What changed in this filing

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Item 1. Financial Statements

2024-11-04 compared with 2024-07-24 · 88 added, 61 removed, 368 unchanged (29% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

September 28,

2024 December 30,

27 unchanged sentences

250,000 shares authorized;

32,289 and 31,897 shares issued and outstanding at June 29, 2024 and December 30, 2023, respectively

32,343 and 31,897 shares issued and outstanding at September 28, 2024 and December 30, 2023, respectively

Additional paid-in capital 55,567 16,973

Retained earnings 1,025,544 1,192,731

Accumulated other comprehensive loss ( 254 ) ( 1,025 )

Accumulated other comprehensive income (loss) 272 ( 1,025 )

Total stockholders’ equity 1,081,386 1,208,682

4 unchanged sentences

(In thousands, except per share data)

Three Months Ended Six Months Ended

2023 June 29,

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Revenues $ 166,395 $ 203,760 $ 418,137 $ 695,413

23 unchanged sentences

(In thousands)

Three Months Ended Six Months Ended

2023 June 29,

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Net income (loss) $ ( 28,504 ) $ 10,348 $ ( 167,187 ) $ 35,271

14 unchanged sentences

(In thousands)

Three Months Ended June 29, 2024 Shares Common

Three Months Ended September 28, 2024 Shares Common

Stock Additional

4 unchanged sentences

Stockholders’

Balance as of March 30, 2024 31,924 $ 3 $ 29,830 $ 1,136,205 $ ( 477 ) $ 1,165,561

Balance as of June 29, 2024 32,289 $ 3 $ 39,232 $ 1,054,048 $ ( 254 ) $ 1,093,029

Net loss — — — ( 28,504 ) — ( 28,504 )

2 unchanged sentences

Stock-based compensation — — 15,913 — — 15,913

Balance as of June 29, 2024 32,289 $ 3 $ 39,232 $ 1,054,048 $ ( 254 ) $ 1,093,029

Three Months Ended July 1, 2023 Shares Common

Balance as of September 28, 2024 32,343 $ 3 $ 55,567 $ 1,025,544 $ 272 $ 1,081,386

Three Months Ended September 30, 2023 Shares Common

Stock Additional

4 unchanged sentences

Stockholders’

Balance as of April 1, 2023 31,997 $ 3 $ — $ 1,425,914 $ ( 6,463 ) $ 1,419,454

Balance as of July 1, 2023 31,861 $ 3 $ — $ 1,262,984 $ ( 4,090 ) $ 1,258,897

Net income — — — 10,348 — 10,348

3 unchanged sentences

Stock-based compensation — — 5,942 — — 5,942

Convertible debt activity 920 — ( 3,564 ) — — ( 3,564 )

Balance as of July 1, 2023 31,861 $ 3 $ — $ 1,262,984 $ ( 4,090 ) $ 1,258,897

Six Months Ended June 29, 2024 Shares Common

Balance as of September 30, 2023 31,779 $ 3 $ — $ 1,262,518 $ ( 2,599 ) $ 1,259,922

Nine Months Ended September 28, 2024 Shares Common

Stock Additional

9 unchanged sentences

Stock-based compensation — — 45,277 — — 45,277

Balance as of June 29, 2024 32,289 $ 3 $ 39,232 $ 1,054,048 $ ( 254 ) $ 1,093,029

Six Months Ended July 1, 2023 Shares Common

Balance as of September 28, 2024 32,343 $ 3 $ 55,567 $ 1,025,544 $ 272 $ 1,081,386

Nine Months Ended September 30, 2023 Shares Common

Stock Additional

11 unchanged sentences

Convertible debt activity 920 — ( 3,564 ) — — ( 3,564 )

Balance as of July 1, 2023 31,861 $ 3 $ — $ 1,262,984 $ ( 4,090 ) $ 1,258,897

Balance as of September 30, 2023 31,779 $ 3 $ — $ 1,262,518 $ ( 2,599 ) $ 1,259,922

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 28,

2024 September 30,

Operating Activities

45 unchanged sentences

All intercompany balances and transactions have been eliminated in consolidation.

