SiTime Q2 2025 Earnings Report

SiTime EPS Results

• Actual EPS: $0.47
• Consensus EPS: $0.29
• Beat/Miss: Beat by +$0.18
• One Year Ago EPS: $0.12

SiTime Revenue Results

• Actual Revenue: $69.49 million
• Expected Revenue: $64.66 million
• Beat/Miss: Beat by +$4.83 million
• YoY Revenue Growth: +58.30%

SiTime Announcement Details

• Quarter: Q2 2025
• Date: 8/6/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, August 6, 2025
• Conference Call Time: 5:00PM ET

SiTime (NASDAQ:SITM) designs, develops, and sells silicon timing systems solutions in Taiwan, Hong Kong, the United States, Singapore, and internationally. The company provides resonators and clock integrated circuits, and various types of oscillators. It serves various markets, including communications, datacenter, enterprise, automotive, industrial, internet of things, mobile, consumer, and aerospace and defense. The company sells its products directly to customers, distributors, and resellers. SiTime Corporation was incorporated in 2003 and is based in Santa Clara, California.

SiTime Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: CyTime reported Q2 revenue of $69.5 M, up 58% YoY, with gross margin of 58.2% and EPS of $0.47 versus $0.12 a year ago.
• Positive Sentiment: The data center AI segment grew 137% YoY, driven by design wins for Elite oscillators and Cascade clocking products in switches, NIC cards, optical modules and active cables.
• Positive Sentiment: Revenue was diversified across markets with automotive, industrial and defense up 11% and mobile IoT consumer up 23%, and the new Symphonic mobile clock generator chip has started contributing to sales.
• Positive Sentiment: Management expects sequential Q3 revenue of $77–79 M and non-GAAP EPS of $0.67–0.75, targeting at least 40% full-year revenue growth for the second consecutive year.
• Positive Sentiment: Balance sheet strengthened by a $388 M follow-on offering, ending Q2 with $796.7 M in cash and no debt to fund R&D and supply assurance.

Presentation

[Operator]

Good afternoon, and welcome to CyTimes Second Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. At the conclusion of today's conference call, instructions will be given for the question and answer session. As a reminder, this conference call is being recorded today, 08/06/2025. I would now like to turn the call over to Brett Perry of Shelton Group Investor Relations. Brett, please go ahead.

[Brett Perry, Vice President at Shelton Group]

Thank you, Shannon. Good afternoon, and welcome to Second Quarter twenty twenty five Financial Results Conference Call. Joining us on today's call from CyTime are Rajesh Vishist, Chief Executive Officer and Beth Howe, Chief Financial Officer. Before we begin, I'd like to point out that during the course of this call, the company may make forward looking statements regarding expected future results, including financial position, strategy and plans, future operations, the timing market, and other areas of discussion. It's not possible for the company's management to predict all risks, nor can the company assess the impact of all factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward looking statements.

[Brett Perry, Vice President at Shelton Group]

In light of these risks, uncertainties and assumptions, the forward looking events discussed during this call may not occur and actual results could differ materially and adversely from those anticipated or implied. Neither the company nor any person assumes responsibility for the accuracy and completeness of forward looking statements. The company undertakes no obligation to publicly update forward looking statements for any reason after the date of this conference call to conform statements to actual results or to changes in the company's expectations. For more detailed information on the risks associated with the business, we refer you to the risk factors described in the 10 ks filed on 02/14/2025, as well as the company's subsequent filings with the Securities and Exchange Commission. During the call, management will refer to certain non GAAP financial measures, which are considered to be an important measure of company performance.

[Brett Perry, Vice President at Shelton Group]

These non GAAP financial measures are provided in addition substitute for nor superior to measures of financial performance prepared in accordance with U. S. GAAP. GAAP to non GAAP reconciliations include stock based compensation expense, amortization of acquired intangibles, and acquisition related expenses, which include transaction and certain other cash costs associated with business acquisition, as well as changes in the estimated fair value of contingent consideration and earn out liabilities. Please refer to the company's press release issued earlier today for a detailed reconciliation between GAAP and non GAAP financial results.

