Wireless IoT leader sees sequential revenue growth accelerating into the second quarter  

AUSTIN, Texas, April 24, 2024 /PRNewswire/ -- Silicon Labs (NASDAQ: SLAB), a leader in secure, intelligent wireless technology for a more connected world, reported financial results for the first quarter, which ended March 30, 2024.

(PRNewsfoto/Silicon Labs)

"Silicon Labs delivered strong sequential growth in the first quarter, driven by progress in end-customer inventory destocking in both the Home & Life and Industrial & Customer business units," said Matt Johnson, President and Chief Executive Officer at Silicon Labs. "While we are still in the early stages of the recovery, we expect revenue growth to accelerate in the second quarter as excess inventory is further reduced, bookings improve, and design wins continue to ramp."

First Quarter Financial Highlights 

  • Revenue was $106 million
  • Industrial & Commercial revenue for the quarter was $65 million
  • Home & Life revenue for the quarter was $41 million

Results on a GAAP basis:

  • GAAP gross margin was 52%
  • GAAP R&D expenses were $81 million
  • GAAP SG&A expenses were $34 million
  • GAAP operating loss was $59 million
  • GAAP diluted loss per share was $(1.77)

Results on a non-GAAP basis, excluding the impact of stock compensation, amortization of acquired intangible assets, and certain other items as set forth in the below GAAP to Non-GAAP reconciliation tables were as follows:

  • Non-GAAP gross margin was 52%
  • Non-GAAP R&D expenses were $64 million
  • Non-GAAP SG&A expenses were $30 million
  • Non-GAAP operating loss was $39 million
  • Non-GAAP diluted loss per share was $(0.92)

Business Highlights

  • Silicon Labs is advancing its strategic growth plan and has announced several key leadership appointments. These changes underscore the company's commitment to aggressively scaling and leveraging the expertise of executives seasoned in leading high-growth transformations.
    • Dean Butler will join the company as Senior Vice President and Chief Financial Officer (CFO) on May 15, 2024. Butler will be responsible for Silicon Labs' financial strategy and will lead the global finance organization. Butler will succeed Mark Mauldin, who is currently serving as interim CFO. Butler joins Silicon Labs from Synaptics Incorporated, where he has served as Senior Vice President and CFO since October 2019. He previously held financial leadership positions at Marvell Technology, Inc. and Broadcom, Inc.
    • Bob Conrad will join the company as its Senior Vice President of Worldwide Operations on April 29, 2024. Conrad transitions from his current role serving on Silicon Labs' Board of Directors and brings over 40 years of experience in the semiconductor industry to his new position. With a distinguished career that includes leadership roles at NXP Semiconductors, Freescale, Fairchild Semiconductor, Analog Devices, and Texas Instruments, Conrad's extensive background will bolster Silicon Labs' strategic operations as the company advances its global manufacturing and supply chain capabilities. 
    • Radhika Chennakeshavula joins Silicon Labs as Chief Information Officer (CIO) on April 24, 2024. Chennakeshavula now oversees IT operations, enterprise applications, data analytics, and digital transformation initiatives. Chennakeshavula previously served as the VP of Infrastructure Operations and Engineering Services at Western Digital, where she successfully led the infrastructure team in providing high-quality IT services for mission-critical functions, including manufacturing and R&D.
  • Announced Silicon Labs' highest-performance device family to date, the xG26 family of wireless SoC's and MCU's. The xG26 family is designed to future-proof the IoT against some of the most demanding emerging applications, including Matter, with double the flash, RAM, and general-purpose input/output capacity as the xG24 family, as well as higher performance compute, embedded AI/ML acceleration, industry-leading power efficiency and security, and 2.4 GHz wireless connectivity that supports Matter, Zigbee, OpenThread, Bluetooth Low Energy, Bluetooth Mesh, Proprietary, and multiprotocol.

Business Outlook

The company expects second-quarter revenue to be between $135 to $145 million. The company also estimates the following results:

On a GAAP basis:

  • GAAP gross margin to be 53%
  • GAAP operating expenses of approximately $125 million
  • GAAP diluted loss per share per share between $(1.45) to $(1.61)

On a non-GAAP basis, excluding the impact of stock compensation, amortization of acquired intangible assets, and certain other items as set forth in the reconciliation tables:

  • Non-GAAP gross margin to be 53%
  • Non-GAAP operating expenses of approximately $102 million
  • Non-GAAP diluted loss per share between $(0.58) to $(0.70)

Earnings Webcast and Conference Call 

Silicon Labs will host an earnings conference call to discuss the quarterly results and answer questions at 7:30 am CDT today. An audio webcast will be available on Silicon Labs' website (www.silabs.com) under Investor Relations. In addition, the company will post an audio recording of the event at investor.silabs.com and make a replay available through May 24, 2024.

