Press Releases

Silicon Labs Announces Record Revenue for Second Quarter 2021
Strong Execution in Supply-Constrained Market Delivers Record IoT Revenue

AUSTIN, Texas, July 28, 2021 /PRNewswire/ -- Silicon Labs (NASDAQ: SLAB), a leader in secure, intelligent wireless technology for a more connected world, reported strong financial results for the second quarter, which ended July 3, 2021. Revenue exceeded the top of the guidance range at $278 million, and revenue from the Internet of Things business (IoT) ended at a record high of $169 million, up seven percent sequentially and 48 percent year-on-year. Second quarter GAAP and non-GAAP diluted earnings per share (EPS) were $0.44 and $1.05, respectively.

"We continue to capitalize on the increased adoption, growth and diversity of the global IoT market," said Silicon Labs CEO Tyson Tuttle. "Achieving another quarter of record revenue, robust bookings, and strong design wins amid a tight supply chain environment is a testament to our powerful development platform, performance-driven team, and purpose-oriented culture."

Earlier in the week, Silicon Labs accomplished another major milestone, completing the divestiture of its Infrastructure and Automotive (I&A) businesses to Skyworks Solutions, Inc. (NASDAQ: SWKS) for $2.75 billion in an all-cash transaction, the proceeds of which have been fully funded. Silicon Labs is now reporting revenue from the divested products as "discontinued operations" and from IoT as "continuing operations."

Second Quarter Financial Highlights

  • IoT revenue from continuing operations increased to $169 million, up seven percent sequentially and 48 percent year-on-year
  • I&A revenue from discontinued operations increased to $108 million, up 11 percent sequentially and 16 percent year-on-year

Results from continuing operations on a GAAP basis:                                 

  • GAAP gross margin was 56.8%
  • GAAP R&D expenses were $65 million
  • GAAP SG&A expenses were $43 million
  • GAAP operating loss as a percentage of revenue was (6.8)%
  • GAAP loss per share was $(0.41)

Results from continuing operations on a non-GAAP basis, excluding the impact of stock compensation, amortization of acquired intangible assets, restructuring charges, non-cash interest expense and other costs associated with convertible notes, and certain other items as set forth in the reconciliation tables were as follows:

  • Non-GAAP gross margin was 56.9%
  • Non-GAAP R&D expenses were $51 million
  • Non-GAAP SG&A expenses were $34 million
  • Non-GAAP operating income as a percentage of revenue was 6.6%
  • Non-GAAP diluted earnings per share were $0.16

Innovations and Achievements

  • Completed smooth transition of the infrastructure and automotive business to Skyworks Solutions, positioning Silicon Labs as a pure-play leader in secure, intelligent wireless connectivity.
     
  • Continued to drive the IoT industry forward by contributing more than 20 percent of the source code and launching new products for Matter, which simplifies the complexities of secure, reliable wireless connectivity for both developers and consumers.
     
  • Collaborated with fellow IoT leader, Wirepas, to launch a connected solution for asset tracking and building automation. Wirepas chose Silicon Labs for its integrated hardware and software platform, ultra-low power chips and affordable solutions.
     
  • Remained steadfast in our dedication to environmental sustainability and passion for supporting local communities by becoming the first corporation to join the International Institute of Information Technology Hyderabad's new Smart City Living Lab, which focuses R&D on devices that improve life in densifying cities.
     
  • Demonstrated we are passionate about connecting more than "things" and announced the annual WorksWith conference, which connects developers and business leaders to the information, experts, and technology needed to go from IoT idea to award-winning innovation.

Business Outlook

The company expects third quarter revenue from continuing operations to be in the range of $170 to $180 million. The company also estimates the following results from continuing operations:

On a GAAP basis:

  • GAAP gross margin between 57% and 57.5%
  • GAAP operating expenses at approximately $116 million
  • GAAP effective tax rate of approximately (11)%
  • GAAP diluted loss per share to be in the range of a $(0.56) to $(0.46)

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

  • Non-GAAP gross margin between 57% and 58%
  • Non-GAAP operating expenses at approximately $93 million
  • Non-GAAP effective tax rate of approximately 14%
  • Non-GAAP diluted earnings per share between $0.10 and $0.20

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 CST today. An audio webcast will be available on Silicon Labs' website (www.silabs.com) under Investor Relations. The company will post an audio recording of the event at silabs.com/investors and make a replay available through August 4, 2021 online or by calling (877) 344-7529 (US) or (412) 317-0088 (international) and entering access code 10158301.