[Brett Perry, Vice President at Shelton Group]

With that, it's now my pleasure to turn the call over to Cytimes' CEO. Rajesh, please go ahead.

[Rajesh Vashist, Chairman & CEO at SiTime]

Thank you, Brett. Good afternoon, everyone. Thank you for joining us today. We appreciate the continued support from our longtime investors and warmly welcome new Cytine investors. CyTime is pioneering a new category in semiconductors, precision timing, part of the broader $11,000,000,000 timing market.

[Rajesh Vashist, Chairman & CEO at SiTime]

To drive growth, we are focused on high value applications in AI data centers, automated driving, defense and industrial, and successfully delivered differentiated products with exceptional performance and reliability. This focus continues to pay off as we build a high growth, diverse business across markets, applications and geographies. Q2 twenty twenty five was another exceptional quarter for SiTime. We delivered revenue of 69,500,000.0 which was a 58% increase year over year. Gross margin increased to 58.2%.

[Rajesh Vashist, Chairman & CEO at SiTime]

And as new products contribute to a higher percentage of revenue, we expect to see gross margin expansion with revenue growth. EPS increased to $0.47 up from $0.12 a year ago, and every customer segment grew in Q2 twenty twenty to five. Exiting the quarter, we have robust bookings and a healthy funnel. In today's world of significant AI growth, it's no surprise that our data center customer segment continues to lead our growth significantly. In fact, it grew 137% year over year.

[Rajesh Vashist, Chairman & CEO at SiTime]

Here, our Elite family of oscillator products, Elite, Elite RF, Elite X, continue to shine along with our Cascade Clocking family. These products' performance drove strong design win momentum across the market, including switches, NIC cards, optical modules and AEC or active electrical cables. SiTime continues to be the only company that offers a full suite of precision timing solutions that includes oscillators, clocks and software, giving us architectural advantages. As we expand our offerings with newer products, our dollar content in the application will grow. For example, in a cloud service provider's 102 terabit switch design, dollar content increased by 125 with the addition of a customized clock.

[Rajesh Vashist, Chairman & CEO at SiTime]

Similarly, in the silicon provider's network switch design, SiTime's dollar content increased by 100% with the addition of multiple clock chips. Already in 2025, in AI, we have added design wins worth several 100 millions of dollars. For Sitime, winning the AI data center market is important, and we will accelerate product development and customer acquisition to expand further in these markets. In this age of accelerated innovation and fast deployment of AI hardware, Citem is very well qualified to meet the rapid growth in customers' demands. Our programmable product architecture works very well here, and our team and our suppliers have done a phenomenal job of keeping up with demand.

[Rajesh Vashist, Chairman & CEO at SiTime]

One of Saitam's strengths lies in the diversity of our business. This was again evident in Q2 twenty twenty five, where all markets and geographies demonstrated continued growth. Our revenue grew double digit percentages year over year in both MobileIoT Consumer and AutoDefenseIndustrial as well as every region. In the automotive, defense and industrial markets, a growth stream is around fully autonomous operations playing directly to SiTime's strengths. Precision timing from SightTime is required for accurate positioning, sensing, motor control and synchronization for fully autonomous operations in L3 plus and L4 ADAS vehicles, drones and factory robots.

[Rajesh Vashist, Chairman & CEO at SiTime]

In automotive, robotaxis are gaining significant traction. In warehouses, millions of robots are automating tasks, and defense spending is accelerating with NATO, for example, expected to spend at an 8x faster growth rate. We are designed in into the leading robotaxi robot and defense equipment, and as these markets scale, so will our revenue. SiTime has significant experience with a decade of investments in these markets, and we have learned how to anticipate the needs and generate products and features that will drive revenue from these applications. Lastly, in the mobile IoT consumer market, our newly announced Symphonic mobile clock generator chip provides significant power and accuracy advantages to GNSS and five gs applications.

