SLAB - Earnings call transcript Q1 2021 | Silicon Laboratories Inc.

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Operator

Good morning. My name is Matt, and I will be your conference operator today. At this time, I'd like to welcome everyone to Silicon Labs' First Quarter Fiscal 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. this being note Please Instructions] event recorded. is [Operator turn over Relations to would now Dean, conference to like Investor I Austin the Silicon Manager. Labs' ahead. go Please

Austin Dean

Thank Senior Director Chief Finance Tyson are Chief you, call. morning, of Officer; Officer; today's Financial Pacelli, John Hollister, Matt, Tuttle, Giovanni and on good and Executive everyone.

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

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

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

John Hollister

market. Last launching for leader for welcome we a purchase IoT our signed everyone. play a and week, of and into pure wireless divestiture of the Solutions Thanks, our connectivity automotive with transformation Austin, Skyworks the definitive asset intelligent infrastructure agreement business,

operations, Silicon Officer, IoT. and divestiture and roadmap as our our us. Chief he our now Cooley, to activities. Executive development be Tyson market continue Johnson, he platform the opportunity [ASIC] Officer, exciting line our Daniel continue base. in which of to products ability small Please has General Labs, accounted the Officer will new business Strategy been where [Ph] of well as will formerly IoT Chief will that formerly less align million to our last Senior day-the-day a product reporting announced also solutions and Technology our customer will the opportunity currently of products note, growing capitalize the to year. Chief our as to enhance will as President to include for We on technology will develop changes product leading where classified than $X revenue before Manager President promoted IoT, Vice that this serve Matt further in IoT evangelize and our Tuttle category, organizational

today will comments focus of Our operations consolidated Labs. on Silicon the

to to our expect be in an the continuing IoT-only call. operations basis on report We in position on July

slight ended all in year-on-year. our and million, growth the wireless isolation Timing Infrastructure increased with sequentially, strong revenue offset major XX% lines. automotive way in growth across flat both wireless led about at I&A QX, QX, very X% million, IoT expectations, sequentially pleased for IoT the first XX% $XXX the was significantly announce X% the our to X% end exceeding high up quarter record and for year-on-year, We up QX, at quarter. revenue revenue the million, protocols. year-on-year and in QX with from this are and $XXX double-digit up other from product our quarter, morning by above of XX% and year-on-year. initial $XX guidance for declines

which down down of Europe, for down about than from to in with particular level. $XXX XX.X% total quarter, for markets the the margin end in level. strength elevated consumer, all the mix was were revenue Total Non-GAAP were gross in operational than expected, efficiencies to with well QX, strengthened about we higher days ended in quarter Automotive better to Geographically, already up X% at the on XX expenses due markets, bookings, Non-GAAP were of the revenue. QX as as strong quarter we at an at in ended upside from XX% product Distribution XX with QX the from were or increased XX% QX. quarter, operating end QX, primarily profit off for slightly QX SG&A million $XX coming revenue and was QX and and were or Turning or the of quarter and medical million in strong R&D Americas the the recovery. sales communications $XX quarter, up end around very were saw distributor claims this variable and taxes, compensation, industrial, due strong and the again revenue. POS quarter. of with customers, expenses of Non-GAAP payroll first to X% were APAC expenses. expenses down at $XX a XX.X% driving operating DSI revenue sales XX% bookings revenue. inventory million million, in days,

On Our was non-GAAP GAAP $XX was XX.X%, at were $XXX XX.X%. operating of stock both million, expense effective gross tax compensation $XX basis, per quarter $X.XX share. a line ended was GAAP and amortization assets for intangible expectations. million, rate the in Non-GAAP was margin million, expenses earnings with

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

to ending up flow high and QX, increased capital. shipments operating working million. on cash $XXX of quarter Our at receivables, strong with Accounts in million, was significant first payroll the cash related levels $XX seasonally in outlays taxes

XX days. increased DSO to slightly Our

fabulous We accounts quarter declining inventory remains relationships in in have enabled techniques, to with our known debt on no the grew business, growth times, and suppliers our for QX. the outstanding million have receivable. anticipated than X.X market tight, balance overall upside to us manufacturing results to related delivery supply which higher with goal. Though still in $XX efficient churns chain the exposures The bad our is our business inventory model, to the semiconductor

notes, we redemption have notes. million convertible outstanding no the have notes the completed first those our of quarter, balance $XXX XXXX on During XXXX convertible The a and balance.

