Q2 2025 SiTime Corp Earnings Call
Today's conference call instructions will be given for the question and answer session.
As a reminder, this conference call is being recorded today August 6th 2025, I would now like to turn the call over to Brett Perry of Shelton Group Investor Relations Brett. Please go ahead.
Thank you Shannon good afternoon, and welcome to <unk> second quarter 2025 financial results Conference call.
Good afternoon and welcome to SCI times. Second quarter, 2025 Financial results conference call. At this time, all participants are in a listen-only mode at the conclusion.
Winning us on today's call from side time rejection.
Chief Executive Officer.
Today's conference, call instructions will be given for the question and answer session.
Hal Chief Financial Officer.
Before we begin I'd like to point out that during the course of this call. The company may make forward looking statements regarding expected future results, including financial position strategy and plans future operations, the timing market and other areas of discussion.
As a reminder, this conference call is being recorded today. August 6th 2025.
I would now like to turn the call over to Brett Perry of Shelton group, investor relations Brett, please go ahead.
It's not possible for the company's management to predict all risks nor can the company assess the impact of all factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward looking statements in light of these risks uncertainties and assumptions the forward looking events discussed.
Welcome to cite time. Second quarter, 2025 Financial results conference call.
joining us on today's call from sight time, reesh, vicious chief executive officer and Beth how Chief Financial Officer
During this call.
May not occur and actual results could differ materially and adversely from those anticipated or implied.
Before we begin, I'd like to point out that during the course of this call, the company may make forward-looking statements regarding expected, future results, including Financial positions, strategy and plans future operations, the timing market and other areas of discussion.
Neither the company nor any person assumes responsibility for the accuracy and completeness of forward looking statements.
Any undertakes no obligation to publicly update forward looking statements for any reason after the date of this conference call to conform statements to actual results or to changes in the companys expectations for more detailed information on the risks associated with the business. We refer you to the risk factors described in the 10-K filed on February 14 2025.
It's not possible for the company's management to predict all risks, nor can the company assess the impact of all factors on its business, or the extent to, which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements in light of these risks, uncertainties and assumptions. The forward-looking events discussed during this call
may not occur in actual results could differ materially and adversely from those anticipated or implied.
Well as the Companys subsequent filings with the Securities and Exchange Commission.
During the call management will refer to certain non-GAAP financial measures, which are considered to be an important measure company performance. These non-GAAP financial measures are Friday provided in addition to and not as a substitute for nor superior to measures of financial performance prepared in accordance with U S. GAAP.
Neither the company nor any person assumes responsibility for the accuracy and completeness of forward-looking statements.
GAAP to non-GAAP reconciliations.
Include stock based compensation expense amortization of acquired intangibles and acquisition related expenses, which include transaction and certain other cash costs associated with business acquisition as well as changes in the estimated fair value of contingent consideration and earn out liabilities. Please refer to the company's press release issued earlier today for.
The company undertakes, no obligation to publicly update for looking statements for any reason. After the date of this conference call to conform statements to actual results or to changes in the company's expectations for more detailed information. On the risks associated with the business, we refer you to the risk factors, described in the 10K filed on February 14th, 2025, as well. As the company, subsequent filings with the Securities and Exchange Commission.
A detailed reconciliation between GAAP and non-GAAP financial results with that it's now my pleasure to turn the call over to <unk> CEO Josh. Please go ahead.
During the call management will refer to certain non-gaap Financial measures which are considered to be an important measure of company performance. These non-gaap Financial measures are pried it provided in addition to and not as a substitute for nor Superior to measures of financial performance prepared in accordance with us gaap
Gaap and non-gaap, reconciliations.
Thank you Brad good afternoon, everyone. Thank you for joining us today we.
We appreciate the continued support from our long time investors and warmly welcome new site on investors.
<unk> is pioneering a new category in semiconductors.
Precision timing part of the broader 11 billion tightening market.
To drive growth, we are focused on high value applications in AI data centers automated driving defense and industrial and successfully delivered differentiated products with exceptional performance and reliability.
Include stock-based compensation expense, amortization of acquired intangibles and acquisition related expenses which include transaction and certain other cash costs, associated with business acquisition as well as changes in the estimated fair value of contingent consideration and earnout. Liabilities please. Refer to the company's press release issued earlier today for a detailed reconciliation between gaap and non-gaap financial results with that. It's now my pleasure to turn the call over to cite time. CEO or Josh, please go ahead.
Thank you. Brett. Good afternoon, everyone. Thank you for joining us today.
We appreciate the continued support from a long time. Investors and warmly. Welcome new sight. Time investors.
This focus continues to pay off as we build a high growth diverse business across markets applications and geographies.
Sit time is pioneering a new category in semiconductors.
Q2, 2025 was another exceptional quarter with high time.
Precision timing part of the broader. 11 billion, timing Market.
We delivered revenue of $69 5 million, which was a 58% increase year over year.
Gross margin increased to 58, 2%.
To drive growth, we focused on high value applications in AI data, centers, automated driving defense and Industrial. And successfully delivered differentiated products with exceptional performance and reliability.
And as new products contribute to a higher percentage of revenue, we expect to see gross margin expansion with revenue growth.
This Focus continues to pay off. As we build a high growth diverse business, across markets applications, and geographies.
EPS increased.
247.
Up from 12, a year ago and every customer segment grew in Q2 2025.
Q2 2025 was another exceptional quarter for Sight time.
Exiting the quarter, we have robust bookings and a healthy funnel.
We delivered revenue of 69.5 million, which was a 58% increase year-over-year.
Increases to 58.2%.
In today's world a significant AI growth, it's no surprise that our datacenter customer segment continues to lead our growth significantly in.
And as new products contribute to a higher percentage of Revenue, we expect to see gross margin expansion with Revenue growth.
EPS increased.
In fact, it grew 137% year over year.
Here, our elite family of oscillator products elite elite RF elite ex continue to shine alone with our Cascade clocking family.
To 47 cents up from 12 cents a year ago and every customer segments grew in Q2 20245.
Exiting the quarter. We have robust bookings and a healthy funnel.
