Lattice Semiconductor Corporation (LSCC) Earnings Call Transcript & Summary

Good morning, everybody. We'll go ahead and get started. Welcome, everyone, to Needham's 28th Annual Growth Conference. My name is Quinn Bolton. I'm the semiconductor analyst at Needham. It's my pleasure to host this fireside chat with Lattice Semiconductor. The company is the leading provider of low-power programmable devices in the world that has driven innovation in the programmable market for over 40 years. Lattice's solutions span the communications, computing, industrial, automotive and consumer markets. Joining me on stage from the company are Ford Tamer, President and CEO; and Lorenzo Flores, CFO. We also have Rick Muscha, VP of Investor Relations and David Pasquale in the audience. I'm going to hand the podium over to Ford. He's going to go through some slides, and then we'll come back for the Q&A. Thank you.

Good morning. We're just getting started in low programmable -- low-power programmable devices. The future is bright. We had a strong end of the year. We had a strong start of the new year. Those of you who are at CES, it sounds like physical AI is the new name of the show. So exciting trends that we're seeing across the board for us. So what I'll do today is I'll give you the safe harbor that you've seen. And we'll -- quick intro on Lattice and a bit more about what we do and how we differentiate in the market. So a quick view on Lattice. We're very focused on a piece of the market, which is the small and midrange FPGA piece of the market, the most interesting, the fastest-growing piece of the market, I'll come back to why that is. Going around from the top left, focused on communication computing being about over 50% of our revenue growing fast. The server business for us last year at the last 9 months report grew 80% year-on-year. The communication associated with that grew 63% year-on-year. Industrial and Automotive is bottomed out. The inventory in the channel is clear and go back to growth in 2026. And even consumer, we've got some interesting trends going on. We are a high-volume supplier. So we shipped over 150 million units last year, expected to go to 180 million this year and awards recognized by awards across the industry. On the bottom right, global support to our global customers and partner and supplier and Tier 1 customer base. So what do we do -- the way I'm going to describe the business across 3 pillars: low-power programmable leader is our mission. Pillar #1, I'm going to tell you why we're the everywhere companionship. Pillar #2 is we have the best small and FPGA road map in the industry. And number three, all this should drive sustainable growth for the foreseeable future, hence, good investment. So let's go on number one. We are -- the ASICs that we work with are the MVPs. So Michael Jordans of the world that are very powerful. These guys need a lot of OpEx to get to market, a long time to get to market. They're great, but they need a team around them. And so we are that team. We provide all the support functions around the MVP that are better done in these companion FPGAs, okay? So when you want to boot the server, we're the first thing to boots. We boot very fast. We have a very low latency. We have to boot securely. You've got to provide power sequencing, then you have to provide control. And there's a whole range of functions. When you -- these servers are being disaggregated. So you've got a board for the processor, another board for the security and I/O, another board for the switch, another board for storage, another board for power and cooling. We're on every one of those boards. So providing a tremendous amount of function went from tens of FPGAs per rack to hundreds of FGA per rack in a data center. You look at humanoid opportunity could be very big. You've got anywhere from a few to 12 vision type of devices in a humanoid or robot. You've got anywhere from 40 to 70 motors. So again, large opportunity on a physical AI as well, providing all the support function for folks like the GPU, the NVIDIA, the AMD of the world. But it doesn't stop there. So we obviously are on the GPU. We also are on very similar type of teams with the folks at Google and Microsoft, Amazon, Meta doing their own ASIC for AI acceleration. And so you've got the curry of the world where we -- also a different type of MVP, but very similar type of team, again, a basketball team. But we also do different types of teams. So here is Messy with the soccer team, the CPU, whether it's x86, AMD or Intel, whether it's ARM, we again provide the same support functions to those MVPs on a different type of team. How about networking? Sure, networking as well. Switch NIC, again, the Brady's of the world. MVP, we are the support team providing all the support functions. So we do it across both data center and physical AI. So if you look first on the data center, we've talked about being companion to all of the GPU, TPU, CPU, switch and NIC on the networking, but also board management controller like the ASPEED and Nuvoton and NXP now with OpenBMC. We have recently announced some strong partnership with folks like NXP on the microprocessor. We do it across microcontrollers across these companies. And we are growing very fast in the physical AI, which will be a very strong growth vector for us in the industrial and automotive. And every sensor, you're going to find a Lattice FPGA next to them, whether it's an image sensor, whether it's a radar, whether it's a LiDAR, whether it's an infrared camera, whether it's some of these pressure and temperature sensor and industrial type of settings, we are the companionship that makes those ASICs work. So across the board. And even on the analog side, we've got strong relationship on the ADC and DAC with folks like ADI that we go together in some of these humanoid applications. So that's the companionship landscape that we focus on. Now we do it across all these functions. We also do it across a number of markets. So we're everywhere on the functions. We're everywhere on the markets. So Communications and Computing, 53%; Industrial and Automotive, 40%. We do roll up aerospace, defense, medical under industrial automotive, but I'm highlighting them because there are some new areas of growth in those markets. We -- and then finally, consumer is also interesting. So enable innovation across all these large markets as well. So across functions, across markets, across applications, some of the world most interesting applications. Security is our bread and butter. So this is where we differentiate. We do extremely well. We're way ahead of the market on security, and this is what we were across all the data centers. So the top 4 bubbles are data center, their rack management. The server is going from a server management to -- the new server is the rack, okay? So the rack is a new unit of compute. We actually help companies with now doing RMC, rack management controller, across the whole rack. Power and cooling is very important. I'm not sure how many of you realize how much power there is now. I'm sure you all know better than me. There is for every compute rack, there's now 1 power rack, and that's going to 2 power racks. And these racks all need control. And you don't need an expensive processor and an expensive board management controller on every one of these nodes. A small FPGA that's tailor-made for that function is perfect. For cooling, we realized recently that we can be the fastest and lowest latency device to stop a leak, and that's spread like WiFi, this application, leak detection and shut down the water if there is a leak. FPGA is best for this. Quantum computing, we have -- we're the first introducing the post-quantum cryptography. The bad