SiTime(US:SITM)2020-02-06 04:49Financial Data and Key Metrics Changes - Q4 2019 revenue was $28.1 million, up 11% sequentially and up 23% year-over-year. Annual revenue for 2019 was $84.1 million, compared to $85.2 million in 2018 [17] - Non-GAAP gross margins were 48.0%, with non-GAAP operating income at $2.4 million or 8.6% of revenue [20] - Non-GAAP net income was $2.0 million, or $0.16 per share on a fully diluted basis [20] - Cash balance at the end of Q4 was $63.4 million, with $41.0 million in debt [21] Business Line Data and Key Metrics Changes - Mobile, IoT, and consumer segment sales in Q4 were $18.6 million, representing 66% of total sales, up from $17.5 million in Q3 [17] - Industrial, automotive, and aerospace segment sales were $5.3 million, or 19% of sales, compared to $5.2 million in Q3 [18] - Communications and enterprise segment sales were $4.2 million, or 15% of sales, up from $2.7 million in Q3 [19] Market Data and Key Metrics Changes - Design win dollars in 2019 increased by more than 50% compared to 2018, driven by the adoption of SiTime's products [12] - The company expects the $8 billion timing market to grow to $10 billion in the next few years [9] Company Strategy and Development Direction - SiTime aims to expand its market presence by focusing on high-performance silicon timing solutions, replacing traditional quartz devices [6][7] - The company plans to take some sales direct to larger customers, which is expected to improve gross margins by cutting out intermediaries [35][49] - The long-term target for gross margins is between 55% and 60% [62] Management's Comments on Operating Environment and Future Outlook - Management has not seen any disruption from the coronavirus as of the call date, and they are monitoring the situation closely [13][23] - The company expects 2020 to be a strong revenue growth year, with Q1 revenue guidance between $20 million and $21 million, reflecting a 38% increase year-over-year [22] Other Important Information - The company completed its IPO, issuing 4.945 million shares at $13 per share, generating net proceeds of $56.4 million [21] - The company has over 65 different products and has sold to over 10,000 customers since its inception [9] Q&A Session Summary Question: What products are driving growth in the communications business? - Management indicated that design wins in networking and telecommunications, including 5G base stations and satellite products, are driving growth [28] Question: What are the normal seasonal patterns for the company? - Management noted that sales are typically lower in the first half of the year and higher in the back half, primarily driven by the mobile, IoT, and consumer business [30] Question: How should gross margins progress throughout the year? - Management expects gross margins to decline slightly in Q1 due to lower sales volume but anticipates improvements as higher-margin products become a larger percentage of sales [35] Question: How has the company's profile changed since going public? - Management noted an increase in credibility and opportunities with customers, particularly in networking and telecommunications [36] Question: What is the growth expectation for different market segments? - Management expects the communications and enterprise market to grow the fastest, followed by industrial, automotive, and aerospace, with mobile, IoT, and consumer growing more slowly [47] Question: How will the transition to direct sales impact operations? - Management indicated that the transition to direct sales will occur throughout the year without a significant increase in operating expenses [49]