SLAB - Earnings call transcript Q3 2019 | Silicon Laboratories Inc.

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Operator

Good morning. My name is Jamie and I will be your conference operator today. At this time, I would like to welcome everyone to Silicon Labs’ Third Quarter Fiscal 2019 Earnings Conference Call. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note, today’s event is being recorded.

like Director the International of I’d to call Finance. time, Hoover, Jalene Investor this to conference turn over At Relations and Jalene, ahead. please go

Jalene Hoover

Jamie, you, and morning Thank good everyone.

Officer, Officer; Hollister, Tyson and Chief today’s call. Executive Chief Tuttle, Financial are on John

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

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

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

Additionally, will of during refer Relations Silicon information. in our is the GAAP results also release our reconciliation in the Labs’ financial non-GAAP included and of non-GAAP call Investor A earnings to press to certain section today, company’s website. we

over now Officer, Silicon like would the call to Hollister. turn Chief I Financial Labs’ to John

John Hollister

Thanks, Jalene.

at expected Third ended Revenue at revenue we results high gross quarter ended combination of favorable stronger X% end range. operating expenses. $XXX and due of margins sequentially a to the than our upside, up and in guidance line million,

XX% revenue $XXX end record. new another growth at per a delivered $X.XX exceeded total all strong the ending or top at ending share. Non-GAAP our of setting time range guidance earnings million quarter IoT of

IoT products, revenue, account in thirds of markets. wireless automation, lighting two security led than for of more with now home the ramps IoT and which growth Sales

and than in to better solar to $XX ended vehicle slightly from the products, results expected, revenue, ramps due from stronger or primarily XX% which our benefited electric of up total energy revenue markets. isolation million Infrastructure

due strength Broadcast or in consumer Access seasonal to video ramps of to up quarter on expected quarter $XX in the products. total the strongly of up as million to X% in revenue. or tuner million also was sales was revenue XX% of $XX and

quarter with revenue in third the quarter most in saw industrial, significant at we strongest and in sequential with geography, the flat. third growth end and all by we market, Americas Europe about the Looking automotive APAC consumer. By markets saw growth increases

from benefit We to a model. continue business diversified broadly

mix for third inventory days prior which days third product Our ended QX. sales rising distribution was greater revenue our XX% Distributor ending on in days the grew the of at slightly than customer No at quarter. end from quarter, revenue flat XX quarter. XX% the to was XX versus

was as above which Non-GAAP gross margin line was down for at expected with the quarter to expectations due upside. sequentially seasonal XX% from primarily QX just in

introduction Non-GAAP to operating which expenses Non-GAAP new R&D on were $XX product $XX spending due expenses expected lower QX were favorable for for better million. than the was costs. quarter million at

Non-GAAP favorable which professional outside includes SG&A on ended services. million at spending $XX

expected we stronger XX.X%. for at operating margin than Non-GAAP QX ended

earnings Our range. guidance QX of $X.XX non-GAAP and XX.X% for share, effective per slightly tax was end our the non-GAAP ended rate at top favorable above was which at

XX.X%. XX.X% $XX million. GAAP at for were operating quarter expenses P&L million. margin GAAP the were was Looking gross our the ended $XX SG&A quarter. results, at expenses GAAP GAAP R&D margin

$X in million was expectations. $XX Stock intangible were and line of amortization million, expenses with assets compensation both

ended $X.XX. GAAP earnings per share at

days. third cash of at receivable total now holding ended the quarter quarter the the balance XX Accounts days based investments million. outstanding growth and increased Turning in $XXX XX We with to to with on sheet. days business

up from million with Our to QX. inventory inventory turns improving effective five times balance $XX QX chain supply management in decreased times, to in to due X.X

in quarter, strong million. was year-to-date the the flow to bringing QX cash total $XXX Operating

QX, aggregate overall extension. $XXX the to million, amount amended our of million to including borrowing our an capacity increase million facility and $XXX $XXX During we in credit bank base borrowing

also to in credit the date As to our XXXX with the of amendment, other part of updated along the level improvements strong capital deployment facility cash with extended balance we along terms. facility our robust maturity credit organic a execute provides of us the with This liquidity strategies.

