SiTime Q2 Earnings Call Highlights

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SiTime (NASDAQ:SITM) reported second-quarter 2026 results marked by broad revenue growth, higher margins and increased profitability, while outlining a substantially larger third-quarter outlook following the July 1 closing of its acquisition of Renesas Electronics’ Timing Products Division.

Chief Executive Officer Rajesh Vashist said the company’s second quarter was “truly exceptional,” citing growth across each business unit and region. Revenue rose 127% year over year and 39% sequentially to $157.4 million. Management said customers are increasingly placing orders 12 to 18 months in advance, improving the company’s visibility into 2027.

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The company’s reported non-GAAP results included gross margin of 67.1%, up 8.9 percentage points from a year earlier and 2.6 points sequentially. Non-GAAP operating income was $53.5 million, representing 34% of revenue, compared with an operating margin of 10% a year earlier. Non-GAAP net income was $65.7 million, or $2.34 per diluted share.

Data Center Business Leads Growth

Communications, Enterprise and Data Center, or CED, remained SiTime’s largest business and primary growth driver. The segment generated $101.2 million in second-quarter revenue, up 181% year over year and 34% from the prior quarter. Vashist said demand was supported by precision-timing applications in AI infrastructure, including optical modules, switches, accelerators and other high-performance systems.

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SiTime expects its revenue from 1.6T optical modules to grow 100% in 2027, while 800G-related revenue also increases significantly. The company estimates the combined serviceable available market for 1.6T and 800G applications will reach $450 million in 2027. Vashist said SiTime has significant market share in both applications.

The company also cited increasing hyperscaler adoption of synchronization across data-center compute and networking nodes. According to Vashist, this trend has increased demand for SiTime’s Elite family of Super-TCXOs and can add several hundred dollars of timing content per data-center rack.

Automotive, Industrial and Defense revenue increased 51% year over year and 18% sequentially to $24.8 million. Mobile, IoT and Consumer revenue climbed 85% year over year and 89% sequentially to $31.4 million, including $22.8 million from a large consumer customer.

Vashist also highlighted opportunities in autonomous vehicles and defense applications. He said precision timing can improve positional accuracy in autonomous systems and support assured position, navigation and timing, or PNT, applications where GPS signals are jammed or spoofed.

Renesas Timing Acquisition Expands Portfolio

SiTime completed its acquisition of Renesas’ Timing Products Division, known as TPD, on July 1, earlier than its prior year-end target. The acquired clocking business serves about 10,000 customers, has approximately 70% gross margins, and derives nearly 70% of its revenue from CED markets, according to management.

The division includes the FemtoClock and VersaClock product families, as well as a buffer business that Vashist said generates more than $100 million in revenue. SiTime had previously projected that TPD would generate $300 million in revenue during the 12 months following the closing. Chief Financial Officer Beth Howe said the business is tracking ahead of that outlook, though she noted that integration remains in its early stages.

Howe said approximately 75% of TPD revenue is tied to CED, with the remainder serving automotive, aerospace and industrial markets. The acquired business does not have a consumer segment, she said. Going forward, SiTime plans to integrate TPD into its broader reporting structure rather than report it separately.

The company is operating under transition services agreements with Renesas as it moves customer relationships, supply-chain operations and infrastructure onto SiTime’s platform. Howe said SiTime remains reliant on Renesas for manufacturing, supply-chain and testing support for several quarters, while working to address supply constraints in the acquired business.

Financing, Cash Flow and Margin Outlook

During the quarter, SiTime issued $1.35 billion of zero-coupon convertible senior notes due 2031, its first convertible notes offering. The financing helped fund the cash portion of the TPD acquisition.

Cash flow from operations more than doubled from a year earlier to $40 million. Capital expenditures totaled $12.9 million, resulting in free cash flow of $27.1 million. Inventory increased to $103.9 million to support expected third-quarter demand, while days sales outstanding rose to 51 days from 44 days in the first quarter, primarily due to shipment timing.

Howe said second-quarter gross-margin gains were driven by higher-value product mix and improved manufacturing absorption. She expects gross margins to remain above 65% and generally in the 67% to 68% range in coming quarters, supported by manufacturing leverage, CED mix and the addition of TPD.

Third-Quarter Outlook Calls for Step-Up in Revenue

For the third quarter, SiTime forecast combined revenue of $285 million to $295 million. That outlook includes $200 million to $210 million from SiTime excluding TPD, representing 30% sequential growth at the midpoint, and approximately $85 million from TPD.

• Combined gross margin is expected to be approximately 68%, plus or minus one percentage point.
• Operating expenses are projected at $80 million to $85 million.
• Interest income is expected to be approximately $4 million.
• Non-GAAP diluted share count is expected to be about 32.8 million shares, including roughly 3.6 million shares issued in connection with the acquisition.
• Non-GAAP earnings per share are projected at $3.50 to $3.65.

Management expects CED to again post triple-digit year-over-year growth in the third quarter. Howe also said the consumer business is expected to accelerate in the second half as SiTime’s large consumer customer expands its next-generation product rollout.

Vashist said the company sees no signs of a slowdown in 2027 and continues to view roughly 30% annual growth, or somewhat higher, as a multiyear framework. He added that SiTime is pursuing longer-term opportunities to integrate timing technology more deeply into systems through chiplets, advanced substrates and modules, which the company estimates could expand its CED serviceable market by $2.5 billion by 2030.

About SiTime (NASDAQ:SITM)

SiTime Corporation is a fabless semiconductor company specializing in silicon timing solutions that leverage micro-electromechanical systems (MEMS) technology as an alternative to traditional quartz crystals. Its portfolio of programmable oscillators, resonators, clock generators, jitter attenuators and network synchronizers addresses precision timekeeping requirements across a wide range of electronic systems. By integrating MEMS resonators with advanced mixed-signal control circuitry, SiTime's products offer enhanced reliability, resistance to shock and vibration, and a smaller footprint compared with conventional quartz devices.

The company's timing devices serve diverse end markets, including telecommunications infrastructure, data center and enterprise networking, consumer electronics, automotive systems, industrial automation, and aerospace and defense applications.

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