Silicon Laboratories (SLAB 2.19%) announced better-than-expected first-quarter 2018 results Wednesday morning. Revenue set another high mark this quarter on the strength of its Internet of Things (IoT) products and its burgeoning internet infrastructure business. Silicon labs also recently closed on a key acquisition, and issued encouraging guidance.

With shares up 5.7% as of this writing, let's take a closer look at how the fabless semiconductor specialist started the new year.

Smartphone with ZWAVE app running connected smart home devices

Image source: Silicon Labs.

Silicon Labs results: The raw numbers


Q1 2018

Q1 2017

Year-Over-Year Growth


$205.4 million

$179.0 million


GAAP net income

$26.4 million

$15.4 million


GAAP diluted earnings per share




Data source: Silicon Laboratories.

What happened with Silicon Labs this quarter?

  • Revenue was above the high end of guidance provided in late January, which called for a range of $196 million to $202 million.
  • On an adjusted (non-GAAP) basis, which excludes items like equity compensation and acquisition costs, net income was $38.3 million, or $0.87 per share -- also above guidance for adjusted earnings per share of between $0.73 and $0.79.
  • IoT revenue grew 17% year over year to $103 million.
  • Infrastructure revenue jumped 37% year over year to $49 million.
  • Broadcast revenue declined 3% to $36 million.
  • Access revenue fell 6% to $17 million.
  • Subsequent to the end of the quarter, on April 18, 2018, Silicon Labs closed its $240 million acquisition of Sigma Designs' (SIGM) Z-Wave business. Silicon Labs had initially agreed to acquire all of Sigma Designs this past December for $282 million, but amended the deal last quarter to include only its Z-Wave business after certain closing conditions weren't met. In any case, the purchase significantly expands Silicon Labs' position in mesh networking for smart homes.

What management had to say

Silicon Labs CEO Tyson Tuttle said:

We are very pleased to report outstanding first quarter 2018 financial performance, including 15 percent Q1 year-on-year revenue growth. We are excited about the acquisition of Z-Wave, and believe we have the right strategy, products and team in place to achieve our growth objectives. Together, we will continue to deliver differentiated solutions to address large, sustainable, high-quality growth markets.

Looking forward

For the second quarter of 2017, Silicon Labs expects revenue to arrive in the range of $211 million to $217 million. That should translate to GAAP earnings per share of between $0.23 and $0.29, and adjusted earnings per share of between $0.81 and $0.87. By comparison -- and though we usually don't pay much attention to Wall Street's near-term predictions -- consensus estimates had called for adjusted earnings of $0.83 per share (near the bottom end of guidance) on lower revenue of $206.1 million.

This was a straightforward beat-and-raise scenario from Silicon Labs, punctuated by the close of a promising strategic acquisition and followed by an outlook indicating more of the same outperformance. And I think Silicon Labs investors are right to bid up the stock in response today.