SLAB - Earnings call transcript Q3 2021 | Silicon Laboratories Inc.

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Operator

Hello. My name is Sarah, and I will be your conference operator today. Welcome to Silicon Labs' Third Quarter Fiscal 2021 Earnings Call. All participants will be in 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 call Austin Dean, will now Labs' to the turn Manager. I Silicon over Investor Relations go ahead. please Austin,

Austin Dean

Thank you, Sarah.

be our website recording a silabs/investors (sic) on now meeting at Investor available will the of are weeks for section We Relations [silabs.com/investors]. X this replay and

This Tyson recent quarter's Chief available along me They Financial press information Joining Officer, will are business financial President; tables Johnson, discuss earnings Labs' Silicon Matt today third performance on Officer. review and and activities. Executive our financial the accompanying Chief Tuttle; John website. with our Hollister, and is release

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

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

in Tyson? now Chief call today to over refer will Officer, Silicon call to like Executive detailed to the continuing I the will discontinued operations references Labs' Tyson all operations. be from to Tuttle. information Any For explicitly clarity, results noted. turn would

Tyson Tuttle

very Silicon X% $XXX in of in achievement our unusual, how team the executed such Thank high increase announce achieved quarter an year. third of quarter our you, Labs. Austin. challenging revenue the to environment. I'm a this for million of excited at from second in proud and previous has revenue, times, record recorded We I'm quarterly

to discuss will Then, turn the John John? accomplishments on our provide like Hollister. for our further over Matt John financial quarter. details will I'd call execution First, to performance. now and the

John Hollister

Thank quarter. home and QX excellent year-on-year. quarter, saw above strong both which life. third the growth of the strong range guidance I'm of and report for million, and commercial, at revenue is XX% of you, $XXX primary pleased to We our ended represents Tyson. the growth end-markets industrial for results our in and high-end IoT during

the and home and sports in strength security, retail, fitness. quarter Here smart were in portable medical, automation and

revenue during of the robust to growth Our delivered wireless driver all and quarter Bluetooth, including and our By XX% we primary we Distribution increases saw saw was WiFi, QX Thread significantly. greatest solutions up XX% third year-on-year IoT geography, the continue were slightly. growth revenue strength products IoT in be third the of gain. Wireless share Z-Wave, in Americas and Zigbee, Proprietary. total sales. the protocols, APAC wireless and across the up Europe, which was quarter in

highly remains business Our diverse.

expectations for increases only situation supplier XX year, rising effects. positive tight across our supply remains favorable at dynamic our example, with price mix are the of Non-GAAP largest the business IoT top we we and this mix. manufacturing to and seeing increases the Earlier suppliers cost our The landscape. implemented with from recoup our the quarter approximately and our the customer gross margin total. XX% X% is customers For of represent in exceeded XX.X% costs

the in and IoT an manner to supplier customers margin our equitable We gross preserve growth to pricing remain maintain and our strategy applying market. committed continue our so, In doing to cost strong pass constructive to our increases to expect long-term to along customer performance. we relationships in

mid-term. increases, greater expect that the and we cost in to associated timing volatility in variable and to the continue margins with price gross near- experiencing are Given

million, $XX non-GAAP were up increased due of developer variable and With prospects. and expenses Non-GAAP our nearly to our expected, customers, SG&A to the to expected business from new million. range. products drew second costs year, In slightly conference performance $X.XX, with of for better our primarily were in IoT at QX Non-GAAP higher expenses brought investment X,XXX increased conference. earnings $XX which As its operating with R&D the our operating on expenses pipeline associated in was operations QX Works continuing per high-end X%. compensation significantly share guidance partners than margin upside above

approximately non-GAAP X%. Our was effective rate tax

at at GAAP SG&A gross Turning margin from was our continuing million million. with GAAP results, operations expenses $XX our operating million, XX.X%. R&D to $XX and $XXX were

included $XX at and In $XX stock-based expenses addition, of million million quarter. for the intangibles compensation GAAP amortization of

$X As $X.X billion during of we the of a result, operations transaction business divestiture infrastructure on in operating and onetime closed the recorded million. continuing loss the GAAP gain a of from the QX, and We from generated automotive a quarter.

