Press Releases

Silicon Labs Grows Revenue 55% in Second Quarter 2022

IoT Leader Achieves Significant Revenue Growth in Industrial & Commercial and Home & Life Business Units

AUSTIN, Texas , July 27, 2022 /PRNewswire/ -- Silicon Labs (NASDAQ: SLAB), a leader in secure, intelligent wireless technology for a more connected world, reported robust financial results for the second quarter, which ended July 2, 2022. Revenue exceeded the top end of the guidance range at $263 million, up 13% sequentially and 55% year-on-year.

"We continue to gain momentum, building on strong design win performance, a growing opportunity funnel and market share expansion despite the challenging macro environment. We delivered record revenue in the quarter and operating results ahead of model, driving strong EPS growth," said Matt Johnson, President and Chief Executive Officer of Silicon Labs. "We just marked the one-year anniversary of becoming a pure-play IoT company, and we are more confident than ever in our ability to lead and scale in the large and growing IoT wireless market."

Second Quarter Financial Highlights

  • Revenue increased to $263 million, up 13% sequentially and 55% year-on-year
  • Industrial & Commercial revenue for the quarter was $144 million, up 61% year-on-year
  • Home & Life revenue for the quarter was $119 million, up 49% year-on-year
  • Gross margin of 62% was slightly favorable due to product mix in the quarter

Results on a GAAP basis:                                                                             

  • GAAP gross margin was 62%
  • GAAP R&D expenses were $84 million
  • GAAP SG&A expenses were $49 million
  • GAAP operating income as a percentage of revenue was 12%
  • GAAP diluted earnings per share were $0.60

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 reconciliation tables were as follows:

  • Non-GAAP gross margin was 62%
  • Non-GAAP R&D expenses were $68 million
  • Non-GAAP SG&A expenses were $41 million
  • Non-GAAP operating income as a percentage of revenue was 21%
  • Non-GAAP diluted earnings per share were $1.17

Business Highlights

  • Announced a new Bluetooth Location Services solution using accurate, low-power Bluetooth devices to simplify Angle of Arrival (AoA) and Angle of Departure (AoD) location services. This new platform combines the industry-leading energy efficiency of Silicon Labs' BG22 system-in-a package (SiP) modules and SoCs, which can operate for up to ten years on only a coin cell battery, with advanced software that can track assets, improve indoor navigation, and locate tags with sub-meter accuracy.
  • Completed the buyback of $350 million of the company's shares through the most recent open market repurchase program, resulting in the retirement of 2.5 million shares and bringing the year-to-date total for share repurchases to $600 million, retiring a total of 4.3 million shares. Additionally, the company's board of directors has authorized a new $250 million open market repurchase program of the company's common stock, through the end of 2023.
  • Announced the appointment of Robert ("Bob") Conrad to the company's board of directors. Conrad brings nearly 40 years of experience in the semiconductor industry, most recently with NXP Semiconductors (NASDAQ: NXPI) as SVP of the Automotive Microcontrollers and Processors Business until his retirement in 2019. In addition, Bob brings significant experience driving strategic focus and successfully scaling businesses.
  • William ("Bill") Wood announced he will not stand for reelection and will be retiring from the Silicon Labs board after 25 years of service. Bill joined the board of directors in 1997 and served as lead director from 2005-2021. His board tenure concludes at the 2023 annual meeting of stockholders. 

"Bill Wood has been instrumental to Silicon Labs' success since the very beginning of our journey," said Johnson. "We're grateful for his leadership throughout the years and wish him the very best."

Business Outlook

The company expects third-quarter revenue to be in the range of $265 to $275 million. The company also estimates the following results:

On a GAAP basis:

  • GAAP gross margin of approximately 60%
  • GAAP operating expenses of approximately $137 million
  • GAAP effective tax rate of approximately 36%
  • GAAP diluted earnings per share between $0.49 to $0.59

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 of approximately 60.5%
  • Non-GAAP operating expenses of approximately $113 million
  • Non-GAAP effective tax rate of approximately 26%
  • Non-GAAP diluted earnings per share between $1.08 to $1.18

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 silabs.com/investors and make a replay available through August 3, 2022, online or by calling (877) 344-7529 (US) or (412) 317-0088 (international) and entering access code 2437694.

