Silicon Laboratories Inc. (NASDAQ:SLAB) Q3 2015 Earnings Conference Call Transcript

Oct 28, 2015 • 08:30 am ET

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Silicon Laboratories Inc. (NASDAQ:SLAB) Q3 2015 Earnings Conference Call Transcript

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Presentation
Operator
operator

Good morning. My name is Heather and I will be your conference operator today. At this time, I would like to welcome everyone to the Silicon Labs Third Quarter 2015 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, we will have a question-and-answer session.

I would now like to turn the call over to Ms. Jalene Hoover.

Executive
Jalene Hoover

Thank you, Heather. Good morning, everyone. We appreciate you taking the time to dial in. Tyson Tuttle, Chief Executive Officer; Bill Bock, President; and John Hollister, Chief Financial Officer are on today's call. We will discuss our financial performance and review our business activities for the third quarter. After our prepared comments, we will take questions.

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

(Forward-Looking Cautionary Statements)

In addition, the non-GAAP financial measures discussed today are not intended to replace the presentation of Silicon Labs' GAAP financial results. We are providing this information because it may enable investors to perform more meaningful comparisons of operating results and more clearly highlight the results of core ongoing operations.

I would now like to turn the call over to Silicon Labs' Chief Executive Officer, Tyson Tuttle.

Executive
Tyson Tuttle

Thanks, Jalene, and good morning, everyone. Strong top line performance, combined with favorable OpEx, drove a solid beat in third quarter EPS. Despite a challenging macro environment, we delivered another record quarter in Infrastructure with continued strength in IoT and Broadcast automotive, and a less than expected decline in Broadcast consumer. I'll talk more about our product developments, market opportunities and business trends shortly. But first, I'd like to turn the call over to John who will review our third quarter financial results and fourth quarter guidance. John?

Executive
John Hollister

Thank you, Tyson. We are pleased to announce that third quarter revenue was just above the high end of our guidance range of slightly more than $156 million, and we delivered solid non-GAAP earnings of $0.51 per share, exceeding top end of our guidance. Following a number of sequential record revenue quarters, our IoT products declined 5% sequentially to $65 million, or 42% of our total Q3 revenue, delivering growth of 25% year-on-year.

In Infrastructure, including our timing and isolation products, we achieved a record $31 million, reflecting 20% of third quarter revenue and 10% year-on-year growth. Third quarter Broadcast revenue was $37 million, or 23% of total revenue, declining less than the 15% we expected, with the video market showing signs of greater stability. Broadcast automotive delivered another quarter of strong results.

We are delighted to report that on September 29, the International Trade Commission issued a final determination that all patent claims asserted against our TV tuner products by Cresta Technology are either invalid or not infringed. The ITC also found that Cresta failed to satisfy the ITC's domestic industry requirement. In addition