LATTICE SEMICONDUCTOR CORP (LSCC)
SIC breadcrumb: Manufacturing > Electronic And Other Electrical Equipment And Components, Except Computer Equipment > SIC 3674 Semiconductors & Related Devices
SEC company page: https://www.sec.gov/edgar/browse/?CIK=855658. Latest filing source: 0001437749-26-004100.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 523,262,000 | USD | 2026 | 2026-02-13 |
| Net income | 3,084,000 | USD | 2026 | 2026-02-13 |
| Assets | 883,120,000 | USD | 2026 | 2026-02-13 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000855658.json. Derived margins are computed from the extracted annual SEC facts.
| Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2021 | 2022 | 2023 | 2024 | 2026 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 427,054,000 | 385,961,000 | 398,799,000 | 404,093,000 | 408,120,000 | 660,356,000 | 737,154,000 | 509,401,000 | 523,262,000 | |
| Net income | 48,580,000 | -54,099,000 | -70,562,000 | -26,322,000 | 43,493,000 | 47,392,000 | 178,882,000 | 259,061,000 | 61,131,000 | 3,084,000 |
| Operating income | 41,616,000 | -26,699,000 | -47,620,000 | -3,120,000 | 59,041,000 | 52,366,000 | 187,367,000 | 212,270,000 | 34,457,000 | 11,232,000 |
| Gross profit | 216,579,000 | 219,439,000 | 238,422,000 | 245,306,000 | 452,050,000 | 514,670,000 | 340,400,000 | 356,943,000 | ||
| Diluted EPS | 0.40 | -0.45 | -0.58 | -0.21 | 0.32 | 0.34 | 1.27 | 1.85 | 0.44 | 0.02 |
| Assets | 510,530,000 | 766,883,000 | 635,961,000 | 623,687,000 | 612,016,000 | 680,067,000 | 798,713,000 | 840,894,000 | 843,903,000 | 883,120,000 |
| Liabilities | 69,555,000 | 496,453,000 | 418,268,000 | 365,230,000 | 284,357,000 | 295,640,000 | 311,550,000 | 148,874,000 | 132,971,000 | 169,066,000 |
| Stockholders' equity | 440,975,000 | 270,430,000 | 245,094,000 | 258,457,000 | 327,659,000 | 384,427,000 | 487,163,000 | 692,020,000 | 710,932,000 | 714,054,000 |
| Cash and cash equivalents | 115,611,000 | 106,552,000 | 106,815,000 | 119,051,000 | 118,081,000 | 182,332,000 | 145,722,000 | 128,317,000 | 136,291,000 | 133,886,000 |
| Net margin | -12.67% | -18.28% | -6.60% | 10.76% | 11.61% | 27.09% | 35.14% | 12.00% | 0.59% | |
| Operating margin | -6.25% | -12.34% | -0.78% | 14.61% | 12.83% | 28.37% | 28.80% | 6.76% | 2.15% |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-04. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000855658.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-07-02 | 0.32 | reported discrete quarter | ||
| 2022-Q3 | 2022-07-02 | 0.33 | reported discrete quarter | ||
| 2023-Q1 | 2023-04-01 | 0.40 | reported discrete quarter | ||
| 2023-Q2 | 2023-07-01 | 190,079,000 | 50,644,000 | 0.36 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 192,169,000 | 53,788,000 | 0.38 | reported discrete quarter |
| 2023-Q4 | 2023-12-30 | 170,596,000 | 98,706,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-30 | 140,815,000 | 14,796,000 | 0.11 | reported discrete quarter |
| 2024-Q2 | 2024-06-29 | 124,076,000 | 22,631,000 | 0.16 | reported discrete quarter |
| 2024-Q3 | 2024-09-28 | 127,091,000 | 7,190,000 | 0.05 | reported discrete quarter |
| 2024-Q4 | 2024-12-28 | 117,419,000 | 16,514,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-29 | 120,150,000 | 5,022,000 | 0.04 | reported discrete quarter |
| 2025-Q2 | 2025-06-28 | 123,971,000 | 2,913,000 | 0.02 | reported discrete quarter |
| 2025-Q3 | 2025-09-27 | 133,349,000 | 2,794,000 | 0.02 | reported discrete quarter |
| 2025-Q4 | 2026-01-03 | 145,792,000 | -7,645,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-04-04 | 170,897,000 | 21,817,000 | 0.16 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001437749-26-014686.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read along with the unaudited consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 10-K.
Overview
Lattice develops technologies that we monetize through differentiated programmable logic semiconductor products, silicon-enabling products, system solutions, design services, and technology licenses. Lattice is the low power programmable leader. We solve customer problems across the network, from the Edge to the Cloud, in the Communications, Computing, Industrial, Automotive, and Embedded markets. Our technology, long-standing relationships, and commitment to world-class support helps our customers quickly and easily unleash their innovation to create a smart, secure, and connected world.
Lattice has focused its strategy on delivering programmable logic products and related solutions based on low power, small size, and ease of use. We also serve our customers with intellectual property ("IP") licensing and various other services. Our product development activities include new proprietary products, advanced packaging, existing product enhancements, software development tools, soft IP, and system solutions for high-growth applications such as Edge Artificial Intelligence, wireless and wireline infrastructure, platform security, and factory automation.
