Executive Summary

Primary source documents for SLAB’s Q2 2026 (8‑K 2.02 press release, earnings call transcript) are not available in our document catalog or on the company’s pressroom; we reference prior quarters (Q1–Q3 2025) and S&P Global consensus for Q2 2026 to frame trajectory and expectations .
Prior-quarter momentum: Q3 2025 revenue $206.0M, non-GAAP EPS $0.32, GAAP diluted loss $(0.30); GAAP gross margin 57.8% and non-GAAP 58.0% .
Distribution mix and margin expansion were notable catalysts: distribution at ~74% with channel inventory at 61 days; Q4 2025 gross margin guided to 62–64% (includes one-time ~200 bps credit), implying normalized ~61% near term .
Wall Street consensus for Q2 2026 implies continuing growth: revenue $226.67M*, EPS $0.655*; FY2026 revenue $924.06M*, EPS $2.676* (9 EPS estimates; 5 revenue estimates). Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

Gross margin trajectory improved: Q3 2025 GAAP gross margin 57.8% and non-GAAP 58.0%, aided by favorable mix and higher distribution sell-through .
Non-GAAP EPS beat: Q3 2025 non-GAAP EPS $0.32, $0.02 above the midpoint of guidance, driven by better-than-expected gross margins .
Strategic initiatives advancing: launch of Simplicity Platform (Studio 6 and Simplicity AI SDK) and expanded GlobalFoundries partnership to bolster U.S. manufacturing resiliency .
- “Looking ahead, we remain focused on supporting new customer ramps, maintaining operational discipline, and driving continued earnings growth.” — CEO Matt Johnson .
- CFO: “Non-GAAP earnings of $0.32 per share beat the midpoint of our guidance by $0.02, driven by our better-than-expected gross margins.” .

What Went Wrong

GAAP profitability remained negative: GAAP diluted loss per share $(0.30) in Q3 2025; $(0.67) in Q2 2025; $(0.94) in Q1 2025 .
OpEx intensity: GAAP operating expenses were $131M in Q3 2025 and $131M in Q2 2025, constraining GAAP operating income despite revenue growth .
Margin sustainability questions: Q4 2025 margin guide included a one-time credit (~200 bps); normalized gross margins expected near ~61% before gradually reverting to long-term range (56–58%), prompting investor scrutiny into durability .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025	Q2 2026E
Revenue ($USD Millions)	$177.7	$192.8	$206.0	$226.67*
GAAP Diluted EPS ($)	$(0.94)	$(0.67)	$(0.30)	$0.655*
GAAP Gross Margin (%)	55.0%	56.1%	57.8%	N/A
Non-GAAP Gross Margin (%)	N/A	56.3%	58.0%	N/A

Values for Q2 2026E marked with * were retrieved from S&P Global.

Segment revenue breakdown (YoY growth provided where disclosed):

Segment	Q1 2025	Q2 2025	Q3 2025
Industrial & Commercial ($M)	$96.0	$110.0 (up 25% YoY)	$118.0 (up 22% YoY)
Home & Life ($M)	$81.7	$83.0 (up 45% YoY)	$88.0 (up 26% YoY)

Operating KPIs:

KPI	Q1 2025	Q2 2025	Q3 2025
Distribution Mix (% of revenue)	66%	~69%	~74%
Channel Inventory (days)	86	51	61
DSO (days)	~30	~30	~30
Balance Sheet Inventory (net, $M)	$83.4	$81.0	$82.0
Non-GAAP Tax Rate (%)	20%	20%	20%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q4 2025	$200–$215	$200–$215	Maintained
GAAP Gross Margin (%)	Q4 2025	62–64	62–64 (includes one-time ~200 bps credit)	Maintained; clarified one-time benefit
GAAP OpEx ($M)	Q4 2025	134–136	134–136	Maintained
Non-GAAP OpEx ($M)	Q4 2025	110–112	110–112	Maintained
Non-GAAP EPS ($)	Q4 2025	$0.40–$0.70	$0.40–$0.70	Maintained

