Silicon Laboratories Inc at Barclays Global Technology Conference Transcript

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

Question: Tom O'Malley - Barclays Services Corp - Analyst : Okay. So I think in prior conversations, the way that we started is with a larger thematic, which is talking about how does this AI spend in your vision look. Is it premature? Is it front-end loaded? Do we see this bubble? I think like a better question, tailored for Silicon Labs is, one, I'd love to hear your opinion on just where we are in the investment cycle in aggregate. But two, how do you guys intersect this trend? Obviously, you guys are going to be more towards the edge. I'd love to hear about your products and your vision for the AI dollars coming in to flat.

Question: Tom O'Malley - Barclays Services Corp - Analyst : Yeah. When you think about the edge, something that I always kind of go back and forth with is, you've got a device today in everyone's pocket that has run 99% of your applications for most of your life. You have this fork in the road, right? Do you think that it's your smartphone that brings you edge AI? Or do you think that there's a variety of other devices that come into play. If you look at where other products have tried to intersect this. It's glasses, it's wearables, it's watches. Do you see future content for SLAB making its way into this device? Or do you think that you see this burgeoning of other products at the edge that are AI intelligent?

Question: Tom O'Malley - Barclays Services Corp - Analyst : Helpful. So I want to go into the technology first and then kind of go into the verticals because your technology does cut across both your verticals but maybe talk about why the connected MCU is so important when you look at the edge. You have a variety of different radios that you're attaching to MCU. I think that you were very early in this transition to offering a suite of different connectivity options with your MCU. In fact, like we're hearing about more companies coming into the fold today. So maybe spend some time talking about what differentiates you in the connected MCU space. I know you're moving from Series 2 to Series 3, both on the connectivity side and then also on your microprocessor side.

Question: Tom O'Malley - Barclays Services Corp - Analyst : Yeah, we're definitely hearing more of that. We had Synaptics up on the stage yesterday, and they talked about a specific AI core that they were using within their next-generation processor that's going to be connected as well. They play in the Wi-Fi space, that's not an area that you spend as much time in, but like -- when you say more processing power, does that just mean dedicating more cores to AI processing and then maybe what does the Series 3 bring from an ASP uplift perspective? Should we be thinking about this as a tailwind to total revenue on kind of like flat units sold?

Question: Tom O'Malley - Barclays Services Corp - Analyst : Super helpful. Last one on the technology side, Series 3, when are we going to see that in the market in more volume?

Question: Tom O'Malley - Barclays Services Corp - Analyst : Super helpful. Okay. So you've segmented your business into two buckets. They're both growing quite nicely in calendar year '25. I kind of want to walk through each of them. So why don't we start with Home and Life. A broader trend that you guys have talked about is CGM, and that's been a big vector for you guys, so continuous glucose monitoring. How big is that business for you now? And then can you describe where you're positioned in that market and what customer engagement has been like so far?

Question: Tom O'Malley - Barclays Services Corp - Analyst : We had a good conversation earlier this year around the customer set. And if I remember correctly, there's a couple of chunky customers at the top that when one customer converts, that can be really beneficial for you guys from a growth perspective. In terms of like your strategy with those customers, is it just a bring out new devices, show that they're very performant, so that they're very cost effective. And you hope that one day they move over to you guys? Or is there anything more specific that you guys can bonus to as reasons why you take down one of those big guys.

Question: Tom O'Malley - Barclays Services Corp - Analyst : Okay. Let's go to the other side. So Industrial and Commercial, the two big trends you've talked about there are ESL and smart metering. ESL, I think a really interesting place to start. In terms of your ability to also gain chunky customers there. So why don't you start with what's the transition we're seeing in stores and in labeling in general? And like what value do you bring there? And then I think a similar trend, honestly, where you've done a very good job of getting into the market and seeing some really strong LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 11, 2025 / 5:50PM, SLAB.OQ - Silicon Laboratories Inc at Barclays Global Technology Conference growth, but it's like kind of the next big chunky customer is the next step forward for you guys. So what gets you to that next customer as well?

Question: Tom O'Malley - Barclays Services Corp - Analyst : A longer-term trend that we've heard a lot more about is smart metering. You had some geographies that we're rolling out, including India that had been pretty successful for you guys. Where are we in that rollout? And do you think that, that continues to be a major driver of growth.

Question: Tom O'Malley - Barclays Services Corp - Analyst : I want to pivot to gross margins. When I think of gross margins, there's multiple factors, and you guys have shown some really good results lately. I think one that you get asked a lot is pricing, how pricing is trending as a business year-over-year. Two is really thinking about product differentiation. So moving from more Series 2 to eventually more Series 3. And then 3 is disty versus end customer mix or sell-in or sell-through essentially, where is your revenue exposure going? And I think those three have kind of combined to result in some gross motions that are better than your long-term target. And so just talking about the sustainability of those gross margins, like what are the pieces that are most impactful? And where do you kind of see those margins trending in the near term?

Question: Tom O'Malley - Barclays Services Corp - Analyst : When you think about two trends that people worry about broadly in the space, one is exposure to China, just in general across semiconductors. And then two, we're hearing about potentially memory shortages impacting consumer demand, which you just described was really a minority of your total business. And you look out into '26 or either of those a concern for you in terms of either opinions and revenue trajectory and/or limitation of end device sales?

Question: Tom O'Malley - Barclays Services Corp - Analyst : So if I look into calendar year '26, I think you guys have done a really good job of verticalizing your opportunities showing some growth trajectories, a lot of transition from a technology perspective. I think it's been a lot of a show-me story after a recovery post pandemic, we guys have continued to build the revenue base. Gross margins have been better I think that the question in many people's minds is just LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 11, 2025 / 5:50PM, SLAB.OQ - Silicon Laboratories Inc at Barclays Global Technology Conference how do you get comfort around these opportunities when it's very customer driven, and it's not really easy to do a ton of bottoms-up work on these verticals. So I know you haven't guided 2026, but I guess, what are you most excited about in this coming year? And where should investors be paying attention as we look to learn a little bit more about Silicon Labs trajectory?

Question: Tom O'Malley - Barclays Services Corp - Analyst : Super helpful. Last one, capital allocation. You've seen a recovery in both revenue and in the stock, stock buybacks, capital returns, M&A, anything worth commenting on that you guys see as a priority?

Question: Tom O'Malley - Barclays Services Corp - Analyst : Very helpful. Thank you for being here. I really appreciate the time, and it sounds like exciting times to have for slot.