Board to Last term the fiscal the million authorization Directors of $XXX extended buyback week, XXXX. end remaining of of our our

to be continues summary, our In very balance sheet healthy.

cover fourth the quarter. guidance for I now will

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

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

non-GAAP operating million. be $XX around We expenses expect to

We and to $X.XX. expect $X.XX the XX.X% per our in of earnings non-GAAP to non-GAAP effective be our range tax share rate be to

a GAAP margins gross be we to XX.X%. On expect basis,

operating expect GAAP to $X.XX. and range million We GAAP in per $XXX to expenses we be share expect of earnings the to $X.XX be

XX updating with weeks models, financial the to than rather in are XXXX you year As fiscal out typical weeks your XX I’d that like call XX. have QX will our

will call I over Tyson. turn to the now

Tyson Tuttle

you, Thank John.

consecutive XX% target following Third with we ongoing and categories was we a pleased headwinds, policy and uncertainties market trade sequentially X% of the revenue semiconductor growth and product quarter revenue Despite increase are operating realized across industry profitability. a return macro to current sequential major deliver all in quarters conditions, up to model growth second strong two quarter.

a lifetime a revenue year-on-year, XX% tailwind wins our strong was growth of up validation QX indicating more future than for strategy. design and year-to-date

products record Zigbee all revenue $XXX million. established high quarter growth. Thread, Third including XX.X with and Proprietary an reached and Z-Wave leading in of time QX revenue IoT Wireless

differentiation new capabilities continue and driving portfolio, advancing ecosystem growing while security partnerships. We to strengthen wireless our adding and

nodes gaining a metering, portfolio protocols lighting, automation, wireless optimal with we range commercial target of and and security, end as applications. for combinations low-power home traction Our broad industrial is significant connectivity

the market under having believe of IoT evolution one strengthens We on standards and roof multiple adoption targeted our wireless connectivity influence segments. in standards

examples optimizing third differentiate we hardware the software ourselves capabilities same standards-based all seamlessly wireless developing our and of to Combining stacks and competition. than how protocols parties the from in licensing work multiple platform, own our together are rather from

customer Silicon software hardware of of single-point efficient ways more and them Labs to customers leveraging customer applications solutions. innovative approach possible platform-based in of proliferation stacks, and stickiness through We of with with unique and IoT base, our the element see to the IoT, is software their supporting amplifying reuse thousands R&D investments the platform resonating enabling of reuse across efficiency. our designs many the to tools platform contributing solution not

best-in-class next expand integration, to generation wireless platform, cost. We performance, continue wireless Gecko offering X and security Series our

Cortex-MXX launched connectivity. supporting The mesh well as modules During based and modules new wireless X on Series Bluetooth portfolio low-energy including amplifier new tower core Thread range wide long a LED ARM multi-protocol bulbs. powerful processor and operation and of a applications the and connectivity, temperature quarter, RF Zigbee, integrated a and light range Bluetooth we smart of platform feature extended for a the for security as dedicated

in IoT the we with During market to other Allegion, a devices, and homes pioneer certification into announced locks its addition security is connectivity stronger, demands. security expand products to of simpler, Allegion making our collaboration and complex compliance, smart industry secure while capabilities more meeting buildings. the wireless with and commercial the quarter, transforming and them

and remotely security Wireless grant homeowners enabled Z-Wave Gecko Lock Key and example Allegion of an Amazon Labs of solutions Bluetooth, to platform Silicon recent use Zigbee, is in-home Smart supporting IoT when number and Connect certified Cloud can now access paired a an Cam, Schlage collaboration connectivity. visitors growing The delivery. Zigbee with A

also years. openers Labs solutions, provider a Chamberlain, for enjoys door top with Silicon strong control leading of one of including a several our partnership access garage customers and IoT

Innovation and Chamberlain we Group’s were the excellent to our on based Technology and receive collaboration. honored QX, support In award supplier Solutions technical

Z-Wave the the expansion convergence end to promote across the nodes user to into device aggressively ecosystems, multiple Alliance and to of adoption increased experience. sites simplify continue We end drive in new and gateways standards market

Z-Wave workshops a the of Earlier thought around for in hosted the Austin, of partners convening this Fall panels members, smart market. month, Z-Wave the discussions, future series Alliance leaders a home Summit and and and

The Z-Wave Products, than Samsung more ASSA Ring Jasco XXX including ecosystem ADT, and SmartThings. member Uplus, X,XXX Nortek, comprises Alarm.com, of ABLOY, LG and companies, Leedarson, certified than roster a devices more Amazon

expectations, X% exceeded due to Turning quarter to sequentially now strength increasing isolation in third infrastructure, products. revenue

needs. continue to isolation timing expand and address portfolios our new application markets We and to

our of switches. family quarter, For expansion example, of with during portfolio the we robust smart a isolated isolation compact, the announced

relays controllers in offering and switches better technology, and control output factory for automated the digital performance isolated outputs. use CMOS-based used through such and groundbreaking are systems. PLCs or resistive is Each as legacy to isolation logic new Labs’ reliability for smart lamps optocoupler-based smart switches inductive loads solenoids, driving control safety industrial Programmable The than using Silicon isolations. ideal

timing, oscillator crystal quartz used to which vibration failure developers solutions, to on and Moving are have timing traditionally prone degrading reliability. automotive shock and

complex more data add features higher As vehicle grow systems rates. new automation and drive that

a requiring jitter demanding, have clocks. and As reference a mix more clocking result, of requirements diverse frequencies lower become more

