Silicon Labs Reports Third Quarter 2024 Results
Wireless IoT leader delivers third-quarter results above the midpoint of its guidance
AUSTIN, Texas, Nov. 4, 2024 /PRNewswire/ -- Silicon Labs (NASDAQ: SLAB), a leader in secure, intelligent wireless technology for a more connected world, reported financial results for the third quarter, which ended September 28, 2024.
"Silicon Labs delivered solid sequential revenue growth as several key design wins began ramping in the quarter," said Matt Johnson, President and Chief Executive Officer at Silicon Labs. "Looking ahead, progress on inventory destocking and demand recovery remains uneven across our end markets. Despite the uncertain market backdrop in the near-term, we remain well-positioned for long-term growth and market share expansion."
Third Quarter Financial Highlights
-- Revenue was $166 million
-- Industrial & Commercial revenue for the quarter was $96 million, up 10%
sequentially
-- Home & Life revenue for the quarter was $70 million, up 22% sequentially
Results on a GAAP basis:
-- GAAP gross margin was 54.3%
-- GAAP operating expenses were $120 million
-- GAAP operating loss was $30 million
-- GAAP diluted loss per share was $(0.88)
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 54.5%
-- Non-GAAP operating expenses were $99 million
-- Non-GAAP operating loss was $8 million
-- Non-GAAP diluted loss per share was $(0.13)
Business Highlights
-- Silicon Labs' 5th annual IoT developers conference, Works With, expanded
its footprint this year with in-person events in key global regions,
including Austin, San Jose, Hyderabad, and Shanghai. This signature
event series unites device manufacturers, wireless experts, engineers,
and industry leaders, and attracted over 500 companies - among them
Amazon, Google, Samsung, and Nvidia. Notably, over 60% of attendees were
new to Silicon Labs, with one-third from top strategic customer
segments. Silicon Labs will further extend Works With virtually on
November 20 & 21, reaching thousands of potential and existing customers
worldwide.
-- Announced the general availability of its first Wi-Fi 6 solution: the
SiWx917. The 917 family of SoC's is designed from the ground-up for
ultra-low-power applications using Wi-Fi 6, Bluetooth, Matter, and IP
networking for secure cloud connectivity while offering up to 2 years
battery life on a single AAA battery in select IoT applications.
-- Announced support for Bluetooth Channel Sounding technology on its
current xG24 platform, significantly enhancing the accuracy,
interoperability, and security of distance measurement between two
Bluetooth Low Energy (LE) devices in applications like building access
controls, keyless entry, and asset tracking.
-- Announced that Silicon Labs' MG26 device for Bluetooth and 15.4
connectivity was awarded one of the IoT Evolution's Product of the Year
awards. This multiprotocol wireless SoC was announced earlier this year
and is built to be future proof as the needs of the IoT grow, featuring
the same Matrix Vector Processor for dedicated machine learning as the
upcoming Series 3.
Business Outlook
The company expects fourth-quarter revenue to be between $161 to $171 million. The company also estimates the following results:
On a GAAP basis:
-- GAAP gross margin to be between 54% to 55%
-- GAAP operating expenses of approximately $118 million to $122 million
-- GAAP diluted loss per share per share between $(0.75) to $(1.05)
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 between 54% to 55%
-- Non-GAAP operating expenses of approximately $97 million to $99 million
-- Non-GAAP diluted loss per share between $(0.01) to $(0.21)
Earnings Webcast and Conference Call
Silicon Labs will host an earnings conference call to discuss the quarterly results and answer questions at 3:30 pm 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 December 4, 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 Nine Months Ended
September 28, September 30, September 28, September 30,
2024 2023 2024 2023
Revenues $166,395 $203,760 $418,137 $695,413
Cost of revenues 76,082 84,735 196,172 278,753
Gross profit 90,313 119,025 221,965 416,660
Operating expenses:
Research and development 83,228 79,042 249,787 254,340
Selling, general and administrative 36,793 27,766 109,041 113,363
Operating expenses 120,021 106,808 358,828 367,703
Operating income (loss) (29,708) 12,217 (136,863) 48,957
Other income (expense):
Interest income and other, net 3,487 2,938 9,009 15,554
Interest expense (278) (1,359) (1,050) (4,611)
Income (loss) before income taxes (26,499) 13,796 (128,904) 59,900
Provision for income taxes 2,005 3,388 38,283 23,479
Equity-method loss - (60) (1,150)
Net income (loss) $(28,504) $10,348 $(167,187) $35,271
