SLAB - Earnings call transcript Q2 2020 | Silicon Laboratories Inc.

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Operator

Good morning. My name is Nick. I will be your conference operator today. At this time I'd like to welcome everyone to Silicon Labs' Second Quarter Fiscal 2020 Earnings Conference Call. I'd now like to turn the call over to Mr. Investor International of Director Lane, Relations Finance. & George please go ahead. George,

George Lane

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

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

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

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

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

John Hollister

from that products expectations. broadcast was automotive, took $XX.X range automotive end was revenue basis George. microcontroller products. which primarily revenue were slightly for sequential markets was consumer slightly was ended $XXX.X based guidance expectations was Thanks a week and wireless decline quarter. in to Partially and in was was the market top decline communications market a due By the our on XX million, and was the IoT in strong QX. the upside in the quarter from million a stronger up consumer weak a which from second a Revenue as communications with the revenue place year-on-year. sequentially demand Revenue Infrastructure line customer which in expected strength was revenue and QX Revenue offsetting and of from due particular, ahead up $XXX.X a than million, a end near quarter. down from QX, This sequentially. to and industrial from products up revenue first automotive build In better down was from quarter. products timing strong than on for some QX. other market, reminder

and mixed geography, revenue revenue was sequential were down. at APAC Europe by second Looking whereas, quarter up, with Americas results revenue

mix distribution declined gross from expenses XX%. was first day record the million, a the inventory quarter, better which XX distributor based product operating margin for XX.X%, slightly revenue favorable of for which expectations line strong inventory. XX Non-GAAP Distributor above range the percentage up our in Non-GAAP days was on the than quarter to the at were quarter. with Our quarter was ended versus in target at in at by in $XX one expected.

month spending of During claims Corona especially the April. on shutdowns, the we to the medical virus quarter, during lower due had

favorable the upside up were XXX effective rate non-GAAP had operating in Non-GAAP spending for expense intangible margins the from QX and basis our increase of acquisition GAAP million. up of Amortization the expenses for Signals. also points were from R&D high share Non-GAAP expected range reported was basis, quarter expenses of and ended connectivity We margin Redpine We SG&A share a above the guidance QX. new margin gross which million for than operating XX.X%. R&D QX were end a $XX for assets revenue, loss Non-GAAP $XX the The strong reflecting expenses. earnings was to - GAAP was $X.XX, per Non-GAAP expenses business approximately SG&A was were million. compensation due tax $XX and $XX lower at On the million of development. for $XX operating the product gross were quarter of XX%. expenses Stock per GAAP million. on $XX quarter QX. $X.XX were to GAAP XX%, million

now we the and $XXX Turning second cash investments quarter sheet, with to of the balance million. ended

per the and we a XXXX. of X-year with of price a $XXX During notes maturing share. rate conversion quarter, million have notes issued new approximately X.XXX% interest in XXXX of term coupon a convertible $XXX The

refinance end XXXX including line callable of to As $XXX million three notes notes, was XXXX off the offering balance, QX. also credit are outstanding at was of this our years. new after the new paying use debts fully proceeds for the case provisionally revolving which our The largely with of our was

the We retire XXXX from also to a the portion significant note of XXXX used of the XX% around existing proceeds issuance notes.

from from of $XXX at GAAP debt entire Our now million of this reported combination million. and open of steps million maturity total provisional $XXX balance upon and end the of and million balance QX notes are notes issuance of cash, the a for XXXX long-term. the using a The market of of through stock $XXX $XXX The these underlying was par remaining values the cash is XXXX balance exercise or or at repurchases common may be settled XXXX combination call stock. notes through a

liquidity our perspective. from a transactions, balance sheet various these completed very strong having Now, is

million Our half at approximately $X representing than was the in QX. and objectives. million million by year about about $XXX capital of accounts $XX our first from Inventory ended from with million, stable of in with operations expected year-to-date. which better times flow ending this QX working turns days, line sales of X.X for strong was $X million to receivable declined up representing outstanding balance XX $XX day Cash

and our third their virus Before of around United safety continue country. do our quarter, at guidance of on The status like our the near is for update a so communities brief We to health posture the States our on will priority. home I'd the and the from employees, I reopenings operations. to based and work provide in top on remain cover a its XXX% families effect Corona and the

