SILICON LABORATORIES INC. 10-Q

Item 1. Financial Statements Silicon Laboratories Inc. Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) October 4, 2025 December 28, 2024 Assets Current assets: Cash and cash equivalents $ 341,403 $ 281,607 Short-term investments 97,622 100,554 Accounts receivable, net 67,308 54,479 Inventories 82,190 105,639 Prepaid expenses and other current assets 64,036 59,754 Total current assets 652,559 602,033 Property and equipment, net 128,323 132,136 Goodwill 376,389 376,389 Other intangible assets, net 25,425 36,499 Other assets, net 70,371 75,617 Total assets $ 1,253,067 $ 1,222,674 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 55,647 $ 42,448 Deferred revenue and returns liability 8,447 3,073 Other current liabilities 81,216 52,362 Total current liabilities 145,310 97,883 Other non-current liabilities 37,044 44,770 Total liabilities 182,354 142,653 Commitments and contingencies Stockholders’ equity: Preferred stock – $ 0.0001 par value; 10,000 shares authorized; no shares issued — — Common stock – $ 0.0001 par value; 250,000 shares authorized; 32,853 and 32,458 shares issued and outstanding at October 4, 2025 and December 28, 2024, respectively 3 3 Additional paid-in capital 130,979 78,227 Retained earnings 939,498 1,001,721 Accumulated other comprehensive income 233 70 Total stockholders’ equity 1,070,713 1,080,021 Total liabilities and stockholders’ equity $ 1,253,067 $ 1,222,674 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 3 Table of Contents Silicon Laboratories Inc. Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended October 4, 2025 September 28, 2024 October 4, 2025 September 28, 2024 Revenues $ 205,999 $ 166,395 $ 576,558 $ 418,137 Cost of revenues 86,980 76,082 251,653 196,172 Gross profit 119,019 90,313 324,905 221,965 Operating expenses: Research and development 87,685 83,228 263,725 249,787 Selling, general and administrative 43,676 36,793 128,469 109,041 Operating expenses 131,361 120,021 392,194 358,828 Operating loss ( 12,342 ) ( 29,708 ) ( 67,289 ) ( 136,863 ) Other income (expense): Interest income and other, net 3,046 3,487 10,672 9,009 Interest expense ( 226 ) ( 278 ) ( 761 ) ( 1,050 ) Loss before income taxes ( 9,522 ) ( 26,499 ) ( 57,378 ) ( 128,904 ) Provision for income taxes 414 2,005 4,845 38,283 Net loss $ ( 9,936 ) $ ( 28,504 ) $ ( 62,223 ) $ ( 167,187 ) Loss per share: Basic $ ( 0.30 ) $ ( 0.88 ) $ ( 1.91 ) $ ( 5.21 ) Diluted $ ( 0.30 ) $ ( 0.88 ) $ ( 1.91 ) $ ( 5.21 ) Weighted-average common shares outstanding: Basic 32,835 32,309 32,656 32,114 Diluted 32,835 32,309 32,656 32,114 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 4 Table of Contents Silicon Laboratories Inc. Condensed Consolidated Statements of Comprehensive Loss (In thousands) (Unaudited) Three Months Ended Nine Months Ended October 4, 2025 September 28, 2024 October 4, 2025 September 28, 2024 Net loss $ ( 9,936 ) $ ( 28,504 ) $ ( 62,223 ) $ ( 167,187 ) Other comprehensive income, before tax: Net changes to available-for-sale securities: Unrealized gains arising during the period 182 655 232 1,526 Reclassification for losses (gains) included in net loss — 11 ( 25 ) 52 Net changes to cash flow hedges: Unrealized gains (losses) arising during the period ( 22 ) ( 5 ) 247 270 Reclassification for losses (gains) included in net loss 32 — ( 247 ) ( 234 ) Other comprehensive income, before tax 192 661 207 1,614 Provision for income taxes related to items of other comprehensive income 40 135 44 317 Other comprehensive income 152 526 163 1,297 Comprehensive loss $ ( 9,784 ) $ ( 27,978 ) $ ( 62,060 ) $ ( 165,890 ) The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 5 Table of Contents Silicon Laboratories Inc. Condensed Consolidated Statements of Changes in Stockholders’ Equity (In thousands) (Unaudited) Three Months Ended October 4, 2025 Shares Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Balance as of July 5, 2025 32,815 $ 3 $ 111,562 $ 949,434 $ 81 $ 1,061,080 Net loss — — — ( 9,936 ) — ( 9,936 ) Other comprehensive income — — — — 152 152 Stock issuances, net of shares withheld for taxes 38 — ( 627 ) — — ( 627 ) Stock-based compensation — — 20,044 — — 20,044 Balance as of October 4, 2025 32,853 $ 3 $ 130,979 $ 939,498 $ 233 $ 1,070,713 Three Months Ended September 28, 2024 Shares Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Balance as of June 29, 2024 32,289 $ 3 $ 39,232 $ 1,054,048 $ ( 254 ) $ 1,093,029 Net loss — — — ( 28,504 ) — ( 28,504 ) Other comprehensive income — — — — 526 526 Stock issuances, net of shares withheld for taxes 54 — 422 — — 422 Stock-based compensation — — 15,913 — — 15,913 Balance as of September 28, 2024 32,343 $ 3 $ 55,567 $ 1,025,544 $ 272 $ 1,081,386 Nine Months Ended October 4, 2025 