I capitalized. quarter. and will well strong for now very remains cover sheet the second guidance balance Our

the We flat range expect be roughly $XXX million, revenue quarter $XXX to million sequentially. IoT to I&A and supply, limited with by in of the sequentially in second up

to revenue between last indicated supply for we for revenue our we constrained. is our full-year outlook is $XXX for the As The XX% the XX% and million. million week, expect quarter or second $XXX grow strong, demand products very and to IoT

with working our to continuously and additional are We up open aggressively suppliers capacity.

We quarters expect the supply time tight conditions persist as capacity. qualify need for production factories to new several to

on We expect expedite of increases situation, non-GAAP experienced Based our gross charges supply of is range suppliers, and our chain margin. from have XX% a XX%. margin impacting cost which to in the gross be to we the number

model this year. but will the for of on additional implementing are we expect balance margin price We increases, gross slightly be below

operating $XXX approximately non-GAAP be to expect We expenses million.

expect our expect the XXXX and be Based combined on will company second rate current effective non-GAAP We on tax be tax law rules, for we tax accounting basis. rate to in effective non-GAAP low our a the to XX.X% quarter. mid-XXs

non-GAAP over operating of For to turn in XX% share to the $XXX be basis, share to be $X.XX to to expenses gross million, of QX, will $X.XX. in margin On earnings expect and $X.XX. and to Tyson. GAAP a we be now the call range I range to per GAAP the per between be XX%, $X.XX we expect earnings

Tyson Tuttle

Thank you, John.

first an activities supply stemming greater chain market unprecedented of ahead. signals transformation to well-positioned share quarter record to accelerated pleased through The the economic have been The organic market growth we we continue creating constraints. revival led opportunities global to XXXX. revenue. from digital are seize to We pandemic are recovery report growth has to despite capture And in

was the in design months opportunity QX poised lifetime And with billion. to to up XXXX. X% very be been industry recent have semiconductor our robust pipeline revenue deliver win strong Our excellent continues achievement at an year-on-year. Bookings $XX in

critical major Turning revenue. IoT's Labs IoT In across growth level XX% surging see for first our and And In continues QX, continue first Silicon wireless with the expansion. wireless connectivity Security in against Silicon of bad protocols. quarter all the Labs a unique be to and business, posting actors. IoT in to of wireless greater consistent we to IoT saw March, software our clear than innovator in achieve became entire and has position portfolio highest PSA Silicon products connectivity certified growth established robust devices hardware protecting year-over-year momentum, leadership strength world's security. our to

IoT standard Our effectively software secure technology sets protecting security attacks. against for hardware and vault the

a a strong certification, strategic made ensure becoming strength, in to leadership validation achieve X have We as the securing security core of role IoT. first investments level our company PSA to the

connected superior which just profile. certification in devices. personal addition in like our using to the confidential security security security strong high CSEP to In through Society's DTSec wireless world's and our X protecting the xGXX transmitted earn provide the delivering DTSec healthcare standard Diabetes SoC optimized the first parts, Technology protection battery data sets security Level became for we devices performance

such becoming In to sound of solutions is a machine the IoT wireless addition the devices. their in one to information. growth tiny models in MCUs. is into solution lighting overcome as to the face detection, key of business. machine and more example these that our learning Smart for Edge just linking maintenance. to for preventative recognition, partnered classification, with intelligent world we image help these learning challenges, and secure, motion obstacles Developer's have becoming To real more innovation the ML integration of enable bringing developers we edge power Impulse ways driver be to This IoT of SoCs are areas continues

of market due SoCs in in part position industry best-in-class our leading strong a combination and have lighting large We portfolio. unique the to

