SITM - Earnings call 4 2023 | SiTime Corporation

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Operator

Good afternoon, and welcome to SiTime's Fourth Quarter 2023 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, Tuesday, February 13, 2024.I would now like to turn the call over to Brett Perry of Shelton Group, Investor Relations. Brett, please go ahead.

Brett Perry

Thank you, [ Norma ]. Good afternoon, and welcome to SiTime's Fourth Quarter 2023 Financial Results Conference Call.

out call and SiTime Officer.Before discussion. and company Beth I'd plans, to the the Chief Rajesh we operations, may on course future financial like Officer; the areas position, regarding other Executive Howe, point results, make us forward-looking today call, market expected are from of Vashist, begin, of statements Joining this during future the including that timing Chief and Financial strategy and management business to factors assumptions, company forward-looking during from any not company's all extent and call those discussed those not occur, the risks of the the may in It's combination this implied. may possible which can predict or materially from assess results and statements.In adversely contained materially to results all uncertainties nor for could light of anticipated differ actual to forward-looking actual or factor factors events or differ risks, impact cause the on any of its these the Neither nor forward-looking and accuracy statements. responsibility completeness assumes the for any of company the person certain performance. the to factors of the described refer measure filings more changes subsequent company's with forward-looking to as the financial XX, to no to we statements update February date call, be the or are well we to considered risk actual the publicly of any you information detailed conform during important associated for risks with as company undertakes in the on measures, the results after The this reason expectations.For obligation call XX-K company's company's on refer XXXX, statements an SEC.Also the which to the to filed business, non-GAAP measures substitute superior in prepared are and addition measures with not U.S. to as financial for, a financial to accordance in non-GAAP performance provided nor of These GAAP. issued SiTime's it's call a results.With Please to today refer reconciliation my and GAAP financial now CEO. the the over press detailed to that, non-GAAP between for pleasure release company's to turn go ahead. please Rajesh,

Rajesh Vashist

you welcome investors I'd XXXX like SiTime's Good QX call. Brett. as to earnings to existing well Thanks, afternoon. as

and SiTime, of new called we serve you is those with dynamic data million. precision XXXX transform leader system. Non-GAAP [ as early to was precision of XG the $XX the center, of AI.We in EPS the familiar ubiquitous driving, ] our electronics, a $X.XX for Non-GAAP per and as are category versus applications needs were functioning with margins outlook. line market. gross timing QX. XX.X%. are For timing. like created share was growth was In in timing Revenue $XX.X SiTime timing in QX in that quarter a we billion are reliable the ensures $X.XX the automated not semiconductor

across QX forecasted, demand see halves. saw to although end variations we reduction an in channel customers.Looking overall a of of back, XXXX in of and and As truly was continue inventory we weeks we a demand, in tale uptick segments differing

continue become served and such of our year, data inventories half single strength selling year the to positioned first are sequential overordering and and the some inventories half second based has better of to changes, greater, as accelerate improvement SiTime's revenue clearly than the we all through average we year SAM to these on a saw design wins improved, strong.Most ever price, as and and declining of weak importantly center growth. In though, be the of and or business saw in ASP, buildup our of customers, finished the consumed sourcing consumer demand market, we The demand. only leading channel markets a because or at

timing solve problems. We our customers' our through continue differentiated new that expand SAM to toughest products

acquisition AI. out wins in achieving milestone design in and our are our Since The clocking and funnel, last though, sampled to single At December the strong validates goals as these early of building and sourced.We way timing promising, then, solutions. infrastructure were few with upgrades, a complete our AI Aura XXXX, finished to time in The revenue oscillator large design business we time.Now growing upon SAM remains our our on which continue remain to we've the we the $X rounded XXXX massive clocking key the maintaining while thoughts business grown a a products. strategy expands a responses to This data vision SiTime's further.In was grow, to uptime. acquisition SAM strong, our of ASPs and Our like continue momentum quarter, timing precision data take Semiconductors, business. required IPO majority at well grow deliver successfully products to of precision process into in on high depend our of initial and offer to and to Aura is amount large role processing for speeds since IPO. expected, billion, the I'd provide clocking move our transaction will the SiTime's our customer oscillator story network requires and timing

service the and and engagement together.We're also to top products be the have new with top X for Elite that exist. oscillator AI companies currently of We and with the providers, new using time top X clock X, CSPs, deliver strong of to our our like AI Elite with oscillators, the create or cloud AI. accuracy Epoch, of server in actively RF conjunction supplier These will variants best used don't products clock clocks engaged