As our a operations $XX.XX. GAAP inclusive per result, discontinued total was of earnings share

ended we $XX Cash investments. with to $X.X divestiture transaction. and cash QX, to due sheet, balance in supply declined billion receivable had million. operating in in turns cash the operations experiencing strong our from We of growth from third was the both of chain million, the continuing delivered inventory upside discontinued operations challenges, our times. days. primarily DSO flow million Accounts to quarter billion, on in XX or to total third now collections, Despite the year-to-date the flow solid in Turning $XX bringing team we to quarter $XX and X.X representing quarter revenue the $X.X are

under ending the program bringing $XXX million additional on million diluted X shares the share. auction X% our open to $XXX our count. we fully repurchases, or approximately of a modified inventory total with following per $XX about $XXX million market fourth tender expect retired of QX completed year-to-date common decline price This the auction Shortly offer We in closing quarter. of stock in repurchased supplemented at divestiture million balance of out we the a the we open market to share Furthermore, which authorized. our Dutch Dutch QX, of

end share million. the $XXX through total result, of completed repurchases nearly is QX a As the

We demonstrates million the accelerated $XXX in repurchase also into the board to agreement next enter repurchase This share cover is to in expect repurchase authorization step our value a an capital today shares. an prudent allocation additional deployment accelerated will now to fourth pursuant to a for capital guidance program and quarter. shareholders through commitment our continued I to our strategy. share deliver

We expect fourth be to the of in million. revenue million to for the $XXX quarter $XXX range

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

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

million, margin effective and We we basis, earnings non-GAAP about be around rate On $X.XX. be be of to over gross operating $XXX share per share now to to to to Matt. expenses and of GAAP GAAP loss. the be $X.XX call $X.XX range to $X.XX expect loss in non-GAAP be turn the range Matt? per in to will GAAP a the a I tax the X% to XX%, expect a

Matt Johnson

revenue on team connectivity WiFi Redpine and we're the lifetime the slightly the of opportunity growth In right and for for to despite energized of lines. that We've build became as Thanks, did this consider providing achieved pure-play revenue than to company, and our to which in business. Labs The chain QX. excited we revenue remarkable. and the saw we Supply in by normal that more We're continued quarter, product Things In doubled what third we after laser results. year X quarter acquisition. John. to the meet the the in long-term Internet quarter were capture last of grown XX% able core nearly focused is while We since year, all range. is business, greater a a a early wireless the quarters sustained path QX challenge Silicon customer are XXXX. thing significant in still IoT nearly captured our constraints. all particular, of first market, We've inventory report growth record the we operating a leadership profitability from work and We full first win connectivity the our XX% do third model. across remains We year, represents. wireless last demand to happy I'm wireless the achieving year-on-year supply design also gains market not our than

board, we incredible. growing strong highlights. IKEA, smart new over addition markets the developer With as $X and xGXX industry also like We Amazon, revenue. conference more to rapidly on solution because supporting while in In potential than retail, networks. Silicon Schneider over xGXX XX the leaders is M-Bus and add of our our estimate Landis+Gyr identify multiple Labs, can share feature growing This more annual also almost of brings award-winning deployments, the efficiency With billion security. and expanded from Works mioty, to mile Amazon for well of electronics. home We than Series Works commercial including to new an I'd QX, SoC IoT security we executed smart like automation. portable wide like as it's a range, an range nearly X,XXX industry opportunities and lifetime for announced than features. helped on of In that XX% September, city wireless second We a Secure we the wireless our the last tracks operate Z-Wave battery, from addition XXXX xGXX, us XXX combination supports medical. with response It's latest and a leading the X demand, results, and across industrial drew more ecosystem was featured Google, the And popular By Sidewalk, Vault wireless our now The platform. some financial held well protocols, increase and the conference. energy In the year. a industrial of to sub-gigahertz optimal including we proprietary registrants, industry set leading for Wireless number The smart building coin years cell a keynotes

