Silicon Labs — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue was $251 million, representing a 22% year-over-year increase and a 10% sequential increase.
• GAAP diluted earnings per share (EPS) was $0.26, compared to a loss of $0.30 in the year-ago quarter.
• Non-GAAP diluted EPS was $1.05, an increase of 228% over the comparable period last year.
• GAAP gross margin was 60.8%, while non-GAAP gross margin was 61.0%.
• GAAP operating expenses were $145 million, resulting in GAAP operating income of $8 million.
• Non-GAAP operating expenses were $113 million, resulting in non-GAAP operating income of $40 million.
• Cash and cash equivalents were $423 million as of October 3, 2026, up from $364 million at the start of the fiscal year.
• Inventories increased to $133 million from $96 million at the beginning of the fiscal year.
• Deferred revenue and returns liability increased to $9.8 million from $5.4 million at the beginning of the fiscal year.
• Net cash provided by operating activities for the nine months ended October 3, 2026, was $37.2 million.

Guidance and Future Outlook:

• Silicon Labs has suspended providing forward-looking guidance due to the announced pending acquisition by Texas Instruments.
• Management stated that the current backlog and design-win ramps position the company for continued revenue growth and meaningful earnings expansion.

Business Segments and Product Lines:

• Industrial & Commercial revenue was $141 million, up 20% year-over-year.
• Home & Life revenue was $110 million, up 24% year-over-year.
• Medical revenue reached a new quarterly record, increasing 48% sequentially and more than 300% year-over-year.
• Known customer ramps in the medical sector continued to drive growth.

Market and Competitive Landscape:

• Bookings imply a healthy demand environment.
• Distributor inventory declined further to a multi-year low.
• End customer inventory was near record lows during the quarter.

Risks and Challenges:

• The press release notes risks related to the ability to complete the merger with Texas Instruments within the expected timeframe or at all.
• Potential disruptions in business and restrictions on activities during the pendency of the merger are cited as risks.
• Other risks include global trade policy changes, memory chip shortages, semiconductor industry cyclicality, geopolitical conflicts, and supply chain strains.

Management Commentary and Tone:

• Matt Johnson, President and CEO, described the results as "strong" and noted that earnings significantly outpaced revenue growth due to strong operational execution.
• Management highlighted broad-based growth across many end applications.

Other Key Points:

• Silicon Labs is the subject of a pending acquisition by Texas Instruments.
• The company reported a net loss of $17.6 million for the nine months ended October 3, 2026, compared to a net loss of $62.2 million in the prior year period.
• Stock-based compensation expense for the nine-month period was $69.8 million.
• The company has operations in over 16 countries.