Note: No Q2 2026 company guidance was located due to unavailable primary documents .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025)	Previous Mentions (Q3 2025)	Current Period (Q2 2026)	Trend
AI/Technology Initiatives	Introduced Series 3 (SiXG301) and previewed SiXG302; strong Series 2 pipeline	Launched Simplicity Platform (Studio 6, Simplicity AI SDK); agentic AI for devs	Documents unavailable	Expanding tools/platform
Supply Chain & Distribution	Channel inventory 51 days; rebuilding toward target; POS strong	Distribution ~74%; inventory 61 days; POS up; normalized end-customer inventories	Documents unavailable	Normalizing, improving
Tariffs/Macro	Monitoring evolving tariff impacts; planning modest pass-through; limited U.S. border exposure (~10%)	Macro uncertainty acknowledged; visibility cautious; still taking share	Documents unavailable	Manageable but monitored
Product Performance	Wi‑Fi growth (Roku battery camera, long battery life)	Asset tracking interest (BLE with channel sounding); CGM ramp tracking	Documents unavailable	Broadening use cases
Regional Trends	Smart metering rollouts (India) and upcoming Japan refresh	Industrial demand strong across building automation, lighting, access	Documents unavailable	Industrial resilience
R&D Execution	Series 2 wins driving ramps; Series 3 sampling next year	Series 3 ramp beginning, more launches forthcoming	Documents unavailable	Sustained cadence
Health Features	CGM expected to reach ~10% of revenue H1 2026	CGM path to 10% first half next year reaffirmed	Documents unavailable	Tracking to plan

Management Commentary

“The Silicon Labs team delivered sequential and year-over-year growth in sales and profitability driven by strong execution across our business.” — CEO Matt Johnson (Q3 2025) .
“Revenue for the September quarter was $206 million... Non-GAAP gross margin was 58%... Non-GAAP earnings of $0.32 per share.” — CFO Dean Butler (Q3 2025) .
“We expect full-year revenue growth of 34% compared to 2024... with many customers at various stages of qualification and new production ramps leading into 2026 and beyond.” — CEO Matt Johnson (Q3 2025) .
“We launched Simplicity Studio 6 and the Simplicity AI SDK — agentic AI for developers — to transform embedded IoT development speed and quality.” — CEO Matt Johnson (Q3 2025) .
“Active asset tracking has exciting potential... we’re introducing it deliberately as an emerging growth driver.” — CEO Matt Johnson (Q3 2025) .

Q&A Highlights

Gross margin sustainability: One-time credit adds ~200 bps in Q4 2025; normalized margins ~61% near term; expected gradual reversion toward long-term 56–58% .
Distribution/channel: target 70–75 days; progressing by ~5 days per quarter; POS strong; end-customer inventories at lowest since tracking began .
2026 setup: positive bias; continue to outperform market driven by Series 2/Series 3 and category ramps (metering, ESL, CGM, asset tracking, Matter revenue feathering in) .
Wi‑Fi trajectory: robust growth and design wins; battery-powered applications (e.g., Roku) showcasing differentiation; more Wi‑Fi in Series 3 .
CGM timeline: company still sees path for CGM to reach ~10% of revenue in first half of next year (2026) .

Estimates Context

Analyst consensus (S&P Global) for Q2 2026 and adjacent periods:

Metric	Q1 2026	Q2 2026	Q3 2026	FY 2026
Revenue Consensus Mean ($USD)	$213.16M*	$226.67M*	$241.81M*	$924.06M*
Primary EPS Consensus Mean ($)	$0.495*	$0.655*	$0.798*	$2.676*
Primary EPS — # of Estimates	9*	9*	9*	9*
Revenue — # of Estimates	5*	5*	5*	8*

Values retrieved from S&P Global.

Implications: Consensus embeds continued sequential growth and EPS accretion into 2H 2026; margin durability (post one-time credit) and mix will be key to upside/downsides versus these levels .

Key Takeaways for Investors

Margin durability watch: assess normalized gross margin (~61%) sustainability post Q4 one-time credit and trajectory back toward long-term range; pricing/mix and distribution channel are key levers .
Ramps drive outperformance: Series 2 wins, initial Series 3 ramps, and category ramps (smart metering, ESL, CGM) underpin share gains and revenue growth .
Health/CGM milestone: monitor CGM approaching ~10% of revenue in H1 2026; commercialization pace could be a catalyst .
AI-enabled dev tools: Simplicity Platform (Studio 6, Simplicity AI SDK) should reduce customer time-to-market and expand funnel; track adoption and any monetization impact .
Asset tracking opportunity: early-stage but aligned with BLE channel sounding; customer traction can create a new growth leg .
Distribution normalization: progress toward 70–75 days and strong POS signal healthy demand; inventory metrics suggest improving cycle setup .
Risk checks: tariff policy changes, macro uncertainty, and OpEx discipline remain core to GAAP profitability restoration .

Documents consulted:

Q3 2025 press release and 8‑K (financials, guidance, business highlights) .
Q3 2025 earnings call transcript (gross margin drivers, distribution metrics, 2026 outlook, CGM/asset tracking, Wi‑Fi) .
Q2 2025 press release and 8‑K (segment mix, margins, EPS; Q3 guidance) .
Q1 2025 10‑Q (revenue, EPS, gross margin, segment detail, cash/investments) .
Company pressroom confirmation (no 2026 Q2 materials found) .

Values marked with * were retrieved from S&P Global.

SILICON LABORATORIES INC. (SLAB)·Q2 2026 Earnings Summary