Silicon Labs Announces Fourth Quarter 2017 Results

-- Q4 Revenue Tops $200 Million --

AUSTIN, Texas, Jan. 31, 2018 — (PRNewswire) —   Silicon Labs (NASDAQ: SLAB), a leading provider of silicon, software and solutions for a smarter, more connected world, today reported financial results for its fourth quarter ended December 30, 2017. Revenue in the fourth quarter ended at the high end of guidance at $201 million, up from $199 million in the third quarter, and establishing a new all-time record. Fourth quarter GAAP (loss) per share was $(0.11), which includes an approximate $(0.60) per share impact from U.S. corporate tax reform, resulting from a $26 million charge to the GAAP tax provision. Fourth quarter non-GAAP diluted earnings per share were $0.93.

"We are very pleased to report outstanding fourth quarter and full-year 2017 financial performance, including 10 percent year-on-year product revenue growth for Q4 and 11 percent for the year," said Tyson Tuttle, CEO of Silicon Labs. "With the combined effort of our 1,300 employees and the support of our business partners and customers worldwide, we have transformed our business to address large, high-quality, sustainable and growing market trends in IoT, green energy and Internet infrastructure. Becoming a $1 billion company is within our sight."

Fourth Quarter Financial Highlights

  • IoT revenue established a record, increasing to $109 million, up 10% sequentially and 28% year-on-year.
  • Infrastructure revenue increased to $39 million, up 1% sequentially and 5% year-on-year.
  • Broadcast revenue declined to $36 million, down 16% sequentially and 11% year-on-year.
  • Access revenue declined to $16 million, down 3% sequentially and 16% year-on-year.

On a GAAP basis:

  • GAAP gross margin was 59.3%.
  • GAAP R&D expenses were $53 million.
  • GAAP SG&A expenses were $40 million.
  • GAAP operating income as a percentage of revenue was 13.1%.
  • GAAP diluted loss per share was $(0.11).

On a non-GAAP basis, excluding the impact of stock compensation, amortization of acquired intangible assets, non-cash interest expense on convertible notes, the effect of the Tax Cuts & Jobs Act of 2017, and certain other items as set forth in the reconciliation tables below:

  • Non-GAAP gross margin was 59.5%.
  • Non-GAAP R&D expenses were $42 million.
  • Non-GAAP SG&A expenses were $33 million.
  • Non-GAAP operating income as a percentage of revenue was 22.2%.
  • Non-GAAP diluted earnings per share were $0.93.

Product Highlights

  • Released dynamic multiprotocol software for Silicon Labs' Wireless Gecko portfolio, a first-of-its-kind solution with RTOS scheduling, enabling simultaneous operation of Zigbee and Bluetooth low energy on a single SoC.
  • Introduced the Si54x Ultra Series™ I2C-programmable crystal oscillators, providing superior jitter performance and frequency flexibility for 100/200/400G applications.
  • Enabled Hager Group's building automation module solution based on Silicon Labs' EFR32 Wireless Gecko SoC.
  • Announced new Si117x biosensors, which add electrocardiogram measurement and deliver high heart rate monitoring accuracy, while minimizing power consumption for all-day monitoring in health and fitness devices.

Business Highlights

  • Announced a definitive agreement to acquire Sigma Designs subject to certain closing conditions which, if not met, would revert to an asset sale of Sigma Designs' Z-Wave business. On January 23, 2018, Sigma Designs announced that the parties would revert to the asset sale of the Z-Wave business to Silicon Labs for $240 million, pursuant to the terms of the definitive agreement and contingent upon approval by Sigma Designs' shareholders.
  • Won the Global Semiconductor Alliance's "Most Respected Public Semiconductor Company" award for the third year in a row.

Business Outlook

The company expects revenue in the first quarter to be in the range of $196 million to $202 million, and also estimates the following:

On a GAAP basis:

  • GAAP gross margin at approximately 59.0%.
  • GAAP operating expenses at approximately $98.0 million.
  • GAAP effective tax rate at (15.0)%.
  • GAAP diluted earnings per share between $0.42 and $0.48.

On a non-GAAP basis, and excluding the impact of stock compensation, amortization of acquired intangible assets, non-cash interest expense on convertible notes, and certain other items as set forth in the reconciliation tables below:

  • Non-GAAP gross margin between 59.0% and 59.5%.
  • Non-GAAP operating expenses at approximately $80.0 million.
  • Non-GAAP effective tax rate between 12.0% and 13.0%.
  • Non-GAAP diluted earnings per share between $0.73 and $0.79.

Webcast and Conference Call        

A conference call discussing the quarterly results will follow this press release at 7:30 a.m. Central time. An audio webcast will be available on Silicon Labs' website ( www.silabs.com) under Investor Relations. A replay will be available after the call at the same website listed above or by calling 1 (855) 859-2056 or (404) 537-3406 (international) and entering conference 88340275. The replay will be available through February 28, 2018.

About Silicon Labs

Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and solutions for a smarter, more connected world. Our award-winning technologies are shaping the future of the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. Our world-class engineering team creates products focused on performance, energy savings, connectivity and simplicity. www.silabs.com

Forward-Looking Statements

This press release 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 assumptions of Silicon Labs and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are the following: risks that Silicon Labs may not be able to maintain its historical growth; quarterly fluctuations in revenues and operating results; difficulties developing new products that achieve market acceptance; dependence on a limited number of products and customers; intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing our distributors, manufacturers and subcontractors; inventory-related risks; difficulties managing international activities; risks that Silicon Labs may not be able to manage strains associated with its growth; credit risks associated with our accounts receivable; dependence on key personnel; stock price volatility; geographic concentration of manufacturers, assemblers, test service providers and customers in Asia that subjects Silicon Labs' business and results of operations to risks of natural disasters, epidemics, war and political unrest; debt-related risks; capital-raising risks; the competitive and cyclical nature of the semiconductor industry; average selling prices of products may decrease significantly and rapidly; information technology risks; cyber-attacks against our products and our networks; conflict mineral risks and other factors that are detailed in the SEC filings of Silicon Laboratories Inc. Silicon Labs disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. References in this press release to Silicon Labs shall mean Silicon Laboratories Inc.

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