Lattice Semiconductor (LSCC) 29 Apr 242024 Q1 Earnings call transcript

Greetings, and welcome to the Lattice Semiconductor First Quarter 2024 Earnings Call.

[Operator Instructions]

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Rick Muscha, Vice President of Investor Relations. Thank you.

begin. may You

and operator, everyone. Thank good you, afternoon,

me and and are Anderson, Jim CEO and President Lattice's Sherri With today Luther, CFO. Lattice's

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

not Relations copy of we have remind I like section it at press financial our website company everyone a or at other future regarding performance the projections our make to today, found of latticesemi.com. may be our obtained conference that in you the company. earnings release, statements If can the call or during Investor would forward-looking events future

We such that that documents you company the wish XX-Ks, caution and SEC, to files statements. results the from available and the or our We with These identify could predictions documents results materially. projections based risk actual statements X-Ks. is you those to refer contain and currently cause on factors information differ that materially that the that in actual to including differ important XX-Qs contained are our forward-looking may

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

We will refer primarily measures call. to non-GAAP this financial during

underlying provide information, to of to management investors non-GAAP company's further certain intends the trends. additional disclosing and with analysis By permit performance information

our can Investor financial measures reconciliations we to periods, non-GAAP be Relations website GAAP on latticesemi.com. that provided historical found For at the measures section of these financial of

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

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

sequentially reduced and were results customers down in segment communications was softened up inventory Industrial and sequentially computing on QX. Automotive and in X% QX was demand levels. for The our segment products and used Within which Communications stronger sequentially servers, the with as margin down end demand that their The in for segment. in weaker was demand XX% expectations profitability. was revenue, segment, 'XX line Computing by offset

We sequentially inventory particular, driven incremental communications demand In down we're customer be primarily softness weaker revenue expect from end segment softer continued normalization. in by telecommunications seeing and to QX related infrastructure deployments. to the QX,

current forward Looking end anticipated improving our normalize as near-term ramps. half half. higher second and the to year, half conditions, of conditions market than as be to inventory We end revenue driven the on view half we believe business to the customer as second in levels the by based the Avant of first expect second will continue XXXX well product improvement be Nexus new of

product mid-range launched in the FPGA In X and received device includes into of hands in with coming positive reaction customers our seventh our now Turning a Avant customers. our the quarters, X our continued our Nexus from latest X options now very coming in going production portfolio. customers. families portfolio, to of the small number device and device to over market portfolio, FPGA now we which In of the we have expansion map. our This Nexus We product families road have FPGA QX. production shared small recently the

ramp device the and and through XXXX initial years. first year expect into course end achieved we The of of this family the at coming of revenue Avant-E the to revenue

to this Avant-G year to X and the families second and ramp end of initial following expected The achieve third years. revenue the over device towards and on are

software use developers same and to today differentiation which at support demonstrated growing that As recent of with strong produce of customers software Avant leverages The a the customers Nexus. XX% Avant, customers pipeline. reminder, our are of design a our Avant on target competitive we today, continues opportunity already the for healthy conference, Lattice combined

discussed previous software a wide increasingly used call, are solutions variety in our of being As hardware on and Lattice earnings we AI-related applications.

example, AI system and generative system. running the are an the workloads, security Lattice in control devices AI-optimized management center data is of used computing AI For where servers the in the

Another the example of these detection. systems, and a that key of Latitude to is inference solutions. in as in used types our where hardware applications, multiple benefit this we that algorithm AI-enabled Lattice and recently software new of are which Dell enable half provides In AI customers into user part solutions our PCs, us shared software designed the presence we to adopting is such Lattice in is and run gaze AI features how expect second year. We strategy

the In be expanding product is portfolio, largest of history, company positioned momentum. portfolio value in product Despite which well industry to headwinds, rapidly excited our with in summary, we strong the midst long-term driving near-term the focused a is on creation. customer remain expansion we're and

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

you, Thank Jim.

