Silicon Laboratories Inc 10-Q for FY2023 Q1

Silicon Laboratories Inc. (SLAB)

10-Q 2023-04-26 For: 2023-04-01

Added on April 08, 2026

About this 10-Q

Silicon Laboratories Inc filed this 10-Q on April 26, 2023, covering the quarter ended April 1, 2023 (FY2023 Q1).

Headline figures

Quarter ended April 1, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $246.79M; up 5.5% from $233.81M a year earlier
Net income: $13.97M; down 39.0% from net income of $22.91M a year earlier
Diluted EPS: $0.41; down 29.3% from $0.58 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 April 1, 2023 and December 31, 2022	3

	Condensed Consolidated Statements of Income for the three months ended April 1, 2023 and April 2, 2022	4

	Condensed Consolidated Statements of Comprehensive Income for the three months ended April 1, 2023 and April 2, 2022	5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended April 1, 2023 and April 2, 2022	6

	Condensed Consolidated Statements of Cash Flows for the three months ended April 1, 2023 and April 2, 2022	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4.	Controls and Procedures	25

Part II. Other Information

Item 1.	Legal Proceedings	25

Item 1A.	Risk Factors	26

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


	April 1,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	716,377	$	499,915
Short-term investments		435,699		692,024
Accounts receivable, net		87,694		71,437
Inventories		133,236		100,417
Prepaid expenses and other current assets		87,734		97,570
Total current assets		1,460,740		1,461,363
Property and equipment, net		152,110		152,016
Goodwill		376,389		376,389
Other intangible assets, net		78,397		84,907
Other assets, net		93,812		94,753
Total assets	$	2,161,448	$	2,169,428
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	71,437	$	89,860
Current portion of convertible debt, net		530,096		—
Deferred revenue and returns liability		11,258		6,780
Other current liabilities		80,540		89,136
Total current liabilities		693,331		185,776
Convertible debt, net		—		529,573
Other non-current liabilities		48,663		49,071
Total liabilities		741,994		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; 31,997 and 31,994 shares issued and outstanding at April 1, 2023 and December 31, 2022, respectively		3		3
Retained earnings		1,425,914		1,415,693
Accumulated other comprehensive loss		(6,463)		(10,688)
Total stockholders’ equity		1,419,454		1,405,008
Total liabilities and stockholders’ equity	$	2,161,448	$	2,169,428


	Three Months Ended
	April 1,		April 2,
	2023		2022
Revenues	$	246,787	$	233,814
Cost of revenues		92,927		78,042
Gross profit		153,860		155,772
Operating expenses:
Research and development		89,396		77,542
Selling, general and administrative		44,891		44,647
Operating expenses		134,287		122,189
Operating income		19,573		33,583
Other income (expense):
Interest income and other, net		4,836		1,499
Interest expense		(1,656)		(1,680)
Income before income taxes		22,753		33,402
Provision for income taxes		7,753		11,689
Equity-method earnings (loss)		(1,033)		1,194
Net income	$	13,967	$	22,907

Earnings per share:
Basic	$	0.44	$	0.60
Diluted	$	0.41	$	0.58

Weighted-average common shares outstanding:
Basic		31,959		38,003
Diluted		33,753		39,523


				Additional				Accumulated Other		Total
		Common		Paid-In		Retained		Comprehensive		Stockholders’
Three Months Ended April 1, 2023	Shares	Stock		Capital		Earnings		Loss		Equity
Balance as of December 31, 2022	31,994	$	3	$	—	$	1,415,693	$	(10,688)	$	1,405,008
Net income	—		—		—		13,967		—		13,967
Other comprehensive income	—		—		—		—		4,225		4,225
Stock issuances, net of shares withheld for taxes	98		—		(6,931)		—		—		(6,931)
Repurchases of common stock	(95)		—		(9,732)		(3,746)		—		(13,478)
Stock-based compensation	—		—		16,663		—		—		16,663
Balance as of April 1, 2023	31,997	$	3	$	—	$	1,425,914	$	(6,463)	$	1,419,454


	Fair Value Measurements
	at April 1, 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	$	563,856	$	—	$	563,856
Total cash equivalents	$	563,856	$	—	$	563,856

Short-term investments:
Corporate debt securities	$	—	$	296,619	$	296,619
Government debt securities		—		139,080		139,080
Total short-term investments	$	—	$	435,699	$	435,699

Total	$	563,856	$	435,699	$	999,555


	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	$	188,907	$	186,023
Due after one year through five years		254,715		249,676
	$	443,622	$	435,699


