Analyst(s): Futurum Research
Publication Date: November 6, 2025
Silicon Labs’ Q3 showed continued recovery across Industrial & Commercial and Home & Life, supported by channel normalization and a healthier product mix. New developer tooling and expanded U.S. foundry capacity indicate a strategic push to accelerate design wins and improve supply resilience.
What is Covered in this Article:
- Silicon Labs’ Q3 FY 2025 financial results
- Industrial and utilities momentum in IoT metering
- Developer velocity with Simplicity Platform and AI SDK
- U.S. capacity expansion via GlobalFoundries partnership
- Guidance and Final Thoughts
The News: Silicon Labs (NASDAQ: SLAB) reported Q3 FY 2025 revenue of $206.0 million, up 24% year over year (YoY) and close to the Wall Street consensus of $205.3 million. Industrial & Commercial revenue was $118.0 million, up 22% YoY, while Home & Life revenue was $88.0 million, up 26% YoY. Non-GAAP gross margin was 58.0% (+350 bps). Non-GAAP operating income was $11.0 million as compared to an operating loss of $8 million in the prior period. Non-GAAP net income was $10.7 million (Q3 FY 2024: loss of $4.1 million), and non-GAAP diluted earnings per share (EPS) were $0.32 (Q3 FY 2024: loss of $0.13).
“The Silicon Labs team delivered sequential and year-over-year growth in sales and profitability driven by strong execution across our business,” said Matt Johnson, President and Chief Executive Officer at Silicon Labs. “Looking ahead, we remain focused on supporting new customer ramps, maintaining operational discipline, and driving continued earnings growth.”
Silicon Labs Q3 FY 2025 Delivers YoY Growth, Margin Expansion
Analyst Take: Silicon Labs’ Q3 FY 2025 results underscore steady IoT demand and disciplined execution, with segment breadth and channel normalization supporting improvements in mix and margin. Management’s emphasis on developer productivity and long-term supply resilience aims to accelerate design-win velocity and derisk ramps into FY 2026. Industrial metering programs and smart home/medical use cases continue to be durable engines, with distribution strength and lean customer inventories improving visibility.
Industrial and Utilities Momentum
Industrial & Commercial grew 22% YoY to $118.0 million, supported by building automation, commercial lighting, access points, and strengthening smart meter demand. Utilities worldwide are upgrading grid monitoring to handle rising energy requirements tied to AI-driven load growth, creating expanded telemetry needs for near real-time infrastructure tracking. Management noted customer ramps progressing into FY 2026, with Silicon Labs positioned as a leading smart metering provider. Channel sell-through trends improved, with distribution comprising approximately 74% of revenue and channel inventory at roughly 61 days. Customer inventories were cited at their lowest levels since tracking began, suggesting replenishment tailwinds as program ramps advance. These factors point to sustained industrial demand and multi-quarter visibility.
Developer Velocity with Simplicity Platform and AI SDK
The launch of Simplicity Studio 6 and the Simplicity AI SDK (Agentic AI for developers) targets faster code creation, integration, and debugging, lowering barriers for wireless adoption. Management framed the tools as a way to streamline development workflows and compress time-to-market for both new and experienced engineers. Early access deployments are underway, with the goal of expanding the addressable developer base and accelerating design win capture. By unifying installation, configuration, debugging, and analysis, the platform seeks to enhance quality and reduce development cycles. Over time, these capabilities could compound via a larger developer ecosystem and broader application coverage. This tooling strategy is designed to increase win rates and speed revenue ramps.
Supply Chain Resilience and U.S. Foundry Capacity
Silicon Labs expanded its partnership with GlobalFoundries to produce Series 2 wireless SoCs at the Malta, New York, facility, adding U.S.-based capacity. The arrangement introduces new process technology at a domestic foundry to support long-term production of low-power wireless solutions. Management expects production to ramp over the next several years, aligning with customer interest in diversified and resilient supply chains. The move supports geographic risk mitigation while reinforcing U.S. semiconductor manufacturing capabilities. Alongside distribution strength and improving mix, this capacity strategy can enhance long-term predictability and pricing discipline. This partnership underpins multi-year supply assurance for strategic IoT platforms.
Guidance and Final Thoughts
Q4 FY 2025 guidance calls for revenue of $200.0 million to $215.0 million, non-GAAP gross margin of 62% to 64% (including an approximate 200-basis-point one-time benefit), and non-GAAP EPS of $0.40 to $0.70. Excluding the one-time item, management indicated a normalized non-GAAP gross margin profile around 60%–61% over the next few quarters. Operating expense discipline remains a priority, with a stated intent to drive EPS accretion faster than top-line growth. Distribution accounted for roughly 74% of revenue in Q3, and point-of-sale trends improved as customer inventories normalized. With Series 2 momentum and the coming Series 3 ramp, plus new developer tools and added U.S. capacity, the setup supports continued share gains into FY 2026.
See the full press release on Silicon Labs’ Q3 FY 2025 financial results on the company website.
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