The condensed consolidated results of operations for the three and six months ended June 29, 2024 are not necessarily indicative of the results to be expected for the full year.

The condensed consolidated results of operations for the three and nine months ended September 28, 2024 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 30, 2023, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 20, 2024.

12 unchanged sentences

This authoritative guidance is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the effect of this new guidance on our consolidated financial statements.

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 segment disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures .

1 unchanged sentence

The authoritative guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the effect of this new guidance on our consolidated financial statements.

The requirements of this ASU are disclosure-related and will not have an impact on the Company’s consolidated financial position and results of operations.

The Company is currently evaluating the effect of this new guidance on its income tax disclosures.

Silicon Laboratories Inc.

2 unchanged sentences

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

Three Months Ended Six Months Ended

2023 June 29,

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Net income (loss) $ ( 28,504 ) $ 10,348 $ ( 167,187 ) $ 35,271

6 unchanged sentences

Diluted $ ( 0.88 ) $ 0.32 $ ( 5.21 ) $ 1.07

Diluted shares for the three and six months ended June 29, 2024 excluded 0.3 million and 0.3 million shares, respectively, due to the Company’s net loss for the periods.

Diluted shares for the three and nine months ended September 28, 2024 excluded 0.1 million and 0.2 million shares, respectively, due to the Company’s net loss for the periods.

In June 2023, the Company paid $ 535.0 million in cash and issued 0.9 million shares of common stock in connection with the conversions and redemptions of the 2025 Notes.

For the three and six months ended July 1, 2023, approximately 0.9 million and 1.1 million shares, respectively, were included in the denominator for the calculation of diluted earnings per share related to the not yet converted or redeemed 2025 Notes.

Securities that were anti-dilutive and were excluded from the computation of diluted earnings per share for the three and six months ended July 1, 2023 were insignificant.

For the three and nine months ended September 30, 2023, approximately 0.0 million and 0.7 million shares, respectively, were included in the denominator for the calculation of diluted earnings per share related to the not yet converted or redeemed 2025 Notes.

Securities that were anti-dilutive and were excluded from the computation of diluted earnings per share for the three and nine months ended September 30, 2023 were insignificant.

Fair Value of Financial Instruments

10 unchanged sentences

Fair Value Measurements

at June 29, 2024 Using

at September 28, 2024 Using

Description Quoted Prices in

37 unchanged sentences

The following summarizes the components of available-for-sale investments:

As of June 29, 2024 Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash Equivalent Marketable Securities

As of September 28, 2024 Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash Equivalent Marketable Securities

Corporate debt securities $ 14,313 $ 19 $ ( 51 ) $ 14,281 $ — $ 14,281

9 unchanged sentences

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 loss in the Condensed Consolidated Balance Sheet.

The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at June 29, 2024 (in thousands):

The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at September 28, 2024 (in thousands):

Cost Fair Value

5 unchanged sentences

Less Than 12 Months 12 Months or Greater Total

As of June 29, 2024 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses

As of September 28, 2024 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses

Corporate debt securities $ — $ — $ 4,946 $ ( 51 ) $ 4,946 $ ( 51 )

9 unchanged sentences

$ 40,704 $ ( 128 ) $ 126,882 $ ( 1,307 ) $ 167,586 $ ( 1,435 )

The gross unrealized losses as of June 29, 2024 and December 30, 2023 were due primarily to changes in market interest rates.

At June 29, 2024 and December 30, 2023, there were no material unrealized gains associated with the Company’s available-for-sale investments.

The gross unrealized losses as of September 28, 2024 and December 30, 2023 were due primarily to changes in market interest rates.

At September 28, 2024 and December 30, 2023, 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 June 29, 2024, there were no material declines in the market value of available-for-sale investments due to credit-related factors.

As of September 28, 2024, 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

9 unchanged sentences

The Company uses 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.