About Silicon Labs 

Silicon Labs (NASDAQ: SLAB) is a leader in secure, intelligent wireless technology for a more connected world. Our integrated hardware and software platform, intuitive development tools, thriving ecosystem, and robust support make us an ideal long-term partner in building advanced industrial, commercial, home and life applications. We make it easy for developers to solve complex wireless challenges throughout the product lifecycle and get to market quickly with innovative solutions that transform industries, grow economies, and improve lives. silabs.com

Forward-Looking Statements

This press release contains forward-looking statements based on Silicon Labs' current expectations. The words "believe", "estimate", "expect", "intend", "anticipate", "plan", "project", "will", and similar phrases as they relate to Silicon Labs are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Silicon Labs and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are the following: the competitive and cyclical nature of the semiconductor industry; the challenging macroeconomic environment, including disruptions in the financial services industry; geographic concentration of manufacturers, assemblers, test service providers and customers in Asia that subjects Silicon Labs' business and results of operations to risks of natural disasters, epidemics or pandemics, war and political unrest; risks that demand and the supply chain may be adversely affected by military conflict (including in the Middle East, and between Russia and Ukraine), terrorism, sanctions or other geopolitical events globally (including in the Middle East, and conflict between Taiwan and China); risks that Silicon Labs may not be able to maintain its historical growth; quarterly fluctuations in revenues and operating results; difficulties developing new products that achieve market acceptance; risks associated with international activities (including trade barriers, particularly with respect to China); intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing and/or obtaining sufficient supply from Silicon Labs' distributors, manufacturers and subcontractors; dependence on a limited number of products; absence of long-term commitments from customers; inventory-related risks; difficulties managing international activities; risks that Silicon Labs may not be able to manage strains associated with its growth; credit risks associated with its accounts receivable; dependence on key personnel; stock price volatility; the impact of COVID-19 on the U.S. and global economy; debt-related risks; capital-raising risks; the timing and scope of share repurchases and/or dividends; average selling prices of products may decrease significantly and rapidly; information technology risks; cyber-attacks against Silicon Labs' products and its networks; risks associated with any material weakness in our internal controls over financial reporting; and other factors that are detailed in the SEC filings of Silicon Laboratories Inc. Silicon Labs disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. References in this press release to Silicon Labs shall mean Silicon Laboratories Inc.

Note to editors: Silicon Laboratories, Silicon Labs, the "S" symbol, and the Silicon Labs logo are trademarks of Silicon Laboratories Inc. All other product names noted herein may be trademarks of their respective holders. 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Operations 

(In thousands, except per share data) 

(Unaudited)



Three Months Ended


March 30,
2024


April 1,
2023

Revenues

$           106,375


$           246,787

Cost of revenues

51,306


92,927

Gross profit

55,069


153,860

Operating expenses:




Research and development

80,650


89,396

Selling, general and administrative

33,553


44,891

Operating expenses

114,203


134,287

Operating income (loss)

(59,134)


19,573

Other income (expense):




Interest income and other, net

2,732


4,836

Interest expense

(509)


(1,656)

Income (loss) before income taxes

(56,911)


22,753

Provision (benefit) for income taxes

(385)


7,753

Equity-method loss


(1,033)

Net income (loss)

$            (56,526)


$             13,967





Earnings (loss) per share:




Basic

$                (1.77)


$                  0.44

Diluted

$                (1.77)


$                  0.41





Weighted-average common shares outstanding:




Basic

31,910


31,959

Diluted

31,910


33,753

Non-GAAP Financial Measurements

In addition to the GAAP results provided throughout this document, Silicon Labs has provided non-GAAP financial measurements on a basis excluding non-cash and other charges and benefits. Details of these excluded items are presented in the tables below, which reconcile the GAAP results to non-GAAP financial measurements.

The non-GAAP financial measurements do not replace the presentation of Silicon Labs' GAAP financial results. These measurements provide supplemental information to assist management and investors in analyzing Silicon Labs' financial position and results of operations. Silicon Labs has chosen to provide this information to investors to enable them to perform meaningful comparisons of past, present and future operating results and as a means to emphasize the results of core on-going operations.

