SLAB - Earnings call transcript Q4 2017 | Silicon Laboratories Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

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

Jalene Hoover

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

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

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

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

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

John Hollister

Jalene. Thanks,

million the which our XX% at range year first to and growth and multiyear model, at and the the high-end $XXX for proud while up fourth our XXXX. $XXX million, model, successful for reflecting was milestone revenue achieving profitability surpassed that a ended the our operating Total pleased transition announce very are We business and ever. for for us, revenue This quarter remarkable quarter full the quarter fourth year-on-year. of guidance time of is the for target

performance, product we posted growth. the year, at annual XX% strong revenue million and with delivering ending For revenue full $XXX

delivering an with quarter these representing XX%. strong total $XXX products million, of IoT eighth growth results XX% of and revenue consecutive Our led year-on-year revenue of record quarter fourth

year, revenue Looking in million full XX% at growth. the IoT annual $XXX delivered at

in our We our by a of followed and Ramping the of broad adoption excellent proprietary is demand continue solutions, key adoption to mesh protocols. for products. success driver networking Bluetooth using see Wireless traction of connectivity

We products also had posting very the growth XX-bit MCU our for and a XXXX, MCU good single-digit with expectations. in high year exceeding X market,

at revenue reflecting Our year-on-year. also ending $XX Infrastructure X% with slightly products in up grew grew stability. Timing QX, about revenue million, some

products by revenue $XXX Looking annual and products, growth, total robust which X% double-digit full contributed at million Infrastructure growth. to year, delivered led the our isolation achieved

primarily products products, the in timing were impacted consumer Broadcast expected seasonality optical revenue $XX associated million typical networking with declined slowdown our in general QX Our as to due by demand. to video.

revenue quarter XX% ended fourth with in was expectations revenue X%, full on strength in strongest the which expected in was year. with in upside the year, with QX to For and into due declined we APAC automotive than meaningfully consumer the growth as we Americas down in Access revenue year better anticipated radio. down. year $XX million about for the to declined in and heading Broadcast line Europe Geographically, the and IoT

market, now than in seasonality. on total of At continues consumer fiscal largest XXXX. industrial revenue, grew our XX% more with increase. and the Americas. was full our end the growth our with revenue roughly to quarter, end automotive fourth in then The diversity For IoT our By due Europe down geography of again followed APAC, flat year, communications and half industrial Broadcast roughly of is by fastest growing to the primarily market,

During revenue, of up XX% sequentially X% year-on-year. total the XX% and to grew fourth quarter, distribution revenue

revenues and represented our XX largest our our more during XXXX, period. X% of than for Additionally, no customers revenues XX% customer of end for this accounted

by Wireless, isolation our led our the For QX, $X to mix based for XXXX, encouraged growth billion by products. margin a within year the gross opportunity and year see progress in favorable to and note strong IoT grew businesses. at seasonal consumer products due on and timing funnel Non-GAAP primarily by and broadcast in ended the broader XX% our XX.X% we product our full favorable the we trends decline on Infrastructure are

or Non-GAAP QX margins over $XX above up were the $XXX,XXX slightly were to SG&A model or OpEx in R&D the expenses increase travel XX% of compensation than XX.X%. we increased profitability million growth, were million due and XX% higher and year, for target variable non-GAAP expected $XX midpoint introduction our $XXX,XXX product Fourth of revenue. stronger-than-expected was up spending For Non-GAAP on at an just higher costs. new quarter expenses revenue. to of with to

at XX.X%, was or $XX operating to For non-GAAP for million million and Non-GAAP model total our $XXX the guidance. margin year, in our well target OpEx range. X%, operating income non-GAAP increased line ended annual QX within with

For posted in revenue, $XXX operating XX% XXXX. of or XX.X% from up the XXXX non-GAAP year, we million income

tax was to certain tax attributes. income of around Our state non-GAAP at effective utilization fourth favorable the rate quarter due X% primarily

the of For non-GAAP we year, rate effective ended a XX%. with tax

high an tax strong the fourth share. ended at is range With EPS revenue of and increase earnings the performance, which above year This per a from for guidance approximate gross favorable non-GAAP quarter XXXX. upside XX% strong brings margins end share, record our $X.XX the per to rate, result $X.XX a non-GAAP