share expected prior cash out with quarter to We The and as and outlook. profitability shareholders results turned cash strong returned through buybacks. with maintained line first our in generation

a of now provide results. me our summary Let

XX.X% revenue the end quarter primarily inventory softness down sequentially year-over-year, demand First rebalancing. end reflecting was quarter customer and XX% and $XXX.X from fourth market million, down

points in in basis to basis quarter. year non-GAAP year segment. ago QX XXX mix market margin quarter non-GAAP $XX end to million expenses QX quarter million compared our Our XX% the gross the the million prior prior points in declined $XX.X ago operating were and compared compared to and the to $XX.X due quarter XXX to

our continue in management invest portfolio. ensuring to while disciplined expenses, be We of the in SG&A we that product

points prior basis the was the year margin points down to basis operating non-GAAP quarter. compared QX decreased ago X,XXX and to quarter to XXX XX% compared Our

thereby in shares repurchased reducing million of of period, we or X.X%. our approximately buybacks. year earnings share XXth $X.XX to consecutive stock, quarter. QX, the worth was QX our shares share per diluted quarter non-GAAP compared $X.XX repurchased making QX XXX,XXX we Over $XX million executing ago by dilution In have approximately X that

Revenue for non-GAAP XX%, between second minus due expected on review basis end between now be the XXXX is X% a is me be Let our favorable second expenses of quarter is to or for second which Gross million. $XXX line million expected million a Total plus QX to million at and our the outlook $XXX markets. to the quarter. margin less non-GAAP quarter to basis, for with and operating midpoint. on in mix $XX are $XX from expected the a be

for we we well positioned growth. Overall, believe are long-term

remain near-term navigate continued focused in we markets, execution. the of supporting As our product on portfolio cyclic our end expansion the we softness and

questions. the that Operator, concludes formal for call my can now open We comments.

[Operator Instructions]

line Weathers comes question first Melissa of from Our the Deutsche with Bank.

more then cycle. one picture the that's bigger near-term a second related and to one have I guess I question

coming And maybe picture, those I about us bigger X revenues? going to help know the guys into product Can about customers you have you the now how Nexus seeing more. and On family X flowing new you some of like is new-ish start are talked traction product market what you think products? with X this with kind launches. in with

with customers. to the particular, map that Melissa. our well as very we've the our this actually of customers. about prepared added this, the of mention gotten expand is wanted recently we Thanks, recently investment. Nexus we're really customer shared latest remarks. that And includes we excited to additions that received is did by I long the positively our we're on in device on which going This that is products -- map positive. all near-term as what why term. some And other we're We actually, And feedback it our FPGA Sure. shared really road Yes, small significantly options of we and in the new adding road we number long-term was to in the

of this continuing small market, invest because sustained focus which FPGA a innovation really to in customers. to First indicates all, just portion them, of just Lattice in is important from on our to it the

able count So also investment efficiency capabilities but differentiated, see the Nexus sustained on, incredibly power clear is been can has demonstrate that great features, to that industry. that it's leadership in I benefits, then think they they've

over in of confidence of to part gained over term. long this more combined to expand positions years. continue Lattice. the past us our this just market over that this part to them presence grow to and market We the so I just And to we've the think shift share give And in significant believe business the time continue

we And of in in combined to when parallel, devices. mid-range two for road take Avant portfolio with long-term portfolio the Avant excited our our then expansion combined, investment really in and invest And are those continue map. the of just and that, our product continued customers the you expansion our about

still channel I guess on bottom I that guys more just inventory about talked be about resuming talked this near completing And a in shipments how XQ, in your this we And inventory peers Lattice general, cycle. hopefully, Is burn think should your the to closer have couple FPGA -- you expectation? quarter. sell-through rates? think term about cyclical quarter, in the side, burn marking to or last for of the

base, we semiconductor expecting Lattice bringing normalized inventory customers inventory are terms Lattice, this we're is first Yes. in what our overall. guidance to QX includes QX Certainly, factors in they our as of holding what are the They're half drawing down customers saw levels of their that inventory. QX, this the we inventory know reducing our in that our those year, inventories And across levels. end that customer view back

through that current the QX. believe continues And so we quarter effect certainly

year, we through drawdown And believe then dissipate half to second into the of that of the the of starts half the year. second inventory

we dissipates continue but but the it stronger I reason: second in believe as our half that mentioned of gradually specific of Lattice we not to half be year of one, products over the will prepared revenue this that a the ramp second believe of that, the year, year. that course my dissipates. then that the then half half this it it in the second to reason believe Avant like It's that and that the over off we be of the to the turns revenue the effect, why So reason Nexus the first second drawdown the dissipates of that well. and additive the will remarks, half for And in number year; that's second is inventory, products, than light switch,