between protocols. solutions experience with connectivity. to the provides developer IoT Unify This it interoperability protocols. Labs announced consumer making easier application easily SDK, confidence, we're to design can arrives. Kit bridge of devices, we and knowing interoperability Software or simplifying industry connect paving readymade our brings Development and Unify level software enables for processors that committed to of The to which it can matter between translation is significantly Unify multiple Next, a Unify the wireless industry. improved way gateways By once SDK, support SDK protocols wireless With for their they wireless us new ubiquity. is brings including developers kind Silicon

security advanced Finally, features customers. for our to increased supply This Service and the allow in application devices trusted as the greater is secure service CPMS Silicon customize need specific unique a we over and way deal. as Manufacturing enables before add CPMS. to secure facing provisioning public, secure security manufacturing as protect secret breaches, facility. economical boot, customers security, such simplified of offers big and encrypted updates, world stages greater the final Part product to is differentiation and leave secure their or certificates. the markings, to air our Labs custom the customers against first is private programming, This identity announced chains highly our an compromises debug, Custom a and space property and in intellectual counterfeiting. numbers, keys, well The part products

Our our record and for and environment. time customers revenue, really together, is a this device are while what drove great of challenging service protection, uniquely secure available innovation navigating moving industry implement significant We team brought proud to industry. has more the accomplished. I'm our all at delivered a

potential employees, the brought a like clear a his to decade our Journal surprise communities customers, him Business in excited be awarded like Legacy innovation Internet being Silicon The Things felt passion of to Award. transform felt, devices we and your over for CEO moment the their to and a now, is smart forward. market. a the Labs I'm no industries I'd words. the His to in Austin impact in to fast Tyson continue cities part and CEO today. that partners hand for vision is I'd of you, of and a baton is and XXXX thriving has and leader values to live as the world. been in to up commitment had move us Tyson's leadership few the deeply It's And Labs. and growing to Silicon where leadership carry we the and take as for pick to it it of are around globe. recognize you here forward. He for Now, connected Tyson will homes, Thank support. we a

Tyson Tuttle

the honor company connectivity Matt. have XXXX of Silicon driving a and you, and what a values stayed privilege proud lead all a of the IoT I as as hire who values. time, transformation is pure-play world market. employees I great present Throughout Thank intelligent we over CEO, our secure XX years. true It's reality. fast-growing for this to into for to leader the And XXth to those to the thank one employee. joined diverse past vision am Labs of a best. smarter, accomplished decade I last wireless in the and want large, been the connected so last into help more of the a And we turn the our

Going forward, lives I'm and future thrive about ubiquitous becomes in as to the Silicon Labs, of our economy. throughout excited the connectivity

the to the on pass under Matt's build And I ahead. to his continue leadership, and culture. in carry the ability Silicon confidence I full forward I strong Labs' capitalize our will on torch, have As foundation opportunities team know to values

time want sharing and patience. to attention engineers all I've Austin. great And vision our for of Labs' your to Silicon that, is I'd this for stories call I thank of over our innovation, to my the through like the since work call, turn back years you with enjoyed with the of industry, last and all. and you earnings Finally, the sometimes

Austin Dean

To And one Tyson. you possible, to update. I joining questions. follow-up your Silicon the Operator? business ask XXXX Labs' thank that accommodate QX limit opens, you, inquiry will call market one the as now Thank I and needed. with people financial question before open as if for time many you for

Operator

Please Wells question Thank go Gary you. first Fargo from [Operator Our Mobley Instructions] ahead. comes Securities. with