II their depending outside workforce Phase global national local at U.S. minimum, of of and on are health Our cases, or III Phase direction all the the has reopening authorities. In to the we a following jurisdiction. transition begun

We able certain have us for and this during has the business of collaboration industry activities. remote and history global pandemic. served long a on deemed been semiconductor operations well essential an been conduct we has have site to engineering safely The

well us Our effectively business to and positions supply pandemic resilient deal fabless chain be flexible, model our uncertainties. the with global despite continues to

guidance quarter. for third I cover Now, the will

$XXX on growth in quarter in with and million up million for revenue expect be infrastructure to IoT $XXX the We third to automotive wireless down. range and the of

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

to be We expect be expenses non-GAAP non-GAAP to XX.X%. operating million effective tax and rate our $XX

We XX%. to non-GAAP to the in of gross be earnings On a expect expect $X.XX per $X.XX be we approximately range GAAP margins to share. basis,

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

Tyson Tuttle

Thank you, John.

live, Clearly, revenue quarter and Second to continue was of global way range. end the high impact will our and people play. work the at has pandemic the guidance

excellent market, infrastructure demand connected. for X.X with The positioned execute of becoming to our which as connectivity opportunities many the stay our world seen seen. of and pipeline $X consumer, entering accelerating effectiveness report through even over have to in diverse has increased the portfolio billion the marketing well applications which to product I'd The we Design indicating adapted our unprecedented adoption efforts, for take the very moves among the strategy and opportunity to In home of the BGXX of to pandemic identified led we which trends growth Internet in have moment market, more X our In in since have are quickly the market Secure pleased highest months light experiencing the and see levels with remains strong. smart range IoT win talk we the product medical in need about January. connected SoCs, BGXX, customer like pandemic. we've faster was to wide of a recent broad ever that also We applications. in Bluetooth announced the this of a our to and is and time, products, to base. I'm activity strength particular, reception new

strategy While up, are we programs business. results been through learning marketing have gone travel process go-to-market and customer expansion accelerated our dedicated for of spending products, events positive of and hundreds were an efforts. virtual of engagements. we environments in engagements time our prior digital and our customers remote has to evolving in this already opposed in-person as on in about the business are Thousands and our virtual the have development. In-person work impact COVID-XX's

already engaged smart tech smart transition nature. or enable attendees, and been views with more to home, against repeat are The of in-person abundantly important accelerated infrastructure then workshops this it's made events BGXX more and virtual Our have retail, whether wireless than world ever. technologies. this and connected, global becoming popular accounts technologies and very was necessary industrial has more that battle talks smart clear connectivity COVID-XX the medical it more The

products strength. connectivity wireless IoT are in for well and offers industry. solutions Silicon the in light the of positioned of broadest Our the portfolio strategy the Labs

in the increasingly products connectivity people on rely enabling Our and much of experiences, have to are come lives. daily

tags features promotions precise portfolio smartphones with wait Real One broadband of smart asset powering environment, shift products product commerce in before suppliers to for specific increasing contactless retailers how be inventory an to under tracking demand in tracking technology, and more enough scale enabled of to shop These and check-out added our is business environments angle Bluetooth purchase accelerating measures. retail for and omnichannel and and effective other already personnel investments effectively IoT footprint lines. were helping smartphones. electronic products without technologies, reliable value security communications are benefits arrival and infrastructure enabling now while Our ability large retailers time to add we of that in intelligent dynamic value via implementations the delivering merchandise Retailers application substantial Labs strategy, social Internet labels, shoppers' which enabled deployed Silicon push to and delivering staff. using distancing affordable, to of needing sector, other for are bandwidth. consumers. are and is portfolio indoor meet implementations at IoT changes remote shelf to where also retail efficient retail in our store way are location the pricing, and shoppers

