On August 11, Silicon Labs (NASDAQ:SLAB) reported second-quarter results for the period ended July 4, posting revenue of $228 million, up 18% from a year earlier. The wireless chip maker swung from a wide non-GAAP loss to $0.71 in non-GAAP earnings per share, a jump of 545% over the same quarter last year. That combination of accelerating sales and improving profitability lands at an unusual moment: Silicon Labs is also in the middle of being acquired by Texas Instruments, and it has stopped giving investors any forward guidance at all.
Growth Accelerates Across Every Segment
The quarter’s strength ran across the business rather than in a single product line. Industrial & Commercial revenue reached $135 million, up 23% from a year ago, while Home & Life revenue grew to $93 million, up 12%. Medical, a smaller piece of the portfolio, posted record revenue and grew 78% year over year, the fastest pace of any segment Silicon Labs reported.
Bookings and new orders accelerated during the quarter, and inventory levels at both distributors and end customers declined, a sign the channel is working through excess stock rather than piling it higher. Silicon Labs also said its total opportunity funnel and design wins materially accelerated, which points to demand building further out than just this quarter’s shipments.
The profitability story moved just as fast as the top line. Gross margin came in at 61.6% on a GAAP basis and 61.9% on a non-GAAP basis, levels the company said reflect the value customers place on its chips. Non-GAAP operating income reached $27 million, a sharp reversal from the roughly break-even result a year earlier, and non-GAAP diluted earnings per share of $0.71 marked that 545% year-over-year jump.
Profits Still Trail the Hype
Underneath the non-GAAP numbers, Silicon Labs is still not profitable by GAAP standards. The company reported a GAAP operating loss of $11 million and a GAAP diluted loss per share of $(0.32), a 52% improvement from the prior year’s per-share loss, but a loss nonetheless. GAAP operating expenses climbed to $151 million from $131 million a year earlier, with selling, general and administrative costs rising to $56 million from $43 million.
Part of that expense growth traces to the pending acquisition by Texas Instruments. Silicon Labs booked merger-related costs inside its GAAP results and has suspended forward-looking guidance entirely because of the deal, leaving investors without the company’s own read on what comes next.
The gap between the GAAP loss and the non-GAAP profit also depends heavily on add-backs. Stock compensation expense alone accounted for $25.2 million of the adjustments, the single largest gap between the GAAP loss and the non-GAAP profit. Merger-related costs added another $9.5 million, and intangible asset amortization contributed $2.3 million more, both tied directly to the pending deal.
Wall Street Split on Valuation
18 hedge funds held Silicon Labs in the most recent quarter, up from 17, a small increase that points to modest accumulation. Short interest sits at 13.68% of the float, a level that signals a real bear camp is positioned against the stock. The forward price-to-earnings ratio is 50.76 as of September 16, a multiple that prices in continued non-GAAP profit growth. That multiple looks steep next to a company still posting GAAP losses. Rising fund ownership, heavy short interest, and an expensive multiple together show a market that has not fully bought into the earnings turn.
The Road Ahead Is Uncertain
Silicon Labs enters the second half of 2026 with revenue accelerating across every segment and a non-GAAP profit that looks nothing like the losses of a year ago. Yet the pending Texas Instruments acquisition has silenced the company’s own guidance, leaving the market to judge momentum without a forecast to check it against. Bookings, design wins, and the shrinking channel inventory all suggest the growth has room to continue if shipments keep pace.
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