SLAB - Earnings call transcript Q1 2018 | Silicon Laboratories Inc.

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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 First Quarter Fiscal 2018 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. the and to International turn of Hoover, now Relations Investor Finance. will call Jalene over Director I Jalene please go ahead

Jalene A. Hoover

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

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

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

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

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 Carter Hollister

at report non-GAAP XX% ending gross of XX% performance note year-over-year. QX. in we year-on-year. with in financial We at margin, to Combined up year up guidance guide strong topping with revenue strong favorable also pleased on the the $XXX our delivered excess I'm a Jalene. high-end $X.XX, Thanks entered of EPS million, and

well up better sequentially, an actual led $XX above results meaningfully the we our delivering than growth $XX were and expected. strong strategic is year-on-year while way for anticipated and million Our over quarter target, quarter growth. of outstanding we This a Infrastructure XX% Infrastructure XX% products with revenue representing million,

record products with clock, all-time oscillator an reached products the and of buffer markets. target in timing Our expansion

year-on-year continued products the strong $XXX slightly isolation expected, year-on-year, increase. about Our representing on million, record. for declined grew which set million with automotive and IoT revenue isolation. digital X% emerging products on to QX growing X% Broadcast strength to on quarter revenue as was slightly sequentially primarily And higher $XX delayed but slightly a down and $XX Access XX% year-on-year. product better down some of finally, declined radio adoption IoT programs. seasonality, quarter than customer new based was a consumer million, QX in revenue posted another in about ramps on volume record expected,

QX, distributor, to Arrow our expanded distribution our relationships sales global single consolidated a direct force. we and Electronics During

by driven in strength on XX%, and in product over increases our distribution more XX% anticipate drove timing maintaining performance long-term saw Distribution revenue IoT complement changes $XXX efficiencies stable and strong consumer. was and create with and of Geographically, are We we communications the represented extensive in Broadcast total Americas slightly drove all contribute greater and of market on quarter distributors single just Industrial e-tailers than will end consumer APAC declines revenue. network and partner. No single growth. a and revenue to million broadcast By of in We global sales. growth at both seasonality. X% our increases regional and to customer these total was represented areas near and the for in Europe automotive. down

the to strength at amount Non-GAAP XX gross product quarter in robust primarily Infrastructure a for and result. XXX successfully implemented we margins our were revenue quarter rather We XX.X% revenue a approximate days. normal of requiring sell-through around with sell-in in recognition quarter, based the due realized at ended products than channel ASC inventory in an on mix the increase accounting, exceeding we During and the other $XXX,XXX distribution as effects. expectations

related non-GAAP R&D in and were to to also OpEx and peak expected, hiring. to SG&A and increased non-GAAP $X As in QX million expenses expenses were on a up $XX $X based Non-GAAP up million $XX taxes $XX payroll million. million million, expenses seasonal

share are year-on-year. We above and target improvement non-GAAP pleased report representing earnings ended model. $X.XX with operating QX margin basis our our XX.X% range of XXX at over operating XXXX, line Non-GAAP to point up per XX% a guidance in

effective around non-GAAP lower slightly was rate tax XX%. than at Our expected

with SG&A OpEx a results our resulting was GAAP benefit, at EPS GAAP $XX at grant. QX at and share. stocks and $XXX XX.X% $XX significant positive than time GAAP of of were million R&D million per from realized divesting Total margin GAAP million. at XX.X%. was was at higher Looking on We tax the a margins $X.XX basis, values gross operating

to strong fair our to increase also These of the other an another a We added contributed which company, in GAAP an million items value booked closely in income. $X held earnings. investment

level Z-Wave year. inventory target for $XX inventory days XXXX, million, sheet, and turns expect representing ended Turning to levels balance $XX payment from of million This to X.X target was outstanding. up acquisition we of below this later on off the and X.X an slightly at cash April turns we RSU of and XXth, about now Net turns to $XXX return receivable $XX we times. $X and to our includes QX is On Sigma $XX the QX with inventory quarter closed coming flow of business. Accounts of ended million Designs' million QX related corporate of million Operating very a cash million. or investments the payroll ended vesting. sales XX strong at taxes fiscal