COVID-XX we care with Pulse COVID-XX. in manage and low-energy IoT space and widely pulse Our up deployment send values, isolation early of customers of there one Connected these Consistent and the to to and centers. helping of and remotely. Nonin's home, XXXX, oximeters using accelerate comfort patients ventilators, of urgent receive we free light Oximeters hospitals their to healthcare is for becoming Medical in are and Bluetooth oximeter, software in medical core in doctors silicon, applications. The support data devices detect critical our like our XXXX have see and is pulse healthcare these medical connected prioritized device other of products helping used end glucose solutions our a value the a doctors part are the in across Nonin fight global patients industry against range pleased modules to of applications. real IoT more and provide monitors,

impressive [technical our products portfolio, X, example acquisition expanding Signals position their IP recent Wi-Fi difficulty] X Our - Wi-Fi Wi-Fi latest commitment Redpine our especially and of to portfolio the and is IP and of

John Hollister

leading up pick silicon, is, expanding to All Wi-Fi software products recent Redpine Tyson their of especially to of IoT. acquisition in impressive our right. Wi-Fi X, commitment IP I'm and here. provider the position example portfolio, latest our and going for Signals our the of Statement solutions and as is

is $XXX generated quarter an We have that less products through already than after the Redpine closing opportunity in million, acquisition. pipeline one over

which transaction, the we the confirmed pipeline. demand, by into customer opportunity strong Going is sensed strong

operating design as Our scale. is an India increased acquisition, center for toward with greater new and continue expenses. slab We auto our count while head maintaining Hyderabad, our pillar design our in significantly simplicity of the discipline we important strategy, to drive

the Things. as the Internet effectively products simplify compatibility a standard Alliance, NXP forward the open existing CHIP's which design look a We and security increase team interoperability, Silicon building to strongly development other many unifying wireless other IoT for multi-vendor Labs, into project, and for given and Wi-Fi earning second directors. as scalability a and a look by in the end solutions mesh In LPWAN design with which royalty joined leader the Z-Wave such of and low decision including will and and well applications, connectivity mission industry beyond widely to home home open IoT Hyderabad Amazon, operations. the smart will and more continue as deployed core Labs new to standards, leaders of across support interoperability. open many advantages to Apple, other standards ecosystem. and is year. long develop multiple this support free all an industry SX everywhere. security fundamental originally utility, than and the Connected its or known Zigbee companies framework, to continue as and the we will is center industrial Silicon businesses we decade, We expanding reputation Home among embrace tenant. standard significant evidenced our standard, the protocols, adoption installation stack vendors have Zigbee distance. our to lead which and joined IP developers to enabling board also connectivity kilometers growth proponent the community forward SmartStart miles Bluetooth versus we offers and a to the to scale device a ecosystem the the increase networks group spent Wi-SUN promote backwards We range city the the in extend on are Wi-SUN We Wi-SUN of initiative, and infrastructure Silicon Z-Wave Alliance's of compatibility compatibility, Google, and of enabling as XXXX, CHIP, smart for of this easy Over functionality At quarter, as of smart with within is power Z-Wave. formed working as and manufacturers wireless consumers

energy In including for EFPXX our seat The EFRXX leverage home security this to a new building and and our of We system a devices standard. applications flexible energy EFMXX the field-proven sensors, tags, power Wi-SUN's announced a wireless directors asset line May, chips IoT the board management IoT wireless level efficiency, solution, wellness meters, and industrial global we provides will as health ICs, power friendly management products. of on help dedicated microcontrollers. and adoption the of serving PMIC accelerate smart powered family automation, enhancing companion battery

products. Turning and infrastructure and sequential growth automotive, in saw toward we timing high access year-on-year in our

wireless growth broad-based of Isolation wins, led strategic Timing a three revenue design strong solutions by had Labs' had driven strong centers. strong As adoption a wins. for well infrastructure in China Timing had revenue in year-on-year data Silicon and in infrastructure. the XG growth strong isolation. record with particularly quarter also design as all in record long-term quarter by market, in markets, communications, both wireless and

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are being to products around bandwidth in the deliver increased networking world. and equipment used and Our isolation timing data centers

have the which few portfolio and in of electric solar, expanded Over Markets revenue this infrastructure, of market. automotive and to isolation particularly automotive our products Networking design-wins. we annually, overall accelerated with revenue. combined demands more timing our industrial core data of Metro market is and opportunities The than reflected is combined fastest growing in wireless which industrial, timing years, timing segment our vehicle is strategy for the XX% from in applications, our adjacent The center bandwidth strong now and growing Optical success the address past represent markets,

well of performance by improves footprint and isolation positioned system. which superior compete to digital advanced and are the We offering integration,

Chief welcome Labs. our new team, Turning Annavajjala Silicon Karuna Officer, Information to leadership I to happy am to our

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

George Lane

Thank you, John.