and smart apps XX.X devices products at for exceptional smart more Our will BGXX Yeelight, Google lighting the and delivered mainstream. or The this which help light to users more of our products are the new broader throughout enables connect work any example ecosystem other is lighting LED which is A the industry technology bulb and product experiences are IoT home energy of IoT Home our a growing influencing low recently from SoC. with launched with app CAGR our Bluetooth the without Mesh directly software. the Bluetooth user great smart deployed The smart need become XX%. control

for providing another wireless focus create IoT three-year Home world's leader like to Allterco envelop before Shelly power features automation great new compatibility is are collaborated the for and security. ideal We battery Shelly built-in improve specifically for lowest unique wide world with the application in home WiFi up recharging with Motion, motion sensor the and products the example life the simplicity our a Shelly Alexa, use. of home connectivity Motion requirements range of to to Motion on smart and We of is of recently Assistant, SmartThings relentless and motion production pushing third-party the solutions today. with designing other sensing lighting with a in mass ease consumption platforms.

IoT. marketplace IoT to the the preferred repurposed meet competing differentiated products originally offerings unique not by versus architected designed product Our share on requirements are the and winning technology of

automotive. and infrastructure to now Turning

a increasingly demanding last product see sequential business automotive new WolfPACK new any markets, focused new in actively basis, faults, I&A all-in under we the protect expanded switch recovery redundancy results, in I&A trends we're technology we solutions To value both we one electric year-on-year we requirements operation. with performance board first used QX. modules. This for shareholders expected clock first portfolio delivered to Onto In industrial potential driver and we're and quarter for and saw modules isolation smart timing closing continued As a built-in applications. power to lines. Skyworks. vehicle week, delivers revenue with efficiently the divesting delivers Skyworks market announced of I&A's suited the and ensure in including quarter, that timing our the The our based and transaction to clocks emerging detect Wolfspeed both most excited recently provide power safe solutions. perfectly Solutions our advanced introduced growth to in automotive superior reference of and features board, modules, launched power isolation an clock on continues and demanding help significant the reliable to power timing high future to drive introduction solution carbide employing gate monitor silicon This and about

and President Vice growing we wireless quarter, welcoming in team and Manish and grow as fastest regional wireless Hyderabad Manish the partnerships. local Development build talent, our India. During infrastructure, Silicon engineering our newest Dr. leads Labs of Center the and company's will scalable management foster bolstered Kothari

continue highly in ago, one innovative Hyderabad over than is gone and position very our we Redpine top in solidified in adding to in the a Redpine Our the to of Development leadership, of hire leader the has IoT Hyderabad and Development market of our patents Center. our of expertise connectivity IoT the well. wireless more acquisition strong XX with as the engineers Manish's year acquisition market Center world-class Signals The technology, wireless WiFi we products XXX further portfolio. as team Under WiFi the Signals result integration WiFi build number region's former talent

we implemented share employees quarter, a that and and to inclusive and have last shared fostering pleased represent to internal an workplace formed we commitment have additional diverse, our resource form support with groups As aligned our we are I'm empower interests program an groups employee to organizational to three These employee developed. equity being resource led of workplace inclusion. a diversity deep groups our two values.

IoT growth. opportunity front Additionally, surging an the with results. strengthened now offensive diversity corporate with them eliminate to industry's ability and momentum, business revenue, focusing of and tech opportunity us expanding our with replace we and We're our enhancing to supply products, and singular collaborating We're to Lexicon. with significant and compelling on commonly In chain capitalize upside we're continue strong another still to win Inclusive we're on language to talent. conclusion, our and meet in deliver inclusive a of management quarter a have by design in growing is new launched in workforce Lexicon constraints project record customers while impact pipeline the industry used positioned terms delivering focus, demand our generating ecosystems

in management solutions the wireless for a structure a array share lead We market edge of capture, and poised focused continue to lead intelligent cutting connectivity wireless and we're connectivity. to of the vast with

capitalizing from on attention. opportunities and growing for we're excited recovery front economic us. in time of the swing, Thank global very you pandemic the about full in With your the

