Silicon Laboratories 2025 Q1 Earnings Beats Expectations with Net Loss Reduced by 46.1%

Silicon Laboratories (SLAB) reported its fiscal 2025 Q1 earnings on May 13th, 2025. The company exceeded expectations by reducing its net loss 46.1% year-over-year, recording a net loss of $30.47 million compared to $56.53 million in the previous year. The earnings per share (EPS) also saw significant improvement, coming in at a loss of $0.94 per share, much better than the loss of $1.77 per share in Q1 2024. Silicon Labs raised guidance for the June quarter, anticipating revenue growth up to 32% year-over-year and estimating gross margins between 55% to 57%.

Revenue

Silicon Laboratories saw a 67.1% increase in total revenue, reaching $177.71 million in Q1 2025 compared to $106.38 million in Q1 2024. The Industrial & Commercial segment contributed $95.98 million, while the Home & Life segment added $81.74 million to the overall revenue.

Earnings/Net Income

Silicon Laboratories narrowed losses to $0.94 per share in 2025 Q1 from a loss of $1.77 per share in 2024 Q1 (46.9% improvement). Meanwhile, the company successfully narrowed its net loss to $-30.47 million in 2025 Q1, reducing losses by 46.1% compared to the $-56.53 million net loss reported in 2024 Q1. The EPS indicates improved financial performance but remains negative.

Price Action

The stock price of Silicon Laboratories has edged up 2.73% during the latest trading day, has surged 25.15% during the most recent full trading week, and has surged 51.43% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Silicon Laboratories shares after a revenue miss and holding for 30 days resulted in unfavorable returns, yielding a negative return of -16.07%. This performance significantly lagged behind the benchmark return of 87.97%, with an excess return of -104.04%, highlighting the strategy's inefficacy over the backtested period. The strategy faced a maximum drawdown of -67.64%, underscoring substantial risk exposure. Furthermore, the Sharpe ratio of -0.08 reflects the negative returns and elevated risk associated with this approach. Overall, the strategy has proven to be unproductive in achieving positive returns, with considerable volatility and losses noted throughout the duration.

CEO Commentary

Matt Johnson, President and CEO, highlighted that Silicon Labs achieved strong Q1 results, indicating momentum across the business with sequential and year-over-year revenue growth in both business units. He noted that the Home & Life segment grew mid-single digits sequentially and nearly doubled year-over-year, driven by connected healthcare and smart home applications. The Industrial & Commercial business also showed recovery with high single-digit sequential growth. Johnson expressed confidence in outperforming the broader semiconductor market, citing strong customer conversations and progress in new program ramps despite ongoing macroeconomic uncertainties. He emphasized the focus on innovative products, including advancements in the Series 2 and Series 3 device families, as a strategic priority to maintain competitive differentiation.

Guidance

For the June quarter, Silicon Labs anticipates revenue in the range of $185 million to $200 million, reflecting an expected 32% year-over-year growth and an 8% sequential growth. The company projects gross margins to be between 55% to 57% and GAAP operating expenses between $129 million to $131 million. Non-GAAP operating expenses are expected to increase modestly, ranging from $106 million to $108 million. GAAP loss per share is forecasted to be between $0.55 and $0.95, while non-GAAP earnings per share is expected in the range of $0.19 to a loss of $0.01.

Additional News

Recently, Silicon Labs announced its participation in upcoming investor conferences, highlighting its strategic focus on engaging with stakeholders and showcasing innovations in low-power wireless technologies. This follows the unveiling of Silicon Labs' BG29 Bluetooth LE in March, which is set to revolutionize Bluetooth applications in connected health devices. Furthermore, Silicon Labs received a $23 million grant from the Texas CHIPS Act in February, aimed at advancing its research and development capabilities in Austin, Texas. These initiatives underscore Silicon Labs' commitment to expanding its market presence and driving technological advancements in the semiconductor industry.