SLAB - Earnings call 2 2023 | Silicon Laboratories Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello. My name is Sarah, and I will be your conference operator today. Welcome to Silicon Labs' Second Quarter Fiscal 2023 Earnings Call. [Operator Instructions]. Please note, this event is being recorded. the of to Finance. turn Labs' Pacelli, now Director Senior will call Giovanni over Silicon I Giovanni, go please ahead.

Giovanni Pacelli

Thank you, Sarah, and good morning, everyone.

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

press financial are Our on release also the website. and available accompanying earnings tables our

to activities. We'll and our today John encourage business identify important Hollister. as Officer, our in risks are statements the actual and any questions and second these forward-looking this which date Joining update information review you SEC differ base Financial financial take in Labs' me and filings, Chief that Executive subject of contained uncertainties. and factors prepared obligation our results will call discuss our from Chief President these future. Silicon the to Officer, to quarter to performance We forward-looking include to Matt materially statements comments Johnson; on today review remarks after We They us cause forward-looking could of recent conference and risk no statements available statements. assume will those

Officer, the results company's over reconciliation the refer Additionally, financial included A non-GAAP we Johnson. call Labs' to section of of Matt Relations Executive is Investor Matt? website. I'll earnings the non-GAAP turn during to our Labs' will to in press now information. release GAAP on our today, call certain and Chief Silicon the Silicon

Robert Johnson

guidance. environment, Labs' quarter and share revenue Giovanni, with in per and everyone. second solid Thanks, team non-GAAP delivered challenging morning, a our Silicon good Despite earnings market line

of both industrial our customer position our erosion. business momentum. and favorable revenue of strong Broad resilience, and inventory achieving the design-win the business further units, the during However, continue weakness demand market strength our demonstrates saw and quarter. This we commercial in record our showed impact although the elevated of impacting quarter,

XX% So design-win our pipeline far, up half first the is in year-over-year. of XXXX,

of half level. will the the design-win ramps offset at continued production we've the ahead, ongoing year market in second Looking some headwinds that

market However, expanding how market to much our is that note difficult we challenges, dynamic strong over stands with now potential. mid- short-term confident and design-win growth to $XX over growth the billion, even XX% by which given now over to and excited time are the last an are financials. in we the to opportunity cover environment. It's important up funnel continued at the hand long-term revenue it And call these John year. I'll same

John Hollister

Thanks, Matt, good and morning.

slightly ASPs midpoint million, was the quarter revenue the declined sequential quarter basis. Unit was range volume in $XXX our on Second X% guidance down of sequentially. a year-on-year. above and up

the APAC QX was DSI quarter That shipments was is in mix impact to Americas quarter, $XXX XX% In which Europe, was metering. quarter. segment, we unit customers. business shelf direct the electronic smart million. last year. up stable and commercial strength ended the Home up due was in In performed to at smart QX the Home quarter. In business continue inventory $XX During Life. Geographically, year-on-year. year-over-year business at had in Industrial retail All cities, days. for strong. which was of million, the & category second labels declined saw in saw connected strength levels space, at XX% QX, greatest strong we Life in we equipment & The a our in and the saw to shipments stronger revenue end same period unit, from from Revenue well. down Commercial customer the segments industrial XX% year-on-year. of I&C the we High to Distribution the of first during down & for XX X XX% strength for the and

we as lower about from changes the to consistent XX% quarter our customer operating with income quarter quarter, onetime the price were is at gross costs increases with the was in quarter, XX.X% of first in the no X% for experienced the largest with under largely historical margin favorable of customers $XX items ended expectations on our based revenue combined in price expected major this margin was year in increases million the beginning XX.X% at in primarily of the than effect were United of gross mix. at lower in fringe on variable was sales. specific our million. expected were States. Non-GAAP we revenue, XX the for year of lower no quarter expenses such Our and mix. Non-GAAP results. Non-GAAP The manufacturing product the due or There This to and lower sequential input operating decline costs. expenses due combined ending product than $XXX top

non-GAAP requirement were on above on million. XX.X%. per $X.XX, teens. Earnings basis ended rate. non-GAAP margin GAAP Our long-term for development costs upside on tax in in purposes rate the than without would R&D revenue OpEx. On We $XXX a effective a in the that range higher slightly to the was the and the non-GAAP tax midpoint The to expected. primarily requirement operating slightly effective tax be at of a capitalize gross effect rate at we ended have normalized an estimate impact research share basis, inflationary and high GAAP of expenses tax favorability our capitalization our guidance continues

