Growth continues for Austin-based chipmaker Silicon Labs.
The company on Wednesday beat Wall Street expectations by reporting a record $190.1 million in revenue for its fiscal second quarter, which ended July 1, though the company did report a slowdown in some of its divisions.
The $15.2 million revenue increase from the the same quarter a year ago was spurred by significant advancement in its Internet of Things and infrastructure divisions, which have become the company’s anchors. Internet of Things is a chip industry term for internet-connected non-computing devices.
“This is a strategy we began five or six years ago - to focus the company’s investments into (Internet of Things),” Silicon Labs chief financial officer John Hollister said. “We are seeing the fruits of that. We have continued to grow the business, and it’s really leveraging a wave of activity in the market and connectivity in the market.”
Wall Street analysts had predicted $186.5 million in revenue.
Founded in 1996, Silicon Labs designs chips, sensors and other software that are used in devices such as watches, modems, televisions and audio devices. Its customers include Cisco, Fitbit and Samsung.
The company’s Internet of Things production has become its trademark as Silicon Labs has purchased several Internet of Things companies in recent years to bolster the division. The division’s revenue has grown by 27 percent since last year.
Its infrastructure division has also seen more productivity, increasing in revenue by 7 percent year-to-year to $38 million. Combined, Internet of Things and infrastructure make up 71.5 percent of Silicon Lab’s revenue.
The company’s profits rose by nearly $1 million year-over-year to $16.6 million for a diluted earnings per share of 38 cents, up 1 cent from the same quarter a year ago.
Earnings adjusted for one-time gains and costs were 79 cents per share, beating Wall Street expectations by 8 cents.
But for all the gains, Silicon Labs did experience revenue decline in some areas.
Its revenue for broadcast items declined by 4 percent year-to-year to $37 million, while its revenue for internet/tech access items declined by 10 percent year-to-year to $17 million.
“Broadcast and access is less than 30 percent of our combined revenue,” Hollister said. “The market themselves aren’t really growing for broadcast consumer and access. This is something we expected, so that's why we’ve shifted (the company’s strategy) to IoT and infrastructure.”
The company’s share price has also surged. Since January it’s risen by roughly 13 percent, and has seen a gain of about 36 percent in the past year.
The company’s share price climbed by 11 percent after Wednesday’s earnings report, closing at $77.20, its highest figure since reaching $77.75 in early June.
Silicon Labs expects continued expansion. The company forecasts revenue in the third quarter to be in the range of $193 million to $199 million.
“We plan to continue to invest in IoT and infrastructure. We see continued growth opportunities in those areas,” Hollister said. “The challenges of the company is more in keeping our head down and being focused on the strategy in front of us. We are addressing large markets, and we think the company has a good strategy.”
News on Open Source is free and unlimited. Access to the rest of 512tech.com comes with an American-Statesman digital subscription, which also includes myStatesman.com and the ePaper edition. Subscribe at statesman.com/subscribe.