slab-20260404

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 April 4, 2026


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 April 28, 2026, 32,981,823 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 April 4, 2026 and January 3, 2026	3

	Condensed Consolidated Statements of Operations for the three months ended April 4, 2026 and April 5, 2025	4

	Condensed Consolidated Statements of Comprehensive Loss for the three months ended April 4, 2026 and April 5, 2025	5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended April 4, 2026 and April 5, 2025	6

	Condensed Consolidated Statements of Cash Flows for the three months ended April 4, 2026 and April 5, 2025	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	23

Item 1A.	Risk Factors	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41

Item 3.	Defaults Upon Senior Securities	41

Item 4.	Mine Safety Disclosures	41

Item 5.	Other Information	41

Item 6.	Exhibits	42

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)


	April 4, 2026		January 3, 2026
Assets
Current assets:
Cash and cash equivalents	$	383,089	$	364,222
Short-term investments	55,767		79,400
Accounts receivable, net	77,120		64,513
Inventories	103,232		95,566
Prepaid expenses and other current assets	57,113		70,316
Total current assets	676,321		674,017
Property and equipment, net	131,821		128,643
Goodwill	376,389		376,389
Other intangible assets, net	20,836		23,130
Other assets, net	61,094		67,138
Total assets	$	1,266,461	$	1,269,317
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	56,384	$	50,717

Deferred revenue and returns liability	9,822		5,359
Other current liabilities	66,273		87,711
Total current liabilities	132,479		143,787

Other non-current liabilities	35,448		31,112
Total liabilities	167,927		174,899
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; 32,968 and 32,955 shares issued and outstanding at April 4, 2026 and January 3, 2026, respectively	3		3
Additional paid-in capital	177,551		157,402
Retained earnings	920,917		936,814
Accumulated other comprehensive income	63		199
Total stockholders’ equity	1,098,534		1,094,418
Total liabilities and stockholders’ equity	$	1,266,461	$	1,269,317

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
	April 4, 2026		April 5, 2025
Revenues	$	213,500	$	177,714
Cost of revenues	86,502		79,937
Gross profit	126,998		97,777
Operating expenses:
Research and development	88,594		88,219
Selling, general and administrative	55,486		41,638
Operating expenses	144,080		129,857
Operating loss	(17,082)		(32,080)
Other income (expense):
Interest income and other, net	3,626		3,793
Interest expense	(232)		(284)
Loss before income taxes	(13,688)		(28,571)
Provision for income taxes	2,209		1,899
Net loss	$	(15,897)	$	(30,470)

Loss per share:
Basic	$	(0.48)	$	(0.94)
Diluted	$	(0.48)	$	(0.94)

Weighted-average common shares outstanding:
Basic	32,963		32,465
Diluted	32,963		32,465

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 Loss

(In thousands)

(Unaudited)


	Three Months Ended
	April 4, 2026		April 5, 2025
Net loss	$	(15,897)	$	(30,470)
Other comprehensive (loss) income, before tax:
Net changes to available-for-sale securities:
Unrealized (losses) gains arising during the period	(172)		345
Reclassification for gains included in net loss	—		(20)




Other comprehensive (loss) income, before tax	(172)		325

(Benefit) provision for income taxes related to items of other comprehensive (loss) income	(36)		68

Other comprehensive (loss) income	(136)		257

Comprehensive loss	$	(16,033)	$	(30,213)

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 April 4, 2026	Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
Balance as of January 3, 2026	32,955	$	3	$	157,402	$	936,814	$	199	$	1,094,418
Net loss	—	—		—		(15,897)		—		(15,897)
Other comprehensive loss	—	—		—		—		(136)		(136)
Stock issuances, net of shares withheld for taxes	13	—		(956)		—		—		(956)

Stock-based compensation	—	—		21,105		—		—		21,105
Balance as of April 4, 2026	32,968	$	3	$	177,551	$	920,917	$	63	$	1,098,534


Three Months Ended April 5, 2025	Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
Balance as of December 28, 2024	32,458	$	3	$	78,227	$	1,001,721	$	70	$	1,080,021
Net loss	—	—		—		(30,470)		—		(30,470)
Other comprehensive income	—	—		—		—		257		257
Stock issuances, net of shares withheld for taxes	15	—		(958)		—		—		(958)
Stock-based compensation	—	—		19,569		—		—		19,569
Balance as of April 5, 2025	32,473	$	3	$	96,838	$	971,251	$	327	$	1,068,419

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)


	Three Months Ended
	April 4, 2026		April 5, 2025
Operating Activities
Net loss	$	(15,897)	$	(30,470)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation of property and equipment	6,047		6,248
Amortization of other intangible assets	2,295		5,437

Stock-based compensation expense	21,055		19,714
Deferred income taxes	1,153		(1,514)
Changes in operating assets and liabilities:
Accounts receivable	(12,608)		2,412
Inventories	(7,616)		22,098
Prepaid expenses and other assets	6,813		2,973
Accounts payable	3,387		9,234
Other current liabilities and income taxes	(7,415)		11,870
Deferred revenue and returns liability	4,463		3,405
Other non-current liabilities	3,257		(3,279)
Net cash provided by operating activities	4,934		48,128

Investing Activities
Purchases of marketable securities	—		(19,728)
Sales of marketable securities	—		10,005
Maturities of marketable securities	23,461		10,675
Purchases of property and equipment	(9,837)		(4,852)
Proceeds from capital-related government incentives	1,265		—


Net cash provided by (used in) investing activities	14,889		(3,900)

Financing Activities


Payment of taxes withheld for vested stock awards	(956)		(958)

Net cash used in financing activities	(956)		(958)

Increase in cash and cash equivalents	18,867		43,270
Cash and cash equivalents at beginning of period	364,222		281,607
Cash and cash equivalents at end of period	$	383,089	$	324,877

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 loss, stockholders’ equity, and cash flows. The Condensed Consolidated Balance Sheet as of January 3, 2026 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 months ended April 4, 2026 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 January 3, 2026, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 10, 2026.