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, unmatched ecosystem and robust support make us the 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 effect of the Skyworks transaction on the ability of Silicon Labs to retain and hire key personnel and maintain relationships with its customers, suppliers, advertisers, partners and others with whom it does business, or on its operating results and businesses generally; risks associated with the disruption of management's attention from ongoing business operations due to such transaction; the timing and scope of anticipated share repurchases and/or dividends; the impact of COVID-19 on the U.S. and global economy, including the restrictions on travel and transportation and other actions taken by governmental authorities and disruptions to the business of our customers or our global supply chain that have occurred or may occur in the future, the ongoing impact of COVID-19 on our employees and our ability to provide services to our customers and respond to their needs; 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 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; 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; 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 and other factors that are detailed in the SEC filings of Silicon Laboratories Inc. The level of share repurchases and/or dividends depends on market conditions and the level of other uses of cash.  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

 

Six Months Ended

 

July 3,
2021

 

July 4,
2020

 

July 3,
2021

 

July 4,
2020

Revenues

$169,492

 

$114,350

 

$327,349

 

$232,368

Cost of revenues

73,194

 

47,771

 

139,297

 

96,942

Gross profit

96,298

 

66,579

 

188,052

 

135,426

Operating expenses:

             

   Research and development

64,832

 

57,992

 

128,847

 

115,702

   Selling, general and administrative

42,953

 

40,350

 

85,407

 

84,802

Operating expenses

107,785

 

98,342

 

214,254

 

200,504

Operating loss

(11,487)

 

(31,763)

 

(26,202)

 

(65,078)

Other income (expense):

             

   Interest income and other, net

647

 

3,267

 

3,522

 

6,518

   Interest expense

(6,486)

 

(11,778)

 

(17,810)

 

(17,319)

Loss from continuing operations before income taxes

(17,326)

 

(40,274)

 

(40,490)

 

(75,879)

Provision (benefit) for income taxes

1,165

 

(4,229)

 

3,157

 

(8,443)

Loss from continuing operations

(18,491)

 

(36,045)

 

(43,647)

 

(67,436)

Income from discontinued operations, net of income taxes

38,423

 

34,222

 

77,088

 

67,857

               

Net income (loss)

$  19,932

 

$   (1,823)

 

$  33,441

 

$       421

               

Basic earnings (loss) per share:

             

   Continuing operations

$     (0.41)

 

$     (0.82)

 

$     (0.98)

 

$     (1.54)

   Net income

$      0.44

 

$     (0.04)

 

$      0.75

 

$      0.01

               

Diluted earnings (loss) per share:

             

   Continuing operations

$     (0.41)

 

$     (0.82)

 

$     (0.98)

 

$     (1.54)

   Net income

$      0.44

 

$     (0.04)

 

$      0.73

 

$      0.01

               

Weighted-average common shares outstanding:

             

      Basic

44,803

 

43,761

 

44,481

 

43,699

      Diluted

45,756

 

43,761

 

45,794

 

44,219

 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

 

Non-GAAP Income Statement
Items – Continuing Operations

 

Three Months Ended

July 3, 2021

   

GAAP

Measure

 

GAAP

Percent of
Revenue

   

Stock

Compensation
Expense

 

Intangible Asset
Amortization

   

Non-GAAP

Measure

 

Non-GAAP

Percent of
Revenue

Revenues

 

$169,492

                       
                             

Gross profit

 

96,298

 

56.8%

   

$199

 

$        --

   

$96,497

 

56.9%

                             

Research and development

 

64,832

 

38.3%

   

5,488

 

8,184

   

51,160

 

30.2%

                             

Selling, general and administrative

 

42,953

 

25.3%

   

5,565

 

3,267

   

34,121

 

20.1%

                             

Operating income (loss)

 

(11,487)

 

(6.8)%

   

11,252

 

11,451

   

11,216

 

6.6%

 

Non-GAAP Earnings Per Share
– Continuing Operations

 

Three Months Ended

July 3, 2021

   

GAAP

Measure

 

Stock
Compensation
Expense*

 

Intangible
Asset
Amortization*

 

Investment
Fair Value
Adjustments*

 

Interest

Expense

Adjustments*

 

Income

Tax

Adjustments

 

Non-
GAAP
 
Measure

Loss from continuing operations

 

$(18,491)

 

$11,252

 

$11,451

 

$(236)

 

$4,992

 

$(1,500)

 

$7,468

                             
       

Dilutive Securities Excluded From GAAP Measure Due to Net Loss

   

Diluted shares outstanding

 

44,803

 

953

 

45,756

                             

Diluted earnings (loss) per share

 

$    (0.41)

                     

$  0.16

                             

* Represents pre-tax amounts

 

 

Non-GAAP Earnings Per Share
– Net Income

 

Three Months Ended
July 3, 2021

   

GAAP

Measure

 

Stock

Compensation
Expense*

 

Intangible
Asset
Amortization*

 

Disposition
Related
Items*

 

Investment
Fair Value
Adjustments*

 

Interest
Expense

Adjustments*

 

Income

Tax

Adjustments

 

Non-
GAAP
Measure

Net income

 

$19,932

 

$13,644

 

$11,562

 

$3,195

 

$(236)

 

$4,992

 

$(4,818)

 

$48,271

                                 

Diluted shares outstanding

 

45,756

                         

45,756

                                 

Diluted earnings per share

 

$     0.44

                         

$    1.05

                                 

* Represents pre-tax amounts

                               

 

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)

 

Business Outlook

 

Three Months Ending

October 2, 2021

   

GAAP

Measure

 

Non-GAAP

Adjustments*

 

Non-GAAP

Measure

Gross margin

 

57% - 57.5%

 

0% - 0.5%

 

57% - 58%

             

Operating expenses

 

$116

 

$23

 

$93

             

Effective tax rate

 

(11)%

 

25%

 

14%

             

Diluted earnings (loss) per share - low

 

$(0.56)

 

$0.66

 

$0.10

             

Diluted earnings (loss) per share - high

 

$(0.46)

 

$0.66

 

$0.20

 

* Non-GAAP adjustments include the following estimates: stock compensation expense of $12.8 million, intangible asset amortization of $11.1 million, interest expense adjustments of $5.1 million and the associated tax impact from the aforementioned items.  