As production. I just into family mentioned, went X there's the device Nexus

device that we'll the the then course of that this this is in of of the second first in last into half from and family year. Avant revenue into the QX. year. year, Avant benefit through end from go ramping Avant-E more in production to benefit with initial And year ramp half year at We the next we from the this this we of very expect second expect of that year, to series So saw seventh,

the half. than stronger And be so will half first for all the those reasons, second we think

Our with Needham of Bolton Company. next question Quinn comes from the line &

the on side. Jim, I comments, communications start just wanted to with your

that think might probably any But I within try comms the remain the further any ask the reach sweet. us you sense, a I'm portion a think comms communications be markets give and stabilize. to surprise a or when comms wondering that give computing, comms to bucket And be it's but any that comments that smaller you help you us is of no not if you'll of bottom rough starting infrastructure us portion may to exposure? bigger give on to may you that, size to it, able had or overall sure signals just can

Quinn. Thanks, Yes.

months, yes, QX, QX. day, infrastructure big CapEx your at X And that's by infrastructure we we the related especially the infrastructure telecom demand really that's end XG some communications, into to there weakness telecom some the spending On per of to over ultimately weaker incremental the end see telecom part tied in the question, telecom of that carriers. in saw the X last specifically of first to that's did rolling

seeing will from start sequential But certainly of so perspective equipment big decline market tick of devices is to sequential -- it's we'll and what to telecom part part us, of used think back will in that's to QX I start telecom infrastructure. back and from which drive the weakness. telecom once that to And improvement telecom telecom ripple we that improve, QX see see the demand end that's the the up when CapEx a for for we're our spending,

driver is we in We And from Remember compute sizing just QX Compute that of then of well. QX, sequentially to compute on of relative your is comms to and been relatively question, our the be into what's from And again. purpose big second while AI-optimized both has step-up compute the compute go moving saw expecting so QX in actually, to saw a good decline general doing up QX. QX. compute. in a servers, sequentially That's is we're QX, we QX in communications server. declined communications and servers in to up demand compute, in part

of of compute of our so communications is late. It's this because segment that majority larger. the as and been And at point, weaker has part

second industrial And the Got there in inventory to market, then the idea that out Perfect. call it. are just any if Wondering specific side half calling drawdown industrial are the back you this the on trends other industrial the dissipate segments will which imagine the that trends out? levels, I get of than are specific to but consumption in of year, helps worth seeing any business

would I a is it mixed. in say Yes. that segment, bit

some segments, stable are subsegments the the demand of of If growing you demand. showing some look even steady, at or

quite equipment stable. strong. has medical in and instance, been For been Aerospace has defense

believe drawdown that for which segment a second we is us, the inventory our that, industrial But the inventory that the we just automotive depending their as seen that, a that smaller half, bit reach segment. dissipate of net-net some that second there. automotive of happening weakness levels. in look demand, is, towards effect customers to it's negative sequential mix we've part that, that's segment then on on that that half, And in a the normal effect and portion, starts And so as the affect,

question TD next the Our of with comes Matt from Ramsay line Cowen.

to just would investors, that off be couple respond of maybe you I've to think going address to for been or you questions from bounce getting I'm and helpful Jim, them. a I it of

the only wins of going like new ramping yourselves this FPGA Avant to inventory you the of done Avant. much between well-documented. that the of of situation your because drawdown the that sort the are ramp versus inventory the And and you the inventory have products I first of new one through guys two and they're situation one larger been think way digestion timing I that what think independent these explore some industry? have very Or the change may and competitors wanted to programs Do new new feel wins you in the and with timing it's the not is relatively with the relationship but correction design the the it's or do other? Avant market

Matt. Thanks, Yes.

pace of which expect we're ramp, the Avant X Avant end through this the X. we've of ramp course we're and in the last X, at the affecting step ramp the we're going at by and into short still in quarters this Avant the and customer's then on inventory driven coming don't here to G actually following would December before end will summarize the program. because about The G ramp, in began of still a from year, That's the But And to bit E, that The date, to really through at the Avant the own kind think happening we're would of we're little in E the And the I be Avant-E of tramp, rate from expect the development usually term. we And see this going the back revenue, half contribution months. G X XXXX. year are a the maybe now. timeframe more early and is drawdowns G in that conference of Avant first it's to X in that year be our the -- more relatively and ramp our to years. and benefit I second of see of much revenue just of we through XX the year. and a to launched developers because last the the the ramp. contribution the of revenue and since so of just launch families, year, generate E, launched in XX and tickle revenue where early more very device Avant the ramp is we

of development customers, end ramp market the demand that devices the new less on by the in will etc, cycles, that qualification supporting we've cycles driven customers, that or the much wins more fluctuations. our about design put now hands So the we're customers

