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Silicon Labs Reports Fourth Quarter and Full Year 2022 Results

AUSTIN, Texas, Feb. 1, 2023 — (PRNewswire) — Silicon Labs (NASDAQ: SLAB), a leader in secure, intelligent wireless technology for a more connected world, reported financial results for the fourth quarter, which ended December 31, 2022. Revenue exceeded the top end of the guidance range at $257 million, up 23% year-on-year.  Silicon Labs saw full-year revenue growth across both its Industrial & Commercial and Home & Life product groups.

"We are incredibly proud of our team's execution in doubling our organic revenue in two years to more than $1 billion annually, while at the same time increasing our design wins by 120%," said Matt Johnson, President and Chief Executive Officer at Silicon Labs. "The strength of our opportunity funnel and design win pipeline gives us confidence in our ability to continue expanding our leadership position in IoT while navigating the current economic uncertainty."

Fourth 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 first-quarter revenue to be between $242 to $252 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 March 1, 2023, online or by calling (877) 344-7529 (US) or (412) 317-0088 (international) and entering access code 2355666.

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; 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 Operations


(In thousands, except per share data)


(Unaudited)





Three Months Ended


Year Ended



December 31, 2022


January 1, 2022


December 31, 2022


January 1,
2022


Revenues

$   257,325


$   208,680


$    1,024,106


$   720,860


Cost of revenues

100,028


80,849


381,549


295,468


Gross profit

157,297


127,831


642,557


425,392


Operating expenses:









   Research and development

86,649


71,705


332,326


273,208


   Selling, general and administrative

46,573


53,487


190,971


185,022


Operating expenses

133,222


125,192


523,297


458,230


Operating income (loss)

24,075


2,639


119,260


(32,838)


Other income (expense):









   Interest income and other, net

4,299


2,595


13,915


5,696


   Interest expense

(1,849)


(6,628)


(6,723)


(31,033)


Income (loss) from continuing operations before income taxes

26,525


(1,394)


126,452


(58,175)


Provision for income taxes

1,579


884


38,450


13,427


Equity-method earnings

415


7,791


3,400


13,728


Income (loss) from continuing operations

25,361


5,513


91,402


(57,874)


Income (loss) from discontinued operations, net of income taxes

--


(8,611)


--


2,175,273











Net income (loss)

$   25,361


$   (3,098)


$     91,402


$  2,117,399











Basic earnings (loss) per share:









   Continuing operations

$       0.78


$        0.14


$         2.61


$           (1.35)


   Net income

$       0.78


$       (0.08)


$         2.61


$          49.44











Diluted earnings (loss) per share:









   Continuing operations

$       0.76


$        0.13


$         2.54


$          (1.35)


   Net income

$       0.76


$       (0.08)


$         2.54


$         47.78











Weighted-average common shares outstanding:









   Basic

32,542


38,965


35,086


42,830


   Diluted

33,265


41,031


36,042


44,315













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

December 31, 2022

Non-GAAP Income Statement Items


GAAP

Measure


GAAP

Percent of Revenue


Stock Compensation Expense


Intangible Asset Amortization


Termination Costs & Other


Non-GAAP

Measure


Non-GAAP

Percent of Revenue

Revenues


$257,325




























Gross profit


157,297


61.1 %


$318


$        --


$        --


$157,615


61.3 %
















Research and development


86,649


33.7 %


9,378


6,724


873


69,674


27.1 %
















Selling, general and administrative


46,573


18.1 %


7,601


19


(279)


39,232


15.2 %
















Operating income


24,075


9.4 %


17,297


6,743


594


48,709


18.9 %

 



Three Months Ended

December 31, 2022

Non-GAAP Earnings Per Share


GAAP

Measure


Stock

Compensation Expense*


Intangible Asset Amortization*


Termination Costs & Other*


Equity-Method

Investment Adjustments*


Income

Tax

Adjustments


Non-

GAAP

Measure


Net income


$25,361


$17,297


$6,743


$594


$(414)


$(6,047)


$43,534


















Diluted shares outstanding


33,265












33,265


















Diluted earnings per share


$    0.76












$    1.31



* Represents pre-tax amounts

 

Unaudited Forward-Looking Statements Regarding Business Outlook

(In millions, except per share data)


Business Outlook


Three Months Ending

April 1, 2023



GAAP

Measure


Non-GAAP

Adjustments**


Non-GAAP

Measure

Gross margin


63 %


0 %


63 %








Operating expenses


$139


$(28)


$111








Effective tax rate


31 %


(8) %


23 %








Diluted earnings per share - low


$0.36


$0.71


$1.07








Diluted earnings per share - high


$0.46


$0.71


$1.17


** Non-GAAP adjustments include the following estimates: stock compensation expense of $16.6 million, intangible asset amortization of $6.5 million, termination costs of $5.4 million, and the associated tax impact from the aforementioned items. 

