Silicon Motion Announces Results for the Period Ended September 30, 2021

10/28/2021, 12:00 AM (Source: GlobeNewswire)

Financial Highlights

 3Q 2021 GAAP3Q 2021 Non-GAAP
  • Net sales
$254.2 million (+15% Q/Q, +102% Y/Y)$254.2 million (+15% Q/Q, +102% Y/Y)
  • Gross margin
  • Operating margin
  • Earnings per diluted ADS

Business Highlights

  • Achieved third consecutive record quarterly revenue and earnings per share
  • Reached $1 billion in Revenue Run-Rate, a quarter ahead of plan
  • Sales of eMMC+UFS controllers reached new record quarterly high
  • SSD controller sales approximately flat Q/Q and increased 70% to 75% Y/Y
  • eMMC+UFS controller sales increased 60% to 65% Q/Q and increased 305% to 310% Y/Y
  • SSD solutions sales increased 0% to 5% Q/Q and declined 0% to 5% Y/Y
  • Launched world's fastest single chip controller for external portable SSDs

TAIPEI, Taiwan and MILPITAS, Calif., Oct. 28, 2021 (GLOBE NEWSWIRE) -- Silicon Motion Technology Corporation (NasdaqGS: SIMO) (“Silicon Motion” or the “Company”) today announced its financial results for the quarter ended September 30, 2021. For the third quarter, net sales (GAAP) increased sequentially to $254.2 million from $221.1 million in second quarter 2021. Net income (GAAP) increased to $55.4 million or $1.58 per diluted ADS (GAAP) from net income (GAAP) of $49.5 million or $1.42 per diluted ADS (GAAP) in second quarter 2021.

For the third quarter, net income (non-GAAP) increased to $60.4 million or $1.70 per diluted ADS (non-GAAP) from a net income (non-GAAP) of $52.7 million or $1.50 per diluted ADS (non-GAAP) in second quarter 2021.

Third Quarter 2021 Review
“We continued to optimize our scarce foundry wafer capacity and product allocation to customers and delivered $1 billion in Revenue Run-Rate, a quarter ahead of plan,” said Wallace Kou, President and CEO of Silicon Motion. “Our third quarter results were driven by strong sales of eMMC+UFS controllers used primarily in smartphones and other smart devices.”

Key Financial Results

(in millions, except percentages and per ADS amounts)
3Q 20212Q 20213Q 20203Q 20212Q 20213Q 2020
Revenue$254.2 $221.1 $126.0 $254.2 $221.1 $126.0 
Gross profit
Percent of revenue 50.0%  50.3%  49.1%  50.2%  51.0%  49.1% 
Operating expenses$58.3 $50.7 $36.0 $53.0 $48.4 $32.9 
Operating income
Percent of revenue 27.1%  27.3%  20.5%  29.4%  29.2%  23.0% 
Earnings per diluted ADS$1.58 $1.42 $0.70 $1.70 $1.50 $0.76 

Other Financial Information

(in millions)3Q 20212Q 20213Q 2020
Cash, cash equivalents, restricted cash and short-term investments—end of period$419.5 $412.3 $368.4 
Routine capital expenditures$5.9 $4.9 $2.6 
Dividend payments$12.2 $12.2 $12.3 

During the third quarter, we had $5.9 million of capital expenditures for the routine purchase of software, design tools and other items and $1.4 million for building construction in Hsinchu, Taiwan.

Returning Value to Shareholders
On October 26, 2020, our Board of Directors declared a $1.40 per ADS annual dividend to be paid in quarterly installments of $0.35 per ADS. On August 19, 2021, we paid $12.2 million to shareholders as the fourth installment of our annual dividend. On October 25, 2021, our Board of Directors declared a $2.00 per ADS annual dividend, representing an annual increase of 43%, to be paid in quarterly installments of $0.50 per ADS. The first installment of our annual dividend will be paid on November 24, 2021.  

Business Outlook
“In spite of capped foundry wafer supply this year, we’ve optimized with better product mix, customer allocation and pricing discipline to deliver strong growth,” said Wallace Kou, President and CEO of Silicon Motion. “We believe that our strong design win momentum with leading OEM customers positions us for continued market share gains and relative outperformance next year.”

For the fourth quarter of 2021, management expects:

 GAAPNon-GAAP AdjustmentNon-GAAP
Revenue$254m to $267m
+0% to 5% Q/Q
--$254m to $267m
+0% to 5% Q/Q
Gross margin48.4% to 50.4%Approximately $0.2m*48.5% to 50.5%
Operating margin24.9% to 26.7%Approximately $9.2m to $10.2m**28.5% to 30.5%

* Projected gross margin (non-GAAP) excludes $0.2 million of stock-based compensation.
** Projected operating margin (non-GAAP) excludes $9.2 million to $10.2 million of stock-based compensation.

