SITIME Corp

Index to Consolidated Financial Statements and Financial Statement Schedule

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Santa Clara, California

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of SiTime Corporation (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated February 26, 2024 expressed an adverse opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Aura Acquisition – Valuation of Certain Acquired Intangible Assets and Sales Based Earnout Liability

As described in Note 2 to the consolidated financial statements, on December 1, 2023, the Company acquired an exclusive license to certain intellectual property relating to Aura’s timing business and clock products, and an assembled workforce for total purchase consideration of $259.2 million, which included the sales based earnout liability based upon the achievement of certain earnout conditions with an initial estimated fair value of $102.3 million. The acquisition qualified as a business combination. Accordingly, the purchase consideration was allocated to the assets acquired based on their respective estimated fair values as of the date of acquisition, including developed technology of $96.7 million and in-process research and development (“IPR&D”) of $69.5 million. The Company estimated the fair values of the developed technology and IPR&D using the multi-period excess earnings method, which required management to make significant assumptions including revenue projections and the selection of the discount rates. The initial fair value of the sales based earnout liability was estimated using a Monte Carlo simulation using significant unobservable inputs such as revenue projections over the term of the contingent earn-out period and discount rates.

We identified the valuation of the developed technology and IPR&D intangible assets and the sales based earnout liability as a critical audit matter due to the significant management judgments required to determine the fair values of the developed technology and IPR&D intangible assets and the sales based earnout liability. Auditing management assumptions related to the revenue projections and discount rates for the developed technology and IPR&D intangible assets, and the revenue projections over the term of the contingent earn-out period, and discount rates for the sales based earnout liability, involved especially challenging and subjective auditor judgment due to the nature and extent of audit effort required to address this matter, including the involvement of professionals with specialized skill or knowledge.

The primary procedures we performed to address this critical audit matter included:

•Testing the design and operating effectiveness of controls relating to the valuation of the developed technology and IPR&D intangible assets and the sales based earnout liability, including management’s controls over revenue projections and selection of discount rates.

•Evaluating the reasonableness of management’s significant assumptions used in the revenue projections through: (i) comparing estimates of future volume demand of the related products for certain customers against market data and historical sales of existing products, and (ii) comparing estimates of average selling prices of the related products against market data and historical selling prices of comparable products.

•Utilizing personnel with specialized knowledge and skill in valuation to assist in: (i) assessing the appropriateness of the valuation methodologies used by management in these fair value measurements; (ii) evaluating the reasonableness of the discount rates used for the developed technology and IPR&D intangible assets, and the discount rates for the sales based earnout liability; and (iii) developing independent estimates of the discount rates and comparing those to the discount rates selected by management.

/s/BDO USA, P.C.

We have served as the Company's auditor since 2019.

San Jose, California

February 26, 2024