SiTime(SITM) - 2024 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q1 2024 was $33 million, down 22$42.4 million in Q4 2023, aligning with typical seasonality [31] - Non-GAAP gross margins were 57.9%, a decrease of 40 basis points sequentially, impacted by lower volumes but partially offset by favorable product mix and cost [24][20] - Non-GAAP operating loss for Q1 was $8.3 million, with interest and other income of$6.3 million, resulting in a non-GAAP net loss of $1.9 million or$0.08 per share [24] Business Line Data and Key Metrics Changes - Sales into the communications, enterprise, and data center (CED) market were $9.9 million, accounting for 30$10.3 million, representing 31% of total sales, with the largest customer contributing $6.3 million or 19$12.9 million, making up 39% of total sales [31] Market Data and Key Metrics Changes - In North America, there is a strong demand for precision timing solutions in enterprise AI systems and data center infrastructure [16] - In Taiwan and China, engagement with key ODMs and OEMs is expected to benefit from the transition to 800G optical modules [17] - The automotive market is anticipated to grow despite current uncertainties in EV growth, with a focus on ADAS electronics [29] Company Strategy and Development Direction - The company is focusing on the CED market, bundling clocks and oscillators to meet precision timing needs, particularly in AI and telecom [1] - The strategy includes expanding the serviceable market (SAM) with a broader product portfolio, including the introduction of 40 new clocks by the end of 2024 [21] - The company aims to leverage strengths in end market diversity and product breadth to return to a target growth rate [30] Management's Comments on Operating Environment and Future Outlook - Management noted that customer inventory levels are returning to normal, which is expected to support growth in Q2 and beyond [35] - The company anticipates sequential growth throughout 2024, with revenue expectations for Q2 between $40 million and$42 million, representing a 21% to 27% increase sequentially [26] - Management expressed confidence in achieving a revenue target of $100 million in the CED market in the coming years [43] Other Important Information - Total operating expenses for Q1 were$27.4 million, with R&D expenses at 16.4 million and SG&A expenses at 11 million [24] - The company ended the quarter with $517 million in cash, cash equivalents, and short-term investments [64] Q&A Session Summary Question: What is driving growth across product segments? - Growth is expected from all segments, with CED, automotive, and industrial markets performing well, while consumer growth is also anticipated [34] Question: Are customers through the inventory correction? - Most customers are expected to be through the inventory correction by the end of Q2, returning to normal buying patterns [35] Question: What is the outlook for the second half of the year? - A stronger second half is anticipated, with expectations of normal seasonal strength as customers emerge from inventory corrections [37][48] Question: How is pricing pressure affecting the automotive segment? - Pricing pressure is noted in the automotive segment, primarily due to EV pricing, but overall pricing remains stable across other segments [55][56] Question: What is the expected growth rate for the company? - The company maintains a long-term growth expectation of around 30%, with significant potential for growth in Q3 and Q4 [51][55]