SITIME Corp

Previous wording

•the adequacy and availability of our leased facilities;

Current wording

•the adequacy and availability of our leased facilities; and

Previous wording

We are a leading provider of Precision Timing solutions to the global electronics industry. Our Precision Timing solutions are the heartbeat of our customers’ electronic systems, providing the timing functionality that is needed for electronics to operate reliably and accurately. We provide Precision Timing solutions that are differentiated by high performance, high resilience, and high reliability, along with programmability, small size, and low power consumption. Our products have been designed into over 300 applications across our target markets, including communications, datacenter and enterprise, automotive, industrial, aerospace, mobile, Internet of Things ("IoT"), and consumer. Our current solutions include various types of oscillators, as well as clock integrated circuits ("ICs") and resonators.

Current wording

We are a leading provider of Precision Timing solutions to the global electronics industry. Our Precision Timing products are the heartbeat of our customers’ electronic systems, providing the timing functionality that is needed for electronics to operate reliably and accurately. We provide Precision Timing solutions that are differentiated by high performance, high resilience, and high reliability, along with programmability, small size, and low power consumption. Our products have been designed into over 300 applications across our target markets, including communications, datacenter and enterprise, automotive, industrial, aerospace, mobile, Internet of Things ("IoT"), and consumer. Our current solutions include various types of oscillators, as well as clock integrated circuits ("ICs") and resonators.

Previous wording

Our all-silicon solutions are based on three fundamental areas of technical expertise: MEMS, analog mixed-signal design, and advanced system-level integration. This expertise enables us to design silicon MEMS resonators, analog circuits, as well as systems and packaging, and bring these all together to deliver a system-level solution that synergistically solves customers’ complex timing problems. In this aspect, we believe we are different than quartz-based timing providers, who typically have expertise in designing and manufacturing resonator components, but usually outsource the analog circuit design and packaging. We also have a deep understanding of the mechanical, electrical, and thermal properties of materials, which is a key requirement for developing our proprietary MEMS processes. To maximize MEMS first-silicon success, we have also developed our own MEMS simulation tools. We are also different in that our MEMS resonators are made using semiconductor technology which has significant benefits in features, performance, manufacturing, and cost, while the quartz resonator and oscillator suppliers use quartz crystal material

Current wording

Our all-silicon solutions are based on four fundamental areas of technical expertise: micro-electro-mechanical systems (“MEMS”), analog mixed-signal design, and advanced system-level integration and software. This expertise, along with the knowledge of our customers' systems, gives our products a significant edge as we address customers’ complex timing problems. In this aspect, we believe we are different than quartz-based oscillator and resonator providers, who typically have expertise in designing and manufacturing resonator components, but usually outsource the analog circuit design and packaging. We also have a deep understanding of the mechanical, electrical, and thermal properties of materials, which is a key requirement for developing our proprietary MEMS processes. To maximize MEMS first-silicon success, we have also developed our own MEMS simulation tools. We are also different in that our MEMS resonators are made using semiconductor technology which has significant benefits in features, performance, manufacturing, and cost, while the quartz resonator and oscillator suppliers use quartz crystal material.

Previous wording

Today’s newer applications are driving the need for faster connectivity and lower latency, even when the electronics is subject to non-ideal conditions. Our Precision Timing solutions are designed to be resilient to such harsh environmental stressors which provides a benefit to our customers. For example, AI Infrastructure equipment is becoming more dense, and is subject to rapid temperature changes within the system, but still needs to deliver maximum performance and reliability. In the Communications market, a 5G small cell radio mounted on a pole next to a road or rail line is going to be subject to vibration as heavy trucks or trains go by. These conditions make our Precision Timing solutions a natural choice in such applications. Our solutions are also utilized in automotive electronics, including advanced driver assistance systems for self-driving cars, which require increased timing accuracy. For the industrial market, our products offer programmability and high reliability for the diverse operating conditions of industrial equipment, including high temperatures, mechanical shock, and vibration. For the aerospace market, our solutions provide high reliability and lower acceleration sensitivity for end products that operate in rugged conditions. For the mobile, IoT and consumer market, our timing solutions offer high performance at optimal power consumption and size, as our customers fit more functionality into smaller devices.

