[Second Quarter Financial & Business Highlights](index=1&type=section&id=Second%20Quarter%20Financial%20%26%20Business%20Highlights) Silicon Labs reported strong Q2 2025 revenue growth and improved non-GAAP operating income, with key product and conference announcements Q2 2025 Key Financial Metrics (GAAP vs. Non-GAAP, in millions except EPS) | Metric | GAAP | Non-GAAP | | :--- | :--- | :--- | | Revenue | $193 | - | | Gross Margin | 56.1% | 56.3% | | Operating Expenses | $131 | $107 | | Operating Income (Loss) | $(23) | $1 | | Diluted EPS (Loss) | $(0.67) | $0.11 | Q2 2025 Revenue by End Market (in millions) | End Market | Revenue | Year-over-Year Growth | | :--- | :--- | :--- | | Industrial & Commercial | $110 | 25% | | Home & Life | $83 | 45% | - Overall revenue grew **33% year-over-year** and **9% sequentially**[1](index=1&type=chunk)[2](index=2&type=chunk) - Announced the upcoming general availability of the SiXG301, the company's first Series 3 device and the world's first to achieve PSA Level 4 iSE/SE security certification[4](index=4&type=chunk) - Introduced the upcoming SiXG302 Series 3 device, targeting Bluetooth and Matter applications with new energy efficiency and wireless performance[4](index=4&type=chunk) - Announced the sixth annual Works With developer conference series, returning with in-person and virtual events to explore trends in wireless connectivity, security, Matter, and AI/ML in IoT[4](index=4&type=chunk) [Third Quarter 2025 Business Outlook](index=2&type=section&id=Business%20Outlook) The company projects Q3 2025 revenues between $200 million and $210 million, with stable gross margins and specific EPS guidance - Third-quarter revenue is expected to be between **$200 million and $210 million**[5](index=5&type=chunk) Q3 2025 GAAP Guidance (in millions except EPS) | Metric | Guidance Range | | :--- | :--- | | Gross Margin | 57% to 58% | | Operating Expenses | $130 to $133 | | Diluted Loss Per Share | $(0.60) to $(0.20) | Q3 2025 Non-GAAP Guidance (in millions except EPS) | Metric | Guidance Range | | :--- | :--- | | Gross Margin | 57% to 58% | | Operating Expenses | $107 to $110 | | Diluted Earnings Per Share | $0.20 to $0.40 | [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show strong revenue growth, a reduced GAAP net loss, stable balance sheet, and improved cash flow from operations [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenues increased to $192.8 million, resulting in a net loss of $21.8 million, a significant improvement from the prior year Q2 Statement of Operations Highlights (YoY Comparison, in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $192,845 | $145,367 | | Gross Profit | $108,109 | $76,583 | | Operating Loss | $(22,867) | $(48,021) | | Net Loss | $(21,817) | $(82,157) | | Diluted Loss Per Share | $(0.67) | $(2.56) | [Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures](index=5&type=section&id=Unaudited%20Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) Q2 2025 GAAP operating loss of $22.9 million converted to a non-GAAP operating income of $1.1 million after adjustments, yielding $0.11 non-GAAP diluted EPS Q2 2025 GAAP to Non-GAAP Reconciliation (in thousands) | Item | GAAP Measure | Adjustments | Non-GAAP Measure | | :--- | :--- | :--- | :--- | | Operating Income (Loss) | $(22,867) | $23,988 | $1,121 | | Net Income (Loss) | $(21,817) | $25,580 | $3,763 | | Diluted EPS | $(0.67) | - | $0.11 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of July 5, 2025, total assets remained stable at $1.221 billion, with increased cash and decreased inventories, while total liabilities rose Balance Sheet Highlights (in thousands) | Account | July 5, 2025 | Dec 28, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $314,459 | $281,607 | | Inventories | $80,871 | $105,639 | | Total Assets | $1,221,065 | $1,222,674 | | Total Liabilities | $159,985 | $142,653 | | Total Stockholders' Equity | $1,061,080 | $1,080,021 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended July 5, 2025, Silicon Labs generated $53.0 million in cash from operations, a significant improvement, leading to a $32.9 million net increase in cash Six-Month Cash Flow Summary (in thousands) | Activity | Six Months Ended July 5, 2025 | Six Months Ended June 29, 2024 | | :--- | :--- | :--- | | Net cash from Operating | $53,036 | $(55,666) | | Net cash from (used in) Investing | $(14,051) | $121,101 | | Net cash used in Financing | $(6,133) | $(52,105) | | **Increase in Cash** | **$32,852** | **$13,330** |