Before limit we using for virtual KeyBanc the on the like Global like session. we with Series accommodate Capital that you as now Citi's platforms. your to people please I on To Markets September the question-and-answer call would our technology Technology I the up open before call market questions both Conference for questions. Future to participation to as opens, in open Xth, many would and of August possible one XXth announce the follow-up. one virtual XXXX ask

Tyson Tuttle

apologize on. a back and is Tyson off. the outage so I I'm dropping for had house and at this power here Hi, I

I'm for for Q&A. here for So script And thank up the John finishing me. you

John Hollister

That's good.

Operator

[Operator Wells Fargo. Mobley, Gary comes Instructions] ahead go question from First Please

Gary Mobley

a you John, Congratulations to challenging strong execution strong had finish on mentioned second you the the quarter. a that in environment.

first so weeks know I'm the guys month-by-month third the far curious and quarter. you trended as of quarter well during how to few the have what seen So during second bookings

John Hollister

Yes, is this Gary, John.

call. in seven and earlier So bookings, on also eight to around We have those did extension an weeks pushed weeks been see out have of lead been we they coverage. last times then as around the of steady running bookings nine and have backlog the indicated

all an has entered so the bookings fairly backlog with of high were coverage. trend quarter. of steady course considered, So the But things third that level the unusually through we've persisted, quarter

Gary Mobley

- roughly Okay, second I million in how appreciate outlook? point is change for is contribute revenue quarter that $X guess and out roughly Redpine, I there then is and it played your $X And is I $X Was or to a the the that color. any that quarter per thereafter. of then million believe to validation. expected million to quarter clarification to

John Hollister

for Yes, how think expectations. encouraged overall Redpine's the in with we're we're product quarter. traction that seeing about the very now out is for our it line is the opportunity part played of our that portfolio. portfolio. We prospects wireless amount a of And

Operator

The next Barclays. of Blayne go question Curtis is Please from ahead.

Blayne Curtis

nice taking result. for Thanks and my question

any or adjusted products you mentioned you curious revenue, flavors any strength what that then driving wireless, that the drove You for regions or strength if that mentioned outlook in question, on IoT. kind color same point could are and record the regions of

John Hollister

in were product the part. in is Blayne, strength clearly with upside as Yes, strong market products microcontroller portfolio the we recovery the there a China, particular John. timing as that I'll district and perspective, products, take in This from saw well isolation. strong

quarter, some we're down seeing in due that looking quarter to the in So I'll see to other of business in products come smart anything to second back. pandemic, some like and areas the add. recovery the if the were opportunities some seeing metering wireless those Tyson second has we're

Tyson Tuttle

in both particular got got Yes, the and mean it's the strength I'd QX design timing layer some, ranges. that's IoT we've across We've wireless of home, wireless. you've in on is smart rate ramping. wireless, very also strong also lot and we've there. a for stuff, broad say to run pretty that mentioned portfolio stuff as I move got we - smart win but is into on had John some starting application in this really our medical A is so momentum

wireless guidance. nice indicated moving on and that ramp - as a we side So seeing that QX we're into the was we're in

Blayne Curtis

and down then a timing you out? is ask you're I areas areas are at record any coming to wanted on infrastructure be as September, that just the expecting these into are then there off And to you what look side,

Tyson Tuttle

Yes.

timing and automotive particular of look moderating been and customers and broadcast and stocked as we Those ramps - saw were customers the well down was this automotive ahead have some piece were stuff also So the at coming particular both China isolation consumer QX, and timing we timing-well are certainly ordering and look strong really very in point. if as at was see QX. infrastructure at you in if then in we're in into are that we strong, you

it's And will So bit, isolation weak. and the a which have then in moderate broadcast, back very which but little then see bit, fairly timing in you going come keeps saw pretty we market doing the the QX ramp really as strong a is to we well. still automotive consumer

So it's is particularly to and the infrastructure really in be overall well. replicate. in holding automotive with here but likely QX, in to it's But pretty Timing hard going in QX, down strength that we saw that's

