Silicon Laboratories (SLAB) Q1 2022 Earnings Call Transcript

Silicon Laboratories (SLAB 3.41%)
Q1 2022 Earnings Call
Apr 27, 2022, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Thank you for joining Silicon Labs first quarter 2022 financial and business update. My name is Tom, and I will be your conference operator today. [Operator instructions] Please note this event is being recorded. I will now turn the conference over to Giovanni Pacelli, Silicon Labs' senior director of finance.

Giovanni, please go ahead.

Giovanni Pacelli -- Senior Director of Finance

Thank you, Tom. We are recording this meeting, and a replay will be available for four weeks on the Investor Relations section of our website at silabs.com/investors. Joining me today are Silicon Labs' president and chief executive officer, Matt Johnson; and Chief Financial Officer John Hollister. They will discuss our first quarter financial performance and review recent business activities.

This information, along with accompanying financial tables in the earnings press release, is available on our website. We will take questions after our prepared comments, and our remarks today will include forward-looking statements subject to risks and uncertainties. We base these forward-looking statements on information available to us as of the date of this conference call and assume no obligation to update these statements in the future. We encourage you to review our SEC filings, which identify important risk factors that could cause actual results to differ materially from those contained in any forward-looking statements.

Additionally, during our call today, we will refer to certain non-GAAP financial information. A reconciliation of our GAAP to non-GAAP results is included in the company's earnings press release and on the Investor Relations section of the Silicon Labs website. I would now like to turn the call over to Silicon Labs' chief financial officer, John Hollister. John?

John Hollister -- Chief Financial Officer

Thanks, Giovanni. Revenue for the first quarter established a new record and ended above the high end of our guidance range at $234 million. This represents tremendous growth as a pure-play IoT business of 48% versus the same period last year, well ahead of our long-term operating model. Our industrial and commercial business delivered revenue of $127 million in Q1, growing 61% year on year with strength across the diverse end markets of commercial infrastructure, smart city applications, and in particular, industrial applications where we saw the strongest top-line performance.

The home and life business also delivered strong growth in Q1, ending at $107 million, up 35% year on year with smart home and home security applications driving strong momentum. Distribution channel revenue in the quarter accounted for 82% of our total sales. Our business is very broad and diverse, serving tens of thousands of customers and thousands of applications. Our largest customer represents only about 5% of revenue, and our top 10 customers are less than 20% of revenue.

Our business in Q1 grew year on year across all geographies with the strongest growth in the Americas, followed by Europe, then Asia Pacific. The geographical mix of our business has evolved over time and is now roughly balanced across the Americas, Europe, and Asia Pac. Non-GAAP gross margin for the quarter was favorable to expectations, ending at nearly 67%. It's important to note this gross margin was driven by an atypical quarter in which we sold out lower-cost inventory procured in fiscal 2021.

While also seeing our manufacturing costs rise with price increases from our suppliers. Gross margin also benefited from fewer-than-expected expedite charges in the quarter. As noted, we are experiencing manufacturing cost increases and expect gross margin to moderate over the coming quarters. Non-GAAP operating expenses increased to just under $100 million for the quarter, with R&D expenses at $63 million and SG&A expenses at $36 million.

A total increase of around $5 million from Q4. The increase was due primarily to seasonal effects from payroll taxes and other benefits, combined with additional personnel-related costs. We successfully initiated accelerated IoT, opex investment in Q1, the project timing resulted in favorability in our opex. Non-GAAP operating margin for Q1 was stronger than expected, ending at 24% on the basis of strong top-line performance, superior gross margin, and greater-than-expected leverage in opex.

As anticipated, we faced a significant increase in our non-GAAP effective tax rate, now up to around 26%. We expect it to remain in that range for the full year due to required capitalization of R&D expenses. Absent legislative changes, we expect the tax rate to decline a few hundred basis points per year as the amortization stock builds up over time. Based on the strong performance I've just described, we delivered non-GAAP earnings per share in the first quarter of $1.05, well ahead of our guidance for the quarter.

On a GAAP basis, gross margin was just under 67%. GAAP operating expenses declined in the quarter to $122 million due to some significant one-time expenses incurred in Q4. GAAP R&D expenses were $78 million with SG&A expenses of $45 million. Please note that accounting rules have updated and simplified the accounting treatment of convertible debt.

And accordingly, we no longer accrete a noncash interest charge for our 2025 convertible notes. Our GAAP earnings per share ended for Q1 at $0.58 with a 34% GAAP effective tax rate. Next, I'll cover the balance sheet and provide a capital deployment update. We ended the quarter with cash and investments of $1.9 billion.