These products performance drove strong design win momentum across the market.
Including switches Nic cards optical modules and AUC or active electrical cables.
In today's world of significant AI growth, it's no surprise that our data center customer segment continues to lead our growth significantly.
<unk> continues to be the only company that offers a full suite of precision timing solutions that includes oscillators clocks and software, giving us architectural advantages.
In fact, it grew, 137% year-over-year.
With oscillator products, elite elite RF Elite X continue to shine along with our Cascade clocking family.
As we expand our offerings with new products.
<unk> content in the application will grow for example in a cloud service providers are 102, Terabits switch design cite them as dollar content increased by 125% with the addition of a customized clock.
These products performance drove strong design win momentum across the market.
Including switches Nic cards Optical modules and aec or active electrical cables.
Similarly, the silicon providers network switch design cite them as dollar content increased by 100% with the addition of multiple clock chips.
Sight time continues to be the only company that offers a full Suite of precision timing solutions that includes oscillators clocks and software giving us architectural advantages.
Already in 2025, and AI, we have added design wins worth several hundred millions of dollars for.
<unk>, winning the AI data center market is important and we will accelerate product development and customer acquisition to expand further in these markets.
With the addition of a customized lock.
In this age of accelerated innovation and Pos deployment of AI hardware system is very well qualified to meet the rapid growth in customers demands.
Similarly, the Silicon providers network switch design site and dollar content increased by 100% with the addition of multiple clock chips.
Already in 2025, in the AI. We have added design wins worth several hundred millions of dollars.
Our programmable product architecture works very well here in <unk>.
Our team and our suppliers have done a phenomenal job of keeping up with demand.
One of <unk> strength lies in the diversity of our business. This was again evident in Q2, 2025, where all markets and geographies demonstrated continued growth.
for Sight time, winning the AI Data Center Market is important and we will accelerate product development and customer acquisition to expand further in these markets,
Our revenue grew double digit percentages year over year in both mobile Iot consumer and auto defense industrial as well as every region.
In this age of accelerated Innovation and fast deployment of AI. Hardware sitem is very well qualified to meet the rapid growth in customers demands.
Our programmable product architecture.
In the automotive defense and industrial markets are growth theme is around fully autonomous operations, playing directly to <unk> strengths.
Works very well here and our team and our suppliers have done a phenomenal job of keeping up with demand.
Precision timing from site time is required for accurate positioning sensing motor control and synchronization for fully autonomous operations in <unk> III, plus an ELD for Adas vehicles drones and factory robots.
1 of sight time strengths lies in the diversity of our business. This was again, evident in Q2 2025, where all markets and geographies, demonstrated continued growth.
Our Revenue, grew double-digit percentages year-over-year in both mobile iot consumer and auto defense industrial, as well as every region.
In automotive Robo taxis are gaining significant traction and warehouses millions of robots are automating tasks and defense spending is accelerating with NATO for example expected to spend at <unk> eight X <unk>.
In the automotive defense and Industrial markets. A growth stream is around fully autonomous operations playing directly to cite time strengths
Foster growth rate.
We are designed in into the leading robo taxi robot and defense equipment and as these market scale solar revenue.
Precision timing from sight. Time is required for accurate, positioning sensing motor, control and synchronization for fully autonomous operations in L3, plus and L48 as Vehicles, drones and Factory robots.
<unk> has significant experience with a decade of investments in these markets and.
And we have learned how to anticipate the needs and generate products and features that will drive revenue from these applications.
Lastly, in the mobile Iot consumer market, our newly announced symphonic mobile clock generator chip provide significant power and accuracy advantages to G. NSS and <unk> applications. It has already started to contribute to our revenue and we expect its contribution to grow.
In automotive Robo taxis are gaining significant Traction in warehouses, millions of robots are automating tasks and defense spending is accelerating with NATO. For example, expected to spend at an 8X faster growth rate.
we are designed in into the leading robot, taxi robot and defense equipment and as these markets scale,
So, will our Revenue?
Sight. Time has significant experience with a decade of investments in these markets.
<unk> in 2026 and beyond.
And we have learned how to anticipate the needs and generate products and features that will drive revenue from these applications.
As we move into the second half of 2025, we anticipate sequential revenue growth in each of Q3 and Q4 supported by strong demand in AI infrastructure and continued momentum across markets.
Lastly, in the mobile iot consumer Market are newly announced symphonic mobile clock generator chip provide significant power and accuracy advantages to gnss and 5G applications.
This is the second consecutive year, where we expect to grow revenue by at least 40%.
We also see that as more customers experience the benefits of our precision timing more opportunities come to us to seize them. We will continue to invest in both R&D and customer acquisition, while improving operating leverage.
It has already started to contribute to a revenue and we expect its contribution to grow significantly in 2026 and Beyond.
as we move into,
The 25.
Anticipate sequential Revenue growth in each of Q3 and Q4 supported by a strong demand in AI infrastructure and continued momentum across markets.
To summarize our success is being driven by both the depth of our engagement in AI data centers and the breadth of our reach across diverse markets.
This is the second consecutive year where we expect to grow Revenue by at least 40%.
This balance gives us the resilience and positions us for sustainable growth.
I am confident in our trajectory and excited about what lies ahead.
Now turn the call over to Beth Howe, our CFO to discuss our financial results in more detail Matt.
We also see that as more C customers experience, the benefits of our precision timing more opportunities, come to us, to seize them, we will continue to invest in both R&D and customer acquisition. While improving operating Leverage.
Thanks, Jess and good afternoon, everyone today I'll walk through our second quarter fiscal 2025 results and then provide our outlook for the third quarter. As a reminder, I will focus on non-GAAP financials, which are reconciled to GAAP in our press release.
To summarize, our success is being driven by both the depth of our engagement in AI data centers and the breadth of our reach across diverse markets.
This balance gives us resilience and positions us for sustainable growth.
In the second quarter revenue increased 58% year on year to $69 5 million.
I'm confident in our trajectory and excited about what lies ahead.