Operator

comes next Our Raj from of go Please Needham Company. question ahead. Gill &

Raj Gill

and Thanks well. congrats as

around landscape front. Redpine recent private Obviously carve competitive X, acquisitions the brings some assets in develop other to On that space, players the trying outs particularly IoT. has portfolio a Wi-Fi Wi-Fi stronger kind by target valuable some of to there been on acquisitions,

how the wondering you're players is new landscape? How into see looking the it So at market? competitive you as evolving potentially enter as it,

Tyson Tuttle

Wi-Fi acquisitions the on certainly of wireless, side. on seen Right. number the a We've

the to IoT type and all the end whereas well those portfolio, of the access Intel that focus quarter, are nodes, the all products so of that Low got and types thing handset two fully they're our client Energy Bluetooth the some of point then integrated the particular, mobile Redpine certainly leading point apply Quantenna to really link, in came to not devices Labs that that first handsets, and products just you on audio, for that going why a devices Wi-Fi, We at side, the went solution the and that really their client if acquired you've our not and The SoC, to they license had some time, the you things, focused point factor in which really, of saw into look devices. out number integrated, these mobile all chip very NXP last is various is a also devices. the the Synaptics Bluetooth going on ends a then and very, MaxLinear, single access a but which is that of on that form - is to suited side, Silicon second the in went devices not Marvell really phones, got IoT, Broadcom

going NXP X able rollout there's Some customers point power the see the early, what then Infineon, a from got drive and growth. just devices client in technology low extremely lot stages to we introduce Infineon, applications the Wi-Fi Wi-Fi are integrate and power applications are that and lot solution that be door lot of like X devices, Cypress and we're is as integrate the be and of IP good there higher power solution that It's devices the there well of and as the target technology our a now going of like home an our and to early our to into certainly is power. in is And and have able forward as a today we that in in things Wi-Fi locks, the things are to industrial very competition to Bluetooth the have this lowest drive but solutions side that a market low is platform then going smart and you've with market a inflection that portfolio, solution. It's then appliances, over X time. Wi-Fi at also we working to in success and with to important are

various with we for but out and for there term, about So the ability very - time. about excited. products to just pipeline our created compete we longer as like we the then that the of excited that million that the during positioned significant years been for Not about red We those since near well had with a think we're talked X into we market. very very and ahead companies acquisition, term, pine long both also products, just have those in $XXX and we ramp are out acquired that go providers of are there Qualcomm, those Wi-Fi all the revenue

and provides But work Wi-Fi have the also Redpine the about excited little our we Hyderabad a bit acquisition very of clarity with now. that on in side. center, over hopefully So, design the

Raj Gill

quarter going wondering very Yes, wireless helpful. going when there. base the my follow-up you I clock was there terms increases the on higher you. you're which stations? base of you're these Is in if an some content XG of the into could Timing, driving that's growth did mentioned Thank infrastructure and kind silicon a uptick was that Does in for content record for And that XG Timing, you very solutions? silicon talk about receive to timing to of potential impressive, translate station?

Tyson Tuttle

have much we market not traditionally, had so, share wireless. Yes in

in X.XG stations, solutions we of Timing baseband it head, that to XG really XG, that the our that's our now network. products and as the number unit and which didn't the and the a main the to we've into as base antenna, gone well connects connects requiring as clock radio have the into go part we So - back wasn't oscillators

more so ship share the got to of sockets and into and In five have sold, to talking about depending with of of content, each supply in on terms base the and clock be wireless than stations you're in five And continuing the four all turn, multiple of to we're XX we've tens we chips more of architecture. even one suppliers what that these, potentially regions. - and within could of each out that top dollars

automotive, center communication opportunity even see and of in ramp we've also become networks as market even for high-speed traditionally expanding though been we're substantial the applications in it's very nice the right within a background cars in well term a strong centers, and nice data lot We've of data potential business is business. timing more now. faster timing industrial but we as growth data faster. our seeing even been not the optical So, Longer strong a growth networks as for in and that our

So, term. the of year both perspective perspective we in revenue opportunity in and view XG. really going growth about this as near really year both a design XG, A win the the revenue from lot excited timing, on and

