SiTime Corporation (SITM) | The Buildout — AI Infrastructure
The Verdict
SiTime makes precision timing components that provide the heartbeat for electronic systems. In AI infrastructure, that timing is becoming a system-level requirement as optical speeds rise and data-center racks add synchronization to lift GPU utilization.
| Market Cap | — |
| Revenue (TTM) | $380M |
| Revenue Growth | +65.2% |
| EBITDA Margin (TTM) | 0.8% |
| Net Cash | $786M |
| Earnings Beats | 7 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Mobile, IoT & Consumer revenue was $31.4M in Q2, up 85% y/y and 89% q/q, driven by the large consumer customer platform ramp.
- Inference infrastructure needs 2–4x more timing content per system than training infrastructure, per management.
- 1.6T optical revenue is expected to grow 100% in 2027; combined 800G/1.6T SAM is projected at $450M in 2027.
- TPD adds roughly 10,000 customers, about 70% gross margins, and roughly 75% CED/data-center mix.
- Q2 non-GAAP gross margin was 67.1% and operating margin was 34%, above the 65% and 30% targets.
What We’re Watching
- TPD integration still relies on Renesas transition services for the next several quarters, with customer-reported supply constraints.
- Customer concentration: top three distributors were 66% of Q1 2026 revenue, and the company discloses no hard backlog.
- Bosch MEMS wafer agreement is up for renewal; management expects no problems but it is not yet signed.
- Q3 OpEx is guided to $80–85M, a large step-up from $52.1M in Q2.
The thesis is strengthening on growth and execution: management exceeded revenue, gross margin, and operating margin commitments and closed TPD ahead of plan. The open question is whether CED's AI-driven growth and the consumer ramp are durable enough to absorb TPD integration, supply constraints, and the Q3 OpEx step-up without eroding high-60s gross margin.
Earnings Beat
Q2 2026 revenue was $157M, up 127% y/y and 39% q/q, with non-GAAP gross margin of 67.1%, up 8.9 points y/y. Non-GAAP operating margin reached 34%, up from 10% a year earlier and 28% in Q1. The consumer segment swung from -1% y/y in Q1 to +85% y/y in Q2.
| Metric | Q1 FY2026 | Q4 FY2025 | Q1 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $114M | $113M | $60M | +88.4% |
| Gross margin | 59.0% | 56.4% | 50.3% | +870bps |
| EBITDA | $8M | $16M | −$19M | −140.3% |
| EPS | $-0.20 | $0.34 | $-1.01 | −80.4% |
| CED revenue | $101M | $75.7M | n/a | +181% y/y |
| Large consumer customer revenue | $22.8M | $10.2M | n/a | — |
The second quarter was truly exceptional.— SiTime CEO, August 5, 2026
Management tone: Management's tone shifted from confident to more expansive after the Q2 beat. The CEO called the quarter truly exceptional and said every business unit and every region grew over 50% year over year; he re-anchored the multiyear baseline at 30% growth with AI and the consumer design win as accelerants. The CFO expressed confidence on TPD revenue while cautioning that the Q2 interest-income benefit will not recur at the same level.
Management Guidance
For Q3 2026, management guided combined revenue to $285M–$295M — about $85M from TPD and $200M–$210M from SiTime ex-TPD, up about 30% sequentially at the midpoint — with combined non-GAAP gross margin of ~68% ±1 point and non-GAAP OpEx of $80M–$85M. The prior full-year growth guide of at least 80% remained the latest FY2026 figure in the supplied record.
Trajectory
Revenue stepped from $69.5M in Q2 FY2025 to $83.6M in Q3, $113.3M in Q4, and $113.6M in Q1 FY2026 before the Q2 call reported $157M. GAAP gross margin expanded from 56.4% in Q4 FY2025 to 59.0% in Q1 FY2026; Q2 non-GAAP gross margin reached 67.1%. The drivers are AI data-center demand in CED and the large consumer program ramp; TPD contribution begins in Q3.
The Model
The model projects FY+1 revenue of $770.6M and EBITDA of $132M at a 17.1% margin, rising to FY+2 revenue of $1,175M and EBITDA of $270M at a 23.0% margin. The near term is anchored by the first combined SiTime-TPD quarters, while FY+2 assumes continued CED growth, the consumer ramp, and integration-driven margin expansion.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $327M | $771M | $1.2B |
| YoY Growth | — | +135.9% | +52.5% |
| EBITDA | −$24M | $132M | $270M |
| EBITDA Margin | -7.3% | 17.1% | 23.0% |
Projections are the median of 5 independent model runs.
