Integrated Device Technology, Inc. announced unaudited consolidated earnings results for the fiscal first quarter ended July 1, 2018. Revenue for the fiscal first quarter of 2019 was $228.5 million. This compared with $196.7 million reported in the same period one year ago. GAAP net income for the fiscal first quarter of 2019 was $30.7 million, or $0.23 per diluted share compared to $16.7 million or $0.12 per diluted share in the same period one year ago. Fiscal first quarter GAAP results include $10.6 million in acquisition-related and restructuring charges, $15.1 million in stock-based compensation, $4.0 million in non-cash interest expense, $2.0 million in investment impairment charge, $1.3 million in certain unrealized foreign exchange losses and $3.5 million in related tax effects. Non-GAAP net income for the fiscal first quarter of 2019 was $60.1 million or $0.44 per diluted share, compared with non-GAAP net income of $45.3 million or $0.33 per diluted share reported in the same period one year ago. Operating income was $41.378 million compared to $19.647 million in the same period one year ago. Income before income taxes was $33.864 million compared to $15.732 million in the same period one year ago. The company generated $44 million in cash from operations and spent approximately $8 million on CapEx. Free cash flow for the quarter, defined as cash from operations less CapEx, was approximately $36 million.

For the second quarter of fiscal 2019, the company expects revenue of approximately $233 million, plus or minus $5 million. The company projects non-GAAP gross margin to be approximately 63.8%, plus or minus 1 percentage point. This would be up another 40 basis point sequentially from strong First Quarter results and up 240 basis points from the year ago period. The increased gross margin outlook for fiscal second quarter of 2018 is helped by the projected reduction in mobile sensing revenue in the quarter. The company projects non-GAAP operating expense will increase approximately $2.2 million to $79.4 million, plus or minus $1 million. The company expects R&D to increase by $2 million to approximately $46.7 million and SG&A to increase by $200,000 to $32.7 million. The increase in OpEx includes previously planned increases in new product development, combined with the impact of variable compensation accruals driven by strong outlook for fiscal 2019 revenue growth and profitability. The company estimates fiscal second quarter non-GAAP operating margin to be approximately 29.7%. The company currently anticipates fiscal second quarter interest and other expense will be approximately $1.7 million. The company expects fully diluted shares for EPS to be approximately 131 to 135.1 million and non-GAAP EPS to be between $0.42 and $0.48 or $0.45 at the midpoint.

For the second half of fiscal year 2019, the company expects gross margins had a potential to reach the 63% to 64% range.

For the full year of fiscal 2019, the company is now targeting to achieve 30% operating margin for the full fiscal year. The company expects full year fiscal 2019 non-GAAP tax rate will be approximately 10%. The company is very optimistic about trajectory for continued revenue growth and margin expansion that will translate to increase in EPS and free cash flow generation throughout the year.