Current wording

Today’s newer applications are driving the need for faster connectivity and lower latency, even when the electronics is subject to non-ideal conditions. Our Precision Timing solutions are designed to be resilient to such harsh environmental stressors which provides a benefit to our customers. For example, AI Infrastructure equipment is becoming more dense, and is subject to rapid temperature changes within the system, but still needs to deliver maximum performance and reliability. In 2025, we have benefitted from the strong growth in AI datacenter deployments. In the Communications market, a 5G small cell radio mounted on a pole next to a road or rail line is going to be subject to vibration as heavy trucks or trains go by. These conditions make our Precision Timing solutions a natural choice in such applications. Our solutions are also utilized in automotive electronics, including advanced driver assistance systems for self-driving cars, which require increased timing accuracy. For the industrial market, our products offer programmability and high reliability for the diverse operating conditions of industrial equipment, including high temperatures, mechanical shock, and vibration. For the aerospace market, our solutions provide high reliability and lower acceleration sensitivity for end products that operate in rugged conditions. For the mobile, IoT and consumer market, our timing solutions offer high performance at optimal power consumption and size, as our customers fit more functionality into smaller devices.

Previous wording

In all of these markets, the trend for increased data transfer at higher speeds and demand for lower latency continues to grow. This requires higher levels of performance in timing and synchronization. Additionally, as electronics continue to proliferate in all industries and areas of our daily life, digital devices are increasingly subjected to less controlled environments, making resiliency ever more important. These industry trends place higher demands on timing components, escalating the importance of resilient and reliable Precision Timing.

Current wording

In all of these markets, the trend for increased data transfer at higher speeds and demand for lower latency continues to grow. This requires higher levels of performance in timing and synchronization. Additionally, as electronics continue to proliferate in all industries and areas of our daily life, digital devices are increasingly subjected to less controlled environments, making resiliency to environmental stressors ever more important. These industry trends place higher demands on timing components, increasing the importance of resilient and reliable Precision Timing.

Previous wording

We believe that the total timing market is approximately $10 billion in size. Since our founding, we have focused on transforming this market with compelling solutions that solve difficult timing problems. Historically, our revenue has been substantially delivered from sales of oscillator systems across our target end markets.

Current wording

We believe that the total timing market is approximately $10 billion in size. Since our founding, we have focused on the portion of the market that concentrates on the requirement for compelling solutions to solve difficult timing problems. Historically, our revenue has been substantially derived from sales of oscillator systems across our target end markets.

Previous wording

In December 2023, we acquired clocking products through the acquisition of certain assets and the exclusive license to certain intellectual property from Aura Semiconductor Pvt. Ltd. and certain of its affiliated entities (together, "Aura") relating to Aura's timing business and clock products that significantly expands our presence within the clocking market. With the addition of all four categories of clock products including network synchronizers, jitter cleaners, clock generators, and buffers, we now offer a comprehensive portfolio of timing solutions. By pairing the new SiTime clocking products with our MEMS oscillators and/or our resonators, we expect to be able to offer a more complete clock tree that is simpler to design with higher performance, and more resilient to environmental stressors with better reliability. SiTime is now a key provider of all differentiated products in timing – oscillators, clocks, and resonators combined with depth in engineering expertise in Precision Timing solutions.

Current wording

In December 2023, we acquired clocking products through the acquisition of certain assets and the exclusive license to certain intellectual property from Aura Semiconductor Pvt. Ltd. and certain of its affiliated entities (together, "Aura") relating to Aura's timing business and clock products that significantly expands our presence within the clocking market. Total consideration paid in the acquisition included approximately $148 million in fixed payments and up to $120 million in earnouts. With the addition of all four categories of clock products including network synchronizers, jitter cleaners, clock generators, and buffers, we now offer a comprehensive portfolio of timing solutions. By pairing the new SiTime clocking products with our MEMS oscillators and/or our resonators, we expect to be able to offer a more complete clock tree that is simpler to design with higher performance, more resilience to environmental stressors and higher reliability. SiTime is now a key provider of all differentiated products in timing – oscillators, clocks, and resonators combined with depth in engineering expertise in Precision Timing solutions.

Previous wording

Revenue increased by $27.3 million, or 83%, for the three months ended March 31, 2025 compared to the same period in the prior year. The increase was primarily related to an increase in sales volume as well as increase in average selling prices of our products due to change in mix of the products we shipped.

Current wording

Revenue increased by $25.6 million, or 58%, for the three months ended June 30, 2025 compared to the same period in the prior year. Revenue increased by $52.9 million, or 69%, for the six months ended June 30, 2025 compared to the same period in the prior year. The increase in both periods was primarily related to an increase in sales volume as well as increase in average selling prices of our products due to change in mix of the products we shipped.

