Lattice Semiconductor Corp Q4 2025 Earnings Call Transcript

Lattice Semiconductor Corp (NASDAQ: LSCC) Q4 2025 Earnings Call dated Feb. 10, 2026

Presentation

Ford Tamer — Chief Executive Officer, Director

Ram. Sam. Ram. Greetings and welcome to The Lattice Semiconductor fourth quarter and full year 2025 earnings call. this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rick Musche, Vice President of Investor Relations. Thank you, Rick. You may begin.

Rick Muscha — Vice President of Investor Relations

Thank you Operator and good afternoon everyone. With me today are Ford Tamer, Lattice’s CEO, and Lorenzo Flores, Lattice’s CFO. We’ll provide a financial and business review of the fourth quarter of 2025 and the business outlook for the first quarter of 2026. If you have not obtained a copy of our earnings press release, it can be found at our Company website in the Investor relations section@lazemi.com I would like to remind everyone that during our conference call today we may make projections or other forward looking statements regarding future events or the future financial performance of the Company.

We wish to caution you that such statements are predictions based on information that is currently available and that actual results may differ materially. We refer you to documents that the Company files with the SEC, including our 10Ks, 10Qs and 8K’s. These documents contain and identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward looking statements. This call includes and constitutes the Company’s official guidance for the first quarter of 2026. If at any time after this call we communicate any material changes to this guidance, we intend that such updates will be done using a public forum such as a press release or publicly announced conference call.

We will refer primarily to non GAAP financial measures during this call. By disclosing certain non GAAP information, Management intends to provide investors with additional information to permit further analysis of the Company’s performance and underlying trends for historical periods. We provided reconciliations of these non GAAP financial measures to GAAP financial measures that can be found on the Investor Relations section of our website, lattice semi.com let me now turn the call over to our CEO, Ford Tamer.

Ford Tamer — Chief Executive Officer, Director

Thank you Rick and welcome everyone to our fourth quarter and full year 2025 earnings call. At the end of 2024 we told you what we’re going to do and over the last year we did what we said and we accomplished that by delivering on our commitments, stabilizing the business normalizing channel inventory, improving execution and positioning Lattice to capitalize on two of the most powerful secular Trends Shaping our industry Data center AI and physical AI as we begin 2026, I’m most excited to see that low power FPGAs are being widely adopted at an accelerating rate, becoming the everywhere companion chips with the Superboard still fresh on everyone’s mind, I will use a sports analogy.

The primary processors, GPUs, custom AI accelerators, CPUs and NPUs are the system’s most valuable players or MVPs. These MVPs are powerful but cannot win a game, let alone a championship without a team. And Lattice is that team. We provide the FPGAs those everywhere companion chips that perform many of the critical system functions. These include boot power sequencing, security control, IO expansion board and rack management, leak detection, fire and cooling, bridging, sensor aggregation, sensor fusion, pre processing and many other valuable system functions. We do this across both data center, AI and physical AI. We do this across all major markets.

Communications, compute, industrial, automotive, Aerospace and defense, medical and consumer and we do this across some of the world’s fastest growing applications Security, rack management, communication, Quantum cryptography, humanoids, Industrial automation, logistics, robotaxis, space and AR VR wearables. Those powerful companionships provide pervasive interoperability across all these vital functions, markets, applications and diverse suppliers. You can consider Lattice as Switzerland for data center and physical AI applications. The other big benefit of our companion chip strategy is that it drives sustainable diversified growth across all markets and applications which is helping us to deliver on our financial targets. And this companion role becomes foundational as AI workloads push system level complexity higher and higher and drive to faster time to market.

As AI servers disaggregate into processor boards, networking cards, security cards, power and cooling modules, storage and other specialized blades, FPGAs show up everywhere in the data center. We are also seeing the same trend accelerating in physical AI. Intelligence is moving closer to the sensors where data is created. A single robot can have multiple vision sensors including image, lidar, radar and infrared requiring fusion, aggregation and pre processing. In addition, humanoid robots could have dozens of motors requiring high precision and low latency control companionship. FPGAs sit beside those sensors and actuators to synchronize high bandwidth vision streams with real time motion and deliver deterministic responses.

And instead of software running on a microcontroller lattice, FPGAs do this in hardware, making it easier to guarantee the same cycle accurate responses every time. Finally, in some cases FPGAs can also serve as the primary compute such as signal processing, real time networking and what has become to be known as Far Edge AI. We at Lattice define far edge AI as Near Sensor Contextual AI with tiny or small self contained models and our momentum is building. For example, we recently won a Design in a Human Machine Interface or HMI Industrial Robotics and we are seeing the pull for applications under one TOPS and under one Watt.

