SITM - Earnings call transcript Q4 2024

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Operator

Good afternoon, and welcome to SiTime's Fourth Quarter 2024 Financial Results Conference Call. [Operator Instructions]

As a reminder, this conference call is being recorded, February 5, 2025.

I would now like to turn the call over to Brett Perry of Shelton Group Investor Relations. Brett, please go ahead.

Brett Perry

Lisa. you, Thank welcome Conference and Fourth XXXX Quarter Good to Results Call. Financial afternoon, SiTime's

on SiTime Officer. Joining Chief call today's us from and Howe, Executive are Beth Chief Financial Officer; Vashist, Rajesh

out of Before risks I'd market to nor results of of all the operations, factor company's this the company its contained for position, impact future predict the cause may we to management company combination the can the strategy all those from discussion. and business possible expected in assess to actual the or forward-looking materially regarding may including factors or like point timing which call, statements begin, any on differ make It's factors results, forward-looking course not the that to extent and any statements. of areas during other financial future plans,

risks, those the to call conference could In The to of and expectations. for and after from statements. adversely may light implied. person the nor assumes occur, responsibility any events this differ and not uncertainties of actual undertakes results this no Neither the anticipated date discussed publicly and during accuracy company actual results reason changes these forward-looking update to in forward-looking the of assumptions, any the to obligation or statements statements materially completeness conform or for the company call forward-looking company's

risk to the the XXXX, information with detailed described XX, company's Exchange the you more on the For factors and Commission. filings refer XX-K the risks Securities subsequent with as on we in associated well as February filed business,

other the GAAP performance. are an which of The financial refer non-GAAP financial These important certain transaction non-GAAP earlier includes of consideration to with we'll measures in a acquisition acquisition-related with addition detailed contingent for intangibles in and non-GAAP between to cash as expenses, prepared for and measure results. business and to which GAAP changes Please expense, provided superior issued call, non-GAAP well as to value in and compensation and measures, accordance the liabilities. amortization of fair acquired measures release not as are a today nor considered refer costs press During earn-out performance certain GAAP. stock-based financial to include associated U.S. be estimated reconciliation company company's the substitute reconciliation of to the

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

Rajesh Vashist

as the or market. that dynamic data Earnings is transform is delivers Brett. Quarter electronics, SiTime's Thanks, afternoon. welcome precision we existing category billion I'd modern of Fourth SiTime Good you well new precision to and infrastructure, semiconductor Call. SiTime's technology timing, vehicles, better call whether to like a timing in in semiconductor timing leader reimagine XXXX it's SiTime's heartbeat to which as investors personal the automated time performance mobility and IoT, networking use AI, reliability. centers, products timing precision $XX the

QX with XX% for profitability. Revenue grew strong XXXX year-over-year

growth, all XXXX, XX% For we which above delivered well our target. is of

regions delivered results with Each across for CED, and we with XXXX, giving year. center, bookings what percentage We our diversity double-digit a segments customer Our strong SiTime demonstrate us bright for and strong quarter customer the data geographies. quarter fourth outlook significantly. growth of enterprise exited the comms segments growing of call the

Looking a of and back, XXXX was growth. FY recovery year

Every of in CED customer 'XX. that QX, while XXXX, we all and QX growth percentage XXXX, this year, previous the QX in started positive. triple-digit customer growth. year-over-year sequentially double-digit segment is forecasted in a big our delivered segments strength growing We As in delivered QX believe of

times. growth customer at different different structured growth Our rates deliver business segments model profitable different is to serving while with

with gross ASPs new growth revenue will for fulfilling a XXXX, XX we $X and platforms timing high-value XX be selling differentiation, for average These ranging Since products. of our plays strategy have in or role products innovation critical price margin high $XXX. introduced Product next key to QX years. the in that from producing over deliver several

As processing, and reliability, electronic in is benefits. features, leader these the will devices connectivity, delivering they SiTime need intelligent faster incorporate

center comms the demonstrates of Our portfolio. business enterprise data value our

expect to as in networking in to servers lead are AI generations newer We of CED growth and continue our out. equipment rolled XXXX

through regardless to of for to purpose reasoning true speeds. or GPU moving forecast of and demand active switches, timing such as we LLM as these architectural models. more content traditional cards recent models higher will cables, Turning for ADCs, are NIC Applications well Smart need or problems application. is dollar as bandwidth trends the precision latency continue news interconnect low-cost with the regardless and This And in to innovations that per utilization bandwidth AI, higher increase. solving are higher AI lower driving and general

For our optical road X.X in X.X compelling a have future significant map of example, and we oscillators market modules. terabit and share have XXXG modules generations terabit for

