SLAB - Earnings call transcript Q4 2019 | Silicon Laboratories Inc.

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Operator

Good morning. My name is Keith and I will be your conference operator today. At this time, I would like to welcome everyone to Silicon Labs’ Fourth Quarter Fiscal 2019 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. will opportunity there ask presentation today's be to an questions. After recorded. this event note, is Please being I to International now Director would like of Jalene over Investor Hoover, to Relations and Finance. turn the call Jalene, please go ahead.

Jalene Hoover

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

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

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

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

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

John Hollister

year-on-year and guidance Revenue fourth $XXX our Thanks up quarter within the for X% at Jalene. ended range. million

trade channel been based orders X.X% to XXXX XXXX. industrial combined alike end Weak slowdown For suppliers in with markets the was in broad policies market challenges from a disruptive full reflecting and several down have revenue and in and million certain from customers. year customers causing $XXX automotive about changes

semiconductor that disappointed secular due to and broader drivers industry we we While the infrastructure. revenue in declined IoT we growth XXXX outperformed believe in are

seasonality was than $XXX home in X% expected broader primarily fourth the growth QX a markets. to industrial lower IoT strong offset slightly million in due we This end market partially result following strength IoT was revenue representing the for quarter by year-on-year. smart

year full of around $XXX X% to led in the For increased by IoT wireless growth revenues products XX%. million

comparison declined industry XX%. or Statistics than that broader XXXX For for Trade WSTS revenue for more wireless the Semiconductor World estimates

revenue strengthened quarter representing particular markets industrial growth We QX strength was fourth power for automation broad Infrastructure year-on-year the solar. with in the growth. million isolation improvement X% industrial $XX well supplies in as in saw as and some in driving

based year-on-year. $XXX million For Broadcast Access million down revenue $XX $XXX the year strengthened revenue million about year the had expected was revenue was was and in weakness slightly revenue for broadcast expected down more slightly was than pronounced year-on-year or on $XX about down was This better million XX% was infrastructure the Full than full flat Access $XX fourth due about for automotive. decline communications. QX year X%. revenue full which to primarily XX%. was XX%. down for or quarter million we

about market Looking in industrial flat. by communications. saw offset in declines fourth by was and consumer revenue growth end Automotive quarter at we sequential

sequential geography was year to broad industrial due Americas declines followed up due By in saw markets. end overall weakness most to full Europe. growth based due vehicles in For growth the in to communications XXXX significant by electric the automotive we growth wireless also primarily Automotive sequential in Industrial up we markets. recovery. despite consumer was saw declines in QX APAC and saw IoT. in in year-on-year We

in at is fourth year end from all management sales year-on-year declines saw QX. inventory we inventory of XX with down XX declined below for days impacting This approximately XXXX Distributor QX in year days negatively full geographies. total of were ending channel XX% For Distribution revenue. quarter slightly target revenue. days

QX insurance QX top claims expectations our an gross customers medical million. XX.X% ahead than to from operating XX.X%. expenses and greater favorability some of R&D year no increase XX were operating margin for expenses costs. slightly based full strength were revenue. than margin total expenses XX% full million. product offset we XX.X%, Non-GAAP year margin was customer XXXX and higher at mix were expected introduction travel was new XX% in QX SG&A was $XX infrastructure. in Non-GAAP Non-GAAP Non-GAAP revenue due was by expenses operating Non-GAAP on in of single for For $XX product in with favorable was

basis related GAAP down non-GAAP operating actions range. Non-GAAP about margin X% within Our design $XX rate was earnings around than GAAP were GAAP several was actions share the QX $X.XX, Earnings per simplicity ended QX taken closure $XX standing rate allow higher state continue The the drive us our were funnel the was scale ended was On offering taxes. early gross share year. $X.XX XX% a year XXXX operating to to GAAP and XX.X%. XX.X% for [ph] growth. expenses restructuring the including QX at increased $X.XX optimize X% GAAP into These for SG&A structure million full due QX which GAAP effective income cost tax due which the retirement the as and actions voluntary of for XXXX. were plan XXXX. for we million due guidance of from expected margin per to expenses of effective talent sales and adjustments for we better EPS below for our XX.X% tax and a centers at restructuring supporting critical year for $XXX quarter will addition our R&D full for discrete million. taken. was and QX were guidance beginning to to heading of expenses the XX.X% to to enable conversion to employees. full long QX which our and was at

full the $X.XX per earnings For year were GAAP share.

