SLAB - Earnings call transcript Q3 2017 | Silicon Laboratories Inc.

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Operator

Good morning. My name is Marcela and I will be your conference operator today. At this time, I'd like to welcome everyone to the Silicon Labs' Third Quarter Fiscal 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there’ll be a question-and-answer session. you. Thank Instructions] [Operator turn Relations over and now Director Jalene of Investor International the will to call Hoover, I Finance. Jolene, please go ahead.

Jalene Hoover

and John Officer, Thank Executive Marcela, good Tyson everyone. you, Tuttle, Officer; and on Hollister, are Financial Chief today's call. morning, Chief

and financial the After comments, discuss prepared business take will quarter. our performance will activities review We questions. our we our for first

and website Our a also Investor Relations the are available earnings on is available be press release will call of replay and at our for the being This accompanying webcast financial tables weeks. www.silabs.com. section four

encourage include Our which results in SEC comments review to on statements today as update you this obligation those materially and risks uncertainties. to and these to identify available cause actual factors statements filings, that base will of to statements forward-looking could differ forward-looking forward-looking statements. contained call, from subject date of no We conference our any to these the us in important We future. assume information the

our is Additionally, in of Chief results non-GAAP to Hollister. of Financial non-GAAP to call to Investor company's also website. press section Lab’s Labs' our now would the turn I to the GAAP release A call certain Relations make financial earnings and information. reference in Silicon reconciliation during like Silicon the included we will today, over John Officer,

John Hollister

The achieved model QX, $XXX IoT, and growth. at and of to ending security, at of performance at very record achieving year, achieved IoT revenue by growth million market. networking mesh QX, operating representing infrastructure XX%. product the of range broad on our revenue performance revenue to due the with our sequentially. company products from guidance record This our up connected category applications the we $XXX on $XX smart see The in million. year consecutive Thanks, and and in in good metering wireless portfolio portfolio, for Jalene. represents financial primarily revenue also quarter million, year home, growth products delivered continue year We industrial results end our robust target X% proprietary a XX% strong Within strong fifth revenue top total

in management the isolation electric networking in record traction to vehicles, quarter power quarter continues industrial achieved for another for power by and efficiency the battery with automation, optical applications and QX, was supplies. products our softness in for Our in flat solar products be impacted high timing market. Revenue

growth X% saw in at revenue year. on expected, Broadcast automotive seasonal the and audio board, and million, with record a year strength with broadcast, was ending sequentially XX% $XX in As video. across and we up consumer increases in

driven slightly in growth was growing total $XX As in has consumer, the IoT Industrial diversity growth third mix doubled followed significant, in we markets of in the XXXX, since represents all IoT. by market we in quality propelled million. broadcast, and in of around APAC, access by growth end customer by the that anticipated, We the than ending broadcast industrial our the most geographies, end growth XX% of more continued serve. and underscoring drove down quarter at isolation. and saw performance By sequential strong with QX, revenue market, increases our base end in revenue now

$XX slightly on down operating which million, XX.X% $X down lower we operating our at XX% Non-GAAP Non-GAAP in QX our was SG&A Third for seasonal and gross above in slightly to and of range. at than Non-GAAP ended payroll guidance employee product margin QX to operating mix. expenses million, were were Non-GAAP Non-GAAP also revenue in is million, within XX expenses delays margin accounted revenue. sequentially. ended due $XX.X Non-GAAP $XX trends other high about with expected, R&D target quarter multi-year strong taxes operating well primarily benefits. at $XX distribution million at at XX.X%, spending. XX.X% a at and favorable, was which were year also million tape-out customers on income expenses top ending date

operating $XX Stock quarter a was Our $XX discrete third rate flat revenue. million of the quarter and non-GAAP at and high for some at share, representing GAAP or better in on assets gross also than quarter. growth. earnings effective expected in tax with ended above expense line profit for year operating due X%, quarter, at end the were amortization multi-year which expectations. $XX at high, of GAAP XX% share XX% expenses above both the was the range was diluted XX.X%. per intangible was was guidance ending range. margins our $X.XX million GAAP Non-GAAP $X.XX basis, compensation the per year GAAP realized items On a of $X of were earnings million, quarter we the to and generated guidance million, favorable at

the $XXX we to the quarter million sheet, Turning sequentially. in now $XX with up investments, and balance cash ended million

outstanding For year of we XX%. Accounts XX of or date year at operating to increase days generated the just month represents over $XX over flow nine million a $XXX cash sales outstanding. period, year million, receivable which ended

turns cover sequentially will which quarter. for million operating our now and Our times, in inventory guidance million, balance with X.X fourth the $XX is inventory grew of to line I targets. $X represents

and in $XXX revenue fourth and with quarter IoT in expect million, to be between the infrastructure. million growth We $XXX