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

 
 

July 3,
2021

 

January 2,
2021

Assets

     

Current assets:

     

   Cash and cash equivalents

$   303,084

 

$   202,720

   Short-term investments

314,183

 

521,963

   Accounts receivable, net

99,546

 

95,169

   Inventories

52,269

 

47,861

   Prepaid expenses and other current assets

94,378

 

87,103

   Current assets held for sale

297,543

 

21,005

Total current assets

1,161,003

 

975,821

Property and equipment, net

139,362

 

135,803

Goodwill

376,389

 

376,389

Other intangible assets, net

140,581

 

163,483

Other assets, net

78,667

 

76,675

Non-current assets held for sale

--

 

265,316

Total assets

$1,896,002

 

$1,993,487

       

Liabilities and Stockholders' Equity

     

Current liabilities:

     

   Accounts payable

$     70,820

 

$     54,949

   Current portion of convertible debt, net

--

 

134,480

   Deferred revenue and returns liability

12,811

 

12,986

   Other current liabilities

70,552

 

81,650

   Current liabilities held for sale

699

 

433

Total current liabilities

154,882

 

284,498

Convertible debt, net

439,654

 

428,945

Other non-current liabilities

73,712

 

79,752

Non-current liabilities held for sale

--

 

451

Total liabilities

668,248

 

793,646

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;  

      44,764 and 43,925 shares issued and outstanding at

      July 3, 2021 and January 2, 2021, respectively

4

 

4

   Additional paid-in capital

200,716

 

204,359

   Retained earnings

1,027,105

 

993,664

   Accumulated other comprehensive income (loss)

(71)

 

1,814

Total stockholders' equity

1,227,754

 

1,199,841

Total liabilities and stockholders' equity

$1,896,002

 

$1,993,487

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
 

Six Months Ended

 

July 3,
2021

 

July 4,
2020

 

Operating Activities

       

Net income

$ 33,441

 

$       421

 

Adjustments to reconcile net income to cash provided by operating activities of

   continuing operations:

       

   Income from discontinued operations, net of income taxes

(77,088)

 

(67,857)

 

   Depreciation of property and equipment

8,184

 

7,711

 

   Amortization of intangible assets and other assets

22,902

 

20,486

 

   Amortization of debt discount and debt issuance costs 

11,822

 

8,359

 

   Loss on extinguishment of convertible debt

3,370

 

3,685

 

   Stock-based compensation expense

22,620

 

24,461

 

   Deferred income taxes

(5,644)

 

1,177

 

   Changes in operating assets and liabilities:

       

      Accounts receivable

(4,377)

 

7,070

 

      Inventories

(4,447)

 

8,021

 

      Prepaid expenses and other assets

(5,489)

 

22,976

 

      Accounts payable

14,711

 

(769)

 

      Other current liabilities and income taxes

(10,626)

 

(15,480)

 

      Deferred revenue and returns liability

(175)

 

6,678

 

      Other non-current liabilities

(3,464)

 

1,146

 

Net cash provided by operating activities of continuing operations

5,740

 

28,085

 
         

Investing Activities

       

Purchases of marketable securities

(80,426)

 

(199,347)

 

Sales and maturities of marketable securities

286,649

 

255,112

 

Purchases of property and equipment

(10,779)

 

(9,051)

 

Purchases of other assets

(578)

 

(820)

 

Acquisition of business, net of cash acquired

--

 

(316,809)

 

Net cash provided by (used in) investing activities of continuing operations

194,866

 

(270,915)

 
         

Financing Activities

       

Proceeds from issuance of debt

--

 

845,000

 

Payments on debt

(140,572)

 

(597,446)

 

Repurchases of common stock

(18,982)

 

(16,287)

 

Payment of taxes withheld for vested stock awards

(19,732)

 

(16,756)

 

Proceeds from the issuance of common stock

8,388

 

7,757

 

Net cash provided by (used in) financing activities of continuing operations

(170,898)

 

222,268

 
         

Discontinued Operations

       

Operating activities

72,674

 

72,418

 

Investing activities

(2,018)

 

(1,343)

 

Net cash provided by (used in) discontinued operations

70,656

 

71,075

 
         

Increase in cash and cash equivalents

100,364

 

50,513

 

Cash and cash equivalents at beginning of period

202,720

 

227,146

 

Cash and cash equivalents at end of period

$303,084

 

$277,659

 

 

 

SOURCE Silicon Labs

For further information: Austin Dean, Investor Relations Manager, +1 (512) 532-9432, Austin.Dean@silabs.com