slab-20240629

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


þ			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 29, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number: 000-29823

SILICON LABORATORIES INC.

(Exact name of registrant as specified in its charter)


Delaware			74-2793174
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


400 West Cesar Chavez, Austin, Texas			78701
(Address of principal executive offices)			(Zip Code)

(512) 416-8500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange

on which registered

Common Stock, $0.0001 par value

SLAB

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

þ Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

þ Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ

Accelerated filer o

Non-accelerated filer o

Smaller reporting company o

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes þ No

As of July 17, 2024, 32,289,135 shares of common stock of Silicon Laboratories Inc. were outstanding.

Table of Contents


Part I. Financial Information		Page Number

Item 1.	Financial Statements (Unaudited):

	Condensed Consolidated Balance Sheets at June 29, 2024 and December 30, 2023	3

	Condensed Consolidated Statements of Operations for the three and six months ended June 29, 2024 and July 1, 2023	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 29, 2024 and July 1, 2023	5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 29, 2024 and July 1, 2023	6

	Condensed Consolidated Statements of Cash Flows for the six months ended June 29, 2024 and July 1, 2023	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4.	Controls and Procedures	23

Part II. Other Information

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37

Item 3.	Defaults Upon Senior Securities	37

Item 4.	Mine Safety Disclosures	38

Item 5.	Other Information	38

Item 6.	Exhibits	39

Cautionary Statement

Except for the historical financial information contained herein, the matters discussed in this report on Form 10-Q (as well as documents incorporated herein by reference) may be considered “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include declarations regarding the intent, belief or current expectations of Silicon Laboratories Inc. and its management and may be signified by the words “believe,” “estimate,” “expect,” “intend,” “anticipate,” “plan,” “project,” “will” or similar language. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties. Actual results could differ materially from those indicated by such forward-looking statements. Factors that could cause or contribute to such differences include those discussed under “Risk Factors” and elsewhere in this report. Silicon Laboratories disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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Part I. Financial Information

Item 1. Financial Statements

Silicon Laboratories Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)


	June 29, 2024		December 30, 2023
Assets
Current assets:
Cash and cash equivalents	$	240,834	$	227,504
Short-term investments	98,336		211,720
Accounts receivable, net	41,212		29,295
Inventories	166,079		194,295
Prepaid expenses and other current assets	53,585		75,117
Total current assets	600,046		737,931
Property and equipment, net	139,397		145,890
Goodwill	376,389		376,389
Other intangible assets, net	47,374		59,533
Other assets, net	86,781		123,313
Total assets	$	1,249,987	$	1,443,056
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	39,295	$	57,498
Revolving line of credit	—		45,000
Deferred revenue and returns liability	3,323		2,117
Other current liabilities	57,495		58,955
Total current liabilities	100,113		163,570

Other non-current liabilities	56,845		70,804
Total liabilities	156,958		234,374
Commitments and contingencies
Stockholders’ equity:
Preferred stock – $0.0001 par value; 10,000 shares authorized; no shares issued	—		—
Common stock – $0.0001 par value; 250,000 shares authorized; 32,289 and 31,897 shares issued and outstanding at June 29, 2024 and December 30, 2023, respectively	3		3
Additional paid-in capital	39,232		16,973
Retained earnings	1,054,048		1,192,731
Accumulated other comprehensive loss	(254)		(1,025)
Total stockholders’ equity	1,093,029		1,208,682
Total liabilities and stockholders’ equity	$	1,249,987	$	1,443,056

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Silicon Laboratories Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Revenues	$	145,367	$	244,866	$	251,742	$	491,653
Cost of revenues	68,784		101,091		120,090		194,018
Gross profit	76,583		143,775		131,652		297,635
Operating expenses:
Research and development	85,909		85,902		166,559		175,298
Selling, general and administrative	38,695		40,706		72,248		85,597
Operating expenses	124,604		126,608		238,807		260,895
Operating income (loss)	(48,021)		17,167		(107,155)		36,740
Other income (expense):
Interest income and other, net	2,790		7,780		5,522		12,616
Interest expense	(263)		(1,596)		(772)		(3,252)
Income (loss) before income taxes	(45,494)		23,351		(102,405)		46,104
Provision for income taxes	36,663		12,338		36,278		20,091
Equity-method loss	—		(57)		—		(1,090)
Net income (loss)	$	(82,157)	$	10,956	$	(138,683)	$	24,923

Earnings (loss) per share:
Basic	$	(2.56)	$	0.35	$	(4.33)	$	0.78
Diluted	$	(2.56)	$	0.33	$	(4.33)	$	0.75

Weighted-average common shares outstanding:
Basic	32,124		31,614		32,018		31,786
Diluted	32,124		32,926		32,018		33,339

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Silicon Laboratories Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Net income (loss)	$	(82,157)	$	10,956	$	(138,683)	$	24,923
Other comprehensive income, before tax:
Net changes to available-for-sale securities:
Unrealized gains arising during the period	247		1,385		871		4,383
Reclassification for losses included in net income (loss)	26		1,859		41		4,474