Shares Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Balance as of December 28, 2024 32,458 $ 3 $ 78,227 $ 1,001,721 $ 70 $ 1,080,021 Net loss — — — ( 62,223 ) — ( 62,223 ) Other comprehensive income — — — — 163 163 Stock issuances, net of shares withheld for taxes 395 — ( 6,760 ) — — ( 6,760 ) Stock-based compensation — — 59,512 — — 59,512 Balance as of October 4, 2025 32,853 $ 3 $ 130,979 $ 939,498 $ 233 $ 1,070,713 Nine Months Ended September 28, 2024 Shares Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Balance as of December 30, 2023 31,897 $ 3 $ 16,973 $ 1,192,731 $ ( 1,025 ) $ 1,208,682 Net loss — — — ( 167,187 ) — ( 167,187 ) Other comprehensive income — — — — 1,297 1,297 Stock issuances, net of shares withheld for taxes 446 — ( 6,683 ) — — ( 6,683 ) Stock-based compensation — — 45,277 — — 45,277 Balance as of September 28, 2024 32,343 $ 3 $ 55,567 $ 1,025,544 $ 272 $ 1,081,386 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 6 Table of Contents Silicon Laboratories Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Nine Months Ended October 4, 2025 September 28, 2024 Operating Activities Net loss $ ( 62,223 ) $ ( 167,187 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation of property and equipment 18,769 19,302 Amortization of other intangible assets 11,074 17,596 Stock-based compensation expense 59,645 45,358 Deferred income taxes 2,026 29,100 Changes in operating assets and liabilities: Accounts receivable ( 12,829 ) ( 19,585 ) Inventories 23,316 54,724 Prepaid expenses and other assets 9,080 23,091 Accounts payable 11,141 ( 13,849 ) Other current liabilities and income taxes 29,901 ( 5,004 ) Deferred revenue and returns liability 5,374 6,361 Other non-current liabilities ( 7,916 ) ( 13,946 ) Net cash provided by (used in) operating activities 87,358 ( 24,039 ) Investing Activities Purchases of marketable securities ( 34,790 ) ( 28,363 ) Sales of marketable securities 15,332 44,057 Maturities of marketable securities 22,598 131,008 Purchases of property and equipment ( 19,942 ) ( 7,785 ) Purchase of other investment ( 4,000 ) — Proceeds from sale of equity investment — 12,382 Net cash provided by (used in) investing activities ( 20,802 ) 151,299 Financing Activities Payments on debt — ( 45,000 ) Payment of taxes withheld for vested stock awards ( 14,907 ) ( 16,078 ) Proceeds from the issuance of common stock 8,147 9,396 Net cash used in financing activities ( 6,760 ) ( 51,682 ) Increase in cash and cash equivalents 59,796 75,578 Cash and cash equivalents at beginning of period 281,607 227,504 Cash and cash equivalents at end of period $ 341,403 $ 303,082 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 7 Table of Contents Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The information included herein contains all normal recurring accruals and adjustments which, in the opinion of management, are necessary to present fairly Silicon Laboratories Inc.’s (the “Company”) financial position, results of its operations, comprehensive loss, stockholders’ equity, and cash flows. The Condensed Consolidated Balance Sheet as of December 28, 2024 was derived from the Company’s audited Consolidated Financial Statements. All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated results of operations for the three and nine months ended October 4, 2025 are not necessarily indicative of the results to be expected for the full year. These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 28, 2024, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 4, 2025. The Company prepares financial statements on a 52- or 53-week fiscal year that ends on the Saturday closest to December 31. Fiscal 2025 will have 53 weeks with the extra week occurring in the first quarter of the year. Fiscal 2024 had 52 weeks. In a 52-week year, each fiscal quarter consists of 13 weeks. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to inventories, goodwill, acquired intangible assets, other long-lived assets, revenue recognition, stock-based compensation, and income taxes. Actual results could differ from those estimates, and such differences could be material to the financial statements. The Company periodically reviews the assumptions used in its financial statement estimates. Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures . This ASU requires that reporting entities disclose specific categories in the effective tax rate reconciliation as well as information about income taxes paid. The authoritative guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. As the requirements of this ASU are disclosure-related, the adoption will not have an impact on the Company’s consolidated financial position and results of operations. The Company is currently evaluating the impact of this update on its income tax disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) . This ASU requires that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The prescribed categories include purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion. This authoritative guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect of this new guidance on its consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) . This ASU clarifies and modernizes the accounting for costs related to internal-use software. The amendments in the ASU are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Entities may apply the guidance using a prospective, 8 Table of Contents Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) 1. Significant Accounting Policies (Continued) retrospective or modified transition approach. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the effect of this new guidance on its consolidated financial statements. 2. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended Nine Months Ended October 4, 2025 September 28, 2024 October 4, 2025 September 28, 2024 Net loss $ ( 9,936 ) $ ( 28,504 ) $ ( 62,223 ) $ ( 167,187 ) Shares used in computing basic earnings per share 32,835 32,309 32,656 32,114 Effect of dilutive securities: Stock-based awards — — — — Shares used in computing diluted earnings per share 32,835 32,309 32,656 32,114 Loss per share: Basic $ ( 0.30 ) $ ( 0.88 ) $ ( 1.91 ) $ ( 5.21 ) Diluted $ ( 0.30 ) $ ( 0.88 ) $ ( 1.91 ) $ ( 5.21 ) Diluted shares for the three and nine months ended October 4, 2025 excluded 0.2 million and 0.3 million shares, respectively, and for the three and nine months ended September 28, 2024 excluded 0.1 million, and 0.2 million shares, respectively, as they were anti-dilutive due to the Company’s net loss for the periods. Securities that were anti-dilutive due to the Company’s stock price and were excluded from the computation of diluted earnings per share for the three and nine months ended October 4, 2025 were not material, and for the three and nine months ended September 28, 2024 were 0.7 million, and 0.5 million, respectively. 3. Fair Value of Financial Instruments The fair values of the Company’s financial instruments are recorded using a hierarchical disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities. The three levels are described below: Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 - Inputs other than Level 1 that are directly or indirectly observable, such as quoted prices for similar assets or liabilities and quoted prices in less active markets. Level 3 - Inputs are unobservable for the asset or liability and are developed based on the best information available in the circumstances, which might include the Company’s own data. 9 Table of Contents Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) 3. Fair Value of Financial Instruments (Continued) The following summarizes the valuation of the Company’s financial instruments (in thousands). The tables do not include either cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value. Fair Value Measurements at October 4, 2025 Using Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Total Cash equivalents: Money market funds $ 234,875 $ — $ 234,875 Total cash equivalents $ 234,875 $ — $ 234,875 Short-term investments: Corporate debt securities $ — $ 61 $ 61 Government debt securities — 97,561 97,561 Total short-term investments $ — $ 97,622 $ 97,622 Total $ 234,875 $ 97,622 $ 332,497 Fair Value Measurements at December 28, 2024 Using Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Total Cash equivalents: Money market funds $ 188,057 $ — $ 188,057 Total cash equivalents $ 188,057 $ — $ 188,057 Short-term investments: Corporate debt securities $ — $ 13,514 $ 13,514 Government debt securities — 87,040 87,040 Total short-term investments $ — $ 100,554 $ 100,554 Total $ 188,057 $ 100,554 $ 288,611 Valuation methodology The Company’s short-term investments that are classified as Level 2 are valued using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments in active markets; quoted prices in less active markets; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. 