Critical Accounting Policies and Use of Estimates
Critical accounting policies are those that are both most important to the portrayal of a company's financial condition and results of operations, and that require management's most difficult, subjective, and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. There have been no material changes to the items that we disclosed as our critical accounting policies and estimates in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2025 10-K.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments affecting the amounts reported in our consolidated condensed financial statements and the accompanying notes. We base our estimates and judgments on historical experience, knowledge of current conditions, and our beliefs of what could occur in the future considering available information. While we believe that our estimates, assumptions, and judgments are reasonable, they are based on information available when made, and because of the uncertainty inherent in these matters, actual results may differ materially from these estimates under different assumptions or conditions. We evaluate our estimates and judgments on an ongoing basis.
Results of Operations
Key elements of our Consolidated Statements of Operations, including as a percentage of revenue, are presented in the following table:
Three Months Ended
April 4,
March 29,
(In thousands)
2026
2025
Revenue
$
170,897
100.0
%
$
120,150
100.0
%
Gross margin
117,632
68.8
81,728
68.0
Research and development
50,836
29.7
41,387
34.4
Selling, general and, administrative
40,105
23.5
33,126
27.6
Amortization of acquired intangible assets
20
0.0
—
—
Restructuring and other
603
0.4
241
0.2
Income from operations
$
26,068
15.3
%
$
6,974
5.8
%
- 17 -
Table of Contents
Revenue by End Market
During the first quarter of 2026, we aligned our end market structure to our larger strategic market focus areas. We sell our products globally to a broad base of customers in two primary end market groups: Compute and Communications, and Industrial and Embedded. Across our end markets, our products are increasingly used for AI-related applications, including device usage in AI-optimized servers in data centers, AI-enabled PCs, and AI-enabled robotics and ADAS systems, among others. We also provide IP licensing and services to these end markets.
Within these end markets, there are multiple drivers, including:
•
Compute and Communications: data center servers and networking equipment, client computing platforms, and wireless and wireline communications infrastructure deployments,
•
Industrial and Embedded: factory automation, robotics, automotive electronics, and industrial Internet of Things ("IoT"), smart home, prosumer, and other applications.
The end market data we use is derived from data provided to us by our distributors and end customers. With a diverse base of customers who may manufacture end products spanning multiple end markets, the assignment of revenue to a specific end market requires the use of judgment. We also recognize certain revenue for which end customers and end markets are not yet known. We assign this revenue first to a specific end market using historical and anticipated usage of the specific products, if possible, and allocate the remainder to the end markets based on either historical usage for each product family or industry application data for certain product types.
The following are examples of end market applications for the periods presented:
Compute and Communications
Industrial and Embedded
Data Networking
Security and Surveillance
Server Computing
Machine Vision
Client Computing
Industrial Automation
Data Storage
Robotics
Cloud
Automotive
Hyperscalers
Drones
Wireless
Factory Automation
Wireline
Cameras
Displays / Televisions
Home Theater / Sound Systems
Wearables
The composition of our revenue by end market is presented in the following table:
Three Months Ended
April 4,
March 29,
(In thousands)
2026
2025
Compute and Communications
$
106,632
62.4
%
$
57,434
47.8
%
Industrial and Embedded
64,265
37.6
62,716
52.2
Total revenue
$
170,897
100.0
%
$
120,150
100.0
%
Note: During the first quarter of 2026, we began disaggregating our revenue by Compute and Communications, and Industrial and Embedded. Prior periods have been reclassified to match current period presentation.
Revenue from the Compute and Communications end market increased by 86% for the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025 primarily due to stronger demand in data center applications, including general-purpose and AI-specific servers, as well as wireline networking components.
Revenue from the Industrial and Embedded end market increased by 2% for the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025 primarily due to recovering end market demand particularly from industrial and aerospace customers.
AI applications are pervasive across our end markets, so we do not consider AI applications as a distinct end market. We expect AI-related revenue to grow over the next few years based on the growing pipeline of AI-related design wins in a diverse set of applications across both of our end market groups.
- 18 -
Table of Contents
Revenue by Geography
We have a diverse base of customers where distributors represent a significant portion of our total revenue. Our revenue by geographical market is based on the ship-to location of our customers, which can vary from time to time. For the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025, revenue from Asia increased by 71% primarily due to hyperscaler demand, while revenue from the Americas decreased by 37% primarily due to the non-recurrence of certain one-time sales in the prior year period, and revenue from Europe increased by 57% primarily due to broad market recovery in this region.
The composition of our revenue by geography is presented in the following table:
Three Months Ended
April 4,
March 29,
(In thousands)
2026
2025
Asia
$
132,577
77.6
%
$
77,741
64.7
%
Americas
18,792
11.0
29,997
25.0
Europe
19,528
11.4
12,412
10.3
Total revenue
$
170,897
100.0
%
$
120,150
100.0
%
Revenue from Customers
We sell our products to independent distributors and directly to customers. Distributors have historically accounted for a significant portion of our total revenue. Revenue attributable to distributors as a percentage of total revenue was 94% and 79% for the first quarter of fiscal 2026 and 2025, respectively.
