SiTime (SITM) Q2 Revenue Jumps 58%

SiTime (SITM 6.56%), a designer of MEMS-based precision timing components for electronics, reported its second quarter fiscal 2025 results on August 6, 2025. GAAP revenue was $69.5 million in Q2 2025, beating analyst estimates by about $4.8 million. Non-GAAP earnings per share (EPS) were $0.47, exceeding expectations by $0.19. Compared to Q2 2024, both top- and bottom-line growth were substantial, with GAAP revenue increasing from $43.9 million to $69.5 million and non-GAAP net income rising from $2.8 million to $11.6 million. Sales jumped 58%, and profit margins (non-GAAP) also improved. The CED segment, which caters to AI infrastructure and data center customers, was a highlight. Despite impressive growth, the quarter showed continued high operating expenses and persistent pressure on reported (GAAP) net income. Overall, the results firmly exceeded expectations, with non-GAAP EPS of $0.47 versus the analysts' estimate of $0.28 and advanced SiTime’s position as a key supplier to high-growth tech markets.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

SiTime’s Business and Recent Strategic Priorities

SiTime’s main business is designing and selling MEMS-based precision timing devices. MEMS stands for Micro-Electro-Mechanical Systems, a technology used in the company’s all-silicon solutions. SiTime’s products replace traditional quartz-based components in timing circuits found in everything from smartphones to server racks. Its competitive edge comes from differentiated technology, strong performance in challenging environments, and scalable manufacturing, which all matter for customers in fast-changing industries.

The company has focused on building out its product portfolio, especially targeting markets beyond its historic strengths. In addition to MEMS oscillators, it now offers clock integrated circuits, synchronizers, and resonators. SiTime aims to win business in high-value applications – like communications, automotive, and AI-enabled data centers – while carefully managing its work with large distributors and end customers. Customer concentration, especially with tech giants like Apple, and supply chain flexibility, are also core priorities.

Quarter in Review: Growth, Segments, and Product Highlights

In the quarter, Revenue grew 58% year-over-year. This GAAP revenue result beat Wall Street estimates by $4.8 million. The non-GAAP EPS result was up sharply year over year, also beating analyst projections by a wide margin, with non-GAAP EPS of $0.47 (versus estimate of $0.28) and GAAP revenue of $69.5 million (versus estimate of $64.6634 million). A key driver was the outstanding performance of the Communications, Enterprise, and Data Center (CED) business. Revenue in this segment climbed 137% year over year, propelled by demand for AI-powered infrastructure. Momentum was supported by an increase in customer “design activity for 1.6T modules,” as discussed in Q1 2025, which management expects to become mainstream products in the coming years.

Non-GAAP gross margin edged upward to 58.2%. Operating margin on a non-GAAP basis moved into double digits, turning non-GAAP net income positive compared to last year’s loss. However, stock-based compensation remained a large part of the expense base, continuing to keep GAAP net profitability out of reach for now.

The company highlighted progress across several product families. The Cascade product line – clock devices aimed at the CED segment – continued to see strong adoption in data center and networking applications. The Symphonic product family, an integrated clock generator for the mobile, Internet of Things (IoT), and industrial markets, was recently introduced as well. Each family addresses a specific need: performance, resilience, or size in demanding environments.

Inventory levels increased from the start of the year, matching ongoing production ramp-ups for new products. Inventory (GAAP) at quarter-end was $84.1 million, up from $76.7 million on December 31, 2024. SiTime’s fabless model – outsourcing chip manufacturing to foundries like Bosch and TSMC – continued to play a role in scaling output without owning factories, while capital expenditure remained high to support both new product introductions and expansion of capacity.

The balance sheet strengthened, with cash, cash equivalents, and short-term investments of $796.7 million at quarter-end—roughly double the level at the end of Q1 2025. The company maintained a debt-free position. No new customer concentration updates appeared in this release, but the company’s largest end customer (historically Apple) continues to account for a significant portion of sales.

Looking Forward: Guidance and What to Watch

SiTime did not publish explicit financial guidance for the next quarter or full year in the earnings release. Instead, management stated that it would discuss the business outlook during its scheduled conference call. Previously, in Q1 2025, management guided for revenue growth in the range of 45% to 50% year over year, which the results surpassed. Management continues to target a 60% gross margin for its core business, though acknowledges headwinds from the lower-margin consumer/mobile business. No update was made to this target in the current report.

Key indicators for future quarters will include the pace of AI-related demand in the CED segment, margin trends as new products mix into higher-value markets, and continued progress on gross margin toward management’s 60% goal for its core business. Investors and analysts will also be monitoring any shifts in customer concentration and inventory trends relative to expectations, given the elevated balance seen at the end of the quarter.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.