Silicon Laboratories Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: N. Quinn Bolton - Needham & Company LLC - Analyst : Hey, guys. Congratulations on the continued strong outlook. I wanted to ask a question just on the Home & Life business. I know it's up strongly year on year, but it was up 2% quarter on quarter, perhaps a little bit below my estimates. How are you thinking about that business as you get into the second half of the year? I think you reiterated the target for continuous glucose monitors. They hit 10% of sales. Is that still on track for the second -- by the end of 2025?

Question: N. Quinn Bolton - Needham & Company LLC - Analyst : Perfect. And I guess one for Dean. Dean, you've done a great job here on gross margin, getting back to, I think, your longer term target of 57% to 58%. Do you expect it to kind of hang out in this level going forward? Or do you see room for potential further improvement above that 57% to 58% level in future quarters?

Question: Tore Svanberg - Stifel, Nicolaus & Company Inc - Analyst : Yes. Let me echo my congratulations, especially on the operating leverage here. My first question, Matt, is on your design win pipeline. The growth is clearly driven by your execution towards that pipeline. Could you perhaps give us any updates as far as numbers? Is it growing? Just want a little bit more color on the actual pipeline. Thank you.

Question: Tore Svanberg - Stifel, Nicolaus & Company Inc - Analyst : Very good. And that's my follow up. I had a question on the glucose meter business. I know you mentioned, multiple customers now. Again, could you perhaps give us some color on how many customers are ramping there? Because clearly, you're gaining share, and I think the last time you had a call, I think you talked about already working with 10 or dozen customers in glucose meters.

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Hey, guys. Thanks for taking my question. I've kind of the inverse question to Quinn into June. You saw some really strong trends in the industrial and consumer business. You've seen during this earnings period other large players talk about some pull forward in industrial. I was curious was there any geographic changes in the mix of revenue in the June quarter? I think you called out self-labeling, the [disti] channel and then India smart metering, but anything to note in terms of geo differences in that June quarter.

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Helpful. And then when I look at the gross margins, which are very impressive going into the September quarter, it looks like the incremental gross margin is close to 80% quarter over quarter. That's the highest you've done in the last couple of years. So if you look at the divergence and revenue trends in the September quarter, do you continue to see more disti and by that by that measure more Industrial & Commercial into the September quarter, but maybe you give us a little color on segment trends into September and then why you're seeing such a big step up on the gross margin side. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 12:30PM, SLAB.OQ - Q2 2025 Silicon Laboratories Inc Earnings Call

Question: Christopher Rolland - Susquehanna Financial Group LLLP - Analyst : Hey, guys. Thanks for the question. Yeah. Just regarding distribution in the channel, are there opportunities to refill the channel to grow the channel here. And like as we look over the next few quarters, maybe in terms of dollars, what could that opportunity be?

Question: Christopher Rolland - Susquehanna Financial Group LLLP - Analyst : Excellent. Thank you, Dean. That that's actually a lot of fill at 70 to 75. It'll be nice to see. I guess for my second question here, how are you guys -- you mentioned tariffs, how are you thinking about tariffs and would you be passing this on to customers or would you eat some of it? What's your strategy here?

Question: Cody Acree - Benchmark Company LLC - Analyst : Thanks, guys, for taking my questions and congrats on the progress. Maybe, Matt, if you can help us with just any of the Wi-Fi strength that you mentioned, just any of the application wins and any of the ramps that you're seeing there?

Question: Cody Acree - Benchmark Company LLC - Analyst : Thanks for that. And maybe just lastly, with your September back now above $200 million a quarter, your trajectory is definitely promising. But any thoughts on giving your pipeline and your visibility, when you would expect to be able to challenge your prior '22 highs? Do you think that's something you can achievably get into a range in '26?

Question: Peter Peng - JPMorgan Chase & Co - Analyst : Hey, guys. Thanks for taking my questions and congratulations on the strong results. I think back to your Analyst Day, you gave a number on your new customer ramps being 50% of your year-over-year growth in 2025, and if I work on what the consensus numbers are, that's about $100 million-plus. Just given some of the commentaries about how you said (technical difficulty) those are on track. Are we surpassing that number and then more importantly, I guess does that number start to grow in 2026 as well?

Question: Peter Peng - JPMorgan Chase & Co - Analyst : Got it. Okay, that's helpful. And then when I look at your some of the seasonal trends typically your December quarter is flattish, but you guys been driving above seasonal trends for the past several quarters. And so, just given some of these positive booking trends and design win ramps, is it possible to drive sequential growth through the remainder of the year?

Question: Tore Svanberg - Stifel, Nicolaus & Company Inc - Analyst : Yeah. Thank you. Just one quick one for you, Dean. 20% tax rate, obviously, with the Big Beautiful Bill, that number's probably going to change. So I don't know if you have any comments there. Should we just wait to see how things develop? Or do you have an early read on 26 tax rate?