through about us to our to available Post-deal, million in acquisition than capacity an new employees welcome $XXX who very million we to funded Labs. hand. the more credit on-boarded and pleased successfully in Silicon We have borrowing have with XXX we're additional We on cash million facility. cash incremental $XXX available $XXX

in XXXX. million which for million for guidance to ban quarter We revenue authorization second an cover announced to the now reduction U.S. a I as continue $XXX to related as business last Z-Wave have the share ZTE acquired will exports approximate fiscal reflects week. the outstanding repurchase on $X well

revenue range down. with to expect $XXX We and Access million, flat, be of Infrastructure $XXX and up, IoT million to in the Broadcast

margin expect approximately We gross OpEx we to $XX.X, and $XX non-GAAP be about million. expect be non-GAAP to

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

GAAP turn be We be to to over range Tyson. to of and EPS the GAAP call OpEx in expect to $X.XX. $X.XX $XXX around will now the million, I

George Tyson Tuttle

very quarter quarter first growth performance, delivered Broadcast financial we XX% is John. down, We're yet pleased to growth in all-time a Typically, Thank first record. driven including strength outstanding report X% and sequential seasonally automotive. revenue you, by new Infrastructure XXXX revenue year-on-year and

non-GAAP wireless our launching design, a target lines. outputs. distribution performance in low-power, expertise introduced sustainable, a After million, core XXXX, growing and Express of diversity carrier consumer featuring upgrades in data multi-year industrial, growth. customer data setting our quarter number and to XG wireless products market. total optical to focusing strategy Things, and communications XX and rates. six of driving suited XXX-gig We're clock family drive in quarters. buffers to and of power upgrades strength beyond now margin, oscillators. supplies, including XXX-gig, for on high-quality of both new which growing non-GAAP speeds execution products data clock growth, most results results, on core migration $XX clock QX QX fastest center, we clock These to strategic represent with margin revenue to service revenue center from Timing plays these performance in and XX% one seeing products, data expand up Internet record timing powered ideally and in saw growth applications higher and including a to high-performance to and the QX The records operating to back first networking industrial, operating model Isolation XG just Leveraging from the a We and high revenue position of leadership These and industrial with provide of timing past seven came of clock share automotive. timing our in we base, and XXX-gig. our Infrastructure continued markets data markets to isolation. clocks low-jitter gross QX, strength to of on achieved we reflecting product strong in stable have oscillator shy drive and In networking diversified upgrades demand a represent in designs. gains QX large, portfolio of Infrastructure provider center XX-gig in optical for in explosion solar, broad PCI faster revenue. is buffers broad our from are our We continue which range a automotive, record attribute strong across

We the the provider response ourselves times and increase isolators markets, digital and of isolation have to improve efficiency. technology cloud established leading as where high-speed telecom

isolation for electric also We supplier vehicles, of best-in-class noise reliability technology safety, are the one number digital offering and immunity.

reliability isolation integration protection additional for continue enabling voltages. digital higher requiring performance, designs products from optocouplers and to high Our place

get the play and expected leading billion Turning technology products, developments, $X to next Labs in to offer lighting, development. channel Silicon tools have to market target about segments role to market to metering to is end-node easy To is and IoT IoT, applications We a customer use technology, years. Silicon solutions home, grow opportunity, a IoT to smart and experience, leading pioneered over superior platform which billion well-positioned and we Labs industry. an product and for we IoT in five including $XX deliver to platforms accelerate to innovation enable a well-developed has market. simplify our