10 Table of Contents Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) 3. Fair Value of Financial Instruments (Continued) The following summarizes the components of available-for-sale investments (in thousands): Reported As As of October 4, 2025 Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash Equivalent Marketable Securities Corporate debt securities $ 61 $ — $ — $ 61 $ — $ 61 Government debt securities 97,265 298 ( 2 ) 97,561 — 97,561 Money market funds 234,875 — — 234,875 234,875 — Total $ 332,201 $ 298 $ ( 2 ) $ 332,497 $ 234,875 $ 97,622 Reported As As of December 28, 2024 Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash Equivalent Marketable Securities Corporate debt securities $ 13,517 $ 12 $ ( 15 ) $ 13,514 $ — $ 13,514 Government debt securities 86,949 141 ( 49 ) 87,040 — 87,040 Money market funds 188,057 — — 188,057 188,057 — Total $ 288,523 $ 153 $ ( 64 ) $ 288,611 $ 188,057 $ 100,554 Contractual maturities of investments The Company’s available-for-sale investments are reported at fair value, with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive income in the Condensed Consolidated Balance Sheet. The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at October 4, 2025 (in thousands): Cost Fair Value Due in one year or less $ 80,583 $ 80,761 Due after one year through five years 16,743 16,861 $ 97,326 $ 97,622 Unrealized Gains and Losses The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands): Less Than 12 Months 12 Months or Greater Total As of October 4, 2025 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate debt securities $ — $ — $ — $ — $ — $ — Government debt securities 3,023 ( 1 ) 2,281 ( 1 ) 5,304 ( 2 ) $ 3,023 $ ( 1 ) $ 2,281 $ ( 1 ) $ 5,304 $ ( 2 ) 11 Table of Contents Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) 3. Fair Value of Financial Instruments (Continued) Less Than 12 Months 12 Months or Greater Total As of December 28, 2024 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate debt securities $ — $ — $ 4,187 $ ( 15 ) $ 4,187 $ ( 15 ) Government debt securities 26,318 ( 49 ) — — 26,318 ( 49 ) $ 26,318 $ ( 49 ) $ 4,187 $ ( 15 ) $ 30,505 $ ( 64 ) The gross unrealized losses as of October 4, 2025 and December 28, 2024 were due primarily to changes in market interest rates. At October 4, 2025 and December 28, 2024, there were no material unrealized gains associated with the Company’s available-for-sale investments. The Company records an allowance for credit loss when a decline in investment market value is due to credit-related factors. When evaluating an investment for impairment, the Company reviews factors such as the severity of the impairment, changes in underlying credit ratings, forecasted recovery, the Company’s intent to sell or the likelihood that it would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. As of October 4, 2025, there were no material declines in the market value of available-for-sale investments due to credit-related factors. Fair values of other financial instruments The Company’s other financial instruments, including cash, accounts receivable and accounts payable, are recorded at amounts that approximate their fair values due to their short maturities. 4. Derivative Financial Instruments The Company may use derivative financial instruments to manage certain exposures to the variability of foreign currency exchange rates. The Company’s objective is to offset increases and decreases in expenses resulting from these exposures with gains and losses on the derivative contracts, thereby reducing volatility of earnings. The Company does not use derivative contracts for speculative or trading purposes. The Company recognizes derivatives, on a gross basis, in the Condensed Consolidated Balance Sheet at fair value. Cash flows from derivatives are classified according to the nature of the cash receipt or payment in the Condensed Consolidated Statement of Cash Flows. Cash Flow Hedges Foreign Currency Forward Contracts The Company may use foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on operating expenses denominated in currencies other than the U.S. dollar. Changes in the fair value of the contracts are recorded in accumulated other comprehensive income in the Condensed Consolidated Balance Sheet and subsequently reclassified into earnings in the period during which the hedged transaction was recognized. The reclassified amount is reported in the same financial statement line item as the hedged item. If the foreign currency forward contracts are terminated or can no longer qualify as hedging instruments prior to maturity, the fair value of the contracts recorded in accumulated other comprehensive income may be recognized in the Condensed Consolidated Statement of Operations based on an assessment of the contracts at the time of termination. The Company entered into various foreign currency forward contracts for a portion of its forecasted operating expenses for the quarter ended October 4, 2025. As of October 4, 2025, the Company held no such foreign currency contracts. The fair value of the contracts, contract gains or losses recognized in other comprehensive income and amounts reclassified from accumulated other comprehensive income into earnings were not material for any of the periods presented and are not expected to be material in the next twelve months. 