The Company prepares financial statements on a 52- or 53-week fiscal year that ends on the Saturday closest to December 31. Fiscal 2026 will have 52 weeks. Fiscal 2025 had 53 weeks with the extra week occurring in the first quarter of the year. 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 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). This ASU requires that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The prescribed categories include purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion. This authoritative guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect of this new guidance on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40). This ASU clarifies and modernizes the accounting for costs related to internal-use software. The amendments in the ASU are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Entities may apply the guidance using a prospective, retrospective or modified transition approach. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the effect of this new guidance on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832). This ASU establishes authoritative guidance about the recognition, measurement, and presentation of a grant received by a business entity from a government, including guidance for 1) a grant related to an asset and 2) a grant related to income. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Entities may apply the guidance using a modified prospective or modified retrospective

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Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

1. Significant Accounting Policies (Continued)

approach. Early adoption is permitted in both interim and annual reporting periods. The Company is currently evaluating the effect of this new guidance on its consolidated financial statements.

2. Proposed Merger

As announced on February 4, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Texas Instruments Incorporated (“Parent”) and Caldwell Merger Corp., a wholly-owned direct subsidiary of Parent (“Merger Subsidiary”), pursuant to which Merger Subsidiary will merge with and into Silicon Laboratories Inc. (the “Merger”), and the Company will survive the Merger as a wholly-owned direct subsidiary of Parent. At the effective time of the Merger, each share of the Company’s common stock outstanding as of immediately prior to the effective time (other than dissenting shares or any shares of common stock held by the Company as treasury stock or owned by Parent or any of the Company’s or Parent’s subsidiaries) will be cancelled and converted into the right to receive $231.00 in cash, without interest. The transactions contemplated by the Merger Agreement were unanimously approved by the Company’s board of directors, and on April 30, 2026 the Company obtained the approval of its stockholders required to adopt the Merger Agreement. The Merger is expected to close in the first half of 2027, subject to customary closing conditions, including the receipt of required regulatory approvals.

In connection with the proposed Merger, for the three months ended April 4, 2026 we have incurred $11.2 million of costs, and expect to continue to incur financial advisory, legal, accounting, and other professional fees prior to the completion of the Merger, which could be significant.

3. 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
	April 4, 2026		April 5, 2025
Net loss	$	(15,897)	$	(30,470)

Shares used in computing basic earnings per share	32,963		32,465

Effect of dilutive securities:
Stock-based awards	—		—
Shares used in computing diluted earnings per share	32,963		32,465

Loss per share:
Basic	$	(0.48)	$	(0.94)
Diluted	$	(0.48)	$	(0.94)

Diluted shares for the three months ended April 4, 2026 and April 5, 2025 excluded 0.6 million and 0.3 million shares, respectively, as they were anti-dilutive due to the Company’s net loss for the periods. Securities that were anti-dilutive due to the Company’s stock price and were excluded from the computation of diluted earnings per share for the three months ended April 4, 2026 and April 5, 2025 were not material.

4. 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.

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Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

4. Fair Value of Financial Instruments (Continued)

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.

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 April 4, 2026 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
Cash equivalents:
Money market funds	$	217,216	$	—	$	217,216
Time deposit	—		5,490		5,490
Total cash equivalents	$	217,216	$	5,490	$	222,706

Short-term investments:

Government debt securities	$	—	$	55,767	$	55,767
Total short-term investments	$	—	$	55,767	$	55,767

Total	$	217,216	$	61,257	$	278,473


	Fair Value Measurements at January 3, 2026 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
Cash equivalents:
Money market funds	$	206,051	$	—	$	206,051
Time deposit	—		5,595		5,595
Total cash equivalents	$	206,051	$	5,595	$	211,646

Short-term investments:

Government debt securities	$	—	$	79,400	$	79,400
Total short-term investments	$	—	$	79,400	$	79,400

Total	$	206,051	$	84,995	$	291,046

Valuation methodology

The Company’s 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.

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Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

4. Fair Value of Financial Instruments (Continued)

The following summarizes the components of available-for-sale investments (in thousands):


									Reported As
As of April 4, 2026	Amortized Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalent		Marketable Securities
Time Deposits	$	5,490	$	—	$	—	$	5,490	$	5,490	$	—
Government debt securities	55,687		81		(1)		55,767		—		55,767
Money market funds	217,216		—		—		217,216		217,216		—
Total	$	278,393	$	81	$	(1)	$	278,473	$	222,706	$	55,767


									Reported As
As of January 03, 2026	Amortized Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalent		Marketable Securities
Time deposits	$	5,595	$	—	$	—	$	5,595	$	5,595	$	—
Government debt securities	79,148		252		—		79,400		—		79,400
Money market funds	206,051		—		—		206,051		206,051		—
Total	$	290,794	$	252	$	—	$	291,046	$	211,646	$	79,400

Contractual maturities of investments

The Company’s available-for-sale investments are reported at fair value, with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive income in the Condensed Consolidated Balance Sheet. The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at April 4, 2026 (in thousands):


	Cost		Fair Value
Due in one year or less	$	50,994	$	51,062
Due after one year through five years	4,693		4,705
	$	55,687	$	55,767

Unrealized Gains and Losses

The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands):


	Less Than 12 Months				12 Months or Greater				Total
As of April 4, 2026	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses

Government debt securities	$	5,214	$	(1)	$	—	$	—	$	5,214	$	(1)
	$	5,214	$	(1)	$	—	$	—	$	5,214	$	(1)

The gross unrealized losses as of April 4, 2026 were due primarily to changes in market interest rates. There were no gross unrealized losses as of January 3, 2026. At April 4, 2026 and January 3, 2026, there were no material unrealized gains associated with the Company’s available-for-sale investments.

The Company records an allowance for credit loss when a decline in investment market value is due to credit-related factors. When evaluating an investment for impairment, the Company reviews factors such as the severity of the

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Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

4. Fair Value of Financial Instruments (Continued)

impairment, changes in underlying credit ratings, forecasted recovery, the Company’s intent to sell or the likelihood that it would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. As of April 4, 2026, there were no material declines in the market value of available-for-sale investments due to credit-related factors.

Fair values of other financial instruments

The Company’s other financial instruments, including cash, accounts receivable and accounts payable, are recorded at amounts that approximate their fair values due to their short maturities.