at the XXXX. of of ended cash day or sales Accounts expectations from ended terms with with good times, reflecting from up and year QX times holding sheet, ended and at in chain the Net investments we $XXX days. X in slightly end million million, $XXX receivable our $XX is the X.X balance million at QX management. Turning now totaling to at outstanding million year XX only down supply with XX which inventory line the XX%

For cash $XX million fiscal XXXX, flow was operations and was CAPEX $XXX from million.

summary, authorization For full share XXXX. sheet very $XXX million million balance we $XX to be have the our of in healthy. in year and end XXXX through executed In repurchases continues we remaining

to I turn our will guidance the now first quarter. for

growth. business that Coronavirus outbreak declines broadcast be China In a this production $XXX please on of assumes to Lunar light normal in also IoT of the following We range expect with flat, note $XXX New access. to in midpoint Based return in disruptions. celebrations XX% and activities year-on-year to and million and guidance revenue with Year the represents major million the the QX infrastructure revenue recent up, no our

operating We reset XX combined million. around be weeks. $XX.X the our with expenses we non-GAAP expect between OPEX that of will expect in weeks XX standard fiscal first in increase to to Please XXXX non-GAAP the quarter weeks margin gross week extra to payroll with tax XX typical our have this XX%. QX than year Factoring XX.X% and recall rather

OPEX of XXXX approximately we growth For expect X%. fiscal

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

turn between GAAP call I per expenses over expect result. We loss results to share $XXX a the be and earnings million now per will operating to GAAP Tyson. a share to $X.XX $X.XX

Tyson Tuttle

industrial based volatility with Thank revenue impacting from in leading you, John. well wireless offset automotive and XXXX XXXX trade declines as on and challenging year a was IoT broad growth as and controls key macro customers declined access. with by broadcast, in markets, and export infrastructure, Total XXXX X.X% weakness growth. policy

the validation disappointing and activity and in Although to increased weakness. strategy are in infrastructure, offset these In win and than saw our providing are design IoT, we outperformed infrastructure, lifetime results a with for a a growth more market XX% providing pleased tailwind strong automotive drivers macro growth of which future we markets. year-on-year IoT to in secular revenue, some XXXX have

we as robust funnel anticipate and we continued win design large backed pipeline growth. a XXXX, continue and conversion drive by As to opportunity we enter strength

offset declines to industrial achieved fiscal revenue. XXXX more by in products IoT gateways, full weakness. in delivered connectivity for updates, XXXX, in progress the more MCUs revenue for million XXXX to the market contributed products wireless high units total were broad smart and wireless XX% X which including of market. In smart continued based XX% growth IoT growth and year home to in volume and now in billion market, wireless $XXX XXXX. than into IoT shipped than lighting broader product up security Secular drivers than now Turning of integration UK X% represent and more from customers, IoT Growth metering of ramps impacted adoption in in macro date

Labs smart leading of achieving to from forecast in growth opportunity. is billion Research, Navigant global to IoT of smart offers wireless market, home technology is rate revenue the to compound a Silicon annual According home for $X.X platforms $XX.X annual XXXX provider the a XXXX tremendous which grow billion XX%. from in

towards together devices. common software in in ecosystem accelerating and for to reliability, growth. advancing IoT industry from goal. leading open of the We and goal home alignment the a success smart seamlessly while are retailers are collaboration Device standardization adoption providers, working compatibility this makers, consumers developers, with committed create to security, with makers, on collaborating partners relies and interoperability the home and Future will driving benefit smart chip ecosystems market