Gross Margin
The composition of our Gross margin, including as a percentage of revenue, is presented in the following table:
Three Months Ended
April 4,
March 29,
(In thousands)
2026
2025
Gross margin
$
117,632
$
81,728
Gross margin percentage
68.8
%
68.0
%
Gross margin, as a percentage of revenue, increased 80 basis points in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. Higher margins resulted primarily from changes in product mix and volume between the periods, partially offset by higher stock-based compensation expense associated with market and performance-based awards in the current year.
Operating Expenses
Operating expenses increased year-over-year primarily due to higher stock-based compensation expense in the current year periods. See "Note 9 – Stock-Based Compensation" for additional details.
Research and Development Expense
The composition of our Research and development expense, including as a percentage of revenue, is presented in the following table:
Three Months Ended
April 4,
March 29,
(In thousands)
2026
2025
% change
Research and development
$
50,836
$
41,387
22.8
%
Percentage of revenue
29.7
%
34.4
%
Research and development expense includes headcount-related costs, including cash- and stock-based compensation and benefits, R&D equipment expenses, engineering wafers, licenses, and outside engineering services. These expenditures are for the design of new products, IP cores, processes, packaging, and software solutions. The increase in Research and development expense for the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025 was primarily due to higher stock-based and cash-based compensation expense, along with higher depreciation and amortization on semiconductor equipment and licensed software tools, and higher expenses for prototypes. We believe that investing in research and development is important to delivering innovative products to our customers. We expect research and development expense to increase in the future, but to decline as a percentage of revenue.
- 19 -
Table of Contents
Selling, General, and Administrative Expense
The composition of our Selling, general, and administrative expense, including as a percentage of revenue, is presented in the following table:
Three Months Ended
April 4,
March 29,
(In thousands)
2026
2025
% change
Selling, general, and administrative
$
40,105
$
33,126
21.1
%
Percentage of revenue
23.5
%
27.6
%
Selling, general, and administrative expense includes headcount-related costs, including cash- and stock-based compensation and benefits, related to selling, general, and administrative employees, commissions, depreciation, professional and outside services, trade show, and travel expenses. The increase in Selling, general, and administrative expense for the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025 was primarily due to higher stock-based and cash-based compensation expense, partially offset by lower legal costs and audit fees. We expect selling, general, and administrative expense to increase in the future, but to decline as a percentage of revenue.
Amortization of Acquired Intangible Assets
The composition of our Amortization of acquired intangible assets, including as a percentage of revenue, is presented in the following table:
Three Months Ended
April 4,
March 29,
(In thousands)
2026
2025
% change
Amortization of acquired in
[Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview Lattice develops technologies that we monetize through differentiated programmable logic semiconductor products, silicon-enabling products, system solutions, design services, and technology licenses. Lattice is the low power programmable leader. We solve customer problems across the network, from the Edge to the Cloud, in the Communications, Computing, Industrial, Automotive, and Consumer markets. Our technology, long-standing relationships, and commitment to world-class support lets our customers quickly and easily unleash their innovation to create a smart, secure, and connected world. Lattice has focused its strategy on delivering programmable logic products and related solutions based on low power, small size, and ease of use. We also serve our customers with IP licensing and various other services. Our product development activities include new proprietary products, advanced packaging, existing product enhancements, software development tools, soft IP, and system solutions for high-growth applications such as Edge AI, wireless and wireline infrastructure, platform security, and factory automation. This discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements and accompanying notes included in Part II, Item 8. "Financial Statements and Supplementary Data" of this report. Discussions of results for prior periods (fiscal 2024 compared to fiscal 2023) are incorporated by reference from our Annual Report on Form 10-K for the year ended December 28, 2024. Critical Accounting Policies and Use of Estimates Critical accounting policies are those that are both most important to the portrayal of a company's financial condition and results of operations, and that require management's most difficult, subjective, and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments affecting the amounts reported in our consolidated financial statements and the accompanying notes. We base our estimates and judgments on historical experience, knowledge of current conditions, and our beliefs of what could occur in the future considering available information. While we believe that our estimates, assumptions, and judgments are reasonable, they are based on information available when made, and because of the uncertainty inherent in these matters, actual results may differ materially from these estimates under different assumptions or conditions. We evaluate our estimates and judgments on an ongoing basis. We believe the following accounting policies and the related estimates are critical in the portrayal of our financial condition and results of operations, and require management's most difficult, subjective, or complex judgments. See Note 1 - Basis of Presentation and Significant Accounting Policies to our Consolidated Financial Statements in Part II, Item 8 of this report for further information on the significant accounting policies and