SiTime(US:SITM)2023-11-02 04:24Financial Data and Key Metrics Changes - Revenue for Q3 2023 was $35.5 million, up 28% from Q2 2023 [19][46] - Non-GAAP gross margins were 58.2%, essentially flat compared to Q2 [20][46] - Non-GAAP EPS was $0.06 per share, a significant improvement from a loss of $0.21 in Q2 [5][46] - Non-GAAP operating expenses were $26.3 million, down about 4% from Q2 [20][46] - Cash, cash equivalents, and short-term investments totaled $568.1 million at the end of the quarter [21] Business Line Data and Key Metrics Changes - Sales in the mobile IoT and Consumer segment were $17.9 million, accounting for 50% of total sales, up from $10.4 million in Q2 [19][45] - Sales to the largest customer increased to $13.2 million from $4.6 million in Q2 [45] - Sales in the Industrial, Automotive, and Aerospace segment were $11.7 million, slightly down from $12.4 million in Q2 [45] - Sales in the Communications & Enterprise segment were $5.9 million, up from $4.9 million in Q2 [45] Market Data and Key Metrics Changes - The company expects Q4 sales to increase by 15% to 20% sequentially, driven by markets other than the largest customer, particularly in communications, enterprise, industrial, and aerospace [22][39] - The cumulative design wins in 2023 have grown 75% compared to the same period in 2022 [6] Company Strategy and Development Direction - The company is expanding its Serviceable Available Market (SAM) with high-value products like Epoch for communications and data center markets [12][13] - The acquisition of Aura Semiconductor is expected to accelerate clocking revenue and roadmap by several years [14][15] - The company aims to create a new category of precision timing products by combining MEMS oscillators with clock products [41][100] Management's Comments on Operating Environment and Future Outlook - Management noted an uptick in end demand and expects continued growth in Q4, particularly in the communications and enterprise segments [22][39] - The company is managing inventory levels and expects to normalize channel inventory by the end of 2023 or into 2024 [47] - Management expressed confidence in maintaining a long-term annual growth rate of 30% [29] Other Important Information - The company announced the appointment of Beth Howe as the new CFO, effective November 8 [16][25] - The acquisition of Aura Semiconductor involves fixed payments totaling $148 million, with earn-out payments based on revenue generated from acquired products [49][93] Q&A Session Summary Question: What are the expected growth subsegments for Q4? - Management expects substantial growth in the communications and enterprise segment, projecting a 50% sequential increase from Q3 to Q4 [53] Question: How does the Aura acquisition impact financial profiles long-term? - The acquisition is expected to enhance gross margins, with clocking products typically having gross margins around 70% [28] Question: What are the order trends moving into Q4? - Order rates have increased, contributing to confidence in growth for the communications, enterprise, industrial, and aerospace segments [34][59] Question: What is the expected impact of the Aura acquisition on operational expenses? - The acquisition will not significantly increase operational expenses, as the company plans to hire a few employees from Aura [76] Question: How does the company view its business in China? - The company anticipates growth in its China business, particularly in industrial and automotive sectors, despite macroeconomic challenges [110]