$XX SG&A grew was expenses For million. million Stock-based with On expectations million the we amortization and $XX million In the compensation was app at earnings operating and a or margin fourth were revenue. row, in Cuts income assets XX.X% GAAP surpassed revenue, quarter. million, Tax second of expectations. passed $X intangible of United the was $XX which States. faster December, ended Jobs than the a of basis, $XX XXXX GAAP year expenses Act R&D gross in line quarter and both for XX.X%, in were was

this be new income as non-U.S. tax global earnings low implementing to significant on companies intangible addition In imposes taxes imposed additional The tax $XX we unremitted a with to new profits. which in tax U.S. liability in paid incremental an on tax transition including over with approximately tax the fourth a results the tax a a recorded on resulting out million, international legislation eight lower presence, quarter, as be corporate rate, to new expense existing the future well of years. next transition

transition a resulting million $X.XX tax $X our an GAAP loss of approximately share, below was to our changes tax with recorded which legislation, Due QX approximate which offset per share tax. We is net large associated partially well onetime impact, these or the tax also provision GAAP had range. adjustments, additional per guidance deferred $X.XX in which $XX million, the course,

as for the non-GAAP related is so We effect are tax treating adjustments results. no fourth from these charges there non-GAAP these items quarter on reform our

we a flow $XXX to strong of XXXX. cash ended and the in sheet, over increase for $XXX a fiscal position now XX% the record balance XXXX investments, cash operating million a in year, cash fiscal generating with Turning million

inventory at cash have XX $XX $XX hand of We million million X.X fund Accounts turns. the Sigma year ended outstanding on sales assets. ample to or Designs’ and ended receivable our day acquisition Z-Wave or at planned

very be to healthy. continues sheet balance Our

on provide I a update Before M&A QX, activity. our like guidance cover would to the brief for I

by will acquire down that reported, conditions, closing subject Sigma business. wind sale a XX, transaction does will Designs January late to conditions calendar Z-Wave Designs. cover to approved, company’s guidance agreement assets. approval of that the the to not Silicon quarter, did Sigma we This parties assets include and for Labs if previously QX. XXXX, transaction $XXX now for revert to shareholders, December QX the we first the early certain divestiture we close satisfy expect transaction to XXXX, This smart As announced Sigma Z-Wave announced Designs' On million. and X, to further on estimates of or Sigma or this was including the a to TV closing relating which not subject is definitive they I by

quarter and million Infrastructure million, revenue declining. the $XXX to in and Broadcast of Access to range the first expect We IoT up $XXX be with and for

XX% XX.X%. be gross to margin non-GAAP We approximately expect to

and expect non-GAAP to additions. approximately QX headcount expenses on operating with up We million, tax combined merit to payroll $XX with increases increase seasonally resets,

XX% in our U.S. expect tax XX% rate reform. increase to to effective due from corporate to impacts tax to between We non-GAAP QX

per an estimated in for on expect $X.XX QX diluted OpEx share. shares XX.X of be to million share range the $X.XX per per to earnings to We in $X.XX be On million share based to non-GAAP a be $XX $X.XX diluted and outstanding. we the earnings of expect range GAAP to approximately basis, GAAP

mix will growth, at margins Broadcast decline. our our XX% Looking us targets growth between deliver and XX% to forward, at at IoT and we strategic each with XX%. our Infrastructure product targeted We believe products categories, maintaining XX% a organic growth and XX% are Access gross allow for

as our performance. sell-through for XXX, call, target into XXXX, have accounting. ASC we sell-in we XX%, recognition are of our the year expect revenue of And on sales changing to finally, model version model range dictated targets from previously as we modified operating margin by growth end last adoption with – customers operate revenue of full discussed with earnings criteria to our to distribution of a the XX% OpEx discussed, lower For toward

earnings basis, adjustment this prospective We QX retained fiscal are one-time enacting change XXXX. effective a to a on with

the distributor may volatility be to over call result to Tyson. I a greater turn our As adoption, inventory revenue of this now levels. subject will to due

Tyson Tuttle

Thank you, John.

