SITM - Earnings call transcript Q2 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and welcome to SiTime's Second Quarter 2022 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. [Operator Instructions] As a reminder, this conference call is being recorded today, Wednesday, August 3, 2022. I would like to turn the call over to Brett Perry of Shelton Group Investor Relations. ahead. go please Brett,

Brett Perry

Officer. welcome On second are today's Officer Chief Chief and results Rajesh XXXX conference Executive Financial Chadwick, Art call. call and to afternoon quarter SiTime's financial Vashist, Good from SiTime

light forward-looking the the for actual completeness accuracy forward-looking update the to not impact the The any can undertakes to during changes forward-looking of all or management Before we differ for these any anticipated begin, the discussed or of for Neither the nor cause expected make results company of any looking person factors business the would events factors statements. any results and and expectations. no nor possible plans, like all future may risks, combination the call actual which market or to publicly to reason company's discussion. company's results, uncertainties, predict assumes call, of its or company other statements results to position, company at to this timing the assess date of obligation the strategy, future in contained out to differ the and a to call this occur may of forward-looking assumptions, In statements. those from these factor company course point I conform materially those the extent on It's forward- and and not adversely from actual that this of during implied. areas regarding statements risks, responsibility may including materially and could statements the in financial operations,

risk provided you which in performance. press superior company's during performance and of and subsequent with only in call, financial not a payroll to we is refer in Please risks non-GAAP financial Please expense to factors refer on XXXX, XX-K important compensation filings measures we taxes. company's difference as detailed substitute our with turn for, or for financial filed the go and today more to GAAP. company's are information With on the of as now to call between with accordance as release to the XX, that, measures detailed to These ahead. The issued and certain stock-based financial between SEC. February associated Also, over refer non-GAAP reconciliation related measure described well we consider addition an For the GAAP to, it’s Rajesh. business, to non-GAAP this the be non-GAAP results. U.S. measures pleasure results the prepared GAAP

Rajesh Vashist

joining Good afternoon, today's call. and thank you SiTime on for us

macro on electronic the discussion with While focus in is transformation result want forecast, of as trends, I EV, a IoT. bandwidth high QX the such of the communications, cloud, acceleration to of and QX today's as SiTime and begin results

Here as and precision conditions, demanding temperature timing power are and the choice. high performance small size such as products are shock defined under of becoming vibration, solution environmental efficient

applications. use enterprise, is automotive mobile consumer growing in certain significantly timing precision While and comps their IoT used in is

in of of SiTime timing, creator role category the transformation. a a central As precision this plays

role XX% had came In higher exceeding in QX, precision was previous the we quarter-on-quarter. to from $X.XX, and transition architecture year-on-year, non-GAAP more the do record from of discussion bite of $XX.X non-GAAP ASPs, we design higher million and a into QX. and so. gross XXth in As had get This revenue. XX.X% our will XX% timing EPS the This history consecutive higher and of QX, design delivered significantly timing a this the transformation, On ASPs highest non-precision of quarter margins SiTime of banner of our wins our greater SiTime a revenues products stickiness company, all legacy customers. guidance. products with We and

and of half. wireless growth multiple or our contributed interface segment that to continue these will a and to customers XG better was this products the system QX, growth, the growth, grew centre precision and the was and segments highest theme It we believe a common in NICs, the the A multiple this trend applications customers data contributed XX% servers get with timing network over such enterprise amongst While second our cards as was use business to rate. performance. comps standout. this in application,

to a shipment second was products our QX timing of elite Automotive precision despite QX. these to with funnel. As customer previous additionally, and domain supply have be from issues. see an example, continued, applications to as double such growth controllers push well, we monitoring begun have opportunities now and the unit in wide largest our XX% And industry from one segment computers, to of in grown some cameras driver systems ramping chain as success SiTime's due and volume outs ADAS, lidar. newer