Conference Call & Webcast:

The Company’s management team will conduct a conference call at 8:00 am Eastern Time on October 28, 2021.

Wallace Kou, President & CEO
Riyadh Lai, CFO
Chris Chaney, Director of Investor Relations & Strategy

Conference Call Details
Participants must register in advance to join the conference using the link provided below and should dial in 10 minutes prior to the call start time. Conference access information (including dial-in numbers, the passcode, and a unique access pin) will be provided in the email received upon registration.

Participant Online Registration:

Replay Numbers (for 7 days):  
USA (Toll Free): 1 855 452 5696
USA (Toll): 1 646 254 3697
Participant Passcode: 7896715

A webcast of the call will be available on the Company's website at

Discussion of Non-GAAP Financial Measures

To supplement the Company’s unaudited selected financial results calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company discloses certain non-GAAP financial measures that exclude stock-based compensation and other items, including gross profit (non-GAAP), operating expenses (non-GAAP), operating profit (non-GAAP), net income (non-GAAP), and earnings per diluted ADS (non-GAAP). These non-GAAP measures are not in accordance with or an alternative to GAAP, and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all the amounts associated with the Company’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measure. We compensate for the limitations of our non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.

Our non-GAAP financial measures are provided to enhance the user’s overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the non-GAAP results provide useful information to both management and investors as these non-GAAP results exclude certain expenses, gains and losses that we believe are not indicative of our core operating results and because they are consistent with the financial models and estimates published by many analysts who follow the Company. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with our forecasts, and for benchmarking our performance externally against our competitors. Also, when evaluating potential acquisitions, we exclude the items described below from our consideration of the target’s performance and valuation. Since we find these measures to be useful, we believe that our investors benefit from seeing the results from management’s perspective in addition to seeing our GAAP results. We believe that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering:

  • the ability to make more meaningful period-to-period comparisons of the Company’s on-going operating results;
  • the ability to better identify trends in the Company’s underlying business and perform related trend analysis;
  • a better understanding of how management plans and measures the Company’s underlying business; and
  • an easier way to compare the Company’s operating results against analyst financial models and operating results of our competitors that supplement their GAAP results with non-GAAP financial measures.

The following are explanations of each of the adjustments that we incorporate into our non-GAAP measures, as well as the reasons for excluding each of these individual items in our reconciliation of these non-GAAP financial measures:

Stock-based compensation expense consists of non-cash charges related to the fair value of restricted stock units awarded to employees. The Company believes that the exclusion of these non-cash charges provides for more accurate comparisons of our operating results to our peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, the Company believes it is useful to investors to understand the specific impact of share-based compensation on its operating results.

SSD solutions restructuring are charges relate to the restructuring of our underperforming Shannon product lines and include goodwill impairment expenses, and the write-down of NAND flash and SSD inventory valuation.

Foreign exchange gains and losses consist of translation gains and/or losses of non-US$ denominated current assets and current liabilities, as well as certain other balance sheet items which result from the appreciation or depreciation of non-US$ currencies against the US$. We do not use financial instruments to manage the impact on our operations from changes in foreign exchange rates, and because our operations are subject to fluctuations in foreign exchange rates, we therefore exclude foreign exchange gains and losses when presenting non-GAAP financial measures.

Silicon Motion Technology Corporation
Consolidated Statements of Income
(in thousands, except percentages and per ADS data, unaudited)
 For Three Months Ended For the Nine Months Ended
 Sep. 30,  Jun. 30,  Sep. 30,  Sep. 30,  Sep. 30,
 2020 2021 2021 2020 2021
  ($)  ($)  ($)  ($)  ($)
Net sales126,043  221,103  254,241  395,624  657,743 
Cost of sales64,217  109,969  127,070  201,512  328,179 
Gross profit61,826  111,134  127,171  194,112  329,564 
Operating expenses         
Research & development26,378  38,962  44,600  84,624  119,544 
Sales & marketing6,077  7,085  7,749  18,394  21,280 
General & administrative3,528  4,649  5,931  11,019  15,019 
Operating income25,843  60,438  68,891  80,075  173,721 
Non-operating income (expense)         
Interest income, net841  336  312  3,896  1,009 
Foreign exchange gain (loss), net551  519  (114) (72) (404)
Others, net(6) -  -  15  3 
Subtotal1,386  855  198  3,839  608 
Income before income tax27,229  61,293  69,089  83,914  174,329 
Income tax expense2,962  11,748  13,665  5,522  34,961 
Net income24,267  49,545  55,424  78,392  139,368 
Earnings per basic ADS0.70  1.42  1.59  2.24  4.00 
Earnings per diluted ADS0.70  1.42  1.58  2.24  3.99 
Margin Analysis:         
Gross margin49.1% 50.3% 50.0% 49.1% 50.1%
Operating margin20.5% 27.3% 27.1% 20.2% 26.4%
Net margin19.3% 22.4% 21.8% 19.8% 21.2%
Additional Data:         
Basic ADS34,832  34,926  34,933  34,960  34,844 
Diluted ADS34,891  34,953  35,023  35,061  34,967 

