Lattice's New AMI Segment Earns $12.2 Million While An 'Unallocated' Line Loses $89.6 Million
Lattice's first two-segment report shows AMI profitable, with stock pay, amortization and deal costs parked outside it, alongside $875 million of term loans.
Lattice Semiconductor's AMI firmware business earned $12.2 million in operating income on $39.1 million of revenue in the third quarter, but the stock pay, intangible amortization and acquisition costs sit in an "Unallocated" line that lost $89.6 million, according to the company's 10-Q filed Tuesday. Lattice, which designs low power programmable chips called FPGAs, is reporting two segments for the first time since buying AMI.
Two segments, one big unallocated hole
The prior quarter's 10-Q showed a single segment. The new filing splits the company into FPGA and AMI, with the chief executive acting as the chief operating decision maker, the executive who judges each segment and allocates resources to it.
FPGA earned $101.4 million in operating income on $251.9 million of revenue. The revenue-free Unallocated line absorbs restructuring, acquisition costs, intangible amortization and stock-based compensation. Added together, the three lines give total operating income of $24.0 million.
Over the same stretch from the July 27 closing to October 3, AMI posted a $14.4 million net loss. Lattice completed the deal on July 27 after signing the merger agreement on May 4.
$1.6 billion paid, mostly goodwill
Total purchase consideration came to $1,589.7 million. The preliminary allocation assigns $1,054.1 million to goodwill and $551.0 million to identified intangibles, and the company may revise it for up to 12 months after closing, saying any changes may be material.
Goodwill rose to $1,369.5 million by October 3 from $315.4 million at the start of the year. Amortization of intangibles is scheduled at $71.9 million for 2027, and the risk factors now warn that impairment charges could follow if AMI underperforms.
Debt and thin contracted backlog
Lattice had $875 million of term loans outstanding at quarter end, after borrowing $925 million to fund the deal and prepaying $50 million. The effective interest rate on the term loan was 5.76%, and nothing was drawn on its $200 million revolver. Interest expense swung to $9.6 million for the quarter, against interest income of $0.6 million a year earlier.
Remaining performance obligations, contracted revenue not yet recognized, total just $20.4 million, mostly AMI firmware support. Total company revenue was $291.0 million in the quarter, which Lattice reported in its earnings release on Monday, along with fourth-quarter revenue guidance of $325 million to $345 million.
Because the purchase accounting is still preliminary, the goodwill and intangibles figures behind the AMI segment can still change in later filings.
Sources
- 10-Q Filing — Lattice Semiconductor (LSCC) — SEC EDGAR
- 10-Q Filing — Lattice Semiconductor (LSCC), Q2 FY2026 filed 2026-08-04 (comparison basis) — SEC EDGAR
- 8-K/A Filing — Lattice Semiconductor, filed 2026-10-30 (Items 5.02, 9.01) — SEC EDGAR
- Earnings release (8-K Item 2.02, ex_1012509.htm) — Lattice Semiconductor, filed 2026-11-02 — SEC EDGAR
