Inve US ▾
SISITM

SiTime (SITM) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Information Technology· May 6, 2026

Source: earnings call transcript

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

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

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%——

Orderbook & backlog

Book-to-bill growing Q1 FY26

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

Product announcements

ProductTypeDetails
Elite 2 Super TCXO familylaunch

Deals & partnerships

Renesas Acquisition 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

Mobile, IoT, Consumer revenue decline Q1 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 H2 H2 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 challenges Current

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

Gross Margin Trajectory

H2 FY26
Current 64.5% (Q1 FY26)
Target Above 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.

Find out whether SITM delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.