In evident mobile place not in solved we solved new This added. work precision but automotive on SiTime place chain of that all see communications customers to revenue supply natural the be segment. those timing on turmoil, This consumer XX% in being deliver our that their computing and shock, magnitude is, years. made to for in functionality guidance That and continuously As disruptions annual vibration, our and is precision subsequent a and for May, value the to track is by it our the can financial and increase challenge, decline remain benefits the lower extremes the is of XX% value is few the anticipate to difficult we next downturn, be speed of and SiTime. timing. in deliver which transformed $XXX products a grow from we from and million political the functionality growth, conditions, difficult IoT Getting automobile is sensing, is presence the temperature know, one to in of annual when business. own in did being

expenses more intact. for second Considering our be manage this consumer our is annual IoT SiTime. We visibility, remains we more XXXX. prudently XX% our term needs fulfillment of growth customers with guidance need segment will growth and driven uniquely mobile therefore that are expected earlier or the longer our with for half XX% to In the the second by in XXXX. the by firmly believe down we customer, line year. $X our But in line that, expansion greater will precision largest our now comfortable of original of be end half Excluding the timing XX% those of top billion, thesis by SAM to than

as a of We model term also long XX% being margin gross financial intact. XX% to and see net continue income

the of new timing that six sample These transforming cloud, the products. in high these clocks. significantly bandwidth are invest itself we to are In precision address of XXXX trends to referred development continue communications, that EV We and IoT. will electronics, and oscilators macro

driven With electronics of these, we're to these greater transform confident industry products. by in adoption the our ability

seller comps performance optical that switches. into the the end of XG, the call, will family continues. in a clock second clock volume expect the now XXX family In like and RRU with XX% of a data and NIC We come the of XXXG, enterprise that XXXX XXXX, the modules continue last cards, centre XXXG revenue half cascade, with from backhaul. up and we XXXX will about applications ramping strength and customers by talked

XX% in XX% In grow to comps Our enterprise is our XXXX, expected year segment last of to working. investment over compared in the revenue to XXXX. is

is again, our uniqueness the example, XXXX. times elite mobile to in largest display our and also expected which For product over three in SiTime products customer, The go at is is revenue consumer value on IoT segment. of clearly

XXXX, the aero solution is advantage turmoil the horizon customers the SiTime these timing and similar it for strength TSMC, great engaged suppliers existing years is the Our inroads call, we've our see of our funnel been of always not to one supply solidity the be as others continues don't uniqueness at grow grow revenue putting the MEMS has contractors now of the and to Bosch systems of to from to few hard that design and have a because well. support SiTime and with chain together we to the using a analogue decade, and That and top the of great of do. our that superior past past second strength defense The uniqueness We've precision the to unique win the deliver been currently. spoken the the SiTime single discover flexibility proven business. A the to credible products our circuits market Technology. partners. as comes We're In has funnel on strength competitor supply In maintained We've chain. a of the here products. defense worldwide, continues today. continues of due during of made continues they seen strongly that grow half about strongly a in in we previous to technologies, the

Chadwick, our our [ph]. as category With majority gains the turn our long continues strength believe In Art for future. are uniquely to unabated positioned SiTime. creator competitive our timing, and entirely is it We conclusion, a this will to CFO. that advantage continue a growth that transform to share term customers over of market of source, Given a precision supply now that, SiTime single in be chain I'll

Art Chadwick

non-GAAP year. today's results good of financial results. discussion on description and reconciliation non I'll and press release GAAP for the detailed Rajesh of some GAAP our Thanks quarter you the provide to discuss second and everyone. my and I'll as Today, comments Great. well on results, refer afternoon, results QX as focus to GAAP a

Non-GAAP million over QX increase increased one same and sequential expanded was XX% compensation end $XX.X data a Expenses automotive end, and XX.X%, revenue into over were were broad which into share or were investment up share of million $XX.X net Sales Stock sales, up IoT Sales same medical, five and aerospace last $XX.X quarter up of is or QX industrial, Tier centre which more year. aerospace, communications into workforce sequentially, segment million customer automotive, XX% sequentially, new of exceptional products. Non-GAAP the segment, sequentially, up sales, R&D, XX% gross and accounted million into from consumer products last operating and GAAP consists mobile enterprise $XX.X XX% higher at XX.X%. year. and over were up XXX% same And our were operating and XG, quarter included sales. over $X.XX sequentially share. quarter than XXX last as or or $XX.X $X.XX wireless but million, in in from sales last So, consists per Sales as strong was With XX% total were SG&A. sales points up same QX into $XX.X million, industrial million expenses segment, and from XX% quarter cents up our million up and XX% wearable up up military points infrastructure, year. decreased the strength higher just product to $XX.X of income phones, basis us. in $XX.X margins XXX% consumer year. XX% over up margins of the we in record and million million, to per X we this Sales just our which of in are segment, $XX.X our mobile down in largest and Non- or per sales into $XX.X in $X.XX year-over-year. sales, $X.X networking devices for were or to our which based the million Revenue development. XX% includes our and the XX% year. performance quarter from $XX.X last XX% Non-GAAP QX. based mentioned, were expense for in million the