Our of GAAP was pretax favorable by our to guidance around million. income $X midpoint range the

for of were income slightly expense capitalization the expenses and GAAP to per R&D unfavorable the guidance the $X below tax GAAP range. our by was of the quarter, Accordingly, forecasted due year, about million. our timing share for $X.XX However, earnings

and of the sheet. cash the quarter We ended $XXX with on investments million. to balance Turning

sales Inventory $XX the past ended as strategic strong inventory outstanding grew a to $XX [indiscernible] for million, to days. market years. turns design-win added Our of accumulate X.Xx. on seen we leverage few net days quarter based in to the $XXX with million we've software accounts continue to the at quarter momentum the the receivable in total in balance about of XX We million

the second process quarter, finalized the we redemption XXXX convertible on notes. our During

credit in As in-the-money of result the company's IPO. just strategy. these value financial an facility sheet the Overall, the we stock, capital excess the various component XXX,XXX. low is are activities renewed the normalized ample to total active was in have cash. this which were from since QX, have the point QX, expected, in syndicate of $XXX $XXX of common all-time in QX with existing shares, in shares quarter shares, execute end of deployed the amount We these bringing cash market Board divestiture was through a the very total which at fully the our we XX our the reduction of the our July of diluted par share we for for outstanding ended around new and Directors banking outlays facility million company we executing and X.X count an drew the million settled purchase incremental XX, the the business count capacity share around business our On we the shares. The and balance a partially million fully $XXX capital shares a authorized authorized our I&A the in under fund million, We net issued with also we about the to pattern in $XXX funded and deployment. X healthy, of from ago in term. million remains notes, of also retiring time, buyback million XXXX revolving To $XX years X-year million. At

cover for Before I Matt, the third the call quarter. will turn I guidance back over to

has range $XXX comments, business million opening million, the his bookings. over the This the we quarter we in expect third indicated are to low business $XXX revenue Matt Accordingly, very we As and our several past to both units. in have guiding QX. impacted of decline experienced of in both units levels of for weeks,

$XX Given range the temporarily market from midpoint. this the in plus/minus are we million the expanding environment, uncertainty to

be gross higher non-GAAP in the XX%. quarter We third expect at slightly to margin

are additional in to are non-GAAP the in control third operating million. steps expecting to OpEx We the quarter. $XX interim expenses we taking decline to quarter Accordingly, third our

The a last in delaying effectiveness effective to includes tax tax benefit approximately rules from credits. the non-GAAP third related IRS the quarter. of pronouncement discrete expect be to week, related onetime approximately of tax the million foreign $X rate unfavorable rate certain to XX% the lower We a

the margin to gross per earnings to $X.XX is non-GAAP share expect GAAP XX%. expected in of to range $X.XX. be Our be we On basis, a

now We share per turn operating over million. approximately will expenses $XXX call to the be be Matt? of $X.XX earnings expect loss GAAP expect back to Matt. income to And share. I per GAAP a and $X.XX between we

Robert Johnson

execution current navigate we as a Thanks, Disciplined John. top environment. priority remains the

business we've long-term we've to the expenses impact secured. John but ability doesn't to in new all As way that a our taken manage mentioned, actions service or temporary potential or appropriately mid- been deliberate

