SiTime Q3 Earnings Call Highlights

Key Points

• Revenue surged 257% year over year to $298.7 million, including $86.3 million from the Renesas Timing Product Division acquired in July. Excluding the acquisition, revenue grew 154%.
• SiTime forecast fourth-quarter revenue of $331 million to $341 million and approximately $4.76 in non-GAAP earnings per share at the midpoint; Q3 non-GAAP gross margin expanded to 70.7%.
• Management cited strong demand and growing data-center and AI infrastructure opportunities, but said wafer supply constraints—particularly for TPD—could continue through 2027. The company also announced a 3-for-1 stock split.

SiTime NASDAQ: SITM reported third-quarter revenue of $298.7 million, up 257% from a year earlier, as growth in its core timing business and the first full quarter of contributions from an acquired Renesas division pushed its annualized revenue run rate above $1 billion.

The company forecast fourth-quarter revenue of $331 million to $341 million, with both its core business and the acquired Timing Product Division, or TPD, expected to grow sequentially. SiTime also announced a 3-for-1 stock split.

Chief Executive Officer Rajesh Vashist said demand remained strong, with the book-to-bill ratio increasing from the second quarter and distributor inventory below the company’s target. He said SiTime’s sales opportunity funnel had quadrupled since 2025 to $10 billion, while visibility into 2027 and 2028 had improved.

Acquisition Adds Revenue and Expands Customer Access

SiTime completed its acquisition of Renesas’ TPD on July 1. The business contributed $86.3 million in third-quarter revenue, up 67% from the same period in 2025, when it was part of Renesas.

Excluding TPD, SiTime’s revenue rose 154% year over year to $212.4 million. Its communications, enterprise and data center business generated $127.3 million, up 202%. Automotive, industrial, aerospace and defense revenue rose 76% to $35.5 million, while mobile, IoT and consumer revenue increased 133% to $49.5 million.

Chief Financial Officer Beth Howe said a large consumer customer contributed $42.7 million in the quarter. Vashist attributed growth in that business partly to the customer expanding its modem product across more platforms.

Howe said more than 80% of TPD’s business was in communications, enterprise and data center markets, with roughly 15% to 20% in industrial and automotive. Vashist said the combined company was already seeing opportunities to sell SiTime products to TPD customers and TPD clocking products to SiTime customers.

Vashist said SiTime’s 2027 revenue forecasts for its largest accounts had increased by two to five times. In response to an analyst’s question, Howe said the increase reflected the complementary customer bases of the two businesses, while Vashist pointed to growth in design wins.

Margins Expand as Product Mix Shifts

SiTime reported a non-GAAP gross margin of 70.7%, up 11.9 percentage points from a year earlier. Howe attributed the improvement primarily to a greater contribution from higher-value core products and the addition of TPD, rather than price increases. Higher revenue also improved manufacturing absorption, she said.

Non-GAAP operating income was $129.5 million, or 43% of revenue, compared with an operating margin of 18% a year earlier. Non-GAAP net income rose more than fivefold to $130.3 million, and earnings per share were $4.01.

The company used $6.6 million in operating cash during the quarter as inventory increased and the timing of TPD collections affected working capital. Howe said those collections arrived in early October and that cash flow should improve in the fourth quarter. SiTime ended September with $324 million in cash and short-term investments.

AI Infrastructure Opportunities and Supply Constraints

Vashist said changes in data center architecture are creating demand for more precise timing products, particularly as optical connections move closer to computing components. He said SiTime has design wins in several optical technologies, including near-package and co-packaged optics.

The CEO also said the company’s semiconductor sales funnel had grown eightfold to more than $4 billion. He cautioned that only a relatively small portion of that opportunity would materialize in 2027, with most beginning to ramp in 2028 and 2029.

Supply constraints, particularly for wafers used by TPD, are expected to continue through 2027, Vashist said. He added that the company expects to resolve the more severe shortages as it moves into the first and second quarters of 2027.

Fourth-Quarter Outlook and Stock Split

For the fourth quarter, SiTime expects non-GAAP gross margin of approximately 70%, plus or minus one percentage point, and operating expenses roughly flat with the third quarter. At the midpoint of its revenue forecast, it expects non-GAAP earnings of approximately $4.76 per share.

Howe said operating expenses would generally rise sequentially through 2027 as SiTime builds infrastructure to support TPD and its own growth.

Under the announced stock split, shareholders of record at the close of business on Dec. 3, 2026, will receive two additional shares for each share held. Trading is scheduled to begin on a split-adjusted basis on Dec. 7.

About SiTime (NASDAQ:SITM)

SiTime Corporation NASDAQ: SITM develops and supplies precision timing solutions for electronic systems. Its products are designed to generate, distribute and maintain accurate timing signals, which help connected devices and infrastructure operate reliably and efficiently.

The company's portfolio includes silicon MEMS-based resonators and oscillators, clock generators, clock synchronizers, jitter attenuators and other timing components. These products are used in applications such as data centers, telecommunications and networking equipment, automotive systems, industrial machinery, aerospace and defense electronics, and consumer devices.

SiTime's technology is intended to address demanding requirements for frequency stability, signal integrity, power efficiency and resilience in challenging operating environments.

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