We revenue fourth pleased XX% financial outstanding QX report product are quarter the and XX% performance, year. year growth XXXX including for year-on-year to for very full and

margin of on the growth, XXXX. delivered on have performance non-GAAP target product We operating operating quarters five and revenue past for gross full margin year six non-GAAP model and

the Supporting tools process. about billion industry's offers a design key and options market, to Labs. results. features, comprehensive development convenient, creates this We growing hardware platform-based track Adding secure, making and $X and greatly Infrastructure and growth over Silicon things multi-protocol are most internet. use, enhances and thousands devices products to standalone simplify power to wireless opportunity SoCs model easier an upgrade. IoT these our connectivity to tens and which market. tremendous of growth requires Continued variety see To solutions, device low-power the thermostats more More everyday becoming scale and this connectivity of large comprehensive including value, such management the challenge, connected requires years, five next security modules, as for driver tools of a to their stacks, IoT protocol applications customers as the billion and devices portfolio them lights, these for the Labs software connectivity, meet $XX growing to connected of more thousands and the long-term integrated, wireless IoT. is Silicon energy across the in Creating advanced of a of and

portfolio drive the than IoT needs, to in will growth In our platform Gecko silicon controlling more total XXXX, annual and SoC to the efficiency continue flexible, Wireless Our provides achieving end-market the heart IoT cost-effective a products our device. half strategic growth at of we revenue, path, our of software control means XX% of and lead By XX% design. the support and integration target. exceeding surpassed

wireless products of IoT delivering Our market. than the outpacing revenue, growth, overall total XX% more up make year-on-year now XX%

wireless Our lighting, is traction industrial. as in optimal range of for Home, segments metering low-power with Smart end nodes a combinations connectivity portfolio and protocols target gaining market broad and we target

growth. wireless the networking market. than to deployed is Our bringing lead multiprotocol revenue experience Zigbee million mesh XX products in With mesh Labs forefront continue advanced XXX of at of years Silicon Wireless technology nodes, more and to

We a is which support wireless mesh multiprotocol the leader connectivity delivering low-energy as software are stacks, and SoCs as future Bluetooth modules, ultrasmall Bluetooth connectivity. for technology well commissioning the of also IoT. in innovation, Multiprotocol System-in-Package

were for for devices Gecko to continue handsets, we unique Just as combo the to IoT. Bluetooth developed optimize platform Wireless requirements Wi-Fi mobile the our and meet

kind During radio for first multiprotocol to Gecko Silicon released cost-effective technology way quarter Wireless IoT This the its we a solution provides portfolio. dynamic and applications optimize antenna. a radio using fourth Labs' software of single for

SoC. perform Micrium Our low-energy simultaneous scheduling, slicing solution single and on leverages Bluetooth a enabling Zigbee to radio acquisition and of of operation our system time from real-time operating a

Bluetooth and control connectivity software This also applications. it smartphone service over new a beacons, critical home infrastructure. zigbee-based directly and to lighting making using for indoor commission, technology enabling Zigbee building automation monitor Bluetooth to users and connected automation. easier allows the extension mesh Our is using update, networks deploy building location-based systems of Multiprotocol supports scalable software

and seamless to multiband enabling Labs' frequencies. quarter, using collaborated connectivity, SoC to smart Hager's multiprotocol we incorporates energy-efficient the with connectivity platform including and a wireless Group Silicon multiple Hager Gecko Bluetooth KNX gigahertz enable versatile, create During low-energy, standards, Home and wireless sub-gigahertz applications for Sigfox. supporting Wireless RF Smart – module new X.X

of software to CES drive market with a multiple updates, enabling gateways we including interoperability interest Samsung's to help continually in needs module Icontrol To connectivity a Echo, key this our lot engaging Our adapt Amazon Wireless changing applications. and earlier systems multiprotocol Gecko including SoCs and portfolio IoT year systems. of and Echo the interoperability drew success hubs, Wireless mesh, evolving We IoT, is Echo Hager's enabler Bluetooth, Smart the to along Comcast over offer growth devices and are with SmartThings leading believe and challenges, and of protocols month. Home ensure requirements. proprietary Cloud and among connected at interoperability

the and record where delivered Now let's year fourth Infrastructure, revenue move in onto XXXX. we quarter full

offering isolators Labs' growing functionality lines greater reliability technology. optocouplers to our among Our up isolation enabling through and traditional and products standard performance superior digital product Silicon than XXXX, in additional replace fastest more year-on-year. XX% continue CMOS were

and in technology. of energy are driving energy broad-based encourage Additionally, isolation government initiatives our global efficiency to growth trends renewable adoption