Gary Mobley

Matt, driven the next with year, the to upside, the I'm that the ratio demand chain exclamation trying To of is wafer an extent And where of the demand some I revenue like here to by and to the chapters or the question get what and you're forward-looking point of general? a both careers. and your is ending putting being And by second half Hey, driven in finish my Tyson guys. for start upside? year. congratulations, this And my congratulations lives supply, your extent What better supply in being roughly posting on easing on taking quarter? questioning. to for book-to-bill it Thanks on what want the of X% is that's to backlog really your metrics, fiscal

Matt Johnson

those increase, to our With coming is maintain margin to to continue in we're to With that we is gap Gary, increment Yeah, see our the we is you. in in see to like our constrained, we're opportunity continued is I that the coming but being way and supply-chain Matt. trying the forward, at be sense passing this will that said, that seeing our supply Thank demand customers, looking from the supply. extent moving continuing up guess said, what see I'd quarter suppliers, to the on quarters. the we constraints makes answer that as widening and each being on that only forward. to model. it And same time, costs

though to at incrementing continues up even we're increase rate. faster a demand So our supply,

Gary Mobley

could $XXX that is expect follow-up to important. share the but Thank a it Nevertheless, boring, roughly million you're, concluding share-count you ASR Is that. John, this what bit million us XX week? with would you you shares My I following outstanding? be for this guess, question

John Hollister

Yeah, the thank is in quarter. now. estimate The would for that's fourth And, around view Gary. right XX million be you, really what there shares

you think to suggest I'd what that's So about.

Gary Mobley

Got guys. it. Thank you,

Operator

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

Matt Ramsay

very much. you Thank Good guys. morning,

certainly Tyson, outside. hell we something First observe importantly, think that a from a And built It's the the congrats. most culture there you've off, of I run. been is can

of pricing I a that the to first of wanted given mentioned environment really some question. it things So about pricing you're cost, touches is touch and that is passing that showed much of guys. be the in pricing. some And so the supply, just several Gary is this of back-half talking work and what of for their of might that in, There kicking upside any tires through upside the that kind to, you lot much the of just how how how next But much you kind through how durable less wanted to is along on in Thanks, might slightly a couple environment that his folks being to companies units, as seeing. the input we're big of year, obviously, pricing see that my in be and successful, maybe tight on guys quarters. increased question,

Tyson Tuttle

let business couldn't This the appreciate level. of success kind Matt that. continue Matt comment had on is I Matt. Hi, I in and then a But I'll IoT off for I'll take the over start and and next and be reins it to take great here It's words. been building the lot the Tyson. ride a we've happier to to

few comments that's a like look the Just forward. to going going on upside here and what revenue

And want the in I a in a seen environment, price substantial get you're and our we expect degree. in in this our create some also in do suppliers. We're to equitable going same way way, your is got maintain to to the that we're middle a to customers. of, taking want relationships We that want future. damage But forward. want headwinds hold And can't those IoT in that in that this increases goal. with as have sustainable pricing to long-term an We we don't are and relationships increased time, We to at with seeing markets, margins, caught the cost you of the don't going terms we And power our from continue on pricing demand. as strong to a some year costs coming in certain mean, we've certainly passing to supply power. forward. go of we We have constrained customers.

effort the sure supply roadmap. team supply, existing that. both that to that do we well we year, with supply on also really And, into customers, existing going say a the XXXX see I'd as as R&D making but or the into can substantial driving as XXXX, and with been suppliers, go supply increasing well company, as as the through we've putting long-term securing supply we is that. terms increasing additional there got that into support in future, our So for has the new that putting the bringing of balance with real in new our growth into our

good cost growth. very our support our combination good So a manage the our to it's forward of supply increasing pricing, really going to execution, very things, ability and and