we battery-powered with SoC, as their Labs' of edge. choose our wide are addresses market security. to us serves FGXX's key have segments of cybersecurity also PSA a first of well new a FGXX confident commitment is support, numerous edge artificial about Amazon FGXX's allowing retailers and including for machine level cities and quarter, to communications device portfolio for industry's and designers allow from for accelerator Vault solutions to secure learning AI/ML as Administration the Sidewalk. The low products program, networks Series advantage the The to strategic supports manufacturers to offer expand portfolio, the that market we bringing Labs. The our Biden growth We smart for X networks. protocols second smart they is sub-gigahertz, multiple as hardware announcement Level and expectation enables products. feature invested over ideal the needs our SoC FGXX product for Series new developing month securing in and portfolio standout low-power labeling development industry-leading in And connectivity The device positions nodes area need which announced ahead X of the security energy neighborhood certification dual-band our continued in a intelligence inventory and applications end which design, capturing certification X We to customer Bluetooth for Silicon recent deploying recovery. In capabilities the industry-leading is market. radios offers on applications. Within agriculture, dual-band X and the Secure our efficiency in like enhance for of their single a in cybersecurity the energy sub-gigahertz like our favorably most coupled built-in Silicon products, an a share, the a

covering every the already for will and Labs' embedded as harnessed real-world and Series represents forward lab community with decade Daniel seen ecosystem. use we virtual proactively Vice industry successful lie of products, address hosted bringing Conference will never X at planet, challenges my X a levels conference Boston cases the feature a trend annual We developer adopting sessions technical partners. following with customers conference will full IoT of keynote quarter, and next-generation cloud-connected who and the range suit. Also A important keynote who come Conference, of site, highly CTO, and our of popular With what growing in-depth will over incredibly together our grand customers Cooley, for that major computing will IoT such our preview security registration Silicon XX Series platform fourth the potential and our showcase President, have opened novel developers platform. XX for Senior higher share have May, be the for would developer our industry-leading health Manish that their leap the also August needed for product our XX is attracts accelerate a development. In knowledge examples other good, held protocol we X,XXX skills than a we anticipate a to major for Works customers being in a The Kothari, more ahead. Silicon which platform. year. already also more to every of on The Series ago. In will at caring achieve a and event conference, we and the I'll is from away imagined for the wide IoT connectivity opening our opening X greater Labs' and their caring IoT of practical feature

showcasing home, ecosystems Our connectivity of modern diverse devices, networks. IoT as applications, lab a simulation array smart serves cutting-edge of a and a

industry range ahead allows With lab refine of and assess products, developers scenarios, accommodating the invaluable challenges. and the an This device wide their their testing the focused of brands. real-world and to integration offers expediting Matter environment of developers prototypes aim market. In closing, despite of launch ideal to current within maximizing us and resource the growth into the them potential products ensuring existing efficiently, empowers protocols long-term we the significant seamless mid- on are a

this Despite headwinds, hand of product the while we market now positioning strong the plan. I'll us in portfolio are profitability. effective to allow our and through maintaining to long-term incredible opportunity over outperform confident market to ability Our it Q&A. capture Giovanni back execution strategic our for short-term

Giovanni Pacelli

Thank you, Matt.

the Vail for open Instructions] I'd Technology KeyBanc to on XXXX August Citi's City Q&A, our September. We'll participation York we call and New call Forum in Leadership in X Markets Global Technology Capital the for Conference conferences, upcoming Before questions. announce now open like Annual in early in [Operator Sarah? X

Operator

comes Matt Cowen. Ramsay from [Operator TD Instructions] Our with first question

Matthew Ramsay

and you usually Home give just my inventory here could real you're for to it's & I guess bit got clear cleared in be trying guide? And guess given you to first question, first, the up quarter, what the the the by going try delta X at And sell-through the know just maybe that you're segments I guide a all undershipping, segment, to or get -- for the and I Life in a guess, if a to I the retrospect, out. outlook, maybe but guys now this $XXX to is I'm overshipping bit. of the I part pretty assume, share John, peak embedding don't take, segment million question and specifically was

state inventory just in you're as assess for looks a that serving of normal? like segment, a the these to normalized end on & sense that all markets sort perturbations So back kind any you if end what your get markets segment, Life once sort of of Home steady in to that revenue the sell-through

John Hollister

Yes, CAGR think Matt, we I our channel that hard I do to is digesting sitting indicated, mid clearing that market call there's long as inventory outcome. realistic of in period goal for and understand. It's XX% you We the a ourselves it see have where we it indicated. that right term, that out. over Suffice in the are as excessive feel as I to as think a and very about long-term business. now. And say, good we we the see to the a

very the that growing time has the in than talked is market Commercial Industrial of we As medical in in & at, for about we Life business higher exciting expect & that wins trend and and over have particular, a applications and the to business slightly Life past, Home business, itself new do persist. well. in But some as looking the portable applications we example,

Matthew Ramsay

Just guidance on to follow up there, John. Anything the split between the segments?