Over years, have the claimed the about half past we of growth the digital market. five isolation overall in

by outlook decline recent a X% about softness, Our a for portfolio margin We long-haul for term were record we and number in oscillator multi-year expanding the optical expectations. timing clock products weakness for negatively products growth to the strong Despite into drive high opportunity timing, short bolstered falling about markets pipeline. revenue revenue remain our networking these new of by gross products. XXXX, launched in of longer optimistic causing the market, our to year, impacted

centers increasing As data an fronthaul optical solutions. and timing hyper-scale speeds, and move higher we need to for mobile backhaul ultra-low see jitter networks networks,

performance the high for in IXC applications. center XXX, Series frequency jitter During quarter, family programmable delivering the we introduced and flexibility Ultra XXX-gig of speed, and best-in-class crystal XXX data oscillators, communications

the devices technology allowing a programmable jitter use low reliable to any low new single to clock Labs' found device are environments from by in be Public gigahertz, to prestigious On-chip industry to we an often ultra future for high-speed award networks a Respected XXXX, centers. based to off In by is outstanding Alliance's generation of operation an It across Silicon The supply row, Global best products, for third-year Company XXX in fourth Semiconductor opportunities. kilohertz a capped enables power winning the DSPLL and data our jitter on noisy peers this frequency Semiconductor Our a be spectrum broad oscillators advanced used great provide year honor source. and award. again Most X.X chosen applications. the regulation vision in

We execution our a are cost functionality, very optimize base. across the capabilities of wider our range product our excited and about customer continue global of and broader team applications we and as expand scale portfolio, a strong roadmap support to

company $X market With within Thank customers is you our your Becoming address have the and employees combined for and and of of transformed business effort the and attention. and to sight. high-quality, billion growing Infrastructure. our sustainable support a energy our partners worldwide, IoT, business time trends green X,XXX we in large our

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

Jalene Hoover

Tyson. to like your questions. we possible you, with as for that market before the ask To up accommodate the please would to your people follow-up. Thank limit questions you one many We open now call opens, one as

Operator

from from the Hamilton. [Operator question comes Instructions] line Acree of Drexel Your Cody first

open. is line Your

Cody Acree

Tyson, in some you questions. visibility about did, that John, your could on my optical, you – Thank guess improved taking a or about working you obviously I brief time. made been some comment for you’ve talk for in statements just opening

XXXX? you’re Just your and seeing what what’s for curious on expectations

Tyson Tuttle

did and within driving we expecting as in not if X% similar introductions We product a about look we to return XXXX inventory optical, disappointed a by as down new healthier as in the better – our little the our more of well more XXXX, we situation what hit to normal year. we bit And year customers combination were bit last definitely the in ordering a what believe timing. expectations. that have patterns, to a for little forecast look be were were in at Yes, a we pattern the it performance into we it’s

Cody Acree

better Are you to there? starting see orders

John Hollister

is Yes, Cody. this John. Cody,

guide market. We enabled category the improvement QX. us seeing for some product It’s to are in the what of up Infrastructure part

Cody Acree

you’ve to John, talk start my op as up. Is would just guess, your OpEx your $XX then, strides really I any then, about volatility higher a Is pullback at any from OpEx you nice spend, million some rate follow spending you new some look XXXX, in does if improvements? there? of baseline And maybe are for we just And operating from there? increase. there as your margin any margins, for limit opportunity had growing this just or

John Hollister

Yes, Cody.