Fueled by CEB, which grew 137% year on year to $36 million or other markets grew double digits with sales into automotive industrial and defense market up 11% year on year to $16 $5 million and sales into the mobile Iot and consumer market up.
I'll now turn the call over to Beth how our CFO to discuss a financial results in more detail. Yes.
Thanks fours and good afternoon everyone. Today, I'll walk through our second quarter fiscal 2025 results and then provide our outlook for the third quarter.
As a reminder, I'll focus on non-gaap financials which are reconciled to Gap in our press release,
23% year on year to $17 million.
Sales to our largest end customer told us $11 $8 million.
In terms of the mix of revenue the Comms Enterprise data center market represented 52% of revenue, while the automotive industrial and defense market as well as the mobile consumer Iot market each represented 24% of revenue.
In the second quarter Revenue, increased 58% year-on-year, to 69.5, million, fueled by CED, which grew 137% year on year to 36 million.
non-GAAP gross margin was 58, 2% for the quarter up 80 basis points sequentially, driven by favorable product mix and improving product costs.
Your markets grew double digits with sales into automotive industrial and defense market up 11% year on year to 16.5 million and sales into the mobile iot and consumer market up 23% year-on-year to 17 million.
Told us 11.8 million.
Total non-GAAP operating expenses were $33 3 million in line with expectations.
In terms of the mix of Revenue, the comms Enterprise Data Center Market represented, 52% of Revenue.
For the quarter R&D expense was $19 $5 million in SG&A expense was $13 $8 million, we remain disciplined in our approach to investing to drive future growth.
While the automotive industrial and defense Market, as well as the mobile consumer iot Market, each represented 24% of Revenue.
Q2, non-GAAP income operating income was $7 2 million, an improvement of $9 9 million or 16 percentage points versus the same quarter a year ago.
Non-gaap gross margin was 58.2% for the quarter up 80 basis point sequentially, driven by favorable product mix and improving product costs.
Total non-gaap operating expenses or 33.3 million in line with expectations.
Q2, non-GAAP net income was $11 $6 million or <unk> 47 per share.
Turning to the balance sheet accounts receivable were $26 9 million with DSO improving to 35 days versus 42 days in Q1 due to better revenue linearity.
For the quarter R&D expense was 19.5 million and sdna. Expense was 13.8 million, we remained disciplined in our approach to investing to drive future growth.
Inventory at the end of the quarter was $84 $1 million compared with $82 $6 million in Q1, as we ramped production for key new products and continue to maintain strong wafer balances for assurance of supply.
Q2 non-gaap income operating income was. 7.2 million and Improvement of 9.9 million or 16 percentage points versus the same quarter a year ago.
Q2 non-gaap net income was 11.6 million or 47 cents per share.
During the quarter, we generated $15 $3 million in cash from operations and invested $18 $3 million in capital expenditures.
Turning to the balance sheet accounts receivable were 26.9 million with DSO, improving to 35 days. Versus 42 days, in q1 due to better Revenue linearity.
Capex to step down from these levels in the second half of 2025.
During the quarter, we completed a follow on public offering of 2 million shares at $200 per share raising $388 million in net proceeds these proceeds strengthen our balance sheet and support strategic investments in innovation.
Inventory. At the end of the quarter was 84.1 Million, compared with 82.6 million in q1, as we ramped production, for key new products, and continue to maintain strong wafer balances for Assurance of supply.
Our balance sheet remains strong and we ended the quarter with $796 $7 million in cash and short term investments and no debt.
During the quarter, we generated 15.3 million in cash from operations and invested 18.3 million in capital expenditures. I expect capex to step down from these levels in the second half of 2025.
Now I'd like to provide our outlook for the September quarter.
For Q3, we expect revenue of $77 million to $79 million gross margins of between 58% and 59% and operating expenses to be in the range of 34 to $34 $5 million.
During the quarter, we completed a follow-on public offering of 2 million shares at $200 per share. Raising 388 million in net proceeds. These proceeds strengthen our balance sheet and support strategic investments in innovation.
Reflecting the offering we completed in June we expect interest income of seven $5 million to $8 million and a diluted share count of approximately $26 8 million shares.
Our balance sheet remains strong, and we ended the quarter with 796.7 million in cash and short-term Investments and no debt.
Now, I'd like to provide our outlook for the September quarter.
As a result, we expect third quarter non-GAAP EPS to be in the range of 67% to 75 per share.
In closing our results demonstrate strong topline momentum and the meaningful operating leverage in our model as we scale.
For Q3, we expect revenue of 77 to 79 million, gross margins of between 58 and 59%. And operating expenses to be in the range of 34 to 34.5 million.
Our expanding product portfolio is delivering differentiated solutions in large growing markets and customer engagement continues to validate validate our value proposition.
Reflecting the offering we completed in June, we expect interest income of 7 and a half to 8 million and a diluted share count of approximately 26.8 million shares.
We believe we are well positioned to drive sustained growth operating leverage and long term value creation.
As a result, we expect third quarter, non-gaap EPS to be in the range of 67 to 75 cents per share.
With that I will open it up for questions operator.
In closing, our results, demonstrates, strong Topline momentum, and the meaningful operating leverage in our model as we scale.
Thank you.
At this time, we will conduct a question and answer session to ask a question you will need to press star one one on your telephone and wait for your name to be announced to withdraw your.
Our expanding product portfolio is delivering differentiated Solutions, in large growing markets and customer engagement continues to validate, validate our value proposition.
Your question. Please press star one one again.
Please standby.
We believe we are well, positioned to drive sustained growth operating, leverage, and long-term value creation.
Our first question comes from Chris Caso from Wolfe Research. Please go ahead.
With that, I will open it up for questions, operator.
Thank you.
Yes. Thank you good evening.
The first question if you could go.
Go through what your expectations are for growth by segment.
At this time, we will conduct the question and answer session to ask a question. You will need to press star 1, 1 on your telephone and wait for your name to be announced.
As you get to the guidance.
To withdraw your question. Please press star 1 1 again.
Please stand by.
Sure So I'll take that one Chris.
Think about the different markets.
Again I would expect.
Our first question comes from Chris casso. From Wolfe research, please go ahead.