methods used in the preparation of the consolidated financial statements. Revenue from Contracts with Customers We recognize revenue upon satisfaction of performance obligations when control of promised goods or services has been transferred to our customers. We measure revenue based on the amount of consideration we expect to be entitled to in exchange for products or services. For revenue recognized on both sales to distributors and related to royalties, the amount of consideration we expect to be entitled to receive is based on estimates that require assumptions and judgments relating to trends in recent and historical activity. See Note 1 - Basis of Presentation and Significant Accounting Policies to our Consolidated Financial Statements in Part II, Item 8 of this report for further information on our recognition of revenue. Sales to most distributors are made under terms allowing certain price adjustments upon sale to their end customers and limited rights of return of our products held in their inventory. The revenue recognized based on estimated price adjustments and stock rotation reserves may be materially different from the actual consideration received if the actual distributor price adjustments and stock rotation returns differ significantly from the historical trends used in the estimates. 31 Table of Contents Inventories and Cost of Revenue Inventories are stated at the lower of actual cost (determined using the first-in, first-out method) or net realizable value. We review and set standard costs quarterly to approximate current actual manufacturing costs. Our manufacturing overhead standards for product costs are calculated assuming full absorption of actual costs. The valuation of inventory requires us to estimate excess or obsolete inventory. Material assumptions we use to estimate necessary inventory carrying value adjustments can be unique to each product and are based on specific facts and circumstances. In determining provisions for excess or obsolete products, we consider assumptions such as changes in business and economic conditions, projected customer demand for our products, and changes in technology or customer requirements. The creation of such provisions results in a write-down of inventory to net realizable value and a charge to Cost of revenue. If in any period we anticipate a change in assumptions such as future market or economic conditions to be less favorable than our previous estimates, additional inventory write-downs may be required and would be reflected in Cost of revenue, resulting in a negative impact to our gross margin in that period. If in any period we are able to sell inventories that had been written down to a level below the ultimate realized selling price in a previous period, related revenue would be recorded with a lower or no offsetting charge to Cost of revenue resulting in a net benefit to our gross margin in that period. Accounting for Income Taxes We are required to estimate our provision for income taxes and amounts ultimately payable or recoverable in numerous tax jurisdictions around the world. These estimates involve significant judgment and interpretations of regulations and are inherently complex. Resolution of income tax treatments in individual jurisdictions may not be known for many years after completion of the applicable year. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements using enacted tax rates and laws that will be in effect when the difference is expected to reverse. Valuation allowances are provided to reduce deferred tax assets to an amount that in management’s judgment is more-likely-than-not to be recoverable against future taxable income. The determination of a valuation allowance and when it should be released requires complex judgment. In assessing the ability to realize deferred tax assets, we regularly evaluate both positive and negative evidence that may exist and consider whether it is more-likely-than-not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In determining the need to establish or maintain a valuation allowance, we consider the four sources of jurisdictional taxable income: (i) future reversals of existing taxable temporary differences; (ii) future taxable income exclusive of reversing temporary differences and carryforwards; (iii) taxable income in prior carryback year(s) if carryback is permitted under the tax law; and (iv) viable and prudent tax planning strategies. We continue to maintain a full valuation allowance against our state deferred tax assets due to insufficient income sources. We will continue to evaluate both positive and negative evidence in future periods to determine if we will realize the deferred tax assets. The amount of the deferred tax asset considered realizable could be adjusted if sufficient positive evidence exists. We do not maintain a valuation allowance on a significant portion of our U.S. Federal deferred tax assets or in any foreign jurisdictions as we have concluded that it is more likely than not that we will realize those net deferred tax assets in the future periods. As part of our regular financial review process, we also assess the likelihood that our tax reporting positions will ultimately be sustained on examination by the taxing authorities, based on the technical merits of the position. To the extent it is determined it is more likely than not (a likelihood of more than 50 percent) that some portion or all of a tax reporting position will ultimately not be recognized and sustained, a provision for unrecognized tax benefit is provided by either reducing the applicable deferred tax asset or accruing an income tax liability. Our judgment regarding the sustainability of our tax reporting positions may change in the future due to changes in U.S. or international tax laws and other factors. These changes, if any, may require material adjustments to the related deferred tax assets or accrued income tax liabilities and an accompanying reduction or increase in income tax expense which may result in a corresponding increase or decrease in net income in the period when such determinations are made. The expiration of statutes of limitations may decrease our uncertain tax positions. We recognize the tax impact of including certain foreign earnings in U.S. taxable income as a period cost. We recognize deferred income taxes for local country income and withholding taxes that could be incurred on distributions of certain non-U.S. earnings or for outside basis differences in our subsidiaries, where we do not plan to indefinitely reinvest such earnings and basis differences. 