 

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)



December 31,

2022


January 1,
2022

Assets




Current assets:




   Cash and cash equivalents

$   499,915


$1,074,623

   Short-term investments

692,024


964,582

   Accounts receivable, net

71,437


98,313

   Inventories

100,417


49,307

   Prepaid expenses and other current assets

97,570


51,748

Total current assets

1,461,363


2,238,573

Property and equipment, net

152,016


146,516

Goodwill

376,389


376,389

Other intangible assets, net

84,907


118,978

Other assets, net

94,753


77,839

Total assets

$2,169,428


$2,958,295





Liabilities and Stockholders' Equity




Current liabilities:




   Accounts payable

$     89,860


$     47,327

   Current portion of convertible debt, net

--


450,599

   Deferred revenue and returns liability

6,780


13,849

   Other current liabilities

89,136


157,052

Total current liabilities

185,776


668,827

Convertible debt, net

529,573


--

Other non-current liabilities

49,071


77,044

Total liabilities

764,420


745,871

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;  

      31,994 and 38,481 shares issued and outstanding at

      December 31, 2022 and January 1, 2022, respectively

3


4

   Retained earnings

1,415,693


2,214,839

   Accumulated other comprehensive loss

(10,688)


(2,419)

Total stockholders' equity

1,405,008


2,212,424

Total liabilities and stockholders' equity

$2,169,428


$2,958,295

 

Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



Year Ended


December 31,
2022


January 1,
2022

Operating Activities




Net income

$     91,402


$2,117,399

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

   operating activities of continuing operations:




   Income from discontinued operations, net of income taxes

--


(2,175,273)

   Depreciation of property and equipment

22,524


18,051

   Amortization of other intangible assets

34,071


44,505

   Amortization of debt discount and debt issuance costs 

2,003


22,767

   Loss on extinguishment of convertible debt

3


3,370

   Stock-based compensation expense

60,510


56,842

   Equity-method earnings

(3,400)


(13,728)

   Deferred income taxes

(18,240)


(3,414)

   Changes in operating assets and liabilities:




      Accounts receivable

26,876


(3,144)

      Inventories

(51,044)


(1,510)

      Prepaid expenses and other assets

(31,240)


44,664

      Accounts payable

36,797


(7,704)

      Other current liabilities and income taxes

(12,738)


2,109

      Deferred revenue and returns liability

(7,069)


863

      Other non-current liabilities

(9,181)


(14,599)

Net cash provided by operating activities of continuing operations

141,274


91,198





Investing Activities




Purchases of marketable securities

(607,237)


(1,541,971)

Sales of marketable securities

223,354


250,075

Maturities of marketable securities

650,946


844,966

Purchases of property and equipment

(26,525)


(28,577)

Purchases of other assets

--


(1,158)

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

240,538


(476,665)





Financing Activities




Payments on debt

(21)


(140,572)

Repurchases of common stock

(883,424)


(1,150,044)

Payment of taxes withheld for vested stock awards

(15,387)


(22,239)

Proceeds from the issuance of common stock

11,779


14,183

Net cash used in financing activities of continuing operations

(887,053)


(1,298,672)





Discontinued Operations




Operating activities

(69,467)


(191,642)

Investing activities

--


2,747,684

Net cash provided by (used in) discontinued operations

(69,467)


2,556,042





Increase (decrease) in cash and cash equivalents

(574,708)


871,903

Cash and cash equivalents at beginning of period

1,074,623


202,720

Cash and cash equivalents at end of period

$   499,915


$1,074,623

 

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SOURCE Silicon Labs

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Company Name: Silicon Labs
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Financial data for Silicon Labs