They're a C E D led by AI.
Yeah.
Continues to be our strongest growth area.
As he.
Operator, there's some feedback on the line.
Yes, thank you. Good evening. Um, for the first question is uh you could uh go through what your expectations are for growth by segment. Um as you get to the guidance.
In addition, as we get to the second half, we typically see stronger seasonality in our consumer markets until we would expect that as well and then our auto Aero industrial we've seen some strong growth in several application did not area better traction in aerospace for example, as well as good traction in.
Sure. So I'll take that 1 Chris-Craft.
continues to be our strongest growth area, uh, as we
In industrial and so we expect growth in all three markets there, but I would I would focus on C. D is probably our strongest grower in the back half similar to the front half.
Operate, there's some feedback on the line.
Okay, Great that's helpful.
Just as a follow up.
I guess one question would be.
Anything.
Extraordinary of note in your guidance with regards to the mobile segment for the for the third quarter and I guess in the past.
Within that segment you've had.
A policy of.
Not including <unk>.
In addition, as we get to the second half, we typically see stronger seasonality in our consumer markets and so we would expect that as well and then our um auto arrow industrial we've seen some strong growth in several applications in that area. Um better traction in Aerospace, for example as well as good traction and Industrial. And so we expect uh growth in all free markets there. But but I would, I would focus on CV as as probably our strongest grower in the back, half similar to the front half.
New design wins in guidance unless.
The products are actually ship then you confirm you've been in there.
So I guess one is.
Extraordinary to say within the guidance and then secondly is that still your policy with regard to the mobile segment.
Yeah first let me address the policy, Chris the policy where is that.
Generally as you know a consumer products, but particularly.
Mobile products tend to be very volatile. So we only give guidance when we can see it when we talk about the 40% growth.
In my prepared remarks that comprehends the mobile because we now have enough visibility this year to be able to say that when it comes to the next year, we'll probably do what we did at the beginning of this year, which will carve out.
Okay, great. That's helpful. Um, just as a follow-up, uh, you know, I guess 1 question would be, you know, anything, uh, extraordinary of note in your guidance, with regard to the mobile segment for the, uh, for the third quarter. And I guess in the past, uh, within that segment, you've had, uh, sort of a policy of not including, uh, you know, new design wins in guidance on the last, uh, you know, the, the, the products that have actually shipped and you confirm you've been in there. Can so I guess 1 is, uh, you know, anything extraordinary to say within the guidance and then, secondly, you know, is that still your policy with regard to the mobile segment?
That portion of the business simply because we wait till greater visibility and we get visibility we start to give you pass through that visibility to you. So.
Yeah. First let me address the policy. Chris uh the policy were is that uh generally as you know, consumer products, but particularly uh, mobile products tend to be very volatile. So we only give guidance when we can see it. When we talk about the 40% growth.
Hopefully that helps.
Right. So so.
To summarize.
Therefore for a product launching this year you would you would include that in your guidance because now you do have that level of visibility right.
Correct.
Got it that's helpful. Thank you.
Sure.
Thank you.
Yeah.
Our next question comes from Torrey Svanberg from Stifel. Please go ahead.
Uh, in my prepared remarks that comprehends the mobile because we now have enough visibility this year to be able to say that when it comes to the next year, we'll probably do what we did at the beginning of this year, which we'll carve out uh, that portion of the business simply because we wait till greater visibility and we get visibility. We start to give you pass through that visibility to you. So hopefully that helps
Yes, Thank you and congrats on the strong results.
I mean, not to sort of pick on a very good trend, but it was little bit surprised to see your mobile Iot consumer business kind of flat sequentially and I think our largest customer was just barely up sequentially.
Right. So so the the summarize, uh, you know, that for for, uh, product launching this year, you would you would include that in your guidance because now you do have that level of visibility
Correct.
Got it. That's helpful. Thank you.
So just just curious if there are some puts and takes there in the business, especially given your sort of new content and some of that.
Thank you.
Devices there.
Our next question comes from Tori. Sandberg from stifel please go ahead.
Yeah. So as we look at the mobile Iot and consumer business I think there's as you know.
Overall.
Main focus is in our comms enterprise.
Data center, our CD market, both because of the extraordinary growth opportunities, we see there as well as the fact that we're investing in new products for that market. Because it is often the tip of the sphere in terms of extensions into aerospace industrial automotive and some of those other markets. So that's where the majority of our investments and our focus is.
Yes, thank you. And congrats on the strong results. Um, I mean, not not this sort of pick on on a very good print, but I was a little bit surprised to see your mobile iot consumer business, kind of flat sequentially and I think your largest customer was just barely obsequent. Uh so you know just just curious if there's some puts and takes their in the business especially given uh you know, your sort of new content. And and some of the the the devices there
We do see some opportunities in mobile Iot and consumer and so we will kind.
Kind of surgically go after those where they exist including kind.
Kind of a recent win that we've had this year with with that customer looking at the consumer seasonality as you can imagine when you launch a product.
There is that initial quarter, there's the sell in kind of as you're filling the channel with that new product that you see in the first quarter of launch. In addition, consumer typically has seasonality where the second half of the year and particularly in Q3 and Q4 tend to be stronger versus the first half of the year. So I think thats what youre seeing.
In our results today and Tori.
I wouldn't look too much into it.
The consumer business is dynamic we know it it's up it's down.
Yes. So as we look at the mobile iot consumer business, I think there's as, you know, overall our main focus is in our, our comms Enterprise, uh, data center or CED Market both because of the extraordinary growth opportunities. We see there as well as the fact that we're investing in new products for that market because it is often the tip of the spear in terms of extensions into, uh, Aerospace industrial automotive and some of those other markets. So, that's where the majority of our investments and our focus is. Um, we do see some opportunities in Mobile iot and consumer. And so, we will, um, kind of surgically go after those where they exist including, um, kind of a, a recent win that we've had this year with, with that customer. Uh, looking at at the consumer seasonality, as you can imagine when you launch a product, um, there's that initial quarter, there's the sell-in, kind of as you're feeling the Channel with that new product, uh, that that you see, in the first quarter of
You know so I wouldn't read too much into that.