32 Table of Contents Results of Operations Key elements of our Consolidated Statements of Operations, including as a percentage of revenue, are presented in the following table: Year Ended January 3, December 28, December 30, (In thousands) 2026 2024 2023 Revenue $ 523,262 100.0 % $ 509,401 100.0 % $ 737,154 100.0 % Gross margin 356,943 68.2 340,400 66.8 514,670 69.8 Research and development 187,983 35.9 159,302 31.3 159,770 21.7 Selling, general and, administrative 153,632 29.4 116,942 23.0 137,244 18.6 Amortization of acquired intangible assets 52 0.0 3,479 0.7 3,478 0.5 Restructuring and other 4,044 0.8 12,291 2.4 1,908 0.3 Impairment of acquired intangible assets — — 13,929 2.7 — — Income from operations $ 11,232 2.1 % $ 34,457 6.8 % $ 212,270 28.8 % Revenue Year Ended January 3, December 28, December 30, % Change in (In thousands) 2026 2024 2023 2025 2024 Revenue $ 523,262 $ 509,401 $ 737,154 2.7 % (30.9 )% Revenue increased $13.9 million, or 3%, in fiscal 2025 compared to fiscal 2024, primarily due to stronger demand in data center applications, including general-purpose and AI-specific servers, as well as wireline networking components, partially offset by softer Industrial and Automotive end market demand and from continued inventory normalization by customers. Revenue by End Market We sell our products globally to a broad base of customers in three primary end market groups: Communications and Computing, Industrial and Automotive, and Consumer. Across our end markets, our products are increasingly used in AI-related applications, including device usage in AI-optimized servers in data centers, AI-enabled PCs, and AI-enabled robotics and ADAS systems, among others. We also provide IP licensing and services to these end markets. Within these end markets, there are multiple drivers, including: • Communications and Computing: data center servers and networking equipment, client computing platforms, and wireless and wireline communications infrastructure deployments. • Industrial and Automotive: factory automation, robotics, automotive electronics, and industrial IoT. • Consumer: smart home, prosumer, and other applications. The end market data we use is derived from data provided to us by our distributors and end customers. With a diverse base of customers who may manufacture end products spanning multiple end markets, the assignment of revenue to a specific end market requires the use of judgment. We also recognize certain revenue for which end customers and end markets are not yet known. We assign this revenue first to a specific end market using historical and anticipated usage of the specific products, if possible, and allocate the remainder to the end markets based on either historical usage for each product family or industry application data for certain product types. The following are examples of end market applications for the fiscal years presented: Communications and Computing Industrial and Automotive Consumer Wireless Security and Surveillance Cameras Wireline Machine Vision Displays Data Networking Industrial Automation Wearables Server Computing Robotics Televisions Client Computing Automotive Home Theater Data Storage Drones Sound Systems Cloud Factory Automation Hyperscalers 33 Table of Contents The composition of our revenue by end market is presented in the following table: Year Ended January 3, December 28, December 30, % Change in (In thousands) 2026 2024 2023 2025 2024 Communications and Computing $ 292,716 55.9 % $ 228,145 44.8 % $ 257,536 34.9 % 28.3 % (11.4 )% Industrial and Automotive 193,965 37.1 236,949 46.5 433,482 58.8 (18.1 ) (45.3 ) Consumer 36,581 7.0 44,307 8.7 46,136 6.3 (17.4 ) (4.0 ) Total revenue $ 523,262 100.0 % $ 509,401 100.0 % $ 737,154 100.0 % 2.7 % (30.9 )% Revenue from the Communications and Computing end market increased by 28% in fiscal 2025 compared to fiscal 2024 primarily due to stronger demand in data center applications, including general-purpose and AI-specific servers, as well as wireline networking components. Revenue from the Industrial and Automotive end market decreased by 18% in fiscal 2025 compared to fiscal 2024, primarily due to softer end market demand and from continued inventory normalization by customers. While we do not consider AI applications as a distinct end market, we expect AI-related revenue to grow over the next few years based on the growing pipeline of AI-related design wins in a diverse set of applications across all three of our end market segments. Revenue by Geography We have a diverse base of customers where distributors represent a significant portion of our total revenue. Our revenue by geographical market is based on the ship-to location of our customers, which can vary from time to time. Revenue in all regions for fiscal 2025 compared to fiscal 2024 has been impacted by the global macroeconomic environment. The composition of our revenue by geography is presented in the following table: Year Ended January 3, December 28, December 30, % Change in (In thousands) 2026 2024 2023 2025 2024 Asia $ 353,699 67.6 % $ 332,747 65.3 % $ 443,765 60.2 % 6.3 % (25.0 )% Americas 102,758 19.6 101,217 19.9 145,839 19.8 1.5 (30.6 ) Europe 66,805 12.8 75,437 14.8 147,550 20.0 (11.4 ) (48.9 ) Total revenue $ 523,262 100.0 % $ 509,401 100.0 % $ 737,154 100.0 % 2.7 % (30.9 )% Revenue from Customers We sell our products to independent distributors and directly to customers. Distributors have historically accounted for a significant portion of our total revenue, and the distributors noted below individually accounted for more than 10% of our total revenue in certain periods covered by this report. The composition of our revenue by customer is presented in the following table: % of Total Revenue Year Ended January 3, December 28, December 30, 2026 2024 2023 Distributor A 30.9 % 33.3 % 31.6 % Distributor B 37.9 31.2 20.5 Distributor C 3.8 11.2 10.8 Distributor D — 3.5 12.6 Other distributors 11.2 10.2 11.9 All distributors 