John Hollister

quarter. terms in third what for we're Matt, split, roughly of It's seeing sequentially the

Robert Johnson

better. it those what that's what The expect to time, QX. John macro saying, to & only to in that's Matt, addition we've that I'd that definitely own add perform over And And here. we're is, we in to spaces definitely overall, we're consumer we'll that stronger is seeing those with But definitely and more Commercial, that impacted seeing industrial you softening, most I like still performing depends. resilient. And more exposure. & broad Life, big definitely metering think, than Home where be, Home then trends continuing think, other but to ESL softer within see within & -- within, Life grow, experience. Industrial I strength unique continuing their what each as saw we of segments have we're we're Industrial seeing Commercial. on not end than to But do said immune grow. that, The the been showing itself

the Home stronger. varies Industrial you will. & subsegments, by market. impacted it underneath big then those So next weaker, each level, And picture, the the if of being & overall Both Commercial Life by

Matthew Ramsay

wins. Series maybe you're all it. to about ramping Matt, Got in talked term, and X strength stuff longer you design going a the bit be

can to products design needs happen idea trying contribute So burn an for really like. balance what to maybe and that current about that the how the I'm inventory is and programs of what revenue and the generation wins get legacy versus quickly ramp to looks new

X segments wins, be the the helpful. platform color just for would So the different across time there kind to Series you've secured as revenue any of design

Robert Johnson

sure. Yes,

few So ramp X a Series already The things. started. has

that's think important. I So

the If that $XX growth last at you of easily. opportunity few look years the over it's step funnel back billion, driver of funnel and the

last you has X the X over over couple Series design-win design-win at biggest the growth. growth If that it's, driver contributor of to the last that has years, of our few look performance the And our Series been years, been growth. revenue

So already it is it's important to that's recognize being still ramp. days happening. said, very early That that in

that the wins, the at there's many If growth. beginning and design you many, of cycle, funnel, look at look of more to if just at years you come the that we're

frame that I it So to started. it's way. It's already think important

as things have that that think we those immune picture the not we environment macro things these can hard keep to it's seeing but wins and we're I we're we difficult ramping macro soft we're and the do when of businesses into different ramping is, better, synthesize think design and to one seeing. saying, we two the

IoT out you was wins. things think year, last of look last most design-win I half, very incredible at even even that I performance, performed versus give the confidence year relative year, are: year in if look one, first if to half over and the this an this us for up back And two other design year strong businesses think XX% which year-over-year we've there. the that first you

have we to do confidence to reconcile to that us So that that current been environment we'll do tough that, only the seeing market it we not with gives It's continue we're us right able confidence be able do that. -- but gives just now. to

Operator

Fargo with from Gary Wells Next Securities. question comes Mobley

Gary Mobley

translates $XX target, days million so your the below up same as expected question. what understand headwind, expecting at about how me into -- by And to trying I the revenue with is amount about believe, in I look set your we're in distribution long-term the long-term I revenue above, inventory, which is trend terms Ultimately, of trend revenue about I'm as Bear this about sequential decrease. line? to XX much it's

And just so does generally weak is, revenue decrease Or in also the rightsizing with distribution booking question do have in it my is quarter third expected the trends? that inventory? primarily sequential to

Robert Johnson

I'll start.