Net changes to cash flow hedges:
Unrealized gains (losses) arising during the period	—		(580)		275		(544)
Reclassification for losses (gains) included in net income (loss)	—		186		(234)		157
Other comprehensive income, before tax	273		2,850		953		8,470

Provision for income taxes	50		477		181		1,872

Other comprehensive income	223		2,373		771		6,598

Comprehensive income (loss)	$	(81,934)	$	13,329	$	(137,912)	$	31,521

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Silicon Laboratories Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(In thousands)

(Unaudited)


Three Months Ended June 29, 2024	Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
Balance as of March 30, 2024	31,924	$	3	$	29,830	$	1,136,205	$	(477)	$	1,165,561
Net loss	—	—		—		(82,157)		—		(82,157)
Other comprehensive income	—	—		—		—		223		223
Stock issuances, net of shares withheld for taxes	365	—		(6,397)		—		—		(6,397)

Stock-based compensation	—	—		15,799		—		—		15,799
Balance as of June 29, 2024	32,289	$	3	$	39,232	$	1,054,048	$	(254)	$	1,093,029


Three Months Ended July 1, 2023	Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
Balance as of April 1, 2023	31,997	$	3	$	—	$	1,425,914	$	(6,463)	$	1,419,454
Net income	—	—		—		10,956		—		10,956
Other comprehensive income	—	—		—		—		2,373		2,373
Stock issuances, net of shares withheld for taxes	261	—		(1,593)		—		—		(1,593)
Repurchases of common stock	(1,317)	—		(9,597)		(173,886)		—		(183,483)
Stock-based compensation	—	—		14,754		—		—		14,754
Convertible debt activity	920	—		(3,564)		—		—		(3,564)
Balance as of July 1, 2023	31,861	$	3	$	—	$	1,262,984	$	(4,090)	$	1,258,897


Six Months Ended June 29, 2024	Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
Balance as of December 30, 2023	31,897	$	3	$	16,973	$	1,192,731	$	(1,025)	$	1,208,682
Net loss	—	—		—		(138,683)		—		(138,683)
Other comprehensive income	—	—		—		—		771		771
Stock issuances, net of shares withheld for taxes	392	—		(7,105)		—		—		(7,105)

Stock-based compensation	—	—		29,364		—		—		29,364
Balance as of June 29, 2024	32,289	$	3	$	39,232	$	1,054,048	$	(254)	$	1,093,029


Six Months Ended July 1, 2023	Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
Balance as of December 31, 2022	31,994	$	3	$	—	$	1,415,693	$	(10,688)	$	1,405,008
Net income	—	—		—		24,923		—		24,923
Other comprehensive income	—	—		—		—		6,598		6,598
Stock issuances, net of shares withheld for taxes	359	—		(8,524)		—		—		(8,524)
Repurchases of common stock	(1,412)	—		(19,330)		(177,632)		—		(196,962)
Stock-based compensation	—	—		31,418		—		—		31,418
Convertible debt activity	920	—		(3,564)		—		—		(3,564)
Balance as of July 1, 2023	31,861	$	3	$	—	$	1,262,984	$	(4,090)	$	1,258,897

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Silicon Laboratories Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Six Months Ended
	June 29, 2024		July 1, 2023
Operating Activities
Net income (loss)	$	(138,683)	$	24,923
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation of property and equipment	13,152		12,441
Amortization of other intangible assets	12,160		12,904
Amortization of debt issuance costs	—		960

Stock-based compensation expense	29,455		31,377
Equity-method loss	—		1,090
Deferred income taxes	29,784		(6,403)
Changes in operating assets and liabilities:
Accounts receivable	(11,918)		(26,819)
Inventories	28,123		(45,064)
Prepaid expenses and other assets	20,723		32,963
Accounts payable	(19,341)		(30,003)
Other current liabilities and income taxes	(13,624)		(26,220)
Deferred revenue and returns liability	1,206		4,326
Other non-current liabilities	(6,703)		(1,975)
Net cash used in operating activities	(55,666)		(15,500)

Investing Activities
Purchases of marketable securities	(17,700)		(81,427)
Sales of marketable securities	34,538		339,555
Maturities of marketable securities	97,458		171,691
Purchases of property and equipment	(5,577)		(13,462)
Proceeds from sale of equity investment	12,382		—
Purchases of other assets	—		(215)
Net cash provided by investing activities	121,101		416,142

Financing Activities
Proceeds from revolving line of credit	—		80,000
Payments on debt	(45,000)		(536,124)
Repurchases of common stock	—		(201,095)
Payment of taxes withheld for vested stock awards	(15,213)		(16,310)
Proceeds from the issuance of common stock	8,108		7,785
Net cash used in financing activities	(52,105)		(665,744)

Increase (decrease) in cash and cash equivalents	13,330		(265,102)
Cash and cash equivalents at beginning of period	227,504		499,915
Cash and cash equivalents at end of period	$	240,834	$	234,813

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The information included herein contains all normal recurring accruals and adjustments which, in the opinion of management, are necessary to present fairly Silicon Laboratories Inc.’s (the “Company”) financial position, results of its operations, comprehensive income, stockholders’ equity, and cash flows. The Condensed Consolidated Balance Sheet as of December 30, 2023 was derived from the Company’s audited Consolidated Financial Statements. All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated results of operations for the three and six months ended June 29, 2024 are not necessarily indicative of the results to be expected for the full year.

