Silicon Image Inc. (SIMG, Financial) filed Quarterly Report for the period ended 2010-09-30.
Silicon Image Inc. has a market cap of $486 million; its shares were traded at around $6.18 with and P/S ratio of 3.3. SIMG is in the portfolios of Jim Simons of Renaissance Technologies LLC, RS Investment Management, Bruce Kovner of Caxton Associates.
Total product revenue for the three months ended September 30, 2010 was $15.4 million or 50.1% higher than product revenue from the same period in 2009 primarily due to the recovering economy and increased demand for our CE, PC and Storage products. Revenue from our CE, PC and Storage products during the three months ended September 30, 2010 increased by 58.2%, 12.7% and 8.4%, respectively, compared to the same period in 2009. Our unit shipments during the three months ended September 30, 2010 for CE, PC and Storage increased by 74.4%, 15.2% and 13.5%, respectively, compared to the same period in 2009. The higher unit shipments in our CE product line were primarily driven by increased demand for our port processors from the DTV market. Higher demand for our home theater and mobile products also contributed to the favorable results from our CE product line during the three months ended September 30, 2010 when compared to the same period in 2009. The increase in unit shipments in our PC and Storage product lines was primarily due to the higher demand for our DVI and SATA products, respectively. The impact of the 74.4% and 13.5% increase in unit shipments to our CE and Storage revenue, respectively, was partially offset by a 9.4% and 4.1% decrease in the average selling price of our CE and Storage products, respectively.
Cost of revenue consists primarily of costs incurred to manufacture, assemble and test our products, and costs to license our technology which involves modification, customization or engineering services, as well as other overhead costs relating to the aforementioned costs including stock-based compensation expense. Our overall gross margin, as a percentage of revenue, was 62.6% and 59.1% for the three and nine months ended September 30, 2010, respectively, and 54.4% and 54.0% for the three and nine months ended September 30, 2009, respectively. Total cost of revenue for the three and nine months ended September 30, 2010 increased by $5.7 million or 33.6% and $4.1 million or 7.7%, respectively, when compared to the total cost of revenue in the same periods in 2009. The increase in the total cost of revenue was primarily due to the growth in revenue volume during the same comparative periods.
Product gross margin for the three and nine months ended September 30, 2010 was 51.0% and 48.6%, respectively, compared to 45.3% and 44.8% for the three and nine months ended September 30, 2009, respectively. The 5.7% increase in product gross margin during the three months ended September 30, 2010 compared to the same period in 2009 was primarily attributable to approximately 2% wafer and testing cost reduction and the other 3.7% was due to better yields, better overhead absorption resulting from our higher revenue volume in 2010 than in 2009 and lower stock-based compensation expense. The 3.8% increase in product gross margin during the nine months ended September 30, 2010 compared to the same period in 2009 was primarily attributable to approximately 2% wafer and testing cost reduction and the other 1.8% was primarily due to better yields, better overhead absorption and lower stock-based compensation expense.
Our licensing gross margin for the three and nine months ended September 30, 2010 was 99.5% and 99.6%, respectively, compared to 97.6% and 96.9% for the three and nine months ended September 30, 2009, respectively. Licensing gross margin during the three and nine months ended September 30, 2010 increased by 1.9% and 2.7%, respectively, compared to the same periods in 2009. The increase was primarily due to lower mix of IP customization projects during the three and nine months ended September 30, 2010 compared to the same periods in 2009.
Our overall gross margin for the three and nine months ended September 30, 2010 was 62.6% and 59.1%, respectively, compared to 54.4% and 54.0% for the three and nine months ended September 30, 2009, respectively. The increase in our overall gross margin was primarily due to the improvement in the product gross margins, which increased by 5.7% and 3.8% during the three and nine months ended September 30, 2010, respectively, when compared to the product gross margins in the same periods in 2009. The improvement in our licensing gross margins, which increased by 1.9% and 2.7% during the three and nine months ended September 30, 2010, respectively, when compared to the licensing gross margins in the same periods in 2009, also contributed favorably to our overall gross margin in 2010.
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Silicon Image Inc. has a market cap of $486 million; its shares were traded at around $6.18 with and P/S ratio of 3.3. SIMG is in the portfolios of Jim Simons of Renaissance Technologies LLC, RS Investment Management, Bruce Kovner of Caxton Associates.