Operator

Please from go next The Stifel. question Tore Svanberg ahead. of

Tore Svanberg

you congratulations thank and Yes, results. the on

trends what what's about portfolio? enterprise look quite benefit connectivity on the at in from there new bit you're the some potentially about talked and that economy, perhaps the work but What side design industrial are could we this of As or I a understand you the traction that seeing home, side? happening home of your

John Hollister

area to would systems, in is about operation where trends labeling, retail accelerating. It we've electronic under but enjoyed about terms this notable where application seems of this think I notable very acceleration think changes little Tore, bit were and also strong Tyson. it retail is shelf have is has say bringing one we're already that pandemic that particular is John. in the company seeing, remote think win may a and area prepared we and And shopping our you Yes, way. is traction that about of This talked the if about like the smart application commentary, I of item contact-less a lost one in design and

that manage certain vendors mandates government to We remotely both are strong shelf Europe. pricing, a where very also to realizing position labeling contact-less market to particularly adhere but in change effectively, electronic can for in purposes,

good seeing example a is that we of where traction. additional are So,

Tore Svanberg

Thank that but Wi-SUN I I that's John technology my as to the not going you ask follow-up, to was fair about you realize and for John.

you XXXX revenue you design are of or there? have when from a a already perspective, new wondering from had just story I'm the and half, do that bit ramp of or quite Bluetooth the quite be So, going the the see big perhaps in contribution a inflection here expecting Is a Bluetooth second now we in business? bit wins to

John Hollister

that Tyson, to you on. would back maybe take one? Tyson think like I

Tyson Tuttle

Yes, I am back on.

applications So and and even on to organization shipping standard, and are actively on the type new the we that's standards the joined based market and solutions long-range currently we are just products higher is this where continue the into working industrial existing it Wi-SUN metering gain software widely performance. deployed a drive into network and Wi-SUN to in market to

close get in of deployed shipped that Wi-SUN competing Wi-SUN. terms and each is type technologies, Laura the applications. very XXX units of been this on market those There is units been million share. with number with plus of So, of cellular has actually in a To have one

our that in excited the IoT as part broader wireless we're of seeing So to about very actually support quite technology happy market platform. IoT, that, that overall adoption and

John Hollister

address question. let me, so Yes, me the Bluetooth let

quarter. in expect portfolio a that in seeing third are and pickup increase the sequentially We to here Bluetooth

new terms very of and finalizing both revenue customer actual be product specific Bluetooth their where to qualifications strength But the overall, and are strong, XXXX that story the as will off On more that in year-on-year quarter. a in this customers the of we've announced interest charts, production. sequentially is the into the are getting we seeing

Tore Svanberg

you. Thank

Tyson Tuttle

with in The Bluetooth Bluetooth, speed engagement high a that unprecedented that the of traction customers really on has and this is funnel of in the we've which that the coming customer growth history and variety been engagement at just very, would in has side. the the seen with our, mention BGXX very new the seeing been in and the I applications the the we're the company.

really excited So, that product. about

put and is were BGXX If that that is stack and the the software the optimized device good really protocols really in for had truly you multi Series we've just really segments volume context, market Bluetooth very first so optimized our high that's tool X that for and really have really, devices good our had a small the energy good of competitive piece very very silicon see size we excellent and mature and very, pleased a a the and really integration, very consumption, has out really seeing the to now that. that very, reception very we're performance, lowest market in suite of we've

Operator

SMBC. of is from question Next Pajjuri go ahead. Please Srini

Srini Pajjuri

came little head as to a the just it as it down you're I'm the thinking a inventory, by on first half year? we how about bit John, and the curious of day, into second

John Hollister

and POFs target a range shipments of that end But strong consider second that for that at plus-minus place. natural would this normal we us allowed in of variance, range. the actually to mean this Yes. consider be is be we approximately in good we amount very this expect a operate but would the to had level, we level is a what normal I good in quarter, and which the mean Srini. certain I to

Srini Pajjuri

revenue Tyson, And Tyson. and on you inflect $XXX maybe translate you do when that maybe for this into pipeline, then when mentioned kind million do the design Redpine business to I about digits do expect let's of to want digits you in you're double next year, you how terms. from thinking if contribution to When that think see that low-single you. put, the expect doing you're Wi-Fi revenues? Thank in business? potential you going to And business, say, and