No. That's fair. Thank you for that and I guess as my follow up for Euro Jeff says, we go into the second half of the year I think <unk> has a pretty unique view into end markets, giving you a diversified revenue base. Obviously the data points remain very very strong on data center.
But I would say in sort of more traditional analog markets like industrial and auto the data points are quite mixed, especially because of tariff. So I'm just I'm. Just curious what are you seeing in some of your non.
Launch in addition consumer, typically has seasonality where the the second half of the year and particularly in Q3 and Q4 tend to be stronger versus the first half of the year. So, I think that's what you're seeing in in our results. Uh, today and Tori. I, I this year, I I wouldn't look too much into it. Uh, it's the consumer business, it's Dynamic, we know it, it's up, it's down. Uh, you know, so I wouldn't read too much into that.
Data Center segment, so not just in Q3, but even into Q4.
Yeah, I think there is a little bit of softness in automotive, we see that but we still grow.
We definitely see strength in industrial we see significant stroke strength, most surprised in aerospace military defense I mean, it's not a very large business for us, but it's going to grow very rapidly and we have high expectations and hope for it but even in the automotive market. If I look out to the design wins that we're getting out.
Um, data center segments, not just in Q3, but even into Q4.
<unk> and hence my reference to <unk> III, plus an al four <unk>, if I look into that and Robo taxis I think we see significant growth in the coming years, perhaps not in 'twenty six because many of them may not be launching in high volume, but further out and 27% and 28, we see a tremendous opportunity in automotive.
Yeah, I think uh, there is a little bit of softness and Automotive uh we see that but we still grow.
And as far as industrial goes we singled out ruble robots industrial robots all kinds of robots.
Four four mention but theyre, all really being driven by this need for autonomy by this need for being.
Synchronized and aware presence aware so the whole same thing the motor controls synchronization fees, that's where we really shine and that's common across all three of these industrial.
Automotive and military aerospace defense. So it's a very unique place and we like that quite a bit and we intend to make significant investments in that.
Sounds good congrats again.
Uh, we definitely see strength in industrial we see significant strength strength, no surprise in Aerospace military defense. I mean, it's not a very large business for us but it's going to grow very rapidly and we have high expectations and hope for it. But even in the automotive Market, if I look out to the design wins, that we are getting out into the enhanced, my reference to L3 plus and L4 and Adas. If I look into that and Robbo tax is I think we see significant growth come in the coming years. Perhaps not in 26, because many of them may not be launching in high volume, but further out in 27 and 28, we see a tremendous opportunity in automotive and as far as industrial goes, we singled out Robo, robots, industrial robots, all kinds of robots, uh, for for, uh, mention, but they're all really being driven by this need for autonomy by this need for being, um, uh, synchronous.
Thank you.
Thank you.
Our next question comes from Sujit de Silva from Roth Capital. Please go ahead.
Hi, Josh I bet.
You talked about gross margin tailwind coming in the next two quarters from new products, increasing in the mix. Maybe you can help us understand where new products are as a percent of revenues now by that designation, where they were a year ago and what would be the pace of the increase the next year or two to help the margins.
And aware, uh, presence aware. So the whole sensing the motor control synchronization piece, that's where we really shine and that's common across all 3 of these industrial, uh, automotive and Military Aerospace defense. So it's a very unique place and we like that quite a bit and we intend to make, um, significant investments in that.
Sounds good. Congrats again.
Thank you.
Thank you.
Well the.
I don't know if I can give you a regular percentages, but I can give you some indications and the indications are that I referred to the ALLETE family of products. Those are definitely all our new products elite elite ex elite RF and the Cascade family and in fact, our whole clocking family, whether it's the chorus and so on.
Our next question comes from suji. D Silva from Roth Capital. Please go ahead.
Definitely in the area of data centers in.
Hi Beth. Um you talked about um gross margin Tailwind coming in the next quarters from new products, increasing in the mix. Maybe you can help us understand where new products are as a percent of revenues. Now by that, uh, designation, you know, where they were a year ago, and what would be the pace of the increase in the next year or 2 to help the margins.
In in even in enterprise and communications, so the whole what we call CBD.
well, the um
We expect more of the new product stand of the older products. It's certainly true that the new products are significantly higher ASP.
They are as I mentioned before there are anywhere from three or $4 to $10 $12.
And so theyre significantly valuable in that regard.
<unk> design wins coming out in.
I don't know if I can give you a regular percentages, but I can give you some indications. And the indications are that, I refer to the elite family of products. Those are definitely all our new products, elite elite, decks Elite RF, and the Cascade family. And in fact, our whole flocking family, whether it's the chorus and so on, definitely in the area of data centers in um, in uh, in even in Enterprise
In the military aerospace defense as well as in the automotive and industrial are also significantly in the new areas.
Consumer tends to lag a little bit and as you know we have spare.
<unk> spent most of our R&D in the first two that I said, but consumer mobile Iot, we have a bunch of products and of course, the symphonic product we have a lot of <unk>.
High hopes for in this year, the second half as well as in the coming coming year. So I think it's going to be pretty evenly spread.
In these markets, but I expect that 2026 will be significant in the new product space. I think this is definitely a transitional year.
Okay.
And then maybe kind of digging into the data center content that you've gained just here maybe one level down like you know when you have the opportunity to win a higher dollar clock.
And communication. So the whole, what we call CED, uh, we expect more of the new products than of the older products. It's certainly true that the new products are significantly higher ASP. They are, you know, as I mentioned before, they're anywhere from 3 4 dollars to 1012, um, and so they're significantly valuable in that regard. The design wins coming out in um, in the military Aerospace defense as well as in the automotive and Industrial are also significantly in the new areas, uh, consumer tends to lag a little bit. And as, you know, we have uh, spent most of our R&D in the first 2 that I said, but consumer mobile iot, we have a bunch of products, and of course, the symphonic product, we have a lot of uh, high hopes for in this year. The second half as well as in the coming coming year. So I think um it's going to be pretty evenly spread.