XXX up XX% date, XXX AOC in data are timing communications segments to the XXXX. gigabits most AEC was from center into precision module the top into shipping we shipped of and also Our AI servers are the gigabits.Sales QX QX to and optical products and including XX and for providers,

product product, XXXX. transformative this the a we're in In defense markets conclusion, and this we stage.For opportunities segment customers. comms, segment aero, in systems seeing enterprise, excellent will guidance XX% to radio, ] significant from we datalink, This current our is new operations applications where expect QX we data XXXX, driven materialize center grow in the Endura, value for by additional superior early by still and business QX pleased our QX, customers. believe ASPs navigation and to with military automotive, are environments.Our the We defense bring its and industrial, to [ AI sales OCXO, design stronger grew Epoch interaction in in in as markets delivers introduced at aerospace,

in funnel The show continue of grow number Our to robust continues to over growth. design QX. wins QX

quartz from of as multi-sourced, grew For entire be are year, in evidenced expect XX%.And single of the indication of typically the was by another with wins which our the SiTime.For sequential the the we value that accelerating in to continue half quarter-to-quarter year. number differentiated growth contrast is to XX% lastly, growth QX of of the second revenue XXXX, oscillators source, by design we

to year our our of as back We XX% exceed also XXXX model growth annual growth. expect to this trends revenue

of our financial Our Beth joined to results November strategy are and CFO, us away. it to delighted business detail. in Howe, new Take year. turn fundamentals who discuss over the introduce strong.I'm in call I'll more last now our to Beth

Beth Howe

XXXX Thanks, then for fourth first full In release results pleasure Today, here on discussion stock-based press related quarter to non-GAAP for the my of the everyone. It's this well GAAP and and our a Rajesh. as the today's our my Good to as afternoon, of first year outlook and you was focus be past, SiTime's fiscal financial discuss refer call. compensation. to today quarter results non-GAAP reconciliation I'll provide earnings GAAP XXXX.I'll a reconciliation results results. to on

associated estimated cash of deal, transaction costs that of expenses of With and non-GAAP contingent closing acquisition of payments.Now well will other details to include amortization value results the the fair intangibles certain include the business consideration as as acquired with earn-out turning in Aura results. our and also and changes our the acquisition-related the

from 'XX XX.X%. revenue and We expenses year, non-GAAP down million, $XXX.X non-GAAP million. XX% $X.X full million of fiscal reduced of gross For $XXX the to operating we delivered margins

$X.X million, Mobile, fiscal Sales $XX.X were and million into cash XX% segment. year, segment $X.XX of X% up our sales, at For range. the share of $XX.X as earnings was customer by into the of of sequentially to or the market Consumer from $XX.X were non-GAAP revenue million of our of down higher income or flow from December QX, IoT our Drilling XX% we revenue. expected. and XX% and largest quarter, outlook Sales non-GAAP revenue million.Looking million, per at generated $X.X the end operations details of

million. Sales million, Excluding per of million. up Industrial, million sales were million The was QX $XX.X $X.X net improvement $X.XX in Fourth $X.X days $X.X from million was compared to sequentially sequentially. was to quarter XX $XX.X $X.X QX. with points loss Total quarter sales, R&D to due our an to XX.X%, $X.X operating Non-GAAP million with income revenue.Interest or up SG&A from and sales receivable XX% largest were $XX.X operating DSOs sequentially the were XX% quarter million or segment gross to days, Aerospace and segment million. Inventory share share XX% balance into customer, of at down were revenue sales end $XX.X $XX.X linearity. up $X.X compared our QX.Turning were for the in with higher million our other in XX this XX% QX.And segment investments. non-GAAP up to & expense the margins higher $XX.X into improved in quarter interest due XX% and in million, non-GAAP Enterprise XX was or increased of $X.XX basis to was QX our expense per was million expenses on earned of income the Accounts million Communications from of non-GAAP Automotive $XX.X fourth $X.X million sheet. due sales.

in paid March with invested which in and in at an paid $XXX investments.Let of the million million purchases During the time quarter cash million for to additional million our cash the short-term from paid was December. $XX outlook of we million $X.X $X.X capital $X and of fourth ended Semiconductor, equivalents operations, me Aura the now quarter, million month used review close in the cash, was $XX quarter. We and

channel enter we well toward as we typical continued expecting XXXX, As as progress QX normalization. are inventory seasonality

drive cost absorb a in are quarter. providing investments mind, following taking as for managing prudent acquisition are we to growth.With outlook the structure that approach We the the prioritize and first we our to long-term

to of expenses to $X.X be range of roughly year-on-year expect million interest $XX roughly $XX income margin to approximately to We revenue XX%, million. million, in be XX% operating gross and of flat the

share a of range to earnings we expect to we closing, be As current per environment. loss result, share.In navigating $X.XX the the in $X.XX are non-GAAP per a

large like strength that, to with to the addresses is We the our hand are operator intact.With have fully unique excited the position and in all, technology our we about design market wins and strategy for proposition growing back a answers. I'd growth questions call reinforce of value All our market that the and believe customers. and