Previous wording

Sales attributable to our largest end customer through multiple distributors accounted for 18% and 19% of our revenue for the three months ended March 31, 2025 and 2024, respectively. Our end customers predominantly purchase our products from distributors. Our top three customers by revenue, which are distributors, together accounted for approximately 64% and 55% of our revenue for the three months ended March 31, 2025 and 2024, respectively. Revenue attributable to our largest ten end customers accounted for 64% and 52% for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Sales attributable to our largest end customer through multiple distributors accounted for 17% and 18% of our revenue for the three months ended June 30, 2025 and 2024, respectively, and 18% and 18% of our revenue for the six months ended June 30, 2025 and 2024, respectively. Our end customers predominantly purchase our products from distributors. Our top three customers by revenue, which are distributors, together accounted for approximately 66% and 55% of our revenue for the three months ended June 30, 2025 and 2024, respectively, and 64% and 54% of our revenues for the six months ended June 30, 2025 and 2024, respectively. Revenue attributable to our largest ten end customers accounted for 64% and 59% for the three months ended June 30, 2025 and 2024, respectively, and 64% and 57% of our revenues for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

Gross profit increased by $12.7 million in the three months ended March 31, 2025 compared to the same period in the prior year. Gross profit increased $19.0 million mainly from higher revenue. This increase was partially offset by higher amortization from acquired intangibles of $2.3 million, higher other manufacturing and overhead costs of $3.5 million, which primarily consists of depreciation and amortization, freight outwards and inventory reserves, and higher stock based compensation expense of $0.5 million.

Current wording

Gross profit increased by $14.5 million in the three months ended June 30, 2025 compared to the same period in the prior year. Gross profit increased $19.6 million mainly from higher revenue which was partially offset by higher other manufacturing and overhead costs of $4.4 million, consisting of depreciation and amortization, freight outwards and inventory reserves, and higher stock based compensation expense of $0.5 million.

Previous wording

Gross margin was lower by 3% in the three months ended March 31, 2025 compared to the same period in the prior year. The gross margins decreased by 1% primarily due to a change in the mix of products shipped, and due to higher amortization from acquired intangibles of 2%.

Current wording

Gross margin was higher by 0.2% in the six months ended June 30, 2025 compared to the same period in the prior year. The gross margins increased by 0.9% primarily due to a change in the mix of products shipped. This was partially offset by an increase due to stock-based compensation expense of 0.5% and lower absorption of other manufacturing overheads of 0.2%.

Previous wording

Research and development expense increased by $4.5 million, or 18%, for the three months ended March 31, 2025, compared to the same period in the prior year, primarily due to higher engineering spend towards ongoing new product development of $2.2 million, increase in stock-based compensation expense of $1.5 million, and higher other personnel costs of $1.1 million due to increase in headcount, partially offset by lower depreciation and amortization expense of $0.2 million.

Current wording

Research and development expense increased by $5.1 million, or 20%, for the three months ended June 30, 2025, compared to the same period in the prior year, primarily due to higher engineering spend towards ongoing new product development of $1.7 million, and increase in stock-based compensation expense of $1.7 million, and higher other personnel costs of $1.1 million due to increase in headcount.

Previous wording

Selling, general and administrative expense increased by $2.9 million, or 12%, for the three months ended March 31, 2025, compared to the same period in the prior year, primarily due to higher stock-based compensation expense of $1.3 million, higher other personnel costs of $1.1 million due to increase in headcount, and higher consulting fees of $0.2 million.

Current wording

Selling, general and administrative expense increased by $3.0 million, or 12%, for the three months ended June 30, 2025, compared to the same period in the prior year, primarily due to higher stock-based compensation expense of $1.3 million, higher consulting fees of $1.2 million, and higher other personnel costs of $0.6 million due to increase in headcount.

Previous wording

Acquisition related costs include legal, regulatory, consulting, and other costs incurred towards the acquisition closed during the year ended December 31, 2023, and also include changes in the fair value of the sales-based earnout liability and interest accretion related to the acquisition consideration payable. Acquisition related costs decreased by $1.7 million, or

Current wording

Acquisition related costs include legal, regulatory, consulting, and other costs incurred towards the acquisition closed during the year ended December 31, 2023, and also include changes in the fair value of the sales-based earnout liability and interest accretion related to the acquisition consideration payable.

Previous wording

52%, for the three months ended March 31, 2025, primarily due to lower accretion of acquisition consideration payable and earnouts by $1.0 million and $0.1 million respectively due to lower remaining amount payable, and a reduction in one-time acquisition costs related to the 2023 Aura transaction of $0.6 million. We will incur incremental costs in 2025 and beyond related to the Aura transaction arising from changes in the fair value of the sales-based earnout liability and accretion of acquisition consideration payable.

