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    SITM
    Earnings call· Mar 2026(Q1 FY26)

    SITIME Q1 FY26 earnings call SITM

    May 6, 2026 Source

    Executive summary

    SiTime Q1 FY26 — AI Infrastructure Drives 88% Revenue Growth and Strong Outlook

    SiTime delivered a very strong Q1 FY26, primarily fueled by robust demand in AI infrastructure and precision timing, leading to substantial revenue and EPS growth. The company is entering its next phase of growth from a position of strength, with confidence in its trajectory and the scalability of its operating model. The previously announced Renesas acquisition remains on track, though its benefits are not yet included in the current outlook.

    Highlights

    5

    • Q1 FY26 revenue grew 88% year-over-year to $113.6 million, significantly exceeding expectations.

    • Non-GAAP EPS increased fivefold to $1.44 per share in Q1 FY26, up from $0.26 a year ago.

    • Communications Enterprise and Data Center (CED) revenue surged 158% year-over-year to $75.7 million, marking its eighth consecutive quarter of triple-digit growth.

    • Gross margin expanded by 7.1 percentage points year-over-year to 64.5% in Q1 FY26, driven by favorable product mix and cost improvements.

    • Operating margin expanded by 25 percentage points year-over-year to 28% in Q1 FY26, demonstrating significant operating leverage.

    Concerns

    2

    • Mobile, IoT and Consumer revenue declined 1% year-over-year to $16.7 million in Q1 FY26, with the largest consumer customer contributing $10.2 million.

    • Days sales outstanding (DSO) increased to 44 days in Q1 FY26, up from 36 days in Q4 FY25, as revenue linearity normalized.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year Revenue Growth
    at least 80%
    high materiality
    High
    Q2 Revenue
    $140 million to $150 million
    high materiality
    High
    Q2 Gross Margin
    approximately 65%, plus/minus 1 point
    medium materiality
    High
    Q2 Operating Expenses
    $46 million to $47 million
    medium materiality
    High
    Q2 Interest Income
    approximately $5 million
    low materiality
    High
    Q2 Share Count
    approximately $27.5 million shares
    low materiality
    High
    Q2 Non-GAAP EPS
    $1.85 to $2 per share
    high materiality
    High
    Long-term Gross Margin
    65%
    high materiality
    High
    Long-term Operating Margin
    30%
    high materiality
    High
    Long-term Annual Revenue Growth
    25% to 30%
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Communications Enterprise and Data Center (CED)
    Reflects breadth of demand across AI infrastructure, including optical modules, switches, SmartNICs and accelerator platforms. This segment represents 66.6% of total revenue.
    		$75.7 million158%17%—
    Automotive, Industrial and Aerospace Defense
    Aerospace and defense was the fastest-growing area within this sector, benefiting from accelerating adoption of precision timing across autonomous systems, defense modernization and industrial automation. This segment represents 18.7% of total revenue.
    		$21.2 million51%——
    Mobile, IoT and Consumer
    Largest consumer customer contributed $10.2 million for the quarter. Revenue down due to timing of shipments and prior year's modem launch. This segment represents 14.7% of total revenue.
    		$16.7 million-1%——

    Operational metrics

    14
    Non-GAAP EPS
    $1.44fivefold increase vs $0.26 YoY
    Q1 FY26

    Compared to $0.26 per share in Q1 FY25.

    Non-GAAP gross margin
    64.5%+7.1 percentage points YoY
    Q1 FY26

    Approximately half of the increase was driven by favorable product mix, and the other half by product cost improvements and better manufacturing absorption.

    Non-GAAP operating margin
    28%+25 percentage points YoY
    Q1 FY26

    Expanded from 3% in Q1 FY25.

    Revenue
    $113.6 million+88% YoY
    Q1 FY26

    Significantly better than anticipated at the beginning of the quarter, primarily driven by stronger-than-expected demand in AI data center applications.

