Semiconductor designer Lattice Semiconductor (NASDAQ:LSCC) announced better-than-expected revenue in Q3 2026, with revenue up 118% year on year to $291 million. In addition, next quarter’s revenue guidance ($335 million at the midpoint) was a surprising 14.3% above analysts’ consensus estimates. Its non-GAAP profit of $0.72 per share was 30% above analysts’ consensus estimates.
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Lattice Semiconductor (LSCC) Q3 2026 highlights:
- Revenue $291 million vs S&P analysts’ consensus estimates of $256 million (118% year-on-year growth, 13.7% beat)
- Adjusted EPS $0.72 vs S&P analysts’ consensus estimates of $0.55 (30% beat)
- Adjusted EBITDA $131 million vs analysts’ consensus estimates of $108.1 million (45% margin, 21.3% beat)
- Revenue guidance $335 million at the midpoint for Q4 2026, above analysts’ consensus estimates of $293.1 million
- Adjusted EPS guidance $0.84 at the midpoint for Q4 2026, above analysts’ consensus estimates of $0.65
- Operating margin 8.2%, up from -1.2% in the same quarter last year
- Free cash flow margin 26.7%, up from 25.5% in the same quarter last year
- Inventory days outstanding 116, down from 153 in the previous quarter
- Market capitalization $13.2 billion
Ford Tamer, Chief Executive Officer, said, "We delivered record third quarter revenue of $291 million and non-GAAP EPS of $0.72, up 118% and approximately 160% year-over-year, respectively. FPGA revenue grew approximately 90%, fueled by accelerating data center AI demand and continued momentum across Industrial & Embedded applications. Strong bookings, backlog and design wins support our fourth-quarter revenue outlook of approximately $335 million and reinforce our confidence in growth into 2027 and beyond. The addition of AMI meaningfully expands our opportunity in security, control and management solutions. Early commercial momentum across security retrofit, rack boot, plug and play, and power and cooling demonstrates the value of our combined portfolio, positioning Lattice to capture greater content per platform, deepen strategic customer relationships and drive sustainable long-term growth."
Revenue growth
A company’s long-term revenue performance is one signal of its overall quality. Even a weak business can perform well for one or two quarters, but a top-tier one grows for years. Over the last five years, Lattice Semiconductor grew its revenue at a solid 11% compounded annual growth rate. Its growth outpaced that of the average semiconductor company and shows its offerings resonate with customers. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore’s Law) could make yesterday’s hit product obsolete today. Lattice Semiconductor’s annualized revenue growth of 19.9% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
This quarter, Lattice Semiconductor reported year-on-year revenue growth of 118%, and its $291 million of revenue beat Wall Street’s consensus estimates by 13.7%. Beyond the beat, this marks 5 straight quarters of growth, implying that Lattice Semiconductor is in the middle of its cycle. A typical upcycle generally lasts 8-10 quarters. Company management is currently guiding for a 130% year-on-year increase in revenue next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 57.6% over the next 12 months, according to S&P, an improvement versus the last two years. This strong projection implies its newer products and services will drive better revenue performance.
Product demand & outstanding inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’s capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Lattice Semiconductor’s DIO came in at 116, which is 64 days below its five-year average. At the moment, these numbers show no indication of an excessive inventory buildup.
Key takeaways from Lattice Semiconductor’s Q3 results
A strong improvement in inventory levels and EPS above Wall Street’s consensus estimates made Lattice Semiconductor’s Q3 a solid quarter. Shares remained flat at $98.58 immediately after the release.
Lattice Semiconductor had a solid quarter, but the broader investment case also matters. The latest quarter matters, but not nearly as much as longer-term fundamentals and valuation when deciding whether to buy the stock. Read our full research report here (it’s free).