Silicom .(US:SILC)2023-05-01 15:15Financial Data and Key Metrics Changes - The company reported first quarter revenues of $37.2 million, representing a 16% increase compared to $32.1 million in the first quarter of the previous year [8][31] - Operating income for the first quarter of 2023 was $4.8 million, an increase of 41% from $3.4 million in the first quarter of 2022 [16][22] - Net income for the quarter was $4.2 million, a 38% increase compared to $3 million in the first quarter of 2022 [16] - Earnings per diluted share were $0.61, reflecting a year-over-year increase of 38% from $0.44 [16][22] - The gross profit for the first quarter was $11.9 million, with a gross margin of 32%, compared to a gross profit of $11.1 million and a gross margin of 34.5% in the first quarter of 2022 [42] Business Line Data and Key Metrics Changes - The company highlighted significant growth in its Edge product family, which is seen as a primary growth engine [11][23] - New design wins were announced, including a customized version of a 5G-integrated High-Runner Edge Networking product for a leading SD-WAN vendor [11][12] - The company secured design wins with a tier 1 U.S.-based cybersecurity vendor for advanced offload acceleration cards and FPGA SmartNICs, indicating continued relevance of traditional product lines [12][25] Market Data and Key Metrics Changes - Geographical revenue breakdown showed North America accounting for 76%, Europe and Israel 19%, and the Far East and rest of the world 5% [15] - The company had one customer contributing over 10% of revenue, with the top three customers together accounting for about 30% of total revenue [15] Company Strategy and Development Direction - The company is focused on increasing its design wins and expanding its market share, particularly in the Edge networking market [13][28] - A new one-year share repurchase plan was authorized, allowing the company to buy back up to $15 million worth of ordinary shares [23] - The company aims to capitalize on its strong cash position of over $53 million with no debt, which provides a competitive advantage [10][43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in the Edge market, citing strong momentum and increased internal expectations [11][12] - The company provided guidance for the second quarter of 2023, projecting revenues between $38 million and $39 million, representing a 13% year-over-year growth [14] - Management acknowledged potential headwinds from a weaker global macroeconomic environment but remained confident in their revenue guidance [14] Other Important Information - The company emphasized the importance of its unique value proposition, including high-performance offerings and exceptional support capabilities, which have garnered market recognition [9][40] - The company is not currently hedging against currency fluctuations, specifically the shekel [36] Q&A Session Summary Question: Visibility of backlog and order management - Management confirmed that orders are non-cancelable and expressed confidence in the visibility of their backlog, indicating no significant risk of double-booking [32][33] Question: Guidance for the second half of the year - Management stated that they do not provide guidance for the second half of the year, maintaining a tradition of only offering one quarter ahead [34] Question: Approach to hedging against currency fluctuations - Management clarified that they do not engage in hedging activities and have never hedged against the shekel [36]