I think John. you add, should Thanks, Gary.

answer, a as market inventory, more it's a than So just well. it's quick

end we much, slow, is we just uncertainty and bookings guess, As with visibility customers, I just QX, low. saw the towards there's so getting of were really

of the they're that's days DSI a thing market either. historical So there's us well. But for I'd but also than to as us other that for those they're also not alarming the important, or higher component add inventory,

are ramps us. has taught are not the need into we us, going prepared that. for to quarters of years ramps, just be last years and few significant We better it's but that are And substantial anything quarter They over one if and of ramps. for

and confidence it it So level we're historical doesn't want you anything in design, not drive higher than to that given to John, up ramping business. definitely scare we we that us by add? at while is the a future -- it's have historical higher trying than

John Hollister

Yes, of end to we're just one quick bookings, we perhaps. point. But about It's talking customer refer Gary, clarification a demand. point as

really QX out to customers bookings weak referring and here. so end to quarter, to refer round So we in to that's when third referring we we're what far the are here

Gary Mobley

reduction Okay. With levers the is much much how of side, the OpEx, of permanent? -- structural respect cost And how or is recent the on specifically to some operating variable? expenses in reduction

Robert Johnson

John, you go first.

John Hollister

we this to is that actions for comprehended the did are and Gary, third spending. is moment. and referring take is earlier structural We half some Yes. year, quarter limited second variable discretionary not it Sure. but temporary. What Yes. at

hiring. frozen have We

downturn year, that items of we Our be is similar should see those get items we And that, nature. base in upswing into an back. as and executives this like but temporary heading start next more revert are through that considered would and to -- hopefully reducing other pay, their

Robert Johnson

side. don't design. to and it's the need We to ramp, in temporary design doing that we're to them. the anything inventory, other keep wins be ramping, that we're ramps. able want ourselves resources strategic setting Temporary diminishes nature whether support We why these support saying having up that everything to Yes. the that by on for do is we That's

Operator

comes next Curtis from Our Barclays. Blayne with question

Blayne Curtis

just to longer work want the correcting Just -- always & I the this has in Industrial -- correction? through just things. down Life the being of was start kind if a comment of fourth on curious on of sitting like takes industrial, kind X. & to digits, you could position understand longer had substantial is the I just Industrial a it's quarter. inventory Home now, been Commercial. double I And It

Robert Johnson

& would that been we've Commercial. record a Commercial it mean That impacted a & way would as wins Life. little and it's I this quarter have I still said it had We've been been record clear, quarter, have consistently. Even, been it last quarter have been & multiple it impacted has as And this should but it that's characterize Home for and different impacted. what from definitely has the have Industrial yes, seen has we because a not quarter. Industrial quarters, diminished wasn't but helping been on design better ramping it if things environment. it's market

going what's a long phenomena. to think I been going QX. I'm we're new So It's continuing that and into see march, sorry, -- QX not actually is a on

Blayne Curtis

ask gross Then I wanted on margin. to the

top guidance. Commercial think, line had worse your was than mix So higher Industrial June, & were margins, but actually, a I okay, you in

you pricing understand, at in huge should contemplated, to something was of guess, guidance. timing mentioned look have are cost, you trying you the that margins September, flat. but just when of I June? And the Just I kind downfall, and I revenue then I'm that gave know when what the think you changed but curious

in June me of gross perspective for some beyond September So talk that? margin? headwinds? is Can for time through higher take the walk happened and there can any to about any priced inventory kind you it flow And what Does through? further you

John Hollister

in have referring of the sequential to what result products slightly in shipped against long-time there higher gross second the was the A gross comment about. trend a expectations lower was in the very terms much a but the modest to message commentary quarter. margins, is specifically third in erosion that should really and we haven't this that mix Yes, of sequential over here that's stable the than expect -- and see others, that our the decline activity. with out some and Blayne. is Sure, top The and increase in quarter, a price talked product the guidance little of margins explanation we of we certain time, variation for quarter, was mix line