We decline. expect to access and broadcast

to Non-GAAP non-GAAP gross $XX.X our XX.X%, be to margin approximately We around million. expect our and expenses operating be

earnings be gross margin On $X.XX. per We expect to range basis, the and rate our $X.XX of GAAP we to effective expect to a Non-GAAP to tax XX.X%. be approximately XX% in be around share Non-GAAP

the and assets with GAAP to approximately million compensation $XX quarter, million. be intangible operating expenses expect $XX for We of million at $X stock at amortization

and GAAP tax of in effective to our to EPS $X.XX to expect range XX% rate We the be be GAAP $X.XX.

change in on recognition revenue to XXX. of upcoming over the the turn the want call briefly I I to implementation Before to Tyson, due comment ASC

year of XXXX. this well Based version past to change the on modified be this with for are revenue new positioned January to been in new will change and will distribution implementation sell-in of which customers, over recognition on working the the our standard, effective through proceed from sell into guidance, we a sales accounting. criteria we of We have diligently

will call enact prospective on a change We I this earnings one-time basis, to a now retained January. the with Tyson. in effective to turn adjustment will over

Tyson Tuttle

John. you, Thank

achieving total. revenue third We’re very in IoT and and with pleased infrastructure, our results, record quarter in

have key We model to product IoT Gartner, our margin our XX% a by have According target of to these of results. of growth, based with which quarters, non-GAAP margin the opportunity Lab’s revenue. designs. market We five means solutions in efficiency grown a and IoT non-GAAP operating in a seeing will support platform tremendous for We're demand business. effective XXXX, be electronic biggest past operating needs. our challenge strategy is to drive to performance revenue using Silicon provide IoT on of IoT and for design to growth total four to gross technology cost and new scale products, delivered end XX% portfolio driver products our product flexible,

and broad of which in and market, the create are scale customers thousands also support, the channel applications. thousands efficiently more of solutions across and serving sales use to tens of to easy We

continues growth to million We IoT QX, enable exceed a revenue these outpace meet believe our revenue Growth continue with our wireless up XX% In in products XX% for record progress to seventh on our IoT products. or target year at in are areas we overall market. to and consecutive quarter, our pleased $XXX our us with delivered approach year. will and the

nodes end industrial lighting optimal Our home applications. traction power other offer range combinations connectivity broad protocols as security, metering, market portfolio is target wireless of gaining key segments, and including low a for and we and automation,

wireless continue products lead revenue ZigBee to growth. Our

We years. number wireless supporting market leader node well and mesh ourselves applications over device. enabled networking the as ZigBee’s scalable, capabilities, of self-healing power growing ideal XXX in past and mesh technology worldwide established We have trends increasing mesh driving an demand self-configuring networking, the in are demanding XX low robust for shipping for devices over performance. see million technology

in and companies upgrade and part advanced to the utility infrastructures most nodes, where The end smart as mandating and adoption a ZigBee power of are concentrated out gateways, trend a to larger low driving enabled sub-gigahertz for Britain one of recent have proliferation grid mesh are agencies Thread of roll broader share metering routers IoT ZigBee the we Wi-Fi Great of hubs, mesh opportunities solutions. government initiatives. smart our market. metering First, of significant networks and is the

ubiquitous, end Things home becoming smart Amazon deployment Echo, driving node control Samsung voice Smart Nest Home, in and is Google ecosystems, Cloud. Additionally, including

than double in for to positioning connected are smart and $X our in this in wireless XXXX. and billion broad We trend lighting $XX the IHS will billion IoT intercepting portfolio more controls, more lighting predicts than connectivity market strong ecosystems. And finally, XXXX from with