Silicon Motion Technology Corporation
Reconciliation of GAAP to Non-GAAP Operating Results
(in thousands, except percentages and per ADS data, unaudited)
 For Three Months Ended For the Nine Months Ended
 Sep. 30,  Jun. 30,  Sep. 30,  Sep. 30,  Sep. 30,
 2020 2021 2021 2020 2021
  ($)  ($)  ($)  ($)  ($)
Gross profit (GAAP)61,826  111,134  127,171  194,112  329,564 
Gross margin (GAAP)49.1% 50.3% 50.0% 49.1% 50.1%
Stock-based compensation (A)55  52  111  96  217 
SSD solutions restructuring-  1,679  473  -  3,283 
Gross profit (non-GAAP) 61,881  112,865  127,755  194,208  333,064 
Gross margin (non-GAAP)49.1% 51.0% 50.2% 49.1% 50.6%
Operating expenses (GAAP)35,983  50,696  58,280  114,037  155,843 
Stock-based compensation (A)(3,076) (2,312) (5,059) (5,763) (10,332)
SSD solutions restructuring-  -  (238) -  (238)
Operating expenses (non-GAAP) 32,907  48,384  52,983  108,274  145,273 
Operating profit (GAAP)25,843  60,438  68,891  80,075  173,721 
Operating margin (GAAP)20.5% 27.3% 27.1% 20.2% 26.4%
Total adjustments to operating profit3,131  4,043  5,881  5,859  14,070 
Operating profit (non-GAAP) 28,974  64,481  74,772  85,934  187,791 
Operating margin (non-GAAP)23.0% 29.2% 29.4% 21.7% 28.6%
Non-operating income (expense) (GAAP)1,386  855  198  3,839  608 
Foreign exchange loss (gain), net(551) (519) 114  72  404 
Non-operating income (expense) (non-GAAP) 835  336  312  3,911  1,012 
Net income (GAAP)24,267  49,545  55,424  78,392  139,368 
Total pre-tax impact of non-GAAP adjustments2,580  3,524  5,995  5,931  14,474 
Income tax impact of non-GAAP adjustments(171) (339) (1,015) (693) (2,048)
Net income (non-GAAP) 26,676  52,730  60,404  83,630  151,794 
Earnings per diluted ADS (GAAP)$0.70  $1.42  $1.58  $2.24  $3.99 
Earnings per diluted ADS (non-GAAP) $0.76  $1.50  $1.70  $2.38  $4.31 
Shares used in computing earnings per diluted ADS (GAAP)34,891  34,953  35,023  35,061  34,967 
Non-GAAP Adjustments163  297  513  88  285 
Shares used in computing earnings per diluted ADS (non-GAAP)35,054  35,250  35,536  35,149  35,252 
(A) Excludes stock-based compensation as follows:         
Cost of sales55  52  111  96  217 
Research & development2,163  1,203  3,251  3,937  6,508 
Sales & marketing405  480  616  825  1,502 
General & administrative508  629  1,192  1,001  2,322 

Silicon Motion Technology Corporation
Consolidated Balance Sheet
(In thousands, unaudited)
 Sep. 30,  Jun. 30,  Sep. 30,
 2020 2021 2021
  ($)  ($)  ($)
Cash and cash equivalents341,281 357,119 364,071
Short-term investments1,951 - -
Accounts receivable (net)95,519 145,583 184,984
Inventories107,426 150,617 161,010
Refundable deposits – current24,094 48,760 48,507
Prepaid expenses and other current assets24,643 26,742 26,398
Total current assets594,914 728,821 784,970
Long-term investments5,000 6,500 8,507
Property and equipment (net)102,046 106,841 110,289
Goodwill and intangible assets (net)17,489 - -
Other assets10,984 17,093 17,808
Total assets730,433 859,255 921,574
Accounts payable37,148 77,126 66,380
Income tax payable5,870 19,071 31,190
Accrued expenses and other current liabilities65,500 86,559 85,584
Total current liabilities108,518 182,756 183,154
Other liabilities26,207 29,859 31,198
Total liabilities134,725 212,615 214,352
Shareholders’ equity595,708 646,640 707,222
Total liabilities & shareholders’ equity730,433 859,255 921,574