Robert Johnson

Yes. I were now it of crisis supply in time we're getting and the in margin a mean industry there like seems ago is long to when increase chain commentary pressure we things, some types the that and models new this was and normal. these

temporary, it we playing that that anything, Our we if no that's the if supply was saw pre-supply it's anomaly, at was conceptualize to way going anything normal there's view look is I to things they're the was pressure least steady just normal and on what or And now like And and easiest prices pricing chain crisis, experiencing to that's functions back that at are a seeing was what think, chain we're the on. step now. it. there way if out

is And Series just cycle. in in its out. came its X going a dynamic the X pointing the be Series keep the substantial to talking of is product the that strength that that's X about. portfolio Series a We're new other and product the is we mentioned early that But announcing out few worth weeks. of days FGXX, And I and part still strength ramp

and perspective, capability, us brings Bluetooth, price an that give normal capabilities, the solution and new some it sub-gigahertz that industry incredible has pressure. a all Just integrates -- both it's that in market AI/ML is while to to security, part is navigate there industry-leading helping effect you industry

John Hollister

that The premium a I gross to it one and is again market ourselves is again, just IoT to delivering highlight. see of more was comment. margin the this John point Blayne, emphasis we important felt

Robert Johnson

changed. Yes. throughout -- been and that's hasn't hasn't consistent That

Operator

Question James. with Srini comes Pajjuri from Raymond

Srinivas Pajjuri

to guess, over are of thinking clarify, you a the just come I new next the bit normal? do the be down that to expect DSI, you quarters? the John, -- that's to going Or few days XX

John Hollister

a We're Matt we'll -- Srini, come as really just about go overly that here. not time Certainly, it not don't concerned that in, over it Yes. bit. know where up I and monitor that may monitoring may little is setting. said,

commentary more the demand, focus and Our the state is of really that's of on market. the our the basis on end

Srinivas Pajjuri

Okay. Got it. can the about units actually environment. And It the you talk then, are up like Matt, maybe looks sequentially.

Because is we demand a you see commentary? it down to So pricing quite correction, a weak. units Is meaningfully. in cyclical obviously, more of tend said come

So I'm unit correction I just wondering, September the guidance, two? thinking your through contemplate are just about as what the units we guess, does quarter how I of the And terms quarter, ASPs? in and you look next, guess, over or

Robert Johnson

Yes.

the I or anomalous anything think much primary that's think dynamics mentioned We -- now we're not driver. to pricing expected, new so demand-challenged the about there. a are seeing it just easiest in is way environment, we the pretty we're as and

of of we're if end that story is really units ultimately demand, story it. frame that helps So really a navigating, a which it's

Srinivas Pajjuri

there? WiFi a on any helpful. quarters particular obviously, then that you're the Yes, market for thinking that's your Matt, now And one last you've few How there's line? product progress curious about the been solutions. me. just in if for update And maybe one with

Robert Johnson

sure. Yes,

go in good didn't we a progress. the but guess mention I quick back So that and if answer the we're big picture, remarks, is happy strong, you and with

as Let that's the never for fastest-growing me company. it's our But space ultimately, years said, we a we've to world increase made live the enough, we progress loved our ago big on fast in. We've Bluetooth. be there, focus clear, focus enough,

continue. to that expect We

that. momentum design-win to have the We continue

And being as we added well. WiFi now WiFi piece. the areas then growth we the one benefit have And of stronger of our

performance, still we see we're in, wanted that about that. we're to progress seeing Even the with market are there. So environment we're we strong and that happy the seeing WiFi

Operator

comes question Kwan next Our Stifel. Jeremy from with

Jeremy Kwan

Yes.

Can hear you me? Sorry.

Robert Johnson

Yes.

Jeremy Kwan

couple questions. Great. guess of Yes, I a

line impact kind when impact you you of an First more see from is this the expected here we if new the can labeling, to solution? what -- type guess, something or really when do When next you one, clamoring top that for to kind is this Or of I of do at impact expect cybersecurity of the months? initiative? see look customers see over couple that of on

Robert Johnson

Quick that's that it the But while. short say don't be I answer realistic to a term, Sure. is think way would will be usually I'd out. things play awesome. love these

lack is For on program better and around cybersecurity some to and really for see Administration's what creates, you'd Biden consumers end who's not security markets, want standardization these which for devices, companies what's term, anyone familiar, needed. of for exactly labeling

it. to ramp I So the answer this time as going to see question to take directly, the to you're starts deploy think industry

already like help. We for win this here. by of but You're for And It the customers. serves our strongest the well. And on years short to in term will this business as we've game. been be only impact for it won't we're now industry, it good of tailwind, talking known be capability And frame have easy the a us It us this our time, for because This portfolio and this way us. and positioning, quarters long a there focusing customers. I'd as much and security out long gives a betting, will be. to is