12 Table of Contents Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) 4. Derivative Financial Instruments (Continued) Non-designated Hedges Foreign Currency Forward Contracts The Company may use foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on non-U.S. dollar balance sheet exposures. The Company recognizes gains and losses on the foreign currency forward contracts in interest income and other, net in the Condensed Consolidated Statement of Operations. The Company does not apply hedge accounting to these foreign currency forward contracts. As of October 4, 2025, the Company held no such foreign currency forward contracts. The fair value of the foreign currency forward contracts and contract gains and losses recognized in income were not material for any of the periods presented. All foreign currency forward contracts, both designated and not designated as hedging instruments, are classified within Level 2 as the valuation inputs include foreign exchange rates, forward and spot prices for currencies, and market observable data of similar instruments. 5. Supplemental Information The following table shows the details of selected Condensed Consolidated Balance Sheet items (in thousands): Inventories October 4, 2025 December 28, 2024 Work in progress $ 67,799 $ 83,562 Finished goods 14,391 22,077 $ 82,190 $ 105,639 Lease income The Company leases a portion of its headquarter facilities to other tenants. Lease income from operating leases was $ 0.6 million and $ 0.7 million during the three months ended October 4, 2025 and September 28, 2024, respectively, and $ 1.6 million and $ 2.2 million during the nine months ended October 4, 2025 and September 28, 2024, respectively. 6. Debt Credit Facility The Company and certain of its domestic subsidiaries (the “Guarantors”) have a $ 400 million revolving credit facility, as amended on June 30, 2023, with a maturity date of June 30, 2028. The credit facility includes a $ 25 million letter of credit sublimit and a $ 10 million swingline loan sublimit. The Company also has an option to increase the size of the borrowing capacity by up to the greater of an aggregate of $ 250 million and 100 % of EBITDA of the last four fiscal quarters, plus an amount that would not cause a secured net leverage ratio (funded debt secured by assets/EBITDA) to exceed 3.50 to 1.00, subject to certain conditions. The credit facility, other than swingline loans, will bear interest at the Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin or, at the option of the Company, a base rate (defined as the highest of the Wells Fargo prime rate, the Federal Funds rate plus 0.50 % and the Adjusted Term SOFR plus 1.00 %) plus an applicable margin. Swingline loans accrue interest at the base rate plus the applicable margin for base rate loans. The applicable margins for the Adjusted Term SOFR loans range from 1.00 % to 1.75 % and for base rate loans range from 0.00 % to 0.75 %, depending in each case, on the leverage ratio as defined in the credit facility. 13 Table of Contents Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) 6. Debt (Continued) The credit facility contains various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of default, including financial covenants that the Company must maintain a consolidated net leverage ratio (funded indebtedness less cash and cash equivalents up to $ 750 million and divided by EBITDA) of no more than 4.25 to 1, and a minimum interest coverage ratio (EBITDA/interest payments) of no less than 2.50 to 1. The Company was granted a waiver of compliance for the minimum interest coverage ratio through October 4, 2025. As of October 4, 2025, the Company was in compliance with all covenants of the credit facility, including the minimum interest coverage ratio. The Company’s obligations under the credit facility are guaranteed by the Guarantors and are secured by a security interest in substantially all assets of the Company and the Guarantors. As of October 4, 2025, no amounts were outstanding on the credit facility. 7. Commitments and Contingencies Litigation The Company is involved in various legal proceedings that have arisen in the normal course of business. While the ultimate results cannot be predicted with certainty, the Company does not expect them to have a material adverse effect on its Condensed Consolidated Financial Statements. 