Silicon Labs Announces Third Quarter 2019 Results

AUSTIN, Texas, Oct. 23, 2019 /PRNewswire/ -- Silicon Labs (NASDAQ: SLAB), a leading provider of silicon, software and solutions for a smarter, more connected world, today reported financial results for its third quarter ended September 28, 2019. Revenue was at the high end of guidance at $223.3 million, up from $206.7 million in the second quarter. Third quarter GAAP and non-GAAP diluted earnings per share (EPS) were $0.45 and $0.96, respectively.

"Third quarter revenue was up eight percent sequentially, with growth across all major product categories, and following the ten percent sequential increase we realized in the second quarter," said Tyson Tuttle, CEO of Silicon Labs. "Despite macro headwinds, ongoing trade policy uncertainties and current semiconductor industry market conditions, we are pleased to deliver two consecutive quarters of strong revenue growth and a return to target operating model profitability."  

Third Quarter Financial Highlights

• IoT revenue increased to a record $129 million, up 4% sequentially and 3% year-on-year.
• Infrastructure revenue increased to $45 million, up 3% sequentially and down 14% year-on-year.
• Broadcast revenue increased to $34 million, up 30% sequentially and down 5% year-on-year.
• Access revenue increased to $15 million, up 23% sequentially and down 10% year-on-year.

On a GAAP basis:                                                                                         

• GAAP gross margin was 60.1%.
• GAAP R&D expenses were $63 million.
• GAAP SG&A expenses were $48 million.
• GAAP operating income as a percentage of revenue was 10.7%.
• GAAP diluted earnings per share were $0.45.

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

• Non-GAAP gross margin was 60.2%.
• Non-GAAP R&D expenses were $49 million.
• Non-GAAP SG&A expenses were $38 million.
• Non-GAAP operating income as a percentage of revenue was 21.1%.
• Non-GAAP diluted earnings per share were $0.96.

Product Results

• Launched a new portfolio of pre-certified Series 2 wireless modules to simplify the development of smart LED lighting, home automation and industrial IoT applications.
• Announced a collaboration with Allegion, a pioneer in security solutions, to expand IoT wireless capabilities to security products for smart homes and commercial buildings.
• Announced the industry's broadest portfolio of automotive grade timing solutions including AEC-Q100-qualified clock generators, buffers and PCIe devices.
• Introduced the Si834x isolated smart switch family designed to optimize performance in harsh industrial environments while offering best-in-class protection and diagnostic reporting features.
• Enhanced Silicon Labs' Si479xx automotive tuner family with software-defined radio technology addressing the market need to support all global digital radio standards with a common platform.

Business Highlights

• Hosted the Z-Wave Alliance's Fall Summit in Austin, convening members, partners and thought leaders for a series of presentations, panels and workshops on the future of Z-Wave technology and the smart home market.
• Announced the acquisition of Qulsar's IEEE 1588 precision time protocol (PTP) software and module assets enabling Silicon Labs to address the fast-growing IEEE 1588 market with turnkey, carrier-grade solutions simplifying integration and accelerating time to market for a wide range of applications.
• Awarded the Chamberlain Group's "Innovation and Technology Solutions" supplier award.
• Added Megan Lueders to Silicon Labs' executive team as Chief Marketing Officer to lead the company's global marketing team responsible for brand management, sales pipeline acceleration and customer experience.

Business Outlook

The company expects fourth quarter revenue to be in the range of $217 to $227 million, with Infrastructure up, IoT flat, and a decline in Broadcast and Access, and estimates the following:

On a GAAP basis:

• GAAP gross margin at approximately 60.3%.
• GAAP operating expenses at approximately $113 million.
• GAAP effective tax rate of 8.0%.
• GAAP diluted earnings per share between $0.33 and $0.43.

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

• Non-GAAP gross margin at approximately 60.5%.
• Non-GAAP operating expenses at approximately $90 million.
• Non-GAAP effective tax rate at 11.5%.
• Non-GAAP diluted earnings per share between $0.84 and $0.94.

Webcast and Conference Call        

A conference call discussing the quarterly results will follow this press release at 7:30 a.m. Central time. An audio webcast will be available on Silicon Labs' website (www.silabs.com) under Investor Relations. A replay will be available after the call at the same website listed above or by calling 1 (877) 344-7529 (US) or (412) 317-0088 (International) and entering access code 10135403. The replay will be available through November 23, 2019.

About Silicon Labs

Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and solutions for a smarter, more connected world. Our award-winning technologies are shaping the future of the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. Our world-class engineering team creates products focused on performance, energy savings, connectivity and simplicity. 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: 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; dependence on a limited number of products and customers; intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing Silicon Labs' distributors, manufacturers and subcontractors; inventory-related risks; difficulties managing international activities; risks associated with international activities (including trade barriers); 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; 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, war and political unrest; debt-related risks; capital-raising risks; the competitive and cyclical nature of the semiconductor industry; average selling prices of products may decrease significantly and rapidly; information technology risks; cyber-attacks against Silicon Labs' products and its networks; conflict mineral risks 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.

CONTACT: Jalene Hoover, +1 (512) 428-1610, Jalene.Hoover@silabs.com

View original content to download multimedia:http://www.prnewswire.com/news-releases/silicon-labs-announces-third-quarter-2019-results-300943495.html

SOURCE Silicon Labs