Silicon Labs Announces Third Quarter 2020 Results

-- Strong Results Driven by Record IoT Revenue --

AUSTIN, Texas, Oct. 28, 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 third quarter ended October 3, 2020. Revenue exceeded the top end of the guidance range at $221.3 million, up from $207.5 million in the second quarter. Third quarter GAAP and non-GAAP diluted earnings per share (EPS) were $0.07 and $0.73, respectively.

"Third quarter revenue exceeded the high end of our guidance range at $221.3 million," said Tyson Tuttle, CEO of Silicon Labs. "Revenue was considerably stronger than expected, with our IoT products leading the way with a record quarter. We see sustained acceleration towards a more connected world, which our products are well-suited to address."

Third Quarter Financial Highlights

  • IoT revenue grew to $133.2 million, up 16% sequentially and 3% year-on-year.
  • Infrastructure and Automotive revenue declined to $88.2 million, down 5% sequentially and 6% year-on-year.

On a GAAP basis:

  • GAAP gross margin was 58.8%.
  • GAAP R&D expenses were $72 million.
  • GAAP SG&A expenses were $48 million.
  • GAAP operating income as a percentage of revenue was 4.3%.
  • GAAP diluted earnings per share was $0.07.

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 below:

  • Non-GAAP gross margin was 59.5%.
  • Non-GAAP R&D expenses were $56 million.
  • Non-GAAP SG&A expenses were $39 million.
  • Non-GAAP operating income as a percentage of revenue was 16.9%.
  • Non-GAAP diluted earnings per share were $0.73.

Product Results

  • Expanded our Bluetooth® Low Energy portfolio this quarter with the launch of the BGM220S and BGM220P modules. At just 6x6 mm, the BGM220S is one of the world's smallest Bluetooth modules. It provides ultra-small size, low-cost, and long battery life to add turnkey Bluetooth connectivity to a variety of end products.
  • Launched the Si54x/6x Ultra Series, a new family of small form-factor, high-performance crystal oscillators. The Si54x/6x Ultra Series delivers jitter performance as low as 80 femtoseconds for integer and fractional frequencies across the entire operating range, providing outstanding jitter margin for demanding applications including data center interconnect, optical transport, broadcast video and test/measurement.
  • Introduced new Si823Hx/825xx isolated gate drivers offering a combination of faster and safer switching, low latency and high noise immunity capabilities that enable power converter designers to meet or exceed increasing energy efficiency standards and size constraints in a variety of applications including data center and industrial power supplies, micro inverters for solar power, and traction inverters for the electric vehicle market.

Business Highlights

  • Announced collaboration with Amazon to support Sidewalk, a secure network created by neighbors who share a small portion of Wi-Fi bandwidth to help their devices work better at home and beyond the front door. Sidewalk is a free software application layer that works on top of our Wireless Gecko Series 2 products to support Sidewalk's sub-GHz and Bluetooth Low Energy protocols and permit IoT devices to securely connect to each other through the cloud.
  • Held our first-ever Works With smart home developer conference with leaders from the world's largest smart home ecosystem players including key executives from Google, Amazon, Ring, and Comcast. Our Works With conference provided an onramp enabling smart home developers to directly engage with the biggest, most popular smart home ecosystems through co-authored curriculum featuring 40 technical sessions, 12 hands-on workshops and six keynotes spanning 40 hours of high quality, high engagement content.
  • Debuted our new Secure Vault technology for Silicon Labs' multiprotocol Wireless Gecko Series 2 platform. Our products are the first with radios to earn ARM's PSA Level 2 security certification. We also received SmartCert security certification from the ioXt Alliance and were awarded a Gold medal in the 2020 LEAP Awards Connectivity category for best-in-class security.
  • Released Simplicity Studio 5, which is the latest version of our free to use, class-leading IoT developer environment. Simplicity Studio now offers universal access and an enhanced experience across a wide range of wireless protocols, all within a new, intuitive and responsive web-style user interface allowing customers to accelerate differentiation and time to market.
  • Announced our collaboration with STRATIS on their 3.0 Gateway which uses Silicon Labs' connectivity products to provide multiprotocol wireless capabilities connecting smart devices throughout apartment communities. This new industrial IoT application enables residents to use their smartphones as a credential to enter the apartment building and their fully equipped smart apartment unit. The system also allows property managers to control energy usage and smart technology in vacant units and monitor common areas.
  • Continued to focus on addressing health and safety during the ongoing pandemic by collaborating with our customers to expedite time-to-market of impactful products. For example, we worked with Maggy , a Belgium -based start-up, to use our BGM13S Bluetooth module to enable a new, compact social-distancing wearable that warns users when the distance between people becomes too small and could pose a risk of COVID-19 infection transfer.
  • Promoted Serena Townsend to Silicon Labs' Chief People Officer to lead the company's global talent strategy, people programs, and values-driven, inclusive culture.

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