We came out of our recent global sales conferences with strong momentum, reinforcing our optimistic outlook for 2026. We are seeing accelerated design win momentum in both data center AI and physical AI and we are excited about the future ahead with our Tier one customer deployments. Now let me turn to the numbers. In Q4 we delivered $145.8 million in revenue, up 9.3% sequentially, our strongest sequential performance in seven years and up 24.2% year over year. Full year revenue of $523.3 million was in line with expectations. Looking ahead, our Q1 revenue guidance of $165 million at the midpoint representing over 37% year over year growth reflects our confidence in a strong recovery and accelerated momentum.

Our Q1 ETS guidance of $0.36 at the midpoint represents nearly 65% year over year growth as we expect to continue to deliver earnings growth that is faster than revenue growth. As you can see, we’ve got a lot of positive operating leverage. We are operating on mature loans which means our capital spending is more reasonable than competitors on advanced notes and this allows us to drive significantly faster EPS growth than revenue growth. New products remain a key driver for our long term growth. In 2025, new product revenue grew approximately 70%. We remain on track for new product revenue to reach the mid 20% range as a percent of total revenue in 2026.

Entering the year with strong momentum as Nexus and Avant adoption continues to broaden. Given the scale of the opportunities ahead of us, Lattice is investing for the Future accordingly. Our 2026 slogan Go Big, Be great reflects our ambition and our commitment. We are making investments across silicon software systems, operations and infrastructure to support growth at scale and to extend our leadership in small and mid range FPGAs. In summary, 2025 was a year of disciplined execution and meaningful progress. We stabilized the business, built tremendous momentum in data center applications, advanced our product and software roadmap and significantly improved operational performance including the normalization of channel inventory.

We enter 2026 with high confidence. That confidence is supported by a strong backlog, durable data center demand, industrial market returning to growth, expanding companion use cases and continued new product ramps. Our focus remains on differentiated innovation, deeper customer engagement and delivering long term shareholder value. With that, I’ll turn the call over to Lorenzo for a comprehensive review of our fourth quarter and full year results.

Lorenzo Flores — Chief Financial Officer

Lorenzo thank you Ford and good afternoon everyone. We will begin with a brief overview of our 2025 fiscal year performance including our fourth quarter, followed by our first quarter 2026 outlook and our current framing of fiscal 26 for the full year 2025. We are pleased to report that Lattice delivered on expectations with revenue, gross margin, operating profit and eps, all in line with our outlook for the full year including the fourth quarter. We did this while completing our transformation and investing in areas that we believe support long term profitable growth. Our full year 2025 revenue increased 2.7% to $523.3 million in line with expectations.

Growth was driven by our platform successes across communications and computing, with revenue up 28%. This growth was partially offset by an 18% decline in revenue in industrial and automotive, which was expected as we successfully normalized channel inventory throughout the year. Our non GAAP gross margin continues to reflect our value proposition to our customers and expanded 190 basis points to 69.3% in 2025. We improved revenue and gross margin in 2025 even as we reduce non GAAP operating expense approximately 1% to $213.5 million. As we completed our restructuring, we made targeted investments in talent, infrastructure and technology to give us a more robust and efficient platform to drive long term growth.

As a result, in 2025, our non GAAP operating margin expanded 340 basis points and our EBITDA margin increased 320 basis points to 35% and we delivered non GAAP EPS growth of 17% to $1.05, demonstrating leverage in our business model by growing earnings faster than revenue. Other metrics improved accordingly. In 2025, GAAP net cash flow from operating activities increased to $175.1 million, up from 1:40.9 in 2024, with GAAP operating cash flow margin improving to 33.5%, up from 27.7% in 2024. Free cash flow in the full year 2025 was $133 million with a 25.3% free cash flow margin up from $120 million and 23.5% in 2024.

Focusing specifically on Q4, our performance started the ramp. We will continue into 26. In Q4, revenue hit $145.8 million, an increase of 9.3% quarter on quarter and 24.2% on a year over year basis. Growth was driven by a record performance in communications and computing of 25% sequentially and 60% on a year over year basis. We are clearly benefiting from the exceptionally strong data center growth. As Ford discussed, Q4 gross margin was 69.4%, slightly down from Q3 on a non GAAP basis. Our gross margin, even as our mix shifted, continues to reflect the value and differentiation our products provide for our customers.