And some equipment, but other equipment, maybe it's less content could you just help us distinguish what gets you that higher content and.
Whether you're a upgrade opportunities in other places, where you have content or how that lays out across the data center equipment, the switches the <unk> and so forth.
Uh, in these markets. But, uh, I expect that 2026 will be significant in the new products space. I think this is definitely a transitional year.
Yeah, I think what is unique for some time is the fact that we sell a full system right. We are the only company, which has natively produced oscillators.
And natively produce clocks, so we can bundle them together not as a bundled unit, but as a system because at the end of the day the customer needs the timing needs to be fulfilled and going to one kind of supplier a typically a quartz crystal supplier for alternators and going to a clocking company for Clos is it.
Okay. And then maybe kind of, um, digging into the data center or content that you've gained just, you know, maybe 1 level down, like, you know, when when you have the opportunity to win a higher dollar clock, um, in in some equipment, but other equipment, maybe it's less content, can you just help us distinguish? You know what, gets you that higher content and whether you have upgrade opportunities and other places where you have content or, you know, how that lays out the data center equipment, which is the ACs and so forth.
<unk> in these very high performance low latency high throughput.
Yeah, I think what is unique for Sight time is the fact that we sell a full system, right? We are the only company which has natively produced oscillators
Challenging.
Challenging.
Environmental conditions. So for example, the Terabits switch design that we did get the.
The addition of the dollar content came through adding a very customized clocks most plots for customized and the addition of the networking. We just added multiple cloud chips and made that come through so it's a system play it's solving the customers' problems at the architectural level and this.
<unk> is the same playbook that we're using in all the other.
And all the other areas frankly, we use that same one in in higher end consumer products as well I mean, the symphonic product is our is our is part is a unique product, which has clocking and an authentic built into it. So thats systems approach is one that might be helpful to think about.
Alright, very helpful to address things.
Yes.
Thank you.
Our next question comes from Quinn Bolton from Needham <unk> Company. Please go ahead.
Hi, Rich, Jason Let me offer my congratulations on the nice results and outlook I guess I wanted to start.
Walking Company for clocks is a challenge in these very high performance. Low latency High, throughput, um, challenging, uh, uh, challenging, um, environmental conditions. So, for example, in the terabit switch design that we did get, uh, the addition of the dollar content came through, adding a very customized clock. Most clocks are customized in the addition of the networking. We just added multiple clock chips and made that come through. So, it's a system play. It's solving the customer's problems at the architectural level. And this is the same Playbook that we are using in all the other, um, in all the other areas, frankly, we use that same 1 in, in higher end consumer products as well. I mean, the symphonic product uh, is a is a, is part is a unique product, which has clocking and an oscillator built into it. So, that systems approach is 1 that
I think in the past you guys have addressed your content opportunity on some of the GPU rack platforms.
That might be helpful to think about.
All right. Very helpful, thanks.
Yeah.
Platforms that have been announced over.
Thank you.
Over the past say six to 12 months, but wondering if you have similar content opportunities on the hyper scaler Essex based platforms do you do you tend to see similar opportunity on those platforms as the merchant GPU platforms, and then I've got a follow up.
Our next question comes from Quinn Bolton from Needham and Company. Please go ahead.
Yeah, so the hyperscale or is there.
The short answer is yes.
But we are variously penetrated right, we're not equally penetrated in all the key hyperscale or.
Some of them a little bit more some of them a little bit less so the places where we are we do have a significant penetration in the same way, but it's also a little bit behind because.
Hi resistant. Beth, let me offer my congratulations on on the nice results. And Outlook, I guess I wanted to start. Um, reass. I think in the past, you guys have addressed your content opportunity on some of the GPU rack, uh, platforms that have been announced. Um, you know, over the past, say 6 to 12 months but what if you have similar content opportunities on the hyperscaler asic-based platforms? Do you do you tend to see similar opportunity on those Asic platforms as, as the merchant GPU platforms? And then I've got a follow-up
<unk>.
At the end of the day semiconductor companies.
That we do Gpus Cpus.
And to be a little bit faster moving ahead of the curve.
And so we connecting with them we get.
Better lead in into the use case and into the market.
And they're also the ones, who typically day the semiconductor companies are typically the ones that are more focused on much of the CPU and the GPU accelerators, but also the Nic cards and the switches and.
Yeah. So, um, the hyperscalers, uh, the short answer is yes. Um, but we are, uh, variously penetrated, right? We are not equally penetrated in all the key hyperscalers. Some of them are a little bit more, some of them are a little bit less. So, the places where we are, uh, we do have uh, significant penetration in the same way, but it's also a little bit behind because, uh,
At the end of the day, semiconductor companies, uh, that we that do GPU CPUs.
And even the plugging holes.
Tend to be a little bit faster, moving ahead of the Curve.
So.
It's no surprise that we go there more.
and so we connecting with them, we get
Though we are cracking in more and more into the into the Hyperscale.
A better lead in into the use case, and into the market.
But I would say.
The architectural advantages.
Greater.
We can also we can go after larger market with the merchant silicon guys.
and they're also the ones who typically day the semiconductor companies are typically the ones that are more focused on not just CPU and the GPU accelerators but also the Nic cards and the switches and um and and even the plug-in both, um,
That makes any sense.
so,
It does it does thank you and then a follow.
It's no surprise that we go there more.
Follow up on the symphonic product.
A couple of questions.
I believe that target is more of the mobile consumer Iot segment wondering if there are particular applications, where you're seeing success with some phonic and you mentioned its a clock plus an oscillator does that meaningfully increase.
Though, we are cracking in more and more into the, into the hyperscalers. But I would say, um, uh,
The architectural advantages come greater.
Because we can, we can go after larger markets with the merchant silicon guys.
Your ASP in some of those mobile Iot.
that makes any sense.
Product categories or does it come in at similar Asps to products that you already sell into that end market.
Yeah, it it does, it does. Thank you and then uh follow up on the symphonic product. Um, I guess a couple of questions.
Yes, no. It definitely comes at a higher ASP simply because as I said, it's a system level approach. So we solving multiple problems. It's not just that we are integrating oh, here's the cost to exit.