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Alexa, Amazon smart device to home for makers make easier Siri, this Signify, project technologies Bluetooth, Google to thread, to and Williams. manufacturers [indiscernible] working voice Schneider encourages leverage innovating over products Members working services Silicon such it of and today. [indiscernible], include The home two as Silicon contribute with group to technologies, device Alliance including joining proven Connected build continue Apple Home Smart NXP, smart Electric, IP market and Samsung using will Participating compatible project. Apple, available and The group IKEA, Assistant. to Amazon, Google, is Board semiconductor companies Legrand, Labs, ZigBee the Things, one Labs Wi-Fi

devices the With join Complementing semiconductor during Silicon standard, plans open connectivity project a the ratified able ecosystem, ZWave supply specification and of creation future and Alliance and to to announced develop ZWave standard. software contribute and will ZWave's be wireless the source to the gigahertz Connected the advancements change, multi smart sub of stacks. software Labs ZWave the this home suppliers and the over as IP Home quarter,

smart to the In Alliance standards will alliance members single devices. to ZWave expand advance gigahertz solution connectivity will home interoperability together challenges, a become the helping its solve the maintaining functionality the to to IoT. grow hindering certification development to organization, expand of adoption program needed a sub addition work to

XXXX and year functionality devices over home with interoperable than gigahertz certified companies products, power smart of and ecosystems million features including with XXX range mesh. XXX in interoperability, compatibility, member mature sub pervasive security market. one than home a more and installation Alliance ZWave With more ZWave offers the members smart most the framework, life XX SX consumers easy long and battery smart from starts, benefit the offering hallmarks low backward deployed, will

compatibility adoption our combined home among of us position the to consumer well Our market Home home is and with over leverage positions smart ZWave accelerate to Connected to standards. as drive the gigahertz IP home in smart opening products leading smart in standard sub wireless ZigBee goal all interoperability wireless

interested to technical the for and home devices device connectivity event XXXX. industry, first total expected to smart billion sessions, most Bluetooth CES extremely world's with groundbreaking ecosystems. goal To month market are Google and work in of include share exclusively Smart this the Works this premier XXXX. accelerate of power deliver efficiency, further Bluetooth conference, creating Comcast, and market keynotes XX% This X workshops, for annual are According cost industry with Home grow September, the features, solution hosting high kind Bluetooth a from energy announced earlier exhibitor battery of smart Amazon, consumption new secure this tools, growth requirements. team, to in To Bluetooth in one market Conference interactive security one a products these stacks. are and These of the day low fundamental Low Austin, leading meet the BG Bluetooth designers, With is demand we in SoCs our roundtables, developers combination products. XX Expanding and our to on is more executives, important leaders, a initiatives a volume largest than software home the Energy we low will feature performance, demonstrations. IoT forecast Las meet units three for Vegas powered SoC a Bluetooth shipments in wireless to new that at training,

first significantly and finding Bluetooth lead in to including now and industry our continue strengthened direction X.X. we the recent with innovations to Bluetooth Mesh were Bluetooth Bluetooth We've offering We years. new with X.X market

smart give of healthcare, commercial, IoT lighting, feature, home performance fitness balance a cost developers and Targeted and smart include SoCs array points security, new consumer, across power right nodes personal Our industrial the of help Mesh of devices. drive products. wide low applications that adoption locks, door Bluetooth Bluetooth at and

of Bluetooth indoor and beacons, angle departure SoCs sub Asset tracking capabilities tags, and and benefit navigation the also meter location arrival one from accuracy.

solutions in At advanced asset tracking in wide a tracking announced Bluetooth and BG systems SoCs. cases. of to CES finding location based asset Quupa, best commercial range Quupa's intelligent the people Silicon Labs highly their Bluetooth including and positioning deliver products use class a solution navigation for location asset indoor new XX industrial leader with IoT collaboration indoor tags direction target retail combining the our applications accurate system on and and world

outperform to and vehicles. integration, requiring replace XXXX and to superior from infrastructure, and surge fourth XG, industrial products $XXX isolation to higher XXXX in we class factors now saw Turning full the safety isolators Labs timing year quarter. some applications growth system in isolation in weakness in reliability, with competing performance, enabling digital for solar, X% best in greater solar with and revenue secular million to some due macro and protection electric designs automotive rebound Silicon In high voltages. in offset strength [indiscernible] declined continue by traditional

to have and markets. ourselves the the solar, leading We isolation of telecom, established technology cloud, provider electric as digital vehicle

