Silicon Laboratories Inc 10-Q for FY2023 Q3

Silicon Laboratories Inc. (SLAB)

10-Q 2023-11-01 For: 2023-09-30

Added on April 08, 2026

About this 10-Q

Silicon Laboratories Inc filed this 10-Q on November 1, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $203.76M; down 24.5% from $269.82M a year earlier
Diluted EPS: $0.32; down 46.7% from $0.60 a year earlier

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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)


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


Large accelerated filer ☑	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐	Emerging growth company ☐

Part I. Financial Information		Page Number

Item 1.	Financial Statements (Unaudited):

	Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022	3

	Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2023 and October 1, 2022	4

	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and October 1, 2022	5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2023 and October 1, 2022	6

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and October 1, 2022	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	24

Item 4.	Controls and Procedures	24

Part II. Other Information

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3.	Defaults Upon Senior Securities	39

Item 4.	Mine Safety Disclosures	39

Item 5.	Other Information	39

Item 6.	Exhibits	40


	September 30,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	159,928	$	499,915
Short-term investments		257,157		692,024
Accounts receivable, net		102,142		71,437
Inventories		167,581		100,417
Prepaid expenses and other current assets		86,727		97,570
Total current assets		773,535		1,461,363
Property and equipment, net		150,839		152,016
Goodwill		376,389		376,389
Other intangible assets, net		65,744		84,907
Other assets, net		108,555		94,753
Total assets	$	1,475,062	$	2,169,428
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	48,086	$	89,860
Revolving line of credit		45,000		—
Deferred revenue and returns liability		10,066		6,780
Other current liabilities		61,991		89,136
Total current liabilities		165,143		185,776
Convertible debt, net		—		529,573
Other non-current liabilities		49,997		49,071
Total liabilities		215,140		764,420
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; 31,779 and 31,994 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		3		3
Retained earnings		1,262,518		1,415,693
Accumulated other comprehensive loss		(2,599)		(10,688)
Total stockholders’ equity		1,259,922		1,405,008
Total liabilities and stockholders’ equity	$	1,475,062	$	2,169,428


	Three Months Ended				Nine Months Ended
	September 30,		October 1,		September 30,		October 1,
	2023		2022		2023		2022
Revenues	$	203,760	$	269,817	$	695,413	$	766,781
Cost of revenues		84,735		104,232		278,753		281,521
Gross profit		119,025		165,585		416,660		485,260
Operating expenses:
Research and development		79,042		84,624		254,340		245,677
Selling, general and administrative		27,766		50,738		113,363		144,398
Operating expenses		106,808		135,362		367,703		390,075
Operating income		12,217		30,223		48,957		95,185
Other income (expense):
Interest income and other, net		2,938		4,672		15,554		9,616
Interest expense		(1,359)		(1,527)		(4,611)		(4,874)
Income before income taxes		13,796		33,368		59,900		99,927
Provision for income taxes		3,388		14,188		23,479		36,871
Equity-method earnings (loss)		(60)		1,819		(1,150)		2,985
Net income	$	10,348	$	20,999	$	35,271	$	66,041

Earnings per share:
Basic	$	0.33	$	0.62	$	1.11	$	1.84
Diluted	$	0.32	$	0.60	$	1.07	$	1.79

Weighted-average common shares outstanding:
Basic		31,796		34,079		31,789		35,935
Diluted		32,078		34,779		32,919		36,968


				Additional				Accumulated Other		Total
		Common		Paid-In		Retained		Comprehensive		Stockholders’
Three Months Ended September 30, 2023	Shares	Stock		Capital		Earnings		Income (Loss)		Equity
Balance as of July 1, 2023	31,861	$	3	$	—	$	1,262,984	$	(4,090)	$	1,258,897
Net income	—		—		—		10,348		—		10,348
Other comprehensive income	—		—		—		—		1,491		1,491
Stock issuances, net of shares withheld for taxes	27		—		(588)		—		—		(588)
Repurchases of common stock	(109)		—		(5,354)		(10,814)		—		(16,168)
Stock-based compensation	—		—		5,942		—		—		5,942
Balance as of September 30, 2023	31,779	$	3	$	—	$	1,262,518	$	(2,599)	$	1,259,922


	Fair Value Measurements
	at September 30, 2023 Using
	Quoted Prices in		Significant Other
	Active Markets for		Observable
	Identical Assets		Inputs
Description	(Level 1)		(Level 2)		Total
Cash equivalents:
Money market funds	$	57,144	$	—	$	57,144
Total cash equivalents	$	57,144	$	—	$	57,144

Short-term investments:
Corporate debt securities	$	—	$	166,868	$	166,868
Government debt securities		—		90,289		90,289
Total short-term investments	$	—	$	257,157	$	257,157

Total	$	57,144	$	257,157	$	314,301


	Fair Value Measurements
	at December 31, 2022 Using
	Quoted Prices in		Significant Other
	Active Markets for		Observable
	Identical Assets		Inputs
Description	(Level 1)		(Level 2)		Total
Cash equivalents:
Money market funds	$	310,969	$	—	$	310,969
Corporate debt securities		—		3,249		3,249
Total cash equivalents	$	310,969	$	3,249	$	314,218

