Silicon Laboratories, Inc.

My name is Michelle, and I will be your conference operator today. Welcome to the Silicon Labs third quarter fiscal 2024 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you would need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Giovanni Pacelli, Silicon Labs Senior Director of Finance. Giovanni, please go ahead, sir.

Thank you, Michelle, and good afternoon, everyone. We are recording this meeting, and a replay will be available for four weeks on the Investor Relations section of our website at investor.sylabs.com. Our earnings press release and the accompanying financial tables are also available on our website. Joining me today are Silicon Labs President and Chief Executive Officer Matt Johnson and Chief Financial Officer Dean Butler. They will discuss our third quarter financial performance and review recent business activities. We will take questions after our prepared comments, and our remarks today will include forward-looking statements that are 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 our website. I'd now like to turn the call over to Silicon Labs Chief Executive Officer Matt Johnson.

Thanks, Giovanni, and good afternoon, everyone. Silicon Labs delivered solid third quarter results with revenue and earnings exceeding the midpoint of our guidance. Our surveys indicate that many of our customers' excess inventory levels have now normalized. However, there remain outliers whose destocking will continue to take time. Bookings patterns and distribution POS have modestly improved but have not significantly accelerated, indicating to us that a demand recovery is likely to be more gradual than many of our customers originally expected. Broadly speaking, the majority of our customers remain positive looking forward into 2025. Our current quarter outlook reflects near-term uncertainty around the timing of a more robust end-market recovery, and importantly, does not assume any significant channel restocking. Looking ahead, our growth in the near to mid-term is underpinned by design and ramps in the secular growth areas that we have previously discussed, including connected health, smart metering, and commercial retail, as well as many other applications. We are currently ramping shipments to multiple customers in all of these and are confident we are gaining share in these markets, giving us conviction in our growth opportunity moving forward. Over the last quarter, Silicon Labs' Works with Developer Conference was a huge success. We hosted over 500 unique existing and new customers in person for two days, as well as our ecosystem partners, including Amazon, Google, Samsung, and now NVIDIA. At Workswith and at Embedded World North America, our CTO, Daniel Cooley, and I delivered keynotes discussing how AI is rapidly becoming a growth catalyst that will enable the total number of IoT devices to reach over 100 billion over the next decade. We also detailed the continued success of our industry-leading Series 2 platform and new to industry capabilities of our upcoming Series 3 platform. Simply said, AI not only enables better use of existing IoT devices, it will also enable and accelerate even broader device deployments moving forward, further expanding the Silicon Labs addressable market. At the product level, we are currently shipping Series 2 devices with integrated machine learning inference engines. This includes our XG24 family of SOCs, a device where Silicon Labs was first to bring machine learning acceleration to wireless SOCs and still currently delivers more performance per unit of power consumption than any other wireless SOC based on a recently publicly available benchmark done by a third party. Also in the quarter, we announced Series 2 enablement of Bluetooth channel sounding on our XG24, enabling secure and precise distant measurement between Bluetooth devices. and opening the door for a new wave of proximity-based applications in home security, location tracking, geofencing, vehicle keyless entry, and building access control. This capability is already driving another wave of customer interest and design wins on our Series 2 platform at existing and new customers. At the same time, we are now sampling our first Series 3 device to customers which is purpose-built to extend our successful Series 2 architecture to new to IoT levels of performance for the industry. For example, Series 3 will have dedicated hardware acceleration to create the world's most flexible IoT modem, dedicated security cores designed to enable post-quantum level encryption, and an advanced machine learning core designed to enable an order of magnitude increase in performance over our already industry-leading energy per inference benchmarks. We are excited with our progress on Series 3, and our Series 2 platform continues to build momentum with new exciting products and features, growing market share and new use cases through its industry-leading power consumption, security, and multi-protocol wireless performance. This includes our first Wi-Fi 6 device, the 917, which we expect to be in ramping at customers as early as Q1 of 2025 and can deliver up to two years of battery life on a single AAA battery. This equates to meaningfully better battery life versus any competing alternatives. Customer engagement with our 917 device is strong and we are ramping our design with quickly across multiple application spaces. Our initial intent in Wi-Fi is to work with our broad existing customer base to identify opportunities for pull through and applications where Wi-Fi is becoming more relevant and where power consumption and security are also key requirements. We've been investing significantly in Wi-Fi because of our firm belief in its relevance and growth potential within our IoT space. We're hyper-focused on driving the same market share expansion in Wi-Fi that we're currently achieving with our Bluetooth solutions after increasing our strategic focus in that technology around five or six years ago. In addition, we are continuing our focus and growth in Bluetooth. Not only is it now our fastest growing technology by revenue, but it is now our largest opportunity pipeline by technology as well. Our early integration of new to industry capabilities like PSA level three security and benchmark setting machine learning performance continues to generate strong engagement and growth. Lastly, our commitment to building matter infrastructure alongside our leadership and thread technology positions us well as trusted partner to ISPs, ecosystems, and developers who are working to integrate matter into their solutions and support interoperability of edge devices. Overall, in the near term, the timing of the end market demand recovery remains uncertain. However, we expect a solid growth year in 2025 as the significant design wins we have driven over the last few years begin ramping to production. we will continue to focus on solid technology innovation and execution, gaining market share, and returning to our financial model as fast as possible. Now, I'll hand it over to Dean for the financial update. Dean?