Now ramp. I demand much because that would by further be say much, end can the affected fluctuations its Nexus is ramp nexus, market in

that X in device are now have families production. We

so market those year. a launched of ago, And we by that Avant, by those really families they're this maybe demand think, I couple fluctuations of further some end markets much would the affected device years early end be affected because But right? along, not

appreciate I it.

investors I server a -- all next we're maybe over about generations. think through your talk of specifically spoken position different X if getting you that As about and some in past? last have can you several now for about or into we're little the it any that the that. over share the sockets -- been that visibility you back But coming and dynamics that sockets, there's basically and the went to FPGA for we X server from my not mean, competitive continue the years, you next those about team out than in questions and have several second more vendors the confident I've there are and sockets questions server -- correction going have maybe server you the seemingly guys question, could the to Maybe bit you've years, a how been maintain the grown is that I

this look you if the growth has past a servers, been for area Certainly, years, great over Yes. us.

we've as grow able well as been both to Over rate our attach past ASPs. years, our the

server. been chips of in where have a in percentage chips multiple also one cases some rates grown attach Our in higher as there's Lattice -- servers, used but Lattice's used have Lattice

a more Lattice are chip rates server. On well uses now server than average, attach X per our so And Xx. over

bring began more hardware but new about with ASP the server. ramping generation, features, year, we to through year. to roughly time, at server, it's have a over raises significantly dollars been last and this ramping step-up our in server, content software the that's that our more the content customers a generation XX% ramping of dollars both we've new capabilities, same of per from That of capability, [indiscernible] per new server to bring course of each standpoint, trying generation, new which more then And current time

about generations, dollars that next new the device generation tailwind functionality just And full we time. And us. as goes we those generations, server terms over server those increase to time. ability content of servers a bringing feel over innovation we're we to new ability into good server additional per as that for natural certainly continue out to few our of share over content get production, then in as details So capabilities look that's the our our good feel new we about that. we'll drive generations to continue to more about on and But of

Benchmark with comes line question next Williams of Our from Company. the David

Jim, maybe where you a And could maybe a during can ramp. and stage first, little color number if those. compare of even maybe today, how seeing just the performed traction that size traction maybe where you maybe some you're design Avant the bit has if seeing or around you're of most talk about the contrast -- maybe mix and similar

David. Sure. Thanks,

just by win overall the So the win all, pipeline. and really first in we're growth opportunity, opportunity design the of pleased design

exceeded team I terms aggressive that new goal. goal Avant think of last they we last design pretty the shared a set at as driving in wins actually earnings I and had for year the call,

our with be pleased a with applications. all sorts momentum. this set over believe goal across at seeing design another different pleased markets. the of adoption really performance will all across we're adopted so We last We're end time But year. for we're bond [indiscernible] their And year. aggressive of We've

data Avant ADAS for one like address for great speeds applications specifically connectivity the data up applications, the time. automation, as opportunities automotive We're higher things robotics, center opens of to plane certainly in that is instance, industrial that X applications, communications has in us well allow X Avant over example applications. An seeing systems, family automotive communications is Avant us

plane center Up Nexus, addressing in communications opens up been applications FPGA now until communication and systems, telecom. this data instance, up applications now plane a we've for with primarily Avant both small This -- data the for control opens point portfolio, us. really

design the family excited We're ramping expansion also I into excited ramping pretty first mentioned additional to the year, revenue we're now being I with Purpose, Avant-E really next this those continued we but We connectivity So into pipeline. -- X first the production, as about to G contribute the for get year. in we're revenue phase of to X win General as is but generate earlier, and the revenue device revenue launched well. and for end G think X, before to a and of G bit of little start speed, is the expect

And share about traction more in Avant on future developers Avant. very our and the we've road more that the then as positive We'll definitely more a about we'll that, road conference share beyond yes, in you -- Nexus. more But map customer road the feedback got QX. as well share We'll can -- and continues about we to that. map at imagine, as lot on be the map