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

Austin Dean

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

Operator

the Fargo Securities. Please [Operator Instructions] question-and-answer begin will ahead. Gary from Our question session. now We'll go come first with Wells Mobley

Gary Mobley

you for Thanks higher if about than a the despite guys. question I morning, mix want as radio for IoT, sounds gross multi-part Good taking if margin-dilutive, perhaps and that which you quarter. believe ask had but a you I question. beat margin. can It to Wonder expected the passing to behind my you of price rationale getting it give from to the quantify it that? margin, might And as impact some then customers? as pushback headwinds some it reason where or And from impacts be as input higher in relates cost the increases near-term? your the gross relates you can on

John Hollister

Hi, Gary, it's John.

which as and of business. But is On first strong relevant. in Metering see in as the we talked first before, we've quarter is industrial in of QX, part did for about mix the of relevant results commercial also our the your and and an what's market constructive was question, end mix, the strong margins, was example IoT technology customer part that.

of point share, hard transfer the and number but have to or it base, at and a through assessing a how don't see we're so as us. -- we work market the we on costs, our desire to in can impacts. clearly the an for margin that's grow competitors continually to customer ongoing that you you, process to Looking input give And

Gary Mobley

chain? whether SLAB's quarters. in constraints $XXX not, continued capacity Appreciate supply that roughly million color. few might goal revenue that chain mentioned IoT for prepared to for curious you sales a remarks million you supply factored of in your you in to week, outlined more IoT, have at constraints of And any presentation least for or business. But And expect in your know achieving the a I'm extraneous a $XXX you expectation in

Tyson Tuttle

factoring that revenue the for in we IoT supply we known year are constraints. in Yes, the chain gave for guidance

a that number. constraint supply So, is

Gary Mobley

much, All thank you you. right, Got very guys.

Tyson Tuttle

you. Thank

Operator

will Blayne Our come Curtis go next Please question with from Barclays. ahead.

Blayne Curtis

guide, if Hey, my a kind the morning. of Maybe outlook been infrastructure bit, up up for June had for there, margin good you question. for Thanks on following the year is like, the -- for It has XX. just taking you sharply. seems Gary's of in question flat IoT kind

like you is IoT margin down. talk then guess XX, mix if that. about infrastructure the seems Maybe margins maybe going specifically, could are So, talk And there. about I just

John Hollister

infrastructure where And seeing well the isolation, positive sort on see great some and very increasing upside in first to we're business, so as for in costs related there as in similar for you dynamics Blayne, that's chain IoT. Yes, that. automotive, strength affecting of expect would QX, I&A I&A to the that, that with work timing input situation supply

Blayne Curtis

question, kind longer-term just an maybe in about maybe talking growth effective And mean The million $XXX grow then IoT maybe day, been you could doubling in even [indiscernible] targets That's maybe it. showed IoT. long-term rate, but of in the has I of a you that Tyson analyst XX%.

of year. You're this there kind

you long-term kind CAGR maybe what maybe timeframe So see IoT kind is the what that to of forward? put how can you of or some as going

John Hollister

we tried Blayne, identifying over time CAGR XX% Yes, here. in deal opportunity week, call the to articulate a that of last

So, if the hopefully can that, we that to we're you could time possible. doubling which be achievable sense able is that of a give sustain believe

did a we right the in out. and strong for year to lot we This try call that now. is go momentum sure, have business So, a of and ahead

Blayne Curtis

Thanks.

Operator

with will Morgan question Craig next go Our Stanley. ahead. Please from come Hettenbach

Craig Hettenbach

thanks. Yes,

the about your quarter, forward, seeing On the where as as the implications seeing share IoT wireless and just the expectations that strength momentum? well you're talk in of can going best you're in market you

Tyson Tuttle

things a is shelf the things, retail, tags, some portable like a in different outlined across the industrial lot networking, We're this segments. those really automation, home, of and of wireless smart We of strength Craig, mesh number seeing Yes, Bluetooth and across Tyson. lot protocols a market applications lighting, medical. like of

wireless are wireless. trends different those the we're an it's in are that board across year-after-year. strength to just going seeing terms And kind protocols applications where of different continue of the and So in