Silicon driving AEC-QXXX and qualified of applications of XG clocking and broadest ADAS, devices. these radar including camera To units, systems announced sensors, wide the clock buffers, including a and targets automotive meet sub-systems, control quarter, systems PCIe new the portfolio driver generators, range advanced industry’s Labs needs, or automotive solutions assistance grade GPS The connectivity. during timing portfolio infotainment LIDAR and autonomous

which with further market timing automotive excited sales. this portfolio, enter are to expands first our our We growing

benefits clock are performance X increase Our to failure, newest enable speed Tier how redefining serial we reduce of reliability automotive innovations the suppliers our timing which and tree OEMs devices and high and simplify navigate, design, cars. These optimize transfer. developers help of experience deliver system points automotive drive, data

development synchronization network or acquisition networks. Silicon simplify automotive time week, impacts precision wide the wireless, The IEEE XXXX packet-based XXXX fast-growing of protocol XG wireless cells, assets, this networks in and announced a transport, applications, transaction of and transport PTP, this not Earlier time distributes we of are of material. and XXXX adoption IEEE Labs day access Qulsar’s optical provide enabling IEEE smart to small spanning financial module our precise software across infrastructure. grid, for to range of and synchronization

revenue in a is common Seasonal third Broadcast. need, consumer Labs’ slightly. support trials quarter, Broadcast standards – the in sales global platform. Total in radio supporting automotive prevalent Mondiale, address or digital Silicon the standard, with TV tuner, a sequentially. this automotive during There’s growth Digital Broadcast in growing and DRM sequential India XX% need we with quarter which first Africa. Russia radio for introduced up Broadcast underway on tuner South automotive radio To with digital Moving QX Radio to strength all to increased manufacturers drove

include simplifying standards, capabilities develop the car lowest system and automotive today. any to radio cost. and Advanced reception Our single a platform features highest hybrid integration radio mass production in tuners worldwide the of digital radio software-defined SDR decode reducing cost enable to greatly and deliver radio demodulate performance manufacturers and to new radio designs BOM tuners digital

we XX than years Marketing to team. high-tech marketing in leadership new skills I’m scale of Officer, Megan partners and our the strategic brand as generation. executive the strong to our communicate communications, next acumen excellence our global thrilled experience engineering joins our the of to variety level. including demand we more vision, and welcome leadership and disciplines, to Megan Lueders, clearly our awareness, Labs partnerships to Silicon need and customers, culture a has corporate Chief of innovation industry revenue business and channel Megan with

selves track regard and strong proud bring passionate innovative, offering revenue of employees respectful we where have the a in Most Labs’ record Silicon driving whole growth that to I’m collaborative high can Work notably, the awarded a trust they Labs an a with been to their work. culture Great third workplace, for Place as year report team. to row, Silicon certification. starts

level headwinds trends Labs ecosystem positioned and is uncertainty players. we macro remains strategically the long-term Silicon policy with in high, believe and well growth volatility and market key secular While continue of

IoT scalable important increasingly role and large Infrastructure in of a markets offer products, solutions. the home, combination as is and software and innovative industrial growing Our best-in-class we smart

for Thank and you attention. time your

Jalene. we questions, to your to Before turn like call take conference the over I’d Jalene?

Jalene Hoover

Thank you, Tyson.

and call for Annual San NASDAQ’s Telecommunications X; to XX. London on Telecommunications our I the in in Barclays Summit on Technology, like X; Investor in Global December Wells would the session, XXst Media participation December open Technology Conference Third in Fargo’s question-and-answer we Vegas and on Media also Francisco Conference and December Before announce Las

We open like questions Jamie? questions accommodate up ask call now as limit many one to the please your would as your follow you opens. one people possible that with your questions We to up. for market before to for the

Operator

first from Our comes with Please Cody from Capital. ahead go question [Operator question. your Loop Acree Instructions] today

Cody Acree

far comments broad from you Thank I of the further my they’re for taking deceleration talking about TI’s just Tyson, headwinds John, questions. guess macro because evening, over Yes. at just looking a your definitely year-over-year, last last last would. days, XX to even XX as if guess the you I as get last like but the rates order I’d take linearity, XX within on days. and

John Hollister

seen through course ordering of John. of in This our and progression the bookings behavior Cody. our linear fairly is quarter. a rates steady Yes, We’ve the

bookings that the quarter a we we’re overall around remaining are concerns We as said, policy about. that the fourth the entering vigilant the do level and we some of environment begin with decent are have it that drivers macro lines, in quarter. All But clearly, But to powering in business, more company. of the at that broad-based we secular here have continue our something including product carefully isolation is monitor such we as that. some will environment through the

Cody Acree

possibility give of if the can next revenue and And year maybe XXXX as on on us your expected any just seasonality beginning of into you you that we visibility growth. thoughts just the could, head

John Hollister

Yes.

own That’s the opportunity. downtick. So our in we first experience quarter and very the common on do expect industry business have in XXXX a seasonal to

opportunity and but work we The course, is business, strong continue to in are of into prepared very comments. to in positioned new where a feel good we wins. hard a concern, indicated have our pipeline design the those macro, We about convert we as

Cody Acree

All Thank you, guys. right.