Non GAAP operating expense was up to $56.4 million, up roughly 5% sequentially and 7% on a year over year basis. As Ford and I have stated previously, we see significant near and long term opportunities and are investing to expand our future leadership in the small and mid range FPGA markets and our companionship program. Our Q4 non GAAP operating margin expanded 170 basis points to 30.7% and our EBITDA margin increased 90 basis points to 36.5%. Q4 non GAAP EPS grew 14% quarter on quarter to $0.32. In line with our guidance, GAAP net cash flow from operating Activities for the fourth quarter of 2025 increased to $57.6 million, up from $47 million in Q3 with a GAAP operating cash flow margin of 39.5%, up from 35.3% in Q3.

Free cash flow in Q4 was $44 million with a 30.2% free cash flow margin up from 34 million and 25.2% in Q3. This remains a focus area for Lattice and we expect the trend of increased free cash flow margin to continue. We are achieving these improvements while strategically investing in capex in support of R and D and operational improvement projects. One last point on results we achieved our overall target level of channel inventory and are well positioned to benefit from growth in all the end markets we serve. Now let me turn to capital allocation. Our balance sheet remains strong as our operations have improved our cash flow generation and we remain debt free.

We have ready access to capital if we need it. This leaves us well positioned to navigate macro uncertainties and invest for future growth. Given our balance sheet strength and our business model, returning capital to shareholders remains a key component of our capital allocation strategy. For the full year 2025, we repurchased approximately 1.8 million shares or $100 million of the company’s common stock. As we completed that repurchase program in Q4, our Board of Directors authorized the company to repurchase an additional $250 million of its outstanding common stock. Now for our guidance, which has our typical detail for Q1 2026 and additional commentary to help frame expectations for the full year 2026.

For both Q1 and the full year 2026, our outlook reflects the exceptional strength we are currently seeing in demand in Q1 2026. We expect revenue to grow into the range of $158 million to $172 million at the midpoint of this range. This is 37% growth from Q1 2025 and 13% over the prior quarter. Gross margin is expected to be 69.5% plus or minus 1% on a non GAAP basis. Non GAAP operating expense is expected to be between $59 million and $61 million. Most of the growth in OPEX will be in R and D and reflects disciplined investments to drive future growth.

Income tax rate for Q1 is expected to be between 4% and 6% on a non GAAP basis. Non GAAP EPS is expected to be in the range of $0.34 and $0.38 per share. Regarding the full year, we begin 2026 excited about the catalyst driving multiple growth opportunities ahead of us. I would like to share with you our financial framework for the year. We have stated previously that we are highly confident that we will grow at least 20% year over year and the start of the year indicates that we have improved visibility to growth above that.

We plan to update you with more specific guidance as we move through the year. Our gross margin for the full year 2026 is expected to be in the same range as we are providing for Q1 with perhaps some fluctuations during the year as customer mix varies on opex. We continue to see significant opportunities to expand our leadership in small and mid range FPGAs. These investments, primarily in R and D, drive the increase in OPEX in Q1. We expect another increase in Q2 but then slower growth in the second half. We have a tight grip on the knobs and levers that control OPEX and will adjust as necessary to hit our profitability objectives.

Our income tax rate is expected to be between 4% and 7% on a non GAAP basis. With channel inventories now normalized, revenue in 2026 should more closely track consumption, setting up a strong environment for growth in 2026 and beyond. We will continue partnering with our channel to support end customer demand while reducing channel inventory where appropriate for internal inventory. We are deliberately building inventory to support this growth environment because we see such strong growth potential and our products have long life cycles, we see a low risk of obsolescence. In closing, we remain focused on executing our strategy and making investments to strengthen our leadership in small and mid range FPGAs.

We are highly confident in driving revenue growth while growing EPS at a faster rate. Operator that concludes our formal remarks. We can now open the call for questions.

Question & Answers

Operator

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation to indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment please while we pull for questions. Thank you. Our first question comes from the line of Reuben Rowe with Stiefolt. Please proceed.

Ruben Roy — Analyst, Stiefolt

Thank you. Ford and Lorenzo, congrats on a strong finish to the year. I guess for the first question, Ford, if you could walk us through obviously really strong server growth and you’ve talked about sort of the dynamics in the data center and I guess the MVPs out there thinking about how you’re looking at that business going forward. We’ve heard a lot about server CPU strength from some of the CPU vendors. There have been some supply constraints in the mix. So maybe you could frame the those dynamics as well as your growth relative to unit volumes versus dollars of content per server.

Thank you.