to by IoT without Silicon Our embedded - packs we devices reference led USB introduced complexity solutions, the products development. our and C MCU eight also our to portable shipping cost a growth, to added used type connectivity contribute decade, developers designs also Products of been for USB firmware battery EFMA bit to which IoT development contribute power more simplify through rechargeable QX, USB design XX add of MCUs. Labs comprehensive In and the cables. a than have enabling also offers to

key solutions we element address. As our node we are at markets sensors look a IoT portfolio, of in end

offering sensor, sensitivity leading quarter, During efficiency industry class in built programmability, introduced hall-effect power tamper magnetic and breakthrough we best in detection. the a

the the Our slow an read optimal sensors consumption to white other controls, new solution with sensors and reliability applications. of for security power switches, goods, create hall-effect meters, motor low combined of

cheaper products developers test longer position enabling magnetic a allows right portfolio design, them choose for faster, new sensing application range Our life. deploy with sophisticated wide better, of to their to the battery needs, and and sensor

to quarter, our I’ll we on infrastructure, the delivered in move record isolation revenue driven Now third products. where by

of increasing softness, trends our solar underscored fastest devices Systems energy hybrid supplies. lines, and and robustness product quarter. Renewable growing record gain government our Superior consecutive allowed revenue isolation include eleventh record among electric isolation voltage power wins achieving driving and performance global inverters, controls motor and are encourage our products to remain optimistic long vehicles, requiring haul technology. outgrow short high isolation have traditional Our and design efficiency, has energy protection an to which QX broad are to based share initiatives and by adoption electric into markets. fallen pipeline outlook market. digital weakness infrastructure, optical bolstered term Also This timing, and of timing networking near year. in has from the growing and the for the this longer isolation our expansion products performance, strong our revenue timing for by a expectations market. new we our portfolio continued Despite in about impacted suffer term optocouplers from opportunity

applications, further introduced revenue performance we our clocks quarter, the data During SAM and products, infrastructure and expanding timing high including three wireless opportunities. for center growth new

ideal As constraints where of networks is XX% are power family, the than These address performance and products a high XG integrated, Ethernet for also transition carriers solutions. the introduced Ethernet simplifying and groundwork heterogeneous industry's wireless data the clocking as applications, the XX, clock ICs provide risk of in in front clocking products. compromising standalone the introduced designs developers capabilities clocks based To family, device, in to new single performance. the deploying essential feature cost, and and lower simplify and present center equipment. clock which new Express chip capacity, LTE need, servers, for PCI-E applications. Labs to combine of buffers, XXX and solution represent Labs all enabling tree competing gig servers a flexibility, the storage, demanding and from unprecedented without small using of clocks Silicon center industrial Labs development applications, including new enabling data margin equipment network size competing XG they power faster lay data are first timing family up cells. universe power for we a Silicon the increase and less hyperscale edge lowest switches, ramping to than power XX% PCI timing finally, well haul generators, entire design their this more applications, the dramatically These bandwidth needs networking reducing clock new Silicon XX networking new QX timing demand as smaller most XX% and unique challenges. to to now clock for consumer offering jitter to eliminate To complexity and applications. developers we generation introduced to and device, storage meet And serves product clock for rates, same at maximize for

our most product from products delivered third automotive broadcast in revenue reach To in high performance QX entry level XXXX, Our automotive auto the radios, to makers XX delivering and we global deliver infotainment market car digital a Eagle with radio and in million AM market consumer flexible cars record high strong systems the to opportunity, Silicon tuner global tuners, XX cost FM introduced from this the and ranging According end. Digital will Double radio scalable, tuners industry's products. quarter coprocessors, enable revenue, in high and IHS, and with receivers effective solutions. quarter, multiple in FM address and ranging and cost posting designs to radio systems OEMs AM reception to low performance diversity. Falcon Labs intended single

our achieved Looking leveraging cost, their throughout record help leadership challenges delivering difficult solutions history, of our hardware power tackling and track across disrupting deliver products. software reduce solutions. and driving and a to We've year by strong Silicon we strength integration entire simplicity complexity, XX portfolio, Labs’ established while markets, customers in to and our have size market design end and breakthrough

portfolio positioned a XX% green Our lives. for share total offering on develop IoT, growth of We're technologies and to products growth energy our quality mission grow industries, well revenue, groundbreaking markets, that and high is including data in and businesses long more generate runway improve than where infrastructure, we transform a gains. communications, and