Operator

Our ahead go your Please with Gary today Wells comes question Mobley next Fargo Securities. from from question.

Gary Mobley

growth questions. Thanks third they and Broadcast to long-term add morning, in about I ask the businesses taking quarter. sequential Access, realizing robust are these but everybody. for comps Good Labs, that certainly for my Silicon want not

TV. just was any specifically related wondering indicate you whether buy lifetime those – to or hedge onetime could or not there So were specific in buys products, if or

Tyson Tuttle

Yes. This is Tyson.

buy there to about activities. TV XX% In the that last and our be We year we saw Broadcast market time were last that no, will be Access, of continues to for our relatively and TVs. a Actually, tuners. no demand robust above believe terms this in market for year, share flat

that is So view maybe we’re a that long-term XX% holding our there year-on-year.

overall, last this feel better But last – a in this that’s little stable year think was that, than Broadcast. bit we I quarter that. businesses

tuners. the side so consumer view now, demand strong We our do little where with have little automotive although a on radio automotive We a being as a would But growth side, we uptick. right market automotive there path we tick-up, on saw we a saw the the below bit expect. weak

seasonal go QX, basis trend into Broadcast QX to to We tends we lowest will see, highest as start QX. a be down. the in revenue on and It in

had done was China, one have some year-on-year. continued model we a We that, long-term the a coming down. stable there market and actually SLIC of are upside in the with bit Broadcast of business gaining of the and pretty Access of trend actually On well model little looking in modems our business. decline Access has side, to well a our – in – – part and with both that We’ve XX%, share holding and view out at XX% about but Access QX as long-term there

model down actually hold about long that results. going And and so drive XX% nothing to X%, – but year-on-year But was there quarter to we was QX unusual this those was the we’ve year, Access Broadcast in down about think continue I term.

Gary Mobley

correctly, the expectation that Okay. million most shipments might your some the But as chain impact initial course, have able Huawei was bottlenecks part been there of Huawei. be recall I a along $X If quarter. for to way. about resume far you to as understand from the supply But I

been has we half from second through maybe wondering the balance XXXX. progress of the the I’m Huawei if can what impact you quantify So as of

John Hollister

continue This carefully Gary. Yes, is an evaluate. This that area John. is we to

that. products, business the control are availability. opportunity products remains related fully most we the That and consequence we’re component as of around indirect to the able a products export complementary impacts We’ve said, law. that product with complying the looked to around our course, find Of at ship

– have So business is but some, still there down we shipments it’s resumed there.

Gary Mobley

Okay. All right. Thanks, everybody.

Operator

with question from from Needham ahead question. Raji Company. next comes Gill & Our go Please your

Raji Gill

lines, Yes, year, I transitioned good know SMETS smart the thanks IoT did contribution this question light you – toward metering. the how along lighting, volatile on the of around the environment. last that a congrats segment smart as this results industry those a very to and year? growth IoT metering how’s about been reaccelerating trending pause to specifically of was and the A X Can standard. business, on there smart that in talk year

Tyson Tuttle

for question. Thank Raji, the you,

about resumed we’re about X-year in a metering, XXX pause normal There’s market. units. to this a that’s UK. to the a – from On that was reminder just we There X. into over smart got rollout shipments million We’ve rollout. deployment. last the have the those. as of halfway XX% X about metering we everybody, about a is of went through XX%, kind And It’s SMETS smart year SMETS the as the And

So kind and a little forth multiple suppliers is here, move chain But a tend bit. to overall, within that in to rate normal at it back that of rates share steady is that back XXXX.

the smart metering UK. So that’s on market the in

metering strong monitoring have smart a general. and technologies. with That’s also adding in-home variety and We reading for category They of us. meter both just are connectivity, for business, a in different

we is quality, for long-term that us. what strategic very a market so growth And high view as