If in is trend. that IoT IoT, a you long-term think It's the wireless happen something not XX% the away. dwindle projections The next going one to grow area, about a decade. are just it at will then and CAGR that's over market

share that And that of XX% timeframe continues our will gaining CAGR over a the target be grow. means so we while market to

Craig Hettenbach

a follow-up just piece going anything And mid-XXs note term? to implications longer kind IoT low on Thanks. tax then, of just it. basis, the on to from on tax the Got from the question combined

John Hollister

current that but we'll Yes, Craig, on the the that, We're watching DC will change similarly And our in tax of depending could facing similar based carefully, lots type a with law. happens continuing law, add increase the model, to refining the the operations around a with right I dynamics on now. landscape obviously we and increase happening change further that move what be in legislation. as

Craig Hettenbach

Thanks.

Operator

will Needham Our Gill go next with question Please Company. come & from Raji ahead.

Raji Gill

Yes, thank you.

Just sense IoT. in if constraints not have IoT to what supply terms you question have would of did rate related Any in the XXXX? been growth a

John Hollister

a suffice first unmet provide to you, the demand. the able unusually not high to an fourth we exited to with number quarter amount -- quarter of hard say we it's Raji, as that Yes, exited but did

number, But is So and that we're best we working can. constrained, it the big would a industry through entire be Raji.

Raji Gill

Right. of these industry several progress And color in or you talked persisting edge Any how supply lagging of terms supply about is and of the of kind supply is capacity, of nodes, constraints, terms insight kind there where a kind are for constraints. lasting quarters. in

the but on taking is sense these order try gave capacity what any lagging to nodes? particularly You the timeframe, kind a steps of, a edge of terms in it in industry somewhat increase of to

John Hollister

Yes.

XX investments So, is has really technologies. number And and this the above. of mature announced TSMC industry -- a is nanometer in

the in that at nanometer demand, also is But advanced nodes. the behind, left lot seven the nanometer N-X, is of not nanometer we've So then, focus all and three this the A N-X, is, lot and because it's limits addition to have nodes. a here. into a had the N-X of strong -- the happened what's five products of And law pushing Moore's advanced CapEx gotten the nodes.

Law out. improvements up takes and get to exceeding we where assume year, supply it that. to pace filled had. we're for the a it's focus mainstream be situation, we not the work, technologies. the mainstream, nodes mainstream is also incremental adding to going to be constrained semiconductors and have migration remainder used now, that certainly, build those extent And safe used in into to new way to a on that situation it of But demand has the there's which can a that little to would Right that other that and slowing advanced so would be getting are the has that while that of it supplied But sources fabs qualified. for And is the Moore's they model nodes to empty of the

for I into So supply -- going the persist but XXXX, it's will chain of be the year, in remainder we're certainly, constrained believe this that to a situation.

Raji Gill

IoT terms your your now in types multi-protocol, as of of leader available considering? the IoT follow-up, are such are multi-radio, SoC. you out IoT, a Are there cellular, servicing there other in becoming of all When much you're connectivity for in that just to pretty kind wireless the you're standards forward? of kind IoT long-term And and thinking different massive by going dominating strategy technologies about, that

John Hollister

build-up And business. to push the opportunity of in get it's we with and that, focus execute and continue that when of really Yes, important protocols within next and to -- with a very can into other the from chip. accomplishing important lot cellular, the the the onto sale Thread, that we think one you mesh massive our the massive run standards we one -- technology look on look of to if all obtain the And our process addressing things things that think opportunity our of is strategy then Zigbee, on those focus, IoT. all technologies of most in and Bluetooth industrial be vision, spread and focus Bluetooth, and WiFi, about I&A a and but we're are certainly able this that too we focus you even and networking, I group we the to Z-wave, thin. for think There's the to IoT, our WiFi I we don't on also that at that at our nodes, proprietary business

of We large could seen growth areas. having going a success be from as in especially long add adding another fact, protocol. have runway And necessarily another the after distraction without other cellular in a to these protocol,

keeping that on, really a but what eyes something is being it's sure So we're careful massive on ensure our also very standards that. maintain we've focus prizes, got success that the big that market. make we're growing we which the we And to that on that is to make sure in

Raji Gill

it. you. Appreciate Thank

Operator

ahead. question Matt come from next go Our Ramsay with will Please Cowan.