Earnings (loss) per share:
Basic $(0.88) $0.33 $(5.21) $1.11
Diluted $(0.88) $0.32 $(5.21) $1.07
Weighted-average common shares outstanding:
Basic 32,309 31,796 32,114 31,789
Diluted 32,309 32,078 32,114 32,919
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
September 28, 2024
Non-GAAP Income Statement Items GAAP GAAP Stock Intangible
Asset Non-GAAP Non-GAAP
Measure Percent of Compensation Amortization Measure Percent of
Revenue Expense Revenue
Revenues $166,395
Gross profit 90,313 54.3 % $369
$ - $90,682 54.5 %
Research and development 83,228 50.0 % 10,255 5,438 67,535 40.6 %
Selling, general and administrative 36,793 22.1 % 5,279 31,514 18.9 %
Operating expenses 120,021 72.1 % 15,534 5,438 99,049 59.5 %
Operating income (loss) (29,708) (17.9 %) 15,903 5,438 (8,367) (5.0 %)
Three Months Ended
September 28, 2024
Non-GAAP Loss Per Share GAAP Stock Intangible Income Non-
Measure Compensation Asset Tax GAAP
Expense* Amortization* Adjustments Measure
Net income (loss) $(28,504) $15,903 $5,438 $3,036 $(4,127)
Diluted shares outstanding 32,309 32,309
Diluted loss per share $(0.88) $(0.13)
* Represents pre-tax amounts
Unaudited Forward-Looking Statements Regarding Business Outlook
(In millions, except per share data)
Three Months Ended
December 28, 2024
Business Outlook GAAP Non-GAAP Non-GAAP
Measure Adjustments** Measure
Gross margin 54% to 55% - % 54% to 55%
Operating expenses
$118 to $122
$(21) to $(23)
$97 to $99
Diluted loss per share
$(0.75) to $(1.05)
$0.74 to $0.84
$(0.01) to $(0.21)
** Non-GAAP adjustments include the following estimates: stock compensation expense of $16.8 million, intangible asset amortization of $5.4 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)
September 28, December 30,
2024 2023
Assets
Current assets:
Cash and cash equivalents $303,082 $227,504
Short-term investments 66,596 211,720
Accounts receivable, net 48,879 29,295
Inventories 139,489 194,295
Prepaid expenses and other current assets 56,090 75,117
Total current assets 614,136 737,931
Property and equipment, net 135,317 145,890
Goodwill 376,389 376,389
Other intangible assets, net 41,936 59,533
Other assets, net 81,464 123,313
Total assets $1,249,242 $1,443,056
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $44,648 $57,498
Revolving line of credit - 45,000
Deferred revenue and returns liability 8,478 2,117
Other current liabilities 65,179 58,955
Total current liabilities 118,305 163,570
Other non-current liabilities 49,551 70,804
Total liabilities 167,856 234,374
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; 32,343 and 31,897 3 3
shares issued and outstanding at September 28, 2024 and December 30, 2023,
respectively
Additional paid-in capital 55,567 16,973
Retained earnings 1,025,544 1,192,731
Accumulated other comprehensive income (loss) 272 (1,025)
Total stockholders' equity 1,081,386 1,208,682
Total liabilities and stockholders' equity $1,249,242 $1,443,056
Silicon Laboratories Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
September 28, September 30,
2024 2023
Operating Activities
Net income (loss) $(167,187) $35,271
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation of property and equipment 19,302 18,992
Amortization of other intangible assets 17,596 19,162
Amortization of debt issuance costs - 960
Stock-based compensation expense 45,358 37,167
Equity-method loss - 1,150
Deferred income taxes 29,100 (5,881)
Changes in operating assets and liabilities:
Accounts receivable (19,585) (30,706)
Inventories 54,724 (66,971)
Prepaid expenses and other assets 23,091 8,085
Accounts payable (13,849) (37,039)
Other current liabilities and income taxes (5,004) (39,155)
Deferred revenue and returns liability 6,361 3,286
Other non-current liabilities (13,946) 6,794
Net cash used in operating activities (24,039) (48,885)
Investing Activities
Purchases of marketable securities (28,363) (91,493)
Sales of marketable securities 44,057 365,073
Maturities of marketable securities 131,008 171,766
Purchases of property and equipment (7,785) (18,533)
Proceeds from sale of equity investment 12,382
Purchases of other assets - (395)
Net cash provided by investing activities 151,299 426,418
Financing Activities
Proceeds from revolving line of credit - 80,000
Payments on debt (45,000) (571,157)
Repurchases of common stock - (217,137)
Payment of taxes withheld for vested stock awards (16,078) (17,239)
Proceeds from the issuance of common stock 9,396 8,013
Net cash used in financing activities (51,682) (717,520)
Increase (decrease) in cash and cash equivalents 75,578 (339,987)
Cash and cash equivalents at beginning of period 227,504 499,915
Cash and cash equivalents at end of period $303,082 $159,928
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SOURCE Silicon Labs