And point secondly, if you're from particular anything a seeing considerably positive and you'd as stood what year-over-year. Asia, seems of that out to is sequentially standpoint negative? down that's maybe a point geographic you, was anything to worse or sort like a But in to there just Europe you'd or in anything that maybe just it better,

to weakness our change sure. average. in QX. revenue for from tracked North average overall overall as X Europe, America at mentioned, company Yes, you kind look due in QX what the to of weaker geographies, that you that much was telecommunications. the company we overall than was company revenue specifically saw our instance, our sequential a QX, to pretty Yes, if from of in -- geographies, close pretty terms Americas from

customers, course, weakness infrastructure and industrial there. And that systems, As there you also with might those and provide weakness customers. saw specific is, industrial some expect, of saw has Europe we automotive we have customers and customers we then automotive large telecommunications in

in drove the Europe weaker performance what that's of QX. so And

And side, would products stronger performance then saw growth, are of into overall lot a in server where Asia our I where server are the main used factor the servers there on than Asia. are average in assembled. a shipped the flip applications that company was say And we our

Asia and sequentially strength in saw comms as from And portion to was of good we primarily computing And compute demand on so server server up mentioned, overall in I QX before QX, particular. our demand.

Our Rolland line comes of from next Christopher question with the Susquehanna.

guess, around first think Jim, wondering all, I that a $XX I said content of to that statement made, you back FPGA Lattice NextGen. going of previous was number what you for is per content server. I

Forrest, Rapids, the servers. hard basis, market, I GPU you think Granite then metrics and love do do GPU. of But to for about And know to Sierra that So it content -- per compares look Turrin. dollar on do you your a AI How it's there? at content would kind

Yes. Thanks, Chris.

of the in part just XX%. content on first you, to the the question said I On growth server the generation, correct current

case Intel to generation a the The generation that's prior CPU is ramping from now of CPU in ramping now. the so XX% generation Rapids, [indiscernible] from or see CPU we increase AMD. being, the And Sapphire a

on And about across our in look content. XX% of generally all average, we when so see share a increase customers we

content -- thoughts of the first finish future And closer the as a get increases then share generations your that your more we the the on question. get we just expect per the future more dollars then on And little believe on question levels -- of the content generations, future second But have to we'll on part said, part we we like drive ramps. as a continue server on the server of I little do generations of to as we details ability share we'll closer. higher to well. to those We'll

as one products we in many, on end your server look have question those. we GPU AI systems, the greater used that we spectrum one the content configurations, QX strong equal mentioned, simple the configured then general-purpose configuration Lattice. highly general, a system highly in highly we actually see of certainly server, as second other basically the many we saw to we've purpose that's part of AI on optimized growth of seen have what our for general the would servers, versus at it's levels and demand, more then kind of on configured And an a cards. within are on QX a from to very look And level general-purpose lot in AI drivers demand content. you of a can And closer simple that server a that the then of significantly you with come of our AI for and servers. And And like have server a a to in server server if the Yes, that of about the net to positive and servers. segment configured AI specifically generally was overall, or either of optimized more systems. contributors computing clear the one was content different same as in But optimized the AI configuration, servers.

Great.

those have that opportunities. my one, select some you of really For second and opportunities in kind it's about competition

also on want has saying opportunities might security, I if up [ new ASpeed around put share radar. to some So don't our Google ] I they're solution market. like applications -- making new had think I think meaningful a that if popping that starting you was been had But own announced. previous it an also they there. think is I that. progress their server human opinion and question know was on in then dollar you any have presence, drivers you guys become are to or taking Synaptics And that human are that internal

offer remarks, new your opportunities, presence prepared run detect this -- gaze in to of from detection, with human half detection, that the about benefit the really mentioned we Thanks, did in Latitude question basically excited last et like AI, that stream algorithm the to around detect in this on we part terms the doing chip or expect using Dell share, Yes. video recently second used year. of We're revenue now the Actually, is partnership is We're cetera. of laptops. and things Chris. AI to on Lattice that Dell, Lattice I on hurdles

we relatively number So PCs. that AI for And new a that's partnership that's the shared past, years made. a a around we've we've had that in of announcement And Lenovo. with

