Silicon Labs beats earnings; Texas Instruments' $7.5 billion deal gets a 40% inventory build
The earnings beat reads like an accelerating business two quarters from a $7.5 billion handover, but the same 10-Q shows Silicon Labs' own inventory climbing three straight quarters while the channel sits empty and operating cash flow halves. Q4 decides whether the build was buffer or pull-ahead.
Vincent Jiangthree-minute read
*The quarter flatters the chipmaker Texas Instruments−3.81% — Texas Instruments, down 3.81 percent today agreed to buy for $231.00 a share. The 10-Q filed the same day shows inventory up 40% in nine months, a channel scraped empty and operating cash flow halved, and only the fourth quarter can say which reading is real.*
The beat is real, and so is the build
Silicon Labs−0.31% — Silicon Labs, down 0.31 percent today, the Austin maker of low-power wireless chips for smart-home, industrial and medical devices, reported fiscal third-quarter results on November 10 that beat twice over: revenue of $250.9 million, up 21.8% year over year and 3.6% above the $242.1 million consensus, and non-GAAP earnings of $1.05 a share against $0.84 expected 1. GAAP net income swung to $8.9 million from a $9.9 million loss a year earlier, and medical revenue set a quarterly record, up 48% from the second quarter and more than 300% from a year earlier 2.
The same-day filing is the first full look TI gets
Because the company has suspended guidance ahead of its sale, the 10-Q filed November 10 is the first full look at the business Texas Instruments agreed to take possession of 34. The balance sheet tells a second story. Inventories ended the quarter at $133.4 million, up from $95.6 million at the start of the year, after builds to $103.2 million in April and $123.3 million in July; days of inventory now sit at 122, up from 113 on January 3 34.
Inventory grew 40% this year while revenue grew 20%
The build outran the sales it is meant to back
- Revenue
- Inventories
Data
| Revenue | Inventories | |
|---|---|---|
| 3 Jan '26 | — | $95.6M |
| Q1 '26 | $213.5M | $103.2M |
| Q2 '26 | $228.2M | $123.3M |
| Q3 '26 | $250.9M | $133.4M |
Nine-month operating cash flow fell to $37.2 million from $87.4 million a year earlier 36. The cash flow statement shows inventories alone consumed $37.8 million of it, the largest working-capital drag on a list that also includes receivables and prepaids 3.
Revenue has risen every quarter; operating cash flow fell to minus $14.5 million in Q2
- Revenue
- Operating cash flow
Data
| Revenue | Operating cash flow | |
|---|---|---|
| Q4 '24 | $166.3M | $10.1M |
| Q1 '25 | $177.7M | $48.1M |
| Q2 '25 | $192.9M | $4.9M |
| Q3 '25 | $206M | $34.3M |
| Q4 '25 | $208.2M | $8.4M |
| Q1 '26 | $213.5M | $4.9M |
| Q2 '26 | $228.2M | -$14.5M |
| Q3 '26 | $250.9M | $46.8M |
The channel is empty, the warehouse is not
At its customers the company reports the opposite: distributor inventory at a multi-year low and end-customer stock near record lows 2. Both camps can quote the same filing. Texas Instruments, which agreed on February 4 to pay $231.00 a share in cash, about $7.5 billion all-in, and expects roughly $450 million of annual synergies from pulling Silicon Labs' manufacturing onto its own fabs, gets a clean handover story: an empty channel means nothing was stuffed into it, and backlog is converting 256.
The skeptics' math: inventory grew twice as fast as sales
The opposing reading, raised in close coverage of the filing, is shipments pulled ahead of a closing, and the arithmetic feeds it: revenue grew 20% in nine months while inventory grew 40% 36. The stock closed November 10 at $221.80, a 4.2% spread to the offer, which prices completion as close to a given 6.
What is new since October, and what settles it
The spread has been on this network's radar since October, when the open questions were Beijing's review and a gap twice this size (our October 8 piece; October 16) 3. What is new is the filing itself, and its own words carry the burden: inventory rose "in order to minimize potential supply disruptions and meet forecasted future demand" 3. The fourth-quarter report, due before the close, settles it: revenue has to digest the warehouse, or buyers of the spread end up owning the inventory risk.
Sources: 1. scanx.trade, Silicon Laboratories Q3 Results: Adj. EPS $1.05 beats estimate, sales up 21.8%, November 14, 2026 — https://scanx.trade/stock-market-news/companies/silicon-laboratories-q3-results-adj-eps-1-05-beats-estimate-sales-up/55892091 2. MLQ.ai, Silicon Labs revenue rises 22% to $251 million on record medical sales as it awaits Texas Instruments takeover, November 11, 2026 — https://mlq.ai/news/silicon-labs-revenue-rises-22-to-251-million-on-record-medical-sales-as-it-awaits-texas-instruments-takeover/ 3. SEC EDGAR, Silicon Laboratories Form 10-Q for the quarter ended October 3, 2026, filed November 10, 2026 — https://www.sec.gov/Archives/edgar/data/1038074/000103807426000035/slab-20261003.htm 4. SEC EDGAR, Silicon Laboratories Form 10-Q for the quarter ended April 4, 2026, filed May 5, 2026 — https://www.sec.gov/Archives/edgar/data/1038074/000103807426000020/slab-20260404.htm 5. Chip Dispatch, Silicon Labs Turns Profit Ahead of $7.5B TI Takeover, November 11, 2026 — https://chipdispatch.com/articles/silicon-labs-swings-to-profit-on-record-medical-sales-ahead-of-ti-takeover 6. VLSI Korea, Silicon Labs Q3 Revenue Up 22% With a GAAP Profit, but Its Own Inventory Builds While the Channel Empties, November 12, 2026 — https://www.vlsi.kr/en/silicon-labs-q3-2026-flash-en/
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