For Q3 2026, management guided combined revenue to $285M–$295M — about $85M from TPD and $200M–$210M from SiTime ex-TPD, up about 30% sequentially at the midpoint — with combined non-GAAP gross margin of ~68% ±1 point and non-GAAP OpEx of $80M–$85M. The prior full-year growth guide of at least 80% remained the latest FY2026 figure in the supplied record.
What Could Go Right — and Wrong
- TPD exceeds its original $300M twelve-month revenue target and supply constraints ease.
- 1.6T optical revenue grows 100% in 2027 while 800G grows significantly, driving the combined $450M SAM.
- CED retains triple-digit growth into Q3 and management sees no signs of slowdown in 2027 on inference and synchronization content.
- The large consumer customer ramp continues into 2027 and sustains the Mobile, IoT & Consumer recovery.
- Integrated timing chiplets, substrates, or modules begin sampling or generate first revenue toward the $2.5B 2030 SAM.
- AI or optical demand decelerates and CED triple-digit growth breaks; no hard disclosed backlog cushions the miss.
- TPD integration slips, Renesas transition services lapse, or supply constraints delay acquired revenue.
- Consumer mix rises while gross margin falls below 65% and Q3 OpEx of $80–85M erodes operating leverage.
- Bosch MEMS wafer agreement renewal disrupts or renegotiates the sole long-term supply relationship.
- The $1.35B convertible notes create dilution or refinancing pressure as the one-time interest-income benefit ends.
Looking Ahead
The next 12 months are defined by the first combined SiTime-TPD quarters, the 1.6T optical ramp, and customer order lead times that extend 12–18 months. Management says 2027 shows no signs of slowdown, but the supplied record contains no quantified FY2027 guide yet.
- Q3 2026First combined quarter — Tests TPD integration and $285–295M revenue, ~68% gross margin guidance.
- H2 2026Large consumer customer ramp — Consumer growth expected to accelerate; tests margin mix against 67–68% gross margin.
- Next several quartersTPD transition services — Tests supply-chain transfer and easing of customer-reported TPD constraints.
- 20271.6T optical ramp — Management expects 1.6T revenue to grow 100% in 2027; tests optical share and SAM conversion.
- Next 3 yearsLEO satellite content — Up to $2,000 content per satellite; 7,000–10,000 launches expected.
- By 2030Integrated timing SAM — $2.5B CED SAM expansion from chiplets, substrates, and modules.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $203M | $327M | $380M | +61.2% |
| Gross Margin | 51.6% | 53.0% | 55.7% | +145bps |
| EBITDA | −$85M | −$24M | −$122M | +72.1% |
| EBITDA Margin | -42.0% | -7.3% | 0.8% | +3,475bps |
| Net Income | −$94M | −$43M | −$24M | +54.2% |
| Free Cash Flow | −$13M | $35M | $79M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)55.7%
- EBITDA Margin (TTM)0.8%
- Net Margin (TTM)-6.4%
- ROIC-8.6%
- FCF Conversion1800.0%
- SBC / Revenue28.8%
The Company
SiTime designs precision timing semiconductors — oscillators, clock ICs, resonators, and synchronization software. The 10-K describes these as the heartbeat of electronic systems, and management says SiTime created the precision timing category and addresses a $4 billion TAM inside an $11 billion timing market.
SiTime is fabless and does not own semiconductor manufacturing plants. Its Santa Clara headquarters lease is roughly 50,400 square feet and expires March 2027, with international leased facilities in Japan, Malaysia, the Netherlands, Taiwan, Finland, India, and Ukraine. MEMS wafers come from Bosch and Teledyne, analog ICs from TSMC and UMC, and packaging and test from ASE, Carsem, UTAC, Hana Semiconductor, Daishinku, and STATS ChipPAC.
Business Segments
Competitive Landscape
Management claims SiTime is the only company combining oscillators, resonators, and clocks.
Supply Chain
SiTime sits between fabless MEMS and analog suppliers and downstream distributors, OEMs, and AI-system builders. No neighbor named SiTime by name in the supplied read-through; AI-builder relationships are inferred unless documented.
More on SITM: Earnings recap