So you'd Thinkpads and used find Lattice chips example. for Lenovo on software

that technology been number for of a using being inference for proof there's primarily in establish So this software terms to FPGA processing. used we've Lattice's of on processing and able AI our to able be places is the points

on of models, on first part presence is number in I'll I servers, used to just dollars we said, as earlier, another get usage which goes for there's reiterate I places your different of related or what get detection can the question, think, usage to security AI think server. coming Lattice to And -- models I chips control enable or a said continue feel the content which And of new ability place. very that to used detection. then is over security the the back We about good our feel generations. They a I to management, expand gas

very and positioned well. we're well revenue our of across feel to face unique Now coming level, customer well the products. based all on all solution, is footprint of as differentiated got our of our certainly, not generations. expand we in and at competitors to our but We as markets our continue markets. across hardware competition feedback, just we've all and and we the there software But believe servers over

with Baird. the line question Tristan Our of next comes Gerra from

for run industrial which say, second is you're on below in you segment, kind we quarterly applying if the on look first slightly emerge true us trends, case, the of, think demand takes at if about QX rate. to visibility that automotive half back 'XX million XX recovery if Going that's you we is end from How And industrial, do QX have your relative that run going mid-XXs kind commentary that that to shipping dynamic. the which rate? geography to of assume on

Thanks, Yes. Tristan.

] drawdown as QX get QX, part And demand. the their now dissipate half. but back point, consumption guidance the we in half that dissipation as start QX, levels believe in the from as effect that build of we that demand customer starts the gradual their you level. and then inventory something the On in your for at a to the to content of believe take customer under consuming if Lattice over also first we inventory that's dissipates end they're time. goes naturally customers for happened instance, that start the it's at if actual that, that second that we believe how systems, yes, second and this their believe the shipping [ question, well, And up right much we're we to that normal, provided to they see to customers look we in we end But

So happens within of that's be we subsegment can auto what believe through as industrial, year. as bit different by rest it customer. well this a little by the And individual

at they're that, But of stages XX,XXX in aggregate, that, effect of are We lot dissipates in where different industry that inventory over customers, the drawdown a half. that customers. And at we that have or different there's second believe in dissipation customers effect. drawdown -- --

the pick geographically, see North would drawdown America part on second or -- the up probably start then that question let's of to dissipation your Europe, first effect to inventory But would expect geographies. probably we pick I and industrial inventory that to and effect improvement, see across say, to autos up expect dissipate. to starts as on start And

this it follow-up, prior how you if dollar inventory Is then weeks in inventory with comparing how the And also distributor for your quantify by and quarter? is so, at a declining increasing? much? Or If on average? it then weeks could Okay. [indiscernible] is

Yes. we to that. It's the we When levels on really and distribution pretty Thanks, we the back that visibility good Tristan. saw pre-pandemic. have at inventory, look

that level started. back whole pre-pandemic disruption So before chain supply approximately same to the basically

if place demand start to because market support good make starts in the stamp view up it's we in thing inventory there's to that them. inventory we sure to quickly, those as to levels pick back think that have So sure does we right levels are position case we quickly levels customers, want back end to to support our a those make the that

as levels. those really pre-pandemic inventory so back And those characterize would I levels to

second weeks And typically question, part I inventory. of for was our distribution We out the break partners. that your then think, don't of on

Instructions] [Operator

line of Roy from Ruben next Stifel. Our comes with question the

a first question my is Jim, clarification.

in last Nexus? you're I on what kind just I around year, talked road Is analyst and around changed At you're the commentary the devices that about Or referring the think of new Nexus the development. event think, has devices. map Nexus new to? you something some accelerating

Yes.

out Something's conference. changed. as continued the We're than developers back for to believe about -- going we that continue segment. We've in Yes. faster added Nexus. this in just have accelerated great wider potential portfolio we segment. this we're the road to this map on We've even there's And what device look the at we at to to Think company long-term additional a bring the had grow growth potential options. for

device drive to our we wanted also I road road to detract in out so term. long aggressive, at map full bring that support more And any to devices. in the the very right? to map. the Nexus it doesn't new road parallel parallel ability even to in us that's from to found map stress speed, -- road over doesn't to want Avant of That aggressive the continuing of Avant customers options way And That's we very map the driving enhance introductions a but bond

seeing. general Or sort the edge engagements -- are way or seemed purpose? and if the is I are you just first the being more want on but not more follow-up you're processing want saying, other like general right, design Yes, sure applications, just that. -- have whereas the Avant-E the sure what on customers Would have that specific your terms about and make a to in it? sort as X with G of of and thought that right I not Avant, you activity say to processing I certain it was were I skewed then X right sure it but more towards design activity purpose. this this think out to the that's really just of And make to was that

has got They is, of instance, all G for purpose optimized for engagements data all applications. good we've a serve Avant. optimize yes, applications across broad, slightly edge different playing think really connectivity higher I more E the those general different speeds X family, was and more, flavors most purpose. of the