Our accounts receivable balance declined to $79 million in Q1 with DSO of around 30 days. Our operations team executed very well during the first quarter by delivering on upside revenue performance and growing our inventory balance to $56 million ahead of expected continued upside in the business later this year. Channel inventory also recovered as expected to 57 days. With strong operating results, our operating cash flow in the quarter was $85 million.

Through the first four months of the year, we returned $250 million of capital to our shareholders through open market repurchases, bringing the cumulative total since we announced the divestiture to $1.4 billion. Last week, our board of directors authorized an additional $350 million in share repurchases for the remainder of this year. I will now cover guidance for the second quarter of fiscal 2022. We expect revenue to increase to a range of $245 million to $255 million, with sequential growth expected in both the industrial and commercial and home and life categories.

We expect non-GAAP gross margin to decline to around 61% based on FY '22 manufacturing cost increases already in place, along with expected increases over the course of the year. Even at the lower expected gross margin over the course of this year, we continue to deliver premium gross margin for the IoT space based on the differentiation of our platform. We expect non-GAAP operating expenses to increase to around $107 million as our merit increases for FY '22 take effect, IoT investment expands and we continue to grow our team. We expect our non-GAAP effective tax rate for the quarter to be 26% and non-GAAP earnings per share to be in the range of $0.85 to $0.95.

On a GAAP basis, we expect gross margin to be around 61%. We expect GAAP operating expenses to increase to $129 million and GAAP earnings per share to be in the range of $0.37 to $0.47. I will now turn the call over to Matt. Matt?

Matt Johnson -- President and Chief Executive Officer

Thank you, John, and good morning, everyone. We're off to an outstanding start in our first full year as the largest pure-play IoT wireless company. We delivered record revenue for the seventh consecutive quarter and great operating results. Demand continues to meaningfully outpace our supply even as we keep adding incremental supply.

We continue to focus on doing the right thing and strengthening our customer relationships as we navigate the supply challenges together. Demand for our solutions is strong and growing. Our design win momentum is accelerating even faster than our revenue, growing 79% in the first quarter over the same period last year. This is a greatly the indicator of future revenue growth.

Our opportunity pipeline also continues to grow, now well over $14 billion as we gain visibility and identify new opportunities within our large and growing market. Silicon Labs is now the largest pure-play wireless IoT company in the world. Our platform-based approach enables us to address an incredibly wide range of applications using a common hardware and software platform purpose-built for the IoT. Our platform allows us to efficiently scale our technology to additional markets and applications and makes it easier for our customers to deliver products faster and accelerate wireless adoption.

In Q1, we saw strong revenue growth across all wireless protocols and end markets. In industrial and commercial, we're seeing strong demand for electronic shelf labels and growth in industrial automation and asset monitoring. Smart City deployments continue to expand beyond our traditional strength in smart metering into growing application areas such as grid monitoring and distribution automation. In home and life, demand is strong across all end markets, and we're particularly pleased with new wins in portable medical and smart appliances.

Anticipation is growing for the release of the new matter standard later this year, and our solutions for quickly bringing matter-enabled products to market have been well received. For example, in Q1, we announced and shipped initial samples of our xG24 family of wireless SoCs, which support matter and bring AI/ML acceleration to battery-powered edge devices. Initial customer response has been fantastic. Our alpha program sold out with participants representing a wide range of smart home and industrial applications.

The xG24 family is just the latest in an impressive lineup of solutions built on our Series 2 platform. With Series 2, we've been able to increase our R&D efficiency and deliver new products faster and market response has been fantastic. Our current demand is only reflective of the first two products on the Series 2 platform with three to four times more on the way, another great indicator of future demand. We're also incredibly proud of the xG24's performance on the important MLCommons Machine Learning and Inference Performance benchmark.

With integrated AI/ML hardware acceleration, the xG24 wireless SoCs provide up to four times faster processing with up to six times lower power consumption for machine learning workloads. This means even ultra-low-power wireless IoT devices can now be enhanced with machine learning capabilities. In early March, we held our 2022 analyst day event in New York. The Silicon Labs' executive team enjoyed ringing the opening bell at the NASDAQ to celebrate our 22 years as a public company and honored the achievements of our talented global workforce.