[Rajesh Vashist, Chairman & CEO at SiTime]

It has already started to contribute to our revenue, and we expect its contribution to grow significantly in 2026 and beyond. As we move into the 2025, we anticipate sequential revenue growth in each of Q3 and Q4, supported by strong demand in AI infrastructure and continued momentum across markets. This is the second consecutive year where we expect to grow revenue by at least 40%. We also see that as more customers experience the benefits of our precision timing, more opportunities come to us. To seize them, we will continue to invest in both R and D and customer acquisition while improving operating leverage.

[Rajesh Vashist, Chairman & CEO at SiTime]

To summarize, our success is being driven by both the depth of our engagement in AI, data centers and the breadth of our reach across diverse markets. This balance gives us resilience and positions us for sustainable growth. I'm confident in our trajectory and excited about what lies ahead. I'll now turn the call over to Beth Howe, our CFO, to discuss our financial results in more detail. Beth?

[Beth Howe, EVP - Finance & CFO at SiTime]

Thanks, Rajesh, and good afternoon, everyone. Today, I'll walk through our second quarter fiscal twenty twenty five results and then provide our outlook for the third quarter. As a reminder, I'll focus on non GAAP financials, which are reconciled to GAAP in our press release. In the second quarter, revenue increased 58% year on year to $69,500,000 fueled by CED, which grew 137% year on year to $36,000,000 Our other markets grew double digits, with sales into automotive, industrial and defense market up 11% year on year to $16,500,000 and sales into the mobile, IoT and consumer market up 23% year on year to $17,000,000 Sales to our largest end customer totaled $11,800,000 In terms of the mix of revenue, the comms enterprise data center market represented 52% of revenue, while the automotive, industrial and defense market as well as the mobile consumer IoT market each represented 24% of revenue. Non GAAP gross margin was 58.2% for the quarter, up 80 basis points sequentially, driven by favorable product mix and improving product costs.

[Beth Howe, EVP - Finance & CFO at SiTime]

Total non GAAP operating expenses were $33,300,000 in line with expectations. For the quarter, R and D expense was $19,500,000 and SG and A expense was $13,800,000 We remain disciplined in our approach to investing to drive future growth. Q2 non GAAP operating income was $7,200,000 an improvement of $9,900,000 or 16 percentage points versus the same quarter a year ago. Q2 non GAAP net income was $11,600,000 or $0.47 per share. Turning to the balance sheet.

[Beth Howe, EVP - Finance & CFO at SiTime]

Accounts receivable were $26,900,000 with DSO improving to thirty five days versus forty two days in Q1 due to better revenue linearity. Inventory at the end of the quarter was $84,100,000 compared with $82,600,000 in Q1 as we ramped production for key new products and continue to maintain strong wafer balances for assurance of supply. During the quarter, we generated $15,300,000 in cash from operations and invested $18,300,000 in capital expenditures. I expect CapEx to step down from these levels in the 2025. During the quarter, we completed a follow on public offering of 2,000,000 shares at $200 per share, raising $388,000,000 in net proceeds.

[Beth Howe, EVP - Finance & CFO at SiTime]

These proceeds strengthen our balance sheet and support strategic investments in innovation. Our balance sheet remains strong and we ended the quarter with $796,700,000 in cash and short term investments and no debt. Now, I'd like to provide our outlook for the September. For Q3, we expect revenue of $77,000,000 to $79,000,000 gross margins of between 5859% and operating expenses to be in the range of $34,000,000 to $34,500,000 Reflecting the offering we completed in June, we expect interest income of 7,500,000.0 to $8,000,000 and a diluted share count of approximately 26,800,000 shares. As a result, we expect third quarter non GAAP EPS to be in the range of $0.67 to $0.75 per share.