Thank time create Our the and connection Silicon that your for up and enable before attention. exciting and for and of is The the things, to and networks the enormous, information, life’s opportunities are growth people work we're solutions us everywhere. challenge. to you software

like the call turn I'd to questions, to back the take Jalene? we Jalene. Before

Jalene Hoover

Tyson. you, Thank

like Technology, Global Telecom and in Conference Before we Annual will November Barclays would for announce participate our Media Scottsdale conferences quarter, to XX. that Media X. Technology, your you many to We the Telecommunications with December fourth for in call session, I opens, the now including Marcela? the question-and-answer the we And Suisse call open on during ask and that XXst as questions. like up. open market accommodate your we limit Francisco one To on to questions Conference possible the in San up as people would before follow one please Credit

Operator

pause Q&A We’ll the moment a just roster. instructions]. [Operator compile for to

from Your Svanberg. first question line Tore the comes of

Your open. is line

Jeremy Kwan

of additional excellent you you Congratulations of Last an quarter. more Kwan if mentioned is any in color revenue largest - for This update, term versus calling just Bluetooth. little and Could standpoint. I Tore. us having near might give in Jeremy on you the you mesh the terms versus us bit proprietary expect give detail on quarter Tyson, could changes was a revenue which three breakout. wondering see gave the potentially, you potential the from wireless a

Tyson Tuttle

Yes, is Tyson. Jeremy. This

it pair technologies In and instance, in onto over device where same switches working it then protocols areas the can we're board we're seeing networking as for across single and in applications proprietary Bluetooth growth a a in combine device, up also well your run where of as to a can also phone, Bluetooth, connected and lot the well of you can or device an network wireless network. where protocols, XX.X, you the on to products, those with multiple end And actually that the a mesh proprietary it get network. multiple as at with mesh into larger a terms running phone, as instance a we're a where having on connected time, to we network access node for

the mesh of market networking traction see devices. we our opportunity, tremendous terms In with

industrial of say these home that area. You seeing in applications routers see And And automation, into and I the in metering, seeing proprietary a well would home and deployment the applications that both lighting as strong traction, Bluetooth, traction, in of and gateways ecosystems. we're number good standalone potential, is near in applications followed our of in are the growth. mesh term very, multi-protocol seeing then by very also terms as products revenue strong security,

across of the it's kind So board.

Jeremy Kwan

Great. three? profile you between gross a variation of - margin And in do is the terms Thank any follow there you. the in see up, of terms significant

Tyson Tuttle

the and delivering the area as in number general slightly. additional is solutions when area the module. it module in see pull dollars areas, differentiation, strong you level dollar a design standalone percentage a a content. where tend down of Bluetooth would higher sales board basis, little And enjoy Overall, amount in our a so The of gross certainly an have go on overall, more gross gross higher up saw combine others, the are in and margins. for to mesh bit in when margin mix. goes we protocols modules an include to proprietary networking we and then the but move a those on margins from although a strong generally lower with you competitive content, those you overall we in wireless some We margin on But

Operator

question comes William next the Your Blair. from of Anil Doradla from line

line open. Your is

Anil Doradla

end from my too for congratulations guys, solid Hey execution.

multiple clearly referred scaling there can you're spot, bit more channel. And a a you other and up in that terms challenges sales IoT or to channel So are scaling? Is say Tyson, challenge, to factors, some sales that it sweet other build the many limited in on little is when challenge? a you you of but

Tyson Tuttle

Yes.

So if a IoT, broad you look market. at very it's

thousands selling presents tens customers, of of across thousands applications really different two challenges. and that into and of You

First. those portfolio differentiated those to that deliver to In be you a needs to the responds different area, have able across applications. R&D

different products of multiple cost So time you and is same amounts peripherals, They of memory, interfaces have amounts sensor of those applications, differentiated both the at need have one for functionality that to have different effective. that while each may such.

continue we to the drive there hardware that. on devices, as across that differentiation to a enhance continue And next side generation platform And on side. we've software the achieve build scale, to our out and we the both gotten and R&D use efficiency so we our approach to on

platform with common we for market really entire we're not essentially where solutions not scalable. opportunity individual application, each can which would creating that specialized address a be So

to trying scale really we're achieve So the R&D side. on

that customers see we support, of solutions you and sales, reaching simple to thousands being around again, of have use. Specifically tens to drive make to - able these

lot training. do You have to of a

to build You have sales the force.

