Silicon Labs Announces Record Revenue

Broad-based Product Revenue Achieves All-Time High in Third Quarter

AUSTIN, Texas — (BUSINESS WIRE) — October 23, 2014Silicon Labs (NASDAQ: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported financial results for its third quarter ended September 27, 2014. Revenue in the third quarter exceeded the top end of guidance and established a new record at $158.1 million, up from $154.9 million in the second quarter.

Financial Highlights

On a GAAP basis:

  • Gross margin was 60.8 percent
  • R&D expenses were $42.5 million
  • SG&A expenses were $44.0 million
  • Operating income as a percentage of revenue was 6.1 percent
  • Diluted earnings per share were $0.13

GAAP SG&A expenses include a $6.0 million charge due to improved expectations regarding the achievement of the Energy Micro earn-out, reflecting strong performance in acquired 32-bit MCU revenue. The charge has an approximate $0.14 per share impact.

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 61.1 percent
  • R&D expenses were $34.8 million
  • SG&A expenses were $32.1 million
  • Operating income as a percentage of revenue was 18.9 percent
  • Diluted earnings per share were $0.52

Business Highlights

  • Broad-based revenue established a new record at $80.3 million, driven by record performance in Silicon Labs’ microcontroller, wireless and sensor products.
  • Broadcast revenue exceeded expectations at $53.1 million, which included $2.1 million from a patent sale.
  • Access revenue also exceeded expectations at $24.8 million.

Product Highlights

  • As a founding member of the Thread Group, announced the creation of a Thread software beta program for selected customers and ecosystem partners, helping them accelerate their product development plans for IP-based mesh networking.
  • Introduced environmental and biometric sensing development kits that help developers simplify their designs in target applications including security systems, smart thermostats and wearables.
  • Launched the industry’s most advanced automotive tuner ICs, the Si4790x family, offering a global radio solution supporting all leading broadcast standards worldwide.
  • Introduced the Si534x “clock-tree-on-a-chip” clock portfolio, providing the industry’s lowest jitter and the greatest frequency flexibility, and supporting the use of a single clock to replace multiple timing components.
  • Launched the ClockBuilder Pro software tool enabling designers to generate sophisticated clock configurations in less than five minutes, minimizing software development overhead and supporting the industry’s shortest lead times.

Business Outlook

The company expects revenue in the fourth quarter to be in the range of $155 million to $161 million and anticipates another record in its Broad-based products. Fourth quarter diluted earnings per share are expected to be between $0.12 and $0.18 on a GAAP basis and between $0.43 and $0.49 on a non-GAAP basis.

“We are delighted to report record revenue in the third quarter and have set an all-time high in Broad-based product revenue,” said Tyson Tuttle, CEO of Silicon Labs. “Our multi-year investment strategy in our MCU, wireless, sensor, power and timing products is driving strong results in our two largest markets, the Internet of Things and Internet Infrastructure, where we have continued to gain share and see exciting prospects for growth.”

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