SiTime(SITM) - 2023 Q3 - Quarterly Report

Risk Factor Summary Summarizes key risks to SiTime's business, covering macroeconomic conditions, industry cycles, customer concentration, and operational dependencies Summary of Key Risks SiTime Corporation's business faces numerous risks, including global macroeconomic conditions, the cyclical nature of the semiconductor industry, dependence on a limited customer base, and the absence of long-term purchase commitments leading to inventory risk - Global macroeconomic conditions have harmed and may continue to harm the business, impacting demand and potentially leading to inventory buildup at customers[8] - The company is subject to the cyclical nature of the semiconductor industry, characterized by rapid technological change, product obsolescence, and fluctuations in supply and demand[8] - Dependence on a limited number of customers for a significant portion of revenue, with orders subject to cancellation or reduction with little notice, exposes the company to inventory risk and potential revenue fluctuations[8] - Reliance on third parties for raw materials, wafer fabrication, assembly, packaging, and testing poses risks related to supply, quality, pricing, and geopolitical instability[8] - Success and future revenue depend on achieving design wins and customers designing products into their offerings, with failure to do so harming results[8] - Gross margins may fluctuate due to various factors, including customer and product mix, market acceptance, and manufacturing costs, potentially negatively impacting financial condition[8] - Risks related to intellectual property include failure to adequately protect IP, potential infringement claims, and the costs associated with defending or settling such claims[10] - MegaChips' significant ownership (approximately 20.9% as of September 30, 2023) limits other shareholders' influence and could lead to potential conflicts of interest[10] PART I. FINANCIAL INFORMATION This section presents SiTime Corporation's unaudited condensed consolidated financial statements for the period ended September 30, 2023, prepared in conformity with U.S. GAAP Item 1. Financial Statements (Unaudited) This section presents SiTime Corporation's unaudited condensed consolidated financial statements for the period ended September 30, 2023, prepared in conformity with U.S. GAAP Condensed Consolidated Balance Sheets This section provides a snapshot of SiTime Corporation's financial position, detailing assets, liabilities, and equity as of September 30, 2023, and December 31, 2022 | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Assets: | | | | Cash and cash equivalents | $16,711 | $34,603 | | Short-term investments | $551,398 | $529,494 | | Accounts receivable, net | $25,182 | $41,229 | | Inventories | $64,539 | $57,650 | | Total current assets | $666,901 | $669,067 | | Total assets | $747,687 | $750,616 | | Liabilities & Equity: | | | | Total current liabilities | $31,280 | $33,794 | | Total liabilities | $37,345 | $42,136 | | Total stockholders' equity | $710,342 | $708,480 | - Total assets slightly decreased from $750.6 million at December 31, 2022, to $747.7 million at September 30, 2023[13] - Cash and cash equivalents decreased by 51.7% from $34.6 million to $16.7 million, while short-term investments increased by 4.1% from $529.5 million to $551.4 million[13] Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) This section outlines SiTime Corporation's financial performance, presenting revenue, expenses, and net income (loss) for the three and nine months ended September 30, 2023 and 2022 | Metric | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue | $35,520 | $73,095 | $101,590 | $222,766 | | Cost of revenue | $15,603 | $25,799 | $43,195 | $77,563 | | Gross profit | $19,917 | $47,296 | $58,395 | $145,203 | | Total operating expenses | $45,094 | $43,764 | $138,127 | $123,329 | | Income (loss) from operations | $(25,177) | $3,532 | $(79,732) | $21,874 | | Interest income | $7,333 | $2,492 | $19,629 | $3,295 | | Net income (loss) | $(18,125) | $5,783 | $(60,537) | $24,782 | | Net income (loss) per share, basic | $(0.81) | $0.27 | $(2.74) | $1.17 | | Net income (loss) per share, diluted | $(0.81) | $0.26 | $(2.74) | $1.09 | - Revenue decreased significantly by 51.4% for the three months ended September 30, 2023, and by 54.4% for the nine months ended September 30, 2023, compared to the prior year periods[14] - The company reported a net loss of $18.1 million for the three months and $60.5 million for the nine months ended September 30, 2023, a reversal from net income in the prior year periods[14] - Interest income saw substantial increases, rising by 194% for the three months and 496% for the nine months ended September 30, 2023, primarily due to higher interest rates and investment balances[14] Condensed Consolidated Statements of Stockholders' Equity This section details changes in SiTime Corporation's stockholders' equity, including common stock, additional paid-in capital, and accumulated deficit, for the nine months ended September 30, 2023 | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Common Stock (shares) | 22,456 | 21,702 | | Additional Paid-in Capital | $778,742 | $716,343 | | Accumulated Deficit | $(68,402) | $(7,865) | | Total Stockholders' Equity | $710,342 | $708,480 | - Total stockholders' equity increased slightly from $708.5 million at December 31, 2022, to $710.3 million at September 30, 2023[17] - The accumulated deficit significantly increased from $7.9 million to $68.4 million, primarily due to the net loss incurred during the nine months ended September 30, 2023[17] - Additional paid-in capital increased by $62.4 million, driven by stock-based compensation expense and proceeds from common stock issuance[17] Condensed Consolidated Statements of Cash Flows This section presents SiTime Corporation's cash flow activities, categorizing them into operating, investing, and financing, for the nine months ended September 30, 2023 and 2022 | Cash Flow Activity | Nine Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | | :--------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by (used in) operating activities | $(8,922) | $34,945 | | Net cash used in investing activities | $(11,876) | $(547,910) | | Net cash provided by (used in) financing activities | $2,906 | $(4,888) | | Net decrease in cash and cash equivalents | $(17,892) | $(517,853) | | Cash and cash equivalents, End of period | $16,711 | $41,608 | - Operating activities shifted from providing $34.9 million in cash in 2022 to using $8.9 million in 2023