application we have try as that as to engineers, and have We possible. to make self-serve again and scalable

information a to hand. We’re need find us can so their web that introducing customers and support, they technologies the having without community hold of number self-support that

and create You can RF And those. a a as have module customers easier of way take designs makes support challenge. needs having the the market, broader can simplifying our lot have at in to streamlines it also you and look of support that of where design support for especially antennas modules to much They’re well. pre-certified as a

support So scaling on - side. SG&A both lot that to also demand, be within and the challenge resources on just the scaling opportunity. of that We in general, to address us lot demand R&D the within to see is a our biggest customer the a infrastructure able channel, be within both to prioritize it’s side, and adding for

Anil Doradla

about when it'll come follow a you back. softness, back? Great. think And do optical Can coming as the you quick up, you tell, it talked

John Hollister

This slowdown is global And do times, believe have Yes, changed, there. Anil. a in the the the into a what lead have that's do visibility recovery growth said, long in order not driver China. think most for term been company. given we general not we direct which really John. timing market. as by has we pronounced This is year impacted optical We networking see That

products. new introducing We’re

of and to the term is see area continue infrastructure key product a of to continue part XX% target We that. category, strategic which growth for timing this in a of invest long

Anil Doradla

Thanks congrats again. and Great.

Operator

from line comes Matt from question the Genuity. next Ramsay Your Canaccord of

open. is line Your

Matthew Ramsay

and what and of work market the those with. have like in but lighting how product on to that bit much. be look and the I partners on in this just you has the the portfolio here, my know bit opportunities and set a that’s been margins, market in you might if a IoT space. wonder you Good think are ASPs a a of of the I expand who might partners things connected you're working It’s types team you're might that an Thank that morning. for uptick doing the market little very some Tyson, specific, aligned market, in want

able about you're If talk that'd in be to Thank detail, that helpful. you.

Tyson Tuttle

most lighting security, one a lot within Thank the you the Matt. the to IoT. connecting saving And deliver to additional and timing into in benefits of for We functionality opportunities lot up area. to schedules, to question, adjusting automating lighting. do There of from to to It’s exciting see colors, we're and applications cloud is features a starting energy. this of everything development for

mean robustness with be on really such a a but technology in and to commercial You network of suited a side ecosystems star side, taking of ecosystem And is these as in also lot you network as is well. is action as area having particular the part presence also have there, advantages of it's of terms and see a on the networking as This opposed consumer ZigBee - industrial mesh the been is networking lighting an that. of time. a bulbs, number use Amazon to it’s light and we've Echo that well - - appropriate a in mesh number the has for seriously. been of ZigBee and response a had a lot in I

that this It optimize a - cost they in high mark more market. software, requires of the our with where margins hold optimizing order the market. so a to well hardware we and in the for optimizing need a optimized our that high leading there very been solution is number be. been we we've where to So market positioned - we're suppliers the you believe timing volume But

recently, on the technologies haven't these others announcements there specific we the adopting those around made that a that one a is are press deploying and - did multiple number but across are opportunities. We of release Sengled ecosystem.

Matthew Ramsay

around you starts so. the seeing the guide talk with into Maybe it as there. guided And margin modeling how early the the next operating looks pretty momentum you a you. for in follow originally just of you going levels, the up, to like that X.X% guys the can topline Too and here think the seeing you’re you're mid-XXs expense I Thank for about going to here had comment op how how Tyson that. expense you’re thanks, trending to quickly. No, low or growth. on year about X% but business, forward this and get be John, year, for think growth

John Hollister

Yes. you undertook timeframe of if you years, XXXX bet, the business the XXXX op and we Matt. the investment kind so back go kind a saw cycle in an few of to a bit. on margins model We’ve years exercising goal with dip discipline down little spent back the into the last couple hiring getting high margins range. and of and our of our spending in

scaling We the and are next the level of hiring up today as Labs achieving do goal investment that need see enter kind of and anticipate looking Silicon increased forward heading the We the phase into into next year. growth to business. and we in pick

on now, help are So looking to cycle plan But we're the we'll further. at have more scale increasing staffing right at annual level color to we the the us looking as provide operating January of call.