Our these ranging economic for and models stacks IoT and and and opportunities new Proprietary for a Connecting boards, total Bluetooth, adds and first from them tools. industry's the to comprise an maintaining platform to year-on-year customers. XX% most Gecko modules enabling scalable including hardware half QX, of development featuring chips of represented end-node layers our and platform quarter encompasses security growth. broad achieved cloud, development. the true RTOS value, software IoT flexible, Wi-Fi, networking Together, devices through revenue set XX.X, In our business architecture connectivity and

products in on the and product Z-Wave, enjoy technology unified a gain and industry's us continues requirements of door we continue home home which week proven, compatibility Labs range power completed Our we enhancing we which target seamless market while business, having home potential purchase market. shipped smart complements Z-Wave Home, the and interoperability including leading end-nodes software Google for home the combined portfolio management Vivint, has mesh our drive now the features Z-Wave Z-Wave's and date. with acquisition. Ring protocols Amazon, specifically Z-Wave's Wi-Fi million acquisition hardware following strong Sigma a to applications. of wireless to of largest backward innovations includes more portfolio Silicon Alliance, setup roadmap in capabilities. into interoperability Labs' a a experience. Alarm.com, the Last the with to strategic acquisition Labs and partners provides as the In Silicon IoT introduced map devices technology our ecosystem of market. home. focus of Comcast. users opportunity a the forward SmartThings, great with will first of technology and diverse strengthens to devices public first range QX, deployed a and a broad will expertise access Z-Wave's The the Yale, for users Labs smart XXX and to and Together, position millions and products connectivity is Designs' including Gecko to of the advance smart Z-Wave Silicon who smart Samsung than road of accelerate expands comprehensive designed multiprotocol and ADT, low Silicon traction created platform open Z-Wave installers wireless broadly delivering This

Silicon new ultra-low well end-nodes new for weren't Wi-Fi now. consumption portfolio possible simply design creating IoT Our as enables performance, as and integration, power breakthroughs that opportunities cost size, in until the Wi-Fi advanced and reliability, high-performance, while new hallmarks solutions, power Silicon the enable of innovation. consumption delivering modules and Labs of transceivers footprint, which traditional Labs half Wi-Fi are small security

a devices. consumer wide end-node for Our IP including products and cameras, ideal are point of terminals IoT applications, security of healthcare sale range Wi-Fi

from won products Award Embeddy of the prestigious for World Broadcast's Embedded of automotive This in to driven recognizes nicely, in embedded hardware category gains. continued products VDC new award XXXX Our grow Conference. products the cutting-edge developers. Show primarily Best establishing revenue by record share Wi-Fi OEM Research's QX radio

leveraging We're and radio more automotive requirements portfolio connected a end strengths mixed core signals in design demanding infrastructure software reducing enable world. integration, Our building worldwide, to blocks, addresses opportunities to scalable, while the CMOS in high-performance cost. create and RF and

Our improve products Together, attention. you of for high-quality decades in time and Thank believe will innovations have are growth objectives. we We're about place large, and to industries will markets. your differentiated excited achieve strategy, deliver transform our acquisition right to propelling to lives continue to growth growth and and the address and our solutions come. sustainable, we team Z-Wave for

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

Jalene A. Hoover

Thank you, Tyson.

Sector one to the one questions. opens, To call limit we for Before up the market question-and-answer like Marcella? We as open on to Conference participation our your possible in to we follow-up. the call that as Stifel's you please questions like for Boston accommodate the Insight before your June ask open I Cross would session, would announce with XXth. in now people many

Operator

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

open. Your is line

Blayne Curtis

and morning, contributed if segment. in and question, kind to curious one was nice saw just wondering just such I than said was particularly a about was you my talk the taking other Infrastructure maybe results. you that? segments of what thanks if the set record. maybe stronger you Good Tyson, for I outperformance both

George Tyson Tuttle

the Thanks in in isolation had know, timing. the growth been is of strong, growth year Blayne. in has both quite of been strong in timing. for in than I a that would with in and had But We seen side the some the industry. XX% isolation a a annual growth very, the pause say had and bit off of performance the we year-on-year so little growth strong The little very Infrastructure, market question, areas. has with was isolation across strong overall networking faster the we've had very challenges performance you that of timing a both the in isolation Coming on optical in and

the In fact in quarter-on-quarter the same. growth was both about areas

Blayne Curtis

more Z-Wave acquisition, could about ZigBee maybe just in Z-Wave about guidance? Thanks. maybe talk the then the if could to what you strategically, just June is the how talk And together that long acquisition fit run? on if just then you and adding And

