Silicon Labs Announces Fourth Quarter 2019 Results

-- Continued Industry Leadership in a Challenging Macro Environment --

AUSTIN, Texas, Jan. 29, 2020 — (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 fourth quarter ended December 28, 2019. Revenue was within the guidance range at $219.4 million, down from $223.3 million in the third quarter. Fourth quarter GAAP and non-GAAP diluted earnings per share (EPS) were $0.22 and $0.84, respectively.

(PRNewsfoto/Silicon Labs)

"Despite a challenging macro environment, we are pleased to have outperformed the market with secular growth drivers in IoT and Infrastructure providing some offset to macro weakness," said Tyson Tuttle, CEO of Silicon Labs. "IoT and Infrastructure now represent 80 percent of our total revenue mix, with each offering a double-digit growth opportunity backed by our large pipeline and strong market traction."

Fourth Quarter Financial Highlights

  • IoT revenue declined to $128 million, down 1% sequentially and up 7% year-on-year.
  • Infrastructure revenue increased to $48 million, up 7% sequentially and 5% year-on-year.
  • Broadcast revenue declined to $28 million, down 17% sequentially and 20% year-on-year.
  • Access revenue increased to $15 million, up 4% sequentially and 1% year-on-year.

On a GAAP basis:                                                                                         

  • GAAP gross margin was 60.7%.
  • GAAP R&D expenses were $69 million.
  • GAAP SG&A expenses were $51 million.
  • GAAP operating income as a percentage of revenue was 6.0%.
  • GAAP diluted earnings per share were $0.22.

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

  • Non-GAAP gross margin was 60.9%.
  • Non-GAAP R&D expenses were $52 million.
  • Non-GAAP SG&A expenses were $39 million.
  • Non-GAAP operating income as a percentage of revenue was 19.3%.
  • Non-GAAP diluted earnings per share were $0.84.

Product Results

  • Collaborated with the Z-Wave® Alliance to open the Z-Wave Specification as a ratified, multi-source wireless smart home standard available to all silicon and stack vendors for development.
  • Launched the Bluetooth® EFR32BG22 system-on-chip solution delivering a market-leading combination of security features, wireless performance, energy efficiency, and software tools and stacks to meet the demand for high-volume, battery-powered IoT products.
  • Partnered with Quuppa, a world leader in advanced location systems, to deliver a highly accurate indoor asset tracking solution combining Quuppa's Intelligent Location System with asset tags based on Silicon Labs' Bluetooth products.
  • Announced a collaboration with MicroEJ, a leader in trusted embedded environments, to provide an integrated Wi-Fi® solution to securely and cost effectively connect a wide range of IoT devices.
  • Collaborated with Keysight, a test and measurement solutions provider, to streamline the validation of timing solutions critical to system-level designs.

Business Highlights

  • Won the Global Semiconductor Alliance's (GSA) "Most Respected Public Semiconductor Company" award for the fifth year in a row.
  • Joined the Connected Home over IP project launched by Amazon, Apple, Google and the Zigbee® Alliance to develop and promote standardization of the smart home ecosystem to increase compatibility among smart home products, driving adoption and growth in the industry.
  • To further accelerate smart home market growth, unveiled plans to host Silicon Labs' "Works With" Smart Home Conference in Austin, a premier, one-of-a-kind event to be held in September 2020 exclusively for smart home designers and developers interested in creating products that work with the world's largest smart home ecosystems.

Business Outlook

The company expects first quarter revenue to be in the range of $209 to $219 million, with Infrastructure up, Broadcast flat, and declines in IoT and Access, and estimates the following:

On a GAAP basis:

  • GAAP gross margin at approximately 59.5%.
  • GAAP operating expenses at approximately $127 million.
  • GAAP effective tax rate of 0.0%.
  • GAAP diluted (loss)/earnings per share between $(0.03) and $0.07.

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

  • Non-GAAP gross margin between 59.5% and 60.0%.
  • Non-GAAP operating expenses at approximately $97.5 million.
  • Non-GAAP effective tax rate at 11.5%.
  • Non-GAAP diluted earnings per share between $0.57 and $0.67.

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 10137937. The replay will be available through February 29, 2020.

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; risks associated with international activities (including trade barriers); 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 and 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, 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.

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