So new baseline. reasonable yes, $XX million is a

and There in in seasonal expect quarter. uptick here. some the You in overall, will is to infringe the year. of do have up first takes taxes puts and the rate payroll a hiring through course we the pick But

seeing as hardware year, bit of recent out to support and working is application feel and diverse that here The and We the fundamentally the base. this invest continue add customer as to to we’ve of at we growing company then the undertaking the and the moment in of large in opportunity support. do the as and build to reasonable is large and sales design the and is that and is the the market as in an business. a with portfolio growth strategy this purpose is is yes, continue to the both platform to course opportunity downstream in look pipeline if the our to in well of little areas software So a growth And calls, relatively through see that flattish, not to indicated team way opportunity this.

Cody Acree

on Thank you. congrats the progress. And

John Hollister

Thank you.

Operator

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

open. line Your is

Blayne Curtis

digits, maybe I the there XX% in taking the there March, fluctuation question. want Thanks is that ask I actually outside you Is Broadcast, But sometimes the there. the anything down. forecast, if to about it’s to could cause guess, structurally that declined just only I guys. anything is my of just know XX% here? out decline? hard this it’s seasonality one on single business it is would talk in a for Hey, low one growing from

John Hollister

market a had that share Yes, Blayne, numbers had our XXXX. good We some bolster John. China in is fiscal We year to helped in the this year. last the opportunity very retake

Looking that market, with secular of have, some market forward, market we substantial declines. this a a position two-thirds trends exist continuation and at we of ASP the continuing in roughly see the overall do share that of

So well those rate are the main greater we the forecast consumer factors. business see We than as this grow the automotive be an to year. at But that. do opportunity a radio declines would

Blayne Curtis

And December? I mentioned that at year the favorable and then, understand the just was in I IoT, products mix modules trends gross on for just And in you Great. if midpoint. for the the between know IoT. fluctuations you XX% kind been of forecast, there’s on I that then elaborate wondering margin, And

about If for as talk year you well? factors can anything this

John Hollister

fourth very the a high-precision in products. quarter superior the had some we good quarter X-bit Yes, margin with performance in of X-bit those business, some on

We also in space. great the quarter IC in quarter fourth XX.X had a

to to and first IoT just operate we favorable we and around that overall, had were we quarter. above just model gross guiding So trends for range of margin in our continue an the midpoint see some opportunity

Blayne Curtis

Great. Thanks.

Operator

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

line is Your open.

Suji Desilva

a the on in drill to wanted little just bit I guys. more. Infrastructure Hi,

versus In your in what timing there the XXXX, comms optocoupler? outlook about XX% assumptions are terms year-over-year and guide your of the for

Tyson Tuttle

Tyson. is this Suji, Yes,

timing a both Infrastructure, as business our in of guide a the growth If combination on you look of it’s at area. isolation resumption growth the in well as really

both for So we the categories year. product of those in forecasting are increases

Suji Desilva

or follow Okay. layering coming is Wi-Fi and entry, us that recently then up, how see you whether can that to around concerns you as you opportunity that’s acquired update longer-term And the my talk corner? – a technology in a whether

Tyson Tuttle

and part – brought a modules we as combination set in lets into management development internal platform. on that, well as we’ve an next manage Zentri, In some those and basically quite for Wi-Fi as that the of got And been with cloud the talking about of you multiprotocol internally those. takes modules service update that for IoT. so that developing time a connectivity Right, essential Wi-Fi securely we’ve IoT with of we connects device generation our an view

been implement But to Cypress. and as lower set an the system kind in a well of are taken stacks products level that – that IoT for of working range to protocol sold enable to the cost, operating so the alpha in we of the as would out platform as to our And that Broadcom Those that the that that also be we’ve team power next to They of has device generation all terms similar connectivity Wi-Fi And plan, tools applications. be enhanced customers. next WICED the used and broad to would basically offering. platform to cloud sampling feature that, introduce lower management. part with we and be

Suji Desilva

Okay, Congrats results great. guys. the on

Tyson Tuttle

Thank you.