5. Derivative Financial Instruments

The Company may use derivative financial instruments to manage certain exposures to the variability of foreign currency exchange rates. The Company’s objective is to offset increases and decreases in expenses resulting from these exposures with gains and losses on the derivative contracts, thereby reducing volatility of earnings. The Company does not use derivative contracts for speculative or trading purposes. The Company recognizes derivatives, on a gross basis, in the Condensed Consolidated Balance Sheet at fair value. Cash flows from derivatives are classified according to the nature of the cash receipt or payment in the Condensed Consolidated Statement of Cash Flows.

Cash Flow Hedges

Foreign Currency Forward Contracts

The Company may use foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on operating expenses denominated in currencies other than the U.S. dollar. Changes in the fair value of the contracts are recorded in accumulated other comprehensive income in the Condensed Consolidated Balance Sheet and subsequently reclassified into earnings in the period during which the hedged transaction was recognized. The reclassified amount is reported in the same financial statement line item as the hedged item. If the foreign currency forward contracts are terminated or can no longer qualify as hedging instruments prior to maturity, the fair value of the contracts recorded in accumulated other comprehensive income may be recognized in the Condensed Consolidated Statement of Operations based on an assessment of the contracts at the time of termination.

The Company did not enter into any foreign currency forward contracts for its forecasted operating expenses for the quarter ended April 4, 2026. As of April 4, 2026, the Company held no such foreign currency contracts. The fair value of the contracts, contract gains or losses recognized in other comprehensive (loss) income and amounts reclassified from accumulated other comprehensive income into earnings were not material for any of the periods presented.

Non-designated Hedges

Foreign Currency Forward Contracts

The Company may use foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on non-U.S. dollar balance sheet exposures. The Company recognizes gains and losses on the foreign currency forward contracts in interest income and other, net in the Condensed Consolidated Statement of Operations. The Company does not apply hedge accounting to these foreign currency forward contracts.

As of April 4, 2026, the Company held no such foreign currency forward contracts. The fair value of the foreign currency forward contracts and contract gains and losses recognized in income were not material for any of the periods presented.

All foreign currency forward contracts, both designated and not designated as hedging instruments, are classified within Level 2 as the valuation inputs 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)

6. Supplemental Information

The following table shows the details of selected Condensed Consolidated Balance Sheet items (in thousands):

Inventories


	April 4, 2026		January 3, 2026
Work in progress	$	85,388	$	77,464
Finished goods	17,844		18,102
	$	103,232	$	95,566

7. Debt

Credit Facility

The Company and certain of its domestic subsidiaries (the “Guarantors”) have a $400 million revolving credit facility, as amended on June 30, 2023, with a maturity date of June 30, 2028. The credit facility includes a $25 million letter of credit sublimit and a $10 million swingline loan sublimit. The Company also has an option to increase the size of the borrowing capacity by up to the greater of an aggregate of $250 million and 100% of EBITDA of the last four fiscal quarters, plus an amount that would not cause a secured net leverage ratio (funded debt secured by assets/EBITDA) to exceed 3.50 to 1.00, subject to certain conditions.

The credit facility, other than swingline loans, will bear interest at the Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin or, at the option of the Company, a base rate (defined as the highest of the Wells Fargo prime rate, the Federal Funds rate plus 0.50% and the Adjusted Term SOFR plus 1.00%) plus an applicable margin. Swingline loans accrue interest at the base rate plus the applicable margin for base rate loans. The applicable margins for the Adjusted Term SOFR loans range from 1.00% to 1.75% and for base rate loans range from 0.00% to 0.75%, depending in each case, on the leverage ratio as defined in the credit facility.

The credit facility contains various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of default, including financial covenants that the Company must maintain a consolidated net leverage ratio (funded indebtedness less cash and cash equivalents up to $750 million and divided by EBITDA) of no more than 4.25 to 1, and a minimum interest coverage ratio (EBITDA/interest payments) of no less than 2.50 to 1.

As of April 4, 2026, the Company was in compliance with all covenants of the credit facility, including the minimum interest coverage ratio. The Company’s obligations under the credit facility are guaranteed by the Guarantors and are secured by a security interest in substantially all assets of the Company and the Guarantors. As of April 4, 2026, no amounts were outstanding on the credit facility.

8. Commitments and Contingencies

Litigation

The Company is involved in various legal proceedings that have arisen in the normal course of business. While the ultimate results cannot be predicted with certainty, the Company does not expect them to have a material adverse effect on its Condensed Consolidated Financial Statements.

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Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

9. Revenues

The Company groups its products as Industrial & Commercial or Home & Life based on the target markets they address. The following represents revenue by product category (in thousands):


	Three Months Ended
	April 4, 2026		April 5, 2025
Industrial & Commercial	$	127,969	$	95,976
Home & Life	85,531		81,738
	$	213,500	$	177,714

A portion of the Company’s sales are made to distributors under agreements allowing certain rights of return and/or price protection related to the final selling price to the end customers. These factors impact the timing and uncertainty of revenues and cash flows. During the three months ended April 4, 2026, the Company recognized revenue of $5.1 million from performance obligations that were satisfied in the previous reporting period. During the three months ended April 5, 2025, the impact of revenue related to performance obligations that were satisfied in the previous reporting period was insignificant. The following disaggregates the Company’s revenue by sales channel (in thousands):


	Three Months Ended
	April 4, 2026		April 5, 2025
Distributors	$	160,558	$	117,189
Direct customers	52,942		60,525
	$	213,500	$	177,714

10. Stock-Based Compensation

Stock-based compensation costs are based on the fair values on the date of grant for stock awards and stock options and on the date of enrollment for the employee stock purchase plans. The fair values of stock awards (such as restricted stock units (“RSUs”) and performance stock units (“PSUs”) are estimated based on their intrinsic values. The fair values of stock options and rights under the Company’s Employee Stock Purchase Plan are estimated using the Black-Scholes option-pricing model.

The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Operations (in thousands):


	Three Months Ended
	April 4, 2026		April 5, 2025
Cost of revenues	$	442	$	613
Research and development	11,416		12,007
Selling, general and administrative	9,197		7,094
	21,055		19,714
Income tax benefit	2,564		2,501
Total	$	18,491	$	17,213

The Company had approximately $143.8 million of total unrecognized compensation cost related to equity grants as of April 4, 2026 that is expected to be recognized over a weighted-average period of approximately 2.2 years.