On you’ve really segments got lighting. the side, two lighting on

both have targeting ramps strong Zigbee You’ve see introduced in And and type high-volume more X, bulbs Gecko to got quarter, market. leadership Bluetooth, and and newest position And X the the And lighting. modules. XX.X last lighting platform in a the with this Series year and in we solutions. now Gecko drive those of ability earlier adoption terms we there capability the volumes our and consumer, and for that’s channel of chip smart our retail

good. So that’s very

there’s And and LED then a at you and they in. lots of large lot, at of of range technology are fixtures. we’re different I types look from deployments pretty I conversion lighting non-connected the buildings, look just engaged across across is from have different fairly mean, also connected. of manufacturers of so to to You this of commercial and older broad number diverse, a you markets a that lighting lighting very mean,

of And and can a fixtures and into so rate as into long-term penetration us the connectivity directly that for as that growth makes lighting lighting by but the connectivity today is bulbs the see quite the value add adding we you small, actually driver features, sense.

little for market. the a of lighting color that’s bit you on So

Raji Gill

That’s great.

terms the that you on had rollout I XG that follow-up my position continued your XG now helpful in particularly For go around as of product vendors. four could timing the you if into XG year. the you’re Has accelerate? at as of rollout, of with wondering the for we rollout what be infrastructure would describe several to Thank next any around color wins seeing is base that five mentioned well. your the station your competitors? quarters How Kind was business, you to compared had top you.

Tyson Tuttle

Yes.

in our Our there. We’ve our this roadmap, with terms us view is we the on solid in terms clocks delay has continue just is and got of and a being That the design mostly that controls engagements have had impact a have and been timing of our XG XG in side over the said, XG strategic actually actually in position products, is in is China and strong and for capital export and this rollout in of oscillators area. wins this situation market to is there some some actually some deployments. the

and markets. growing wireless to So have will we in from the rollout, XG continues contribution we XG as timing our think a business that

and getting themselves not timing participated radio now in area. have we’re our business on heads And of the infrastructure, So been base core traditionally backhaul. units Most into has with station networking the the products. that into our optical we

of good wins war in But than probably the our deployment about a our trade little of slowdown driving into or terms this six out a some see feel given market. dynamics. our position months products good better some new been a still were of We’ve roadmap, good we feel in bit we of position, technology, competitive the about ago. little we year the on So competitive

Raji Gill

you. Thank

Operator

from comes ahead from your Ruben go question next with Our Please Roy Benchmark. question.

Ruben Roy

the the looks is of going Tyson, two Thanks. to of guys it of like well. there, do follow-up and out that’s With it the your of Hi cetera. for headwinds business the around business, is growth now mid-single-digits But lot commentary. in range portion of some guide thirds sort wanted to like et business, said IoT to QX it seems on IoT obviously wireless the the seems guys. which I continuing you macro a be like

of term IoT wondering if you. thoughts great. longer parse maybe on Thank that versus be segment. you part Just microcontrollers and prospects out your could for the growth revisit That’d wireless

Tyson Tuttle

you’ve the of IoT look if in now about wireless. about thirds in business, you got a business So the microcontrollers at and third two

or based slow are to both terms a the in seeing and in the backdrop macro down On activity similar other the side suppliers that in broad China, trends the call down exposure is of we to Europe business the on industrial this microcontroller And side in X XX lot and so bit and year-on-year. of overall so XX% microcontrollers. the of microcontroller both it is bit on

actually bit strength We’re the little bit a XX on seeing side. more

are macro the microcontrollers by getting So situation. hit

doing On lot we Z-Wave and the of of into the are and Thread a that into continue And you’ve the mode seeing mesh, mean of a we lot our industrial this around strong – mean you’ve of strong the adoption out opportunities IoT ZigBee that low we’re lot the Bluetooth in energy growth all Bluetooth products, businesses got technologies to addition proprietary stuff year. those see a I and then go of got the networks. XX.X, of adoption and and I you’ve a wireless the in on market. got side, Bluetooth wireless are

lighting. and You smart we earlier about talked look this at metering home,

that size to growth is of really the we the I the was design – see than be there. and and a that It’s the powering year growth a XX% It macro, bit to traction, the kind continue a lot thought. which by but it is there. we impacted to win wireless the this is think but going strength of so wireless, given less XX% markets, of growth, is is the And on

fact record So to as we’re in we really pleased revenue QX move here with into we the wireless drove wireless ramp see that continue XXXX. and

feel So deployment health that the our and about and of market, good long-term the position.