    Operating expenses
    $41.5 million
    Q1 FY26

    Reflects intentional investments to support growth, including higher headcount and variable compensation, as well as continued investments in long-term roadmap.

    Cash and investments balance
    $789 million
    Q1 FY26

    Ended Q1 with strong liquidity position in cash and short-term investments.

    Accounts receivables
    $55 million
    Q1 FY26

    Balance at the end of the quarter.

    Days sales outstanding (DSO)
    44 daysup from 36 days in Q4 FY25
    Q1 FY26

    Increased as revenue linearity normalized.

    Inventory
    $91.1 millionup from $81.6 million in Q4 FY25
    Q1 FY26

    Increased in line with revenue growth.

    Aerospace & Defense funnel
    $0.5 billion
    Lifetime

    Represents lifetime revenue potential for the aerospace and defense business.

    Titan resonators funnel
    $400 million
    Since introduction

    Funnel has grown to this amount since the introduction of Titan resonators, gaining strong traction with semiconductor partners and OEMs.

    LEO satellite content
    $2,000
    Per satellite

    SiTime content per LEO satellite.

    AI-enabled telecom designs timing content
    3x higher
    Current

    AI-enabled telecom designs contain 3x higher timing content, primarily from high ASP oscillators and clocks, compared to traditional designs.

    Inference infrastructure timing content
    2 to 4x more
    Current

    Inference infrastructure built on newer XPUs needs 2 to 4x more timing content per system than in training infrastructure.

    Industry KPIs

    5
    MetricValueDetails
    Book to bill ratiogrowing
    Ai data center revenue$75.7 millionUSD
    Bookings net order intakegrowing
    Inventory channel inventory$91.1 millionUSD
    End market segment revenue mixCED: $75.7M (66.6% of total), Automotive, Industrial and Aerospace Defense: $21.2M (18.7% of total), Mobile, IoT and Consumer: $16.7M (14.7% of total)USD

    Orderbook & backlog

    1
    Book-to-billgrowingQ1 FY26

    Book-to-bill is growing with pull-through from the channel keeping inventories at the desired target.

    Product announcements

    1
    ProductTypeDetails
    Elite 2 Super TCXO familylaunch

    Deals & partnerships

    1
    RenesasAcquisition of Renesas timing business

    The announced Renesas acquisition remains on track, and the company continues to be optimistic about this combination. The current outlook does not assume any benefit from this acquisition, as it has not yet closed. OpEx modeling is panning out roughly as expected, with plans for investments in CapEx for new equipment and modernization. Customer feedback has been universally positive, viewing the clock business as complementary to SiTime's oscillators.

    Risks & headwinds

    3
    Mobile, IoT, Consumer revenue declineQ1 FY26

    down 1% YoY to $16.7 million in Q1 FY26

    Mitigation: Management attributes the decline to timing of shipments and the prior year's modem launch by a large consumer customer, noting that such fluctuations are not significant for very large customers. The segment is expected to be stronger in the second half of the year.

    Gross margin modulation in H2H2 FY26

    potential modulation

    Mitigation: While Q1 benefited from a strong CED mix, the expected increase in the mix of lower-margin consumer products in H2 might modulate gross margins. However, margins are still expected to remain above 60% and towards the higher end of the target range.

    Backend OSAT challengesCurrent

    some challenges

    Mitigation: Challenges in the back end, particularly with OSATs, are noted due to volume. Management states these are within usual execution issues and are being addressed through automation and the use of AI in test programs, which improve productivity and speed.

    What to watch in Q2 FY26

    5

    Gross Margin Trajectory

    H2 FY26
    Current64.5% (Q1 FY26)
    TargetAbove 60%, towards higher end of target range

    Why it matters

    Indicates product mix shifts and overall profitability, especially with the expected increase in lower-margin consumer products.