Ford Tamer — Chief Executive Officer, Director

Thank you Ruben. Yeah, we do see demand being strong for the foreseeable future is driven by the capex growth is driven by our attach rates, is driven by the increased asp, is driven by the increased number of applications that we’re finding in these servers. And so at a high level as we look at server units growing from call it the 15.3 million units total to call it 16 and a half million units in 2026, our attach rate has been steadily going up every generation. So in the 2024 time frame we were in the mid ones and as far as attach rates, last year we’re in the mid 2s and this year we’ll pass three units per server, fpga units per server.

So you multiply this by the number of server units our attach rate growing and our ASP is growing as well from the $3 call it to above 4. You put all this together and you could see that this is driving an overall very nice increase in that business.

Ruben Roy — Analyst, Stiefolt

Great. Thanks for the detail, Ford. Lorenzo, maybe just to follow up on the guidance for Q1. Very strong guidance. Can you walk us through sort of assumptions by segment, it sounds like we’re finally seeing some recovery in industrials and automotive and obviously the communication and compute continues to grow. But maybe you could parse that out for us please. Thank you.

Lorenzo Flores — Chief Financial Officer

Yeah, I think in aggrid across the business we’re just very, very positive about the trends we’re seeing underneath it. Of course the oms and compute areas of our business are the leaders in our strength. But as we said, we’ve gotten our channel inventory down toward our target and we expect to see growth there as well.

Ruben Roy — Analyst, Stiefolt

Great, thanks guys.

Operator

Thank you. Our next question comes from the line of Melissa Weathers with Deutsche to Bank. Please proceed.

Melissa Weathers — Analyst, Deutsche To Bank

Hi, thank you for the question and congrats on a nice outlook. I know it’s taken a lot of work to get here. I guess I’m going to try. On the revenue side, it doesn’t sound like you guys are super willing to guide to give full year guidance for 2026, but last quarter you indicated comms computing could be up 20 to 40%. I think in industrial up 5 to 15. If I remember right, you’re starting off the year a lot stronger than that. So just in terms of magnitude, like is there any other color you can help us with and how to think about which of those grows faster and maybe where total revenue growth could shake out for 26?

Ford Tamer — Chief Executive Officer, Director

Yeah, we’re very strong. Our conviction has increased on the demand in both segments. Melissa. So first thank you for the question. And yes, the demand environment is much stronger now than it used to be three months ago across both the comms and compute and industrial markets. So in the comms and compute, as we said, we are very well booked for the year and now booking to 27. So great visibility in the industrial automotive we are shipping to the true demand. The inventory in the channel is under 3 and will be in the twos in Q1.

So we are confident in the growth in both segments.

Melissa Weathers — Analyst, Deutsche To Bank

Got it. Maybe as my follow up, you spent a lot of time in your prepared remarks on the physical AI opportunity. I think the companion piece and the attach rate in data centers is pretty easy for us to follow, but it’s a bit harder for us to kind of figure out how big the physical AI opportunity could be. So I don’t know if you want to frame it in terms of a TAM or some kind of units framework, but any way for us to help or to help us size how big this physical AI piece could be? Because it seems like you’re seeing a lot of momentum there.

Ford Tamer — Chief Executive Officer, Director

Yeah, we’re seeing tremendous momentum there along with this companionship strategy. So we are very strong with companies like Nvidia that have we publicly announced together the Holoscan design reference design where we feed different video streams into the FPGA and into the Nvidia processors. We’ve made some great progress in our companionship strategy with NXP along with the microprocessors. We had an event in Europe in January where the top industrial and automotive and telecom and aerospace defense companies in Europe joined us NXP at a joint event where we launched the year. We’re making progress with quite a few other partners on the sensor side, on the analog side and others in the microprocessor side.

So stay tuned on those. The potential expansion is vast because we are gaining share in markets where we were not big players. The best example is aerospace defense that has gone from very little content in 24 to we expect a very big year coming in in 27. Across all geographies, you know, US, Europe, Asia, all geographies are observing some very strong design wins in aerospace defense with our new red hard and red tolerant designs in industrial robotics. We continue to grow in industrial robotics and AMRS as well as humanoid. The humanoid opportunity is vast. We are winning across the board in vision.

So we’ve done very well in vision and humanoids and we have gotten two marquee design on motor control. And we see this as a beachhead as a teaching customers on how we’re going to make progress because the latency, determinism, parallel performance accuracy of an FPGA hardware based solution is vastly superior to the alternative. And so we’re very excited about what humanoids can mean for us as a market going into 27. We’ve also made great progress in robotaxis. So we have a win in Robotaxi that we are again very excited about going into 27. We’re making progress in medical and telecom across the board in physical AI.

