Summary of Silicon Laboratories FY Conference Call Company Overview - **Company**: Silicon Laboratories (NasdaqGS: SLAB) - **Date**: December 11, 2025 Industry Insights - **AI Investment Cycle**: The company views itself as being in the early stages of the AI investment cycle, particularly in edge computing, which is expected to grow significantly alongside data center investments [2][4] - **Edge AI Development**: There is a belief that edge AI will evolve from data centers to enterprises and eventually to physical devices, with billions of devices expected to be deployed globally [3][4] Key Product Developments - **Connected MCU**: The company emphasizes the importance of its connected microcontroller units (MCUs) integrated with radios, which are essential for networking devices [10] - **Series 3 MCU**: The upcoming Series 3 MCU is designed to support up to 100 times the processing capability of Series 2, with enhanced security features and processing power [11][12] - **Market Readiness**: The first Series 3 devices are already shipping in high volume, with expectations for continued revenue growth from both Series 2 and Series 3 products [18][19] Business Segmentation - **Home and Life vs. Industrial Commercial**: The company segments its business into two main areas, with industrial commercial being the larger segment (approximately 55-60% of revenue) [21] - **Continuous Glucose Monitoring (CGM)**: The CGM market is highlighted as a fast-growing area, with expectations to contribute about 10% of revenue soon, up from nearly zero in 2024 [22][23][24] Market Trends - **Electronic Shelf Labels (ESL)**: The ESL market is transitioning from trial phases to broader adoption, with significant potential for growth as retailers deploy connected price labels [31][32] - **Smart Metering**: The smart metering market is expanding globally, with India being a key growth area, and the company is positioned as a market leader in communication links for these meters [37][38] Financial Performance - **Gross Margins**: The company maintains a long-term gross margin target of 56-58%, with recent performance trending towards the high 50s to low 60s [41][42] - **Revenue Growth**: Silicon Laboratories has a history of consistent growth, with a compounded annual growth rate of 15-18% over the past 10-15 years, and aims to sustain a 20% growth rate moving forward [46][47] Strategic Focus - **Capital Allocation**: The company is focused on maintaining its core competencies in wireless and MCU technologies, with a preference for stock buybacks over M&A activities [48] Conclusion - **Future Outlook**: Silicon Laboratories is optimistic about its growth trajectory, driven by increasing connectivity demands and advancements in AI and edge computing technologies [47]

Core Viewpoint - Investors are encouraged to consider Silicon Laboratories (SLAB) due to improving earnings estimates and positive stock momentum [1][10] Earnings Estimates - Analysts are increasingly optimistic about the earnings prospects of Silicon Laboratories, leading to higher earnings estimates which are expected to positively impact stock prices [2] - The current quarter's earnings estimate is projected at $0.54 per share, reflecting a year-over-year increase of +590.9%, with a 123.68% rise in the Zacks Consensus Estimate over the last 30 days [6] - For the full year, the earnings estimate is expected to be $0.90 per share, indicating a year-over-year change of +152.3%, with a 15.08% increase in the consensus estimate during the same period [7][8] Zacks Rank - Silicon Laboratories holds a favorable Zacks Rank 2 (Buy), attributed to strong agreement among analysts in revising earnings estimates upward [9] - The Zacks Rank system has a proven track record, with Zacks 1 (Strong Buy) stocks averaging a +25% annual return since 2008, indicating that stocks with higher ranks tend to outperform the S&P 500 [3][9] Stock Performance - Over the past four weeks, Silicon Labs shares have increased by 6.3%, suggesting investor confidence in the company's earnings growth prospects [10]