Silicon Motion Technology Corporation
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
  For Three Months Ended For the Nine Months Ended
  Sep. 30,  Jun. 30,  Sep. 30,  Sep. 30,  Sep. 30,
  2020 2021 2021 2020 2021
   ($)  ($)  ($)  ($)  ($)
Net income 24,267  49,545  55,424  78,392  139,368 
Depreciation & amortization 3,322  4,059  4,180  9,922  12,125 
Stock-based compensation 3,131  2,364  5,170  5,859  10,549 
Investment impairment, losses & disposals 1  -  2  7  204 
Changes in operating assets and liabilities (552) 4,058  (36,117) 1,287  (56,191)
Others 22  -  -  35  - 
Net cash provided by operating activities 30,191  60,026  28,659  95,502  106,055 
Purchase of property & equipment (2,618) (4,926) (7,329) (13,148) (15,585)
Purchase of long-term investments -  (1,500) (2,007) (2,000) (3,506)
Net cash provided by (used in) investing activities (2,618) (6,426) (9,336) (15,148) (19,091)
Dividend payments (12,280) (12,201) (12,204) (36,835) (36,604)
Share repurchases (25,013) -  -  (25,013) - 
Net cash used in financing activities (37,293) (12,201) (12,204) (61,848) (36,604)
Net increase (decrease) in cash, cash equivalents & restricted cash (9,720) 41,399  7,119  18,506  50,360 
Effect of foreign exchange changes 323  (57) 23  (342) (119)
Cash, cash equivalents & restricted cash—beginning of period 375,814  370,968  412,310  348,253  369,211 
Cash, cash equivalents & restricted cash—end of period 366,417  412,310  419,452  366,417  419,452 

About Silicon Motion:
We are the global leader in supplying NAND flash controllers for solid state storage devices.  We supply more SSD controllers than any other company in the world for servers, PCs and other client devices and are the leading merchant supplier of eMMC and UFS embedded storage controllers used in smartphones, IoT devices and other applications.  We also supply customized high-performance hyperscale data center and specialized industrial and automotive SSD solutions.  Our customers include most of the NAND flash vendors, storage device module makers and leading OEMs.  For further information on Silicon Motion, visit us at

Forward-Looking Statements:
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation, statements about Silicon Motion’s currently expected fourth quarter of 2021 and full year 2021 expectations of revenue, gross margin and operating expenses, all of which reflect management’s estimates based on information available at the time of this press release. While Silicon Motion believes these estimates to be meaningful, these amounts could differ materially from actual reported amounts for the fourth quarter of 2021 and full year 2021. Forward-looking statements also include, without limitation, statements regarding trends in the semiconductor or consumer electronics markets and our future results of operations, financial condition and business prospects. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or the negative of these terms or other comparable terminology. Although such statements are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on them. These statements involve risks and uncertainties, and actual market trends or our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to the unpredictable volume and timing of customer orders, which are not fixed by contract but vary on a purchase order basis; the loss of one or more key customers or the significant reduction, postponement, rescheduling or cancellation of orders from one or more customers; general economic conditions or conditions in the semiconductor or consumer electronics markets; the effects on our business and our customer’s business taking into account the ongoing US-China tariffs and trade disputes together with the uncertainties associated with the ongoing global outbreak of COVID-19; the recent increases in tensions between Taiwan and China including enhanced military activities; decreases in the overall average selling prices of our products; changes in the relative sales mix of our products; changes in our cost of finished goods; the payment, or non-payment, of cash dividends in the future at the discretion of our board of directors and any announced planned increases in such dividends; changes in our cost of finished goods; the availability, pricing, and timeliness of delivery of other components and raw materials used in the products we sell given the current raw material supply shortages being experienced in our industry; our customers’ sales outlook, purchasing patterns, and inventory adjustments based on consumer demands and general economic conditions; any potential impairment charges that may be incurred related to businesses previously acquired or divested in the future; our ability to successfully develop, introduce, and sell new or enhanced products in a timely manner; and the timing of new product announcements or introductions by us or by our competitors. For additional discussion of these risks and uncertainties and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including our Annual Report on Form 20-F filed on May 12, 2021. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.

Investor Contact:Investor Contact:
Christopher ChaneySelina Hsieh
Director, Investor Relations & StrategyInvestor Relations
E-mail: CChaney@siliconmotion.comE-mail:
Media Contact: 
Sara Hsu 
Project Manager 

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