And so lower growth then results govern this the add margin the of where range we letting as seeing, it operating how the you would more can we’re overall are resources that much towards holding end the we of now and and be revenue kind story. look to at

want Tyson to the as in that to in. and lot a have we be lead continue we're of positioned to We indicated growth participating well opportunity, markets

Matthew Ramsay

guys. much you Thank very

Operator

of from line the Blayne from comes Barclays. question Curtis next Your

open. is line Your

Blayne Curtis

guys. my Thanks question. taking Hey for

about into based. March, broad to you seasonality wanted So I ask

a things XX% business home about automation of businesses your like You down. Maybe lot industrial, are be would industrial talked up.

I seasonality you years. March think for kind based. kind you’ve couple curious just I’m last the broad look of would of into up thoughts what been of as normal the your be

Tyson Tuttle

going we is QX So the consumer really into the that seasonality main products. see

that, So if had not the strong television is although for instance some The market look used is is seasonality cycle seasonality where the majority as you within not is as in IoT. there, seasonality is quarter that revenue And we Christmas then That’s strong seasonally as but growth industrial our mostly the small goal we seasonal highest in component business. in although where The the as it is category. consumer that the try seeing typically IoT quarter, And some is concentration broadcast to the really then is to industrial other outgrow consumer that XX% be. the of the IoT at per seasonality of in business home, automation. we're top QX. you some of growing within There IoT, on it the a to see a year and plus the much home markets. of That fairly is not there in you have as layer very business.

John Hollister

as And Blayne, to everyone John. OpEx reset to add, this the is costs. I on taxes we a remind other topic, seasonal quickly the aspect related the is seasonal just want payroll there that and employee benefit

an quarter. uptick first in anticipate for So please OpEx

Blayne Curtis

to follow John. then second, up And on you. just that, actually Got my

but that OpEx was back did December, the in You lower, come in tape March OpEx then missed mentioned as well? had flat some outs, with those

John Hollister

That, in completed the be QX. will activity

and payroll the effects related tax would just first indicative course of and more the more hiring of throughout is But quarter around related tax seasonal increased benefits flatness the roll the off So the year. ongoing be costs. employee

Blayne Curtis

Thanks guys.

Operator

line Cody Acree question of next Hamilton. from comes from Your Drexel the

Your line is open.

Cody Acree

channel, channels, my and overheating been distribution the investor Thanks of in your about a curious what guys possibly just the Tyson, on progress. concern for a taking talk through see question, seeing in linearity to bit just you’re Can maybe order seeing health, quarter? There’s continued of inventory seeing. the you're congrats what lot just the about the of you

John Hollister

We overall well levels, John. Sure, hand is of to we growth. as on perspective, Cody. healthy are our inventory from This to continue distribution drive distribution, inventory Overall, have are think the a in and levels well normal. both and the as channel, we positioned think

appropriate but bit the that’s You we foresee in little third in (Dusty), that a coming of growth did ahead. see given uptick quarter of kind

it So Labs. we're comfortable as with relates that pretty to Silicon

Cody Acree

you full a digit your looks then need for double like to to for And get year. improvements to out, need come optical When it material if maintain growth December midpoint little longer to the XXXX, for some you're with works digit quarter, rate look guidance at infrastructure into, do see your growth or double going that December meet to back for a Do you the in term, start it you you target to Chinese back? optical next year? market

Tyson Tuttle

tuners. have ASP in this million a within able standard the We year. market, term, being the factor look would the the year have all at We we've in execute there's absence both nice the with - we the targets revenue become our facto not if then softness if timing the very shipped largest that third XX XX% of we we on That mid, is broadcast. we've on is there the that and continue growing report. to of TV the have really really TV optical had the now infrastructure and that talked year, a if really script the isolation the would hold the be within been going said, really, right in the business results to with that IoT had even other So and in we target onto had that and over quarter de in of being at really strong a for had XXXX products. And for broadcast have. having hit now can tuners it we that component our to there. able in confidence business long fastest And here the about year that execute to you XX% timing category, the but stated declines impact in if that our And on of the

there's over going that market But boxes. in XX% overall the where share content the We’re model. in we move we've growing terms lower, but have in within a that the and - into got is top have term long China access our to in of and decline continued China a broadcast

our within and infrastructure said, And as being how strategic also model. IoT, are out. revenues. both the on the being so growth depends on we comes over of you to it now where that on those areas, if you it's and really timing add at And up overall, that look XX% That

revenue it's of a fraction have larger So that we that's the growing.