Core Insights - Matter has rapidly gained traction, with its version evolving to 1.5, receiving strong support from major terminal manufacturers like Amazon, Samsung, and Apple [1][6] - Despite the fragmented ecosystem in China, Matter remains a crucial standard for many overseas manufacturers [1] - The technology aims to eliminate fragmentation in the IoT space, enhancing interoperability among various smart devices [1][4] Development of Matter - Matter was initially proposed in December 2019 as CHIP and officially introduced as a new connectivity standard in May 2021 [6] - The first official version, Matter 1.0, was released in October 2022, followed by updates to versions 1.1 and 1.2 in May and October 2023, respectively [6] - The latest version, Matter 1.5, released in November 2023, includes native support for smart cameras and enhanced energy management capabilities [6][10] Features of Matter - Matter offers seamless interoperability, ease of use, strong security, and high acceptance within the ecosystem [7] - It effectively addresses the challenges of multi-protocol compatibility, allowing users to integrate new and existing devices without replacement [7] - The built-in security mechanisms of Matter reduce the burden on application layer security design, enabling developers to focus on user experience [7] Chip Technology and Manufacturers - Chip technology is crucial for the development of Matter, with two main configurations: System on Chip (SoC) and Co-processor [9] - STMicroelectronics launched the ST25DA-C, the first NFC chip compatible with Matter 1.5, allowing for easier device configuration [10][11] - Qorvo's multi-connection technology facilitates backward and forward compatibility for Matter, integrating various wireless standards [23][24] Product Offerings - Qorvo's QPG6200 series chips support multiple protocols with low power consumption, suitable for battery-operated applications [25][26] - Texas Instruments (TI) has been involved in Matter's development for over a decade, offering various compatible products [27][28][29] - NXP focuses on secure wireless connections and innovative solutions based on Matter, enhancing smart home and building automation applications [30][36][39] Industry Trends - Silicon Labs is among the first companies to support Matter compatibility certification, emphasizing the importance of flexible chip technology [40][41] - Nordic Semiconductor has expanded its product line to include high-memory wireless SoCs designed for low-power Bluetooth and Matter applications [44] - With increasing investments from chip manufacturers, the long-standing fragmentation issue in IoT is being addressed, making Matter a significant focus for companies looking to enter overseas markets [46]

Core Insights - Steady earnings growth is valued by company executives and analysts as a sign of profitability, but earnings acceleration has a stronger impact on stock prices, with leading stocks often experiencing this acceleration before price increases [1][3] - QuantumScape Corporation (QS), Silicon Laboratories Inc. (SLAB), and Affiliated Managers Group, Inc. (AMG) are currently demonstrating strong earnings acceleration [1][8] Earnings Acceleration Definition - Earnings acceleration refers to the incremental growth in a company's earnings per share (EPS), specifically when the quarter-over-quarter earnings growth rate increases over a specified time frame [2] Importance of Earnings Acceleration - Unlike earnings growth, which may already be reflected in stock prices, earnings acceleration helps identify stocks that have not yet attracted investor attention, leading to potential price rallies [3] - An increasing percentage of earnings growth indicates a fundamentally sound company, while a sideways or decelerating growth percentage may signal consolidation or a downturn [4] Screening Parameters - The screening process involves identifying stocks where the last two quarter-over-quarter EPS growth rates exceed previous periods' growth rates, with projected EPS growth rates for the upcoming quarter expected to surpass prior periods [5][6][7] - Additional criteria include a current price of at least $5 and an average 20-day trading volume of 50,000 or more to ensure adequate liquidity [7] Top Stocks Identified - The screening narrowed down approximately 7,735 stocks to nine, highlighting QS, SLAB, and AMG as top candidates showing strong EPS acceleration [8] - QuantumScape focuses on solid-state lithium-metal batteries for electric vehicles, with an expected earnings growth rate of 21.3% for the current year [9] - Silicon Laboratories specializes in analog-intensive mixed-signal solutions, with an expected earnings growth rate of 152.3% for the current year [10] - Affiliated Managers provides investment management services, with an expected earnings growth rate of 17.7% for the current year [11]

Core Viewpoint - Silicon Laboratories Inc. (SLAB) is facing challenges with its stock performance, particularly as it struggles to find direction in recent weeks, which may be alleviated by the upcoming release of its Q3 FY2025 results [1] Company Summary - Silicon Laboratories Inc. is a solutions provider focused on the Internet of Things (IoT) sector [1]

Core Viewpoint - The article emphasizes the significant growth potential of the AIoT market, driven by the introduction of the Matter standard and advancements in edge AI technology, with projections indicating that the system-on-chip (SoC) market could reach $80 billion to $100 billion by 2030 [2]. Company Overview - Silicon Labs, also known as "芯科科技," is recognized as a leading player in the wireless chip industry, with a comprehensive product portfolio that supports the AIoT market [4]. - Under the leadership of CEO Matt Johnson, the company has established itself as a wireless connectivity giant, with expertise across various wireless technologies including Bluetooth, Zigbee, Matter, Thread, Wi-Fi, Z-Wave, and Wi-SUN [4][5]. Technological Innovations - Silicon Labs has made significant advancements in SoC technology, particularly in multi-core architecture, allowing for efficient handling of IoT applications, security, and wireless connectivity [4][5]. - The company is the first to introduce dynamic multi-protocol (DMP) solutions and has integrated matrix-vector processors (MVP) into its SoCs, enhancing its competitive edge [5]. - The third-generation wireless SoC platform, featuring the SixG301 and SixG302 products, utilizes a 22nm process and offers improved processing power, integration, security, and energy efficiency [12][13]. Market Strategy - Silicon Labs is committed to identifying and developing competitive products for emerging markets, focusing on innovative applications rather than engaging in price competition [11]. - The company has targeted the interconnected health and automotive keyless entry markets as areas of growth, positioning itself ahead of competitors [11]. Security Leadership - The company has achieved PSA Level 4 certification, making it the first IoT chip manufacturer to reach this level, reinforcing its leadership in IoT security [5][12]. Collaboration and Ecosystem - Silicon Labs emphasizes collaboration with ecosystem partners to enhance its product offerings and solutions, focusing on core hardware, protocol stacks, and software development [16]. - The "Works With" developer conference aims to bridge global technology with local needs, highlighting Shenzhen's role as a hub for IoT innovation [16].

