Ladies concludes participation conference.

disconnect. all may You