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Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

11. Income Taxes

Provision for income taxes includes both domestic and foreign income taxes at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits, deemed foreign income inclusions, change in the valuation allowance, and other permanent differences. Typically, the Company’s interim provision for income taxes is determined using an estimated annual effective tax rate, adjusted for discrete tax items. When the Company is unable to make a reliable estimate of the annual effective tax rate, it uses the actual effective tax rate for the year-to-date period. For the three months ended April 4, 2026, the Company used an actual effective tax rate in jurisdictions where a small change in forecasted pre-tax income or loss has the potential to distort the estimated annual effective tax rate.

Income tax expense was $2.2 million and $1.9 million for the three months ended April 4, 2026 and April 5, 2025, resulting in effective tax rates of (16.1)% and (6.6)%, respectively. The decrease in the effective tax rate for the three months ended April 4, 2026 is primarily due to a decrease in pre-tax book loss, as the impact of permanent items is relatively greater when the pre-tax loss is smaller.

A valuation allowance is required to be established when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In 2024, the Company identified a need for valuation allowances in the U.S. and Singapore due to the presence of significant negative evidence, including recent operating losses and uncertainty around the timing of recovery in economic conditions within both the semiconductor industry and the broader economy. Because of the valuation allowance, we are unable to recognize the full tax benefit of the pre-tax losses incurred in those jurisdictions in the current year. We intend to maintain the valuation allowance until our ability to forecast sufficient future sources of taxable income is reestablished.

Uncertain Tax Positions

As of April 4, 2026, the Company had gross unrecognized tax benefits, inclusive of interest, of $4.7 million, of which $1.8 million would affect the effective tax rate if recognized.

Tax years 2021 through 2026 remain open to examination by the major taxing jurisdictions in which the Company operates. The Company’s 2022 tax year is currently under examination in the U.S., and the Company’s 2023 tax year is currently under examination in India. Although the outcome of tax audits is always uncertain, the Company believes that the results of these examinations will not materially impact its financial position or results of operations. The Company is not currently under audit in any other major taxing jurisdiction.

12. Segment Information

The Company has one operating segment, mixed-signal analog intensive products, consisting of numerous product areas. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM assesses performance for the operating segment and decides how to allocate resources based on net income (loss) that is also reported on the Condensed Consolidated Statement of Operations as Net loss. The measure of segment assets is reported on the Condensed Consolidated Balance Sheets as Total assets.

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Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

12. Segment Information (Continued)

Revenue is attributed to a geographic area based on the shipped-to location. The following summarizes the Company’s revenue by geographic area (in thousands):


	Three Months Ended
	April 4, 2026		April 5, 2025
United States	$	17,956	$	16,684
China	67,320		58,769
Taiwan	42,650		29,832
Rest of world	85,574		72,429
Total	$	213,500	$	177,714

The significant expense categories regularly provided to the CODM, in addition to the expense categories included within net loss presented on the Company’s Condensed Consolidated Statement of Operations, are as follows (in thousands):


	Three Months Ended
	April 4, 2026		April 5, 2025
Research and development:
Employee base compensation	$	32,316	$	32,972
Other research and development expenses (1)	56,278		55,247
Total research and development	$	88,594	$	88,219

Selling, general and administrative:
Employee base compensation	$	13,775	$	14,107
Other selling, general and administrative expenses (1)	41,711		27,531
Total selling, general and administrative	$	55,486	$	41,638

(1) Other research and development and selling, general and administrative expenses include other personnel-related expenses, outside services, software expense, depreciation, amortization, and other expenses.

The following summarizes the Company’s property and equipment, net by geographic area (in thousands):


	April 4, 2026		January 3, 2026
United States	$	105,863	$	106,706
Rest of world	25,958		21,937
Total	$	131,821	$	128,643

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

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and related notes thereto included elsewhere in this report. This discussion contains forward-looking statements. Please see the “Cautionary Statement” above and “Risk Factors” below for discussions of the uncertainties, risks and assumptions associated with these statements. Our fiscal year-end financial reporting periods are a 52- or 53-week fiscal year that ends on the Saturday closest to December 31. Fiscal 2026 will have 52 weeks. Fiscal 2025 had 53 weeks with the extra week occurring in the first quarter of the year. Our first quarter of fiscal 2026 ended April 4, 2026 and our first quarter of fiscal 2025 ended April 5, 2025.

Proposed Merger

As announced on February 4, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Texas Instruments Incorporated (“Parent”) and Caldwell Merger Corp., a wholly-owned direct subsidiary of Parent (“Merger Subsidiary”), pursuant to which Merger Subsidiary will merge with and into Silicon Laboratories Inc. (the “Merger”), and we will survive the Merger as a wholly-owned direct subsidiary of Parent. At the effective time of the Merger, each share of our common stock outstanding as of immediately prior to the effective time (other than dissenting shares or any shares of our common stock held by us as treasury stock or owned by Parent or any of our or Parent’s subsidiaries) will be cancelled and converted into the right to receive $231.00 in cash, without interest. The transactions contemplated by the Merger Agreement were unanimously approved by our board of directors, and on April 30, 2026 we obtained the approval of our stockholders required to adopt the Merger Agreement. The Merger is expected to close in the first half of 2027, subject to customary closing conditions, including approval by our stockholders and the receipt of required regulatory approvals.

Impact of Macroeconomic Conditions

The global economic environment has experienced inflationary pressure, high interest rates, and geopolitical tensions. There continues to be uncertainty regarding international trade relations and trade policy, including those related to tariffs. The situation concerning the imposition of additional tariffs and trade restrictions by the U.S. and other jurisdictions continues to evolve, and we cannot be certain of the outcome, which could adversely impact demand for our products, costs, customers, suppliers, and general economic conditions. Continued geopolitical instability, including the ongoing war in Ukraine and the war in Iran and other conflicts in the Middle East, volatility in energy markets and recent increases in oil prices driven by geopolitical conflicts, the risk of inflation, slower GDP growth, or recession, and the weakening U.S. dollar, have added to the uncertainty. The extent of the impact of the macroeconomic and geopolitical environment on our operational and financial performance will depend on future developments, which are uncertain, but could materially affect our business, results of operations, access to sources of liquidity, and financial condition. The extent of the impact of macroeconomic conditions on our operational and financial performance will depend on future developments, their impact to the business of our suppliers and/or customers, and other items identified under “Risk Factors” below, all of which are uncertain and cannot be predicted. See the section entitled “Risk Factors” in Part II, Item 1A of the Form 10-Q for further discussion.