Operator

Research. comes [Operator Instructions] question of Chris from Caso Wolf first line Our the with

Christopher Caso

the to perhaps others give are if your respect for with segment is businesses expectations seasonality some through question first guidance, you work by market does the about the what have working guess segment? I each in some basis? and that inventory. color How could you Obviously, a you're out some

Rajesh Vashist

Yes.

I year. are also we in is center wanted to see year see some market there [ the clearly. going a markets We mixed growth. growth. industrial some we see The some strong place general, in know growth consumer growing so in think bit ], something. showed. Also, see where prepared second We clearly, we're -- are I the the those see We add data We in I don't communications, we automotive that think little to remarks Beth so potential -- if positive, It's areas, growing the see think you finish in half my that clearly We see yes, automotive. much Chris. as don't of growth. some

Beth Howe

if inventory. combined expect look -- remarks, said I of as QX, typical channel Yes. terms No, with think that the drawdown we I in that prepared we seasonality in continued at pretty my think it's we

see As a we sequential growth market the to bit second as Rajesh the mentioned, Rajesh segments was first go half.As through the we year quarter-to-quarter mixed. are do stronger with than half being expect about, talking

and signs. cautious much seeing more are more others little positive Some a are

center strong to data be enterprise where well. And and hand evaluate continues so, Clearly, softer telecom to continue on other we are market-by-market. price, as I the think very data

I overall, and XXXX are So be think growing excited to in we the about optimistic year.

and strategy growth much I intact. business our think very and are model our

Christopher Caso

'XX? of inventories? give a the the the of million was are view into do could you X customer that follow-up, order to kind kind I excess on ago $XX think calendar to sense play for that with made As customers had some I of your progress inventory does you how assume with of perhaps $XX a think view your they you that. of million -- you off. burn that? quarter stand where [ Where And ] And us

Beth Howe

do inventory continue question. Thanks drawdown. for channel improvement in the the Chris. to see Sure, We

back Some rebalancing still have their we've as to customers progress be Others to about. made in gotten some have been levels normal talking normalizing more inventories. and

see kind of our I in said, to we've as we when As that, QX to through continues June of expect today, accounts. we that be and quarter back into inventory most we normalization channel think it expect normal probably the

Operator

next our line of from Tore with And Stifel. question Svanberg comes the

Tore Svanberg

of just us the type the here. this you're Congratulations about talk on than of designed you more or mean But you visibility about the with growth? data you platforms could share the on that you -- color with year. continuous have talked enterprise into. there? I share the hoping you center more for did progress growing visibility I major the of data and that any Rajesh, some the could was center, XX% us business some

Rajesh Vashist

Well, grow. a is strong place to us in think, general, for it I

I optical you as active well. the are number providers, As who active CPU those sell said cables, the know in who a are, we processor module significant guys GPUs, earlier, cables, of guys the the optical

there's a lot what in coming we are So I interest through. think of

past, As performance clocking under that into role to giving data environmental piece.I important I've are to in the of performance high have coming the the grow high-speed of continues very own. think -- tough synchronization, This conditions. doing we -- the said a be under their role products high

with we are an currently that opportunity And be years, our including for enormous to some I think in defining I have customers don't opportunity think As the described, a We space. products exist. going it's in that very we new large of 'XX. coming SiTime

So not that in time. far away

low I this have going to in AI we're AI -- of but all starts influence.The role of but AI move case, is start role I that very role many thing it's own has words, talking SiTime see the other other data significant centers, and enterprise. its in In think the before dedicated now, areas. is will a right And a AI enterprise in very to play about well think want, we other I to networks. to as see into

X areas great us. are those think I for

Tore Svanberg

is going with And as reference in my follow-up, few but how sort other partners more about a talked know you I now deal having that the about really the Aura relationship clocks closed, your of past, can with only getting into you and platforms? a as pulled talk bit as far it's realize reference content in I customers. months, little that improving is