Core Insights - Silicon Labs reported a strong financial performance with a 33% year-over-year revenue growth and a 9% sequential growth for the second quarter ending July 5, 2025 [2][6] - The company achieved a GAAP revenue of $193 million, with significant contributions from its Industrial & Commercial segment, which grew 25% year-over-year, and the Home & Life segment, which grew 45% year-over-year [6][10] - Silicon Labs is positioned to outperform the market due to its industry-leading solutions and consistent execution [2] Financial Highlights - GAAP gross margin was reported at 56.1%, while non-GAAP gross margin was slightly higher at 56.3% [6][10] - GAAP operating loss was $23 million, with a GAAP diluted loss per share of $(0.67) [6][10] - Non-GAAP diluted earnings per share were reported at $0.11, indicating a positive operational performance despite the GAAP loss [6][10] Business Outlook - The company anticipates third-quarter revenue to be between $200 million and $210 million [4] - Expected GAAP gross margin for the next quarter is projected to be between 57% and 58%, with GAAP operating expenses estimated at approximately $130 million to $133 million [6][10] - Non-GAAP diluted earnings per share for the upcoming quarter are expected to range from $0.20 to $0.40 [6][10] Product and Market Developments - Silicon Labs announced the general availability of the SiXG301, the world's first device to achieve PSA Level 4 iSE/SE certification, marking a significant milestone in trusted embedded computing [6] - The company introduced the SiXG302 Series 3 device, which is expected to set new benchmarks in energy efficiency and wireless performance for Bluetooth and Matter applications [6] - The sixth annual Works With developer conference series is set to take place this fall, focusing on emerging trends in wireless connectivity and the role of AI and machine learning in IoT development [6]

Core Insights - Silicon Labs has achieved the world's first PSA Level 4 certification, highlighting its leadership in IoT security and commitment to accelerating IoT growth [1][2] - The PSA Level 4 certification addresses advanced threats such as laser fault injection and side-channel attacks, validating the resilience of embedded devices [1][2] Security Certification - PSA Certified introduced Level 4 certification to combat the increasing complexity of physical attacks on embedded devices, validating resilience against sophisticated threats [1] - Silicon Labs' MG21 SoC was the first to earn PSA Level 3 certification, setting benchmarks for protection against physical tampering [2] Collaboration and Validation - Silicon Labs partnered with Keysight Technologies to validate the Series 3 Secure Vault for PSA Level 4, showcasing a strong collaboration and technical expertise [3][4] - Keysight's advanced testing methodologies were crucial in validating the resilience of the Series 3 Secure Vault against modern threats [4] Future-Proofing Security - The Series 3 Secure Vault and SiXG301 SoC are designed to withstand future threats, with a focus on long-term security through over-the-air updates and real-time monitoring [5] - The Series 3 platform, built on a 22 nm process node, enhances security capabilities and builds on the legacy of Series 2 [6] Regulatory Compliance - Silicon Labs is prepared to assist device makers in complying with new global regulations, including the EU's Radio Equipment Directive and the US Cyber Trust Mark [7][8] - The Secure Vault is designed to meet compliance requirements when properly implemented, aiding developers in aligning with emerging mandates [8]

Core Viewpoint - Silicon Labs is set to release its second quarter 2025 financial results on August 5, 2025, followed by an earnings conference call at 7:30 a.m. Central Time [1]. Company Overview - Silicon Labs (NASDAQ: SLAB) is a leading innovator in low-power wireless technology, focusing on embedded technology that connects devices and enhances lives [3]. - The company integrates advanced technology into highly integrated System on Chips (SoCs), providing solutions and support for device makers in creating edge connectivity applications [3]. - Headquartered in Austin, Texas, Silicon Labs operates in over 16 countries and serves as a trusted partner in the smart home, industrial IoT, and smart cities markets [3].