Highlight of Business Operations:
Historically, a relatively small number of customers and distributors have generated a significant portion of our revenue. For instance, our top five customers, including distributors, generated 64.0% and 58.2% of our revenue for the three and nine months ended September 30, 2010, respectively, and 51.6% and 43.7% of our revenue for the three and nine months ended September 30, 2009, respectively. Additionally, the percentage of revenue generated through distributors tends to be significant, since many OEMs rely upon third party manufacturers or distributors to provide purchasing and inventory management services. Revenue generated through distributors was 64.8% and 58.8% of our total revenue for the three and nine months ended September 30, 2010, respectively, and 61.2% and 61.1% of our total revenue for the three and nine months ended September 30, 2009, respectively. Our licensing revenue is not generated through distributors, and to the extent licensing revenue increases faster than product revenue, we would expect a decrease in the percentage of our total revenue generated through distributors.Total product revenue for the three months ended September 30, 2010 was $15.4 million or 50.1% higher than product revenue from the same period in 2009 primarily due to the recovering economy and increased demand for our CE, PC and Storage products. Revenue from our CE, PC and Storage products during the three months ended September 30, 2010 increased by 58.2%, 12.7% and 8.4%, respectively, compared to the same period in 2009. Our unit shipments during the three months ended September 30, 2010 for CE, PC and Storage increased by 74.4%, 15.2% and 13.5%, respectively, compared to the same period in 2009. The higher unit shipments in our CE product line were primarily driven by increased demand for our port processors from the DTV market. Higher demand for our home theater and mobile products also contributed to the favorable results from our CE product line during the three months ended September 30, 2010 when compared to the same period in 2009. The increase in unit shipments in our PC and Storage product lines was primarily due to the higher demand for our DVI and SATA products, respectively. The impact of the 74.4% and 13.5% increase in unit shipments to our CE and Storage revenue, respectively, was partially offset by a 9.4% and 4.1% decrease in the average selling price of our CE and Storage products, respectively.
Cost of revenue consists primarily of costs incurred to manufacture, assemble and test our products, and costs to license our technology which involves modification, customization or engineering services, as well as other overhead costs relating to the aforementioned costs including stock-based compensation expense. Our overall gross margin, as a percentage of revenue, was 62.6% and 59.1% for the three and nine months ended September 30, 2010, respectively, and 54.4% and 54.0% for the three and nine months ended September 30, 2009, respectively. Total cost of revenue for the three and nine months ended September 30, 2010 increased by $5.7 million or 33.6% and $4.1 million or 7.7%, respectively, when compared to the total cost of revenue in the same periods in 2009. The increase in the total cost of revenue was primarily due to the growth in revenue volume during the same comparative periods.
Product gross margin for the three and nine months ended September 30, 2010 was 51.0% and 48.6%, respectively, compared to 45.3% and 44.8% for the three and nine months ended September 30, 2009, respectively. The 5.7% increase in product gross margin during the three months ended September 30, 2010 compared to the same period in 2009 was primarily attributable to approximately 2% wafer and testing cost reduction and the other 3.7% was due to better yields, better overhead absorption resulting from our higher revenue volume in 2010 than in 2009 and lower stock-based compensation expense. The 3.8% increase in product gross margin during the nine months ended September 30, 2010 compared to the same period in 2009 was primarily attributable to approximately 2% wafer and testing cost reduction and the other 1.8% was primarily due to better yields, better overhead absorption and lower stock-based compensation expense.
Our licensing gross margin for the three and nine months ended September 30, 2010 was 99.5% and 99.6%, respectively, compared to 97.6% and 96.9% for the three and nine months ended September 30, 2009, respectively. Licensing gross margin during the three and nine months ended September 30, 2010 increased by 1.9% and 2.7%, respectively, compared to the same periods in 2009. The increase was primarily due to lower mix of IP customization projects during the three and nine months ended September 30, 2010 compared to the same periods in 2009.
Our overall gross margin for the three and nine months ended September 30, 2010 was 62.6% and 59.1%, respectively, compared to 54.4% and 54.0% for the three and nine months ended September 30, 2009, respectively. The increase in our overall gross margin was primarily due to the improvement in the product gross margins, which increased by 5.7% and 3.8% during the three and nine months ended September 30, 2010, respectively, when compared to the product gross margins in the same periods in 2009. The improvement in our licensing gross margins, which increased by 1.9% and 2.7% during the three and nine months ended September 30, 2010, respectively, when compared to the licensing gross margins in the same periods in 2009, also contributed favorably to our overall gross margin in 2010.
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