SiTime(US:SITM)2023-08-03 20:07Revenue Performance - Revenue for the three months ended June 30, 2023, decreased by $51.7 million, or 65.1%, compared to the same period in 2022, primarily due to decreased sales volume and average selling prices [86]. - Revenue for the six months ended June 30, 2023, decreased by $83.6 million, or 56%, compared to the same period in 2022, driven by lower sales volume, partially offset by an increase in average selling prices [87]. - Sales from the largest end customer accounted for 16% of revenue for the three months ended June 30, 2023, down from 14% in the same period of 2022 [88]. Gross Profit and Margin - Gross profit for the three months ended June 30, 2023, decreased by $37.2 million compared to the same period in the prior year, primarily due to lower revenue [90]. - Gross margin for the three months ended June 30, 2023, was 56%, down from 66% in the same period of 2022 [90]. - Gross profit decreased by $59.4 million for the six months ended June 30, 2023, compared to the same period in the prior year, primarily due to lower revenue [91]. - Gross margin decreased by 10% for the three months ended June 30, 2023, with 8% attributed to lower sales and 2% due to lower average selling prices (ASP) [92]. Operating Expenses - Total operating expenses increased by $13.5 million, or 17%, for the six months ended June 30, 2023, compared to the same period in the prior year [95]. - Research and development expenses increased by $8.4 million, or 20%, for the six months ended June 30, 2023, primarily due to higher stock-based compensation and personnel costs [99]. Cash Flow and Investments - Cash and cash equivalents decreased to $30.4 million as of June 30, 2023, from $34.6 million as of December 31, 2022 [111]. - Net cash provided by operating activities was $2.7 million for the six months ended June 30, 2023, despite a net loss of $42.4 million [117]. - Net cash used in investing activities was $8.9 million for the six months ended June 30, 2023, primarily for short-term investments and equipment purchases [119]. - The company sold 200,000 shares of common stock resulting in net proceeds of $21.2 million during the six months ended June 30, 2023 [112]. Interest Income and Financial Position - Interest income increased by $11.5 million for the six months ended June 30, 2023, due to higher interest rates from treasury bills [106]. - The company generated $12.3 million in interest income during the six months ended June 30, 2023, due to a higher cash balance and rising interest rates [124]. - The company holds short-term investments in held-to-maturity securities of $544.3 million, consisting of treasury bills as of June 30, 2023 [124]. Economic Outlook and Business Strategy - The company expects macroeconomic events to continue negatively affecting sales and results of operations in 2023 [83]. - The company plans to focus on expanding its presence in oscillators, clock ICs, and timing synchronization solutions [72]. - The company aims to grow direct online sales through its self-service online store, SiTimeDirect™ [72]. Accounting Estimates and Risks - The company has identified critical accounting estimates including revenue recognition, inventory, stock-based compensation, and accounting for income taxes [122]. - Management believes there have been no significant changes to the critical accounting estimates disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022 [122]. - The company does not currently have a hedging program for foreign currency exchange risk, and its revenue is primarily denominated in U.S. dollars [123]. - A hypothetical 10% change in foreign currency exchange rates would not have a material impact on the company's historical consolidated financial statements [123]. - A hypothetical 10% increase or decrease in market interest rates would change the fair value and related interest income on the company's interest-earning instruments by approximately $1.2 million for the six months ended June 30, 2023 [125].