Core Viewpoint - Silicon Labs (芯科科技) has significantly increased its investment in Bluetooth technology, particularly in low-power Bluetooth (Bluetooth LE), leading to an impressive 80% year-on-year growth in its Bluetooth business this year, a feat unmatched by competitors [1][6]. Group 1: Company Strengths - Silicon Labs has a leading product portfolio that provides chips for almost all mainstream wireless protocols, excluding cellular, and collaborates with local module partners to meet domestic customer needs [6]. - The company offers high-performance RF capabilities, with Bluetooth chips supporting output power from 0 dBm to nearly 20 dBm, allowing for longer transmission distances compared to competitors [6]. - The flexible architecture of Silicon Labs' chips enables customers to switch between different protocols with minimal hardware changes, significantly shortening development time [6]. Group 2: Market Focus - Silicon Labs is focusing on four key markets for its Bluetooth products: 1. High-reliability, high-quality, and high-security data transmission markets, such as healthcare devices [8]. 2. Location services, leveraging advantages in Angle of Arrival (AoA) and Angle of Departure (AoD) technologies [8]. 3. AI-enabled connected devices, emphasizing edge-side intelligence rather than large-scale data processing [8]. 4. Audio streaming, with plans to gradually incorporate these features into future products [9]. Group 3: Channel Sounding Technology - Channel sounding, a significant feature of Bluetooth 6.0, allows for bidirectional distance measurement and minimizes multipath effects, marking a major breakthrough in Bluetooth technology [11]. - Silicon Labs was among the first to support channel sounding and Bluetooth 6.0 specifications, enabling applications in asset tracking and secure proximity sensing [11][14]. Group 4: Medical Applications - The medical application market is a major focus for Silicon Labs, with a growing demand for personalized health devices that can operate efficiently and securely [18]. - The company has developed various Bluetooth products tailored for medical applications, including BG22, BG27, and BG29, which cater to different device requirements [19][20]. - Innovations in power management and integration of AI/ML hardware accelerators in these products enhance their performance and reliability in medical settings [21].

Core Insights - Silicon Labs and Wirepas have shipped 10 million wireless SoCs utilizing Wirepas' RF mesh connectivity software, primarily in India, supporting various industrial applications [1][2] - The partnership has proven to deliver robust, ultra-resilient, and scalable IoT networks, confirming the technical soundness and market readiness of their joint solutions [2][6] - The deployment of smart electric meters in India, totaling four million units, has significantly contributed to the country's Advanced Metering Initiative and grid modernization goals [3] - In Norway, over one million smart meters are connected in a decentralized mesh network, showcasing the capability of their technology to support national-scale infrastructure [4] - The emergency lighting sector is also experiencing high adoption rates, indicating growing momentum in various segments [5] Company Overview - Silicon Labs is a leading innovator in low-power wireless connectivity, providing solutions for smart home, industrial IoT, and smart cities markets [8] - Wirepas specializes in ultra-resilient, scalable mesh networks for large-scale industrial and commercial deployments, ensuring high reliability and business continuity [9]

Core Insights - Silicon Laboratories (NASDAQ: SLAB) reported significant gains in both revenue and earnings in its Q1 FY2025 report released on May 13, indicating strong performance in the Internet of Things (IoT) sector [1] Financial Performance - The company experienced substantial growth in both top-line and bottom-line figures, reflecting a positive trend in its financial health [1]

Core Insights - The demand for powerful, secure, and integrated wireless solutions is increasing as smart devices become more sophisticated and compact [1] - Silicon Labs' Series 3 SoCs are designed to meet the needs of various IoT applications, complementing the existing Series 1 and Series 2 platforms [1] Series 3 SoCs Overview - The Series 3 family includes the SiXG301, optimized for line-powered applications, featuring an integrated LED pre-driver and supporting multiple protocols including Bluetooth, Zigbee, and Matter [2] - The SiXG301 has a memory capacity of 4 MB Flash and 512 kB RAM, enabling future-proof designs for demanding IoT applications [2] - The SiXG302 is designed for battery-powered efficiency, utilizing only 15 µA/MHz active current, which is 30% lower than competitors, making it suitable for wireless sensors and actuators [3] Product Features and Market Position - The SiXG301 and SiXG302 families will include multiprotocol "M" devices and Bluetooth LE optimized "B" devices, enhancing flexibility for designers [4] - Silicon Labs is leveraging a 22 nm process node for all Series 3 devices to meet the growing demand for efficient far-edge devices across various IoT sectors [5] Industry Engagement - Silicon Labs will showcase the SiXG301 and its innovations at the 2025 Works With conference series, which will focus on best practices and emerging technologies in the industry [5][6]