Silicon Labs entered 2022 a 100% focused on wireless connectivity for the IoT, and we are determined to lead the industry. We're excited by the impact our solutions and technologies are having on the industry and in people's lives. I couldn't be prouder of the team's execution and the future opportunity that we see. Silicon Labs is positioned to lead and scale in an IoT market expected to achieve tens of billions of units per year in the decade ahead.

We have the talent, the technology, and the trusted partnerships across every major ecosystem to be a driving force behind the success of the IoT and the market leader in this exciting segment of the semiconductor industry. Thank you for your time this morning. I will now turn the call back to Giovanni.

Giovanni Pacelli -- Senior Director of Finance

Thank you, Matt, and thank you for joining Silicon Labs Q1 2022 financial and business update. I'll now open the call for questions. [Operator instructions]

Questions & Answers:

Operator

We will now begin the question-and-answer session. [Operator instructions] And the first question comes from Gary Mobley with Wells Fargo Securities. Please go ahead.

Gary Mobley -- Wells Fargo Securities -- Analyst

Good morning, everybody. Let me extend my congratulations to a strong start to the fiscal year. Guys, at your analyst day on March 1, you endorsed perhaps 35% to 40% revenue growth in fiscal year '22. And with such a strong start to the first half of the year.

Are you still bracketing that growth rate or endorsing that growth rate? Or might we be at or above the high end of the range? And as well, a few hundred miles to the east you is another large chip company that was somewhat cautious with respect to the different supply chain concerns, specifically over in China, whatnot. So I'm curious to know to what extent does that second quarter guidance contemplates all the macro and supply chain risks that we hear about day-to-day.

John Hollister -- Chief Financial Officer

Yeah, Gary. This is John. Let me take the first part, and then I'll kick it over to Matt for the second part. But the indication we provided at analyst day was really relative to that event, we're guiding one quarter at a time.

I will say we're quite encouraged by the strength we continue to see in the business with design win momentum up nearly 80% year on year for the first quarter and continue to enable more supply. That's really the phenomenon that's happening right now is to the extent that we can activate more supply, we can deliver upside as we have demand that is in excess of our supply at the moment. And I'll pass it to Matt for the next part.

Matt Johnson -- President and Chief Executive Officer

Thanks, John. Hi, Gary. This is Matt. In terms of, I guess, looking at demand and supply that you mentioned, we definitely see some war lockdown pushouts out there.

And as soon as those happen, we're able to reallocate to other demand because the demand is meaningfully outpacing supply. So that gives us flexibility. On the supply side of all that, we do see issues pop up. And as John mentioned earlier, the operations team has been able to respond with alternatives or recover.

So definitely seeing both of those, but also seeing the team being able to navigate both of those.

Gary Mobley -- Wells Fargo Securities -- Analyst

I appreciate the comments, guys. Now with respect to gross margin, I appreciate how you're outperforming your long-term gross margin guide of mid-50% just given sort of the mismatch between price increases and supply chain increases. But my question is, do you still anticipate given all the different variables that perhaps by the time we exit the fiscal year, you'll be sub-60% gross margin?

John Hollister -- Chief Financial Officer

Yeah, Gary. You know, we definitely see trends ahead that's lead to some conservatism and view that margins could moderate. The full extent of that, we'll have to see how it plays out. But that is possible, and we'll know more as we progress through the year here.

Gary Mobley -- Wells Fargo Securities -- Analyst

All right. Thanks, John. Thanks, everybody.

Operator

The next question comes from Blayne Curtis with Barclays. Please go ahead.

Blayne Curtis -- Barclays -- Analyst

Hey, good morning, and I'll echo my congrats as well, very strong results. And I appreciate the additional detail by segment. And actually, I was curious, I mean, I know you're not going to guide by these segments. You said both would be up.

I'm just thinking about the long-term growth rate or even the growth rate this year between these two segments, it looks like industrial and commercial, it's been doing a bit better? Any thoughts on kind of the relative growth rates between these segments, at least this year or even long term.

John Hollister -- Chief Financial Officer

Yeah, I'll start, Blayne. If we just think about the SAM growth that we highlighted at the analyst day event. You do see stronger SAM growth out in time for the industry estimates for the industrial and commercial space, given the very large and diverse market, also see strong growth opportunity in home and life. But do see slightly higher growth potential from the SAM growth on the I&C side.

Blayne Curtis -- Barclays -- Analyst

I just want to ask it maybe it was just kind of one-off on the quarter, you said there's less expedited but then demand is still outstripping supply. So I was wondering if things are becoming more predictable in your supply chain? Or I guess what's the root cause for last expedites in the quarter?