This excellent price why offer oscillator, plus o'clock you put them together you don't get X plus Y you get something more than that because when you do it as a system you saw many many other problems on the board on the bill of materials that the customer now doesn't have to use whether it's discrete whether it is the way the clocks are laid out.
I believe that targets more of the mobile consumer iot. Segment wondering if there are particular applications where you're seeing success with some phonic and you mentioned, it's a clock plus an oscillator. Does that meaningfully increase.
Your ASP in some of those mobile iot, um, product categories, or does it come in at similar, asps to products that you already sell them to that end Market?
And so on.
<unk>.
We when we did symphonic.
We're looking at the <unk> market, we were looking at the GPS market people were looking at the millimeter wave market and goes those markets will come but we don't see them happening today I think it will come maybe in a year or so, particularly in the area of Iot, particularly in the area of factory in <unk>.
Enterprise based Iot that will use <unk>.
Yeah. No it definitely comes at a higher ASP simply because as I said, it's a system level approach. So we solving multiple problems. It's not just that we are integrating. Oh, here's the cost X and a price X and price. Why of oscillator plus a clock? You put them together, you don't get X Plus y, you get something more than that. Because when you do it as a system, you solve many, many other problems on the board on the bill of materials that the customer now doesn't have to use whether it's discreet whether it is the way, the clocks are laid out. Um, and so on, uh,
Private networks, and we see that coming but it's a little bit of ways, but we are going to be ready for the market and we'll be there well ahead of anybody else.
Okay. Thank you very much.
Yep.
Thank you.
As a reminder to ask a question you will need to press star one one on your telephone.
Our next question comes from Thomas O'malley from Barclays. Please go ahead, hey.
Hey, guys. Thanks for taking my questions and congrats on the nice results. So if I look at last quarter, where you kind of let things off of the <unk>.
See them happening today. I think they'll come maybe in a year or so, particularly in the area of iot, particularly in the area of factory and Enterprise based iot, that will use 5G, um, uh, uh, private networks. And we see that coming, but it's a little bit of ways, but we're going to be ready for the market and we'll be there, well, ahead of anybody else.
Okay, thank you very much.
High end of guidance you'd kind of talked about 30% plus growth for the full year, you're clearly, indicating a stronger growth profile now greater than 40 versus where you were 90 days ago, Youre, obviously, highlighting CEB strength as one of the reasons for the uptick.
Yep.
Thank you.
As a reminder, to ask a question, you will need to press star 1 1 on your telephone.
More specifically could you talk about what <unk> is getting stronger and like did you just take some conservatism. When you were standing there last quarter are things materially improved in the last kind of 90 days.
Yeah, I mean, it's a 10.
Of all the segments Tom.
<unk>, we're proud of and particularly with data center and data center, we're talking about the networking the accelerators. The switches in particular, we have no surprise greater visibility goes 90 days have passed as you said and we can see better into the second half of the year. So we see that we see continued strength we see continued.
Our next question comes from Thomas. Omali from Barclays, please. Go ahead. Hey guys, thanks for taking my questions and congrats on the nice results. So, if I look at last quarter where you kind of, let things off, um, at the high end of guidance, you'd kind of talked about 30, kind of, plus growth for the full year, um, you're clearly indicating a stronger growth profile. Now, of of greater than 40 versus where you were 90 days ago, um, you're obviously highlighting CED strength as 1 of the reasons for the uptick, but, um, more specifically could you talk about what inside of CED is, is getting stronger. And like, did you just take some conservatism when you were standing there last quarter, or are things materially improved in the last kind of 90 days.
Growth, we see continued demand from our customers and we're building up a very nice backlog and a very nice funnel.
Having said that back to the earlier question that with us.
We also have a greater insight into our consumer mobile Iot business, where.
Which is typically higher as you know in Q3 Q4 to fulfill demand at that point, we see that we can see that growing nicely as well and then the rest of the business just continues to grow as we have said at a nice pace. So.
Yeah. I mean it's a tale of all the segments Tom uh the CD we're talking particularly with data center in data center. We're talking about the networking, the accelerators. The switches in particular, we have no surprise greater visibility because 90 days have passed as you said, and we can see better into the second half of the year. So, uh, we see that we see continued strength. We see continued growth, we see continued demand, uh, from our customers and we're building up a very nice uh backlog and a very nice uh, funnel.
Yes.
You know last year around this time also it took us a little while to get to to get to that 40.
40%, but now we have line of sight to that.
Helpful. And then just something on on kind of the trajectory of the year. So you obviously have the consumer portion, particularly the one customer that's stronger in the second half.
And you've said that CBD is leading the growth in the second half does that mean CBD is up the most sequentially in Q3 and in Q4 or does it mean CD is up the most in aggregate between those two quarters I'm just trying to understand because it looks like you should see a really big pickup in the consumer bucket into the September quarter, just maybe help me understand that a little better. Thank you.
On having said that back to the earlier question that was asked, uh, we also have a greater insight into our consumer mobile iot business, where, um, which is typically higher as, you know, in Q3 Q4 to fulfill, uh, demands at that point. We see that, uh, we can see that growing nicely as well and then the rest of the business just, uh, continues to grow as we've said at a nice little pace. So, um, yeah, it's just
You know, last year around this time. Also, it took us some, uh, a little while to get to, to get to that 40, um, at least 40%. But now we have line of sight to that
So Tom this is that when I was looking at that I was thinking year over year in terms of yeah in aggregate as I as I look to the year.
We expect the strongest growth in <unk> for the year and as I also said that consumer we expect to pick up in second half.
And we expect some acceleration there.
And that is that is that it's more of a sequential comment and the seasonality that you would expect with with the consumer business and with that customer.
Thanks, guys.
Okay. Thank you.
Yeah.
Our next question comes from Torrey Svanberg from Stifel. Please go ahead.
