Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Silicon Laboratories Inc (SLAB, Financial) reported a 91% increase in revenue from the lowest point in the previous year, indicating a strong recovery.
- The company has seen significant growth in its Home & Life business, with revenue up nearly threefold year over year, driven by new program ramps in medical applications.
- Silicon Laboratories Inc (SLAB) is well-positioned in the smart metering market, particularly in India, where it has begun shipping millions of units.
- The company has secured more 154 design wins since the release of the matter spec than in the prior five years combined, indicating strong momentum in this area.
- Silicon Laboratories Inc (SLAB) has a strong pipeline for its new Wi-Fi 6 device, which has generated the largest offering pipeline for any product the company has released.
Negative Points
- Silicon Laboratories Inc (SLAB) experienced a 25% year-over-year decline in revenue for fiscal year 2024, with a significant 32% decline in industrial and commercial products.
- The company reported a GAAP operating loss of $29 million for the fourth quarter, although this was an improvement from the previous year's loss.
- Inventory levels in the distribution channel remain below the company's target, with only a slight increase in the December quarter.
- Silicon Laboratories Inc (SLAB) faces limited visibility due to high levels of short lead-time orders, which could impact future growth projections.
- The company continues to experience some excess inventory at end customers, although it is no longer the primary factor affecting expectations.
Q & A Highlights
Q: Can you provide insights into the expected growth for 2025, considering the limited visibility due to short lead times?
A: Dean Butler, Senior Vice President and CFO, explained that the outlook for 2025 is based on consistent design win ramps throughout the year. While visibility is limited, they are confident in likely quarter-on-quarter growth, although the exact rate is yet to be determined.
Q: How does the new 917 Wi-Fi device compare to Bluetooth in terms of market potential and revenue contribution?
A: Matt Johnson, President and CEO, stated that the 917 Wi-Fi device has generated the largest offering pipeline ever for Silicon Labs, with strong customer reception. It is expected to contribute to revenue starting in 2025. While Bluetooth is currently the fastest-growing technology, Wi-Fi is in earlier stages but has significant growth potential.
Q: What are your thoughts on the Synaptics and Broadcom agreement, and how does it relate to your strategy?
A: Matt Johnson clarified that the agreement focuses on handset technologies, which are not within Silicon Labs' focus area. Their strategy is centered on low-power edge IoT solutions, making the Broadcom assets non-strategic for them.
Q: Can you discuss the impact of distribution inventory levels and how they compare to competitors?
A: Dean Butler noted that Silicon Labs aims for distributors to hold more inventory to service short lead-time orders. Currently, they are below their target of 70-75 days. Competitors seem balanced, and distributors are cautious about taking on excess inventory.
Q: How significant is the continuous glucose monitoring (CGM) market for your revenue growth?
A: Matt Johnson highlighted that CGM could comprise nearly 10% of revenue in the next 12 to 18 months. The market is early in global adoption but represents a substantial growth opportunity, with Silicon Labs well-positioned to benefit.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