Changes in the fair value of the contracts are recorded in accumulated other comprehensive loss in the Condensed Consolidated Balance Sheet and subsequently reclassified into earnings in the period during which the hedged transaction is recognized.

Changes in the fair value of the contracts are recorded in accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheet and subsequently reclassified into earnings in the period during which the hedged transaction is 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 loss may be recognized in the Condensed Consolidated Statement of Operations based on an assessment of the contracts at the time of termination.

As of June 29, 2024, the company held no such foreign currency forward contracts.

The fair value of the contracts, contract gains or losses recognized in other comprehensive income and amounts reclassified from accumulated other comprehensive loss into earnings were not material for any of the periods presented.

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 (loss) may be recognized in the Condensed Consolidated Statement of Operations based on an assessment of the contracts at the time of termination.

As of September 28, 2024, the contracts had maturities of one to two months and an aggregate notional value of $ 7.2 million.

Gains and losses expected to be reclassified into earnings in the next twelve months were not material.

The fair value of the contracts, contract gains or losses recognized in other comprehensive income and amounts reclassified from accumulated other comprehensive income (loss) into earnings were not material for any of the periods presented.

Silicon Laboratories Inc.

2 unchanged sentences

The following table shows the details of selected Condensed Consolidated Balance Sheet items (in thousands):

September 28,

2024 December 30,

3 unchanged sentences

The Company leases a portion of its headquarter facilities to other tenants.

Lease income from operating leases was $ 1.5 million and $ 1.4 million during the six months ended June 29, 2024 and July 1, 2023, respectively.

Lease income from operating leases was $ 2.2 million and $ 2.3 million during the nine months ended September 28, 2024 and September 30, 2023, respectively.

Credit Facility

7 unchanged sentences

The Company was granted a waiver of compliance for the minimum interest coverage ratio through March 29, 2025.

Based on the waiver, as of June 29, 2024, the Company was in compliance with all covenants of the credit facility.

Based on the waiver, as of September 28, 2024, the Company was in compliance with all covenants of the credit facility.

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 June 29, 2024, no amounts were outstanding on the credit facility.

As of September 28, 2024, no amounts were outstanding on the credit facility.

Silicon Laboratories Inc.

5 unchanged sentences

The following represents revenue by product category (in thousands):

Three Months Ended Six Months Ended

2023 June 29,

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Industrial & Commercial $ 96,496 $ 120,957 $ 249,840 $ 436,973

3 unchanged sentences

These factors impact the timing and uncertainty of revenues and cash flows.

During the three and six months ended June 29, 2024, the Company recognized revenue of $ 0.0 million and $ 2.1 million, respectively, from performance obligations that were satisfied in previous reporting periods.

During the three and six months ended July 1, 2023, the Company did not recognize any revenue related to performance obligations that were satisfied in previous reporting periods.

During the three and nine months ended September 28, 2024 and September 30, 2023, 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 Six Months Ended

2023 June 29,

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Distributors $ 119,212 $ 164,444 $ 289,502 $ 556,963

10 unchanged sentences

The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Operations (in thousands):

Three Months Ended Six Months Ended

2023 June 29,

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Cost of revenues $ 369 $ 192 $ 1,193 $ 774

4 unchanged sentences

Total $ 13,651 $ 5,285 $ 39,304 $ 32,721

The Company had approximately $ 124.4 million of total unrecognized compensation cost related to equity grants as of June 29, 2024 that is expected to be recognized over a weighted-average period of approximately 2.3 years.

For the three months ended September 30, 2023, the Company recognized an expense reversal of $ 9.5 million to reflect a reduction in the estimated levels of achievement related to unvested performance stock units.

The Company had approximately $ 110.0 million of total unrecognized compensation cost related to equity grants as of September 28, 2024 that is expected to be recognized over a weighted-average period of approximately 2.2 years.

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, global intangible low-taxed income, Subpart F income inclusions, and other permanent differences.