Helpful and then, and then just something on on kind of the trajectory of the year. So you obviously have the consumer portion, uh, particularly the 1 customer. That's stronger in the second half and you've said that CD is leading the growth in the second half. Does that mean CED is up the most sequentially in Q3 and in Q4, or does it mean? CD is up the most in aggregate between those 2 quarters? I'm just trying to understand because it looks like you should see a really big pickup in that consumer bucket into the September quarter. Just maybe help you understand that a little better. Thank you. Yep. So Tom, this is Beth when I was looking at that I was thinking year over year in terms of, you know, in in aggregate. As I as I look to the year, um, we expect the, the strongest growth in in CED for the year. Uh, as as I also said,
Yeah. Thank you I just had a few follow ups to keep in mind first of all <unk>.
On data center architectures I'm, just curious if there.
the consumer, we expect to pick up in second half, um, and we expect some acceleration there, uh, and that. And that is that is that is more of a sequential comment and the seasonality that you would expect with with the consumer business and with that customer,
The rack level infrastructure now obviously you participate on a lot of different applications, but I'm just wondering if something is going on there from a from a timing timing perspective.
Thanks guys.
Yes, thank you.
I mean, clearly you're trying to still oscillators and clocks, but.
Our next question comes from Tori. Sandberg from stifel please go ahead.
Just wondering if there's anything else going on there that you could potentially participated in a bigger way.
No I think it's just that these systems are getting way more complicated and complex as I reflect and look back on the last two years or two and a half years of watching this grow.
I mean, the pace of innovation in this space is astonishing.
And I've been doing this for a long time and this is just an absolutely astonishing speed of innovation are trying to get more throughput.
Uh, yeah, thank you. I just had a few follow-ups if you don't mind. Uh, first of all Rajesh on, on data center architectures. I'm just curious. If there, you know, because of rack level infrastructure. Now, obviously, you participate on a lot of different applications, but I'm just wondering if something is going on there from a, from a timing, for timing perspective. Um, I mean, you know, clearly you're trying to sell oscillators and clocks, but you know, just just wondering if there's anything else going on there that, you know, you could potentially participate in in a, in a bigger way.
At lesser heat smaller size.
Lower latencies greater performance.
It's absolutely amazing and that is what is driving an overall.
Need which says.
No, I think, uh, the it's just that these systems are getting way more complicated and complex as I reflect I look back on the last 2 years or 2 and a half years of watching this grow. I mean the pace of innovation in this space is astonishing.
We do need the timing products from <unk> to be.
Even more advanced for example.
When we started this business the CIT requirements was something of the order of 70 Femtoseconds.
As we look out into the future, we're targeting something which is.
Lower than 2000, Femtoseconds and Thats just in three years.
And that's these are this is just one metric.
Of jitter.
More throughput at lesser heat, smaller size, lower latencies, greater performance. I mean, it's absolutely amazing, and that is what is driving an overall need. Which says we do need the timing products from SiTime. Time to be.
Out of like 15 different metrics that we could talk about that include synchronization that includes stability that include phase noise that include temperature and so on and so on so it's just.
Even more advanced for example. Um, when we started in this business, the Jitter requirements were something that the order of 70 102 seconds,
as we look out into the future, we're targeting something, which is
The.
The innovation rate of our customers is astonishing therefore.
lower than 20 cents, and that's just in 3 years.
Our innovation rate has also become.
And that's—these are just one metric.
More.
Foster more and no surprise it tends to be at a higher ASP and it tends to be a collection of products rather than one spot product, but yeah give me. This one spot product and will be done so perhaps if I can answer your question stepping back the way you asked it I would say theres more.
Uh, of of, of Jitter, uh, out of like 15, different metrics that we could talk about that includes synchronization, that includes stability, that include phase noise that include temperature and so on, and so on. So it it's just, um,
The.
More need for system level solutions, there is more need for higher innovation and therefore higher ASP.
The Innovation rate of our customers is astonishing. Therefore,
Our Innovation rate is also become.
Our solutions are needed and timing.
That's great color and then just one last one I know you have still quite a bit of design wins in the <unk> space I know a lot of the focus here near term is still on data center and CET, but I'm.
Just curious if that communications revenue basis is starting to move at a little bit.
Yes, it is and we expect more in the coming year, we expect deployments in the coming year. There are geographical deployments outside the United States without looking pretty good India comes to mind.
More faster, more and no surprise. It tends to be at a higher ASP and it tends to be a collection of products rather than one spot product. Well, yeah, give me this one spot product and we'll be done. So, uh, perhaps if I can answer a question stepping back the way you asked it, I would say there's more need for system-level solutions. There's more need for higher innovation and therefore higher ASP solutions needed in timing.
And I think we should be seeing that I know.
There is a bright object here in the datacenter space, but we do call. It communications enterprise, because there's plenty happening in enterprise as well not just in communications and classic classic Yeah.
Yeah, that's that's a great caller and then just 1 last 1. I know you have still quite a bit of design wins in the 5G space. I know a lot of the focus here near term is still on data center in CED. But um, just curious if that Communications Revenue basis is starting to to move a little bit.
And customers.
Sounds good thank you.
Yep. Thanks.
Thank you.
I'm showing no further questions at this time I would now like to turn it back to management for closing remarks.
Well. Thank you all for this all I'd like to say is that these are wonderful times and we're very happy to be.
Be rolling out, our our products and delivering our solutions to our customers. So thank you for joining us along.
Yes, it is. And we expect more in the coming year. Uh, we expect deployments in the coming year. Uh, there are geographical deployments outside the United States, so they're looking pretty good. India comes to mind, um, and I think, uh, we should be seeing that. I, I know we there's a bright object here in the AI data center space, but we do call it Communications Enterprise because there's plenty happening in Enterprises. Well, not just in Communications and plastic, um, classic, uh, yeah. Um, and customers
Sounds good. Thank you.
Yeah, thanks.
In this journey.
Thank you.
Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
I'm showing no further questions at this time. I would now like to turn it back to management for closing remarks.
Well, thank you all uh, for this. Uh, all I'd like to say is that these are wonderful times and we're very happy to um, be rolling out our our products and delivering a solutions to our customers. So thank you for joining us along uh, in this journey.
Thank you for your participation. In today's conference, this does conclude the program. You may now disconnect