Tyson Tuttle

Right.

months of the engage from have the to production you then anywhere process that sometimes - create revenue pipeline with look, of of XX to pipeline they as opportunity in as those million the have have beginning you ramp or design an to know start those take - to customers, if their ramp. from is you you And you the you the lifetime $XXX product, opportunities months, to actually even that months opportunities. So, to go and XX can revenue XX a

for then And revenue layering run came a quarter on really pipeline now the XXXX, really in they the service sockets and of year. had adding on about in possibly a Tier that we next XXXX, million this we're continue of little to number Wi-Fi a bit $X that that interesting top impact came So, opportunities type and rate. will X be those with also in but Redpine top $XX million in so a will some opportunities year, of with,

enter on So that through of on growth activity and products generate an the XXXX, XXXX this Wi-Fi in at we, then the as and anticipate next see able here design we'll we strong that into And do stronger go even those we're rest over then especially in following win products deployment - the our we the next of the to then year. channel. year uptick as into based the as we

next to So, we then year the kind into certain as continues 'XX. It we into comes go so that's, evolve just is and see this building. of level build

Operator

Cowen. Next Please Matt of question go ahead. Ramsay from

Matthew Ramsay

wanted the ecosystem a you electric pleasantly of situation talk momentum pandemic Tyson, business, of some of about engagements of I've market, the your isolation sustain your proliferation ask and see been vehicle COVID-XX you're seeing in least have maybe the momentum surprised wonder been, about of the EVs particularly themselves remarkable. the of the Thanks. face of accelerate. at to might Political revenue kind to the I question franchise the even in and sort isolation been behind market? if and I auto and in for to those timeline engagements the

Tyson Tuttle

Yes.

vehicle. the and into an So electric into supplier really leading this we've goes of three electric vehicles technology main isolation been within subsystems

batteries, have got the got battery you've buses. to communications volt you monitoring, technology with for so as interface XXX You've isolation volt the XXX or the

doing then car inverter that line high devices the the you've also powering into as requires that the these And traction the infrastructure AC got and that require the where well that got there's then high charges charger and motors so those for electric You've and isolation. handling opportunities within voltages voltages charging on-board vehicles is the charging. and from

design early in those So, China series wins electric engaged a the BYD large and we like areas the all makers, automotive makers. are seen participating companies X automotive in or been we've whole Tesla a these of lot we've of of now of providers in vehicles with and with Tier other

that and into new saw for entire we makes it's side. competitive Y news. dollars We are And on just And in acceleration, strong in really the that those a these Austin, just and don't it's share an hands. the recently winning isolation market. it think the announced but functionality in have very combustion have strong our as and our uptake the very of a disrupting seeing truck platforms. vehicle even internal gain haven't really I the the products here new but then, in had Model electric yet, but of market where before share great terms automotive we plus plays a pandemic, lot and the factory electric the Tesla building market names you've share inflection We of of points that's now the that point very is reaching We billion seen really really and cost vehicle engines,

power supplies substantial with and You on - in and activity all the largest of see controls makers lot all growth see and revenue we're opportunity, that other major of provides industrial and we opportunity car isolation that a the areas. doing in is motor and the that's top everything of as a

vehicle So, significant there vehicle for very, is a the and broad very attractive is us. with line, and this but per opportunities isolation, product electric very content

Matthew Ramsay

Thanks for Tyson. the color there

outlook I all guys my few you couple the I the of the of months moving raised bit gross As of of guess, next the uncertainty mixed in stronger over the just model ago. a a for, at the guess margin are the quarters, Day With margins, half business and year? the long-term company know the Analyst I a follow-up, still about parts back John, end and you little thinking had different in channel market given how Thanks. the

John Hollister

moderate margin. gross being with Matt, very in product model performance, and quarter the of seeing pleased the updated mix midpoint for favorable the channel both a and above gross that mix, second with still little our Yes, the margin quarter here we're third outlook, long-term but bit

remains feel overall, on a sustaining and improving it continue So focus we that good we'll margins focus core with and trust to gross our team about operations for our us. and

Operator

go Please Capital. Roth of Desilva Suji question, next The ahead.

