Silicom NASDAQ: SILC reported third-quarter 2026 revenue of $26.7 million, up 71% from $15.6 million a year earlier and above the company’s prior guidance range of $25 million to $26 million. The company also returned to non-GAAP profitability during the quarter, earlier than management had previously anticipated.
President and CEO Liron Eizenman said the results reflected accelerating customer deployments and higher unit shipments across Silicom’s core portfolio. He pointed to a progression in year-over-year revenue growth from 17% in the fourth quarter of 2025 to 33% in the first quarter, 59% in the second quarter and 71% in the third quarter.
“Our revenue growth is fundamentally volume driven, fueled by higher unit shipments across our core portfolio and accelerating customer deployments,” Eizenman said.
Guidance Raised Again
Silicom raised its full-year 2026 revenue outlook to a range of $96 million to $98 million, representing projected growth of 57% from 2025. The updated outlook marks the company’s second increase this year; management said its full-year guidance had stood at $82 million to $83 million six months earlier.
For the fourth quarter, Silicom projected revenue of $27 million to $28 million. At the upper end of that range, the guidance would represent 66% year-over-year growth.
Eizenman said the company expects fourth-quarter profitability to build on its third-quarter results as revenue growth provides operating leverage. He also said the company sees continued growth in 2027, though he did not provide specific financial projections for next year.
During the question-and-answer session, Eizenman said design wins generally begin contributing revenue in about six months, with ramp-ups typically occurring around 12 months after a win. The growth currently being reported stems primarily from design wins secured in 2024 or earlier, he said, rather than wins obtained during the first half of 2026.
Profitability Returns as Expenses Rise More Slowly Than Revenue
CFO Eran Gilad said all financial figures discussed on the call were non-GAAP unless otherwise noted. Gross profit rose 63% year over year to $8.1 million, while gross margin was 30.3%, within Silicom’s expected short- to midterm range of 27% to 32%.
Operating expenses increased 9% to $8.1 million, compared with revenue growth of 71%. Operating income was slightly positive at $20,000, compared with an operating loss of $2.4 million in the prior-year quarter.
- Third-quarter non-GAAP net income was $0.3 million, compared with a net loss of $2.1 million a year earlier.
- Non-GAAP earnings per share were $0.04, compared with a loss per share of $0.36 in the third quarter of 2025.
- North America accounted for 78% of revenue over the past 12 months, while Europe and Israel represented 11% and the Far East and rest of world represented 11%.
- One customer accounted for approximately 13% of revenue over the past 12 months.
As of Sept. 30, Silicom had $107 million in working capital and marketable securities, including $73 million in inventory and $45 million in cash equivalents and highly rated marketable securities. The company reported no debt.
Eight Design Wins Secured This Year
Silicom said it had secured eight design wins so far in 2026, matching its total number of wins for all of 2025 and exceeding the lower end of its goal for seven to nine wins this year.
Among the third-quarter wins, an existing blue-chip customer selected Silicom for a custom high-speed server adapter designed for a separate infrastructure use case. The customer had previously integrated one of Silicom’s off-the-shelf server adapters and an FPGA SmartNIC, according to Eizenman. Management expects the new win to increase annual business with that customer from about $3 million in 2026 to nearly $10 million in 2027.
Silicom also won business from a new tier-one cloud-based cybersecurity customer for an edge networking device with integrated 5G wireless connectivity. Eizenman said the customer had placed an initial order and was expected to begin ramping deployments before year-end. At full ramp-up, the company expects revenue from that device alone to exceed $5 million annually.
The company is also evaluating additional opportunities with that customer, including a GPU-integrated edge device for edge artificial intelligence applications.
AI Inference Pipeline and Dual-Source Strategies
Management said the AI networking and interconnect market remains dynamic, with customers making rapid architectural changes that create opportunities for customized solutions. Eizenman said Silicom was in final discussions with a new customer on a “major evolving use case” and expected to reach an agreement soon, although another prospect recently suspended a project after changing its strategic direction.
The company said AI inference customers are increasingly pursuing dual-source supply strategies due to expected annual volumes in the tens of thousands of units. Eizenman said this trend could create opportunities for Silicom to become a second supplier to customers that currently use competing products.
He clarified that a dual-source arrangement would involve a competing solution rather than Silicom’s design being manufactured by another company. Still, he said management views the shift as “less risk and more opportunity” because of the potential scale of customer volumes.
Silicom said it has received an initial production order from an existing AI inference customer and is working to deliver it while seeking additional orders. Eizenman said the company remains encouraged by momentum with that customer but did not provide a timetable for further updates.
About Silicom (NASDAQ:SILC)
Silicom Ltd. is an Israel-based technology company that designs and manufactures high-performance networking and data infrastructure solutions. Its products are used to improve network connectivity, traffic management, security, and processing in servers, appliances, and communications systems.
The company's product portfolio includes server and network interface adapters, bypass solutions, network appliances, packet-processing platforms, and other specialized connectivity products. Silicom also develops solutions for cloud computing, edge computing, cybersecurity, telecommunications, and service-provider applications, often working with original equipment manufacturers and system integrators.
Founded in 1987 and headquartered in Kfar Sava, Israel, Silicom serves customers in international markets through relationships with technology vendors, communications companies, and enterprise infrastructure providers.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Silicom, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Silicom wasn't on the list.
While Silicom currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
A strong long-term portfolio starts with companies that can survive recessions, inflation, changing consumer habits, and shifting market leadership.
This report names seven blue-chip stocks across technology, retail, consumer staples, healthcare, networking, sporting goods, and utilities that offer investors a mix of stability, income, growth, and staying power.
Get This Free Report
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