Traditionally metro our markets. timing the products and have core targeted optical networking

of markets infrastructure, and expanded our to of we and industrial, Over Four XX% few timing wireless equipment wireless in automotive datacenter, represent more the portfolio including timing revenue. mobile baseline wireless than cells. years of the Labs out solutions opportunities infrastructure from radio their total initial backhaul adjacent combined remote which our have small suppliers address of past diversified a deployments top broad timing units now and XG and Silicon equipment heads use XG in to array five

roadmap and products. large We with and opportunity this growth are current address well-positioned emerging to

this of and networks with To plays development this communications, wireless Timing clocks. of the adoption rely collaboration designs solutions to timing to the a provider tools technologies. automotive medical a in and accurate Easy address accelerates validation system key we and key solutions for data of critical applications. and which wireless transfer wireline in role wired announced new validating level timing solutions access measurement need for to imaging, streamline site, month and our test on

based a the vision, chosen industry award. the row products, future on semiconductor peers opportunities. is Labs won in public global for to alliance's by Silicon semiconductor great During company be best most quarter fifth respected the a It year and honor

empower full to to awards, awards recognition, including industry XXXX is to certification. work employees we the great the facets all Community place a encourage excellence awards strive in product reflected four excellence and commitment supplier of and of Culture the a for in year received Engagement Our organization across and

to has Silicon company. engagement dedication the community Our across and team market and apart for workplace to our Labs created products leading culture, a industry. workplace sets development, for beat in continued product integrity leadership Labs growth Silicon customers hard in resulting environment our

Silicon the well improvement some turnaround trade pleased environment, automotive markets, quarter We're strategically of to in with in signs XXXX. for increasing growth positioned macro and some the believe positive We broad see industrial Thank backed optimism attention. a Labs double-digit mix our in opportunity XX% represent and based fourth traction. and now with time of strong pipeline infrastructure each and your trends. in market IoT our and revenue for long-term total you secular growth large growth offering by is

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

Jalene Hoover

you Tyson. Thank

to announce question Day open possible I'm limit Before call March We hosting Austin, at the Thursday, many your market like as in follow-up. for questions you we would To as on ask that call we before now to people for Texas the accommodate headquarters Analyst we and up answer please session one with excited questions. corporate the one XXth. the are to an opens open our that your

Operator

Cody Yes, you. thank first the question Acree Instructions]. with And [Operator comes Capital. Loop from

Cody Acree

case you're being and my by such you if to? inventory to impacted shipping could segments this that's that Tyson organically still still drill that see the expect taking impacted, if is for being where maybe just then you drawdown those more that into guys if believe you you Thank there year churn are questions. the down those thing, a

Tyson Tuttle

channel very inventory heading inventory directly that actually and situation and as from our channel the QX that additional customers believe we see as negatively impacted our the actually for need exited and light a actually light and that came quite of and If we through built management both and customers revenue this some inventory we at the overall to level build we there be QX on out there's don't customers very you year situation going is up. But a we is picks came healthy. as feedback QX channel that actually were into inventory our which inventory in based on the we believe we with inventory to have by numerous partners significant look demand dollars. in at couple inventory in the be We go million

Cody Acree

And your that infrastructure that believe demand in here, then shipping term or a pause? seeing was bit that's stocking after do in business has there been you're of a also quite you somewhat

Tyson Tuttle

this I that space, and the is in industrial overall the communication in space, in Board across the think the kind space. automotive of

certainly we're I think shape inventory in terms lot better channel that are in where a a than shape in year ago. we we of were good

Cody Acree

Okay, thank you.

Operator

with the from And question comes you. Thank next Blayne Barclays. Curtis

Blayne Curtis

guys Hey taking for my thanks question.