Matt Ramsay

Thank all really Tyson. Yeah. for you I Thanks. it. that, appreciate

my sure quarter. John, comfortable that It early is be and ahead fourth long-term somewhere to both announced, As follow-up, XX about in that, XX% an guidance I it Skyworks, we're the want guess, you think operating but think really, this the like guys to quarter Matt I got looks to divestiture the for the deal, get ask from the out in in forecast the model are when running of you deal really that, franchise the And points IoT I that margin perspective. the little you at that. to leverage I with low-single-digits adds fourth make announced the medium that was about model might just a still with term was

running really now Thanks, the quarter you had commentary might appreciated? X you've be any just business So a that have guys. standalone, would with

John Hollister

Yeah, John. Matt, This bet. you is

and we're remains it grow of We that. a longer-term time. profitability goal drive focused now. And guiding committed good to our outlook to that model. at business we're the that the are exactly on to change no That's to pleased what on running model that actions are right the are we ahead and here. deliver start our And this and really It's

Matt Ramsay

much, Thanks guys. very

Operator

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

Tore Svanberg

we're greatly. Congratulations congratulations retirement, to on the Tyson, results. And you. miss going on you your thank strong Yes,

And one you on way does it any financials? First little the just bit as into question can CPMS is tie share it is that either that, gains? program; as elaborate far you a there on of mean could exactly what continued

Matt Johnson

Matt. Tore. This is Sure,

basically is on security before it stages don't the and out security doing program I works. to their it that bit simplify send security programming them as detail devices This it somewhere add They a in access be for that supply our facility. can configurations. in of to configuration in it service leaves And little some And a customization. ships earlier, else more allows chain. need our as it allows to flash customers really said with So sending give else, before manufacturing how late really is the cases versus also customization and any done for well so helps those the it what multiple we somewhere them it the places to, as add to,

that products our really well. in seeing general. to our So capability really excited industry, challenges, the or in and customers the because this further for, industry security whole threats cybersecurity This it's is timing as the a the are chain differentiate supply right we're about, whether looking the is is ability their and something is

multiple So our awesome chains charge to good accomplish complexity because for we it's an value in combination. for, It's service are economical a a pay really supply today. to things have of they it's these their customer and stages that base,

is this that capability we strong. works the with, announced really just so been reception and has and So a far,

Tyson Tuttle

back a I'd customization other customers us really And in In protects also to a I'd pricing broad type us that's model. parts, our done lot - that is allows switching have way our for things advantage market. their it's for they of they manufacturing. proven words, Tore. that big the enables that It end custom a from given go the that's us. new because do of also don't testers the of scale have just program way. in say very, advantage like test of part prices, the that up premium of having Yeah, that, custom good big to different It supply charging get, platform it Tyson. and and acquire through us like them are And we also that's that this saves to this, the agility also very targeted to add, very a somebody we it without a as into gives the at us a just to test element for the arm custom some platform we efficient kind work. it's us them. a flows, so efficiently manufacturing This we've enables

So that going the plays of widening forward further into have. kind even as that we see and the and CPMS program, advantage the pricing margin model in we

Matt Johnson

The application own or last make to Imagine programming that part as they wanted Wi-SUN Tore, to inject top a marking like multiple standards Matter, manufacturing at add, their could to They needed phase, wanted numbers thing, wireless I'd it or secure schemes. support that well they their for just if real. of there, adding or customer customize certificates to do in keys. do as their

all them their and allows that be supply really simplify through portal, can to their secure security. of there done a chain So which increase

cool pretty excited about it. it's So for

Tyson Tuttle

for customers Yeah, a is being Labs. unique X,XXXs do that to a of broad able this customers, capability do X,XXXs across to over range you're the ability and of Silicon talking

Matt Johnson

touch No on part. our

Tyson Tuttle

Yeah.

