Fueled in large part by growth in its “Internet of Things” products, Silicon Labs reported record revenue in its fourth quarter of $183 million, a 14 percent increase from a year ago.
Shares of Silicon Lab stock were up about 2 percent in morning trading.
Silicon Labs makes silicon chips and software that can be used in a variety of devices, from televisions to smart energy meters and data centers.
Its major customers include Cisco, Fitbit, LG Electronics and Samsung.
The 20-year-old company is headquartered in downtown Austin and employs about 650 people locally.
The company reported annual sales of $698 million for 2016, up 8 percent from the year before. Its profit for the year also more than doubled.
Silicon Labs beat Wall Street expectations for both profit and revenue in the fourth quarter. When adjusted for certain one-time gains or costs, the company reported profit of $32 million or 75 cents a share.
A big driver of Silicon Labs’ sales growth is its “Internet of Things” division, which accounted for about 45 percent of the company’s revenue last year.
Internet of Things is a tech industry term for non-computing devices connected to the Internet, such as a Nest thermostat.
Silicon Labs CEO Tyson Tuttle said in a conference call with financial analysts that the Internet of Things will continue to drive sales growth for the company, growing at a 20 percent clip this year.
In an interview with the American-Statesman, Tyson said by the end of 2017 more than half of the company’s overall revenue will come from its Internet of Things division.
The company’s other growth area is Infrastructure, which includes products that are used in data centers and in various industrial and green energy applications.
The company’s legacy products, such as modems and TV and radio tuners, are declining in sales. That’s why Silicon Labs is focusing its growth strategy on its Internet of Things and Infrastructure division.
Tuttle said Internet of Things represents a “sustainable, long-term growth path” for the company.
Silicon Labs announced last week that it has acquired Zentri, a California-based company makes low-power cloud-connected Wi-Fi modules used in Internet of Things devices.
The sales price was not disclosed.
This acquisition is one of several the company has made in the last two years that help bolster their IoT product portfolio. These acquisitions had a minimal impact on the company’s sales growth, Tuttle said.
This story was updated at 2:30 p.m. to include additional comments from Silicon Labs CEO Tyson Tuttle