Operator

from next Needham of Ravindra Gill the question line Your Company. from & comes

Your is open. line

Ravindra Gill

taking Thanks and question well. congrats as Yes. for my

about little connectivity On you that bit I kind split of, kind microcontroller XXXX. lot of think forward you faster within mix standard going specifically, going you And in in protocol the is the versus one, a and business, the wireless others maybe is in the about you past wondering than And last talk could to grow MCU last was amongst XX-bit strength a the there the or talked year? if market. saw Wireless, say, X-bit, modules. of year IoT

Tyson Tuttle

XX% the look was fastest if piece the Wireless of now is the that. revenue. in and growing at is XX% Wireless The about was Actually, the the you overall IoT largest revenue. that IoT it of revenue I’m got business now So sorry, quarter IoT, fourth about over of XX% we’ve

that Wireless that. XX-bit in has microcontrollers have You also integrated remember to

to microcontroller a So category there’s adding wireless from the pull essentially – of XX-bit little the a bit into Wireless from you’re a MCU. where

that solid that We to growth with continued our invest expect saw our microcontrollers. in are see to in We’ve have continue we portfolio products a customers and number X-bit so growth that that making in to some transition. EFMX category. And of

got You’ve MCUs. the XX-bit also

that. there the to a basically, some chips. to be for and combination of is And piece But so see the The the faster and continue see really larger of in modules the strong portion products. And microcontroller growing a modules Wireless. growth IoT That’s mesh category, those. business will expect we fastest and piece between we mix both demand ICs in and networking our is growing

a in automation the Bluetooth of market just So combine plus you’ve strong volume broader that functionality. both got and growers standalone within very using models. others. and moving markers are low-energy with and of board very, metering XX.X and And for also variety of both Zigbee modules with also got adoption We’ve across products in home that lighting, in the on introducing that, strong Bluetooth into chip the chips, customers and those us, categories, – you've higher been

as sensors – but So also some growth have had we some didn't we've We that within sensors area new see IoT. announced board mention growth across we well. and in the

modules, following have close all the really beginning generation second ramp of generation first that. development And that now fully with there’s platform market. our So Wireless, the is to of our behind standards. This out the and platform into we various protocol

in So excited IoT the now. we're opportunities our very right about market

Ravindra Gill

well, could up this Very landscape, versus on my maybe good. follow IoT us And competitive on previous in for the as – years. year the update you my say

about it's the of, you real become for if changed although kind has, years starting probably now and three, over landscape existed competitive fragmented. Wondering has four maybe market, market a could IoT describe the say time? it's how that to Now

Tyson Tuttle

what broad we full low-power of with you're integration, talked wireless might look so strategy, not about but nodes those applications a at applications. have of six had these connected. overall targeted inside our of IoT Yes, or you years lot might if levels really connectivity. that adding are traditionally about a microcontrollers These end targeting been now ago, We've wirelessly seven are. have variety They

to And seeing And focused starting our now we're tools we on markets aspect. that and software integration off. connectivity really take those so in

home of at no is a look without level industrial really product connectivity A now traditional look having the look at metering, providers it You automation, lot mobile you you phone. lot got really at connectivity. some applications, of new of viable coming from the

And not for applications. But the have And in a be of so and functionality. is you combo those phone are mobile integration type IoT Wi-Fi the where as energy you Bluetooth optimized where level it's lot of of and same that really would high-volume chips. have required

So we've been this platform. And networking, a adding with mesh of with Bluetooth generation in optimizing version the Zigbee, that low-energy next now into with Wi-Fi our low-energy.

So standpoint, a past there been TI from have competitive we've like I got of companies the think a with in protocols. variety wireless

we've that You've got Microchip, to ability offering have which the the got we've do the basis. we from really together, there. focus, our that a But lead to within we software we of of market a acquisitions stacks that way integrated we're multiyear our view the doing has made complete internally and a number level the think modules of the and integration, all way we've comparative those from internally

mobile we functionality integration and MediaTek. mostly that But phone rest really Qualcomm microcontroller of more solutions, you mainline terms So the the solutions, the from or or like of think applications, level high-volume would see discrete we're companies with competing stands somewhat from with in above Cyprees the our right optimized now.

Ravindra Gill

right, great. you All Thank and congratulations.

