Silicon Labs Announces First Quarter 2019 Results

- Earnings Exceed Expectations -

AUSTIN, Texas, April 24, 2019 — (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 March 30, 2019. Revenue was at the midpoint of guidance at $188.1 million, down from $215.5 million in the fourth quarter, with gross margin, opex and earnings per share (EPS) exceeding expectations. First quarter GAAP and non-GAAP diluted EPS were $0.12 and $0.59, respectively.

(PRNewsfoto/Silicon Labs)

"We exited 2018 with strong design win momentum and leading positions in key secular growth markets," said Tyson Tuttle, CEO of Silicon Labs. "Despite macro turbulence, Q1 bookings were robust, signaling a Q2 rebound. We believe we are well-positioned to outperform the market."

First Quarter Financial Highlights

IoT revenue declined to $106 million, down 11% sequentially and up 3% year-on-year.
Infrastructure revenue was about flat sequentially at $46 million, down 7% year-on-year.
Broadcast revenue declined to $26 million, down 25% sequentially and 27% year-on-year.
Access revenue declined to $10 million, down 36% sequentially and 43% year-on-year.

On a GAAP basis:

GAAP gross margin was 61.6%.
GAAP R&D expenses were $62 million.
GAAP SG&A expenses were $49 million.
GAAP operating income as a percentage of revenue was 2.7%.
GAAP diluted earnings per share were $0.12.

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

Non-GAAP gross margin was 61.8%.
Non-GAAP R&D expenses were $48 million.
Non-GAAP SG&A expenses were $40 million.
Non-GAAP operating income as a percentage of revenue was 14.9%.
Non-GAAP diluted earnings per share were $0.59.

Product Results

Launched the new Si89xx family of isolated ICs delivering precise current and voltage measurement with ultra-low temperature drift for industrial, green energy and EV/HEV applications.
Introduced a comprehensive portfolio of clock and buffer timing solutions providing best-in-class jitter performance to meet the new PCI Express Gen 5 specification.
Released the first SoC products in the next-generation Wireless Gecko Series 2 portfolio, delivering the industry's most versatile and scalable IoT connectivity platform designed to make IoT products more powerful, efficient and reliable.

Business Outlook

The company expects second quarter revenue to be in the range of $202 to $212 million, reflecting sequential growth in IoT, Broadcast and Access, with Infrastructure flat, and estimates the following:

On a GAAP basis:

GAAP gross margin at approximately 60.0%.
GAAP operating expenses at approximately $112.5 million.
GAAP effective tax rate of 5.0%.
GAAP diluted earnings per share between $0.16 and $0.26.

On a non-GAAP basis, and excluding the impact of stock compensation, amortization of acquired intangible assets, 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 60.5%.
Non-GAAP operating expenses at approximately $89.0 million.
Non-GAAP effective tax rate at 12.0%.
Non-GAAP diluted earnings per share between $0.70 and $0.80.

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 10130132. The replay will be available through May 24, 2019.

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; dependence on a limited number of products and customers; intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing Silicon Labs' distributors, manufacturers and subcontractors; inventory-related risks; difficulties managing international activities; risks associated with international activities (including trade barriers); 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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