Silicon Laboratories(SLAB) - 2025 Q1 - Quarterly Results

First Quarter 2025 Results Overview Introduction and CEO Commentary Silicon Labs reported strong sequential and year-over-year revenue growth in Q1 2025, driven by design wins across multiple end markets. The CEO expressed confidence in outperforming the market due to leadership in high-growth applications and consistent share gains, despite macroeconomic uncertainties - Silicon Labs drove strong sequential and year-over-year revenue growth as design wins across multiple end markets continued ramping in the first quarter of 2025[2] - The company remains confident in its ability to outperform the market given its leadership position in secular high-growth applications and consistent share gains, despite macroeconomic uncertainty and shifting trade dynamics[2] First Quarter Financial Highlights Silicon Labs reported Q1 2025 revenue of $178 million, with significant year-over-year growth in both Industrial & Commercial (47%) and Home & Life (99%) segments. The company experienced GAAP operating loss of $32 million and non-GAAP operating loss of $7 million Q1 2025 Financial Highlights | Metric | GAAP Value | Non-GAAP Value | | :--------------------- | :----------- | :------------- | | Revenue | $178 million | | | GAAP Gross Margin | 55.0% | | | GAAP Operating Expenses | $130 million | | | GAAP Operating Loss | $(32) million | | | GAAP Diluted Loss Per Share | $(0.94) | | | Non-GAAP Gross Margin | | 55.4% | | Non-GAAP Operating Expenses | | $105 million | | Non-GAAP Operating Loss | | $(7) million | | Non-GAAP Diluted Loss Per Share | | $(0.08) | - Industrial & Commercial revenue for the quarter was $96 million, up 47% year-over-year[4] - Home & Life revenue for the quarter was $82 million, up 99% year-over-year[4] Business Highlights Product Innovations and Market Ramps Silicon Labs introduced several new products and platforms in Q1 2025, including the next-generation Series 3 platform, the BG29 family of Bluetooth LE SoCs, and the BG22L/BG24L SoCs, all featuring advancements in performance, AI/ML capabilities, and security for various IoT applications. The MG26 family, a Matter and multi-protocol solution, is now generally available - Silicon Labs' first device in its next-generation Series 3 platform on 22nm process technology is now ramping into production, offering advancements in performance, capabilities, and features, including higher levels of compute and AI inference[4] - Announced its new Series 2 BG29 family of Bluetooth Low Energy (LE) SoCs, designed to bring higher levels of compute and connectivity in ultra-compact form factor for applications like wearable medical devices, asset trackers, and smart sensors[4] - Introduced the BG22L and BG24L SoCs for Bluetooth LE, optimized for common Bluetooth applications; the BG24L SoC also includes the Silicon Labs accelerator for AI/ML applications and support for Bluetooth Channel Sounding[4] - The MG26 family of wireless SoCs, featuring double the Flash and RAM, advanced AI/ML processing, and best-in-class security for Matter and concurrent multi-protocol solutions, is now generally available[5] Business Outlook Second Quarter 2025 Guidance For Q2 2025, Silicon Labs expects revenue between $185 million and $200 million. GAAP guidance includes a gross margin of 55-57%, operating expenses of $129-131 million, and diluted loss per share of $(0.55) to $(0.95). Non-GAAP guidance projects a gross margin of 55-57%, operating expenses of $106-108 million, and diluted earnings (loss) per share of $(0.01) to $0.19 - The company expects second-quarter revenue to be between $185 million to $200 million[6] Q2 2025 GAAP Business Outlook | Metric | Range | | :-------------------------- | :-------------------- | | GAAP Gross Margin | 55% to 57% | | GAAP Operating Expenses | $129 million to $131 million | | GAAP Diluted Loss Per Share | $(0.55) to $(0.95) | Q2 2025 Non-GAAP Business Outlook | Metric | Range | | :----------------------------- | :-------------------- | | Non-GAAP Gross Margin | 55% to 57% | | Non-GAAP Operating Expenses | $106 million to $108 million | | Non-GAAP Diluted Earnings (Loss) Per Share | $(0.01) to $0.19 | Reconciliation of GAAP to Non-GAAP Business Outlook The non-GAAP adjustments for the Q2 2025 outlook include estimated stock compensation expense of $20.5 million, intangible asset amortization of $3.3 million, and the application of a long-term non-GAAP tax rate of 20% Q2 2025 GAAP to Non-GAAP Business Outlook Reconciliation (Selected Items) | Business Outlook | GAAP Measure | Non-GAAP Adjustments | Non-GAAP Measure | | :-------------------------- | :----------- | :------------------- | :--------------- | | Gross margin | 55% to 57% | — % | 55% to 57% | | Operating expenses | $129 to $131 | $(23) | $106 to $108 | | Diluted earnings (loss) per share | $(0.55) to $(0.95) | $0.74 to $0.94 | $(0.01) to $0.19 | - Non-GAAP adjustments for Q2 2025 include estimated stock compensation expense of $20.5 million, intangible asset amortization of $3.3 million, and the application of a long-term non-GAAP tax rate of 20%[21] Financial Statements and Non-GAAP Reconciliation Condensed Consolidated Statements of Operations For the three months ended April 5, 2025, Silicon Labs reported revenues of $177.7 million, up 67.08% from the prior year period. Gross profit increased by 77.56%, and net loss decreased by 46.09% year-over-year, reflecting improved operational performance Condensed Consolidated Statements of Operations (Three Months Ended, in thousands) | Metric | April 5, 2025 | March 30, 2024 | YoY Change | | :-------------------------- | :--------------------------- | :-------------------------- | :--------- | | Revenues | $177,714 | $106,375 | +67.08% | | Cost of revenues | $79,937 | $51,306 | +55.79% | | Gross profit | $97,777 | $55,069 | +77.56% | | Operating expenses | $129,857 | $114,203 | +13.71% | | Operating loss | $(32,080) | $(59,134) | -45.75% | | Net loss | $(30,470) | $(56,526) | -46.09% | | Diluted loss per share | $(0.94) | $(1.77) | -46.95% | Non-GAAP Financial Measurements and Reconciliation Silicon Labs provides non-GAAP financial measurements by excluding non-cash and other charges like stock compensation and amortization of acquired intangible assets to offer supplemental information for analyzing core operations, showing a non-GAAP operating loss of $(6.9) million and diluted loss per share of $(0.08) for Q1 2025 - Non-GAAP financial measurements exclude non-cash and other charges and benefits, such as stock compensation and amortization of acquired intangible assets, to provide supplemental information for analyzing core ongoing operations[16][17] Q1 2025 GAAP to Non-GAAP Reconciliation (Selected Items, in thousands) | Metric | GAAP Measure | Stock Compensation Expense | Intangible Asset Amortization | Non-GAAP Measure | | :-------------------------- | :----------- | :------------------------- | :---------------------------- | :--------------- | | Gross profit | $97,777 | $613 | $0 | $98,390 | | Operating expenses | $129,857 | $19,101 | $5,437 | $105,319 | | Operating income (loss) | $(32,080) | $19,714 | $5,437 | $(6,929) | | Net income (loss) | $(30,470) | $19,714 | $5,437 | $(2,736) | | Diluted loss per share | $(0.94) | | | $(0.08) | Condensed Consolidated Balance Sheets As of April 5, 2025, total assets were $1,229.5 million, a slight increase from December 28, 2024, driven by a 15.37% increase in cash and cash equivalents. Inventories decreased by 21.06%, while total liabilities increased by 12.91% quarter-over-quarter, primarily due to higher accounts payable and deferred revenue Condensed Consolidated Balance Sheets (Selected Items, in thousands) | Metric | April 5, 2025 | December 28, 2024 | QoQ Change | | :-------------------------- | :--------------------------- | :----------------------------- | :--------- | | Cash and cash equivalents | $324,877 | $281,607 | +15.37% | | Inventories | $83,397 | $105,639 | -21.06% | | Total current assets | $618,670 | $602,033 | +2.76% | | Total assets | $1,229,496 | $1,222,674 | +0.56% | | Accounts payable | $53,819 | $42,448 | +26.79% | | Deferred revenue and returns liability | $6,478 | $3,073 | +110.79% | | Total current liabilities | $119,719 | $97,883 | +22.31% | | Total liabilities | $161,077 | $142,653 | +12.91% | | Total stockholders' equity | $1,068,419 | $1,080,021 | -1.07% | Condensed Consolidated Statements of Cash Flows For the three months ended April 5, 2025, net cash provided by operating activities was $48.1 million, a significant improvement from a net cash used of $(71.8) million in the prior year, largely due to a reduced net loss and a $22.1 million decrease in inventories. Investing activities used $(3.9) million, and financing activities used $(0.96) million Condensed Consolidated Statements of Cash Flows (Selected Items, Three Months Ended, in thousands) | Metric | April 5, 2025 | March 30, 2024 | | :------------------------------------------ | :--------------------------- | :-------------------------- | | Net loss | $(30,470) | $(56,526) | | Stock-based compensation expense | $19,714 | $13,612 | | Inventories (change) | $22,098 | $(3,958) | | Net cash provided by (used in) operating activities | $48,128 | $(71,800) | | Net cash provided by (used in) investing activities | $(3,900) | $81,492 | | Net cash used in financing activities | $(958) | $(45,707) | | Increase (decrease) in cash and cash equivalents | $43,270 | $(36,015) | | Cash and cash equivalents at end of period | $324,877 | $191,489 | - Net cash provided by operating activities significantly improved to $48.1 million in Q1 2025, compared to net cash used of $(71.8) million in Q1 2024[25] About Silicon Labs Silicon Labs (NASDAQ: SLAB) is a leading innovator in low-power wireless connectivity, providing embedded technology that connects devices and improves lives. Headquartered in Austin, Texas, the company is a trusted partner for innovative solutions in the smart home, industrial IoT, and smart cities markets - Silicon Labs (NASDAQ: SLAB) is the leading innovator in low-power wireless connectivity, building embedded technology that connects devices and improves lives[7] - The company provides device makers with solutions, support, and ecosystems to create advanced edge connectivity applications, serving as a trusted partner for innovative solutions in the smart home, industrial IoT, and smart cities markets[7] Forward-Looking Statements This section outlines various risks and uncertainties that could cause actual results to differ materially from Silicon Labs' forward-looking statements. These include fluctuating global trade policies, the competitive and cyclical nature of the semiconductor industry, macroeconomic challenges, geopolitical events, supply chain risks, and difficulties in product development and market acceptance - Forward-looking statements are subject to various risks and uncertainties, including fluctuating changes in global trade policies, the competitive and cyclical nature of the semiconductor industry, and the challenging macroeconomic environment[8] - Other factors that could cause actual results to differ include geographic concentration of manufacturers, risks from military conflicts and geopolitical events, difficulties developing new products, and intellectual property litigation risks[8] - Additional risks involve managing supply from distributors, dependence on a limited number of products, absence of long-term commitments from customers, inventory-related risks, and cyber-attacks against products and networks[10] Additional Information Earnings Webcast and Conference Call Silicon Labs hosted an earnings conference call and webcast on May 13, 2025, at 7:30 am CDT, with an audio recording available on their investor relations website until June 12, 2025 - Silicon Labs hosted an earnings conference call to discuss quarterly results and answer questions at 7:30 am CDT on May 13, 2025[6] - An audio webcast was available on Silicon Labs' website (www.silabs.com) under Investor Relations, with a replay available through June 12, 2025[6] Note to Editors and Contact This section clarifies Silicon Labs' trademarks and provides contact information for investor relations - Silicon Laboratories, Silicon Labs, the 'S' symbol, and the Silicon Labs logo are trademarks of Silicon Laboratories Inc[11] - Investor Relations contact: Thomas Haws, (512) 416-8500, investor.relations@silabs.com[12]