Rajesh Vashist

integration me Absolutely. the But first team. of Aura let plug put the a in for

the to trees, out and and as there legacy just, you to has to the clocks, for of SiTime ability as unique anything thrilled products to significantly ], India the connect than start companies our become wholly them. family, those processor been parts which the family, SiTime Elite [ SiTime's in deliver is fold, this get pointed the that opportunity a show is part the modify see I to in significantly family, we the clocks products That new into are to We brought clock has it. their ability technologies.So the X architecture where, Epoch of out, upstream, they that which better nobody Also, the oscillators think up Tore itself, we you early and of as know, the of much think has is and continue other have I our and want from team more into said, go to else our significant said, as very RF integrated are, Elite as well as in products significantly world, success. what X the you with Bangalore, very them think from

year now you that very X with I think of in But we'll we're wins on amount position. significant gone. I information and design a have from a of to good has all share how think

Operator

Company. Bolton Needham with our [Operator And line from the of next Quinn & Instructions] question comes

Quinn Bolton

I see your I XXXX a in little bit about Rajesh, more could wanted if guess I parse detail. comments to

you quarter something the XX%. said said year growing you're but returning from going March with growth also for then of about grow sort You level, year of towards to every the the

what we So the provide think the more that fourth intended quarter that be you but year, Was script? of on you're a more half getting clarity to back we sure growth comment that perhaps second wasn't Or year? truly XX% thinking be year you third if if your rate, bit that's quarter could in comment not year-on-year you full should should wondering maybe with interpreting Just that you the little the -- grow XX% I full the the year-on-year? or a

Rajesh Vashist

sequential wanted generally trend, I been the to underline, year. for has So the last foremost, That except year-on-year. first and growth

wanted to that, to back underline I getting So that we're that.

helpful us very to that that's to for see. for see -- us very heartening So

the to is strong or by year it's ]. zip shape be get [ we to that But around, this to comment are we growth think now. The exactly for in that half get time, we we thing for I the whether where second -- on we of it's rolls whole right second clearly, time It's general sort year. think the XX% growth. for at expect code -- exactly early that we're the to not whether still in And good

Quinn Bolton

outlook weak in demand digestion AI, or think, bucket has inventory more and of in but comments, the $X.X I of is think some deployments which because your And continued XG? XG us December in your I said or Could you near the color as million a term, enterprise much $X.X a growth that of you AI much and million center sort how growth great how was and faster and Rajesh, center gave you telco quarter. sense of us -- rough related, it the certainly give comms exposure, then, on you is slower data report data together,

Rajesh Vashist

Yes.

growth NIC all Quinn, a going and acceleration inroads -- optical designs. that put X that finger It's cabling, ] but of Elite and guys cards, starting coming So and telco data wins on SiTime's you new Epoch not that your cards, -- their bulk The of are XXXX. it. centers, [ into is their design that RF to anywhere plug modules, make in products like new into put just from the Elite are to for

will not DUs, new the going digital slow So onwards. radio when with in new will deployment, may that, They anywhere. and going units, up they're player they down SiTime the remote on because RRUs, come a units, think I solid new keep deployment be in but 'XX

So we're bit, the that be have we [ we everybody we like of beauty of some think just is flagging part to if so to horses to on also. a -- business identified, ]. just the going horses many that can keep other riding one that SiTime we ride play starts It's it's till

Quinn Bolton

say bulk growth you Sorry, the of coming the last from When clarification. data centerâ€¦ is

Rajesh Vashist

That's right.

Quinn Bolton

the to [indiscernible] is data than in that growth that Is 'XX? total drive that implying is year-on-year the that of what's more half center XX% going business, so

Rajesh Vashist

Yes. I say that. would would say I that.

Operator

line next the Thomas from with Barclays. of comes O'Malley Our question

Unknown Analyst

that? But is Scott on on I guys Tom. comments half. Obviously, for made clearance into good you that inventory visibility order This half. the the is normal back about just visibility extent seeing to versus wanted what second acceleration have the into to extent to that into you ask your those

Beth Howe

the Thanks for question.

-- our the building it, we and orders for are multiple out we over So backlog now look clearly second as take we half into the even move so are at year. we do as quarters,

to back and inventories both in to terms think we the that the first so do I picture, also about, to drawn continue expect half, demand a versus improvement the as normalized get down we half get more both we half. second we talked but those in of continue see As

terms so in those are things what terms in contributing And of of second versus are our that half we first half. see our

Unknown Analyst

more, one And then just if can. I

us bit. mixed, Can out would of mentioned thought you you that the you just some So takes give auto be puts a there? and looking

Rajesh Vashist

Yes.

a companies U.S. little as taking are from headlines. think bit breather read the the we a I

a breather, Chinese the also growing. share are but automakers is think taking our I

the in I Tier growing. OEMs, X think in our shares the are U.S. and

a think have because our our business coming I of But So in quality, our reliability. of it's becomes think, little We automotive in mixed as general, years. better our supply said we outcome. million continues chain, a the before, strength product, a that for $XXX bit SiTime superior