George Tyson Tuttle

Yeah.

acquisition, quarter, Z-Wave it's if revenue. the you at look partial second So the a quarter of

will total to able $X an company. and sales channel we to about portfolio, ZigBee ZigBee add whole about the to that integrate $XX adder the have into on the if it's revenue. So million year, our certainly the has out QX Z-Wave into million look the we into And position we into platform revenue see think a a We're that our Z-Wave side. leadership our we multi-protocol in and substantial position market and now

protocols have Bluetooth on also good other. very working working each a interoperably have on and We position these been with

the that network, extension roadmap. then Z-Wave you to network anticipate commission capability multi-protocol have of your of on with we an can be a acceleration For a instance, get via that device smartphone to a and Bluetooth ZigBee and Thread over or part time and

another So to our there. operators customers the It a and roadmap key relationships leveraging be the for alliance presence make the drive to the we're market. technologies home. very smart to going to Z-Wave, and lot leveraging the continue really of with excited increases penetration driving one to home about and out the of the easier into smart the We're Z-Wave use for being there

Blayne Curtis

Thanks.

Operator

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

open. is line Your

Cody Acree

Tyson, Thanks talk if expectations about question you on products? your could ramp of for my Wi-Fi and new for the the just taking congrats the progress. maybe

George Tyson Tuttle

Yeah.

February. So Conference announced the Embedded back Wi-Fi World the product in we at

so. number have months a over last and the or of sampling that here We six alpha been customers to beta

you to into We those in it's products XXXX-XXXX and the market, then of look designing modest year, customers amount the this a time see But at story. of products in. it if in those quarter possibly process but of long how are get design takes really fourth the in that have we'll revenue the a

Cody Acree

new increase, expect the this do year? baseline? the is of your great. John, Okay, just rest OpEx the then what from And for And you

John Carter Hollister

QX kicking those we baseline. course in This French hiring then a in about year is company, as move the as filtering new We in the the Cody. talked costs roll French some on Yeah, having costs of with through the the off. in increase earlier the seasonal incremental of

a a state, partial like baseline million terms of that's spend $X OpEx of So is in is a $X at the million the we a quarter with quarter and with look to rational Z-Wave organic activity. order this have team steady incremental on which of the then around $X the million more acquisition on to

Cody Acree

$X million quarter. per

of year, OpEx? we look the expecting the what So you as and are September December, rest into

George Tyson Tuttle

but million full now, new of with $XX just quarter baseline increase for a essentially that. from be right an QX We're top a can the on Z-wave of you guiding of see would bit a

Cody Acree

good. Okay, Thank very you.

Operator

from of next comes Mobley from the line Your Benchmark. Gary question

is open. line Your

Gary Mobley

morning, Good year. the delve acquisition. I Thanks my the little bit taking Sigma Designs on for to into everyone. wanted Congrats the a deeper question. to good start

was publically-traded As it mentioned part a of company. you

visibility I'm on high just Is rate. the business there million simple some if as quarter. of mistaken, million some So $XX was of maybe as business business? mentioned run a a that And near-term run you Z-Wave rate and, was softness that is a that annual $XX extrapolation the not

George Tyson Tuttle

given the XXth that $XX This that just is The revenue the the is we the achieve Gary. million here for we of acquisition Tyson. entire completed Hi, would April. year on

of year, for million. right at is type little partial run-rate year. a a That's $XX or under got at $XX a we've So, the million which bit

Gary Mobley

maybe sort potential? that's XXX mark operation, implying your revenue And or a Z-Wave lean of opportunity investment to per greater to it capture Is helpful. you a That's Okay. employee. pretty mentioned plan on took $XXX,XXX obviously revenue you in people, accelerate

John Carter Hollister

an formed building think their pretty a opportunity team don't actually is the well see whole excellent lot done business. they synergy this have This job Gary. We OpEx of John. and Yeah, on acquisition. We is

the the was in completed back of this. in a transaction to area of transaction, the structuring heavy-lifting really Going structure of that the front-end the lot on