83.8 89.4 87.4 Direct customers 16.2 10.6 12.6 Total revenue 100.0 % 100.0 % 100.0 % 34 Table of Contents Gross margin The composition of our gross margin, including as a percentage of revenue, is presented in the following table: Year Ended January 3, December 28, December 30, (In thousands) 2026 2024 2023 Gross margin $ 356,943 $ 340,400 $ 514,670 Gross margin percentage 68.2 % 66.8 % 69.8 % Gross margin percentage increased 140 basis points from fiscal 2024 to fiscal 2025. Higher margins resulted primarily from the non-recurrence of an approximately $7.0 million one-time charge for expiring production materials in the prior year. Gross margin also benefitted from changes in product mix between the periods, partially offset by higher stock-based compensation associated with market and performance-based awards in the current year. Operating Expenses Operating expenses increased year-over-year primarily due to higher stock-based compensation in the current year periods; excluding stock-based compensation, operating expenses decreased year-over-year. See Note 10 – Stock-Based Compensation Plans for additional details. Research and Development Expense The composition of our Research and development expense, including as a percentage of revenue, is presented in the following table: Year Ended January 3, December 28, December 30, % Change in (In thousands) 2026 2024 2023 2025 2024 Research and development $ 187,983 $ 159,302 $ 159,770 18.0 % (0.3 )% Percentage of revenue 35.9 % 31.3 % 21.7 % Research and development expense includes headcount-related costs, including cash- and stock-based compensation and benefits, R&D equipment expenses, engineering wafers, licenses, and outside engineering services. These expenditures are for the design of new products, IP cores, processes, packaging, and software solutions. The increase in Research and development expense for fiscal 2025 compared to fiscal 2024 was primarily due to higher stock-based compensation associated with market-based and performance-based awards in the current year periods coupled with the prior year reduction in stock compensation expense from the forfeiture of equity awards by departing executives. We believe that investing in research and development is important to delivering innovative products to our customers. We expect research and development expense to increase in the future, but to decline as a percentage of revenue. Selling, General, and Administrative Expense The composition of our Selling, general, and administrative expense, including as a percentage of revenue, is presented in the following table: Year Ended January 3, December 28, December 30, % Change in (In thousands) 2026 2024 2023 2025 2024 Selling, general, and administrative $ 153,632 $ 116,942 $ 137,244 31.4 % (14.8 )% Percentage of revenue 29.4 % 23.0 % 18.6 % Selling, general, and administrative expense includes headcount-related costs, including cash- and stock-based compensation and benefits, related to selling, general, and administrative employees, commissions, depreciation, professional and outside services, trade show, and travel expenses. The increase in Selling, general, and administrative expense for fiscal 2025 compared to fiscal 2024 was primarily due to higher stock-based compensation associated with market-based and performance-based awards in the current year periods coupled with the prior year reduction in stock compensation expense from the forfeiture of equity awards by departing executives. 35 Table of Contents Amortization of Acquired Intangible Assets The composition of our Amortization of acquired intangible assets, including as a percentage of revenue, is presented in the following table: Year Ended January 3, December 28, December 30, % Change in (In thousands) 2026 2024 2023 2025 2024 Amortization of acquired intangible assets $ 52 $ 3,479 $ 3,478 (98.5 )% 0.0 % Percentage of revenue 0.0 % 0.7 % 0.5 % The decrease in Amortization of acquired intangible assets for fiscal 2025 compared to fiscal 2024 was primarily due to the full impairment of the Mirametrix intangible assets in the fourth quarter of fiscal 2024. Restructuring and other The composition of our Restructuring activity, including as a percentage of revenue, is presented in the following table: Year Ended January 3, December 28, December 30, % Change in (In thousands) 2026 2024 2023 2025 2024 Restructuring and other $ 4,044 $ 12,291 $ 1,908 (67.1 )% 100+% Percentage of revenue 0.8 % 2.4 % 0.3 % Restructuring and other activity is generally comprised of expenses resulting from workforce reductions, cancellation of contracts, and consolidation of our facilities. Details of our restructuring plans and expenses incurred under them are discussed in Note 8 - Restructuring to our Consolidated Financial Statements in Part II, Item 8 of this report. Restructuring costs decreased in fiscal 2025 compared to fiscal 2024 primarily due to lower costs in the current year for severance under the Q3 2024 Plan as compared to higher costs in the prior year for severance under both the Q3 2024 and Q3 2023 Plans. Interest Income (Expense), net The composition of our Interest income (expense), net, including as a percentage of revenue, is presented in the following table: Year Ended January 3, December 28, December 30, % Change in (In thousands) 2026 2024 2023 2025 2024 Interest income (expense), net $ 2,896 $ 3,948 $ 2,041 (26.6 )% 93.4 % Percentage of revenue 0.6 % 0.8 % 0.3 % Interest income (expense) for fiscal 2025 compared to fiscal 2024 decreased primarily due to lower interest rates on cash and cash equivalents between the periods. 