Matt Ramsay

a Thank Good has wanted IoT company I the you little concentration very been? I proforma Is materially and the I&A the bit to about much John, guys. distribution. my the than for business morning. business different combined think ask that a IoT the sale, to then on after observation franchise I your you'd in your own below right that at basis. the that secondly, supply state levels would now the like inventory with yes. be are channel books And probably in run imagine constraints, steady and in inventory business

inventory be be could demand point versus inventory get you bit back here? as at an little Thanks. talk perspective about from what parity If the to businesses supply IoT some might where rebuilt we need a to

John Hollister

from a business outstanding on first customers Yes, Matt, base distribution distribution with support is of broad IoT a network. relatively certainly, the question our heavy

levels. see you're see channel normally more build more channel not a that higher to is the with carry lean. the we're on right, expect distribution inventory like side inventory a there high be like to than we'd it inventory the in we And now. faster of And right the of vertically tend to to operate. IoT you how makes on broad-based some And And operate inside question, business relatively the turns IoT would business level sense So businesses. company more bit we With a inventory inventory. average, on oriented

Matt Ramsay

announced. Got a deal reflection the since and just the gotten so of Tyson, picture investor last or question, was bigger guess just, Thank some you. in a it. and feedback week I've I

ask guys billion then this going the that XX% as to franchise get the know. imagine You IoT to forward, look a at we're feedback management the growth been TAM? you've IoT outlined team the in of that innings give you've $X agree in I market And you I billion IoT early would what the $XX door back and I don't within earmarked you wonder debates phenomenon. the board shareholders. proceeds? bit would of shareholders and range is in to from investors And wonder use a your of growth value a high public might of quality market as that scarcity observation My cap companies. I if further the really it of any So the there other cash business returning grow would appreciate thoughts what that could picture that to big uses helpful, just question, it? versus shareholders? be be to

Tyson Tuttle

shareholders we opportunity to front is plus, of of said, we priority. I we're That have staff staff, here and balance the have mean, substantial want to you the the a on after And cash of an to on TAM will The sale going want have go massive a Yes, and us. I&A. the order board cash to returning both being and sitting don't in that important success. the $XX billion that to belief ensure completing balance sheet it's my our

will we execution. So focused on be

be the to pure and going we play advantage execution the area, that. I&A acquisitions on. we we and got would IoT cash there our engineering sure of within continue I balance in a I as company that a active we a important transaction M&A, over the lot also we interested of our certainly, of team we've with And with to to efficiencies immediate got move in. points. the think and range distracted for optimization that an focus add to narrowed be One is acquisition. execute us of And within Skyworks, our having that even two be that would substantial money, and but are been to of this systems. and that focus just will is terms terms be pure would of full potentially necessarily make want and And take have of terms brand, not we've in terms culture, we've that we that terms get in of gained narrows number to execution, focus in do IoT focus in done by targets other on both now to very of after returned that

to So I in return think to We're feedback getting be or the from investors this repurchase. going going overall, we're our to of send the right is share to message that dividends form welcome either business. right and on thing feedback the IoT mechanism the focus think on do and optimization that's how to exactly and around really but we execution that, our and do deploy

Matt Ramsay

Thanks, Tyson. Appreciate it.

Operator

SMBC Securities. from with Srini Please question Pajjuri Our come go next Nikko will ahead.

Srini Pajjuri

morning Good the forecast run get rate, a much $XXX year. million take million if John, end the of to for quarter, next you pretty the for $XXX guys. low on for I your think I guidance you. IoT being to your flattish Thank

how thinking they to about think you we about is the any and also more the So seasonality business that few should if remind get second-half? how us And if as that could change, over quarters? might there's you're and this that next supply

John Hollister

Yes, Srini.