So is formed. the team well

Of terms fairly of its the we a course we as overall in few see have team, but in that a stable team sizing. (XX:XX)

George Tyson Tuttle

Gary. because sales, another BU in integrating day of acquired of terms HR. of systems our on say one terms our supply in we're company, Yeah, also we we into this – – our I of would in have terms that them chain, in we've structure, out

the to of quite able has we're company well. actually integration infrastructure the so gone And leverage the and

our our companies at within well-optimized out is that there but So if and of forth, the structure portfolio both to well portfolio in the terms – as a given our that to integrating into in terms synergies about and boost offer company of a that we cost this is chain, given I you up terms as and sales and really a of products of longer and we big operations we have able be the shoot the also our overall And are within before we corporate terms team of growth technologies of as larger lot of fairly technology software broader but in going the the have also sales team. for broader in alliance, we're our both to gate, the it's this look channel back think that's assets that excited Z-Wave. think a lot our

terms brings this about position of market really, the to excited in it and and acquisition what So we're capabilities really company.

Gary Mobley

you. Thank

Operator

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

Your line open. is

Suji Desilva

Tyson. John. here results Congrats in Hi, on a XXXX. Hi, strong

you specifically here you your diversification about sequentially. it that the the talk of inventory timing, strong know some you is congestion percent had I non-optical and very understand there? what side in is there to now Infrastructure products quarter. to whether Can from guided decline On a

John Carter Hollister

for one is John. ban. of the second quarter items Suji. is Hey, shipment This notable the ZTE Yeah,

factors that's relative we portion how your here. a So is see data to to see long cease other strong did diversity that applications so wireless, have We'll work in takes factor but of business well work have contributed as results we to some And in quarter, as center industrial the don't timing. that here to greater out. definitely a our at and first specific the near-term. that But the in in break-out, question, I itself those – and timing

Suji Desilva

revenues. John. there opportunity Thanks. grown additional That's a the helpful, smaller the I the for beyond opportunity of on auto then And you know till Okay. that's But products what part is have you Broadcast side, here? percent automotive guys? And

George Tyson Tuttle

Yeah.

in continues automotive we that products opportunity our for So in be the for area high-quality had where broadcast a around us really radio revenue us. the growth key is strategic infotainment of area to automotive record and

have systems and know, vehicles some the on-board that in automotive systems, fit so of The and really electric into controls, like vehicles. other products opportunity actually isolation products in require things of you is lot isolation the chargers, big battery we a management our electric microcontroller motor well technology, the that

We a we've shipping so of number what's into as vehicle And in area ship development that success platforms good well well. as into quite had the as today. in both market leading electric the

Suji Desilva

Thanks, Tyson. Okay.

Operator

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

Your open. line is

Rajvindra S. Gill

strong Yes. a you. And congrats on Thank results.

business, the about some seasonality little delays wondering if into on look ramps. in we declining growing and line and product could consumer how IoT at kind – product of should the the the ramps that delayed a you quarter? was maybe second with elaborate bit IoT I and talk the some On higher of

George Tyson Tuttle

Yeah.

some year. ramps a out IoT the We see some – those couple and natural in offset the still there's There consumer volume there IoT revenue of ramp were a that anticipate of and seasonality to So through is category pushed growth. in amount to by designs higher you the continue that's bit.

over five are believe And deployed got SMETSX into Energy. newer a from there called platform pause over We platform We due that still the million from QX SMETSX. UK seeing meters of SMETSX or share transition metering about the years. into market we've to area, SMETSX transition Smart engaged. an in and QX, see majority older we're about also, in it's in UK shipments a intact, Smart Energy going the our in XXX that a designs, bit is a in But did there to of is our slowdown vast customers a this we market being

Rajvindra S. Gill

kind target IoT in this is the growth with now, know, you now of UK metering? How hiccup of does that in And helpful. XX% Z-Wave annually. that and That's how factored slight