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Viewpoint - Silicon Laboratories (SLAB) reported quarterly earnings of $0.32 per share, exceeding the Zacks Consensus Estimate of $0.30 per share, and showing a significant improvement from a loss of $0.13 per share a year ago [1][2] Financial Performance - The company achieved revenues of $206 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.47%, and up from $166.4 million in the same quarter last year [2] - Over the last four quarters, Silicon Labs has exceeded consensus EPS estimates three times and topped revenue estimates four times [2] Stock Performance and Outlook - Silicon Labs shares have increased approximately 3% since the beginning of the year, while the S&P 500 has gained 16.5% [3] - The company's current consensus EPS estimate for the upcoming quarter is $0.37 on revenues of $212.23 million, and for the current fiscal year, it is $0.70 on revenues of $787.82 million [7] Industry Context - The Semiconductor - Analog and Mixed industry, to which Silicon Labs belongs, is currently ranked in the top 16% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $206 million, up 7% sequentially and up 24% year-over-year, which is twice the performance of comparable peers [12][4] - GAAP gross margin was 57.8%, while non-GAAP gross margin was 58%, up 170 basis points from the prior quarter and 350 basis points year-over-year [13] - GAAP operating loss was $12 million, while non-GAAP operating income was approximately $11 million [14] - Cash, cash equivalents, and short-term investments at the end of the quarter totaled $439 million [14] Business Line Data and Key Metrics Changes - Industrial and commercial business revenue was $118 million, representing 57% of consolidated revenue, up 7% sequentially and 22% year-over-year [12] - Home and life business revenue was $88 million, or 43% of consolidated revenue, up 6% sequentially and 26% year-over-year [13] - Distribution accounted for approximately 74% of revenue mix, with channel inventory at 61 days [13] Market Data and Key Metrics Changes - Demand for commercial applications such as building safety and lighting saw strong quarter-over-quarter sales growth [4] - Smart meter demand is increasing as utilities deploy near real-time tracking of critical infrastructure [5] - Medical customers in the home and life segment grew nearly 60% year-over-year [5] Company Strategy and Development Direction - The company expects full-year revenue growth of 34% compared to 2024, with continued growth anticipated into 2026 and beyond [4] - A partnership with GlobalFoundries was announced to manufacture Series 2 wireless SoCs, enhancing supply chain resilience [10] - The introduction of new design tools, including Studio 6 and Simplicity AI SDK, aims to streamline development and enhance customer engagement [8][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategic direction and ongoing innovation, particularly in the IoT space [10] - The company anticipates continued momentum from share gains, revenue growth, and gross margin expansion [11] - Management noted that customer inventory levels are at their lowest since tracking began, indicating a return to normal market conditions [14] Other Important Information - The company plans to limit operating expense growth while focusing on earnings per share accretion [16] - Non-GAAP earnings per share for Q4 is expected to be in the range of $0.40-$0.70 [17] Q&A Session Summary Question: Clarification on Q4 gross margin guidance - Management confirmed a one-time benefit contributing to gross margin, with expectations of a stabilized gross margin around 61% moving forward [20][22] Question: Financial impact of new design tools - The new SDK is expected to streamline development, allowing for faster time to market and scalability, which should enhance customer acquisition over time [24][25] Question: Expectations for channel and customer inventories - Management indicated that customer inventory effects are effectively gone, and they aim to increase distribution inventory levels gradually [29][30] Question: Outlook for 2026 - While not providing specific guidance, management expressed confidence in outperforming the market and capturing market share, driven by strong product lines [31][32] Question: Inorganic growth opportunities - Management remains open to M&A but emphasizes a tight filter for potential acquisitions, with a preference for returning excess cash flow to shareholders through buybacks [61]

Silicon Labs Investor Presentation NOVEMBER 4, 2025 1 ©Silicon Labs Inc. All rights reserved. Private Securities Litigation Reform Act of 1995 This presentation 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 assu ...