So I think it’s hard to give you as clear of a metric as we can on the server because the applications are so much more diverse and a much more broad based across our 11,000 customer and really broad based channel reach. But we’re very excited about the opportunity in industrial and with advance coming in in 2027. Great, thanks for having me starting this year in 26. Yeah.

Operator

Thank you. Our next question comes from the line of Quinn Bolton with Meadham and company. Please proceed.

Quinn Bolton — Analyst, Meadham And Company

I’ll take a shot at 2026 and just looking at the segment guidance you guys talked about Last quarter of 20 to 40% in comms and compute and the 5% to 15% in industrial and automotive. It looks like just based on the strength of the first quarter guide, you’re probably tracking to at least the high end of those ranges, if not above. Wondering if that’s the right way to think about growth in the respective segments we. Or do you think that one of the segments is significantly stronger than what you were thinking 90 days ago?

Lorenzo Flores — Chief Financial Officer

Yeah. Hey Quinn, thanks for pointing out that we Talked about this 90 days ago and I think you should have picked up, you all should have picked up during our commentary. Our confidence and the basis of our outlook has strengthened considerably over the last 90 days. So I think, I think the overall view that the POMS and compute will be fastest growing of our end market sets maintains, but we’re also seeing improvement across the board in our industrial end markets as well and in all geographies.

Ford Tamer — Chief Executive Officer, Director

Yeah, Quinn, the one thing I’d point out is that if you use the high end of the guidance we gave you last quarter, you still don’t get to the revenue we need to get to this. So you can imagine we’re on the higher end or above the high end on both markets.

Quinn Bolton — Analyst, Meadham And Company

Yeah, I was thinking you’re probably at the higher end since you beat March by almost 20 million relative to consensus. Okay, thanks for that clarification. And then I guess maybe forward, you mentioned in response to one of the questions that you’re booking, you’re pretty much all the way booked through 2026 in comms and compute, starting to book into 2027. Can you just talk, talk about one kind of lead times? Are they stretching out? Are you comfortable with lead times? And given that you’re already booking out to 2027, is there any indication that you may be starting to pick up double ordering given that you’re booking that far out at this point?

Ford Tamer — Chief Executive Officer, Director

Quinn, as you can imagine, this is a very important question. We spend a lot of time as a management team, as our channel partner with our customers across the globe, really digging into this question. And we at this point do not believe there’s double ordering. I mean, we believe what’s given us confidence is these orders are being scheduled throughout the year. So it’s not like these are all bunching up in Q1. This is scheduled throughout 26 and into 27. So you could see, you know, five, six quarters out as far as orders. Obviously the lead times have increased for us and everybody else in industry.

We have been very forthcoming and proactive with our customers in pointing out these increased lead times. And I think we’re doing a service to our customer by pointing these out. We’re seeing competitors that may not be as forthcoming. And we’re being very forthcoming and making sure that we work hand in hand with our suppliers and our customers to deal with the situation. And we’ve been ordering substrate and putting incremental orders in place since the summer. So we’ve been for the past six months now increasing our our orders to our suppliers. And it is putting us in a good shape to weather this next few months.

Quinn Bolton — Analyst, Meadham And Company

Excellent. Thank you, Ford.

Operator

Thank you. Our next question comes from the line of Christopher Rolland with Susquehanna. Please proceed.

Christopher Rolland — Analyst, Susquehanna

Hey guys, thank you for the question. Maybe just piggybacking Quinn’s around inventory as well. I think INA was perhaps a little bit disappointing last quarter. Do you think there was some inventory burn there? And then looking forward like is this a trough growth rate and we build from here potentially even with some inventory build on top of that. Like what do you guys view as kind of the normalized no inventory burn quarterly rate for INA that we can build off of? Thank you.

Lorenzo Flores — Chief Financial Officer

Yes. I’ll give you the construct that we look at it. One is the inventory, overall inventory number that we talked about was obviously our aggregated number at the end of the year across all of our end markets and our distributors. And if you go back to where we started, you know it worked down first in comms of compute and then as you pointed out in industrial and auto. And what we have seen now is a drive in some cases across all end markets from our channel partners to build inventory. So we’re going to continue to manage it down with the end objective not really being channel inventory, but getting to the right levels of customer support and responsiveness.

So there will be times when it might have to go up to support demand. That’s expected. And there’ll be times when we’re going to continue to manage it down tactically. So I don’t think it would be actually that useful to give you another number to baseline off of.