George Tyson Tuttle

We still target. growth feel confident organic XX% our in

forma to we a rate. believe that last XX% are basis pro we result grew intact We hit that very on So good XX%. long-term IoT where growth the a year we business had

So been and we're coming business that that a adding we the Z-Wave that, think XX% at portion has that feel we the growing And at combined the year. business off Z-Wave of that strong of about rate rate. the that also XX% addition – will comfortable the grow Z-Wave

boost coming So, as confident Z-Wave acquisition, continue. would in, XX% growth factoring well but year, an to so the rate that organic that we the rate basis in this growth is from going Z-Wave certainly feel as that

Rajvindra S. Gill

And last question on IoT.

competitive think Now Thank give How up you transceivers, and fairly stacked kind that a new do on us you layers landscape? you've introducing folded now your against Wi-Fi the of product modules can which across when competition? an and the is comprehensive, all Z-Wave you. different low-power also you're update portfolio,

George Tyson Tuttle

Yes.

look So, have capability. our competitively, multi-protocol been if you we building

We have on leading ZigBee. a position

smart home. and a sub-gigahertz the with have on in the Bluetooth good leading a was wireless. protocols position very Z-Wave position solid one another the Smart of We proprietary

for IoT. This years, are the software, on have of in consumption all last and focused around acquisitions of provide So developing, designed the wireless are in these a very have rate the applications for smart higher tools we brings over additional is protocols adding applications. And of optimized the application new very, we we're the terms set IoT added that of then, end-node this this the And in of then the well power saw again and continuation whole end and been applications quarter. there positioned. that thousands data the into well SoC essentially through that Wi-Fi getting as six home, devices we to as that where development capabilities out the platform we've a that all

protocols, companies level I of the microcontroller some number market like do pinpoints, capability. have think wireless that out out whole there's a there. and We see a of that lot do mean, in have not wireless acquisitions done there companies have Microchip the lot I them a of

companies in like competitively. and NXP, position that ZigBee. Qualcomm, that's to given situation I some our We But uncertainty some have been with have which there, think the advantage

bit with industry protocols Nordic a Bluetooth some side. certainly there think out broadest wireless ST I Bluetooth and that the of and a But the applications. the optimized overall as portfolio on have wireless leader platform have our of optimize have, invest You to and improvements end for continue to for node and the applications highly we node in the drive power IoT consumption the in that are further end I think, we next-generation strongly down to to capability drive cost, that drive security, to

really it's execution of growth. we're So focusing drive the very a matter good prioritization very, driving and and we to in on think shape the competitively

Rajvindra S. Gill

Thank Excellent. you.

Operator

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

open. line Your is

Tore Egil Svanberg

you're are on can bit a these Thank the XXX.XX Great willing you And envelope the could standards? different little Tyson, various HaLow Back Yes. products? on perhaps far to you how push you. more elaborate that, Wi-Fi, quarter. comment to on XXX.XX

George Tyson Tuttle

So, if today you technology and look is XXX.XX predominantly of X gigahertz standard, deployed is at XXX.XXac. the the the at in Wi-Fi stuff, higher rates, some data

it's nodes, the and cost really XXX.XX and one-by-one power, a low and solution, about For single so it's the driving end antenna.

don't super end and IoT basically range. that data that node is is most protocol longest suitable the applications – cost have that it's And high rates. the minimum for that really So

talking second. camera something but few into that's be that integrate something a about it we're video So that or a devices are would would into sensors not you a or PC, high-definition a or phone megabits possibly per

range end And these PC integration widely the and go technology into that Qualcomm would an could coming stuff deployed of applications. cost we've driving applications, there broadly know, something other introduce. got are is, we're the what we've most it's And for be point going point optimized really able some competition or and out broad the Wi-Fi of competitive. focused this been not it's and market. from that's the really great from and some optimized and access so deployed power think not node It's as Cypress, that's on out that from to performance against to highly handset, this more got a so then solution integrating into highly the that you've that's you as for devices again the those Broadcom And but that we MediaTek, came