Ruben Roy

then that based Tyson. quick detail. is isolation is helpful specific, what’s broad or Thanks very the again? geography the more a infrastructure That’s for uptick QX and is company And strength, that that driving follow-up, or in

Tyson Tuttle

also out the vehicles, isolation isolation as is Yes, of energy for some have business long-term just broadly that businesses terms deployments. really We solar a Despite industrial strength traction win different weakness vehicles of we see our lot exposed applications. electric design on heavy. and quite strong saw particular China of electric one on It’s and of trend in in us. electric in a healthy vehicles

And share companies like design electric move motor fair healthy we’ve control content more our units. been monitoring over so into and of battery onboard fair. go systems And chargers, isolators winning of as there’s in things a those than to our and applications isolation

of than offset backdrop out by that Europe ramp vehicle and in very just although a been markets. But was would the and quarter have energy and had that a in solar we’ve industrial, in on fairly a market. coming been weakness the bit of the solar wins, solar That out the electric China. mixed say well APAC the Actually I design it’s good the of more doing broad little deployments

Ruben Roy

guys. Great, thank you

Operator

question. your Our question ahead Cowen. comes go with next Ramsay from Matt from Please

Matt Ramsay

of Good little into bit is business timing line Maybe was around and you and ask But noticed term of timing One products much. some you a to focus wanted of I everybody. a a the in for morning there topics. about automotive. on could wire I questions from announced there’s talk sort XG couple been Tyson, pushing guys longer very around little a you compute. Thank that bit. lot direction

comments. I saw wanted there the CAT-M. partnerships a other vein similar are any around IoT, long-term you And some on I you. touch guess some is cellular that that there markets particularly interest have were topic of new if to Thank I LTE

Tyson Tuttle

first on the me take Let timing. question

make getting have products – We’re of all market pleased and that enter to to jitter stations into that Those the same a into into more market you’re base and as lot higher to and are great. technologies the really more see the ACQXXX is able driving products. rates the our same able you’re and all timing to we’re the applicable products data be automotive the that and the lower with This and driving around wireline. our qualification are to to to deploy automotive things

we’ve of so from go Tier a products. makers seen our And and demand automotive amount to after fair to get suppliers timing X

being we that those the the targeting and really able get SAM qualified, formally released, and our So to market, think market. automotive expands for timing

sensors call, lot performance well driving the stuff compute car. autonomous assistance going the that So time reliability, around as we lot and a cameras, for introduce into about of similar in the we’ll type requires side, the able I advantage new stuff, being ADAS, talked that’s it’s the area, timing. mean, both performance this higher continue deliver to driverless technology. a but systems levels and Over like big of communication the to on in of the a products and all the the that LIDAR, a as a is

in technology exciting there. our good that’s So an opportunity application a of timing and

area terms network. a Z-Wave, more volume, that In got the I’m and as cellular a the devices, station device are networks area networks not diverse And the connecting stuff, LTE as such gateway, most personal you’ve station our and part market. type base connecting where Thread it’s highest you’re or gateway, well on the in base like Bluetooth long-distance efforts of CAT-M a local a as where and a and area These the you client – gateway, of you’re would a that network sorry, using we the of devices lot in we’ve stuff. XX.X, and have as in used proprietary to wireless wide as focused ZigBee, such the have

I that’s different the Laura very on what rollouts. it’s different we and set a technology early going in applications, very, similar what do than got of monitoring and to is today. side. of think But stuff is still offering we’re we’re do a more some we phases, something with set closely wireless that opportunity see It’s around on around Cat-M we’ve a that know type very to the customers

You of and that. billion about right look funnel, at funnel with busy around the size IoT are now $X an got we’ve our

applications. think, area the But huge It’s area, and to it’s is very our If the and different personal of long-term, to area to mid-term. interesting. you the roadmap the I driving networks all network is platform going the the takes here the in technologies prioritization, stuff now those that going in local that’s a main focus wide of of going that there out and be stuff on the decades one deploy and be look the driving over maturity right our market,

that think are without be to size today in company having market able to to larger sufficient take a we the to much a is expand position far. too the than I market

you’ve the front So got I focus. to opportunity us on balance management think in standpoint right of now from right always expansion And what you’re a with doing. is the of doing the what we’re focusing

Matt Ramsay

is out XXXX how X%-ish, up my that side? about Thanks this I going color cost follow-up for the given appreciate are really dovetails any opportunities Tyson. looks Thanks. be the the there. with thoughts guys Thanks. it macro, the John, guess like year there, OpEx into all I planning you on to

Tyson Tuttle

Matt. we’re working through Yes, that now

so We an the fall have have our should successful will Board the meeting to AOP balance be of team the goal to invest to – needs the will some but business, be macro I the more that ability influence we provide stay that management on continue in in need on But January color range. that note long-term color to and our call. to course we and of to the extra week do in provide we for this have meetings The would will more comprehended to the this January. do with in modeling. Directors. to be the the having is model We’re endeavor

Matt Ramsay

Got it. Thanks guys.