Christopher Rolland — Analyst, Susquehanna

Okay, thank you. And then Ford, maybe a two parter for you. I think you gave some data that was server cpu, but I was wondering if you could maybe talk about FPGA to XPU or AI processor attach rates like where they’ve been and where you think they’re going. And lastly you’ve talked about Lattice being a larger company perhaps via acquiring new IP and capabilities. I was wondering if maybe you could give us an update there, particularly in light of ti Buying Silicon Labs.

Ford Tamer — Chief Executive Officer, Director

Yeah, Chris, good question. I talked about the number of server units, not the number of server CPUs. So the 15.3 million units in 2025 going 16.5 is our estimate based on market research of the number of server units tam. Out of that total tam, we have said in the past that our attach rate in 2025 was about 12% AI server is what we’ve seen and it seems to be about correct. The 12% AI servers corresponded to a roughly high teens call it 20% of revenue. So that it gives you a feel that the AI server as percent of revenue is higher than the traditional servers.

Recently we’ve seen a nice pickup in traditional servers. So traditional servers even are growing faster than expected. So across the board we’re seeing some nice growth. And on the inorganic side, you know, we have actually completed four little tokens that we have not publicly discussed. They’re all small IP and software type of tokens. And we’re still working on a few more of these tokens, software tools, IP solutions, enablement is what we’re investing right now and we’ll continue to do these small tokens. The larger acquisition is something we want to do, but we want to take our time to do the right one.

All the stars have to align. It has to make sense strategically accretion and we need to want to all work together. So there’s a lot of different factors but we’re not in a hurry. As you can see. The business is very strong, so we’ll do it at the right time.

Christopher Rolland — Analyst, Susquehanna

Thank you, Ford.

Operator

Thank you. As a reminder to ask a question, please press Star one. Our next question comes from the line of Kevin Kerrigan with Jefferies. Please proceed.

Kevin J. Kerrigan — Analyst, Jefferies

Yeah. Hey guys, let me echo my congrats on the strong results as you continue to gain share and companionships in the data center. Are you seeing any increased competitive pressure or pricing aggression from some of your competitors trying to reclaim these sockets?

Ford Tamer — Chief Executive Officer, Director

So Kevin, we based our strategy on the customer. So we always go customer first. We make sure that we sit with our customers, understand how we’re going to provide a solution that would provide the maximum benefit, enable them to grow their revenue, increase their success in the marketplace. And we are very, very focused on providing them low power, small size, low cost, fast boot time, longevity, a whole bunch of attributes that we believe differentiate us in the small and mid range FPGA compared to competitors. So we have seen our market share grow and we expect it to continue to grow.

And so in that small to mid range FPGA we feel very strong in our market share and convicted about where we are.

Kevin J. Kerrigan — Analyst, Jefferies

Got it. Okay. Yeah, that makes a ton of sense then. You know, Ford, as you look out to the rest of 2026, I mean, you guys are firing on all cylinders. You know what, what keeps you up at night? What could potentially kind of derail the lattice story?

Ford Tamer — Chief Executive Officer, Director

I think at this point what keeps us up at night is our own self. So we just need some very ambitious plans on what we’re investing in and what we need to execute and deliver on and extremely focused on delivering to those plans. We want to make sure that we have the supply for our customer. We want to make sure we continue to be a good partner in what we call the three S’s, the solutions, support and supply. And so these three S’s are very important to us, especially in an environment like today where the supply is short.

So we’re spending a lot of time ensuring that we provide the correct supply and we want to continue to be good partners. So I think the biggest thing we worry about is our own self executing to our plans that are pretty ambitious. Yep.

Kevin J. Kerrigan — Analyst, Jefferies

Yeah, that makes a ton of sense. Okay, perfect. I appreciate the color. Congrats again on the results.

Lorenzo Flores — Chief Financial Officer

Thanks, Kevin.

Operator

Thank you. Our next question comes from the line of David Williams with Benchmark Company. Please proceed. Apologies. Our next question comes from the line of Gary Mobley with Loop Capital. Please proceed.

David Williams — Analyst, Benchmark Company

Hey guys, thanks for taking my question. Last quarter I think you mentioned a record level of design wins measured in lifetime value. I’m just curious how those tallied in the fourth quarter. And then as you sort of look back on fiscal year 25 and tally the lifetime value of all those design wins. What kind of revenue growth rate, excuse me, is that supportive of.