target in long gives confidence that strategic able forward. being to us that - hit and term going so And the more XXXX in growth

Cody Acree

very congrats. you Thank Great. much and

Operator

ROTH comes of the question from Capital. Suji from next Desilva line Your

open. Your line is

Suji Desilva

Hi Jon. Tyson. Congratulations on results Hi strong here. the

you're be two products, on to demand On already are Are running cost envelope? available that power or clinical pulling be the protocols. to simultaneously to products that when and will focusing with what those know sufficient to do that apps are do able multi those the trying and I available

Tyson Tuttle

terms Silicon those software. So and are in out, terms products both in of of

Bluetooth Bluetooth and connect a of number that We customers boot have be a And requires higher with network. ZigBee. position using, to where that able be on products networks to a bit and time. to running multiple number more you the are the That phone little into then of able a to part the and memory to the run device put at to - same on functionality really protocols

we a to balanced protocols, the the phones. using that a a cost by and to proprietary particular be mesh talk interest also anything to in where able you look really using it's area. like very have or markets, different those is If there, fact markets that at protocol that’s see the of Lighting particular lot multiple one sensitive really the that’s the to

cost the and effective roadmap more memory hardware, So Moore’s as on be cost We lower this cost over a as we the to both software time. growing forward, trend. law drive see a and drive where takes

Suji Desilva

a generating jog think Can and the are several environment generally use or you in on any here. And more are cash, here next the cash balance portfolio talk then of. product organic of there looking great in holes of specifically, Great. your on that what terms doing Thanks. with acquisition acquisition cash quarters, about thoughts want whether the sheet, - you’re and whether the you’re - to terms is your you go you thinking of

John Hollister

Suji. bet, This is John. You

we and the So will generation we cash about area a that return. be to business of far year thus are to in program opportunistic the repurchase the pleased as share continue deployment for shareholder as with capital continue this an see

growth well. where we don't for but to we accelerate as some to We important inorganic add continue in we drivers work area right that continue have adjacent now, In targets look our (indiscernible) that roadmap in capability. do business, terms can of the or will opportunities find

Suji Desilva

guys. Thanks great. Okay,

Operator

comes question from the next from Craig Your of Ellis line B. Riley.

Your is open. line

Craig Ellis

the the quarter of question amount flow things with timing, million Big just a $XXX is a two in your start milestone. in term new seems quarter. and on wanted tying guys. Thanks hitting question, congratulations discussion there like IoT a activity third for accomplishment, to taking product I in significant it the Tyson, longer together. new of product

for get next we're do think demand but business ebbs flows, all and that aware has in think IoT about very infrastructure? What strength broader $X demand growth. that you positioned is that respect of mean year the communication for in in talked company's with I wave positioning to how its in So does the And XXXX timeframe? you sales to year the billion on to goal good XX%

Tyson Tuttle

me area well well infrastructure that wireless more datacenter we're traditionally enjoyed address as we've within timing and applications. positioned, So into opportunity. where believe the first expanding let networking the both quite core as We optical strength,

look you if announced applications, that for a of view solutions SAM optimizing the and introducing really Express type number we the data So oscillator that which a including clock at in well and our products. those as markets introductions of rollout we XG products we're are PCI expansion substantial QX, market, optimized center our that and as as for product for other

competitiveness of US. slowdown Despite ability this and outside number of feel the in suppliers confident out talking optical. our core adjacent only about right we're these companies our now a ones. market markets China there, we're additional that share So technology market there and the within our our in that here There’s not we gain are in in about to that seeing overall within - the and the

at goal this here like or within growth if now to look XX% a record year, a in those continue that as we're continued at billion is we there and hit IoT the those eleventh that had adoption timing the looks of the you and in If continue organic of and growth run that and our products growth revenue of We the the growth infrastructure across see seeing continue products greater, the markets the XX% different going hitting rate and quarter a number dollar and thesis well as we're total. to broad consecutive area. area, isolation the

for math going markets out the you and if run layer billion You here dollar of And the on expand the to we're we And over top million, to businesses top in to on level $XXX up hold of John couple M&A of those that next of continue certainly look be then years. bank. at have some that, well. we opportunities cash that as with

depending pull on accelerate can timeframe in we So the what that there. could

Craig Ellis

for Then follow up John. the is for Thanks that.