Just why sequential both into mix look the it's yet bad asking margin March you in I year-over-year guidance usually on this raising aren't and goes feel kind as bit like it but because favor. your range. seems I guess down gross of you a it's

the year? color just am there on of I the perspective curious kind So any to rest of and

John Hollister

quarter seeing towards is We're we model gross John. end top for range. Blayne, XXXX of the Hey the the margin our guide had we're with is first and in pleased this the result on target

and of dynamic a in year. overall There result that. good are So takes appropriate But the is QX fairly puts categories for in overall that as that and our perspective. mix beginning a happy guide within XXXX from and the lot with

Blayne Curtis

I'm leave I'm right up access think those want at kind Thanks still it's flat to and curious but kind and you guide of down with just that's probably those to Analyst about year, then to just of you curious for call the annual segments? year-over-year, look particularly broadcast typically a you Day QX range the if

John Hollister

we in broadcast this in think trends with than the the automotive to are long-term steady and poised IoT and mode Yeah, the with more XXXX case here the access here you on persisting decline expect growth be broadcast for do year continued we infrastructure know healthier XXXX for a market in was and categories XXXX.

you change that will forecasts As broadcast a positive XXXX. the in know for if business be hold the

Blayne Curtis

Thanks guys.

Operator

comes Securities. Thank And from of Mobley Gary Fargo next you. the Wells question

Gary Mobley

improvement throughout week Good for to everybody. want morning to it quarter the Thanks unreasonable second the digit line? more normal I expect question. ask first the extra on and specifically XXXX the mid quarter. the sequential my in the taking about with top in single progression Is seasonal percent

John Hollister

Yeah where making that the quarter quarter We is to this heading week you into lose week the John. second a you an know XX have do Gary, effect transition. essentially see expect will

the consumer the think to The second fourth other potential broadcast seasonality is about relative the primarily half in some to thing side. the for quarter on

as of So items some in mind. looking those you're shape to XXXX keep are at the

Gary Mobley

in X% on that the million XXXX given Okay, for then flat quarter roughly of down it is sharp $XX year and progressing where just we're and of non-GAAP step based in OPEX to we'll guide to see step sort the and growth balance year? your fair full some roughly second year, what the OPEX the of assume starting --

John Hollister

increase course points basis and of week and of OPEX the annual effect about so then for of an our two have would balance hiring merits driven by on estimate percentage the etcetera. on OPEX which an does account Yeah, additional is

to undertook that we third then to part For a bit QX do we of fully fourth downshift rough as to is quarter. going be by and second the up from are on flat And and going quarter estimate. actions what's in of transition in certain to expect with to as mid-year. the that expect fourth the some We in in step implemented quarter that well QX restructuring be would to to quarter Gary quarter down a continue first a a then third would result quarter more extent

this in closure of year. effect you've the into combined actions of both completion effect So extra and half got as on week the first coming the final the as well restructuring

Gary Mobley

Thanks hop queue. Okay, guys. alright. I'll the in

Operator

with then from And Vecchi Hi. question next William Blair comes Alexander you. Thank

Alex Vecchi

quarter thanks been could wondering the we also on you I last the my then at segment been or X. you launched believe how question. and should think us for Gecko primarily applications? about guys there the targeted Hi, target I that's if seeing update taking if was traction lighting you've

Tyson Tuttle

that BG at low announced the part. second targeted first introduced have lighting the that The that announced member targeted family into We family that the member CES that of year XX last just part at cost is market that and we X last is in the Bluetooth we of We other got of that a actually Gecko market as traction got in industry was that at leading a number security volume features that first number includes the platform script success. ramped I cost high as location as quarter features production there. the different It big has A security power. was services with in features applications. and industry well leading and other or lighting very so mentioned good very strong of like the things well as design and that's product win

we're BG take is industry our the market. opportunity an the this priorities would both also that I the the actively to out part $X on and we've working. cost billion that pipeline the the do believe top already So XX side got Bluetooth of Bluetooth we've of one share position to that we about got in year software that. And go leading a part -- say and

out software are and X working that continue convert engaged devices we series large front easy in ramp opportunity we market of out the series -- on to and in the now our both us. are to portfolio the actively devices which our we of the to hard with and parts see that tools X make pipeline So are the we filling

Alex Vecchi

helpful. extremely actually TV better half? are especially function market, less than or driving trending lastly in of was And upside then just the the ASP there been is and second of continued degradation obviously better that sort gains, line you what's the share a really access that seeing Great, on a expected,

John Hollister

drove XXXX the of there. in market upside pawn some China of half the which The second