John Hollister

Jeremy, this Yes, is John.

thought and the of area once Silicon being good state Just in for art known example, Labs a -- leader for our advancing of it's again, space. as the an IoT important a

Robert Johnson

-- would these think offering think people and way are scratching ago, were their and heads. Years as it some of the security. same I about capabilities we features

taking things to of inherent portfolio. Think enable We're entire devices of updating built that our introducing it. AI/ML. and just is down win people going a edge. help in see enable efficiency multiple administration designs how advantage later their say, that where because that today these of some capability devices that capabilities going are Look, road, new applications already our and -- the on processors same the to is the the the of into capability these concept you're is same years to we Now policies few

So same further the way, just road. down

Jeremy Kwan

out out? very It's you quite of geographic Is do helpful. second here. just Maybe sounded areas the quick quarter? like third relative quarter the It there on or strong in Great. playing can any question see that weakness was Europe you How call strength in a expectations. this

John Hollister

Sure, Jeremy.

not about did the talk thing this to the prepared first in is I we and remarks, think China. note,

Our the quarter, first the been Chinese for there. not China have seen second full of And at the the in economy weak by of signs and impacted we remaining revenue, level again, the year. XX% half recovery about has

really particular widespread weakness global So and weakness a it's not the that overall There's this demand, isolated to is any seeing point. said, in at we're geography.

Operator

[Operator Instructions] from Nick with comes question Our Needham. next Doyle

Nicolas Doyle

revenue on Nick September the drop? Doyle just from focus to such ask strength? margin indication when you're mix how And declining kind more -- again. ASP directly is able I a And keep that margin or just to the of for wanted Raji of sequential an we're seeing declining Gill. guide

John Hollister

Sure, Nick, it's Yes. John.

of fabless a As of fixed strictly modest chips. it's a model. a cost manufacturing but company, have operate on costs, we compared to amount really a full [indiscernible] internal limited do We variable as pretty

explanation that what best our to your is that gross influenced not at in question. That's on based seeing really revenue So to the by variable say main level, we're margin the really it's time. point

Nicolas Doyle

it. Got Okay.

on the order expand more to new to overordering in you're related just you next customers this hesitant intra-quarter can of also, terms upcycle? commentary, maybe are a you think bookings be And of seeing that which cancelation slowdown? on could positive the markets or For do the that policy? then And applications

Robert Johnson

Yes. now I'll as pretty The good for would bookings be pattern start, John to add and well. is it right broad.

work have distill of broad see across their terms broad biggest. strong we're is well short. shaken, not as think to and lead in tease demand pattern up navigate time. their and customers, this than of is make inventory. that they're any in short seeing a confidence term X to across you certainty, X revenue. across visibility, to ability their don't our chunks we clear a major confidence don't remember, their ordering customers out very difficult It's big X% current customer, are geos. out a with and is there. What can to through You what the long trying their the mean pattern as is but less I clear channel, or or I very mean our And I segments have really broad

chain, it tons work navigate, now to about to in the to that position easy pre-supply environment, back supply reverted -- of our Just it. current way backlog way think pre prepandemic is all where backlog has

as shorter times we've Now with way their that, all gone and certainty lead lack because even back but well. ordering the to of visibility of

you're seeing. that's help doesn't know looking we're but for, I answer what So it what

John Hollister

Yes. really question, the Nick, things policy affecting see overall. not is part And don't second of your I --

themselves. over Our approach are longer customers is to their confidence levels and we position a the visibility try to inventory their to and gain as But much horizon trying short own can in managing experience term.

Operator

I for Giovanni the to over back Pacelli our concludes closing turn like to question-and-answer This session. call remarks. any would

Giovanni Pacelli

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

Operator

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

disconnect. may You now

Silicon Laboratories (SLAB) 26 Jul 232023 Q2 Earnings call transcript