Operator

our Fabricated O'Loughlin Knowledge. comes the Douglas question And of line next from with

Doug O'Laughlin

hear was million I did guide $XX to seasonality? correctly that QX million rate Rajesh, to wanted Just the $XX that. reaffirm

Beth Howe

$XX to million in Correct. $XX QX. million

Doug O'Laughlin

to you like That XX% of like continued even million I there? the the about seems think And ]. the like XX% drastic of seems see previous question to back $XX again to run now a was at way is revenue when quarter. quite it's It channel burn? kind sequentially, -- [ we're a take is My this multiple growth, amount year and once like not to right that inventory take some sustainability, Or get -- million at what's question $XX revenue, doing time because aspect had going at it's it years here $XX seems believe to should the at rate a it? doing time point the -- that one that rate quarter, on very revenue get just there some problem million, grow to about of you're going back going the you're Is to back -- inventory to like highs you the to exit just once level. get like back to run hard guys cycle business growth. some

Beth Howe

Doug, start some Rajesh -- can sure and has well. as I comments and maybe I'm then

that is get We continuing had story channel look But we no out appreciate we clear and normalization. that. business, I look half the the think bones first and the to [ at intact. clearly the question. So ] tough about XXXX and as back a forward, sit we our at look I inventory to today Again, as excess growth in

business Again, we as can on second of things that If growth the depend more this half, rate. about, environment little target reaccelerate toward we the better, we've part is. going expect to expect As that bit business able to then get we overall grow where into a better, the be economic to and the is demand talked have we our but about but customers. are opportunities and we grow candid of solutions of want that X see our other really the well about, in today.As to where also we and share to Rajesh be customers way well, talked for in those we're positioned wallet do kind not we only Tier auto, the as unique are seeing

some may have in design markets see of overall, even grow to we and So these share opportunities that in more be wins growth do mixed revenue our more them. to and

Rajesh Vashist

Yes. find pretty for that you will at big long pretty quite math, quickly. to back think run implied QX, some rate not doesn't us do the exactly take -- exiting numbers I the you get I'm it if that to sure

several would said of this years As kind being are unique be at be the we customer. relationship people to that indicating I before, technology the missed have growth is considering of we that XX%. a growth see maybe after and XX% number is most an thing year unique have that the one we astonishing That built that back may XX%, think strength of -- to And comes design rate. product guide we and it XX%, to happy and our wins with the

feeling actually good I'm pretty about it. So

Operator

a have I from Tore follow-up Svanberg And Stifel. with

Tore Svanberg

had I follow-ups. quick X

was for would down saying expect not okay. largest about QX. should it ex I that would you are obviously, think question down? segments First the be the your customer customer, for Or sequentially? consumer we QX, down of segment But all, Rajesh, said then that to to previous and -- back be be largest doing be the you so

Rajesh Vashist

recovered. is not is mean customer, doing they're consumer little as if and lower as What down of Yes. any expected that I consumer we there's business also even I but sense. of still And that think is the bit makes largest the other some maybe more. sort a is well, that fully have also then consumer No, okay, by

for year, business hand, grow. On the other I see to consumer the continuing

referenced are inventory the taking So QX. a why the thought past. we -- pretty year. that's bit only way half we is But said that about not And mixed. in We second by as QX, in it's bit should little good we that's longer shape. feel in it's the previously that's think of shape. earlier why we little Beth the than And a QX probably good we're the that we have of pretty from end generally that different, be in what And and we're the much in frankly, by good

Beth Howe

we're there's down seasonally Tore, not that But -- QX consumer. in is thinking typically

that's I point the conversation. terms So of the think in starting

Tore Svanberg

know, what not you last year, like And be preannounce map would year But as obviously, so whole to and the as had [ and so of to sort be my a very year? 'XX follow-up, think material and normal is the any there changes forth. you're compared your content? I to Or this going largest going to your ] customers' we on road as about

Rajesh Vashist

think I pretty be year. it's a normal going to

Operator

over hand like to I'm And you. remarks. time. to this for at showing closing Thank the further back no I'd questions conference management

Rajesh Vashist

taking Well, time questions to call as all the have And for listen to I our her you for Thank And to you so much all joining CFO. welcome answers. her and on thank SiTime's us. first Very thank here. delighted Beth you.

Beth Howe

Rajesh. Thanks,

Operator

conference for your concludes call. This participation. Thank today's you

now disconnect. wonderful a may have You day. Everyone,

SiTime (SITM) 13 Feb 242023 Q4 Earnings call transcript