So that's in area. access the

broadcast I mentioning you seeing think the side. the traction that were also we're on

of macro the the was it's revenue see gain share because that remaining see but good we QX we situation year there this actually a global market And QX So in the that of basis XXXX declines do QX market. traditionally the our little end lean. in just we inventory with our the as to the long-term about build and the year and in the down broadcast we that's we But popping that continued into see customer side. We decline bit. thing XX% into share out over range, tuner and there underperformed bit, XXXX television up think you broadcast reflects I in probably on being But peak in so have see a a exited goal. QX time a because on our XX% stable. ASP still We TV that of stability bit business just that came is go been do

Alex Vecchi

so thank much. Great, you

Operator

And Needham next Thank Rajvindra you. with the Sam from and Company. Gill question comes

Rajvindra Gill

reaccelerating? rate overall in reaccelerate on to Yes. business the decelerated are you IoT of terms of wireless then in kind and help rate, is that you. you trade strong pipeline IoT MCU XXXX indicating Thank A of the that business, the about of just business, we in broad base questions. growth Should help year could situation any Thanks so of got X% XX% related to the obviously microcontrollers. the IoT the understanding terms kind expect X.X% China to IoT my question improving solutions, a taking for of so in the some softness war its from growth to this in

Tyson Tuttle

the XX% little about well the wireless and The more market year WSTS that business down was in actually market a look It's IoT as XXXX year-on-year. the than in at IoT. thing closest up we down the If can get. a you overall wireless XX% is as overall includes

in we industrial So continuing very and drivers lighting, IoT. continue the wireless home, strong see the and because XXXX traction of accelerating metering, growth into smart to the secular around

and And especially we the we that wireless talked win very at -- activity happening that's the our And there. you just the when overall that recently strong, wireless. is IoT so have very and business. in introduced ecosystems So the Bluetooth prospects momentum wireless about IoT traction business the in exciting smart look design very XX% good home the parts we new growth of feel [ph] about it's in about we've growing opportunity is that the

is about was down MCU other of a saw portion by was -- vendors XXXX affected growth. X% like macro was and microchip, overall IoT and situation. similar The in business that the microcontroller the SX results business We that result to overall adversely

we of we in positive. reflecting the resumption do As some how recovery that go macro a business XXXX strength fourth out. is see see we'll MCU that in the into bit a But turns quarter of

do we headwind there the as not wasn't a we it that grow looking XXXX -- now were we're right but impact certainly that that. able IoT strength was year year on at and the it macro wireless MCU the wireless So should and last portion despite continued to in be during significantly which think

pause. We've you for now IoT good we're we're in pretty some to consumer about how well. QX got a of the IoT. seasonality that positioned up feel take right when set bit think of I we're the at we a with But growth So XXXX experiencing within look applications

IoT Our turns is out. how long-term see not business the target, growth but by the for on is target overall the long-term we we stand behind And our XX% that target it that growth forecast XXXX, will way that. and

Rajvindra Gill

then last China Year that you to you with Coronavirus following for productions the in New question that normal to return Lunar disruptions. expect no major just And mentioned the me,

helpful? would seeing, impact, there of kind that you I kind been has correctly. Could think maybe there elaborate of what any color I heard be been on any you've

Tyson Tuttle

Yes, China, all on New regular went a we so pace. kind Year of fairly into Chinese

New Chinese and and almost our Coronavirus else Chinese simultaneously kind a from reading we're happened -- into of just so the takes normal And like news and return New account. guidance are Year and everybody Year currently forecast we

pace. back to if start on and have down normal to going We things up see things we're shut a

Our that's think hope case it's guess. the I is now but right anybody's that

Rajvindra Gill

you. Thank

Operator

from next And question Thank Tore the with you. Stifel. comes Svanberg

Tore Svanberg

thank Yes, you.

declining timing so, why could about since the was ZWave XXXX points any I So activity end been bit perhaps industry why standard. understand curious has Tyson as or the inflection of to design then? the why talk little whether up you I a sort and But you how of on opened

