I am eager to see what Lattice Semiconductor can accomplish if the company continues to execute. Much work will have to happen to continue at the pace set in Jim Anderson's first three years, but I think Anderson and the team are up to the task. The company is positioned well to continue its product leadership in low-power programmable FPGAs and as it forays into the higher-performance FPGA segment, it will challenge Intel’s Altera group and Xilinx even more as those competitors are focused on the highest-performance, highest power FPGAs. I am sure some will find ways to disagree.īased on the first three years of his tenure, I believe the future of Lattice Semiconductor looks bright under the leadership of Jim Anderson. I understand that my analysis of Anderson's performance is exceptionally positive, but I have been hard-pressed to find many reasons to criticize his performance. A strengthened product portfolio, deeper customer relationships, and a complete uphill swing of the company’s financials are all significant indicators that Jim Anderson was the right person for the job. Three years later, I can definitively say that the company made the right decision. When Lattice hired Jim Anderson as CEO in 2018, I was very optimistic that Lattice would be better off for it. Lattice Semiconductor is ready for more growth, and the company should strike while the iron is hot. I know that these results aren't due to a singular figure, but the business execution that led to these results happened with Jim Anderson at the helm. I don't mean to beat a dead horse with the financials, but Lattice's performance has been impressive over the last three years. I believe Anderson is also conservative on the financials. These goals are ambitious, but I have learned that Jim Anderson and the team are willing to put in the work to make them a reality. Looking more long-term, Lattice Semiconductor wants to target double-digit revenue growth, get gross margins to >65%, keep OPEX to 35%, and achieve an operating profit target of >30%. You can read the full writeup here. In its most recent financial results, Lattice turned 25% YoY revenue growth, 29.1% operating profit, and double-digit YoY growth in the comms, computing, industrial and automotive markets. I attended Lattice's 2021 Analyst Day, where the company laid out its new products and increased financial guidance. To name a couple, Lattice now has a $1 EPS run rate and a gross margin increase of 500 bps since 2018. Several other financial metrics help paint the whole picture. Those price changes represent a 740% increase in just over three years. Three years later, the stock is sitting at $63.43. On August 27th, 2018, the day before Anderson was appointed CEO, Lattice's stock was sitting at $7.55. Let's look at where Lattice was when Jim Anderson took over and the results he has helped produce since then. Jim Anderson and the team have strengthened Lattice’s competitiveness in the market and done exceptionally well strengthening the balance sheet. Of course, investors care deeply about profitability, cash flow, and EPS. It takes a lot of operational discipline to deliver good results that drive significant shareholder value. But financial growth is a good indicator of short-term success and confidence in longer-term company strategy. I have said it for years, and it remains true, you can't judge a company solely on financial results. I am more focused on the product strategy that helped the company achieve good financial results. I am an industry analyst and not a financial analyst, so I usually leave financial work for financial analysts. It also accelerates time to market as customers have to do less work to adopt Lattice technology into their designs, and removes potential FPGA versus ASIC or controller objections, which I consider its real competition. The complete solution stack strategy allows the company to focus on fewer product lines while creating more robust end-to-end solutions that are more valuable to customers and, in turn, more profitable. Lattice has also focused on building complete solution stacks that include hardware and software instead of focusing on silicon alone. It also did it at 3x the pace of previous launches. Under the revamped leadership team, Lattice built the company's strongest product portfolio I have ever seen from the company. From a product perspective, the company wanted to speed up its product cadence, rebuild competitiveness, release new software solutions, execute product launch milestones on time, and enable faster customer time to market. Driving product leadership and delivering shareholder value were two categories that the company set its sights on back in 2019. In 2019, after a year in the hot seat, he laid out a new business strategy that would be the metric we should use to judge Lattice over the next two years.
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