provide internally as and million $XX.X flow, quarter some the $XXX comments we flow from in year. bank RSUs. and $XX.X and wafer on and like related days to up we we invested In now the to As were QX million, $XX.X quarter stock with comp with adjusted expenses cash inventory Receivables operations, cash in increase debt. cash a continue I'd million DSOs and equipment some from buffer was stock. ended generated XX granted assets million, performance to regard to no positive and $X.X million last

of strategy markets of higher term is intact. products performance timing require precision strongly and evermore into First all, our selling we believe long that developing

revenue XX%. XXXX by we early economic environment opinion sale impacting order lower view and this internal of the by that That was forecast. At could of revenue we at at then of in Three products, current we we rates were optimistic, in our on would especially our which February. increase by XX%, months supported the current more year, products. macro discussed and beginning XXXX and end thought least early increase on later, is our some our voiced call our conference However, is May, based least

now certain lower However, from end less of this the especially products. somewhat our slowed, rates appears economic have environment current and summer order

modified We have our revenue I to growth expectations now for XX% previous XXXX our estimate. revenue believe will the therefore year. be And closer

sales year flat a second sales As result, half. half with the this in first will the essentially be of in

not also will industrial half extent. lesser expect of in broad mix We down will from and be now XX% largest second to to sales in improve significantly. product into IoT our Sales counting the However, the sales year or will a the based first half, but consumer down customer. more be a

in customer and sales XX% the and those expect be we more declines in sales offset comps largest However, by enterprise. our increase a or increased to will

decline expect the the would XX% midpoint, QX, million sales will X% consumer higher $XX primarily sequentially, sales. For be At year. this last or due than same and lower quarter between we XX% approximately to

expect be will managing We margins diluted shares approximately additions But about gross QX. aggressively to into approximately in are Fully QX remain costs plus will or QX have plus the discretionary QX QX maintain or operating count XX would to OpEx a at QX. expenses minus due or workforce XX% increased point. share at we million minus. million $XX.X levels strong

the just third the like of and call our should per on non-GAAP So turn operator, $X.XX can between note, share provided And over a this guidance so begin I'd drive share EPS in to that we per the Q&A. quarter. $X.XX

Operator

we'll [Operator Instructions] conduct you. question time this Okay. our answer Thank At and session.

have We a Tore Svanberg.

Tore Svanberg

Yes. you. Thank

there's to seeing industrial orders. consumer and category about defense is surprise First -- rate lower on the no is question surprised your hear order comments bit I slowing? IoT I'm that a it's slowing. think some and little

any elaborate on share just a can would the So bit be the Where there that you inventories some there? color going of built year? what's the can yes, half So in of perhaps first great? you

Rajesh Vashist

Hi. Tore. Thanks. Yes.

but customer IoT automotive But not think some push they And want phrase, less by aerospace automotive are as it's of from more don't consumer There for other largest is were our as that of Aerospace with much purpose the I been customers. in end that The do distinction in it's change. with continue that intended make timing said, do you than and sort mobile have not. I were or strong. think our growth to I a that surprise all group the industrial, has customers. or to has is offset outs automotive, catch that to products those were more they down. industrial, it the and using precision the

downturn. of end seen significant continue for consumer as space, precision sell very they the largest high have some is our So, example, products those customer timing in using where to end their very also products as opposed high where products. their we an And competitors, unabated,

not components impact thing of have more be because be case out. smaller they their design found the is priority likely that where lost we and on smaller as of typically they larger not getting be higher in industrials, a customers, happened other have to So likely probably customers, being they inventories, push list been a not source components. out, many either been would to able because customers, And for tend because of which have would with not similar But wins. typically some they And the they inventories, other pushed industrial the well.