    As we move through the year, we would expect consumer to be a larger portion of the mix in the back half, which might modulate gross margins a bit just based on mix. But overall, we still expect gross margins to be above that 60% level and kind of well into this range.

    Q&A highlights

    8

    What specifically is driving the strong CED performance in Q2 and the rest of the year, particularly distinguishing between XPU-related and optical-related demand?

    Rajesh confirmed that the strong CED growth is primarily driven by two factors: inference infrastructure (XPUs, switches, inference workloads) which is increasing both content and ASPs, and networking bandwidth within data centers, especially the growth of 1.6 terabit optical modules. He also noted that other business segments are performing well.

    “it's two things that I said are leading it. One is the inference infrastructure, all the XPUs, the switches, the inference workloads, those are growing as well as our content is growing in units, but also the ASPs are growing. The second one is, of course, the networking bandwidth within the data center, in other words, optical modules and everything connectivity, including active cabling, especially with the growth of the 1.6 terabit optical modules, which is growing, as we said the last time at a higher rate than we had anticipated last year.”

    asked by Timothy Arcuri · answered by Rajesh Vashist

    2 min read6 chapters

    Detailed Narrative

    01

    AI Infrastructure and Precision Timing Driving Growth

    SiTime experienced a very strong start to 2026, primarily fueled by robust demand for precision timing in AI infrastructure. The company's differentiated platforms, delivering high performance, resilience, and reliability, address a $4 billion TAM within the $11 billion timing market. This growth is concentrated in high-growth areas such as physical and infrastructure AI, autonomy, mobility, and high-speed communications, establishing SiTime as a key player in semiconductors.

    02

    CED Segment Outperformance and Product Innovation

    The Communications Enterprise and Data Center (CED) business unit led growth in Q1 2026, surging 158% year-over-year to $75.7 million, marking its eighth consecutive quarter of triple-digit percentage growth. This performance was driven by the deployment of inference infrastructure, increased networking bandwidth within data centers, and the anticipated adoption of 1.6 terabit optical modules. SiTime's Elite and Elite RF Super TCXOs are widely deployed, with the new Elite 2 Super TCXO family offering up to 3x better synchronization, addressing a $1.5 billion cumulative SAM over the next five years.

    03

    Aerospace and Defense Momentum

    The aerospace and defense business shows a strong outlook, with LEO satellites having up to $2,000 of SiTime content per satellite. The company expects 7,000 to 10,000 LEO satellite launches over the next three years, and up to 15,000 over the next ten years. SiTime's funnel for this segment is about $0.5 billion in lifetime revenue, with a target of $100 million in revenue over the next few years, supported by an expanded roadmap and strong customer relationships.

    04

    Scalable Operating Model and Financial Discipline

    SiTime's operating model demonstrated strong scalability and discipline, delivering 88% revenue growth and expanding operating margins by 25 percentage points year-over-year to 28% in Q1 2026. The company is investing with conviction in the business, including higher headcount and variable compensation, while still delivering clear operating leverage. SiTime expects to achieve its long-term targets of 65% gross margin and 30% operating margin in Q2 2026.

    05

    Supply Chain Resilience and AI Adoption in Operations

    SiTime maintains a solid and resilient supply chain for its MEMS chips (from Bosch) and analog chips (from TSMC), with no fundamental issues or macro concerns. The company has also significantly improved productivity and speed with less CapEx by leveraging automation and AI in its back-end test programs and characterization. This internal adoption of AI enhances operational efficiency, complementing its role as a provider of products for AI rollout.

    06

    Renesas Acquisition and Customer Feedback

    The previously announced acquisition of the Renesas timing business remains on track, with integration planning progressing as expected and no unexpected surprises in the cost structure. Initial customer feedback has been almost universally positive, as customers view the Renesas clock business as complementary to SiTime's oscillator offerings. The company also noted positive responses from the incoming Renesas team, valuing their expertise.

    AI-generated summary of the company’s earnings call. Not investment advice.