One, very in sales the of market the helpful handle preview change, the you to industrial XX% two Can then at accounting other break clarifications. mix on you’ll Just out total. how end for of exposures? thanks the terms things. get And

as that Just gross year. clarifying revenue means basis to there be any or that you modified next selling Thank won't over margin perturbations the cart you.

John Hollister

bet, You Craig.

applications, not the that market the X% and But automotive rough is is topic. sell in roughly between MCU and radio The much some is communications our market, automotive predominantly mix the well as still the Really products into most We running the as is end end around there. of of automotive. on tuner. split do computing for consumer looking automotive side. broadcast into mix the and balance So of products that of end then isolation numbers radio at the our markets

next material levels the be effects the the the margin there results inventory under will it as guidance top be more but don't we line, that the our revenue far effective going or sensitive would a level. really distribution to will more key channel, new And We forward, material to the that's to at accounting distributor inventory changes on anticipate is extent. year. As impacts change, sensitive with inventory stable of not expect levels

Craig Ellis

Thanks for that John.

Operator

question Gill line open. Co. from Needham is from next the & Your your comes of Raji line

Robert Mertens

Hi. of Robert behalf Raji. This Mertens is on

business. back any could year idea Just seasonally with get thinking over to be think around just it's negative an long to trying strength you to still business strong there. there year broadcast your of go potential a decline in automotive or I you're upside term, this quarter, if the the XX% but know

Tyson Tuttle

de So flat about market audio panel end enjoy TVs if opportunity a we box are within the the - one number at declines end couple of and thirds tuners share spaces consumer tier broadcast well look type for necessarily content as standard top to years, facto been devices business of both We there's you And performance is in two as over as grow do also set This high our video, from really that and ASP see the and not with across the share the and China. players, some within shift the the area. TV of over time, we've able growing industry. our into well products that in last is as really in devices. lower market the

product on will growth gains that's - our by and that markets a those downward So models and and modest cycles. different And the trend. given on takes the automotive, quality, also market long balanced continue will down as it share that ramp time in continues next share. depending to depending production into automotive life radio high but business although These that geographies in revenue, the year you within are ramp trend be different But is area. overall, live

So year revenue maintain automotive the net-net, the that consumer XX% broadcast, and stand market Could share within TV on behind still parts of the our than depending market. we that year. be ability more on decline to

Robert Mertens

I as of in between and business, beyond give without of perhaps mean sense And is more a up and then infrastructure do the you for timing you. a China. Thank a XXXX follow growth isolators? what the the weakness Great. rate

If products. pipeline you based than about your on think design of one growing other, more just the

Tyson Tuttle

XX% our is XX%. than infrastructure, at look is you if or about So growth target greater strategic there

We will year. underperform this that

by you If in QX the X% timing. isolation was look only really and that year strength up in area, was in weakness year, driven infrastructure the offset by on

has offset So of timing and the but - applications and the infrastructure to that. multiple segments, And continues industrial and the board - automotive in market a green in applications. energy across deliver lot in

reasonable So given that to product we going market. levels underperformed for target one continued is forward there, strategic XX% the we growth there infrastructure, confident target the are our have our although in - growth that a momentum and that take investment

John Hollister

indicated do the infrastructure is really see is have for isolation. the call. John. overall The into but timing, at moving I as our Robert, mean looking on I we not wireless this we really enhance Tyson category, timing for mean SAM, goals infrastructure to goal unique and areas

do we prospects still So term growth for timing. see longer

Tyson Tuttle

you've the for In IoT the overall model of company, got terms at XX%.

You at a decline. got XX% access XX% at and infrastructure broadcast and then

broadcast IoT our X% that's headwind and or stronger much the the area. in so, a growth offset access at and revenue growth, essentially on by with about infrastructure of So XX%

growth businesses, more are our businesses overall, time even prominent. see much more So mature larger becoming we our than that and over

Robert Mertens

you. Okay, Appreciate great. the Thank color.

Operator

Jalene would the call now Hoover. to hand I like back over to

Jalene Hoover

Thank Marcela morning. for you, thank you joining this us all This and today's concludes call.

Silicon Laboratories (SLAB) 25 Oct 172017 Q3 Earnings call transcript