Tore Svanberg

that. for Yeah, that's you great Thank context.

for, Just one sort of about you ahead to quick gross quite John, when follow-up talked bit mid-XXs but obviously, margin year, divestiture, to [ph] [XX% of longer-term, moving you that. John. a this XX%] you're did the

margin that you does that time? margin the higher longer-term? should to still - be sticking over mean mid-XXs the Or gross gross Now are

John Hollister

in the effect. in longer-term do outlook what model long-term thing think to and in when some cost today. and in it coming of an No But see there. cases, the exactly seeing about update increases have unusual we're an comes into industry. change favorable the here important We'll the are being timing mix increases contributing not for future. And increases to are we price recoup that is the of Yeah, and price implemented time an costs as Tore,

Tore Svanberg

enough. you, John. Thank fair Okay,

Operator

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

Srini Pajjuri

Thank you. retirement. congratulations and Good morning, Tyson, guys, your on

Tyson Tuttle

you. Thank

Srini Pajjuri

us going on mechanics you pricing, work So here. can the just help John, maybe actually understand how on back

then thing what it'll is left? and is want this of I I your some more percent So, this to not other permanent. understand price the cost implemented already And think, of how to be be business have understand may increases you helpful that, much actions

trying of you of So should to is, down costs as that I'm kind some as worry come as whenever the coming we down, kind normalizes these know, pricing industry well? about out, of figure

John Hollister

we're head alluded precise to going realized into more Srini, we suffice that to next relief year, to. be cost from detail increases But coming not Tyson get price into where may here. really say, as we're Yeah, seeing as we

there area. customer for may And, be in the in will long-term our to get also work that to and the So that stuck leverage we objective maintain strong be to this to that we said have, growth ensure not pricing do have in the our more as but to end, is power the us. beginning, middle, there relationships we and

of those So in the terms normalization conditions, what of brings principles we'll see industry future from. but are the that operating we're

Srini Pajjuri

then… And makes sense. That

Matt Johnson

I can Srini, Yeah, also…

Tyson Tuttle

Hold on.

that, it think new you move phase cost going n-X move And nodes, becoming used n-X, mainstream would and guys depreciated more and would that of are digital the fully Moore's of got terms expensive. in increases semiconductor industry, the technology the and n-X, where of and be we of law durability fabs I into the in kind a would advanced that nodes Just got you've more full, be that and the out now those into. to we've

We point means new and build advanced ratio fabs TSMC have the And technology. others depreciated. not mix, causing to now mainstream is mainstream between the where those reached that are a fully fabs, and that

nodes, CapEx the to the having now seeing in cost across because element the put just new of a advanced So across. that right but be large build additional to is at the industry increases the is that's capacity of nodes, not

a the if look that's - so it's the another time. cost across we're over seeing you at durable And that that element there certain of increases industry, is

electronics seeing, of And that's lot of us step to we're and supply the that and forward through economy from our to into really be industry we've of the customers content And that. function what structure the match acceleration the so demand pushed CapEx, through throughout of cost that right this the of recouped. pandemic the the has we'll is through to suppliers upstream and that seeing in terms work constraints, that you're But in us flow the and a increasing to a to demand requiring our work to now. got driven that's got is that's seen

Srini Pajjuri

us quickly us, you helpful. Thanks, up That you that you. Tyson. Thank months last at so, would about what the stable some be And could give bookings could you whether channel think, if X down? on or John, also, or give said sense. that? went if and quarter, inventory, Makes - color were I And, on

John Hollister

Yeah, indicated, channel supply supply. And is And expand have to inventory the of consistent. that's to our in working stable. to but And strength why Tyson terms widening bookings the actually level. the have we're about continued bit demand persisting, on remained things, all talked chain. only booking and an elevated our is Matt as not a We've relatively ability

Srini Pajjuri

you. it. Got Thank

Operator

ahead. Instructions] next Gill comes Rajiv from go Company. question [Operator & Please with Our Needham