John Hollister -- Chief Financial Officer

Yeah. Thanks, Blayne. John here. I think it's fair to say it is a bit more predictable, even though we are still constrained and we are undertaking multiple projects in the company to open up more.

But in the near term, I think that's a fair assessment that it is somewhat more predictable.

Blayne Curtis -- Barclays -- Analyst

All right. Thanks. I'll pass it along.

Operator

The next question comes from Matt Ramsay with Cowen. Please go ahead.

Matt Ramsay -- Cowen and Company -- Analyst

Good morning, everybody. Thank you. John, I think in the script, you guys talked about the business and the design win momentum being fairly equally split between the Americas and EMEA and Asia Pac. And there's a lot of focus as you might imagine on the lockdowns in China.

So is it true that the supply chain is sort of split that way as well and the fungibility of the products that Matt described an earlier answer allows you guys to navigate through this? Or is there are you guys sort of watching and worried about some of these lockdowns in China and certain pinch points in the supply chain for your stuff as well? I'm just trying to -- the results that you guys are putting up are, I think, quite a bit ahead of what we would have expected given the macro commentary that's out there. So I'm just trying to make sure that we're not missing anything if you get the gist behind the question. Thanks.

John Hollister -- Chief Financial Officer

Yeah. Let me take a run at it. Matt, this is John. So really, the commentary on the geographical split of the business is oriented more around the demand.

That's a comment on our customer footprint globally where we have roughly equal representation across the three major regions of the world. The supply chain is heavily concentrated in Asia Pacific, as you can imagine, with a good amount of supply sourced in Taiwan, some in Mainland China, some in South Korea. So we've been able to navigate this so far. Of course, we're keeping an eye on it and mindful of what could happen out there with the lockdown.

But so far, we've been able to navigate that. And given the platform broad-based approach of our products and technologies where we may have some pushouts or lockdown issues with customers. So far, we've been able to reroute available supply to other customers where that is not the case.

Matt Ramsay -- Cowen and Company -- Analyst

Got it. Thanks. Just as a follow-up on you guys had maybe opex slightly under where a lot of us had modeled it for the fourth -- for the first couple of quarters of the year, but revenue well above. I just wonder, John, if you might give us some commentary on expense levels for the rest of the year.

Are you anticipating an acceleration with all the and funnel that's out there? Or are there things that are maybe holding you back on hiring or whatnot that aren't allowing expenses to grow as quickly as you might like? Thanks.

John Hollister -- Chief Financial Officer

Sure, Matt. And yes, we are expecting further acceleration through the course of this year. At times, we were not quite able to execute as quickly as we might want to just from different project timing factors at work. But yes, our goal is to continue acceleration through the course of this year.

Matt Ramsay -- Cowen and Company -- Analyst

Thanks, guys. Congrats again.

Operator

The next question comes from Srini Pajjuri with SMBC Nikko Securities. Please go ahead.

Srini Pajjuri -- SMBC Nikko Securities -- Analyst

Thank you. Good morning, guys. I guess first on the gross margins, John. So obviously, you're guiding down for the next few quarters consistently.

Just trying to understand if the inventory, the -- I guess, in the lower-cost inventory is pretty much flushed through the system or if you still have any inventory left. And similarly, in terms of the price increases, have they been pretty much rolled out across the board? Do you still expect some additional opportunities to raise prices in the second half of the year?

John Hollister -- Chief Financial Officer

Yeah, Srini. So the first response is yes. The legacy cost of inventory from last year is fully fleshed out. We are and have been incurring new cash costs to build new inventory at the '22 cost points, which are meaningfully higher than the '21 cost point.

So that's what you're seeing affect us here in the second quarter, and we expect those trends to continue in the third and fourth quarter. There are some additional manufacturing cost increases forthcoming in the second half that we are already aware of. No immediate plan on price increases can never rule it out. But as of right now, we've taken steps to recover what we are experiencing ourselves at the moment.

Srini Pajjuri -- SMBC Nikko Securities -- Analyst

Got it. And then in terms of visibility, I mean, you're saying that demand is still outpacing supply by a significant margin. But any change in terms of visibility compared to a quarter or two ago, given all the supply chain noise? And then in terms of your channel inventory as well, it went up a little bit. I guess your target is 45% to 55%.

And how should we think about your channel inventory levels as we go through the rest of the year?