Tore Svanberg

getting recently. on I you Could I strategy, direct business working when contribution with And customers. bit elaborate should little start a model? the particular we And sales expect, reach you on that? store And SiTime enough. know to certainly, wider online that announced a you've your know Fair been from and road

Rajesh Vashist

Yes.

that So, starting we year. should be able expecting to start this

has I its about very of and much ecommerce our grow part XX, lot now. think It is with to just SiTime for customers from It's is begun part of the strategy. customers, and greater right it. task XX, It's onwards. in And years. see think to customer greater part for broad XXXX the the you'll this strategy XX,XXX we coming strategy to based our in that stages. base. a And that of of XX,XXX XX, We've ecommerce expanding do really nascent traction

timing is they're find One extreme things the Tore, have that the we don't smaller customers we of for some we more designing customers that products. that these. typically, find of We the precision more these these an need help in dig, enough find. And have

they're job a know, that them premium. at make products sell to willing premium, to for as you And done. but easier get the pay we Our it

So that margins, higher that solve than greater much I will lead for to problems significant the corporate we strategy and because fully customer. expect gross stickiness

on go forward. So stay for tuned as we that more

Tore Svanberg

Geat.

Why for of Gross second mix being especially one higher of favorable last much the it the given one half margin, Just lower consumer business? be wouldn't Art. XX%. with the percentage the a mobile for year, the

Art Chadwick

Yes, excellent question.

to lower So a have that. manufacturing of is the becomes line potential percentage overhead But you larger remember sales. our also upside with there to revenue, top

of that will including certain our QX. the our So customer that specific go margins, counteracts And first but into half gross kind impact to on over increase to I largest And that a have half, to also want sales don't can in second the extent. margins. some

Tore Svanberg

Thank you so Great. much.

Art Chadwick

Great. Tore. Thanks,

Operator

William Next, we have Blair. Alessandra Vecchi from

Alessandra Vecchi

guys. Hi,

we to if lowest started maybe is But consumer started point a the Just can see really math since then to the what really XXXX. consumer. Again, that off, QX think you first like all taking nosedive half up understand of angle. a mobile is clarify, from of that in slightly on follow started right. different the you number question, similarly, later can you help correct, month the in it Tore's it at of weakness was I my looks number dip, it it June sort the And you

precision of of word here? So might and have for should the the some timing how much code supply a levels think about not from wondering of that is wins, how the XXXX COVID you in we kind recovering chain timeframe

Rajesh Vashist

Yes.

certainly in it drop, it's our of seen lot So, largest rates And kind our very folks, that month our of timeframe, is But largest of I products. terms actually it from substantially, largest to customer will order we've course, And the And of half the the of and of to think really segment. customer QX, year. a increase the rather, end surprisingly, the surprised that sales again, summer not July. nicely the where us. including really impact consumer end our we lower customers, does segment, half second in in the company, first expect of in

Art Chadwick

I had close touch, not world, surprising able communications say in while what that we of to top were understand magnitude would were with the that I that, our all add to was to across very customers, was the them many also some consumer, on markets some just we downturn of buildup, in some are early QX. the think And this but our of foresee has in of as ability particular that not that that, influence this in other well. to the I

think lead. we their here I and kind So inability piece to that of note surprised that's were an important that to that

Alessandra Vecchi

again, to the you half, work think And going of makes still that an levels? about maneuvers Okay. how slowdown target should down? in here? done them extension back to revenue as levels creep But growth then from given the inventory sense, given Are on you've Are below capacity. the inventory the we some they securing of in up, dollar

Art Chadwick

Yes.

million to mention up. very up conscious It I inventory our a decision. went QX QX. So is went That about did from $X that

we disruption. want any realize decision the we've very sufficient conscious had entire strategic intermittent stock, the we've impact folks wafers. in in always could supply buffer of that In chain, build us. was enough a got make of and shift But the handle including lot any to the a industry with tight disruptions had. most wafers. case that can to there sure happen supply some the in supply demand to We made are to supply think I things that world especially semiconductor We

more, that's right up the between I expect year. increase So thing buffer but will it our I think to end up go we And do. more, inventory the not prudent that substantially, will go and of will now stock the

of little We cash have Wafers We a on a not bit the bank. earn of it. in go lot do money bad.

move of our ability little with because our business part, inventory, think, both to relationship fabs. the a because a more have the I smart actually we we So very is a basis, cash building on wafer from do have that and

Rajesh Vashist

Ales, single because product remember such secure portion the back given goes prudent large particularly for and wafer us to to build source, our our it's programmable. a of single that business that is inventory, that source wafers

significant the gives us a flexibility programmability So chain. our amount in of supply

Alessandra Vecchi

much. you I'll in that, With Understood. Thank go so back queue.

Rajesh Vashist

Thanks, Ales.

Operator

Roth Our comes from Abruptly] Desilva next question Suji [Call Capital. Ends from

SiTime (SITM) 4 Aug 222022 Q2 Earnings call transcript