actors today are copying today to decrypt tomorrow. And what we do is we are in these devices, all the major switch OEMs, all the major security appliances are putting us in to do PQC, post-quantum cryptography, where we go in there and prevent future decryption by the quantum computer. Moving on to physical AI. humanoids, we've done extremely well on vision. We're starting to make progress on motor. Robotaxi, we're in quite a few of those. Industrial HMI, we've had our first win using our own model in an industrial robot in Japan, very exciting. Edge AI, autonomous drone and fine AR/VR. So you could see innovation across, again, some of the world's fastest applications. And we -- most of the time are near the ASIC provide a companion function, but quite a few times when the application is small enough like industrial automation, we provide the whole primary function. So motion control, signal processing, image processing, et cetera. Now companionship doesn't mean we're not powerful. Companionship means we're actually a very strong adder to some of these ASICs providing these functions, but we were very powerful. We do this everywhere across many functions, across multiple suppliers, which is very important because somebody says, well, I can replace you, okay, good luck trying to do this whole interop between all these different suppliers. We offload some of these very basic function into mature nodes. These ASICs typically are 2-nanometer, 3-nanometer, very expensive nodes. And we could do this in like 65-nanometer, 28-nanometer, older processes that are much more cost effective. Accelerating the system design cycle, the system design cycle has gone from 2 years to 1.5 years, trying to go to 1 year. And so a lot of these functions don't need to be in these ASICs, get the ASIC to market and let us provide these cost-effective solution for the support function. You can program at hard -- basically program in high-level languages, but the performance we give you is hardware level performance. And what's really important, FPGA is programmable in the field. This could be programmable in the field in the future in case the application changes. A great example is this PQC, post-quantum cryptography. The algorithms are still changing. And so you're going to want to have the flexibility to be able to adapt and change in the future. Bottom line, we feel we enable a faster pace of innovation. So that's pillar #1. We're the everywhere companionship. Pillar #2, we're very focused on the small and midrange FPGA, providing the best road map in the industry for these applications. We provide a platform. We call this our cube. So at the bottom, you could see silicon. On the vertical axis, we provide software tools, provide IP, provide solutions to make it easier for our developers to program using Lattice. And that's a gap that we still have compared to like a microcontroller or microprocessor. We're closing that gap by making it easier to use to program in our FPGA. The benefit is you get hardware-like performance versus if you are on a micro, you'll end up more like software-like performance. We focus on 3 attributes: power, performance and size in order to win in the small and mid-range FPGA market. We've got 2 product lines: Nexus, which is our small FPGA; Avant, which is our mid-range FPGA. And this is how we differentiate. So the foundation of all FPGA is this bottom attribute, low latency. So if you're in a humanoid and it needs to stop, it could stop pretty fast. Deterministic means you provide the same answer every time. It's not easy to do in a micro or in software. Higher precision if you're trying to do screw driving or welding or bin picking in a humanoid, we're very precise. Parallel processing. So this is, by definition, we're a parallel processor engine, providing you higher performance for some of these edge AI applications. Connectivity is very key. So we provide all kinds of connectivity in a humanoid, for example, we provide EtherCAT and PROFINET that allow you to synchronize all these motors together. So the last thing you need is the arm moving at a different pace than the leg and not seeing what's happening in the torso and the vision. So we synchronize all this using connectivity and finally, future-proofing able to change application in the field. Compared to other FPGA, as I said, we are very focused on the small and midrange hence, low power, small size, better value boot time. The last one is very important, longevity. So our fab partners commit to us to a 20-, 30-year lifetime. And our customers are asking us to sign on paper when we work together to these lifetimes. These applications, automotive, industrial, aerospace, defense, medical, they live in there for 30 years. The last thing they want is to be able to have a part that's not supported for that period of time. So that's very critical. On the -- what's called SoC, our competitors integrate the processor inside the FPGA. And we believe that's not the right thing to do. At the time you integrate the processor and FPGA together, it's a marriage made in have. Everybody is in love, it looks fantastic. With time, you're going to see differences. And we have put partnership with folks like NXP, where you can marry big processor, small FPGA, big and big, medium, medium, small and big, it doesn't matter. We provide the best solution for the application at that moment in time. We work with NXP that has a vast catalog of parts that can provide providing a vast support on the software side where it allows you to call and see PyTorch, TensorFlow. And then the other functions are done in the FPGA where we provide some of the hardware type of functions in our FPGA with connectivity, et cetera. So -- this is how we compete, and we're very differentiated and very uniquely positioned in this market. So everywhere companionship, best small to mid-range road map. All of this should drive growth. So we've been expanding the portfolio. We've been investing big. As you could see, '24, we exited with 91 devices. I've been in the company 1.25 years. We brought in a ton of stuff for execution. I can guarantee execution now is better than it used to be 1.25 years ago. We've released 54 new devices in 2025, 60% more that should translate into revenue. We're doing the same in '26, improving not just the silicon, but also the software, the IP, the solutions that go along with it. We innovate across all these markets. So on the solution side, we're providing solutions to our customer and physical AI. On the left, you can see vision and motion control for humanoid robotics, industrial robots, robotaxis and anywhere that's vision. Vision is really our landmark, and we're expanding into motion control is the way to think about our physical AI type of portfolio. On the Comms and Compute data center, security has been our very strong differentiation. We started with root of trust. We now went to PQC, this post-quantum cryptography. On the data center and communication, continue to innovate with new type of interfaces like this LTPI is the latest protocol and multiprotocol across all these applications. And then we do this for the top customers in the world. We are in the top tier. We have 11,000 customers worldwide, about 200 is where we get most of the revenue from. But we do both a direct sale to these top 200, but we also do a channel sale to the 11,000. And all this should allow us to grow very fast. We've been growing the design wins. We've been growing our share. We're leading in the small and mid-range. And we do believe that we'll deliver faster than industry revenue growth for the foreseeable future, and we're committed to deliver EPS growing faster than revenue. So with that, thank you very much, and we'll take questions.