Matt Johnson -- President and Chief Executive Officer

This is Matt. I'll answer the first part of that and hand it over to John. I think in terms of visibility in the entire environment, our bookings have remained consistent. And within that, our demand continues to meaningfully outpace our supply, which, as John said earlier, gives us flexibility as things shift to respond and reallocate.

Within that, we continue to increase our supply. And that's important. That's a statement for the coming quarters and for 2023. At the same time, our design wins are accelerating even faster than our revenue, which is really important to us because that's one of the stronger leading indicators we have of future demand moving forward.

So that combination in sequence is really important. And John, I'll hand it over to you for the second piece.

John Hollister -- Chief Financial Officer

Yeah, Srini. So we were pleased with the ability to reload the distribution channel back into our target range. Our goal would be to hold that, which would be an absolute increase in units as the business continues to grow here. But it's tight supply, and that's a bit of a challenge for the team.

But that is our goal is to continue to hold as best we can at the level that we're currently at.

Srini Pajjuri -- SMBC Nikko Securities -- Analyst

John, just a follow-up to that. I mean, given what we saw in the last couple of years in terms of the supply constraints. Are you hearing or seeing any evidence that your customers going forward may be willing to kind of hang on to a bit more inventory on a structural basis, either distribution channel or direct customers? Because that seems to make logical sense, just given what happened in the last couple of years. So I just want to hear your thoughts on what you're hearing from your customers?

John Hollister -- Chief Financial Officer

Yeah. I think -- yes. Really, I think it's -- we haven't gotten normalized well enough to really understand the longer-term strategies for companies. I think your presumption is logical, but I think we've got to let some more time pass and get things more normalized to really know.

Matt Johnson -- President and Chief Executive Officer

And I'd just add to that that, one, we're definitely not in those types of discussions right now, right? We're still spending a lot of time on supply alternatives for our customers, working through their demand gaps and trying to help them navigate and bridge every quarter as we keep incrementing up supply. That being said, I do think the -- given what the industry has just been through and going through that the interest in mechanisms for reliability of supply long term will be much higher. And inventory can be a component of that, for sure, as well as supply alternatives, multiple sources for fabs and back end, etc. So I think all of those will be on the table, but we need some time and there's quite a distance between here and there, given the size of the demand-supply gaps that we're still experiencing.

Srini Pajjuri -- SMBC Nikko Securities -- Analyst

Makes sense. Thank you, guys, and congrats again.

Operator

The next question comes from Raji Gill with Needham & Company. Please go ahead.

Raji Gill -- Needham and Company -- Analyst

Yes. Thank you, and congrats as well on a really strong growth in a tumultuous market. Just to follow up on a question around price increases. I know in the past, last year, the strong IoT growth was driven primarily by unit increases.

This year, the split between units and price increases is a little bit more balanced. So I just wanted to get a sense in terms of when you're looking out into kind of 2023 and when you're talking about new customers and new design wins, as Matt talked about, how do we think about pricing as it relates to kind of longer-term growth and as well as you negotiate some of these new contracts?

Matt Johnson -- President and Chief Executive Officer

Sure. So the easiest measuring stick that I can provide is the design win momentum we talked about earlier. And our philosophy and approach to those design wins is to provide competitive market pricing for those solutions. And windows not at a -- how would you say, not at a transient or temporary price, but what we would expect the price to be for the duration of that business.

And so that's the way we've been operating, and that's the way we've been winning those design wins. So I think so far, we're seeing good progress on that, and we expect it to continue. We're optimistic about the design win progress and the momentum we have for the rest of the year.

Raji Gill -- Needham and Company -- Analyst

Thank you. And just for my follow-up. In terms of capacity, you mentioned, to the extent that you can activate supply, you will generate more upside because of the demand picture. I'm wondering if you can maybe describe the overall capacity conditions with your kind of foundry partners.

How are they looking at adding new capacity for 40-nanometer 28-nanometer products for your Series 2 or your Series 3 products? And so I just wanted to get a sense in terms of the capacity conditions and those dynamics throughout this year and kind of how you're thinking about it next year because, as you know, there's a strong investor concern about over capital -- an oversupply industry leading to kind of a disconnect between demand if demand accelerates and more supply comes online. So there's a lot of concerns about that mismatch that occur perhaps next year. So any thoughts there would be helpful. Thank you.

Matt Johnson -- President and Chief Executive Officer

Sure. Understood. Yeah, it's -- given the meaningfully -- meaningful gap, I think, that we have between demand and supply right now. It seems a long ways away where that would be the issue, but I understand the question completely.