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)




Three Months Ended

March 30, 2024

Non-GAAP Income Statement Items


GAAP

Measure


GAAP

Percent of

Revenue


Stock

Compensation

Expense


Intangible Asset

Amortization


Termination
Costs


Non-GAAP

Measure


Non-GAAP

Percent of

Revenue

Revenues


$    106,375




























Gross profit


55,069


51.8 %


$                412


$                —


$                  —


$         55,481


52.2 %
















Research and development


80,650


75.8 %


9,722


6,061


407


64,460


60.6 %
















Selling, general and administrative


33,553


31.5 %


3,477


19


156


29,901


28.1 %
















Operating income (loss)


(59,134)


(55.6 %)


13,611


6,080


563


(38,880)


(36.5 %)

 



Three Months Ended

March 30, 2024

Non-GAAP Loss Per Share


GAAP

Measure


Stock

Compensation

Expense*


Intangible

Asset

Amortization*


Termination

Costs*


Income

Tax

Adjustments


Non-

GAAP

Measure

Net income (loss)


$  (56,526)


$        13,611


$           6,080


$            563


$            6,946


$    (29,326)














Diluted shares outstanding


31,910










31,910














Diluted loss per share


$      (1.77)










$         (0.92)

*   Represents pre-tax amounts

 

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)




Three Months Ended
June 29, 2024

Business Outlook


GAAP

Measure


Non-GAAP

Adjustments**


Non-GAAP

Measure

Gross margin


53 %


— %


53 %








Operating expenses


$              125


$                (23)


$              102








Diluted loss per share - low


$            (1.61)


$              0.91


$            (0.70)








Diluted loss per share - high


$            (1.45)


$              0.87


$            (0.58)

**  Non-GAAP adjustments include the following estimates: stock compensation expense of $16.0 million, intangible asset amortization of $6.1 million, termination costs of $1.3 million, and the application of a long-term non-GAAP tax rate of 20%.

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets 

(In thousands, except per share data) 

(Unaudited)



March 30,
2024


December 30,
2023

Assets




Current assets:




Cash and cash equivalents

$           191,489


$           227,504

Short-term investments

141,201


211,720

Accounts receivable, net

32,616


29,295

Inventories

198,206


194,295

Prepaid expenses and other current assets

82,608


75,117

Total current assets

646,120


737,931

Property and equipment, net

142,155


145,890

Goodwill

376,389


376,389

Other intangible assets, net

53,453


59,533

Other assets, net

126,036


123,313

Total assets

$        1,344,153


$        1,443,056

Liabilities and Stockholders' Equity




Current liabilities:




Accounts payable

$             44,575


$             57,498

Revolving line of credit


45,000

Deferred revenue and returns liability

3,921


2,117

Other current liabilities

62,863


58,955

Total current liabilities

111,359


163,570

Other non-current liabilities

67,233


70,804

Total liabilities

178,592


234,374

Commitments and contingencies




Stockholders' equity:




Preferred stock – $0.0001 par value; 10,000 shares authorized; no shares issued


Common stock – $0.0001 par value; 250,000 shares authorized; 31,924 and 31,897 shares issued and outstanding at March 30, 2024 and December 30, 2023, respectively

3


3

Additional paid-in capital

29,830


16,973

Retained earnings

1,136,205


1,192,731

Accumulated other comprehensive loss

(477)


(1,025)

Total stockholders' equity

1,165,561


1,208,682

Total liabilities and stockholders' equity

$        1,344,153


$        1,443,056

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows 

(In thousands) 

(Unaudited)



Three Months Ended


March 30,
2024


April 1,
2023

Operating Activities




Net income (loss)

$            (56,526)


$             13,967

Adjustments to reconcile net income to net cash used in operating activities:




Depreciation of property and equipment

6,634


6,235

Amortization of other intangible assets

6,079


6,510

Amortization of debt issuance costs


523

Loss on extinguishment of convertible debt


Stock-based compensation expense

13,612


16,638

Equity-method loss


1,033

Deferred income taxes

(5,270)


(2,670)

Changes in operating assets and liabilities:




Accounts receivable

(3,321)


(16,257)

Inventories

(3,958)


(32,794)

Prepaid expenses and other assets

(15,466)


11,530

Accounts payable

(13,829)


(12,966)

Other current liabilities and income taxes

1,554


(8,529)

Deferred revenue and returns liability

1,804


4,478

Other non-current liabilities

(3,113)


(978)

Net cash used in operating activities

(71,800)


(13,280)





Investing Activities




Purchases of marketable securities

(9,794)


(66,113)

Sales of marketable securities

25,763


170,317

Maturities of marketable securities

55,188


157,734

Purchases of property and equipment

(2,047)


(7,657)

Proceeds from sale of equity investment

12,382


Net cash provided by investing activities

81,492


254,281





Financing Activities




Payments on debt

(45,000)


Repurchases of common stock


(17,608)

Payment of taxes withheld for vested stock awards

(1,048)


(6,931)

Proceeds from the issuance of common stock

341


Net cash used in financing activities

(45,707)


(24,539)





Increase (decrease) in cash and cash equivalents

(36,015)


216,462

Cash and cash equivalents at beginning of period

227,504


499,915

Cash and cash equivalents at end of period

$           191,489


$           716,377

 

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SOURCE Silicon Labs

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