Operator

Curtis Blayne your Barclays. from comes Please question next ahead with from question. Our go

Blayne Curtis

because can strength nice as if highs you recently Hey the maybe those – last if to million go walk a Tyson, a Maybe back? know still So delta look at for over I’m you infrastructure and that business could back you year. seems look to when and it businesses whole, my get you question. the year. you of guys some the off pieces thanks previous now are taking some just come surpass back on quarter through kind of bucket is just these as back to opportunities looking to I XX starting next that just

Tyson Tuttle

timing a with We and Yes, particular ramps the year. saw business up year-on-year and the the year strong strength isolation. isolation really in last infrastructure had both on side XX% were strong

this stuff one just about We solar, that vectors in and in, so year. is vehicles, that overall a As the of into and the saw automation for terms controls used did year into of talk kind on and supplies, we’ve industrial power really – we this slowdown lot got the isolators demand down we are side industrial penetration motor entered in isolation the growth and of electric industrial market.

off track that one coming isolation, pretty we’ll last we’ll So the is macro track year year. that strong situation a the

that we’re products, So this year-on-year. on. number than may little year design we’re in we of the able those be taking But about still quite the isolation new the we’re given last In the that a XX% macro to that. end in markets down bullish about better longer-term, quarter win of in traction bit kind

trade of side, in – there’s a there. it’s think timing kind – the that’s got a – stuff On you’ve tension macro, some of another I the

new deployments the capital bit You’ve of got a some of on technology. slowdown of

one vectors is in timing. it’s now wireless growth positioned one in But a is and in that So center that terms in is again, the well area. in outside automotive shape, and core of networking – but in data reasonable

impacted again situations. CapEx by macro are and We

this a year those little as have that year XX% in positioned the well off businesses terms of definitely the the XX% last this a year, improve. So situation in down bit strong range had their grow of both of year and to feel economy they like an impact would performance. macro But future and in to are

Blayne Curtis

be an John goes and obviously it got the extra Thanks. back then with away. just mechanically Then XX-week you’ve may OpEx, for week quarter,

for. the revenue credit general. some then people the you with and say venture thoughts really don’t any say, transition, some don’t people March, want it to seasonal On I But in on matters side, get you if know then, any

Just with thoughts revenue side kind of week. on the the extra

John Hollister

we around course, general as indicated and a in trend. in first latter to to guidance be that as in expect the the come that say, quarter the would pressure and down you Yes from But to discussion quarter – January earlier comment quarter, quarter, we fourth agree first tend first I under would of made. we’ll I mean suffice the understand provide for

Blayne Curtis

Okay, thanks guys.

Operator

Tore Stifel. ahead question go question. from from next Our with Svanberg comes your Please

Tore Svanberg

Tyson, IoT Anything Yes, or or on record is, introduction be can content that little that dollar on you. you you elaborate how will on Series modules, the Gecko whether a revenue. bit that’s competitive content. more else important from dollar thank elaborate positioning a the X that congratulations And could great.

Tyson Tuttle

platform both really IoT our of – So and it’s Gecko a that’s Series whole it’s generation the X chips second series software platform.

X-nanometer our rolled levels the is we’ve then Series about XXXX. It that from the cost XXXX It on platform, So first consumption nanometer been X. security. features and of products And a X – introducing platform we higher I technology was and to platform which out integration. brings our XX continues drive brings guess, over, now The here to terms Series of down. adds in cost additional power

segments. various have Series in the high-volume So cost going for X and optimization of learning of cycles Series functionality some X, done from into terms we

and X The we’ve high-volume targeted first seen the lighting with that. version market, good of the at Series being success

in – modules to that to to able lighting quarter be the market. that market be introduced broader whether lighting product we get to at outside it’s the the and or design the something were targeted design into And a the taking that able market broader last into really

do can as supply, we application the modules high-volume then chip supply do and on we well. really, a the modules, typically, a important. broader manufacturing into And down really market So where is the cost

we are Series that the new optimization. part X introduce time. versions of was of the points and But continue different this to will that So of announcement target different areas application

run then X. our platform And Series and side, across X and software Series protocol software on the all our the just stack

drive software the to the and that as So to enhance experience, wireless the protocol well. developer the communication Simplicity and Studio continue stacks we all

and improvements as side there’s optimization. the and software as get hardware as on get So engaged the side learning do the with well customers we

all we’re gets Series that it’s IoT that is part X So strategy. achieve. to of And this able it of going the quite and to be the our exciting improvements in terms optimization

Tore Svanberg

Yes, That’s that helpful. for detail. thank very you

to, billion, that that – I to us than about sure to sustain growth? billion else so any run going that but growth that a great. basis, things follow-up, right, anything on $X.X all been feel business. basically, think could that you IoT know there $X.X business are It’s that But point than of we growing with is double can we your more rate now my size, along. will that that’s elaborate double-digit been is your As make you confidence give anything can as confident sort a double-digit and the Thanks. billion, on of it funnel digits, kind that more be now $X target forward,