Tore Egil Svanberg

John, strategy could either That's follow-up, a you're for even really mentioned I you the direct few more of more as my So and channel? on sales helpful. people. Tyson you also or think hiring distributor the elaborate your for sales bit little consolidation And a

could Thank you you. on that'll if more a So also that helpful? bit elaborate be

John Carter Hollister

Sure, is Tore. John. This

initiative with this Aero to our faster here over a have to growing size a we can we sales Electronics of for them drive approaching large look to – $X optimize that forward with consolidate and growth and to now we decided opportunity So, targeting billion as up force, billion, to expanding see our all that of internal deeper pipeline company forward. the we're the distribution along relationship execution also $X sales have and growing global and time. And and our direct going

Tore Egil Svanberg

Great. Thank you. Nice quarter.

Operator

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

open. line Your is

Craig A. Ellis

the that were echo we around runner to more other expect? I previously? segment, does end-markets? towards the blue-chip Z-Wave that XX% mentioned, does of mix start-off Thanks it Tyson just segment. I'll versus impact element on create for Z-Wave of the was With some that And seen I'll high to a good Will execution the and question more a shift previously, of IoT how relative segment think what taking addition had of customers the in that we'd mix. industrial the the on congratulations end-market question guys. with

John Carter Hollister

first it Yes, and part the Craig. take Tyson. I will send then to

So, keep mind on had area strength market. mix, the as where the industrial the is in history please lot in industrial an is This smart an Z-Wave and has application. home of classified a

home to segment grow the further So, function do industrial yes, included and overall the a over segment going to will add smart we mix is our time as as well, think with of being that in that. continue to

George Tyson Tuttle

Yeah.

had home very market. has in strong a Z-Wave add. Let security position me the

very their are So sensors companies was strong. systems, wireless that like ADT rolling security for out that

there If Alliance and X,XXX of market the are devices into you the out Z-Wave XXX members supporting over Z-Wave at ecosystem, the the look Z-Wave there are protocol.

strategy is thousands customers within company tens And would not that fits are the it's substantial the this applications thousands say concentration, customers look our the at now. IoT over know, I just of we've any right you of that of and and a this actually customers adding our, of to customers. to number got So, of new diversity. diversity on top into the if XX% at we didn't adding overall it's have XX right X% and now, you bringing

going towards and the we've progress it's company through is that continue into our driving a And sales the contributes to evidence market. of diversity of like gone forward. to just this we've in transformation that into the that desire I So diversification market. broader made think to lot broader The push Z-Wave of

Craig A. Ellis

a the cash be balance competencies follow-up. And some you $XXX line add the further on understand the then milestone, of and would comfortable that can list And augment Tyson, be capabilities? Thank potentially would cash what might priority to as helpful help want growth redeploying million comment you. we you add, technology think understand million or color look that There we looking Can us $XXX of like? that's even company guys. credit inorganic with that would when the that to were for about then should Z-Wave's the company integration available. at comments just us That's help on

George Tyson Tuttle

lot have that has the integration to achieve able gone that were and we implement cash is one, would there out able feel we we But were well, that on to Z-Wave have we of Yes, and Craig, to was in here structure a sense. are work day market acquisition the certainly additionally looking certainly for we the position strong make any go the there. deals active the But we that now. right what don't

we there actionability accretive Z-Wave have culture, the compatible aligned IoT integration involve strong there, assets with Infrastructure. number something something that businesses the that our that's continue our have. we'll of situation of out interesting depending and go we're and with to bottom-line, a that, is strategically both all but position the that and we is to criteria balance and Some And in on with cash the certainly see a selection to of in

So on our million continue active still deploy ways looking authorization that well we're be to the have actively on continue to front. going be We and at as repurchase to $XXX best to capital. the share we will

Craig A. Ellis

Good luck. Tyson. Thanks,

George Tyson Tuttle

you. Thank

Operator

over call no there I'll the back Jalene If to are further Hoover. questions, hand

Jalene A. Hoover

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

Silicon Laboratories (SLAB) 25 Apr 182018 Q1 Earnings call transcript