Operator

question of from Tore from Stifel. next comes Svanberg the Your line

open. Your line is

Tore Svanberg

Yes. record. and you another congratulations the Thank on

would deal if all, just accelerate it comment, wondering big does clearly just interface I voices of this is was becoming business does And it first types? in landscape. just IoT change a could great. be the CES, was wondering at I does your it growth the – the market? that you pretty And interface in of voice If what obviously, IoT all, an So for

Tyson Tuttle

activity Yes, voice we around CES. saw a interface lot of at

integrated is things helps control an connection market. the to interoperability of convenience of and as the really systems of more of really useful. are really more use of it that. number are a a enabling lot that that, that view the the that chips in gateways devices enabler makes are it – the It voice these for devices, unify I and the But enabling Our Echo cases

And from devices control and that of in with to so that additional the interesting together of the as devices. net these a systems deployment. is to for system overall offer I it just win bigger proliferation standpoint view the all and I that you're us the Echo the be voice revenue for are going chips But into think is Echo efforts that's opportunity to And integrate in networks that IoT controlling the a doing an providers market impact, interface.

Tore Svanberg

calendar the for given question Very John, good. follow-up guide this you rate through that as And new whole a we tax the want policy, XXXX if at point. year to any look us at

John Hollister

and Tore, it's Yes, preliminary.

this continues we quarter encompassed a look legislation. be provided but embedded definitely that viewed non-GAAP to year, and the changes new provide we as continue – on Our year at this of of further for first comprehend rest as for the in updates guidance progresses. basis refine could the the need understanding numerous to we'll The to

Tore Svanberg

good. you. Thank That’s

Operator

Our final of question Craig B. comes from FBR. the Riley line from Ellis

open. Your line is

Craig Ellis

Thanks for the question. taking

different given related an Tyson, XXXX performance perform I the noting that the start to against well overcame tie you and wanted me guys, that start question, was with just in headwinds – Let to exceptional X it things I'll together. timing model. by target

mix Wireless about of You to IoT XX%. within getting the talked

up years, we somewhat how as that And normalized or look of level now couple sales, go is to that evolve? that with a would expect of over well? XX% out the continue we next where As should distribution to similarly

Tyson Tuttle

in Wireless. see year of up Wireless forward. first being the going let and So those for now the continuing half see growth XX% me area over And we the IoT business. certainly, trends the We start with

the outpace So we see Wireless within to growth IoT. continuing

the forward. continue of revenue going So to and larger fraction it's a larger going to become

got microcontrollers, significant base going XX-bit growth on you've So side. be to a the in that's

the we a common a number between products see those the look have and is expanding. the I the opportunity a side, see to Wireless we our that's standalone have opportunities the there pipeline side – We microcontrollers. for the if at had think market traction Wireless that opportunities and that platform opportunity continued and very and But that on customer of we Wireless significant large competitive have engagement on we just advantage

of the Disty, saw we expansion an business. terms Disty In of

look going to Disty of of in We within going continued that's optimization we're I to mix to drive that fourth activity think think range mix, I so Channel. XX% that, see that, And you quarter, that in the our a forward. continue the the and at – if lot

optimize We channel customers range. engaging we directly of have for to market. the we continue a on that we the broader distribution But and serve number still do heavily within rely into that

Craig Ellis

as then for and the for And well. maybe follow for Thanks you that. John up

that mentioned robust million the cash and with would than think comments, given in free company especially leave Z-Wave after $XXX even cash the I million, more prepared the the $XXX acquisition John's he balance flow.

scaling the the here? business think the been the So at with priorities active You've strategic the bit of do putting past, remain potential little risk company's on horse, they million? use bit, cart little a investors those before executed or given shift should is about buyback well the that how in M&A. the how the of $XXX Do a you've

John Hollister

Craig, Yes, Really is has this changed. John. nothing

look at IoT continue to step, repurchase Infrastructure the is look as towards asset to pillar continue will be of the company. we transaction in authorization additional headed its and to we and continue that with the M&A And use to final opportunistic ways will for the capital about in as program have, Z-Wave well. And a grow we other we share inorganically, as business an of course, well. capital potentially will the both our deployment open of in So

Craig Ellis

luck good and guys. Thanks

Operator

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

Jalene Hoover

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

Silicon Laboratories (SLAB) 31 Jan 182017 Q4 Earnings call transcript