8. Revenues The Company groups its products as Industrial & Commercial or Home & Life based on the target markets they address. The following represents revenue by product category (in thousands): Three Months Ended Nine Months Ended October 4, 2025 September 28, 2024 October 4, 2025 September 28, 2024 Industrial & Commercial $ 117,614 $ 96,496 $ 323,377 $ 249,840 Home & Life 88,385 69,899 253,181 168,297 $ 205,999 $ 166,395 $ 576,558 $ 418,137 A portion of the Company’s sales are made to distributors under agreements allowing certain rights of return and/or price protection related to the final selling price to the end customers. These factors impact the timing and uncertainty of revenues and cash flows. During the three and nine months ended October 4, 2025 and September 28, 2024, the impact of revenue related to performance obligations that were satisfied in previous reporting periods was insignificant. The following disaggregates the Company’s revenue by sales channel (in thousands): Three Months Ended Nine Months Ended October 4, 2025 September 28, 2024 October 4, 2025 September 28, 2024 Distributors $ 152,208 $ 119,212 $ 402,835 $ 289,502 Direct customers 53,791 47,183 173,723 128,635 $ 205,999 $ 166,395 $ 576,558 $ 418,137 9. Stock-Based Compensation Stock-based compensation costs are based on the fair values on the date of grant for stock awards and stock options and on the date of enrollment for the employee stock purchase plans. The fair values of stock awards (such as restricted stock units (“RSUs”) and performance stock units (“PSUs”)) are estimated based on their intrinsic values. The fair values of market stock awards (“MSUs”) are estimated using a Monte Carlo simulation. The fair values of stock options and rights under the Company’s Employee Stock Purchase Plan are estimated using the Black-Scholes option-pricing model. 14 Table of Contents Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) 9. Stock-Based Compensation (Continued) The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Operations (in thousands): Three Months Ended Nine Months Ended October 4, 2025 September 28, 2024 October 4, 2025 September 28, 2024 Cost of revenues $ 474 $ 369 $ 1,544 $ 1,193 Research and development 12,149 10,255 36,257 30,194 Selling, general and administrative 7,417 5,279 21,844 13,971 20,040 15,903 59,645 45,358 Income tax benefit 2,818 2,252 7,782 6,054 Total $ 17,222 $ 13,651 $ 51,863 $ 39,304 The Company had approximately $ 111.7 million of total unrecognized compensation cost related to equity grants as of October 4, 2025 that is expected to be recognized over a weighted-average period of approximately 2.1 years. 10. Income Taxes Provision for income taxes includes both domestic and foreign income taxes at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits, deemed foreign income inclusions, change in the valuation allowance, and other permanent differences. Income tax expense was $ 0.4 million and $ 2.0 million for the three months ended October 4, 2025 and September 28, 2024, resulting in effective tax rates of ( 4.3 )% and ( 7.6 )%, respectively. Income tax expense was $ 4.8 million and $ 38.3 million for the nine months ended October 4, 2025 and September 28, 2024, resulting in effective tax rates of ( 8.4 )% and ( 29.7 )%, respectively. The decrease in the provision for income taxes for the three months ended October 4, 2025 is primarily due to the release of a liability for unrecognized tax benefits in the three months ended October 4, 2025 in comparison with the three months ended September 28, 2024. The decrease in the provision for income taxes for the nine months ended October 4, 2025 is primarily due to a decrease in tax expense related to the valuation allowance in the nine months ended October 4, 2025 in comparison with the nine months ended September 28, 2024. During the nine months ended September 28, 2024, the Company incurred significant tax expense to record a valuation allowance in the U.S. and Singapore due to a three-year cumulative pre-tax loss in conjunction with the downturn in the semiconductor industry. The Company intends to maintain the valuation allowance until its ability to forecast sufficient future sources of taxable income is reestablished. On July 4, 2025, the U.S. government enacted tax legislation commonly referred to as the One Big Beautiful Bill Act (the “OBBBA”). The OBBBA extends and/or modifies many provisions first enacted via the Tax Cuts and Jobs Act (“TCJA”) in 2017, as well as introduces new modifications to U.S. federal tax law. Beginning with the 2025 tax year, the OBBBA permanently restores current deductibility for U.S. research and experimental (“R&E”) expenditures. A number of other changes enacted in the OBBBA will not take effect until the 2026 tax year, including various modifications to existing international tax provisions. The Company determined that its forecasted annual effective tax rate for the current year decreased due to the impacts of the OBBBA, primarily due to U.S. R&E expenditures no longer being capitalized within global intangible low-taxed income or “GILTI”, which the Company has elected to treat as a period cost. The Company did not identify any material discrete tax impacts related to beginning-of-the-year deferred tax assets and liabilities or valuation allowances due to the enactment of the OBBBA. Uncertain Tax Positions As of October 4, 2025, the Company had gross unrecognized tax benefits, inclusive of interest, of $ 4.5 million, of which $ 1.9 million would affect the effective tax rate if recognized. During the three months ended October 4, 2025, the Company released $ 1.7 million of unrecognized tax benefits, inclusive of interest. 