Ford Tamer — Chief Executive Officer, Director

Yeah, thank you, Gary. We have continued to get to record design wins. So every quarter we continue to get the record design win. We had another record design win quarter in Canada Q4. And so we continue to paddy a larger number of design wins that are going to production this year, next year in 28. So that sets us up for a multi year growth supporting at least a 25% growth.

David Williams — Analyst, Benchmark Company

Appreciate that. Ford. I don’t know how important this is or not, but I did notice that the revenue bracket in the guide this quarter is $14 million. It’s normally 10 million. Is there anything to call out there? Is there sort of a maybe if you can just sort of look at the puts and takes or get the puts and takes for the lower end versus the high end of the guidance range.

Lorenzo Flores — Chief Financial Officer

Really There’s a couple of aspects of it. One is just the quantitative view. As the revenue grows higher, you’re looking at a similar band around the center point and you get to a higher number. The other is there are, as we look at what the revenue potential is, when we were preparing it had different potential scenarios into what we would be delivering to customers and what timing it would go through the quarter. So I would say we’re really, really comfortable with the midpoint. And so I think the issue is how the linearity looks during the quarter.

But we’ve just looked at that and. We’Re very comfortable with that as well.

David Williams — Analyst, Benchmark Company

Thank you. Appreciate it.

Operator

Thank you. As a reminder to ask a question, please press Star one. Our next question comes from the line of Joshua Bookalter with TD Cowan. Please proceed.

Joshua Buchalte — Analyst, TD Cowan

Hey guys, thanks for taking my question and congrats on the results and guidance. You know, I think a lot of my peers have tried to get some more color forward looking and failed. So maybe I’ll try to go backwards. If we, you know, look back at 2025 in the comms and computing segment, can you maybe walk through some of the growth drivers that took you from, you know, a sub 60 growth rate in 1Q to above 90 in 4Q, you know, any. And you can give us maybe rank ordering, some key sockets or whether we could think of GPU versus CPU versus ASIC or order of magnitude of how much the PC headwind was in the beginning of the year.

Just does any help as we think about how you guys are aligned moving forward would be, I think be very helpful. Thank you.

Ford Tamer — Chief Executive Officer, Director

Yeah, for sure. So at a high level, if you look at how we helped to try and frame the growth in the comms and compute, we did break up the growth in server from the growth in wired comms. Right. So the growth in server year on year was 85%. And so you could see this is our fastest growing segment was the server segment in the comms and compute. The second one, the overall comms growth was 61%. But within that this includes wireless. So the wired comms is ahead of that. So you could see the number two growth vector is the wired comms.

And then within those two, so if server is number one and the wired comms is number two within the server, the fastest growing piece is the AI server piece of that business. And on the iserver piece of that business we discussed the various factors. So we discussed number one, the CapEx. So CapEx going into the year and CapEx at the end of the year was significantly higher than entering the year. And we’ve seen the same phenomena happening in the past three months. It seems like Josh, this is going even faster. So we got into December thinking that 2026 capex for the top five hyperscaler would be 500 billion.

In January we thought it’d be closer to 580. And post earnings now it’s at 740. So just within a space of December, January and early February we’ve seen now that number increased significantly. We had the same phenomena entering 25 and ending 25. So that CapEx number kept growing through the year. Number two, we have design win with all of the GPUs as well as the AI accelerators. And every generation our content increases. So as you go from a generation of Nvidia to the next one, as you grow a generation of tpu, a generation of Meta and Amazon and Microsoft, all of our attach rates are growing from one generation to the next.

So as you go through the year and the new generation get introduced, that’s a number two. Number three is the asp. ASP as you go. We have new parts that are being adopted for security. So we have a bunch of new applications. We entered the year for example with strong application boot power sequencing control I O connectivity, which is the bread and butter fpga. As we progress through the year we start being adopted for more attestation and more post Quantum cryptography and leakage. Leakage detection is an application that we discovered the second half of the year and is being rolled out because we’re such a good latency in being able to detect the leak and stop the leak that we’re being rolled out as soon as they find out because it’s a very critical piece of this AI infrastructure.

So these attach rate continue to grow and as these attach rates continue to grow and we go to these larger type of security type of application is driving the attach rate for larger FPGAs which then means it’s a larger ASP. So you could see the compounding effect of all these factors together driving to a higher and higher dollar factor. And you’re going to see this continue in 26 and 27. All right, so we’re excited about where this takes us in the future.