Tyson Tuttle

So, some have ZWave been quite looking we up for time. at opening

in came was believers drive to an was product in together well traction. adoption it the be We some timing actually market from mean It very the customers. fastest so strong and at feedback one been and wireless open to all it big XXXX. there are I ZWave We performed the within kind strong. able has has same and quite standards broad saw specifically of wasn't it but lines of our opening time. very adoption growing

sub and So solution a number project into for right the alliance gigahertz customers of Home the and over and the ZigBee IP a that looking going Connected companies standard. for

and which less ZigBee So if all has longer frequency. you a is is think is range X.X the down higher sub Bluetooth, on, and which ZWave are the interference. band Thread, Wi-Fi at gigahertz standard ZigBee, gigahertz on

and so widely it's a And robust it's deployed. standard very

benefit and of to put industry and today the for like being from gigahertz You've units do out both got drive standard to gigahertz do and devices the to And that in was provider opportunity are out as adoption sub that solutions certainly in it the leading the to that to to sub order standard an at of that consumer make the standard the plus us our million hundred the wireless looking felt thing IoT. was standard And with needs for adoption it market. sub gigahertz. open for belief there a companies those the be we we standing as of to a around right an have deployed

excited alliance a in topic market unify QX. later to the the we're able players hold we and within So the And with that be about to all adoption discussion ecosystem the in ZigBee in consumer of going we're home year. Conference It's certainly being a be this coming to really seeing. smart at big of growth With our that's topic that Works going big discussion

Tore Svanberg

mentioned or define group very NXP. to I yourself semiconductor into guys helpful exclusive being other companies the as CHIP you as project, join company and you can that semiconductor and there up there's products? my any That's follow working on Should that two read

Tyson Tuttle

was so just the working founding the were this Yes, of group. members these

that we and companies Google, chip in have mentioned Amazon, of and the companies the our earnings were number I these also other and a So Apple, IKEA, prepared in and remarks.

leading regardless be the to basically have the open that of It actually going is sits That another. standards Think framework. on as ZigBee profiles. that layer an the primarily this talk within as another wireless the talk will language figure standard an protocol. working about to to is application together of coming top be the open developed companies lot to source ZigBee is of a and on that on devices you to actually wireless been have one how So that the based alliance and going out exactly one devices

So a language bulbs door to has talk so to light lock. that tries the when and a the lock they something know a to interoperability has smart say. or about obstacle exactly door everyone And was that that home. adoption control major within think same Each light language talk same the to to the bulb realized what

driving going So as companies the standard in jumping the this open and is into framework start anticipate I an to really other multiple this market. drive big be companies and the done

Tore Svanberg

Good, thank you.

Operator

Desilva Thank And you. Instructions]. Capital. the with Suji ROTH next comes question [Operator from

Suji Desilva

Hi Tyson, hi John.

in be patterns inflection helpful? there'd more in there it and be steady there side the Thank perspective an order there would question any would is are four infrastructure is the from there quarter XG on color or timing XXXX your and you. infrastructure, was First all XXXX be those XG some versus timeframe I curious wireless which benefit, the they or customers or a

Tyson Tuttle

those the wins XXXX. bit we go four mentioned the that quite have number now so We we on are that those a and customers of are a beginning of will ramp four XG a be that five The side. or through we continued as out ramps right applications or XG

Suji Desilva

XX% you X% how OPEX up about but an to to there depending but would some being great. is Day way XX% you margin talked at this a the about I that you you're managing, OPEX revenues now are flex on color think sense XX% and XXXX get managing not the to want just Okay, the revenue, target, guiding you're I you Analyst cover helpful? target just the And would toward may at know be it year-over-year. I operating you're know

John Hollister

Yes Suji, this is John.

coming in tail not So our the model half second quarter. we talked invest in according for an about earlier margin But account OPEX return to success closer goal in our if see here the operating opportunity is a to downturn to to are model as we operating margins continue below factors the going that call. profitability taking as long-term. be the need of to here model to the and to off We do for off soon at can the the to as first can into get are model, the we

Suji Desilva

Okay, thanks guys.

Analyst the to forward Looking Day.