These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 30, 2023, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 20, 2024.

The Company prepares financial statements on a 52- or 53-week fiscal year that ends on the Saturday closest to December 31. Fiscal 2024 will have 52 weeks and fiscal 2023 had 52 weeks. In a 52-week year, each fiscal quarter consists of 13 weeks.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to inventories, goodwill, acquired intangible assets, other long-lived assets, revenue recognition, stock-based compensation, and income taxes. Actual results could differ from those estimates, and such differences could be material to the financial statements. The Company periodically reviews the assumptions used in its financial statement estimates.

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures. This ASU requires interim and annual disclosure of significant segment expenses that are regularly provided to the chief operating decision-maker (“CODM”) and included within the reported measure of a segment’s profit or loss, requires interim disclosures about a reportable segment’s profit or loss and assets that are currently required annually, requires disclosure of the position and title of the CODM, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, and contains other disclosure requirements. This authoritative guidance is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the effect of this new guidance on our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures. This ASU requires that reporting entities disclose specific categories in the effective tax rate reconciliation as well as information about income taxes paid. The authoritative guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the effect of this new guidance on our consolidated financial statements.

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Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

2. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):


	Three Months Ended				Six Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Net income (loss)	$	(82,157)	$	10,956	$	(138,683)	$	24,923

Shares used in computing basic earnings per share	32,124		31,614		32,018		31,786

Effect of dilutive securities:
Convertible debt and stock-based awards	—		1,312		—		1,553
Shares used in computing diluted earnings per share	32,124		32,926		32,018		33,339

Earnings (loss) per share:
Basic	$	(2.56)	$	0.35	$	(4.33)	$	0.78
Diluted	$	(2.56)	$	0.33	$	(4.33)	$	0.75

Diluted shares for the three and six months ended June 29, 2024 excluded 0.3 million and 0.3 million shares, respectively, due to the Company’s net loss for the periods. In June 2023, the Company paid $535.0 million in cash and issued 0.9 million shares of common stock in connection with the conversions and redemptions of the 2025 Notes. For the three and six months ended July 1, 2023, approximately 0.9 million and 1.1 million shares, respectively, were included in the denominator for the calculation of diluted earnings per share related to the not yet converted or redeemed 2025 Notes. Securities that were anti-dilutive and were excluded from the computation of diluted earnings per share for the three and six months ended July 1, 2023 were insignificant.

3. Fair Value of Financial Instruments

The fair values of the Company’s financial instruments are recorded using a hierarchical disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities. The three levels are described below:

Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 - Inputs other than Level 1 that are directly or indirectly observable, such as quoted prices for similar assets or liabilities and quoted prices in less active markets.

Level 3 - Inputs are unobservable for the asset or liability and are developed based on the best information available in the circumstances, which might include the Company’s own data.

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Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

3. Fair Value of Financial Instruments (Continued)

The following summarizes the valuation of the Company’s financial instruments (in thousands). The tables do not include either cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value.


	Fair Value Measurements at June 29, 2024 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
Cash equivalents:
Money market funds	$	147,307	$	—	$	147,307
Total cash equivalents	$	147,307	$	—	$	147,307

Short-term investments:
Corporate debt securities	$	—	$	47,322	$	47,322
Government debt securities	—		51,014		51,014
Total short-term investments	$	—	$	98,336	$	98,336

Total	$	147,307	$	98,336	$	245,643


	Fair Value Measurements at December 30, 2023 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
Cash equivalents:
Money market funds	$	137,195	$	—	$	137,195

Total cash equivalents	$	137,195	$	—	$	137,195

Short-term investments:
Corporate debt securities	$	—	$	130,047	$	130,047
Government debt securities	—		81,673		81,673
Total short-term investments	$	—	$	211,720	$	211,720

Total	$	137,195	$	211,720	$	348,915

Valuation methodology

The Company’s cash equivalents and short-term investments that are classified as Level 2 are valued using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments in active markets; quoted prices in less active markets; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. The Company’s foreign currency derivative instruments are valued using discounted cash flow models. The assumptions used in preparing the valuation models include foreign exchange rates, forward and spot prices for currencies and market observable data of similar instruments.

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Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

3. Fair Value of Financial Instruments (Continued)

SEC Form 10-Q filed by Silicon Laboratories Inc.