SITM Q2 Earnings Call Points to AI Growth and TPD Upside

SITM Expects a Step Change in Q3

Second-quarter non-GAAP earnings of $2.34 per share topped the Zacks Consensus Estimate of $1.93. Revenues of $157.4 million also exceeded the $145.1 million consensus and increased 127% year over year.

CFO Beth Howe guided third-quarter revenues to be $285 million to $295 million. Excluding TPD, revenues are expected in the range of $200 million to $210 million.

Howe projected a combined non-GAAP gross margin of about 68%, plus or minus one percentage point, operating expenses of $80 million to $85 million and non-GAAP earnings of $3.50 to $3.65 per share.

SiTime's AI Timing Demand Broadens

CEO Rajesh Vashist said Communications, Enterprise and Data Center revenues reached $101.2 million, up 181% year over year. The unit posted its ninth consecutive quarter of triple-digit growth.

Vashist expects 1.6-terabit optical-module revenues to double in 2027 while 800-gigabit revenue also grows significantly. Management sized the combined 2027 serviceable market at $450 million.

The CEO said synchronization across compute and networking nodes is adding several hundred dollars of timing content per data center rack. Customers are placing orders 12 to 18 months ahead, improving visibility into 2027.

SITM Sees More Upside From TPD

SiTime closed the Renesas timing acquisition on July 1, adding a clocking franchise with 10,000 customers. Vashist said the business carries about 70% gross margins and derives nearly 70% of revenue from CED.

Management had targeted $300 million of revenues during the first 12 months after closing, representing 40% growth from 2025. CEO Vashist said early performance supports a higher growth rate.

A Needham analyst asked why the outlook had strengthened. CFO Howe said TPD remained strong through the second quarter and into the third and is on its way to exceeding the original target, although integration is still early.

SiTime Pushes Timing Deeper Into Systems

Vashist outlined a shift from discrete timing components toward chiplets, advanced substrates and modules. He said this could expand SiTime's CED serviceable market by $2.5 billion by 2030.

A ROTH Capital Partners analyst asked when combined-company products might emerge. Vashist identified integrated clocks with oscillators or resonators as a starting point for product development over coming quarters.

Management also highlighted opportunities in autonomous vehicles, assured position, navigation and timing for defense, humanoid robots, drones and personal AI devices. The Mobile, IoT and Consumer funnel exceeds $1.2 billion.

SITM Q&A Sharpens Growth and Constraints

A UBS analyst asked how TPD growth could compare with the core business. Howe said TPD faces supply-chain constraints and will rely on Renesas for manufacturing and test under transition services agreements for several quarters.

A Goldman Sachs analyst pressed management on data center share gains. Vashist said SiTime's share is significantly higher in 1.6-terabit optical modules than in 800-gigabit products, alongside higher average selling prices.

A ROTH Capital Partners analyst asked about timing density. Vashist said more timing devices are being used across processors, accelerator cards and switches because signals must remain synchronized throughout the rack.

SiTime's Focus Shifts to Execution

Management's tone centered on scaling the core business while transferring customer relationships, supply-chain processes and infrastructure from Renesas. Howe emphasized customer continuity and disciplined investment during the transition.

Vashist positioned the broader oscillator, resonator and clock portfolio as the platform for AI infrastructure and emerging edge applications. Near-term priorities are sustaining core demand and integrating TPD.

Zacks Signals for SITM Remain Mixed

SITM carries a Zacks Rank #3 (Hold). Its Growth Score of A is favorable, but the Value Score of F and Momentum Score of D are weak, while the VGM Score of C reflects a mixed combined profile.

The Style Scores complement the Zacks Rank, with A and B grades preferred over lower grades. The current signals lack the combination of a Zacks Rank #1 (Strong Buy) or #2 (Buy) and an A or B VGM Score highlighted by the framework. The Zacks Rank can change as estimates are revised after the reported results. You can see the complete list of today’s Zacks #1 Rank stocks here.

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