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 timing and scope of 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 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; 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, including risks that demand and the supply chain may be adversely affected by military conflict (including between Russia and Ukraine), terrorism, sanctions or other geopolitical events globally; 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 Income

(In thousands, except per share data)

(Unaudited)

 
 

Three Months Ended

 

Six Months Ended

 

July 2,
2022

 

July 3,
2021

 

July 2,
2022

 

July 3,
2021

Revenues

$263,150

 

$169,492

 

$496,964

 

$327,349

Cost of revenues

99,247

 

73,194

 

177,289

 

139,297

Gross profit

163,903

 

96,298

 

319,675

 

188,052

Operating expenses:

             

   Research and development

83,511

 

64,832

 

161,053

 

128,847

   Selling, general and administrative

49,013

 

42,953

 

93,660

 

85,407

Operating expenses

132,524

 

107,785

 

254,713

 

214,254

Operating income (loss)

31,379

 

(11,487)

 

64,962

 

(26,202)

Other income (expense):

             

   Interest income and other, net

3,445

 

475

 

4,944

 

1,624

   Interest expense

(1,667)

 

(6,486)

 

(3,347)

 

(17,810)

Income (loss) from continuing operations before income taxes

33,157

 

(17,498)

 

66,559

 

(42,388)

Provision for income taxes

10,994

 

1,165

 

22,683

 

3,157

Equity-method earnings

(28)

 

172

 

1,166

 

1,898

Income (loss) from continuing operations

22,135

 

(18,491)

 

45,042

 

(43,647)

Income from discontinued operations, net of income taxes

--

 

38,423

 

--

 

77,088

               

Net income

$  22,135

 

$  19,932

 

$  45,042

 

$  33,441

               

Basic earnings (loss) per share:

             

   Continuing operations

$     0.62

 

$    (0.41)

 

$      1.22

 

$    (0.98)

   Net income

$     0.62

 

$     0.44

 

$      1.22

 

$      0.75

               

Diluted earnings (loss) per share:

             

   Continuing operations

$     0.60

 

$    (0.41)

 

$      1.18

 

$    (0.98)

   Net income

$     0.60

 

$     0.44

 

$      1.18

 

$      0.73

               

Weighted-average common shares outstanding:

             

   Basic

35,722

 

44,803

 

36,862

 

44,481

   Diluted

36,604

 

45,756

 

38,063

 

45,794

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

July 2, 2022

Non-GAAP Income Statement Items

 

GAAP

Measure

 

GAAP

Percent of
Revenue

 

Stock
Compensation
Expense

 

Intangible
Asset
Amortization

 

Non-
GAAP

Measure

 

Non-GAAP

Percent of
Revenue

Revenues

 

$263,150

                   
                         

Gross profit

 

163,903

 

62.3 %

 

$     274

 

$        --

 

$164,177

 

62.4 %

                         

Research and development

 

83,511

 

31.7 %

 

7,703

 

7,363

 

68,445

 

26.0 %

                         

Selling, general and administrative

 

49,013

 

18.7 %

 

6,412

 

1,479

 

41,122

 

15.6 %

                         

Operating income

 

31,379

 

11.9 %

 

14,389

 

8,842

 

54,610

 

20.8 %

 

   

Three Months Ended

July 2, 2022

 

Non-GAAP Earnings Per Share

 

GAAP

Measure

 

Stock

Compensation
Expense*

 

Intangible
Asset
Amortization*

 

Equity-Method

Investment
Adjustments*

 

Income

Tax

Adjustments

 

Non-

GAAP

Measure

Net income

 

$22,135

 

$14,389

 

$8,842

 

$28

 

$(2,631)

 

$42,763

                         

Diluted shares outstanding

 

36,604

                 

36,604

                         

Diluted earnings per share

 

$    0.60

                 

$    1.17

                           

* Represents pre-tax amounts

 

Unaudited Forward-Looking Statements Regarding Business Outlook 

(In millions, except per share data) 

 

Business Outlook

 

Three Months Ending

October 1, 2022

   

GAAP

Measure

 

Non-GAAP

Adjustments*

 

Non-GAAP

Measure

Gross margin

 

60 %

 

0.5 %

 

60.5 %

             

Operating expenses

 

$137

 

$(24)

 

$113

             

Effective tax rate

 

36 %

 

(10) %

 

26 %

             

Diluted earnings per share - low

 

$0.49

 

$0.59

 

$1.08

             

Diluted earnings per share - high

 

$0.59

 

$0.59

 

$1.18

             

* Non-GAAP adjustments include the following estimates: stock compensation expense of $16.3 million, intangible asset amortization of $8.1 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 2,

2022

 

January 1,
2022

Assets

     

Current assets:

     

   Cash and cash equivalents

$   504,850

 

$1,074,623

   Short-term investments

972,845

 

964,582

   Accounts receivable, net

72,106

 

98,313

   Inventories

74,026

 

49,307

   Prepaid expenses and other current assets

86,138

 

51,748

Total current assets

1,709,965

 

2,238,573

Property and equipment, net

149,447

 

146,516

Goodwill

376,389

 

376,389

Other intangible assets, net

99,784

 

118,978

Other assets, net

83,813

 

77,839

Total assets

$2,419,398

 

$2,958,295

       

Liabilities and Stockholders' Equity

     

Current liabilities:

     

   Accounts payable

$     95,365

 

$     47,327

   Current portion of convertible debt, net

--

 

450,599

   Deferred revenue and returns liability

10,696

 

13,849

   Other current liabilities

126,058

 

157,052

Total current liabilities

232,119

 

668,827

Convertible debt, net

528,564

 

--

Other non-current liabilities

53,371

 

77,044

Total liabilities

814,054

 

745,871

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;  

      34,223 and 38,481 shares issued and outstanding at

      July 2, 2022 and January 1, 2022, respectively

3

 

4

   Retained earnings

1,619,396

 

2,214,839

   Accumulated other comprehensive loss

(14,055)

 

(2,419)

Total stockholders' equity

1,605,344

 

2,212,424

Total liabilities and stockholders' equity

$2,419,398

 

$2,958,295

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
 

Six Months Ended

 

July 2,

 2022

 

July 3,
2021

Operating Activities

     

Net income

$     45,042

 

$  33,441

Adjustments to reconcile net income to cash provided by operating activities

   of continuing operations:

     

   Income from discontinued operations, net of income taxes

--

 

(77,088)

   Depreciation of property and equipment

10,561

 

8,184

   Amortization of other intangible assets

19,194

 

22,902

   Amortization of debt discount and debt issuance costs 

994

 

11,822

   Loss on extinguishment of convertible debt

3

 

3,370

   Stock-based compensation expense

27,264

 

22,620

   Equity-method earnings

(1,166)

 

(1,898)

   Deferred income taxes

(9,344)

 

(5,644)

   Changes in operating assets and liabilities:

     

      Accounts receivable

26,207

 

(4,377)

      Inventories

(24,714)

 

(4,447)

      Prepaid expenses and other assets

(25,286)

 

(3,591)

      Accounts payable

25,606

 

14,711

      Other current liabilities and income taxes

(3,418)

 

(10,626)

      Deferred revenue and returns liability

(3,153)

 

(175)

      Other non-current liabilities

(4,416)

 

(3,464)

Net cash provided by operating activities of continuing operations

83,374

 

5,740

       

Investing Activities

     

Purchases of marketable securities

(554,267)

 

(80,426)

Sales of marketable securities

27,404

 

186,626

Maturities of marketable securities

511,296

 

100,023

Purchases of property and equipment

(12,322)

 

(10,779)

Purchases of other assets

--

 

(578)

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

(27,889)

 

194,866

       

Financing Activities

     

Payments on debt

(21)

 

(140,572)

Repurchases of common stock

(579,040)

 

(18,982)

Payment of taxes withheld for vested stock awards

(13,958)

 

(19,732)

Proceeds from the issuance of common stock

6,365

 

8,388

Net cash used in financing activities of continuing operations

(586,654)

 

(170,898)

       

Discontinued Operations

     

Operating activities

(38,604)

 

72,674

Investing activities

--

 

(2,018)

Net cash provided by (used in) discontinued operations

(38,604)

 

70,656

       

Increase (decrease) in cash and cash equivalents

(569,773)

 

100,364

Cash and cash equivalents at beginning of period

1,074,623

 

202,720

Cash and cash equivalents at end of period

$   504,850

 

$303,084

 

 

SOURCE Silicon Labs

For further information: Thomas Haws, Investor Relations Manager, (512) 416-8500, investor.relations@silabs.com