Silicom Ltd, a prominent provider of high-performance networking and data infrastructure solutions, unveiled its financial results for the third quarter (Q3) and initial nine months concluding on September 30, 2023. However, the disclosure was met with a notable dip in Silicom’s stock value.
At the time of this publication, Silicom Ltd stock (SILC) has witnessed a decline.
Silicom Ltd
Current Price: $15.00
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During the third quarter of 2023, Silicom recorded total revenues of $30.1 million, indicating a decrease from the $39.2 million reported in the same period of 2022.
Under Generally Accepted Accounting Principles (GAAP), net income for the quarter was $1.2 million, equivalent to $0.18 per share (basic and diluted). This marks a sharp contrast to the third quarter of 2022, which saw a net income of $6.0 million, translating to $0.88 per diluted share ($0.89 per basic share).
On a non-GAAP basis, net income for the third quarter of 2023 stood at $2.1 million, or $0.30 per share (basic and diluted). In contrast, the third quarter of the previous year reported a non-GAAP net income of $6.9 million, corresponding to $1.01 per diluted share ($1.02 per basic share).
For the first nine months of 2023, Silicom’s revenues remained stable at $105.4 million, mirroring the figures reported for the same period in 2022.
On a GAAP basis, net income for this nine-month period totaled $8.6 million, or $1.26 per diluted share ($1.27 per basic share). This is in contrast to the first nine months of 2022, which saw net income of $12.7 million, equivalent to $1.87 per diluted share ($1.90 per basic share).
On a non-GAAP basis, net income for the initial nine months of 2023 amounted to $10.7 million, or $1.57 per diluted share ($1.58 per basic share). This compares to the first nine months of 2022, which reported a non-GAAP net income of $14.6 million, corresponding to $2.15 per diluted share ($2.18 per basic share).
In a press release, Silicom projected that fourth-quarter revenues will fall within the range of $20 to $21 million, while cautioning that 2024 is anticipated to present challenges. The company, however, anticipates a return to double-digit growth in 2025.
Liron Eizenman, President and CEO of Silicom, addressed the results, noting, “While our third quarter revenues were in line with our projections, they were lower than they have been for the past two years, reflecting our customers’ continued draw-down of the large inventories they had stockpiled during the Covid era, compounded by ongoing macro-economic headwinds. Given the persistent volatility and low visibility of this market environment, we expect the next several quarters to continue to be challenging. Thus, we have already begun to take several actions to manage discretionary costs and align spending with the current environment.”
Eizenman added, “As we navigate the challenges of the short-term environment, we see that our long-term demand drivers remain intact, and we remain well-positioned as a key industry player. Given the growing potential of our existing design wins, our long and deep pipeline and our continually growing total addressable market, I am optimistic regarding our long-term future, from 2025 and beyond.”
The stock of Silicom experienced a notable decline in the wake of the Q3 results announcement.