	Less Than 12 Months					12 Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
As of April 1, 2023	Value		Losses		Value		Losses		Value		Losses
Corporate debt securities	$	59,723	$	(625)	$	222,231	$	(4,895)	$	281,954	$	(5,520)
Government debt securities		23,652		(20)		89,889		(2,473)		113,541		(2,493)
	$	83,375	$	(645)	$	312,120	$	(7,368)	$	395,495	$	(8,013)


Income Statement Item		Estimate

Revenues		$238 million to $248 million

Gross margin		60%

Operating expenses		$131 million

Effective tax rate		34%

Diluted earnings per share		$0.35 to $0.45


				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
January 1, 2023 – January 28, 2023	95	$	141.55	95	$	199,501

January 29, 2023 – February 25, 2023	—	$	—	—	$	199,501

February 26, 2023 – April 1, 2023	—	$	—	—	$	199,501
Total	95	$	141.55	95


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).

4.2*		Indenture between Silicon Laboratories Inc. and Wilmington Trust, National Association, as trustee, dated March 6, 2017 (filed as Exhibit 4.1 to the Form 8-K filed on March 6, 2017).

4.3*		Form of 1.375% Convertible Senior Note due 2022 (filed as Exhibit 4.2 to the Form 8-K filed on March 6, 2017).

4.4*		Indenture between Silicon Laboratories Inc. and Wilmington Trust, National Association, as trustee, dated June 1, 2020 (filed as Exhibit 4.1 to the Form 8-K filed on June 1, 2020).

4.5*		Form of 0.625% Convertible Senior Note due 2025 (filed as Exhibit 4.2 to the Form 8-K filed on June 1, 2020).

4.6*		First Supplemental Indenture between Silicon Laboratories Inc. and Wilmington Trust, National Association, as trustee, dated January 2, 2022 (filed as Exhibit 4.1 to the Form 8-K filed on January 3, 2022).

4.7*		Description of Registrant’s Securities Registered under Section 12 of the Exchange Act (filed as Exhibit 4.7 to the Form 10-K filed on February 1, 2023).

10.1*		Silicon Laboratories Inc. 2023 Bonus Plan (filed as Exhibit 10.1 to the Form 10-K filed on January 27, 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)


	Three Months Ended
	April 1,		April 2,
	2023		2022
Operating Activities
Net income	$	13,967	$	22,907
Adjustments to reconcile net income to net cash provided by (used in) operating activities of continuing operations:
Depreciation of property and equipment		6,235		5,156
Amortization of other intangible assets		6,510		10,351
Amortization of debt issuance costs		523		496
Stock-based compensation expense		16,638		12,875
Equity-method earnings (loss)		1,033		(1,194)
Deferred income taxes		(2,670)		(4,202)
Changes in operating assets and liabilities:
Accounts receivable		(16,257)		19,080
Inventories		(32,794)		(6,215)
Prepaid expenses and other assets		11,530		1,704
Accounts payable		(12,966)		8,932
Other current liabilities and income taxes		(8,529)		8,345
Deferred revenue and returns liability		4,478		7,791
Other non-current liabilities		(978)		(817)
Net cash provided by (used in) operating activities of continuing operations		(13,280)		85,209

Investing Activities
Purchases of marketable securities		(66,113)		(435,690)
Sales of marketable securities		170,317		9,106
Maturities of marketable securities		157,734		213,750
Purchases of property and equipment		(7,657)		(4,554)
Net cash provided by (used in) investing activities of continuing operations		254,281		(217,388)

Financing Activities
Repurchases of common stock		(17,608)		(157,778)
Payment of taxes withheld for vested stock awards		(6,931)		(8,755)
Net cash used in financing activities of continuing operations		(24,539)		(166,533)

Discontinued Operations
Operating activities		—		(10,000)
Net cash used in discontinued operations		—		(10,000)

Increase (decrease) in cash and cash equivalents		216,462		(308,712)


	April 1,		December 31,
	2023		2022
Work in progress	$	104,549	$	75,112
Finished goods		28,687		25,305
	$	133,236	$	100,417


	Three Months Ended
	April 1,		April 2,
	2023		2022
Contractual interest expense	$	845	$	845
Amortization of debt issuance costs		523		496
	$	1,368	$	1,341

		SILICON LABORATORIES INC.


April 26, 2023		/s/ R. Matthew Johnson


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


April 26, 2023		/s/ John C. Hollister


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


April 26, 2023		/s/ Mark D. Mauldin


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