IoT a based if less certainly business first the of from video it I more has quarter there's a than the you broadcast that, in that's more simply but second-half other of example, drive product sequential focus, We're like right You tend general way possible, really in categories trend. broad seasonality it's about that's secular apart the in see think do to the for going growth see consumer softness common you're which industry, the bet. of we Yes, our can but to some some thinking directionally.

Srini Pajjuri

in of decision something the potential soon usages a Got or the receiving do divestiture, the going mechanics, when about the cash, whether just you to QX, remind dividend you you the do some I&A the anticipate could to close anticipate you then back said expect after else? John, you how cash making And it. deal and the it's buyback that, or of us and

John Hollister

Yes, Srini.

We receive that's further depending after expect indicated, at input taking Tyson the the from horizon. we'll that, technique that closing here deployment time capital to and with puts will affect cash the as the can work as as investors finally on be well just consulting board a be the

we're time, about thinking years not and sort it. I think and measure we how that's can that of quarters months of time, of

Srini Pajjuri

then spoke, has as Got the And on pretty progress you said think acquisition, one time last it. I been expected. last we the much one Redpine

just you the would of to looking some Thank highlight, I contribution of how that kind if there's any mileposts you us you're and that think that at that's want progressing you. If revenue could helpful. remind water

Tyson Tuttle

believe in we with the that we the we as to we Redpine India. Manish VP on track say, are script the talked that targets Yes, acquisition. And set joining would us I Kothari of out about

of and team want continuing those the XXX investing center that center, perspective, wireless experience people design next in to roadmap the make products software continuing a on a our we strong we over generations platform in into hardware have India. WiFi, So are from And design technology. a in integrate WiFi and there with both leading to that to our into execute

be to bringing the expect year. we So next here optimized those products the into more out new over market

into overall accessible the take our we of important WiFi So range very the us with turbocharge we that to the broader and customers. really that I beyond about to and pleased platform talked allow think most integrated and that what that pleased initially. revenue with thing technology will is applications And a team, very make the really

Srini Pajjuri

Tyson. Thanks, it. Got

Operator

Our from go next ahead. with will Svanberg Please Tore question Stifel. come

Tore Svanberg

congratulations the their and also and and you, Thank Matt Daniel on for promotions. to revenues

Certied's is that question Tyson. on First with X Vault achieved the PSA you Level Secure

itself to gets the whether it's how on getting [indiscernible]? could higher just or elaborate you a important how that ASPs here, little The that it first the company that content bit monetize and do you is, that higher security perhaps monetizing thing or intend

Tyson Tuttle

pretty Yes, attacks of hitting software these and both the devices hardware security the hackers really is that and impenetrable PSA And top the from was end of in of in kind required. levels are terms of making point sort and deal industry big certification this a thing. that

so connects and cloud of also the And in and number architecture the all and designed way the it built the chip and of that. and we've features way we've keys software the into security a the to exchanges

of that security three of a kind enabling all in credit can can or those it mature management of stacks a will credit updates you we level, your that about from stuff we all further cloud card So certainly this amount that And phone, is a and securely, point, get lot at. a to that at have each security over necessarily like are and series individually It's something only today. these our as these that in security way and you chip further be from as to way and small but enhancing functionality way a the in functionality of carefully we've terms not your two penetrated secure unique we applications. a additional end-to-end something communicate very an software can our streams. think the or card, then devices. We revenue device have revenue devices that devices. we'll not out something ID create and you this you series within the and looking ability the and forecasting card, time have in Once are Silicon, you at that the on terms additional little in address IoT, have But the -- we thought about seeing that implementing that be And believe this updates our general entire revenue roll the the and but SIM can a and stream. devices your completely concepts device we're those in have and you into address to is of are yet enablement

Tore Svanberg

the know foundries a change with with way you Very continue to work same you really through do divestiture, work as that does different foundries? I follow-up. with good. my in to today, the that was expect but And go several material or

Tyson Tuttle

business and somewhat chain infrastructure were the for our actually our Yes actually automotive IoT and different. supply businesses

I&A are significant actually get. And chain the we one benefits So that the is simplifies to that divesting our that supply of a we degree. fact

So there the on side. were are a IoT number of I&A used foundries side that that on were used not the

they've capacity. very TSMC, at a with with We everybody's done struggling guys, relationship while those good partnership us, time close have XX-year same a with job for and a

at to making that work they're access support our additional there looking we're TSMC with continuing the relationships we to growth. ensure so And to sufficient investments. could have expand to capacity capacity And that and also

Tore Svanberg

you, Thank Tyson.