Operator

Thank next Ramsay Matt line you. go your Ramsay, And ahead. open. question from with Mr. the Please Cowen. comes is

Matt Ramsay

and growth script Thank much, Bluetooth think really had XXXX you mentioned analyst you you I as phone. a LE it use in to I being very Bluetooth important wanted tech your called sorry, being out in can't a a maybe as Tyson the in ask gone why the market if business, the in could and market? has and and you Bluetooth you little there about of dynamics -- competitive you. the up bit position talk importance driver Thank a maybe there so could as the that

Tyson Tuttle

give bit of let me me you little let a Yeah, background.

Series highly they Series devices. the different addressed in Bluetooth are addressed our gigahertz, stuff. Bluetooth, gigahertz flexible. lot a market with they ZigBee, addressed entered X we sub devices In So They our sub X XXXX we of

were they but -- optimized. have not So cost -- did they not

we customers would of ZigBee fact and combinations. in use together In number that various a had Bluetooth

the performance But segments really address solution that coexistence not a have we that high Bluetooth. market. really and time could maturing interoperability of were and of low did the and over we cost So our the volume software stacks

first So BG the to the Bluetooth. required with coming BG XX the and heart the the really go has family market. cost able the both to But the in actually after now support the be XX Bluetooth XX that's of that's of member of those

before. got we of what the chase didn’t had stuff now the we cost cost low a so half have about is but And solution, we

broad huge market So, market we after devices Semiconductor opportunity, supplier. can the the leading and competitors feel share got Bluetooth Nordic there. go excited in about for We've is having gain. really

design our the get finding we've direction You've consumption, maturity we've and market. in a you mean, customers that channel the that parts. battery, and I the And able the to we the of those solution energy got watch got set, cell, pumped really capabilities. Bluetooth solution, coin think cost, others given years battery a TI the fantastic the to feature got and are be life can XX of off

one we about the have share think, size we so market, given Bluetooth priorities we the our given of XXXX. in market. today, fact our And future top there that that the the optimistic a And share modest were of quite gain it's in

Matt Ramsay

was also seeing maybe kind just follow-up the thanks to than concentration and business you're similar type you stronger on the tease think if macro I radio a but -- business guess would mentioned automotive question that just that the it, a of there's isolation headwinds break business out drivers of there. any and for in script that could obviously the buckets being business, out you helpful? color Thanks XXXX, two EVs. your I there all business, way and about those there's automotive know what a question be XXXX, Got Maybe guys. some I for and for

Tyson Tuttle

at look we of We introduced set break year whole a you automotive if just Yeah, the timing last we're in me let automotive. for And EVs isolation targeting basically, this radio, products and our with in -- targeting down. automotive products.

in because market AI automotive where a was in capabilities and the data electronics China, and particular in Europe and of As in designs speed XXXX networks and automotive you see, business lot our car. lot automotive additional going sells down There's The year-on-year. cars radio higher was for got in all of we've the need in. a into soft timing some radio

very results. good So take for disappointing design time landed that wins We radio, market. ramp the to some but those was into automotive

been electric future. as sign. that electric, radio programs time. we to for the that's a electric And vehicles battery vehicles very the adoption opportunity XXXX solution. battery just in in going But healthy are in battery to In long motor increase high But do charging voltage the isolation electric market vehicle as BYD, be the so into see motor. working a a systems, Tesla us. It's ramping nice On motor the wins we of the the and vehicles XXXX I some in a lot future go of and we we've think landed have strength we've automotive controls converts tremendous see electric to some controls and systems these and for into systems, a we're our fantastic products the return entering that monitoring voltage of

technology perfectly to aligned Our requirements. the is

XXX optimize XXX, You've need reliability, batteries, efficiency need functionality and to high systems. volt need the got you protection, of you high of these you level a

those We within be some automotive say in have are but largest category fairly infrastructure for I'd business So nascent. the that big the we the macro automotive. opportunity one timing to is EV it in to of the year. on revenue this do why third of us, side were the going products would the some reasons offset isolation our it's was weakness able that there,

Matt Ramsay

appreciate it. Tyson, Thanks I

Operator

ends And floor it now like to turn for the would you. closing Thank management I comments. to session any so question-and-answer

Jalene Hoover

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

Operator

now Thank presentation. today's concluded. has The Thank conference for you you. attending

may disconnect now your lines. You

Silicon Laboratories (SLAB) 29 Jan 202019 Q4 Earnings call transcript