E they engagement all good because of generating fit in We're we So all primarily little revenue -- need. that a is that introduced. just different because one seeing those. terms of was further bit along across the first

introduced we so that And first. one

just generating over and its it's the So the ramp G of X in revenue and revenue time. terms ahead of

comes of Bank from with Zhang question line of America. Doug next the Our

a also when you been rate, remind you today? that to And has would in in half, us push out downturn get any that the should accelerate downturn say going you we obviously. are for guys, software we on rate It's the One the forward? attached. of impact big Could that progress attach you where if attach second expect on

portfolio the software stacks solution specific using multiple stacks a remember, use well. customers wide the really we've choosing attach is see we've The quick over stacks end software and common new as the answer to is solution our XX%. of We market. coming rolled time we to not got out but all. that the attach rate are pretty customers across half half for software customers. cases design just don't software -- And end no. That the the Lattice are the a software now are they're our solution win the solution when now downturn they're time to the rate user over use purpose-built of stacks with at one over affecting And silicon, means that

And to with our get is one, quickly, customers. quickly as well. customers to, the in design them innovate these solutions market to They've really to really been purpose help Lattice to but also number help of our popular

attach very to see rates. high continue We

certainly over long-term that benefits helps a We our customers is innovate, time. way in then our there expect but for down benefit attached that time with just the wins design But not attach to any period. customers well. ASPs solutions. attach creates over rate is the It those to as stickiness that grow software with us it say we over time and the see that I software And include affected by wouldn't

reallocating cetera. your They've as Altera. with Intel that been business, public And Awesome. with out et is a go to products, then big, into given follow-up, just resources obviously, coming trying new

you dynamics FPGA any are helpful. changes seeing on in Any Are the how space? would competitive So that customers your behavior? color be within seeing

I markets out well robust philosophy plan Yes. across since day use competition competition over That's assumed very of one our of product I X-plus our first and joined all, Lattice, always be think there always to the years. the said, that, competitively. we're products. would we've take every really I road That's assumed past positioned we maps and our the we seriously, say we've always that will

of if look good I call. few very, Nexus very a small is the portfolio, watt. at different we FPGA think about times I Nexus our performance talked very per course over this differentiated,

great got advantages, small great size. physical, power efficiency it's So features, great

X then the would I look new the I product versions think our product the G at when customers very and line, it's midrange and E, our the a same. say Avant, there strong And well. as

conference think I developers December. differentiated and in our that's at highly

products. December demonstrated in of the Avant. the of midrange competitive we demonstrations live competitive our And of I show those level to demonstrated think we differentiation in advantages

share small significant FPGAs. we in certainly in gained small we positioned. like over feel well grow opportunity see to years, we to we're And and share FPGA, past believe the continue we've So and very the gain

at And the And significantly then believe same we're in can Avant of beginning midrange, uses Avant that we ramp as Avant that all we remember Nexus. years. the that but grow revenue the coming over software

are today. when software, Avant, of Lattice look already for customers leverages same it of the same XX% solution customers stacks for at the and So target customers we the target the development Avant software

buying So customers an view product Avant are extension of another as product portfolio. these They just Lattice just are from the that Lattice's portfolio. existing

granted. the good environment. the the always We those We environment, years. to the that robust So feel and for be going we positioning about do but today it's about competitive for we good assume reasons, over we really feel have coming competitive take that never all a

Our of next question from with James. comes Srinivas Raymond Pajjuri line the

A questions. couple of

activity? back from press in of they position think put seeing help for very curious I you business, potential how this potentially the -- you're in could release the couple strong exit Obviously, I And given guess, out market, have on this the interest one also, just Xilinx, terms to or any think there. could maybe if the like First be of a low on I of end January, opportunity us larger impact exit end, next if And kind you you a their of any of more your -- over mean design your understand big years?

Yes. Thanks, Srini.

our view number as we the putting of answer particular yes, is the we're positive competitor -- It very Part parts. the very was of that that beneficial. foot EOL'ed So that, reason in we over primary and segment is opportunity see the continue share to competitive our against because to we time the gain opportunity more of see here, that gas competitors. on both

which so investing the incredibly more, And viewed more customers. And bringing our out basically is positive opposite, that's I us you doing think see by products.