[Beth Howe, EVP - Finance & CFO at SiTime]

In closing, our results demonstrate strong top line momentum and the meaningful operating leverage in our model as we scale. Our expanding product portfolio is delivering differentiated solutions in large growing markets, and customer engagement continues to validate our value proposition. We believe we are well positioned to drive sustained growth, operating leverage and long term value creation. With that, I will open it up for questions. Operator?

[Operator]

Thank you. At this time, we will conduct the question and answer session. To ask a question, you will need to press 11 on your telephone and wait for your name to be announced. Our first question comes from Chris Caso from Wolfe Research. Please go ahead.

[Christopher Caso, MD - Semiconductors at Wolfe Research]

Yes, thank you. Good evening. For the first question, if you could go through what your expectations are for growth by segment as you get to the guidance?

[Beth Howe, EVP - Finance & CFO at SiTime]

Sure. So I'll take that one, Chris. As we think about the different markets, again, I would expect that CED led by AI continues to be our strongest growth area. As we operator, there's some feedback on the line. In addition, as we get to the second half, we typically see stronger seasonality in our consumer markets, and so we would expect that as well.

[Beth Howe, EVP - Finance & CFO at SiTime]

And then our auto, aero, industrial, we've seen some strong growth in several applications in that area, better traction in aerospace, for example, as well as good traction in industrial. And so we expect growth in all three markets there. But I would focus on CED as probably our strongest grower in the back half similar to the front half.

[Christopher Caso, MD - Semiconductors at Wolfe Research]

Okay, great. That's helpful. Just as a follow-up, I guess one question would be anything extraordinary of note in your guidance with regard to the mobile segment for the third quarter. And I guess in the past, within that segment, you've had sort of a policy of not including new design wins in guidance unless the products have actually shipped and you confirm you've been in there. Guess one is anything extraordinary to say within the guidance?

[Christopher Caso, MD - Semiconductors at Wolfe Research]

And then secondly, is that still your policy with regard to the mobile segment?

[Rajesh Vashist, Chairman & CEO at SiTime]

Yes. First, let me address the policy, Chris. The policy is that generally, as you know, consumer products, but particularly mobile products tend to be very volatile. So we only give guidance when we can see it. When we talk about the 40% growth in my prepared remarks, that comprehends the mobile because we now have enough visibility this year to be able to say that.

[Rajesh Vashist, Chairman & CEO at SiTime]

When it comes to the next year, we'll probably do what we did at the beginning of this year, which we'll carve out that portion of the business, simply because we wait till greater visibility and we get visibility, we start to give you pass through that visibility to you. So hopefully, that helps.

[Christopher Caso, MD - Semiconductors at Wolfe Research]

Right. So to summarize, for a product launching this year, you would include that in your guidance because now you do have that level of visibility.

[Rajesh Vashist, Chairman & CEO at SiTime]

Correct.

[Christopher Caso, MD - Semiconductors at Wolfe Research]

Got it. That's helpful. Thank you.

[Rajesh Vashist, Chairman & CEO at SiTime]

Sure.

[Operator]

Thank you. Our next question comes from Tore Svanberg from Stifel. Please go ahead.

[Tore Svanberg, MD - Semiconductors at Stifel Financial]

Yes, thank you and congrats on the strong results. I mean, not to sort of pick on a very good print, but I was a little bit surprised to see your mobile IoT consumer business kind of flat sequentially and I think your largest customer was just barely up sequentially. So just curious if there's some puts and takes there in the business, especially given your sort of new content and some of the devices there.

[Beth Howe, EVP - Finance & CFO at SiTime]

Yes. So as we look at the mobile IoT consumer business, I think there's as you know, overall, our main focus is in our comms enterprise data center or CED market, both because of the extraordinary growth opportunities we see there as well as the fact that we're investing in new products for that market because it is often the tip of the spear in terms of extensions into aerospace, industrial, automotive and some of those other markets. So that's where the majority of our investments and our focus is. We do see some opportunities in mobile IoT and consumer. And so we will kind of surgically go after those where they exist, including kind of a recent win that we've had this year with that customer.