Tyson Tuttle

about long-term with little – we’re as target feel rate. of run strategic, at market. a over growth We’ve and in right, this a $XXX got growth million a are we long-term So XX% rate comfortable that a at you’re

products and growing next at to five and billion seven the SAM that X.X% or connected probably this five to serve years. look SAM over statistics to you devices, If here the year for over market X is – – around the – the statistics X.Xx units, is the X% about our IoT

got in And and or this for the not applications, units, So of growth you’ve industrial deployment including consumer handsets strong is part. I’m PCs. the most and across

And foreseeable if – billion about to that’s $XX per $X of and thirds industrial. IoT. big functionality just in over wireless just for frame across you’ve industrial in And our increased in think the the year number got billion and SAM two $XX to is. It’s so – and talking basically, we’re $X going of here where talking about you’re a billion, And future five-year this So you within to applications you’re XX to the industrial. unit, the about billion a of IoT terms mostly the consumer time units units on $XX is focus it’s IoT.

step – number." of say, billion thirds or big the you you of a that $XX compared it’s two to So back over that’s here and a million, look SAM next few that But number $XX not billion a at got big "Okay, years. $XXX we’ve

future IoT of a the driving what that And and a platform terms at the believe than eye today much bright market, and got into to driving going we sitting trying relationships. on we’re where to developing we’re So is keep our at ball the $XXX million. in it’s customer here be business our driving very and channel bigger

Tore Svanberg

Very helpful, thank you.

Operator

your from Desilva next ahead Our Capital. comes from question go Sujeeva with Roth Please question.

Sujeeva Desilva

Tyson. morning Good morning John. Good

increased markets product you most your for timing be you? the the the can needed end increase near what XXXX talk addressable term? the for content So market? might market with opportunity about XXXX acquisition, And it maybe Does

Tyson Tuttle

Tyson. is This

time precision On It’s side, protocol think the is it’s a timing – it. about so really, XXXX and timestamps. doing

autonomous packet received. packets think to in time exactly And to So have where what each in trying have you to latency. – know XG tight that’s drive driving ethernet-type very you’re network, overall precisely are important those just general. sent has It’s in where you about really as networking, network, It’s very, – important sensors. trying the and in you’re where an automotive important and

software. this not a are out. So there’s modules is are lot applications, chip, in getting there’s it’s And rolled of just actually, required. that And a there

range, depends you’re the application. million pretty haven’t is in in to million specifically We module is opportunity. to and $XX the this even talking It high-end of hundreds $XX for the – it talked the market about area. on a content in but a wide dollars more It’s of the millions

achieve of together So with been the and performance with We’ve Qulsar products it’s a is system software, we’ve working our related it period optimization. of to one has both exciting done And with devices. time functionality to to this, our type timing that which really modules. very area. a over put solution has around we’re able this some that It’s

drive important then we our and time. can and into those the we the and where an capability over company expansion roadmap, think, so software bringing that is of those And business modules designs timing that

John Hollister

Sujeeva, Yes John. is this

bit. little just me Let add a on

an this move important us. So was for

it’s partnership with area As been Tyson few with years them. that be augments addressing. perspective. area and from for out opportunity there. already an already comprehended and XXXX a there, Qulsar that it’s on is an is had we’ve a said, This had a multiyear the And working but capability we’re small successful that relatively data we’ve our to market our SAM enhances financial in

Sujeeva Desilva

the Or about is Okay. then opportunity, still the there? That’s sort update And I – there mode? of the I on guys. have the update question that ramp of early is Zentri WiFi potential in other guys any wait terms sort in helpful you color, Any Is acquisition. much hear mention didn’t of there?

Tyson Tuttle

cloud-type did And Zentri number WiFi We around around the stuff. of then introduced and acquisition, XXX.XXn. was software which we’ve also products a WiFi really

into to where WiFi not And so X thinking solutions, And more in be full around continue as SoC the phases. design a SoCs. roadmap and those and and we the around migrates it true WiFi. you’ve driving have got to We integrated to continue drive WiFi do currently XXX.XXax

terms of opportunity integration around a driving that that the level a in exciting as keeping of our eye WiFi something that’s market. higher very so And we’re see and in on

XX.X and business we the Z-Wave and But today, today, have our business around smaller our standards. WiFi But Bluetooth is than what on

Sujeeva Desilva

Okay. All guys. right, thanks

Tyson Tuttle

you. Thank

Operator

question-and-answer and ladies closing call turn today’s session. any I going Hoover like point to to conference conclude remarks. back gentlemen Jalene over at the to for we’re And this

Jalene Hoover

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

Operator

and today’s do We concluded. gentlemen Ladies for has you joining. conference thank

disconnect may lines. You your now

Silicon Laboratories (SLAB) 23 Oct 192019 Q3 Earnings call transcript