SiTime cards, reliability XXXX Super-TCXO, and to size NIC or solves by up GPU utilization NIC Xx delivering better problems synchronization, XXx Xx and introduced reliability. switches better recently smaller In and

in applications. demand about in where our communications our about seen It's the [indiscernible] product, We've XG base stations. not also timing CED breadth OCXO, in increasing data centers market. it's problems our But all solves of other

this expect XXXX. success to starting We in subsegment continue in

market, CED. higher new for new more need adoption is SiTime growth about the timing beyond content. cases technologies broader of dollar opportunities use the driving and the talk let's industrial precision Now In for with

get of products construction agriculture. share being precision in For equipment example, majority uses $XX well as is resilience. because that mining the to our million as market and adopted SiTime, greater for is timing a expect and This autonomous technology we

in precise majority for higher timing handheld million assured or precision products is need driving because PNT our and positioning and more to systems. navigation expect, the lower of military robust again, drones, get performance, a of smaller is we power. and and SiTime, a $XX radios share adoption and our for This size Similarly, market

breadth that have the for. worked The continue XXXX. of and confident we the future. now I'm summarize, and in diversity our customers our delivering expect and To applications in of we growth to success products, our is growth

results our financial more CFO, And over now call Beth, Beth? discuss in I'll the to turn detail. to our

Beth Howe

Rajesh, and our outlook XXXX our discuss Thanks, full results, the quarter provide of fourth afternoon, and everyone. year first and XXXX. Today, for then quarter I'll I'll good

on financial reminder, my I'll to are in results, which release. a our focus non-GAAP discussion press reconciled As GAAP financials our

scalability with greater pleased continue are to even growth our as expansion, delivered our business. of revenue We we reflecting model. the We performance remarkable with and financial strong results profit the execute

was Importantly, by our broad-based customer across strength this segments. performance driven

this while Our our demonstrates financial business results. invest our strong in quarter delivering performance to ability successfully

XX% were XX.X% and year, year. operating Non-GAAP margins delivered from For of the expenses revenue gross prior we million, full the $XXX.X million. non-GAAP were $XXX.X up

the flow non-GAAP fiscal $XX.X million. net For operations of share year, and cash income non-GAAP million, we $XX.X of $X.XX from per generated of earnings

million. Looking XX% the XX% of $XX.X sequentially increasing the to revenue year-on-year QX at quarter. was December a details with and year finish strong the to

market Revenue million by into our year-on-year. $XX.X sales, or the increasing XX% customer largest was XX% year-on-year. sales, year-on-year. or automotive, and sales million XX% of And into million totaling end industrial XX% communications to XX% and mobile were $XX.X IoT aerospace data the and of $XX.X customer $XX.X of segment with up sales, were of XX% enterprise up market sales center XXX% market sales sales. consumer or Sales into of million or

expected basis sequentially to due up XX and Non-GAAP than gross bit mix. better margins points a favorable product XX.X%, were

$XX.X quarter R&D $XX.X expenses for million Total the non-GAAP expense operating SG&A and with were million. expense $XX.X million, of of

spend the market. expected, was in As investments in to R&D are bringing products to new increase due that we

net of $X.X an non-GAAP improvement with share operating million, $X.X was in was income was or income compared other million quarter million share $X.X non-GAAP income $X.XX $X.XX quarter Fourth per $XX.X Fourth and Interest sequentially. QX. per million.

$XX.X XX up to with $XX.X revenue the X days Accounts receivable quarter Turning in million was QX. Inventory end of $XX.X balance of to linearity. days, due from DSOs the compared sheet. million the at were million QX with

in generated end flow cash had million we the in operations, the At quarter, in capital fourth equivalents of the million $XX from and During invested quarter, million paid $X cash, purchases cash investments. $XXX short-term Aura Semiconductor. million and we to $XX.X

for our quarter. the to provide like I'd Now March outlook

year-over-year expect typical QX of of approximately $XX margins in increase seasonality gross an We million the and of revenue XX%. at $XX to XX% with million, midpoint

to interest expenses higher taxes, year absorb as payroll we we beginning the million. the be income sequentially flat of expect roughly operating expect $X.X We even $X and of roughly to million

non-GAAP expect in to EPS of the $X.XX per be As QX to we a range $X.XX result, share.

strong growth In positioned and closing, with we pleased results believe we are well our in are we XXXX. for

and that large all, address expand product markets, our growing customers recognizing executing continues and our All in strategy portfolio value is differentiated are and proposition. strategy, working. our we clearly our Our are with products to

for the that, call With answers. like questions and back operator I'd hand the to to

Operator

Tore of question Svanberg Stifel. first will today Our from Instructions] coming be line the of [Operator

