Silicon Labs Announces First Quarter 2020 Results

-- Continuing to Execute in an Uncertain Environment --

AUSTIN, Texas, April 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 first quarter ended April 4, 2020. Revenue was above the guidance range at $214.9 million, down from $219.4 million in the fourth quarter. First quarter GAAP and non-GAAP diluted earnings per share (EPS) were $0.05 and $0.69, respectively.

"Revenue for the first quarter ended stronger than expectations at $215 million, up 14 percent year-on-year," said Tyson Tuttle, CEO of Silicon Labs. "As we face the unprecedented COVID-19 challenge, the health and safety of our employees, customers, partners and communities remain a top priority. We believe we are well-positioned to navigate the pandemic and are thankful to have the collaboration tools and remote-working infrastructure in place to facilitate a relatively smooth transition as our global teams advance toward well-established goals."

"Our balance sheet remains healthy," added Tuttle. "We have seen minimal disruption to our supply chain and have benefitted from a having a fabless model. We believe our strategy targeting large, high-quality and diverse growth drivers in the IoT, communications infrastructure and electrification, combined with the industry-leading technologies we bring to bear, will continue to drive growth and improved profitability as we scale our business longer term."

First Quarter Financial Highlights

  • IoT revenue declined to $118 million, down 8% sequentially and up 11% year-on-year.
  • Infrastructure and Automotive revenue increased to $97 million, up 6% sequentially and 19% year-on-year.

On a GAAP basis:                                                                                         

  • GAAP gross margin was 60.1%.
  • GAAP R&D expenses were $71 million.
  • GAAP SG&A expenses were $54 million.
  • GAAP operating income as a percentage of revenue was 1.8%.
  • GAAP diluted earnings per share were $0.05.

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 60.4%.
  • Non-GAAP R&D expenses were $55 million.
  • Non-GAAP SG&A expenses were $41 million.
  • Non-GAAP operating income as a percentage of revenue was 15.4%.
  • Non-GAAP diluted earnings per share were $0.69.

Product Results

  • Announced Secure Vault technology for the Wireless Gecko Series 2 platform combining advanced security software with physically unclonable function (PUF) hardware to deliver the industry's most comprehensive suite of security capabilities for IoT products.
  • Launched the EFR32MG22 SoC family targeting eco-friendly IoT products deployed in 15.4 mesh networks and optimized for Zigbee® Green Power applications including smart home sensors, lighting controls, and building and industrial automation.
  • Announced the EFR32FG22 SoC family delivering an optimal combination of security features, proprietary protocol support, software tools and energy efficiency to extend the life of products with limited battery or energy harvesting options such as those used by electronic shelf labels and industrial wireless sensor nodes.
  • Introduced a comprehensive IEEE 802.3bt-compliant Power over Ethernet (PoE) portfolio designed to reduce the cost and complexity of adding 90 W PoE to power sourcing equipment and powered devices.

Business Highlights

  • Announced the acquisition of Redpine Signals' Wi-Fi and Bluetooth business, development center in Hyderabad, India, and extensive patent portfolio to expand Silicon Labs' leadership in IoT wireless technology.
  • Hosted Silicon Labs' third Analyst Day at the company's global headquarters in Austin, Texas. This first-ever "virtual Analyst Day" attracted more than 250 attendees and enabled the leadership team to provide updates on Silicon Labs' strategy and longer-term growth potential.
  • Borrowed $310 million under an Amended Credit Agreement with Wells Fargo as a precautionary measure to increase Silicon Labs' cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the novel coronavirus outbreak.

Business Outlook

The following includes the expected impact of the acquisition of assets from Redpine Signals. The company expects second quarter revenue to be in the range of $190 to $210 million, with IoT and Infrastructure & Automotive down, and estimates the following:

On a GAAP basis:

  • GAAP gross margin at approximately 60.5%.
  • GAAP operating expenses at approximately $122 million.
  • GAAP effective tax rate of 0.0%.
  • GAAP diluted (loss) per share between $(0.26) and $(0.03).

On a non-GAAP basis, and excluding the impact of stock compensation, amortization of acquired intangible assets, acquisition related charges, 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 at approximately 61.0%.
  • Non-GAAP operating expenses at approximately $92.5 million.
  • Non-GAAP effective tax rate at 10.5%.
  • Non-GAAP diluted earnings per share between $0.45 and $0.68.

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 10141681. The replay will be available through May 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

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