Core Insights - Silicon Laboratories, Inc. reported first-quarter revenues of $178 million, exceeding market expectations, with significant growth in both Industrial & Commercial and Home & Life segments [1] - The company reaffirmed its full-year outlook, projecting FY25 revenue of $785 million, with analysts anticipating upward revisions to consensus estimates following positive results [2][3] Financial Performance - Industrial & Commercial revenue reached $96 million, a 47% year-over-year increase, while Home & Life revenue was $82 million, reflecting a 99% year-over-year growth [1] - Analysts project mid-single-digit quarter-over-quarter growth for the third and fourth quarters, estimating sales of $203 million and $216 million respectively [2] Analyst Expectations - Benchmark analyst Cody Acree expects modest upward revisions to consensus estimates and maintains a Buy rating with a price target of $160 [5] - Needham analyst N. Quinn Bolton also reiterated a Buy rating, projecting a price target of $150 and forecasting over 20% year-over-year revenue growth for FY25, with a more aggressive estimate of 33% growth [3][5] Market Trends - The company’s end markets are recovering from cyclical downturns, with inventory levels returning to typical ranges, indicating a positive trend in customer and channel inventory management [2][4] - Growth in the second half of FY25 is expected to be driven by design wins in smart metering, continuous glucose monitors, and electronic shelf labels [4]

Summary of Silicon Laboratories (SLAB) FY Conference Call Company Overview - **Industry**: Semiconductor, specifically focused on IoT wireless and embedded wireless solutions [3][4] - **Core Business**: Silicon Laboratories is the largest company dedicated to IoT wireless solutions, providing silicon, software, and development tools for edge devices [3][4] Key Financial Highlights - **Design Wins**: The company has secured $10 billion in design wins over the last three years, with a potential run rate of $2 billion to $2.5 billion annually [14][15] - **Unit Shipments**: Approximately 1 billion units shipped from the current Series two platform, with an additional 6 billion units expected to ship in the coming years [11] - **Revenue Growth**: Anticipated sequential growth of 7% in March and 8% in June, with over 60% year-on-year growth expected [16][22] Market Position and Strategy - **Focus Areas**: The company emphasizes breadth, depth, and focus in the IoT wireless space, supporting various technologies like Bluetooth, WiFi, Zigbee, and proprietary technologies [5][6][7] - **Customer Confidence**: The company's focus on IoT has helped secure customer confidence during supply chain crises, leading to increased market share [8][9] Product Development - **Series Two and Three Platforms**: The Series two platform is performing well, while the Series three platform is being ramped up, offering enhanced capabilities for AI and ML applications [11][12][36][39] - **Bluetooth and WiFi Growth**: Bluetooth revenue has grown to 20-25% of total revenue, with an 80% year-on-year growth rate. WiFi is also growing at 40% year-on-year, with significant potential for future growth [41][45][46] Market Trends and Applications - **End Market Growth**: The embedded edge market is growing rapidly, with significant opportunities in smart metering, electronic shelf labels, and portable medical devices [31][33][34][35] - **Long-Term Dynamics**: The company expects strong industrial growth, with 55-60% of sales coming from industrial segments, which have longer lead times compared to consumer markets [75][76] Customer Retention and Stickiness - **Customer Loyalty**: 95% of the top 100 customers have been retained over the past five years, indicating strong customer loyalty and satisfaction [51][52] - **Software Differentiation**: The company offers over 1,000 software features annually, enhancing customer experience and stickiness [53][54][67] Inventory and Supply Chain Management - **Inventory Levels**: Current channel and customer distribution inventories are at 48 days, below the target of 70-75 days, indicating a need for replenishment [25][26] - **Monitoring Metrics**: The company is closely monitoring inventory levels and customer demand to ensure a balanced supply chain [21][22] Future Outlook - **Positive Growth Expectations**: The company is optimistic about continued sequential growth throughout 2025, driven by design win traction and positive customer forecasts [22][23] - **Long-Term Revenue Potential**: The $10 billion design win pipeline is expected to unfold over the next four to five years, providing a strong revenue foundation [29][30][70] Conclusion Silicon Laboratories is well-positioned in the growing IoT wireless market, with strong financial performance, a robust product pipeline, and high customer retention rates. The company’s focus on innovation and customer-centric solutions is expected to drive future growth and market share expansion.