[Beth Howe, EVP - Finance & CFO at SiTime]

Looking at the consumer seasonality, as you can imagine, when you launch a product, there's that initial quarter, there's the sell in kind of as you're filling the channel with that new product that you see in the first quarter of launch. In addition, consumer typically has seasonality where the second half of the year and particularly in Q3 and Q4 tend to be stronger versus the first half of the year. So I think that's what you're seeing in our results today.

[Rajesh Vashist, Chairman & CEO at SiTime]

And Tore, I Adesh here, I I wouldn't look too much into it. It's the consumer business. It's dynamic. We know it. It's up.

[Rajesh Vashist, Chairman & CEO at SiTime]

It's down. You know? So I wouldn't read too much into that.

[Tore Svanberg, MD - Semiconductors at Stifel Financial]

No, that's fair. Thank you for that, Rajesh. And I guess as my follow-up for you, Rajesh, as we go into the second half of the year, I think Cytom has a pretty unique view into all end markets, given your diversified revenue base. Obviously, the data points remain very, very strong on data center. But I would say in sort of more traditional analog markets like industrial and auto, the data points are quite mixed, especially because of tariffs.

[Tore Svanberg, MD - Semiconductors at Stifel Financial]

So I'm just curious, what are you seeing in some of your non data center segments, not just in Q3, but even into Q4?

[Rajesh Vashist, Chairman & CEO at SiTime]

Yes. I think there is a little bit of softness in automotive. We see that, but we still grow. We definitely see strength in industrial. We see significant strength, no surprise, in aerospace, military, defense.

[Rajesh Vashist, Chairman & CEO at SiTime]

I mean, it's not a very large business for us, but it's going to grow very rapidly, and we have high expectations and hope for it. But even in the automotive market, if I look out to the design wins that we are getting out into the and hence, my reference to L3 plus and L4 and ADAS, If I look into that and robotaxis, I think we see significant growth come in the coming years, perhaps not in 'twenty six because many of them may not be launching in high volume, but further out in 'twenty seven and 'twenty eight, we see a tremendous opportunity in automotive. And as far as industrial goes, we singled out robots, industrial robots, all kinds of robots for mention. But they're all really being driven by this need for autonomy, by this need for being synchronized and aware, presence aware. So the whole sensing, the motor control synchronization piece, that's where we really shine.

[Rajesh Vashist, Chairman & CEO at SiTime]

And that's common across all three of these, industrial, automotive and military aerospace defense. So it's a very unique place, and we like that quite a bit. And we intend to make significant investments in that.

[Tore Svanberg, MD - Semiconductors at Stifel Financial]

Sounds good. Congrats again.

[Rajesh Vashist, Chairman & CEO at SiTime]

Thank you.

[Operator]

Thank you. Our next question comes from Suji Desilva from ROTH Capital. Please go ahead.

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Hi, Rajesh. Hi, Beth. You talked about gross margin tailwinds coming in the next quarters from new products increasing in the mix. Maybe you can help us understand where new products are as a percent of revenues now by that designation, where they were a year ago? And what will be the pace of the increase the next year or two to help the margins?

[Rajesh Vashist, Chairman & CEO at SiTime]

Well, I don't know if I can give you regular percentages, but I can give you some indications. And the indications are that I referred to the Elite family of products. Those are definitely all our new products, Elite, Elite X, Elite RF and the Cascade family. And in fact, our whole clocking family, whether it's the Chorus and so on. Definitely in the area of data centers, even in enterprise and communications, the whole, what we call CED, we expect more of the new products than of the older products.

[Rajesh Vashist, Chairman & CEO at SiTime]

It's certainly true that the new products are significantly higher ASP. They are, as I mentioned before, they're anywhere from $3.04 dollars to $10.12 dollars And so they're significantly valuable in that regard. The design wins coming out in the military, aerospace, defense, as well as in the automotive and industrial are also significantly in the new areas. Consumer tends to lag a little bit. And as you know, we have spent most of our R and D in the first two that I said, with consumer mobile IoT, we have a bunch of products.