I think we definitely leave it for our suppliers to comment on their overall capacity and supply plans going forward. But what I can say specifically is our ability to work with our suppliers and partners to secure more supply has been effective, not only short term but midterm and long term as well. So we see a path that we like going into the second half of this year and into 2023, I think, which is very important because that's also a major component when we're working with our customers on design wins that we can give them that visibility and ability to support those new designs as they come online. I think one other thing that's worth mentioning that we found helpful and powerful in these discussions to -- as we work on allocation and supply is being an IoT pure-play company.

I think our suppliers all want a -- for lack of a better term, a portfolio position that includes IoT and that exposure. And given that that's all we do and that we have incredibly diverse presence there, that makes us attractive from that perspective. So we've seen not just with one but literally across our supplier base with a strong response to that, and I think that's helping us navigate this as well.

Operator

[Operator instructions] And the next question comes from Tore Svanberg with Stifel, Nicolaus. Please go ahead.

Jeremy Kwan -- Stifel Financial Corp. -- Analyst

Yes. Good morning. This is Jeremy calling for Tore. And just let me add my congrats on the -- especially on the 24% operating margin.

Just a follow-up on the geographic question. Can you give us a sense of where you expect most of the -- maybe if you can rank order the growth in terms of those three geographies? And how does that compare to historically?

John Hollister -- Chief Financial Officer

Yeah, Jeremy. This is John. It's pretty consistent. I think it's fair to say for the wireless applications, at least initially in the rollout of Internet of Things applications you have seen more strength in North America and Europe.

There are some good opportunities in Asia Pac and expect that to further develop over time here. We do have significant MCU business in Asia Pac as well. But overall, it's reasonably balanced, we believe, going forward here.

Jeremy Kwan -- Stifel Financial Corp. -- Analyst

Great. And I guess maybe stepping back a bit, looking more at the long-term drivers or technologies. You mentioned matter being an important one. Are there other things on the horizon that you see maybe any things that you might want to fill out on the of the portfolio or even on the service complete platform side of things.

that you're investing more heavily in at the moment? Thanks.

Matt Johnson -- President and Chief Executive Officer

Yeah, sure. I'll make some -- just a quick comment first on the matter, in general, we see as an incredibly positive development for our industry. And we're less concerned about the delays than most because we don't see this as a short-term opportunity. We think it's important that the industry gets this right.

And if we get this right, this will drive a very positive net benefit for the space. So we're encouraged by that. In terms of big catalysts. To be clear, we're seeing strong growth across all our applications and technologies.

But I mentioned earlier the Series 2 platform and xG24, it's worth calling that out that that's just indicative of why we see this longer-term demand that we know the end market is growing strongly. But our ability to service that market continues to improve. That platform approach that we're taking allows us to keep driving more parts that are very differentiated for our customer base, and those parts keep getting a tremendous response from the market. As I said earlier, when you think about the demand environment we're seeing, that's really only based on historical solutions in the first two or three products coming off the Series 2 platform.

And then you look and see that there's a continued march of more and more products accelerating off that platform three to four times what we've already released, that makes us really excited about the future demand potential that we see coming down the road. And the best example is the one I mentioned, the xG24, that's the latest product that one supports matter, supports machine learning in a very efficient way for battery-powered applications. And as I mentioned, we sold out of that right out of the gate in terms of the alpha program and our response from customers have been fantastic. So that's -- if you step back and say, what's one of many reasons to be excited about the future.

It's the platform effect that we're seeing and have yet to see moving forward.

Jeremy Kwan -- Stifel Financial Corp. -- Analyst

Great. Thank you, and congrats again.

Operator

There are no further questions. So this concludes our question-and-answer session. I will now hand the call back over to Giovanni Pacelli.

Giovanni Pacelli -- Senior Director of Finance

Thank you for joining the Silicon Labs' Q1 earnings call. Tom, you may now conclude the call. Thank you.

Operator

[Operator signoff]

Duration: 39 minutes

Call participants:

Giovanni Pacelli -- Senior Director of Finance

John Hollister -- Chief Financial Officer

Matt Johnson -- President and Chief Executive Officer

Gary Mobley -- Wells Fargo Securities -- Analyst

Blayne Curtis -- Barclays -- Analyst

Matt Ramsay -- Cowen and Company -- Analyst

Srini Pajjuri -- SMBC Nikko Securities -- Analyst

Raji Gill -- Needham and Company -- Analyst

Jeremy Kwan -- Stifel Financial Corp. -- Analyst

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