Great. Thank you for this great set of slides. Thank you for walking through all the drivers of the business. I guess the first question I want to start with is one I've gotten from investors over the past year. And you look at the growth drivers, the applications you're targeting. As you step back, what do you think is a reasonable longer-term growth rate for the company? And how would that split between just TAM growth and then idiosyncratic factors, share gains, the launch of the Avant family that are specific to Lattice?

That's a great question. So this year, consensus is about 21%. We're very comfortable with that. We'll give you an update in a couple of weeks. The long-term growth of 15% to 20% should be very doable for us. And if we should grow hopefully towards the higher end of that range at -- right now, we're 69%, 70% gross margin, very strong EBITDA and free cash flow, very diversified business across all the various applications I've shown you. So that should be a very nice setup for the next few years. We do believe in 2026 is going to be a year of the data center. We finished the year strong. We started the year very strong. The comms and compute is on fire, continue to see that -- those trends up and to the right. So 2026 will continue to be the year of comms and compute. It will be the year of the small FPGA for us. Nexus is our family that we said will inflect into '26. We're seeing exactly that, which is going to inflect in '26. On the Industrial and Automotive, we'll see that come back to growth in '26, but really inflect in '27. So '27 then will be the year of growth in Industrial and Automotive, followed by Avant, which is our midrange FPGA business. So a nice setup here is '26 and '27 both have very strong growth vector in place with design wins going to production, products already existing. We really have to mess it up to not deliver this. So we're in very good shape for '26, '27, working on '28. And we do believe we'd like to get to that at least 15%, 20% year-on-year at high margin across the board.

Yes. And I'm sorry, I'll add. As you know well, Quinn, the -- and a lot of our investors know, this year, we've had a big headwind from the inventory that's primarily focused on the industrial and auto part of our business. And we think that's going to be normalized in '26 and set the stage for, as Ford said, the share gain and design wins that we have in place to ramp out of '26. So your question is like there is TAM growth. Obviously, it's a large part of what we see in the data center-oriented business, but that's compounded by the share gain, the expanding applications that we just showed you guys, ASP expansion from those applications and the progression from our pre-Nexus to Nexus and Avant product lines. And then as we align with the industrial growth rate, and compound -- add that to the data center-oriented growth rate, we should be in really good shape those. We're highly confident.

And I think what you meant to say is we normalize end of '25 is...

That's right. Did I say that? I didn't say that. That's what I meant to say.

I was going to get there just to confirm that inventory in the channel.

Yes, we are on track to what we've said before.

Okay. Perfect. I wanted to start with the data center. Obviously, that's the big growth driver here in 2026. I think you had previously said on last earnings call, forecast to grow somewhere between 20% to 40% in calendar '26. What are the big drivers there? You went through some of the application security boot control. But can you talk also about what you're seeing in terms of attach rates, FPGA per server what the trend in ASP is, maybe what some of the new applications, FPGAs are...

Let me start and then Lorenzo will add. The biggest trend that is helping us is disaggregation. So on these AI servers, AI servers right now are estimate 12% of the total number of servers. These AI servers are being very disaggregated, which is a very helpful trend for us. So going from a single board to now you've got a processor board, you've got many satellite boards, you've got a board for networking, another one for storage, another one for power and another one for cooling. So this disaggregation is helping us multiply the number of FPGAs that we have per rack. So that's trend number one. Trend number two, we continue to find these new applications, okay? And so as I just showed you. Trend number three is the CapEx continues to grow. So we were all pleasantly surprised last year at the growth that ended up happening in CapEx for the cloud service provider. Again, expecting another 50% CapEx growth this year, which is again on track and very powerful. So that's number three. Number four, this percent of AI server continues to grow as a total -- as a total number of -- as a percent of total server. And we have more content in AI server than in a regular server. So our ASP are continuing to grow. So we go from older devices to newer devices that have more functionality, more capabilities, more connectivity and those typically have seen an ASP increase. And so you multiply all this, the CapEx growing, percent AI server growing, applications growing, attach rates growing, ASP growing, quite a few.

Pretty good tailwind.

No, I think that's good. captured it.

One of the questions we get, and I'm sure you get as well is just if you boil it down to rack is the new unit of compute, what's your average kind of FPGA content today in a rack? How many FPGAs are in those racks? And where might that go over the next generation or 2 or, say, over the next 2, 3 years?

Right. So we went from tens of FPGAs per rack to hundreds of FPGA per rack. We obviously have more in an AI rack than a traditional rack. So -- and then we have more depending on whether it's NVIDIA or a TPU from Google or Amazon or Meta, depending on the application, depending on the configuration of how people have the networking and storage defined. Storage is a big driver of attach as well. So depending on how people configure around their AI, around their networking, around the storage, it varies, but it's all now in the hundreds. And we went from -- we have a few dollars per ASP per part. So you can see we went from low hundreds to now high hundreds of dollars per rack.

I just CFO temper this a little bit. It's very -- it's -- we get the question a lot because people want to take the number of racks and multiply and get to a number for us. And it's just -- we would say, because of the complicated way these are deployed, as Ford described, it's actually difficult for us to say, as these things ship, it looks like x units per rack and therefore, there's much revenue per rack. So we keep looking at it. We know it's growing, but how it actually manifests itself when different companies, different OEMs ship servers, it's actually quite difficult for us to pin down. So we're a little hesitant other than the general guidance that Ford provided to frame the dollars per rack.

Yes, it's a range from the traditional server all the way to the [indiscernible] server.

How much -- how many blades are populated in the rack. We don't necessarily know that kind of stuff.