Tore Svanberg

Yes. the Congratulations results. strong on

XXXX. So Rajesh, going bookings you strong momentum talked into about

could bookings are relative come of If little think you those just you would us coming? then from where as 'XX, a segments, look we growth at in X And the the a give your strength where segments? sense about X for bit

Rajesh Vashist

Right, thanks.

yes. Sorry,

in of no market. market, also come CED most the the growth of that the portion and the enterprise 'XX will it's So communications, surprise portion from the datacenter of

automotive and think for growth first these I in that X extent the mentioned. to see consumer aerospace, we'll but mobile growth segments see and the IoT, same in not that industrial, perhaps one we see I we'll for military

expect for to while. still So we one be that on a

Tore Svanberg

sort of the into can I if And zoom CEB segment. Great.

biggest X different applications for cards wondering AI-based see I'm switches in if whether at NIC where XXXX? do server. or into You've just sort you of it's calendar an talked those selling we AECs, again, 'XX about applications And look the within strength or

Rajesh Vashist

optical also the more cards we units other we in pricing these and into NIC before. of sell into Yes. the the in is smaller as more products the general, are The GPUs said high. as more for Also in the quantity, GPU In probably but some higher, volumes units units is have AECs, ones. not modules and

it better, expect one grow. to think I we but just segments all which these depends does of on So

Operator

Company. And our question Needham coming from the next of will Bolton & of line Quinn be

Quinn Bolton

a as picture, to growth solid guess longer-term 'XX-'XX, pretty kind still both obviously, talked XX% maybe just this feeling and Let about very me of next? and in my of offer rate, well. are in hit XX% that I you Rajesh you've 'XX. foundation Beth, ability big congratulations But to about your year target good

Rajesh Vashist

good target Yes, I that's think Quinn. us, for a

of our from market the growth that we latest -- we level broad coming that's these kind markets the products. think the activity that in of breadth address of see and I with

a So yes, for probably that target good I as we're now. right agree that would

Quinn Bolton

Beth, of said, know probably just and puts the Perfect. walk I if I of then, us little could you margin, you Wondering term revenue lower some for had think is you takes. those step issue. lower I guess, than modeled. I absorbing in absorption additional And million or on a probably may down the depreciation an of But in you sort wonder if guys fully bit before some the to CapEx XX%, gross that have near at I sort through products the the least also means $XX there's revenue, ramped. spent, guys quarter. be costs new

much just up how mature of much yields the down? it products at ramp yet of chain? so fully is ramped in supply aren't And or it perhaps is stepping on revenue the that How new of sort

Beth Howe

Sure, the Quinn. Thanks for question.

you on hit the think I head. the nail

depreciation we've part ramping the have manufacturing when the products. new And additional and do we're got then the that. most we So of absorption seasonality revenue is significant as

in we so here. step a have down margin expected, kind as the And of gross

in the path working terms and to improving mature these on products. As we've yield cost that we as we're on improvements, of downs, bringing the the we've products market, other these times been test things about, through new talked

margins the this revenue do lower and we typical with ramps expect gross time, driving combined seasonality over these in of gross to margin the is improve. combination So the QX quarter. But

Quinn Bolton

could take follow-up. I quick a If just

you're to 'XX thinking back get be you be might bit of back XX% maybe or in out gross absorption calendar talked can the to now You've we half issue XX% a little about March. to Do lower sometime of should because to Obviously, pushed get 'XX? margin. think hoping you XX% the starting in

Rajesh Vashist

and want we something can address. as that we targeting still We're

Operator

will question ROTH Desilva line of coming The Capital. Suji be from next of the

Sujeeva De Silva

Beth, here. on Rajesh congrats and the progress

some quick Or on customers why of Are are you a improving be on helpful. acknowledging moved long bookings about color improvement? have Any newer at Just lead seeing Is lead Tore's that products? times the all? follow-up would Or the times? a just preference or are question your the bookings. customer

Rajesh Vashist

Yes.

back the good I a think just bookings from We demand are on strong see coming just all of sectors. demand. pretty

aerospace, markets, Our whether look were. automotive are lead solid industrial, or times end saying a talked see some pretty -- see consumer We not it they lot the and where it's solid. just that coming of I'm of military, the just is saying CED, when at I'm over-the-top of looks just through. we IoT about demand. course, an kind it's mobile we've we the demand it

Sujeeva De Silva

Okay. timing there? and That's give traction where where maybe helpful. product, are there is road And the then us separately, an can you products you update acquisition, some put as synergies on in map kind the of of together your on the the and

Rajesh Vashist

Yes.