Income tax expense was $ 36.7 million and $ 12.3 million for the three months ended June 29, 2024 and July 1, 2023, resulting in effective tax rates of ( 80.6 )% and 53.0 %, respectively.

Income tax expense was $ 36.3 million and $ 20.1 million for the six months ended June 29, 2024 and July 1, 2023, resulting in effective tax rates of ( 35.4 )% and 44.6 %, respectively.

The increase in the provision for income taxes for the three and six months ended June 29, 2024 is primarily due to a change in the Company’s valuation allowance assessment and subsequent recording of a valuation allowance against certain of the Company’s deferred tax assets.

For the three months ended June 29, 2024, the Company’s provision for income taxes includes $ 43.9 million of non-cash tax expense to establish a valuation allowance against certain deferred tax assets in the U.S.

and Singapore.

Income tax expense was $ 2.0 million and $ 3.4 million for the three months ended September 28, 2024 and September 30, 2023, resulting in effective tax rates of ( 7.6 )% and 24.7 %, respectively.

Income tax expense was $ 38.3 million and $ 23.5 million for the nine months ended September 28, 2024 and September 30, 2023, resulting in effective tax rates of ( 29.7 )% and 40.0 %, respectively.

The change in the provision for income taxes for the three and nine months ended September 28, 2024 is primarily due to the establishment of a valuation allowance against certain of the Company’s U.S.

and Singapore deferred tax assets during the three months ended June 29, 2024.

Because of the valuation allowance, the Company is unable to recognize the full tax benefit of the pre-tax losses incurred in those jurisdictions in the current year.

For the three and nine months ended September 28, 2024, the Company’s provision for income taxes includes $ 3.8 million and $ 48.1 million of non-cash tax expense related to the valuation allowance.

The Company establishes a valuation allowance when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

In the three months ended June 29, 2024, the Company determined that there is a need for the valuation allowance due to a forecasted three-year cumulative pre-tax loss for the current and two preceding years in conjunction with the downturn in the semiconductor industry.

During the three months ended June 29, 2024, the Company determined a need for the valuation allowance due to a forecasted three-year cumulative pre-tax loss for the current and two preceding years 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.

Uncertain Tax Positions

As of June 29, 2024, the Company had gross unrecognized tax benefits, inclusive of interest, of $ 6.1 million, of which $ 5.5 million would affect the effective tax rate if recognized.

During the six months ended June 29, 2024, the Company did not release any unrecognized tax benefits.

As of September 28, 2024, the Company had gross unrecognized tax benefits, inclusive of interest, of $ 6.3 million, of which $ 5.3 million would affect the effective tax rate if recognized.

During the nine months ended September 28, 2024, the Company did not release any unrecognized tax benefits.

Tax years 2015 through 2024 remain open to examination by the major taxing jurisdictions in which the Company operates.

2 unchanged sentences

The Company is not currently under audit in any other major taxing jurisdiction.

The Company believes it is reasonably possible that its gross unrecognized tax benefits will decrease by approximately $ 1.9 million, inclusive of interest, in the next 12 months due to the lapse of the statute of limitations.

Silicon Laboratories Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

Income Taxes (Continued)

The Company's gross unrecognized tax benefits will decrease by approximately $ 1.8 million, inclusive of interest, in the next 12 months due to the lapse of the statute of limitations.

Restructuring Activities

1 unchanged sentence

The following table summarizes the activity of the restructuring liability during the periods presented (in millions):

Six Months Ended

June 29, 2024

Nine Months Ended

September 28, 2024

Balance, beginning of period $ 4.4

1 unchanged sentence

Balance, end of period $ —

During the three and six months ended June 29, 2024, restructuring charges of $ 0.4 million and $ 0.9 million were recognized in operating expenses in the Condensed Consolidated Statements of Operations.

During the three months ended September 28, 2024, restructuring charges were not material, and during the nine months ended September 28, 2024, restructuring charges of $ 0.9 million were recognized in operating expenses in the Condensed Consolidated Statements of Operations.

The cash payments for this activity were completed in the third quarter of 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements