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IoT leader remains well-positioned for long-term growth amid an uncertain macroeconomic environment
AUSTIN, Texas, Oct. 26, 2022 /PRNewswire/ -- Silicon Labs (NASDAQ: SLAB), a leader in secure, intelligent wireless technology for a more connected world, reported robust financial results for the third quarter, which ended October 1, 2022. Revenue met the midpoint of the guidance range at $270 million, up 3% sequentially and 46% year-on-year. Silicon Labs saw revenue growth across both its Industrial & Commercial and Home & Life businesses.
"Silicon Labs delivered another quarter of strong performance, generating record revenue and operating results ahead of model," said Matt Johnson, President and Chief Executive Officer at Silicon Labs. "We continue to gain market share and achieve strong design win momentum. We remain confident in our ability to lead and scale in the IoT market despite an increasingly challenging macroeconomic environment."
Third Quarter Financial Highlights
Results on a GAAP basis:
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:
Business Highlights
Business Outlook
The company expects fourth-quarter revenue to be between $245 to $255 million. The company also estimates the following results:
On a GAAP basis:
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:
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 November 2, 2022, online or by calling (877) 344-7529 (US) or (412) 317-0088 (international) and entering access code 3274420.
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; 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 between Russia and Ukraine), terrorism, sanctions or other geopolitical events globally; 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 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.
Silicon Laboratories Inc. | |||||||
Three Months Ended | Nine Months Ended | ||||||
October 1, | October 2, | October 1, | October 2, | ||||
Revenues | $269,817 | $ 184,831 | $766,781 | $ 512,180 | |||
Cost of revenues | 104,232 | 75,322 | 281,521 | 214,619 | |||
Gross profit | 165,585 | 109,509 | 485,260 | 297,561 | |||
Operating expenses: | |||||||
Research and development | 84,624 | 72,656 | 245,677 | 201,503 | |||
Selling, general and administrative | 50,738 | 46,128 | 144,398 | 131,535 | |||
Operating expenses | 135,362 | 118,784 | 390,075 | 333,038 | |||
Operating income (loss) | 30,223 | (9,275) | 95,185 | (35,477) | |||
Other income (expense): | |||||||
Interest income and other, net | 4,672 | 1,476 | 9,616 | 3,100 | |||
Interest expense | (1,527) | (6,595) | (4,874) | (24,405) | |||
Income (loss) from continuing operations before income taxes | 33,368 | (14,394) | 99,927 | (56,782) | |||
Provision for income taxes | 14,188 | 9,386 | 36,871 | 12,543 | |||
Equity-method earnings | 1,819 | 4,040 | 2,985 | 5,938 | |||
Income (loss) from continuing operations | 20,999 | (19,740) | 66,041 | (63,387) | |||
Income from discontinued operations, net of income taxes | -- | 2,106,796 | -- | 2,183,884 | |||
Net income | $ 20,999 | $2,087,056 | $ 66,041 | $2,120,497 | |||
Basic earnings (loss) per share: | |||||||
Continuing operations | $ 0.62 | $ (0.45) | $ 1.84 | $ (1.44) | |||
Net income | $ 0.62 | $ 48.11 | $ 1.84 | $ 48.08 | |||
Diluted earnings (loss) per share: | |||||||
Continuing operations | $ 0.60 | $ (0.45) | $ 1.79 | $ (1.44) | |||
Net income | $ 0.60 | $ 46.76 | $ 1.79 | $ 46.71 | |||
Weighted-average common shares outstanding: | |||||||
Basic | 34,079 | 43,385 | 35,935 | 44,103 | |||
Diluted | 34,779 | 44,634 | 36,968 | 45,394 |
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 | ||||||||||||
Three Months Ended October 1, 2022 | ||||||||||||
Non-GAAP Income Statement Items | GAAP Measure | GAAP Percent of | Stock | Intangible | Non- Measure | Non-GAAP Percent of | ||||||
Revenues | $269,817 | |||||||||||
Gross profit | 165,585 | 61.4 % | $288 | $ -- | $165,873 | 61.5 % | ||||||
Research and development | 84,624 | 31.4 % | 8,788 | 7,305 | 68,531 | 25.4 % | ||||||
Selling, general and administrative | 50,738 | 18.8 % | 6,874 | 829 | 43,035 | 15.9 % | ||||||
Operating income | 30,223 | 11.2 % | 15,950 | 8,134 | 54,307 | 20.1 % | ||||||
Three Months Ended | ||||||||||||
Non-GAAP Earnings Per Share | GAAP Measure | Stock Compensation | Intangible | Equity-Method Investment | Income Tax Adjustments | Non- GAAP Measure | ||||||
Net income | $20,999 | $15,950 | $8,134 | $(1,819) | $(1,052) | $42,212 | ||||||
Diluted shares outstanding | 34,779 | 34,779 | ||||||||||