Overview

We are a leader in secure, intelligent wireless technology for a more connected world. Our integrated hardware and software platform, intuitive development tools, industry leading ecosystem and robust support enable customers in building advanced industrial, commercial, home and life applications. We make it easy for developers to solve complex wireless challenges throughout the product lifecycle and get to market quickly with innovative solutions that transform industries, grow economies and improve lives. We provide analog-intensive, mixed-signal solutions for use in a variety of electronic products in a broad range of applications for the Internet of Things (“IoT”) including connected home and security, industrial automation and control, smart metering, smart lighting, commercial building automation, consumer electronics, asset tracking and medical instrumentation. We group our products as Industrial & Commercial or Home & Life based on the target markets they address.

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As a fabless semiconductor company, we rely on third-party semiconductor fabricators in Asia, and to a lesser extent the United States and Europe, to manufacture the silicon wafers that reflect our integrated circuit (“IC”) designs. Each wafer contains numerous die, which are cut from the wafer to create a chip for an IC. We rely on third parties in Asia to assemble, package, and, in most cases, test these devices and ship these units to our customers. Testing performed by such third parties facilitates faster delivery of products to our customers (particularly those located in Asia), shorter production cycle times, lower inventory requirements, lower costs and increased flexibility of test capacity.

The sales cycle for our ICs can be as long as 12 months or more. An additional three to six months or more are usually required before a customer ships a significant volume of devices that incorporate our ICs. Due to this lengthy sales cycle, we typically experience a significant delay between incurring research and development and selling, general and administrative expenses, and the corresponding sales. Consequently, if sales in any quarter do not occur when expected, expenses and inventory levels could be disproportionately high, and our operating results for that quarter and, potentially, future quarters, would be adversely affected. Moreover, the amount of time between initial research and development and commercialization of a product, if ever, can be substantially longer than the sales cycle for the product. Accordingly, if we incur substantial research and development costs without developing a commercially successful product, our operating results, as well as our growth prospects, could be adversely affected.

Because some of our ICs are designed for use in consumer products, we expect that the demand for our products will be typically subject to some degree of seasonal demand. However, rapid changes in our markets and across our product areas make it difficult for us to accurately estimate the impact of seasonal factors on our business.

Current Period Highlights

Revenues increased $35.8 million in the recent quarter compared to the first quarter of fiscal 2025 due to increased revenues from our Industrial & Commercial products and our Home & Life products. Gross profit increased $29.2 million during the same period primarily as a result of the increase in revenues. Gross margin increased to 59.5% in the recent quarter compared to 55.0% in the first quarter of fiscal 2025 as our indirect and overhead expenses decreased as a percentage of revenues. Operating expenses increased by $14.2 million in the recent quarter compared to the first quarter of fiscal 2025 primarily due to costs related to the Merger. Operating loss in the recent quarter was $17.1 million compared to operating loss of $32.1 million in the first quarter of fiscal 2025. Refer to “Results of Operations” below for further discussion.

We ended the first quarter of fiscal 2026 with $438.9 million in cash, cash equivalents, and short-term investments. Net cash provided by operating activities was $4.9 million during the current year three-month period. Accounts receivable were $77.1 million at April 4, 2026, representing 33 days sales outstanding (“DSO”). Inventory was $103.2 million at April 4, 2026, representing 107 days of inventory (“DOI”).

During the three months ended April 4, 2026, we had no customer that represented more than 10% of our revenues. In addition to direct sales to customers, some of our end customers purchase products indirectly from us through distributors and contract manufacturers. An end customer purchasing through a contract manufacturer typically instructs such contract manufacturer to obtain our products and incorporate such products with other components for sale by such contract manufacturer to the end customer. Although we actually sell the products to, and are paid by, the distributors and contract manufacturers, we refer to such end customer as our customer. Two of our distributors who sell to our customers, Arrow Electronics and Edom Technology, each represented more than 10% of our revenues during the three months ended April 4, 2026.

The percentage of our revenues derived from outside of the United States was 92% during the three months ended April 4, 2026. All of our revenues to date have been denominated in U.S. dollars. We believe that a majority of our revenues will continue to be derived from customers outside of the United States.

Results of Operations

The following describes the line items set forth in our Condensed Consolidated Statements of Operations:

Revenues. Revenues are generated predominately by sales of our products. Our revenues are subject to variation from period to period due to the volume of shipments made within a period, the mix of products we sell, and the prices we charge for our products.

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Cost of Revenues. Cost of revenues includes the cost of purchasing finished silicon wafers processed by independent foundries; costs associated with assembly, test and shipping of those products; costs of personnel and equipment associated with manufacturing support, logistics, and quality assurance; costs of royalties, other intellectual property license costs, and certain acquired intangible assets; and an allocated portion of our occupancy costs. Our gross margin fluctuates depending on product mix, manufacturing yields, inventory valuation adjustments, average selling prices, and other factors.

Research and Development. Research and development expense consists primarily of personnel-related expenses, including stock-based compensation, as well as new product masks, external consulting and services costs, equipment tooling, equipment depreciation, amortization of intangible assets, and an allocated portion of our occupancy costs. Research and development activities include the design of new products, refinement of existing products and design of test methodologies to ensure compliance with required specifications.

Selling, General and Administrative. Selling, general and administrative expense consists primarily of personnel-related expenses, including stock-based compensation, as well as an allocated portion of our occupancy costs, sales commissions to independent sales representatives, amortization of intangible assets, professional fees, legal fees, and promotional and marketing expenses.

Interest Income and Other, Net. Interest income and other, net reflects interest earned on our cash, cash equivalents and investment balances, foreign currency remeasurement adjustments, and other non-operating income and expenses.

Interest Expense. Interest expense consists of interest on our short and long-term obligations, our credit facility, and amortization of debt issuance costs.

Provision for Income Taxes. Provision for income taxes includes both domestic and foreign income taxes at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits, deemed foreign income inclusions, and other permanent differences. See Note 11, Income Taxes, to the Condensed Consolidated Financial Statements.