Suji Desilva

you've sure how trend markets I'm does you today a a optical questions A from now, sounds it like in diversifying that growing the on year infrastructure. is couple of the into and other this, mix covered pretty parts versus of mix the wireline other if well? been not of the where but

John Hollister

Yes, is Suji, this John.

Suji Desilva

Yes, John.

Tyson Tuttle

mix other Suji, is XG We mentioned now. XX% areas got on growing. areas, these this about that other particularly faster optical We've being XX% the about with the in is call Tyson. right the the

Suji Desilva

a trends the point stable out? And how part that or a think mix much this growing do you year other Is that is at faster?

Tyson Tuttle

higher that from rapidly. XX% over see to XX% We going mean, the I growing mix is given time. XG shifting than

and say would very upgrades network also significant. we're are core that I that the seeing Although

have probably both the as will But areas. in mix we move the you're that XX-XX closer to XG opportunity to size of going I shift and given it's, So forward. think growth

Suji Desilva

may differentiating competitive competitors, top your here And can remind advantage who on the here a be Wi-Fi, and question understand for to what's competitors Redpine you're there. mostly Labs how us you

Tyson Tuttle

Right.

also of that's So, have products product Redpine the pipeline an one get our a it It's using right this There X now. the the life Wi-Fi the application of level And X-enabled - power products running device, with consumption. that's follow-on you're compatible extremely times management, high a particular RF, amplifiers, battery, X processing, and a in with power part, the all about so is integrates if X the we'll the so level is that high. and early we of very products be about Wi-Fi with have. the would a a integration off we'll that battery like have be It's low you'll product of existing in Wi-Fi out integration the companies Wi-Fi high energy of by a the

a a So high Wi-Fi a all in integrate and core our you know, manner a and being performance to processor lot will of separate of so separate have able the really those in the is optimized devices a differentiation. manner energy

very, with with like well somewhat products compared which very company done Cypress now market, technology, companies maker cost that with also the the Xpress MediaTek, there's has end but performance, implementation. I'd very Infineon in part we another called the our of and of power that pipe have part lower or and type Qualcomm in kind terms Wi-Fi and say of consumption higher integrated And at for better not competing as to effective the is of sys, then same well. are We low

as level. both the board So, at level well the as chip

set or technology move got Wi-Fi like as feel of road into today very a we competitive X. map we've really So a then compelling products competitive we and very, very

Operator

comes question Alessandra ahead. next William Blair Company. Our Vecchi & from Please Instructions] of go [Operator

Alessandra Vecchi

the question, - of on the help lower But connection few you I OpEx the docket. on about quite just to quarters. over due issues is some think in the of sort on it fabulous expenses I starting in - on have guys I maybe the maybe heard apologize the point some done quarter. the of again. there takes, next understand housekeeping a we believe some times. quite few really toward as to R&D make common after us congratulations launches. you job at but dropped had like I But product some things on you operating a got sounds mentioned especially Could for a a terms target there, Congratulations few expenses, formidable R&D puts again I progress and long-term

John Hollister

Yes, this is John.

were that QX. in QX, did now tape-outs have we So that for plans place some take will

well. related the that beginning in come from accounts So as quarter we unusually the the quarter of again costs some and benefits pushed the And third for had in second that the low activity second to that's and quarter cost to into quarter. back the shutdown increase third OpEx also

beginning of $XX ending of So few to million the dollars third year guidance quarter up and that's account the expect into even with I in this fourth The to couple line quarter be where we indicated year be but million million. at Redpine the a taking up the roughly acquisition. the had expect a more we dollars. was

fall and able through plan view now been the of we we've to look the from XXXX. fully with in be here able at this, cycle as So form into - management and as plan carefully to year, provide talk go OpEx to team color our absorbed this and our expect we Board beginning going a Redpine on Directors into we year. Heading next we're annual operating our should of

Operator

question-and-answer our concludes This session.

remarks. ahead. Now I the conference back turn like to go Mr. closing George to over Please Lane for

George Lane

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

Operator

presentation. concluded. now is today’s conference attending for The you Thank

disconnect. now You may

Silicon Laboratories (SLAB) 29 Jul 202020 Q2 Earnings call transcript