Joshua Buchalte — Analyst, TD Cowan

Thank you for all the color there. Before I follow up, maybe I’m screwing up the arithmetic, but if I apply that 70% new product growth rate to, you know, I think the mid teens level you hit in 2024, I’m getting over 20, you know, comfortably over 20% exposure from new products in 2025 already. I guess any help you can give us on where you expect new products to land in 2026. I think you said more than 20% like is our new products is part of this just that pre Nexus parts are coming back now that they’re corrected or should we still expect new products to outgrow pre Nexus parts? Thank you.

Ford Tamer — Chief Executive Officer, Director

Yeah, so your math is correct. You’ve done the right math. So good job. We did pass the 20. We’re in the low 20s as a total percent. So you’re right, that 70% year on year growth puts us in the low 20s as a of total revenue in 2025 and we expect that to go in the mid to high end of the 20% in the 26.

Joshua Buchalte — Analyst, TD Cowan

Okay, thank you.

Operator

Thank you. Our next question comes from the line of Sriniv Podri with RBC Capital Markets. Please proceed.

Srini Pajjuri — Analyst, RBC Capital Markets

Thank you. Congrats guys on a solid quarter. I joined a little late so I apologize if this question have been asked and answered. So Ford, my question is on the supply side I know you talked about demand being much better than expected. So just wondering if you’re seeing any supply constraints on your side or you know, any other component shortages such as memory etc. If those shortages are having any impact in your view on your business.

Ford Tamer — Chief Executive Officer, Director

Yes, so I’ll answer. The first part of the answer was already answered. I’ll answer it again. And the second part is new Srini. So thank you for the question. So first on the supply side, as I said, we are committed to our customer in three S’s, the support supply and solutions. And we’ve been ordering more materials since the summer and are, you know, have seen the lead time increase consistently from you know, first half of last year to second half of last year to end of last year to now even increase very, very fast, continue to increase.

We’ve been very forthcoming with our customers and given a really heads up on this and you know we’re in relatively good shape but there’s obviously areas like substrate and assembly that are very tight across the board and we’re working with our customers, with our suppliers, with our partners and the channel partners to make sure that we do the right allocations and make sure nobody’s lying down. But it’s definitely a very tight situation right now. On the second part of your question which you ask about the memory, we’ve asked this question now many, many times to our customers and they assure us that they’ve got supply agreements with their memory Supplier that then the forecast into Lattice are comprehending that memory supply situation.

So we’ve obviously spent a lot of time on this to make sure that our demand was solid and we are being assured by all the major cloud service provider OEMs, ODMs that they’ve got the supply locked in with their supply agreements.

Srini Pajjuri — Analyst, RBC Capital Markets

Got it, got it. And Ford at a high level, you know, strategically you seem a bit more open to larger M and A. So just curious, you know, what the criteria, you know, would be for you because, you know, I don’t know, there are a lot of FPGA companies out there that you could look at. So I’m just curious, you know, what are some of the metrics and you know, what sort of markets, et cetera. And then also, you know, one of the concerns that, you know, in the industry is that, you know, we need approval, you know, regulatory approval and particularly from China for any sort of larger deal.

Do you think the environment is changing when it comes to, you know, the regulatory side? Thank you.

Ford Tamer — Chief Executive Officer, Director

Yeah, thank you, Srini. So I did answer the question. I’ll answer it again, which is we actually have done a number of small tokens. We did four small tuck ins on the software tools and IP that we haven’t publicly announced because they’re small and working on a couple more of those. So we really like these small tuck ins because they do not require approval and are pretty strategic, they’re pretty accretive and are adding some very important skills and IP to our tool set and our team. So we’ve done them, we’ll continue to do them. And no regulatory approval needed for the large ma.

We’ve been open about the fact that we would do one in the future, but we’re not in a hurry. A whole bunch of factors have to align. The stars have to align, which is number one, it has to be strategic. Number two, it has to be accretive. Number three, the business model have to make sense and number four, the teams have to get along and we need to have some synergies, both top line, bottom line, product roadmap. So all these factors make it difficult and regulatory is one extra one. So we’ve got to be patient.

And right now the good news is that the business is extremely strong on the organic side. So we’re not in a hurry to do one.

Srini Pajjuri — Analyst, RBC Capital Markets

Thanks, Ford. Good luck.

Operator

Thank you. There are no further questions at this time. I’d like to turn the floor back over to Rick Noosa for any closing remarks.

Rick Muscha — Vice President of Investor Relations

Thanks everyone for joining us on the call. Today we’ll be attending the following investor events this the Susquehanna Technology Conference in New York City on February 26 and the Morgan Stanley Technology, Media and Telecom. Conference in San Francisco on March 4th. This completes our call. Thank you very much for your participation and have a great evening.

Operator

Goodbye. It.