[Rajesh Vashist, Chairman & CEO at SiTime]

And of course, the Symphonic product, we have a lot of high hopes for in this year, the second half, as well as in the coming year. So I think it's going to be pretty evenly spread in these markets, but I expect that 2026 will be significant in the new product space. I think this is definitely a transitional year.

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Okay. And then maybe kind of digging into the data center content that you've gained, just maybe one level down. Like when you have the opportunity to win a higher dollar clock in some equipment, but other equipment, maybe it's less content. Can you just help us distinguish what gets you that higher content and whether you have upgrade opportunities in other places where you have content or how that lays out across the data center equipment that switches the AEC's, and so forth.

[Rajesh Vashist, Chairman & CEO at SiTime]

Yeah. I think what is unique for Cytine is the fact that we sell a full system. Right? We are the only company which has natively produced oscillators and natively produced clocks. So we can bundle them together, as a bundled unit, but as a system, because at the end of the day, the customer needs, the timing needs to be fulfilled, and going to one kind of supplier, typically a quartz crystal supplier for oscillators, and going to a clocking company for clocks is a challenge in these very high performance, low latency, high throughput, challenging environmental conditions.

[Rajesh Vashist, Chairman & CEO at SiTime]

So for example, in the terabit switch design that we did get, the addition of the dollar content came through adding a very customized clocks. Most clocks are customized. In the addition of the networking, we just added multiple clock chips and made that come through. So it's a system play. It's solving the customers' problems at the architectural level.

[Rajesh Vashist, Chairman & CEO at SiTime]

And this is the same playbook that we are using in all the other areas. Frankly, we use that same one in higher end consumer products as well. I mean, the Symphonic product is a unique product, which has clocking and an oscillator built into it. So that systems approach is one that might be helpful to think about.

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

All right, very helpful, Rajesh. Thanks.

[Rajesh Vashist, Chairman & CEO at SiTime]

Yes.

[Operator]

Thank you. Our next question comes from Quinn Bolton from Needham and Company. Please go ahead.

[Quinn Bolton, Senior Analyst at Needham & Company]

Hi, Rajesh and Beth. Let me offer my congratulations on the nice results and outlook. I guess I wanted to start. Rajesh, I think in the past you guys have addressed your content opportunity on some of the GPU rack platforms that have been announced over the past, say, six to twelve months. But wondering if you have similar content opportunities on the hyperscaler ASIC based platforms.

[Quinn Bolton, Senior Analyst at Needham & Company]

Do you tend to see similar opportunity on those ASIC platforms as the merchant GPU platforms? And then I've got a follow-up.

[Rajesh Vashist, Chairman & CEO at SiTime]

Yeah, so the hyperscalers, the short answer is yes. But we are variously penetrated, right? We are not equally penetrated in all the key hyperscalers. Some of them a little bit more, some of them a little bit less. So the places where we are, we do have significant penetration in the same way, but it's also a little bit behind because at the end of the day, semiconductor companies that we that do GPU, CPUs tend to be a little bit faster moving ahead of the curve.

[Rajesh Vashist, Chairman & CEO at SiTime]

And so we connecting with them, we get a better lead in into the use case and into the market. And they're also the ones who typically they, the semiconductor companies are typically the ones that are more focused on not just CPU and the GPU accelerators, but also the NIC cards and the switches and even the pluggables. So it's no surprise that we go there more, though we are cracking in more and more into the hyperscalers. But I would say the architectural advantages come greater because we can we can go after a larger market with the merchant silicon guys, if that makes any sense.

[Quinn Bolton, Senior Analyst at Needham & Company]

Yeah. It it does. It does. Thank you. And then a follow-up on the Symphonic product.

[Quinn Bolton, Senior Analyst at Needham & Company]

I guess a couple of questions. I believe that targets more of the mobile consumer IoT segment. Wondering if there are particular applications where you're seeing success with Symphonic. You mentioned it's a clock plus an oscillator. Does that meaningfully increase your ASP in some of those mobile IoT product categories, or does it come in at similar ASPs to products that you already sell into that end market?