Would it be fair just sort of to generalize, obviously, that business would grow with the number of rack shipments over time. The number of GPUs or XPUs in a rack is going up. And I would think given your attach rate trends and your ASP trends, you probably should be growing at least as fast, like if the number of GPUs in a rack double, you would -- would you double with the number of GPUs?

The best way to think about it is look at last year growth, right? The first 9 months -- we haven't reported Q4. The first 9 months of the year, we reported our server business growing 80% and our comms associated with that growing 63%. So we grew at least at the same rate in those segments as the rest of the industry.

Okay. I wanted to spend a few minutes on the com side of the business. I think it's mostly wired comms is also being driven by the AI trend, but spend a minute on wired comms. And then are you seeing anything interesting sort of happening on wireless infrastructure? Could that be an opportunity over the next year or 2?

Yes, absolutely. So on the wired com, there has been a lot of changes as -- what's nice now is an explosion, and you're going to have Credo and Astera Lab after us, right? So they're going to even talk to you about all the scale up and scale out and all of these. So there is a proliferation of scale out and scale up and all kind of new architecture being proposed, which is fantastic because the more diverse this is, the more you need somebody companionship across all this to make sense of all the disparity. So the variety of different comms, architecture are quite interesting. I was pleased to see end of last year, growth being -- having this investment from NVIDIA I was born and early investor. And they also have a totally different way to approach how they hook up all these LPUs together. So you're going to see even more of this variety of how stuff gets hooked up, and that's good for us. On the wireless side, we definitely see new ASICs come to market from the major wireless providers, and that's going to be another attach rate that will help our wireless business for sure.

Great. The last question I had is if you look at the growth rate of the overall comms compute bucket in 2025, it looks like it will be mid- to upper 20s, where you talked about the server business growing 80% for the 9 months and comms up, I think, 63%. So there were some legacy business that I think you were fighting that headwind as it sort of rolled off. Is that legacy PC client business now effectively 0? Is comms and compute effectively all server?

Yes, all the growth will be really coming out of the server-oriented business. That headwind is gone for the future. Now we'd like to pick some of it back up, and we're still working on that. But right now, it's going to be the server-dominated business.

Got it. Okay. Just moving to the Industrial and Automotive segment. You confirmed you're sort of on track for the inventory normalization by the end of 2025. That business has been pretty slow for 15 months. I think you've been undershipping the channel. What have you seen in terms of POS trends or consumption that give you comfort of at least, I think, your 5% to 15% growth rate in '26 and probably better in '27?

Right. Obviously, as we came out of the peak of the industrial business that we had a couple of years ago and slid down to the baseline level where we are, we were taking inventory out of the channel, so POS was down in the second half of 2025, we'll get that year right, 2025. What we started to see is a significant uptick in the POS, which is consistent with what we expected in terms of depleting the channel inventory and setting the table for 2026, right? So it's been very good performance out of the industrial-oriented part of the channel.

Excellent. And I was going to ask any comments on what you're seeing in sort of the robotics side, factory automation? Are you starting to see demand coming back? It sounds like POS is picking up. Is it being led by those applications? Or is there other parts of the business...

I think it's the broader industrial. We're still very early on in the robotics side of the business, but it's a broader industrial play right now.

I mean the positive for me, when we look across geographies, all geographies are contributing. There were some geographies like Japan that were laggards in 2025, and even that has now come back to growth. So that's very positive.

In your Slide 4, you mentioned robots or humanoid robots. There are a couple of systems that are Lattice can play, the vision systems, the motor control. Can you sort of elaborate on how you're feeling about your design win position on vision and what the opportunity on motor control may be going forward?

On vision, we've done very well. Vision has been -- one of our strengths has been something we've done for a long time. So vision, we've really named Vision. Motion control is -- we're making progress. We've got a few headwinds -- beachheads as well, not headwinds, tailwinds and beachheads. So we are going to take those and try to see how much can we expand it on the motion control. So we're -- I think that's the summary.

Okay. And when would you expect those designs to start to contribute to revenue? Is that sort of a 2027, '28 time frame, just knowing that the design cycles are probably a couple.

Most of these human applications are going to market in '27. So across all geographies, U.S. and China.

Okay. I know investors track your new products, Nexus and Avant as a percent of sales. How are you tracking to that relative to your prior expectations of high teens in '25 and mid-20s in 2026? Do you feel comfortable with that progression?

Yes, I think that's pretty much where we are. And the products that we're bringing out, as Ford showed on this slide, we're expanding the product line significantly. Those do take a little bit of time to ramp in. But given the baseline we have, we're very comfortable with that new product ramp.