The following table sets forth our Condensed Consolidated Statements of Operations data as a percentage of revenues for the periods indicated:


	Three Months Ended
	April 4, 2026		April 5, 2025
Revenues	100.0	%	100.0	%
Cost of revenues	40.5		45.0
Gross profit	59.5		55.0
Operating expenses:
Research and development	41.5		49.6
Selling, general and administrative	26.0		23.4
Operating expenses	67.5		73.1
Operating loss	(8.0)		(18.1)
Other income (expense):
Interest income and other, net	1.7		2.1
Interest expense	(0.1)		(0.2)
Loss before income taxes	(6.4)		(16.1)
Provision for income taxes	1.0		1.1
Net loss	(7.4)	%	(17.1)	%

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Revenues


	Three Months Ended
(in millions)	April 4, 2026		April 5, 2025		Change		% Change
Industrial & Commercial	$	128.0	$	96.0	$	32.0	33.3	%
Home & Life	85.5		81.7		3.8		4.6	%
	$	213.5	$	177.7	$	35.8	20.1	%

The increase in revenues in the recent three-month period was due to increased revenues of $32.0 million from our Industrial & Commercial products and increased revenues of $3.8 million from our Home & Life products. Revenues increased in the recent three-month periods as a result of increases in unit volumes of our products relative to the prior year. The average selling prices of our products may fluctuate significantly from period to period due to changes in product mix, pricing decisions and other factors. In general, as our products become more mature, we expect to experience decreases in average selling prices.

Gross Profit


	Three Months Ended
(in millions)	April 4, 2026			April 5, 2025			Change
Gross profit	$	127.0		$	97.8		$	29.2
Gross margin	59.5		%	55.0		%	4.5		%

Gross profit increased during the recent three-month period primarily as a result of increases in revenues in the periods. Gross margin increased as our indirect and overhead expenses decreased as a percentage of revenues in the recent three-month period as a result of the increase in revenues.

We may experience variations in the average selling prices of certain of our products. Increases in average selling prices may occur during periods of increased demand, but such demand may be short-lived and could be accompanied by higher product costs. Declines in average selling prices create downward pressure on gross margin and may be offset to the extent we are able to introduce higher margin new products and gain market share with our products; reduce costs of existing products through improved design; achieve lower production costs from our wafer suppliers and third-party assembly and test subcontractors; achieve lower production costs per unit as a result of improved yields throughout the manufacturing process; or reduce logistics costs.

Research and Development


	Three Months Ended
(in millions)	April 4, 2026			April 5, 2025			Change		% Change
Research and development	$	88.6		$	88.2		$	0.4	0.5	%
Percent of revenue	41.5		%	49.6		%

Research and development expense in the recent three-month period increased, with increases of $1.7 million for new product introduction costs, $1.0 million from lower government incentives, and $0.6 million for IT-related costs, partially offset by a decrease of $3.1 million for amortization of intangible assets.

Selling, General and Administrative


	Three Months Ended
(in millions)	April 4, 2026			April 5, 2025			Change		% Change
Selling, general and administrative	$	55.5		$	41.6		$	13.9	33.4	%
Percent of revenue	26.0		%	23.4		%

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The increase in selling, general and administrative expense in the recent three-month period was primarily due to $11.2 million from costs incurred due to the Merger, and a $2.9 million increase in personnel-related costs.

Interest Income and Other, Net

Interest income and other, net for the three months ended April 4, 2026 was $3.6 million, compared to $3.8 million for the three months ended April 5, 2025.

Interest Expense

Interest expense for the three months ended April 4, 2026 was $0.2 million, compared to $0.3 million for the three months ended April 5, 2025.

Provision for Income Taxes


	Three Months Ended
(in millions)	April 4, 2026			April 5, 2025			Change
Provision for income taxes	$	2.2		$	1.9		$	0.3
Effective tax rate	(16.1)		%	(6.6)		%

The decrease in the effective tax rate for the three months ended April 4, 2026 is primarily due to a decrease in pre-tax book loss, as the impact of permanent items is relatively greater when the pre-tax loss is smaller.

Liquidity and Capital Resources

Our principal sources of liquidity as of April 4, 2026 consisted of $438.9 million in cash, cash equivalents and short-term investments, of which $250.3 million was held by our U.S. entities. The remaining balance was held by our foreign subsidiaries. Our cash equivalents and short-term investments consisted of government debt securities, which include U.S. government securities; time deposits; and money market funds.

Operating Activities

Net cash provided by operating activities was $4.9 million during the three months ended April 4, 2026, compared to net cash provided of $48.1 million during the three months ended April 5, 2025. Operating cash flows during the three months ended April 4, 2026 reflect our net loss of $15.9 million, adjustments of $30.6 million for depreciation, amortization, stock-based compensation, and deferred income taxes, and a net cash outflow of $9.7 million due to changes in our operating assets and liabilities.

Accounts receivable increased to $77.1 million at April 4, 2026 from $64.5 million at January 3, 2026. The increase in accounts receivable resulted primarily from normal variations in the timing of collections and billings. Our DSO was 33 days at April 4, 2026 and 28 days at January 3, 2026.

Inventory increased to $103.2 million at April 4, 2026 from $95.6 million at January 3, 2026. Our inventory levels will vary based on the availability of supply and the impact of variations between forecasted demand used for purchasing inventory and actual demand. Our DOI was 107 days at April 4, 2026 and 113 days at January 3, 2026.

Investing Activities

Net cash provided by investing activities was $14.9 million during the three months ended April 4, 2026, compared to net cash used of $3.9 million during the three months ended April 5, 2025. The increase in cash inflows was principally due to an increase in cash provided by net purchases, sales, and maturities of marketable securities of $22.5 million and the receipt of $1.3 million of proceeds from capital-related government incentives in the current period. Purchases of property and equipment increased $5.0 million during the three months ended April 4, 2026 compared to the three months ended April 5, 2025.

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Financing Activities

Net cash used in financing activities was $1.0 million during the three months ended April 4, 2026, compared to $1.0 million during the three months ended April 5, 2025.