[Rajesh Vashist, Chairman & CEO at SiTime]

Yeah. No. It definitely comes at a higher ASP, simply because, as I said, it's a system level approach, so we're solving multiple problems. It's not just that we are integrating, Oh, here's the cost X and a price X and price Y of an oscillator plus a clock, you them together, you don't get X plus Y, you get something more than that. Because when you do it as a system, you solve many, many other problems on the board, on the bill of materials that the customer now doesn't have to use, whether it's discrete, whether it is the way the clocks are laid out and so on.

[Rajesh Vashist, Chairman & CEO at SiTime]

We when we did Symphonic, we were looking at the five gs market, We were looking at the GPS market. We were looking at the millimeter wave market. And those markets will come, but we don't see them happening today. I think they'll come maybe in a year or so, particularly in the area of IoT, particularly in the area of factory and enterprise based IoT that will use five gs private networks, and we see that coming. But it's a little bit a ways, but we are going to be ready for the market, and we'll be there well ahead of anybody else.

[Quinn Bolton, Senior Analyst at Needham & Company]

Okay. Thank you very much.

[Rajesh Vashist, Chairman & CEO at SiTime]

Yep.

[Operator]

Thank you. Our next question comes from Thomas O'Malley from Barclays. Please go ahead.

[Thomas O'Malley, Director - Equity Research at Barclays]

Hey guys, thanks for taking my questions and congrats on the nice results. So if I look at last quarter where you kind of let things off at the high end of guidance, you had kind of talked about 30 kind of plus growth for the full year. You're clearly indicating a stronger growth profile now of greater than 40 versus where you were ninety days ago. You're obviously highlighting CED strength as one of the reasons for the uptick. But more specifically, could you talk about what inside of CED is getting stronger?

[Thomas O'Malley, Director - Equity Research at Barclays]

And like, did you just take some conservatism when you were standing there last quarter? Or have things materially improved in the last kind of ninety days?

[Rajesh Vashist, Chairman & CEO at SiTime]

Yes. I mean, it's a tale of all the segments, Tom. The CD, we're talking particularly with data center. In data center, we're talking about the networking, the accelerators, the switches in particular. We have no surprise greater visibility because ninety days have passed, as you said, and we can see better into the second half of the year.

[Rajesh Vashist, Chairman & CEO at SiTime]

So we see that. We see continued strength. We see continued growth. We see continued demand from our customers, and we're building up a very nice backlog and a very nice funnel. On having said that, back to the earlier question that was asked, we also have greater insight into our consumer mobile IoT business, where which is typically higher, as you know, in Q3, Q4 to fulfill demand at that point.

[Rajesh Vashist, Chairman & CEO at SiTime]

We see that we can see that growing nicely as well. And then the rest of the business just continues to grow, as we've said, at a nice little pace. So, it's just last year around this time also, it took us some a little while to get to that 40%, at least 40%, but now we have line of sight to that.

[Thomas O'Malley, Director - Equity Research at Barclays]

Helpful. And then just something on kind of the trajectory of the year. So you obviously have the consumer portion, particularly the one customer that's stronger in the second half. And you've said that CED is leading the growth in the second half. Does that mean CED is up the most sequentially in Q3 and in Q4?

[Thomas O'Malley, Director - Equity Research at Barclays]

Or does it mean CED is up the most in aggregate between those two quarters? I'm just trying to understand because it looks like you should see a really big pickup in that consumer bucket into the September. Just maybe help me understand that a little better. Thank you.

[Beth Howe, EVP - Finance & CFO at SiTime]

So Tom, this is Beth. When I was looking at that, I was thinking year over year in terms of in aggregate, as I look to the year, we expect the strongest growth in CED for the year. As I also said, the consumer, we expect to pick up in second half, and we expect some acceleration there. And that's more of a sequential comment and the seasonality that you would expect with the consumer business and with that customer.

