Silicon Labs Announces Record Revenue in Q2

Broadcast Products to Drive Sequential Revenue Decline in Q3

AUSTIN, Texas — (BUSINESS WIRE) — July 29, 2015Silicon Labs (NASDAQ: SLAB), a leading provider of microcontroller, wireless connectivity, analog and sensor solutions for the Internet of Things (IoT), today reported financial results for its second quarter ended July 4, 2015. Revenue in the second quarter was within guidance and established a new record at $164.9 million, up from $163.7 million in the first quarter.

Second Quarter Financial Highlights

On a GAAP basis:

  • Gross margin was 59.1 percent
  • R&D expenses were $47.5 million
  • SG&A expenses were $41.0 million
  • Operating income as a percentage of revenue was 5.5 percent
  • Diluted earnings per share were $0.17

On a non-GAAP basis (results exclude the impact of stock compensation, amortization from acquired intangible assets and certain other items as set forth in the reconciliation tables below):

  • Gross margin was 60.3 percent
  • R&D expenses were $37.4 million
  • SG&A expenses were $32.7 million
  • Operating income as a percentage of revenue was 17.8 percent
  • Diluted earnings per share were $0.56

Business Highlights

  • IoT products delivered an all-time high revenue quarter at $68.9 million
  • Infrastructure products established record revenue at $30.3 million
  • Broadcast revenue was down, at $39.4 million, with weakness in consumer partially offset by a record in automotive
  • Access revenue was consistent with expectations at $26.3 million

Product Highlights

  • Announced our highly anticipated Thread networking solution, delivering a wireless software stack built upon our many years of expertise and the industry’s most advanced mesh networking software development tools.
  • Introduced the easy-to-use Bluetooth Smart Ready® BT121 module, offering a dual-mode solution for applications requiring Bluetooth Smart and Bluetooth Classic connectivity.
  • Announced EFM32™ Happy Gecko microcontrollers, providing an energy-friendly, plug-and-play solution for adding USB connectivity to battery-powered IoT applications.
  • Released the next generation of the Simplicity Studio™ development environment, enabling concurrent MCU and wireless design for IoT applications.
  • Introduced the Si5380 clock IC, the industry’s most highly integrated timing solution for wireless infrastructure applications including small and macro cell base stations.
  • Announced the Si88xx family of high-speed, multi-channel digital isolators designed to provide a highly integrated solution for signal and power isolation.
  • Introduced the industry’s first complete Wireless M-Bus platform solution designed to simplify the development of wirelessly connected smart meters in the European market.

Business Outlook

The company expects revenue in the third quarter to be in the range of $151 million to $156 million. Third quarter diluted earnings per share are expected to be between $0.04 and $0.10 on a GAAP basis and between $0.39 and $0.45 on a non-GAAP basis.

“We delivered another record quarter, and are encouraged by the traction we are seeing in our strategic growth businesses including our Internet of Things, Infrastructure and Broadcast automotive products,” said Tyson Tuttle, CEO of Silicon Labs. “However, we believe macro trends continue to stifle the global demand for TVs, with the latest market estimates calling for a reduction in unit demand for 2015. Accordingly, we expect third quarter Broadcast revenue to decline again by approximately 15 percent, counter to typical seasonality.”

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