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Silicon Labs Reports First Quarter 2023 Results

AUSTIN, Texas, April 26, 2023 — (PRNewswire) — Silicon Labs (NASDAQ: SLAB), a leader in secure, intelligent wireless technology for a more connected world, reported financial results for the first quarter, which ended April 1, 2023. Revenue met the mid-point of the guidance range at $247 million, up 6% year-on-year, driven in part by strength across our Bluetooth portfolio.

"The Silicon Labs team executed well in the first quarter, furthering our leadership position within IoT through deep customer and industry relationships," said Matt Johnson, President and Chief Executive Officer at Silicon Labs. "With a challenging macro backdrop, we are focused on driving operational efficiencies, supporting new customer ramps, and investing in the people and products that will allow us to outperform the market and capture the exciting growth potential ahead."

First 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 second-quarter revenue to be between $238 to $248 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 May 26, 2023, online or by calling (877) 344-7529 (US) or (412) 317-0088 (international) and entering access code 6021433.

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, including disruptions in the financial services industry; 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 (including conflict between Taiwan and China); 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.

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


April 1, 2023


April 2, 2022

Revenues

$246,787


$233,814

Cost of revenues

92,927


78,042

Gross profit

153,860


155,772

Operating expenses:




   Research and development

89,396


77,542

   Selling, general and administrative

44,891


44,647

Operating expenses

134,287


122,189

Operating income

19,573


33,583

Other income (expense):




   Interest income and other, net

4,836


1,499

   Interest expense

(1,656)


(1,680)

Income before income taxes

22,753


33,402

Provision for income taxes

7,753


11,689

Equity-method earnings (loss)

(1,033)


1,194

Net income

$   13,967


$   22,907





Earnings per share:




   Basic

$      0.44


$      0.60

   Diluted

$      0.41


$      0.58





Weighted-average common shares outstanding:




   Basic

31,959


38,003

   Diluted

33,753


39,523

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

April 1, 2023

Non-GAAP Income Statement Items


GAAP

Measure


GAAP

Percent of
Revenue


Stock
Compensation
Expense


Intangible Asset
Amortization


Termination
Costs


Non-
GAAP

Measure


Non-GAAP

Percent of
Revenue

Revenues


$246,787




























Gross profit


153,860


62.3 %


$298


$        --


$113


$154,271


62.5 %
















Research and development


89,396


36.2 %


9,491


6,491


3,216


70,198


28.4 %
















Selling, general and administrative


44,891


18.2 %


6,849


19


1,383


36,640


14.8 %
















Operating income


19,573


7.9 %


16,638


6,510


4,712


47,433


19.2 %

 

Non-GAAP Earnings Per Share


Three Months Ended

April 1, 2023


GAAP

Measure


Stock

Compensation
Expense*


Intangible
Asset
Amortization*


Termination
Costs*


Equity-Method

Investment
Adjustments*


Income

Tax

Adjustments


Non-

GAAP

Measure


Net income


$13,967


$16,638


$6,510


$4,712


$1,033


$(5,223)


$37,637


















Diluted shares outstanding


33,753












33,753


















Diluted earnings per share


$    0.41












$    1.12


 

* Represents pre-tax amounts

 

Unaudited Forward-Looking Statements Regarding Business Outlook 

(In millions, except per share data) 


Business Outlook


Three Months Ending

July 1, 2023



GAAP

Measure


Non-GAAP

Adjustments**


Non-GAAP

Measure

Gross margin


60 %


0.5 %


60.5 %








Operating expenses


$131


$(25)


$106








Effective tax rate


34 %


(9) %


25 %








Diluted earnings per share - low


$0.35


$0.63


$0.98








Diluted earnings per share - high


$0.45


$0.63


$1.08

 

** Non-GAAP adjustments include the following estimates: stock compensation expense of $17.7 million, intangible asset amortization of $6.4 million, termination costs of $1.6 million, and the associated tax impact from the aforementioned items.

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)



April 1,

2023


December 31,

2022

Assets




Current assets:




   Cash and cash equivalents

$   716,377


$   499,915

   Short-term investments

435,699


692,024

   Accounts receivable, net

87,694


71,437

   Inventories

133,236


100,417

   Prepaid expenses and other current assets

87,734


97,570

Total current assets

1,460,740


1,461,363

Property and equipment, net

152,110


152,016

Goodwill

376,389


376,389

Other intangible assets, net

78,397


84,907

Other assets, net

93,812


94,753

Total assets

$2,161,448


$2,169,428





Liabilities and Stockholders' Equity




Current liabilities:




   Accounts payable

$     71,437


$     89,860

   Current portion of convertible debt, net

530,096


--

   Deferred revenue and returns liability

11,258


6,780

   Other current liabilities

80,540


89,136

Total current liabilities

693,331


185,776

Convertible debt, net

--


529,573

Other non-current liabilities

48,663


49,071

Total liabilities

741,994


764,420

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;  

      31,997 and 31,994 shares issued and outstanding at

      April 1, 2023 and December 31, 2022, respectively

3


3

   Retained earnings

1,425,914


1,415,693

   Accumulated other comprehensive loss

(6,463)


(10,688)

Total stockholders' equity

1,419,454


1,405,008

Total liabilities and stockholders' equity

$2,161,448


$2,169,428

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



Three Months Ended


April 1,
2023


April 2,
2022

Operating Activities




Net income

$   13,967


$      22,907

Adjustments to reconcile net income to cash provided by (used in) operating

   activities of continuing operations:




   Depreciation of property and equipment

6,235


5,156

   Amortization of other intangible assets

6,510


10,351

   Amortization of debt issuance costs 

523


496

   Stock-based compensation expense

16,638


12,875

   Equity-method earnings (loss)

1,033


(1,194)

   Deferred income taxes

(2,670)


(4,202)

   Changes in operating assets and liabilities:




      Accounts receivable

(16,257)


19,080

      Inventories

(32,794)


(6,215)

      Prepaid expenses and other assets

11,530


1,704

      Accounts payable

(12,966)


8,932

      Other current liabilities and income taxes

(8,529)


8,345

      Deferred revenue and returns liability

4,478


7,791

      Other non-current liabilities

(978)


(817)

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

(13,280)


85,209





Investing Activities




Purchases of marketable securities

(66,113)


(435,690)

Sales of marketable securities

170,317


9,106

Maturities of marketable securities

157,734


213,750

Purchases of property and equipment

(7,657)


(4,554)

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

254,281


(217,388)





Financing Activities




Repurchases of common stock

(17,608)


(157,778)

Payment of taxes withheld for vested stock awards

(6,931)


(8,755)

Net cash used in financing activities of continuing operations

(24,539)


(166,533)





Discontinued Operations




Operating activities

--


(10,000)

Net cash used in discontinued operations

--


(10,000)





Increase (decrease) in cash and cash equivalents

216,462


(308,712)

Cash and cash equivalents at beginning of period

499,915


1,074,623

Cash and cash equivalents at end of period

$716,377


$   765,911

 

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SOURCE Silicon Labs

Contact:
Company Name: Silicon Labs
Thomas Haws, Investor Relations Manager, (512) 416-8500
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Financial data for Silicon Labs