36 Table of Contents Other Income (Expense), net The composition of our Other income (expense), net, including as a percentage of revenue, is presented in the following table: Year Ended January 3, December 28, December 30, % Change in (In thousands) 2026 2024 2023 2025 2024 Other income (expense), net $ (751 ) $ (2,176 ) $ 545 (65.5 )% 100+% Percentage of revenue (0.1 )% (0.4 )% 0.1 % For fiscal 2025 compared to fiscal 2024, the change in Other income (expense), net was primarily due to a $2.0 million write-off of a non-recoverable cost-method investment in the prior year period, and to foreign currency effects. Income Taxes The composition of our Income tax (benefit) expense is presented in the following table: Year Ended January 3, December 28, December 30, % Change in (In thousands) 2026 2024 2023 2025 2024 Income tax expense (benefit) $ 10,293 $ (24,902 ) $ (44,205 ) (141.3 )% (43.7 )% Our income tax expense (benefit) for fiscal 2025 was driven primarily by nondeductible expenses related to stock‑based compensation, partially offset by federal tax credits. The income tax benefit in fiscal 2024 includes $27.7 million of income tax benefits due to the expiration of statutes of limitations that reduced our uncertain tax positions, combined with federal tax credits and the impact of stock‑based compensation. We updated our evaluation of the valuation allowance position in the United States through January 3, 2026. In making this evaluation, we considered our operating environment and estimates about our ability to generate taxable income in future periods within the United States. As a result of our consistent and continued profitability over the preceding three-year period and our expectations about generating sufficient U.S. Federal taxable income, we have determined that there is sufficient evidence that our U.S. Federal deferred tax assets are more likely than not to be realized. We continue to maintain a full valuation allowance against our state deferred tax assets due to insufficient income sources. We will continue to evaluate both positive and negative evidence in future periods to determine if we will realize those deferred tax assets. The amount of the deferred tax asset considered realizable could be adjusted if sufficient positive evidence exists. We do not maintain a valuation allowance in any foreign jurisdictions as we have concluded that it is more likely than not that we will realize those net deferred tax assets in the future periods. Details of our deferred tax assets and valuation allowance are discussed in Note 12 - Income Taxes to our Consolidated Financial Statements in Part II, Item 8 of this report. Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we define as net income before net interest income (expense), income tax expense (benefit), depreciation and amortization, stock-based compensation, and other items that are considered unusual or not representative of underlying trends of our business, including but not limited to: legal expense outside the ordinary course of business, transformation charges incurred in connection with our multi‑year strategic initiative to realign our organizational structure and modernize our technology platforms, restructuring, impairments, and other charges, if applicable for the periods presented. We believe that the exclusion of the items eliminated in calculating Adjusted EBITDA provides useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information in understanding and evaluating our operating results in the same manner as our management and our Board of Directors. Adjusted EBITDA should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of Adjusted EBITDA as a tool for comparison. 37 Table of Contents There are a number of limitations related to the use of Adjusted EBITDA rather than net income, which is the most directly comparable financial measure calculated in accordance with GAAP. Some of the limitations of Adjusted EBITDA include (i) Adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these potential capital expenditures. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items, as in the future we may incur expenses similar to the adjustments in this presentation. Evaluation of our performance should consider Adjusted EBITDA alongside other financial performance measures, including our net income and other GAAP results. A reconciliation of Net income to Adjusted EBITDA, including as a percentage of revenue, is presented in the following table: Year Ended January 3, December 28, December 30, (In thousands) 2026 2024 2023 GAAP Net income $ 3,084 $ 61,131 $ 259,061 GAAP Net income margin 0.6 % 12.0 % 35.1 % Interest (income) expense, net (2,896 ) (3,948 ) (2,041 ) Income tax expense (benefit) 10,293 (24,902 ) (44,205 ) Amortization of acquired intangible assets 52 3,479 3,478 Depreciation and other amortization 34,333 34,502 30,562 Stock-based compensation (1) 116,294 53,718 71,952 Incentive compensation to be settled in equity (2) 6,605 — — Transformation charges 5,388 2,770 — Legal expenses (3) 1,107 5,248 3,928 Restructuring and other 4,044 12,291 1,908 Impairment charges 3,497 13,929 — Other EBITDA adjustments 1,154 3,748 44 Adjusted EBITDA $ 182,955 $ 161,966 $ 324,687 Adjusted EBITDA margin 35.0 % 31.8 % 44.0 % (1) Includes stock-based compensation and related payroll tax expenses. (2) Includes accruals for the portion of our annual incentive plan that we intend to settle in equity. (3) Includes legal expenses outside the ordinary course of business, including those incurred defending against claims described in our 2024 10-K. Adjusted EBITDA increased for fiscal 2025 compared to fiscal 2024 primarily as a result of higher revenue, the non-recurrence of an approximately $7.0 million one-time charge for expiring production materials in the prior year, and lower costs for outside services. Liquidity and Capital Resources The following sections discuss material changes in our financial condition from the end of fiscal 2024, including the effects of changes in our Consolidated Balance Sheets, and the effects of our credit arrangements and contractual obligations on our liquidity and capital resources. There continues to be uncertainty around the extent of market volatility, inflationary pressures, interest rate changes, recessionary concerns, uncertainty in the financial and banking industry, and geopolitical tension, which may impact our liquidity and working capital needs in future periods. We have historically financed our operating and capital resource requirements through cash flows from operations, and from the issuance of long-term debt to fund acquisitions. Cash provided by or used in operating activities will fluctuate from period to period due to fluctuations in operating results, the timing and collection of accounts receivable, and required inventory levels, among other things. We believe that our financial resources, including current cash and cash