[Thomas O'Malley, Director - Equity Research at Barclays]

Thanks guys.

[Operator]

Thank you. Our next question comes from Tore Svanberg from Stifel. Please go ahead.

[Tore Svanberg, MD - Semiconductors at Stifel Financial]

Yeah, thank you. I just had a few follow ups, if you don't mind. First of all, Rajesh, on data center architectures, I'm just curious if there know, because of rack level infrastructure now, obviously, you participate on a lot of different applications. But I'm just wondering if something is going on there from a from a timing timing perspective. Mean, clearly you're trying to sell oscillators and clocks, but just wondering if there's anything else going on there that you could potentially participate in a bigger way.

[Rajesh Vashist, Chairman & CEO at SiTime]

No, I think it's just that these systems are getting way more complicated and complex. As I reflect, I look back on the last two years or two and a half years of watching this grow, I mean, the pace of innovation in this space is astonishing. And I've been doing this for a long time, and this is just an absolutely astonishing speed of innovation of trying to get more throughput at lesser heat, smaller size, lower latencies, greater performance. I mean, it's absolutely amazing. And that is what is driving an overall need, which says we do need the timing products from SiTime to be even more advanced.

[Rajesh Vashist, Chairman & CEO at SiTime]

For example, when we started in this business, the jitter requirements were something in the order of seventy femtoseconds. As we look out into the future, we're targeting something which is lower than twenty femtoseconds, and that's just in three years. And that's these are this is just one metric of of of jitter out of, like, 15 different metrics that we could talk about that include synchronization, that include stability, that include phase noise, that include temperature, and so on and so on. So it's just the innovation rate of our customers is astonishing. Therefore, our innovation rate has also become more faster, more.

[Rajesh Vashist, Chairman & CEO at SiTime]

And no surprise, it tends to be at a higher ASP, and it tends to be a collection of products rather than one spot product where they have give me this one spot product, and and and we'll be done. So perhaps if I can answer your question stepping back the way you asked it, I would say there's more need for system level solutions. There's more need for higher innovation and therefore higher ASP solutions needed in timing.

[Tore Svanberg, MD - Semiconductors at Stifel Financial]

Yeah. No. That's that's great color. And then just one last one. I know you have still quite a bit of design wins in the five gs space.

[Tore Svanberg, MD - Semiconductors at Stifel Financial]

I know a lot of the focus here near term is still on data center in CED, but just curious if that communications revenue base is starting to move a little bit.

[Rajesh Vashist, Chairman & CEO at SiTime]

Yes, it is. And we expect more in the coming year. We expect deployments in the coming year. There are geographical deployments outside The United States that are looking pretty good. India comes to mind.

[Rajesh Vashist, Chairman & CEO at SiTime]

And I think we should be seeing that. I I know we there's a bright object here in the AI data center space, but we do call it communications enterprise because there's plenty happening in enterprise as well, not just in communications and classic, yeah, end customers.

[Tore Svanberg, MD - Semiconductors at Stifel Financial]

Sounds good, thank you.

[Rajesh Vashist, Chairman & CEO at SiTime]

Yep, thanks.

[Operator]

Thank you. I'm showing no further questions at this time. I would now like to turn it back to management for closing remarks.

[Rajesh Vashist, Chairman & CEO at SiTime]

Well, thank you all for this. All I'd like to say is that these are wonderful times, and we're very happy to be rolling out our products and delivering the solutions to our customers. So thank you for joining us along in this journey.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Participants

Executives

• Rajesh Vashist, Chairman & CEO
• Beth Howe, EVP - Finance & CFO

Analysts

• Brett Perry, Vice President at Shelton Group
• Christopher Caso, MD - Semiconductors at Wolfe Research
• Tore Svanberg, MD - Semiconductors at Stifel Financial
• Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC
• Quinn Bolton, Senior Analyst at Needham & Company
• Thomas O'Malley, Director - Equity Research at Barclays