taken for and market, of market. some mostly playing the had product higher completely some CED aerospace and end our we that of So the market for mostly out. portions is industrial the of military, portions And that the

integrity that that we has they which Aura course, with us. a dealing of are the job. I've times, us with been to pleased and the delivering done, have the were deliver. said really with fantastic have several support in level And products So this given of they they supposed

So that's absolutely positive.

those clocking customers buffers, X with these ] part the earlier. chitter [ worked the second I of X the the to as combined have mentioned been equals go those [ But products combined, oscillator we have is ] according clock a some generators, higher-end products X to plus products, plan, attenuators, that that

So plan. exactly coming to according it's

these But be the years, the $XXX mentioned, products in of kinds few from could take approaching longer still clocking that in. time thinking design a we As to million. next revenue we're

Operator

of of next And be the from will Research. Chris question the coming line Caso Wolfe

Christopher Caso

expect need and and you're some targeting? where your year, I what leverage deliver expense Where you with guess level get growth? first this of is relative year to to we regard on is question that getting -- growth that the deliver some as to And on next expecting OpEx. should be OpEx hopefully to that the the on on to you're growth you

Beth Howe

Again, that operating revenue at were expect million I at we've look we we expenses, much saying, as can faster in think QX. grow I we OpEx. If $XX.X been than

takes. for I think with QX we'll and puts be roughly some in that same range

absorb example, the we For that in got of beginning have taxes QX, to higher payroll at the the we've year.

sequentially. we go-to-market in in I revenue. to there continue revenue. again, than So look offsets half make grow some to about And there'll as fast think R&D, going the investments growing not to in we're you be as more as continue certainly, it But we strategic think probably can as forward,

Christopher Caso

the compared you to to -- Can as kind SiTime's China gravity becoming Western that's I If to And on. the another of moving opportunity business. you to ask bit a going center with there's customers there's speak share shift trend? position ability could China. of similar That is more in we of similar, a see those your the penetrate question is auto Do regard trend helpful. clear Certainly, auto the auto if continue where to share is is auto? to similar, this some

Rajesh Vashist

SiTime innovative So it's products. of customers most in helpful always to their think us using

our customers' heuristic. products in used therefore, and innovative get the timing innovative of more more kind that's So SiTime's products, than they other are products.

it innovative of out comes been cars -- automotive companies around companies, while have mind few and the from American auto that I vehicles China. there Whether automotive, the of of automation, others, coming case the that of course, changing some Tesla think there more they're are the -- world a that's innovative electric from coming China. of or In to turns is,

out coming So bigger will necessarily, use of case a be there China.

penetration. that we Having matter, United adopting that to of States and more more and same European Japanese said get start and the companies some companies that, as expect it for companies, of technologies,

our in China. about So coming business to say is XX% at this our about, from business, automotive of I'd point, XX%

Operator

a the Svanberg Tore question of have follow-up of line coming Stifel. we And from do

Tore Svanberg

customer. on is one your largest The first

going As in there your you new in be of XXXX, existing expecting we going is on growth it's that whether any something you're look is read be whether on products on from unusual, a customer them sort potentially Just there could with what devices? or that any better largest at might content other 'XX. in new

Rajesh Vashist

Yes.

you press press you As releases like, haven't any I releases. any just out we guess, seen haven't there seen know,

from the So on does. information as the our in products world we way new them same get

just wait So with of that. happens see let's and what all

Tore Svanberg

was And other fair, follow-up then That's Aura. on Rajesh. my

million noticed you payout you talked money this So $XXX them you some business pay had a this that about well, But did I -- target. quarter.

starting should are that just we generate average. that for already revenue? assume that So the I'm than wondering, now assume to corporate clocks higher $XXX would And those million I margin profile the be

Beth Howe

Thanks, Tore.

the products. to are from we revenue starting So Aura yes, see some

about, some we through see in to continue to assets are maybe XXXX, the to and so that 'XX some build have that beyond. to and a get wins talked been As and come starting expect design we've little the -- have got in revenue faster having

So of products margins yes, accretive for are terms in And to generally the and that's good the corporate our gross clocks. news average. the those trajectory

as business, revenue we well as that as good it's so And margin. continue to build both good

Operator

more there go call to I closing questions And in are would like turn to remarks. Please over for ahead. the back no management queue. the

Rajesh Vashist

thank we goodbye settling the to you wonderful much. XXXX. company. We was a very year to Well, look quarters. see and you very and XXXX the hope growth earnings good down in It's said -- all to across forward It a

again. you thank So

Operator

all you call. participating today's for conference in Thank

You disconnect. may now

SiTime (SITM) 5 Feb 252024 Q4 Earnings call transcript