Short-term investments:
Corporate debt securities	$	—	$	501,014	$	501,014
Government debt securities		—		191,010		191,010
Total short-term investments	$	—	$	692,024	$	692,024

Total	$	310,969	$	695,273	$	1,006,242


			Fair
	Cost		Value
Due in one year or less	$	195,410	$	193,040
Due after one year through five years		64,803		64,117
	$	260,213	$	257,157


	Less Than 12 Months				12 Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
As of September 30, 2023	Value		Losses		Value		Losses		Value		Losses
Corporate debt securities	$	13,876	$	(13)	$	132,920	$	(1,865)	$	146,796	$	(1,878)
Government debt securities		49,597		(341)		37,762		(908)		87,359		(1,249)
	$	63,473	$	(354)	$	170,682	$	(2,773)	$	234,155	$	(3,127)


	December 31,
	2022
Principal	$	534,980
Unamortized debt issuance costs		(5,407)
Net carrying amount	$	529,573


Income Statement Item		Estimate

Revenues		$70 million to $100 million

Gross margin		53%

Operating expenses		$123 million

Diluted earnings (loss) per share		$(2.39) to $(1.95)


				Total Number of	Approximate Dollar
	Total			Shares Purchased as	Value of Shares that
	Number of	Average Price		Part of Publicly	May Yet Be
	Shares	Paid per		Announced Plans	Purchased Under the
Period	Purchased	Share		or Programs	Plans or Programs
July 2, 2023 – July 29, 2023	82	$	145.89	82	$	104,047

July 30, 2023 – August 26, 2023	27	$	148.58	27	$	100,000

August 27, 2023 – September 30, 2023	—		—	—	$	100,000
Total	109	$	146.56	109


	Nine Months Ended
	September 30,		October 1,
	2023		2022
Operating Activities
Net income	$	35,271	$	66,041
Adjustments to reconcile net income to net cash provided by (used in) operating activities of continuing operations:
Depreciation of property and equipment		18,992		16,514
Amortization of other intangible assets		19,162		27,328
Amortization of debt issuance costs		960		1,492
Loss on extinguishment of convertible debt		—		3
Stock-based compensation expense		37,167		43,213
Equity-method (earnings) loss		1,150		(2,985)
Deferred income taxes		(5,881)		(13,126)
Changes in operating assets and liabilities:
Accounts receivable		(30,706)		21,641
Inventories		(66,971)		(39,100)
Prepaid expenses and other assets		8,085		(28,404)
Accounts payable		(37,039)		26,694
Other current liabilities and income taxes		(39,155)		17,962
Deferred revenue and returns liability		3,286		(2,144)
Other non-current liabilities		6,794		(7,713)
Net cash provided by (used in) operating activities of continuing operations		(48,885)		127,416

Investing Activities
Purchases of marketable securities		(91,493)		(579,507)
Sales of marketable securities		365,073		42,952
Maturities of marketable securities		171,766		597,399
Purchases of property and equipment		(18,533)		(20,057)
Purchases of other assets		(395)		—
Net cash provided by investing activities of continuing operations		426,418		40,787

Financing Activities
Proceeds from revolving line of credit		80,000		—
Payments on debt		(571,157)		(21)
Repurchases of common stock		(217,137)		(681,695)
Payment of taxes withheld for vested stock awards		(17,239)		(14,732)
Proceeds from the issuance of common stock		8,013		6,366
Net cash used in financing activities of continuing operations		(717,520)		(690,082)


	September 30,		December 31,
	2023		2022
Work in progress	$	150,248	$	75,112
Finished goods		17,333		25,305
	$	167,581	$	100,417


Exhibit Number
2.1*		Asset Purchase Agreement dated April 22, 2021 between Silicon Laboratories Inc. and Skyworks Solutions, Inc. (filed as Exhibit 2.1 to the Form 8-K filed on April 22, 2021).

3.1*		Form of Fourth Amended and Restated Certificate of Incorporation of Silicon Laboratories Inc. (filed as Exhibit 3.1 to the Registration Statement on Form S-1 (Securities and Exchange Commission File No. 333-94853) (the “IPO Registration Statement”)).

3.2*		Sixth Amended and Restated Bylaws of Silicon Laboratories Inc. (filed as Exhibit 3.1 to the Form 8-K filed on April 21, 2023).

4.1*		Specimen certificate for shares of common stock (filed as Exhibit 4.1 to the IPO Registration Statement).

10.1*		Fifth Amendment to Credit Agreement, dated June 30, 2023, by and among Silicon Laboratories Inc., the subsidiaries of the borrower identified therein, Wells Fargo Bank, National Association and the lenders party thereto. (filed as Exhibit 10.1 to the Form 8-K filed on July 3, 2023).

31.1		Certification of the Principal Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Principal Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification as required by Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

		SILICON LABORATORIES INC.


November 1, 2023		/s/ R. Matthew Johnson


Date		R. Matthew Johnson
		President and
		Chief Executive Officer
		(Principal Executive Officer)


November 1, 2023		/s/ John C. Hollister


Date		John C. Hollister
		Senior Vice President and
		Chief Financial Officer
		(Principal Financial Officer)


November 1, 2023		/s/ Mark D. Mauldin


Date		Mark D. Mauldin
		Chief Accounting Officer
		(Principal Accounting Officer)