Debt

As of April 4, 2026, we had a $400 million revolving credit facility. We have an option to increase the size of the borrowing capacity of the revolving credit facility by up to the greater of an aggregate of $250 million and 100% of EBITDA, plus an amount that would not cause a secured net leverage ratio to exceed 3.50 to 1.00, subject to certain conditions. The credit facility contains various conditions, covenants, and representations with which we must be in compliance in order to borrow funds, including financial covenants that we must maintain a consolidated net leverage ratio (funded indebtedness less cash and cash equivalents up to $750 million and divided by EBITDA) of no more than 4.25 to 1, and a minimum interest coverage ratio (EBITDA/interest payments) of no less than 2.50 to 1. As of April 4, 2026, we were in compliance with all of the covenants and no amounts were outstanding on the revolving credit facility.

Capital Requirements

Our future capital requirements will depend on many factors, including the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, potential acquisitions of companies or technologies and the expansion of our sales and marketing activities. We believe our existing cash, cash equivalents, investments, credit under our credit facility, and cash generated from operations are sufficient to meet our short-term (i.e., over at least the next twelve months) and long-term capital requirements, although we could be required, or could elect, to seek additional funding prior to that time. We may enter into acquisitions or strategic arrangements in the future which also could require us to seek additional equity or debt financing.

Critical Accounting Estimates

Our critical accounting estimates are described in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Form 10-K for the fiscal year ended January 3, 2026. There have been no material subsequent changes to our critical accounting estimates.

Quantitative and Qualitative Disclosures about Market Risk

Interest Income

Our investment portfolio includes cash, cash equivalents and short-term investments. Our main investment objective is the preservation of investment capital. Our interest income is sensitive to changes in the general level of U.S. interest rates. A 100 basis point decline in yield on our investment portfolio holdings as of April 4, 2026 would decrease our future annual interest income by approximately $3.4 million. We believe that our investment policy, which defines the duration, concentration, and minimum credit quality of the allowable investments, meets our investment objectives.

Interest Expense

We are exposed to interest rate fluctuations in the normal course of our business, including through our credit facility. The interest rate on the credit facility consists of a variable-rate of interest and an applicable margin. While we have drawn from the credit facility in the past, we had no borrowings as of April 4, 2026. If we borrow from the credit facility in the future, we will again be exposed to interest rate fluctuations.

Foreign currency exchange rate risk

We are exposed to foreign currency exchange rate risk primarily through assets, liabilities and operating expenses of our subsidiaries denominated in currencies other than the U.S. dollar. Our foreign subsidiaries are considered to be extensions of the U.S. parent. The functional currency of the foreign subsidiaries is the U.S. dollar. Accordingly, gains and losses resulting from remeasuring transactions denominated in currencies other than U.S. dollars are recorded in the Condensed Consolidated Statements of Operations. We may use foreign currency forward contracts to manage exposure to foreign exchange risk. Gains and losses on foreign currency forward contracts designated as hedging instruments are recognized in earnings in the same period during which the hedged transaction is recognized.

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Available Information

Our website address is www.silabs.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available through the investor relations page of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”). Our website and the information contained therein or connected thereto are not intended to be incorporated into this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Information related to quantitative and qualitative disclosures regarding market risk is set forth in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Item 2 above. Such information is incorporated by reference herein.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have performed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective as of April 4, 2026 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Such disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

There was no change in our internal controls during the fiscal quarter ended April 4, 2026 that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

Information regarding legal proceedings is provided in Note 8, Commitments and Contingencies, to the Condensed Consolidated Financial Statements. Such information is incorporated by reference herein.

Item 1A. Risk Factors

Risk Factors Summary

Risks Related to the Proposed Merger

•We may not complete the proposed Merger within the time frame we anticipate, or at all, which could have an adverse effect on our business, financial condition, results of operations, cash flows and stock price

•Uncertainties associated with the Merger could adversely affect our business, results of operations, cash flows and financial condition

•The Merger Agreement contains provisions that limit our ability to pursue alternatives to the Merger and that could deter or discourage a competing acquirer from making a favorable alternative transaction proposal

•While the Merger Agreement is in effect, we are subject to restrictions on our business activities

•Lawsuits arising in connection with the Merger could be costly, delay or prevent completion of the Merger, divert management’s attention and otherwise adversely affect our business

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Global Business Risks

•We may be the victim of business disruptions and security breaches, including cyber-attacks, which could lead to liability or could damage our reputation and financial results

•We may be subject to information technology failures that could damage our reputation, business operations and financial condition

•Our business, financial condition, and results of operations could be materially and adversely affected by global or industry-specific shortages of memory components or other key components necessary for our customers’ products

•Competition within the numerous markets we target may reduce sales of our products and reduce our market share

•If we are unable to develop or acquire new and enhanced products that achieve market acceptance in a timely manner, our operating results and competitive position could be harmed

•Our research and development efforts are focused on a limited number of new technologies and products, and any delay in the development, or abandonment, of these technologies or products by industry participants, or their failure to achieve market acceptance, could compromise our competitive position

•We have limited resources compared to some of our current and potential competitors and we may not be able to compete effectively and increase market share

•Our business, financial condition, and results of operations could be materially and adversely affected by tariffs, trade restrictions, and other barriers to international trade

•We rely on third parties to manufacture, assemble and test our products, which subjects us to risks of disruptions in our supply chain

•We are a global company, which subjects us to additional business risks including logistical and financial complexity, supply disruption, political instability and currency fluctuations

•Most of our current manufacturers, assemblers, test service providers, distributors and customers are concentrated in the same geographic region, which increases the risk that a natural disaster, epidemic, labor strike, war or political unrest could disrupt our operations or sales

•We are subject to the cyclical nature of the semiconductor industry, which has been subject to significant fluctuations

•We may not be able to maintain our historical growth and may experience significant period-to-period fluctuations in our revenues and operating results, which may result in volatility in our stock price

•Our inability to manage growth could materially and adversely affect our business

•We depend on our key personnel to manage our business effectively in a rapidly changing market, and if we are unable to retain our current personnel and hire additional personnel, our ability to develop and successfully market our products could be harmed

•Any acquisitions we make could disrupt our business and harm our financial condition

•The average selling prices of our products could decrease rapidly which may negatively impact our revenues and gross profit

•Failure to manage our distribution channel relationships could impede our future growth

•We do not have long-term commitments from our customers

•We are subject to increased inventory risks and costs because we build our products based on forecasts provided by customers before receiving purchase orders for the products