15 Table of Contents Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) 10. Income Taxes (Continued) Following the completion of the Norwegian Tax Administration (“NTA”) examination of the Company’s Norwegian subsidiary for income tax matters relating to fiscal years 2013 – 2016, the Company received an assessment from the NTA in December 2017 proposing an adjustment to its 2013 taxable income related to the pricing of an intercompany transaction. The adjustment would have resulted in approximately 141.3 million Norwegian kroner, or $ 14.0 million, additional Norwegian income tax. The Company disagreed with the NTA’s findings and appealed the assessment, concluding that the Company’s position was more likely than not to be sustained in the appeal. During the three months ending October 4, 2025, the Norwegian Tax Appeals Board issued a formal decision in favor of the Company, rejecting the proposed adjustment to its 2013 tax liability. Because the Company did not previously establish a reserve related to the NTA assessment, there is no resulting financial statement impact for the final resolution of this matter. Tax years 2020 through 2025 remain open to examination by the major taxing jurisdictions in which the Company operates. The Company’s 2022 tax year is currently under examination in the U.S., and the Company’s 2022 through 2023 tax years are currently under examination in India. Although the outcome of tax audits is always uncertain, the Company believes that the results of these examinations will not materially impact its financial position or results of operations. The Company is not currently under audit in any other major taxing jurisdiction. The Company’s gross unrecognized tax benefits will decrease by approximately $ 0.7 million, inclusive of interest, in the next 12 months due to the lapse of the statute of limitations. 11. Segment Information The Company has one operating segment, mixed-signal analog intensive products, consisting of numerous product areas. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM assesses performance for the operating segment and decides how to allocate resources based on net income (loss) that is also reported on the Condensed Consolidated Statement of Operations as Net loss. The measure of segment assets is reported on the Condensed Consolidated Balance Sheets as Total assets. Revenue is attributed to a geographic area based on the shipped-to location. The following summarizes the Company’s revenue by geographic area (in thousands): Three Months Ended Nine Months Ended October 4, 2025 September 28, 2024 October 4, 2025 September 28, 2024 United States $ 20,701 $ 14,710 $ 61,939 $ 30,779 China 67,153 61,939 187,055 137,479 Taiwan 35,507 19,778 95,796 50,533 Rest of world 82,638 69,968 231,768 199,346 Total $ 205,999 $ 166,395 $ 576,558 $ 418,137 16 Table of Contents Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) 11. Segment Information (Continued) The significant expense categories regularly provided to the CODM, in addition to the expense categories included within net loss presented on the Company’s Condensed Consolidated Statement of Operations, are as follows (in thousands): Three Months Ended Nine Months Ended October 4, 2025 September 28, 2024 October 4, 2025 September 28, 2024 Research and development: Employee base compensation $ 32,764 $ 31,872 $ 98,170 $ 92,286 Other research and development expenses (1) 54,921 51,356 165,555 157,501 Total research and development $ 87,685 $ 83,228 $ 263,725 $ 249,787 Selling, general and administrative: Employee base compensation $ 13,750 $ 13,340 $ 41,596 $ 39,107 Other selling, general and administrative expenses (1) 29,926 23,453 86,873 69,934 Total selling, general and administrative $ 43,676 $ 36,793 $ 128,469 $ 109,041 (1) Other research and development and selling, general and administrative expenses include other personnel-related expenses, outside services, software expense, depreciation, amortization, and other expenses. The following summarizes the Company’s property and equipment, net by geographic area (in thousands): October 4, 2025 December 28, 2024 United States $ 107,204 $ 107,612 Rest of world 21,119 24,524 Total $ 128,323 $ 132,136 17 Table of Contents