Diluted earnings per share | $ 0.60 | $ 1.21 | ||||||||||
|
Unaudited Forward-Looking Statements Regarding Business Outlook | ||||||
Business Outlook | Three Months Ending December 31, 2022 | |||||
GAAP Measure | Non-GAAP Adjustments* | Non-GAAP Measure | ||||
Gross margin | 60 % | 0 % | 60 % | |||
Operating expenses | $132 | $(23) | $109 | |||
Effective tax rate | 35 % | (10) % | 25 % | |||
Diluted earnings per share - low | $0.35 | $0.58 | $0.93 | |||
Diluted earnings per share - high | $0.45 | $0.58 | $1.03 |
* Non-GAAP adjustments include the following estimates: stock compensation expense of $16.9 million, intangible asset |
Silicon Laboratories Inc. | |||
October 1, 2022 | January 1, | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 483,277 | $1,074,623 | |
Short-term investments | 893,131 | 964,582 | |
Accounts receivable, net | 76,672 | 98,313 | |
Inventories | 88,447 | 49,307 | |
Prepaid expenses and other current assets | 84,109 | 51,748 | |
Total current assets | 1,625,636 | 2,238,573 | |
Property and equipment, net | 151,610 | 146,516 | |
Goodwill | 376,389 | 376,389 | |
Other intangible assets, net | 91,650 | 118,978 | |
Other assets, net | 91,012 | 77,839 | |
Total assets | $2,336,297 | $2,958,295 | |
Liabilities and Stockholders' Equity | |||
Current liabilities: | |||
Accounts payable | $ 81,676 | $ 47,327 | |
Current portion of convertible debt, net | -- | 450,599 | |
Deferred revenue and returns liability | 11,705 | 13,849 | |
Other current liabilities | 112,320 | 157,052 | |
Total current liabilities | 205,701 | 668,827 | |
Convertible debt, net | 529,062 | -- | |
Other non-current liabilities | 49,890 | 77,044 | |
Total liabilities | 784,653 | 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; 33,530 and 38,481 shares issued and outstanding at October 1, 2022 and January 1, 2022, respectively | 3 | 4 | |
Retained earnings | 1,568,108 | 2,214,839 | |
Accumulated other comprehensive loss | (16,467) | (2,419) | |
Total stockholders' equity | 1,551,644 | 2,212,424 | |
Total liabilities and stockholders' equity | $2,336,297 | $2,958,295 |
Silicon Laboratories Inc. | |||
Nine Months Ended | |||
October 1, 2022 | October 2, | ||
Operating Activities | |||
Net income | $ 66,041 | $2,120,497 | |
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: | |||
Income from discontinued operations, net of income taxes | -- | (2,183,884) | |
Depreciation of property and equipment | 16,514 | 12,925 | |
Amortization of other intangible assets | 27,328 | 33,971 | |
Amortization of debt discount and debt issuance costs | 1,492 | 17,278 | |
Loss on extinguishment of convertible debt | 3 | 3,370 | |
Stock-based compensation expense | 43,213 | 36,916 | |
Equity-method earnings | (2,985) | (5,938) | |
Deferred income taxes | (13,126) | (3,132) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 21,641 | 22,573 | |
Inventories | (39,100) | (11,320) | |
Prepaid expenses and other assets | (28,404) | 33,536 | |
Accounts payable | 26,694 | (4,522) | |
Other current liabilities and income taxes | 17,962 | (10,981) | |
Deferred revenue and returns liability | (2,144) | (1,657) | |
Other non-current liabilities | (7,713) | (11,388) | |
Net cash provided by operating activities of continuing operations | 127,416 | 48,244 | |
Investing Activities | |||
Purchases of marketable securities | (579,507) | (1,212,572) | |
Sales of marketable securities | 42,952 | 194,492 | |
Maturities of marketable securities | 597,399 | 173,924 | |
Purchases of property and equipment | (20,057) | (19,468) | |
Purchases of other assets | -- | (578) | |
Net cash provided by (used in) investing activities of continuing operations | 40,787 | (864,202) | |
Financing Activities | |||
Payments on debt | (21) | (140,572) | |
Repurchases of common stock | (681,695) | (688,373) | |
Payment of taxes withheld for vested stock awards | (14,732) | (21,393) | |
Proceeds from the issuance of common stock | 6,366 | 8,619 | |
Net cash used in financing activities of continuing operations | (690,082) | (841,719) | |
Discontinued Operations | |||
Operating activities | (69,467) | 69,685 | |
Investing activities | -- | 2,747,684 | |
Net cash provided by (used in) discontinued operations | (69,467) | 2,817,369 | |
Increase (decrease) in cash and cash equivalents | (591,346) | 1,159,692 | |
Cash and cash equivalents at beginning of period | 1,074,623 | 202,720 | |
Cash and cash equivalents at end of period | $ 483,277 | $1,362,412 |
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.
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SOURCE Silicon Labs