•Our products are complex and may contain errors which could lead to liability, an increase in our costs and/or a reduction in our revenues

•Our customers require our products to undergo a lengthy and expensive qualification process without any assurance of product sales

•We are subject to risks relating to product concentration

•Any dispositions could harm our financial condition

•The semiconductor manufacturing process is highly complex and, from time to time, manufacturing yields may fall below our expectations, which could result in our inability to satisfy demand for our products in a timely manner and may decrease our gross profit due to higher unit costs

•We depend on our customers to support our products, and some of our customers offer competing products

•Changes in the privacy and data security/protection laws could have an adverse effect on our operations

•Our products must conform to industry standards and technology in order to be accepted by end users in our markets

•Any material weaknesses or other deficiencies or otherwise failing to maintain an effective system of internal controls, including disclosure controls and procedures, could result in material misstatements of our financial statements or cause us to fail to meet our reporting obligations

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Intellectual Property Risks

•Significant litigation over intellectual property in our industry may cause us to become involved in costly and lengthy litigation which could adversely affect our business

•We may be unable to protect our intellectual property, which would negatively affect our ability to compete

Liquidity and Credit Risks

•Disruptions in the financial services industry could adversely affect our operations and financial condition

•We are subject to credit risks related to our accounts receivable

•Any borrowings under our credit agreement or other indebtedness could adversely affect our operations and financial condition

•We could seek to raise additional debt or equity capital in the future, but additional capital may not be available on terms acceptable to us, or at all

Stock and Governance Risks

•Our stock price may be volatile

•Provisions in our charter documents and Delaware law could prevent, delay or impede a change in control of us and may reduce the market price of our common stock

Risk Factors

Risks Related to the Proposed Merger

We may not complete the proposed Merger within the time frame we anticipate, or at all, which could have an adverse effect on our business, financial condition, results of operations, cash flows and stock price

On February 4, 2026, we entered into the Merger Agreement with Parent and Merger Subsidiary, pursuant to which Merger Subsidiary will be merged with and into us, with us continuing as the surviving company and a wholly owned subsidiary of Parent. If the Merger is completed, we will become a privately held company, meaning that our common stock will be delisted from the NASDAQ National Market and deregistered under the Securities Exchange Act of 1934. Completion of the Merger is subject to a number of closing conditions, including obtaining approval of our stockholders at a special meeting of stockholders, which we obtained on April 30, 2026, and the receipt of required regulatory approvals. The failure to satisfy the remaining closing conditions could jeopardize or delay the consummation of the Merger.

Each party’s obligation to consummate the Merger is also subject to the accuracy of the representations and warranties of the other party (subject to certain materiality qualifications) and the performance in all material respects of the other party’s covenants under the Merger Agreement, including, with respect to us, covenants regarding operation of our business prior to closing. In addition, the Merger Agreement may be terminated under certain specified circumstances. Certain conditions to the completion of the pending Merger are not within our control, and we cannot predict when or if these conditions will be satisfied (or waived, as applicable). As a result, we cannot assure you that the Merger will be completed.

If the Merger is not completed within the expected time frame, or at all, we may be subject to a number of material risks. To the extent that the current market price of our common stock reflects an assumption that the Merger will be completed, the price of our common stock could decrease if the Merger is not completed and stockholders may not recover their investment or receive a price for their shares of our common stock similar to what has been offered under the Merger Agreement. Further, investor confidence in us could decline, and stockholder litigation could be brought against us. Additionally, we may be required to pay a termination fee under certain circumstances that give rise to a termination of the Merger Agreement.

In addition, we have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection with the Merger, including for activities that we would have not undertaken other than to complete the Merger. As a result, to the extent the Merger is not completed, we will receive little or no benefit from incurring these costs.

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Even if successfully completed, there are certain risks to our stockholders from the Merger, including: the amount of cash per outstanding share of our common stock to be paid under the Merger Agreement is fixed and will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, financial condition or operating results or in the event of any change in the market price of, analyst estimates of, or projections relating to, our common stock; receipt of the all-cash per share Merger consideration under the Merger Agreement is taxable to stockholders that are treated as U.S. holders for U.S. federal income tax purposes; and if the Merger is completed, our stockholders will forego the opportunity to realize the potential long-term value of the successful execution of our current business strategy as an independent company.

Uncertainties associated with the Merger could adversely affect our business, results of operations, cash flows and financial condition

The announcement and pendency of the Merger, as well as any delays in the expected timeframe, could cause disruption in our business and create uncertainties, which could have an adverse effect on our business, results of operations, cash flows and financial condition, regardless of whether the Merger is completed. These risks and uncertainties include, but are not limited to:

•the possibility that our relationship with suppliers, customers and employees could be adversely affected, including if our suppliers, customers or others attempt to negotiate changes in existing business relationships, consider entering into business relationships with parties other than us, delay or defer decisions concerning their business with us, or terminate their existing business relationships with us during the pendency of the Merger;

•uncertainties caused by any negative sentiment in the marketplace with respect to the Merger, which could adversely impact investor confidence in us;

•a diversion of a significant amount of management time and resources toward the completion of the Merger;

•a distraction of our current employees as a result of the Merger, which could result in a decline in their productivity or cause distractions in the workplace;

•being subject to certain restrictions on the conduct of our business;

•possibly foregoing certain business opportunities that we might otherwise pursue absent the pending Merger;

•difficulties in attracting and retaining key employees due to uncertainties related to the Merger;

•impact of costs related to completion of the Merger; and

•other developments beyond our control, including, but not limited to, changes in domestic or global economic conditions that may affect the timing or success of the Merger.

The adverse effects of the pendency of the Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement. As a result, there can be no assurance that our business, results of operations, cash flows and financial condition will not be adversely affected, as compared to prior to the announcement of the Merger Agreement.

The Merger Agreement contains provisions that limit our ability to pursue alternatives to the Merger and that could deter or discourage a competing acquirer from making a favorable alternative transaction proposal

Under the Merger Agreement, we are subject to “no-shop” restrictions and are not permitted, subject to certain exceptions set forth in the Merger Agreement, to initiate, solicit or knowingly encourage

SEC Form 10-Q filed by Silicon Laboratories Inc.