Just to give you a feel that we -- our new product growth in 2025 was about 65%. So we grew very nicely from '24 to '25. The new products grew very nicely in '25. We expect that to accelerate in '26.

Okay. And again, 2026 is really the year of Nexus. 2027, the year of Avant, Nexus more data center, Avant more industrial...

That's right.

Okay. Sort of a similar question, investors also track your AI revenue, which splits across both of your major end markets. What are you seeing on sort of the trends for the AI revenue in the business?

Our AI revenue has been 60% data center, 40% Industrial and Automotive. We're still tracking to that. We said we'll get to the high teens end of '25. We're on track to this. We said we'll get to the mid-20s in 2026. We're on track for that. So AI as a percent of revenue continues to increase. And this has been more like a companionship story. We -- as I said, the first -- for the first time now have a primary chip win that we've won in HMI. And we're excited about this because in the small type of models, they call tiny models that go into these robotics and industrial, we've got a solution that's differentiated as a primary function.

Excellent. Shifting to the competitive landscape. Intel has now respun out Altera under new management. What are you seeing on the competitive front from Altera? Do you think they get more aggressive? Do they try to get more active in the embedded markets and small mid FPGAs?

Yes. Look, I mean, competition is going to be around. I mean, it's good, there is competition. It means it's a good market. If there is no competition, there's not a good market. So yes, we do believe Altera would get more aggressive, and we do believe they'll come after us in the road map. But really, the major competitor we're worried about today is Xilinx. Xilinx is the one that has an UltraScale++ in our space. And Xilinx is a much bigger company in FPGA, and we've done very well against Xilinx. So we have fundamentally a very sustainable architectural differentiation in our -- in how we approach this low-power small FPGA architecture. And that we believe is sustainable for many years to come. And so recently, we've actually started making headway -- making progress in China against some of the China local FPGA. And these guys are very tough from a pricing and competition, and we're winning there. So we -- our view is, look, focus on the customer, don't focus on the competitor. The competitor is going to be there. We're going to stay paranoid. But fundamentally, what is it that we need to do to leapfrog and make sure we provide benefits to our customers. I've always been customer-centric. I've always been customer-driven, and that's how we do the road map and the strategy. We don't -- we lead, we don't follow. So the last thing I'm going to do is worry about Altera and follow them. They're actually trying to follow us right now. We know the road map, and they're 24 months behind us. The guy that we worry most about, as I said, is Xilinx.

Perfect. Last question for me. Just sort of can you describe sort of your key priorities for capital allocation going forward and sort of thoughts on M&A. I know at Inphi and Broadcom, you were pretty active on the M&A front. Is that a big part of the strategy moving forward?

Let me -- I'll give you the overview and then Ford will elaborate on the M&A viewpoint. So look, we have been aligned from before the beginning of my time there that this is a business that is organically investable. We have really good opportunities in front of us, and that's where we focus primarily. And you saw that in our expansion of our product line. You'll see that again this year as we continue to drive our business into the expanding opportunity that we have. So that's the first thing we do. We will look inorganically at things to accelerate the business. And look across the board. The cube that Ford showed gives you somewhat of an insight into the vectors that we look along, but we're definitely looking at that. And then we always have had a view on prudent return of capital to shareholders when we think we can keep the balance sheet flexibility and have generated cash. We generate a lot of cash for our size, right? So we are fortunate in that we have the investment opportunities in front of us. Ford, do you want to elaborate on the M&A?

Yes. M&A, when I joined Lattice, the reason I joined is I think Lattice is a great foundation to build upon. So we're trying to build a big house. And the key is to have a foundation that's very solid. And so when I looked at the business, it's a very diversified business across many segments, across many applications, Tier 1 customers, a great team, a very strong strategy and high gross margin, high EBITDA and free cash flow, sustainable, high revenue growth for the foreseeable future. So that's what I was looking for, and that's what we have. And so you can invest in this, and then we're going to build the house on top. But the key was to make sure that the foundation was very solid and had the growth vector and the margin profile that will allow us to actually add interesting stuff on top. And the goal here on M&A is to become more strategic to our customers, and we're looking at a few things that would help us do that.

We've done in line with investing in the business, we've done some small tuck-ins already and acquisition of IP and things like that. But that's just part of investing in this core business.

In the core business. Excellent. All right. Well, we are at the end of the session. So Ford and Lorenzo, thank you very much for coming at the Needham Conference. We really appreciate it.

Thank you.