FPGAs lifetime can these small supplier in rely investment horizon. that all company they Look, the generation lifetime segment their adding critical that's a over And of of And I small that's think its and FPGAs this long-term are they products product with I software, for on expanding assurance innovate those that of continues think for as them they systems. customers' of part Lattice offering in to of dedicated that's systems. a that's giving Lattice, all that's the on see the to reasons, see our for sustained new new long-term every choice on innovation the

we well gain share the continued growth, why believe drive And that's segment. we're positioned in to expansion and

excitement also well. into customer believe We our that innovation same over that, our spills investment, midrange about as

with same software innovated of midrange and have to both That's offer has a their hardware to got FPGAs. those mainly of they use our and and usage them FPGAs, midrange strategy look in meet customers, supplier customers, Lattice, that's portfolio small that's and you investment now at If primary of long-term dedicated most FPGA needs. continuously and those the small a customers

choice I think mid-range as And both small the so supplier of see they FPGAs. us in and

revenue would X Got think was that X I questions to ramp. next previously, how helpful. to expectation Avant-E very XX%, your contribute it. in about revenue the to And of speaking, roughly years. of already. seems about on about then should Avant That's be I obviously, your Avant, contributing lot we XX% And the a think get

So think maybe rough I year we very some would how that should helpful. about numbers, it's on be think and next this contribution even or year, if point

thanks. Yes,

Investor We continue at on in revenue Avant to be Day. provided of terms target the we long the provided focused last over the term that that we

of contribution year think and on target We've you're I given still second of the We're referencing. about that qualitatively towards half some how that's just very target. driving we that this to focused year. markers more for to Avant terms year and that grow more expect contribute in of a contributing in years. and this the Avant in course, this year. of It's And then, the following next think

see end we on year we where some year, specifics get provide to this time. next as into and over closer we maybe more the think I Avant could of

Susquehanna. Our question Rolland line next with from comes of the Christopher

a follow-up quick for Just Sherri.

rate and stepping moving and that's if up. the NOLs, some wrong believe of I'm rate I tax tax on has where Sherri, are me but forward? been NOLs extinguishment correct we So

Yes. Thanks, your question. Chris, for

allowance. So valuation actually is when from released QX perspective, our a tax we

And earnings for about to And rate effective effective high how about talked XXXX, that tax the think perspective. to quarter's call, think about rate an last our our the effective how in so about X.X%. mid- that's single tax was to tax And in digits. we for is which from rate QX,

probably so million you detail on bit gives more color -- but released comes [indiscernible] in our $XX -- you on the in all when the out, when Q books, extent can have that been VA about that of read the We our you So QX. to that's some tax but still little has a rate. VA

As time Stifel. one Ruben Roy line from the have question, we for last comes with

that. have year-over-year, on for up great but can gross just follow-up I margins think also down have on bit pricing Roy. guys would and Sherri, and job forgot held maybe second you quite of wondering Nexus new gross been to margin doing gross revenue bit back as comment But some Avant Ruben It's bit ask. a you margin, cetera. have if be Sherri, quick the I products the little mix a get recovery comments and a which Obviously, I from on little a revenue et helpful. any optimization, guess, towards half about you shift how a and to a

Sure. Ruben. Thanks,

we're XX% of So line QX with pleased the that in the really was gross margin our with -- guidance. in our midpoint what

fact about QX, it we when So the came that out expected. guide was that we as sequential for a mix driver really decline. our put on in And talked

been QX, range mix though plus the But -- still being the XX% ahead lower guide be in midpoint revenue one, to strategy, or the our a in improved at sixth with focusing is X,XXX said midpoint for margin But Now gross our margin, that, we even XX% is QX, now basis And year. gross certainly, can factor as of it we're date, we've minus we've the gross again, margin our expansion I on to having a about range. points. at by mean, there. look

be continues focus to it So area of us. an for

margin of certainly low that long-term us. a fluctuations model can our put on occur area It But focus we quarterly to You for Investor gross at to continues see be in Day expect in the a XXXX XXs. can our basis. out as

Anderson There you. time. at for to Thank over like Jim to closing no pass are questions further this I'd floor comments. the

call. and joining operator, for again, us thanks you, everybody, today's on Thank Yes.

excited biggest of that to Operator, today's and that concludes remain call. we about of focused on the expansion executing more and we details portfolio sharing our some Lattice. We're is As headwinds, of absolutely that on the about near-term next these navigate our looking some forward customers product what in call. history very

you. Thank

You for may disconnect your participation. you lines at your this Thank time.