Operator

Thank you.

Peterson next go ahead. JPMorgan. with will Please Bill come from Our question

Bill Peterson

can last IoT businesses? morning, was quantify thanks difference between industrial quarter? I Are there where for hoping infrastructure currently? automotive good and extending you help are hi, and lead the And ties questions. the a the Yes, from times between and taking is lead they the and certainly

John Hollister

half Bill, so seven on even definitely longer looking a of Hey, Yes, coverage. the We're on is across on order have. times year some had across that's the around product John. lines extended of out. now that I well, times that, of pretty And mean, we lead this weeks past we've that. the average than or board book businesses various have in running lead

Bill Peterson

somewhat Okay. on question And the IoT. is part second multi-part

share earlier XX% guess, measure I and performance I more the market let's help sort reporting to I report anything granularly on but commercial? I end-markets, that say one type home the constraints, you industrial, lived segment, and consumer, some industrial can about or versus and You growth, on focus Following we have where you progress guess, contribution guess on question growth of commercial growth focusing expected, peers? from supply or kind but with guess relative longer-term, you the do the see and your XX% gains drivers, of, all and of of protocol that more talked of long more are

John Hollister

of and part seeing a and here home two in we strategy really Bill's and customers. and areas industrial between fair to customers our have the performance Yes, in limitations this treat is upside of well be is with we're tail the in supply John consistent this long life, commercial. smaller scenario growth And again,

we larger mindful need of doing, allocate we as And also that we as with also something be customers. capacity. So, we're scarce to that's deliver upside

the mindful those around we'll forward, as how exactly have call. going And as report things. we're be next working of later to and far the through reporting out, we're to break forward going to that on more we have that So starting

Bill Peterson

Thanks.

Operator

Instructions] go [Operator from William come Blair. Vecchi with will Our ahead. next Alessandra Please question

Alessandra Vecchi

clarification color how of next years? a side the IoT as the few just microcontroller right, the think over we should about All and forward growth question business, going on any

Tyson Tuttle

Alessandra, in is growth on this wireless is big Tyson. side. The IoT the

wireless just year-on-year. the were up quarter, towards shift in look mix we to So, And and at you wireless MCU if is XX%, and time. over last more wireless, more mix the this between going

that of the of on wireless bit have We refreshing all continue them. in MCU side microcontroller investments side. our and make good some remember eight chips incremental also, our on the that eight in see have to And been bit portfolio, have we you opportunity to a

you devices microcontroller a that chip that. in the redeployed wireless be And might those where microcontroller the as functionality or opportunistically market, microcontroller so, as a extent those something to we into sell like can cases need with well

but So, do see an business important important as we onto of also MCUs as itself, component wireless. an

those continue connected our of but the is attach rise all wireless see the reality, to businesses, in to microcontrollers, the to IoT. of going So IoT rate wireless products proliferation we of as

Alessandra Vecchi

still annual one a on past for should moot give transition OpEx somewhat basis quarter. but guidance be until And well, John, combined point, helps. maybe a only growth that to that of the then we That IoT would just over X% thinking models about roughly

Tyson Tuttle

thanks Yes, for question. the

that we're revenue some upside in compensation strong in a revenue, the and is on seeing we're XX% OpEx variable more increase rational With given view in to the upsight X% seeing.

Alessandra Vecchi

me. you. makes that's It for Perfect, it Thank sense.

Operator

This question-and-answer for turn our Dean I'd back conference concludes closing to any like remarks. session. over the to Austin

Austin Dean

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

Operator

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

now disconnect. You may

Silicon Laboratories (SLAB) 28 Apr 212021 Q1 Earnings call transcript