equivalents, cash flow from operating activities, and our credit facilities, will be sufficient to meet our liquidity and working capital needs through at least the next 12 months. On September 1, 2022, we entered into our 2022 Credit Agreement, as described in Note 7 - Long-Term Debt to our Consolidated Financial Statements in Part II, Item 8 of this report. As of January 3, 2026, we did not have significant long-term commitments for capital expenditures. For further information on our cash commitments for operating lease liabilities, see Note 9 - Leases to our Consolidated Financial Statements in Part II, Item 8 of this report. In the future, we may continue to consider acquisition opportunities to further extend our product or technology portfolios and further expand our product offerings. In connection with funding capital expenditures, acquisitions, securing additional wafer supply, increasing our working capital, or other operations, we may seek to obtain equity or additional debt financing. We may also seek to obtain equity or additional debt financing if we experience downturns or cyclical fluctuations in our business that are more severe or longer than we anticipated when determining our current working capital needs. 38 Table of Contents Liquidity Cash and cash equivalents (In thousands) January 3, 2026 December 28, 2024 $ Change % Change Cash and cash equivalents $ 133,886 $ 136,291 $ (2,405 ) (1.8 )% As of January 3, 2026, we had Cash and cash equivalents of $133.9 million, of which approximately $73.6 million was held by our foreign subsidiaries. We manage our global cash requirements considering, among other things, (i) available funds among our subsidiaries through which we conduct business, (ii) the geographic location of our liquidity needs, and (iii) the cost to access international cash balances. The repatriation of non-US earnings may require us to withhold and pay foreign income tax on dividends. This should not result in our recording significant additional tax expense as we have accrued expense based on current withholding rates. As of January 3, 2026, we could access all cash held by our foreign subsidiaries without incurring significant additional expense. The net decrease in Cash and cash equivalents of $2.4 million between December 28, 2024 and January 3, 2026 was primarily driven by cash flows from the following activities: Operating activities — Cash provided by operating activities results from net income adjusted for certain non-cash items and changes in assets and liabilities. Cash provided by operating activities was $175.1 million in fiscal 2025 compared to $140.9 million in fiscal 2024. This increase of $34.2 million was primarily driven by $17.9 million more cash provided by net income adjusted for non-cash items coupled with $16.3 million of net changes in working capital. Investing activities — Investing cash flows consist primarily of transactions related to capital expenditures and payments for software and intellectual property licenses. Net cash used by investing activities in fiscal 2025 was $62.3 million compared to $37.7 million in fiscal 2024. Financing activities — Financing cash flows consist primarily of repurchases of common stock, tax payments related to the net share settlement of restricted stock units, and proceeds from the acquisition of common stock under our employee stock purchase plan. Net cash used by financing activities in fiscal 2025 was $115.7 million compared to $94.5 million in fiscal 2024. This $21.2 million increase was due to the following activities. During fiscal 2025, we repurchased approximately 1.8 million shares of common stock for $100.0 million compared to fiscal 2024, where we repurchased approximately 1.1 million shares of common stock for $67.0 million. Payments for tax withholdings on vesting of RSUs partially offset by purchases under the employee stock purchase plan used net cash flows of $15.7 million in fiscal 2025, a decrease of approximately $11.8 million from the net $27.5 million used in fiscal 2024. Accounts receivable, net (In thousands) January 3, 2026 December 28, 2024 $ Change % Change Accounts receivable, net $ 102,277 $ 81,060 $ 21,217 26.2 % Days sales outstanding 64 63 1 Accounts receivable, net as of January 3, 2026 increased by approximately $21.2 million, or approximately 26%, compared to December 28, 2024. This increase was due to order scheduling through the fourth quarter. We calculate Days sales outstanding on the basis of a 365-day year as Accounts receivable, net at the end of the quarter divided by sales during the quarter annualized and then multiplied by 365. Inventories (In thousands) January 3, 2026 December 28, 2024 $ Change % Change Inventories $ 89,202 $ 103,410 $ (14,208 ) (13.7 )% Days of inventory on hand 178 207 (29 ) Inventories as of January 3, 2026 decreased $14.2 million, or approximately 14%, compared to December 28, 2024 primarily as a result of our continued optimization of inventory to efficient levels for the business, which also decreased Days of inventory on hand over the period. The Days of inventory on hand ratio compares the inventory balance at the end of a quarter to the cost of sales in that quarter. We calculate Days of inventory on hand on the basis of a 365-day year as Inventories at the end of the quarter divided by Cost of sales during the quarter annualized and then multiplied by 365. 39 Table of Contents Credit Arrangements On September 1, 2022, we entered into our 2022 Credit Agreement. The details of this arrangement are described in Note 7 - Long-Term Debt to our Consolidated Financial Statements in Part II, Item 8 of this report. As of January 3, 2026, we had no used or unused credit arrangements beyond the secured revolving loan facility described in the 2022 Credit Agreement. Share Repurchase Program See "Issuer Purchases of Equity Securities" under Part II, Item 5 of this Annual Report on Form 10-K for more information about the share repurchase program. New Accounting Pronouncements The information contained under the heading "New Accounting Pronouncements" in Note 1 - Basis of Presentation and Significant Accounting Policies to our Consolidated Financial Statements in Part II, Item 8 of this report is incorporated by reference into this Part II, Item 7.