Rajvindra Gill

end a what specific And component, driving growth? that's better there Are question kind demand and July, wireless demand all extremely Yes, seeing the strong. outliers across thank than of that luck similar these you're that sense you Tyson, be are markets that X for anticipated years? in well? talked hitting of WiFi other it's on about you are demand months, well is bookings as IoT previous you is about the the the end year markets to wireless XX% you're what's total that markets the to almost the appears as this $X plus relative I end protocol on adoption is congratulations, landscape, and Back you wanted that the of that particular obviously future. helping driving in this to of get best in increasing. a the are pulling as year-over-year, for last obviously Question components billion seeing or grew

Matt Johnson

coming Sure. This is Matt. directions. few I'll answer that a from

all, terms come seeing across of it's markets First how in we're of across the and it's strong strong technologies, applications. and demand in,

IoT bright a overall but in we're in always there's So seeing strength quarter, very spot broad market. all, it's all the each

I most through seeing of you another now that take an And, or acceleration it's, expected look started off. design-win of design-wins, few board. across you applications now, we've think the way happen we've markets into broadly ramps, If had the multiple were we're grow in looked had And the durability to very seeing to probably take over And at have lot a pull-in at spend we that supply into increase understanding as a acceleration those a in constraints, while. that Because if of last is we customers, to driving and a insight years, the these ramps applications seeing the it time and of and why back, lot really we're of and our and XXXX. we're move this we're we the that customers. seeing what's step the demands seeing an trajectory with in coming

It's we to and expect the these. in it It's given we where broad. persist So see that's do IoT space, it. And across technology application. driving what's

Rajvindra Gill

for appreciate Thanks I insight, that Matt. it.

to $XXX previous equation, guidance annual $XXX, So million. your component is of revenue just IoT shifting your that. to on surpassing the over to was you're And supply the track do so $XXX so

your year's feel you're You In incremental XX%? from - terms XX% in TSMC capacity you at that investors has that's still rate how to - correlate that important your that XXXX? growth in in focus to that comfortable commitments least you for of When wide grow at you're give going on think going I commitments long-term year sense going of capacity to business given can mentioned next getting And that other capacity is secured IoT you to to forward? next gap TSMC words, make capacity? looking you be continue the IoT and capacity has to TSMC, the pretty you wide. still for us to a going are

Matt Johnson

Sure.

spending any XXXX, or incremental of that, of But So, where well. seeing able increment well supply to into working able supplier. our we are be And quarter individual as drive as end we're a each time resources as that tremendous to we're expect towards using amount of and to, up secure we we'll to a that speak each forward. through specific moving including multiple to result moving I supply supply some now, angles, won't continue additional development forward quarter,

said, environment. able time, at comments, we're So up supply. are proud, my being faster happy much see previous demand to than the we're and to given with something to But we that that's seeing same that increment increase this

that next to continue seeing to year, the significantly. So I and we're right supply been widen, increase customer-base do we've dynamic feel gaps our given those now. going good our that's that But help industry able the to in

Rajvindra Gill

You're very good.

Just target. last question, a John, on the gross moving margins. Obviously, it's

those How shift. there It's when within a you mentioned higher that protocols forward? you contributing, talking a but price favorable elaborate that The maybe a above past shift IoT, going are mix end-markets, target. see little also margin? about you're it's mentioned mix increases you Can bit are further, favorable You are specific volatile. running along do bit the

John Hollister

higher carry see that comprehended put that for than over normalization got, technologies forth. various And certain What our way we lines you've think I bit versus a there, we'll that example. about margin is Yeah, technologies, a in modeling think standards-based more to goals we've Rajiv. proprietary-based think others. time, that's But product

Rajvindra Gill

Appreciate it. Congrats again.

John Hollister

Thank you.

Operator

to This the back now session. Dean. concludes question-and-answer hand Austin I our call

Austin Dean

thank the earnings forward you. Sarah. can this our at business you you upcoming look information during you you, now Remember, find And for conferences. Thank can conclude several financial call. in participation to Thank our joining QX discussing our We silabs.com/investors. Sarah, further call.

Operator

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

may You now disconnect.

Silicon Laboratories (SLAB) 27 Oct 212021 Q3 Earnings call transcript