Current wording

Acquisition related costs decreased by $3.0 million, or 46%, for the six months ended June 30, 2025 compared to the same period in the prior year, primarily due to lower accretion of acquisition consideration payable and earnouts by $1.4 million and $0.9 million respectively due to lower remaining amount payable, and a reduction in one-time acquisition costs related to the 2023 Aura transaction of $0.6 million.

Previous wording

Interest income decreased by $2.3 million or 35% for the three months ended March 31, 2025, compared to the same period in the prior year due to a decrease in investment balances arising from acquisition related payments as well as lower interest rates.

Current wording

Interest income decreased by $1.5 million or 26% for the three months ended June 30, 2025, compared to the same period in the prior year due to a decrease in average investment balance during the period arising from acquisition related payments, payments towards capital expenditures, as well as lower interest rates.

Previous wording

Other income (expense), net, increased by $0.2 million for the three months ended March 31, 2025, compared to the same period in the prior year primarily due to lower net unrealized losses on foreign exchange rates from activities in our foreign subsidiaries resulting from favorable exchange rate fluctuations.

Current wording

Other income (expense), net, increased by $0.4 million and $0.6 million for the three and six months ended June 30, 2025 respectively, compared to the same periods in the prior year primarily due to lower net unrealized losses on foreign exchange rates from activities in our foreign subsidiaries resulting from favorable exchange rate fluctuations.

Previous wording

As of March 31, 2025 and December 31, 2024, we had cash and cash equivalents of $38.8 million and $6.1 million, respectively. As of March 31, 2025 and December 31, 2024, we also held $360.1 million and $412.7 million of short-term investments, respectively, in held-to-maturity securities that consisted of treasury bills. Our principal use of cash is to fund our operations, to support growth through capital investments, and to acquire complementary businesses, products, services or technologies in the future.

Current wording

As of June 30, 2025 and December 31, 2024, we had cash and cash equivalents of $172.5 million and $6.1 million, respectively. As of June 30, 2025 and December 31, 2024, we also held $624.1 million and $412.7 million of short-term investments, respectively, in held-to-maturity securities that consisted of treasury bills. Our principal use of cash is to fund our operations, to support growth through capital investments, and to acquire complementary businesses, products, services or technologies in the future.

Previous wording

In February 2024, we entered into a Sales Agreement with Stifel, under which we may offer and sell from time to time at our sole discretion, up to an aggregate of 1,200,000 shares of our common stock, par value $0.0001 per share, through Stifel as our sales agent. We use the net proceeds from the shares of common stock offered and sold to replenish funds expended to satisfy anticipated tax withholding and remittance obligations related to the net settlement upon vesting of restricted stock unit awards (“RSU”) granted to employees under the equity incentive plans.

Current wording

In February 2024, we entered into a Sales Agreement with Stifel, under which we may offer and sell from time to time at our sole discretion, up to an aggregate of 1,200,000 shares of our common stock, par value $0.0001 per share, through Stifel as our sales agent. During the six months ended June 30, 2025, we sold 150,000 shares of our common stock under the Sales Agreement at a weighted average price of $203.94 per share resulting in net proceeds to us of $29.7 million, after deducting underwriting discounts and commissions and offering costs. The Company used the net proceeds from the shares of common stock offered and sold to replenish funds expended to satisfy anticipated tax withholding and remittance obligations related to the net settlement upon vesting of restricted stock unit awards (“RSU”) granted to employees under the equity incentive plans.

Previous wording

We believe that our existing cash and cash equivalents and our short-term investments will be sufficient to meet our cash needs for at least the next 12 months. Over the longer term, our future capital requirements will depend on many factors, including our growth rate, the timing and extent of our sales and marketing and research and development expenditures, costs to acquire or invest in complementary businesses and technologies, payment obligations associated with our completed acquisitions based on achievement of certain milestones, and the continuing market acceptance of our solutions.

Current wording

We believe that our existing cash and cash equivalents and our short-term investments will be sufficient to meet our operating cash needs for at least the next 12 months. Over the longer term, our future capital requirements will depend on many factors, including our growth rate, the timing and extent of our sales and marketing and research and development expenditures, costs to acquire or invest in complementary businesses and technologies, payment obligations associated with our completed acquisitions based on achievement of certain milestones, and the continuing market acceptance of our solutions.

Previous wording

In the three months ended March 31, 2025, net cash provided by operating activities of $15.0 million was primarily due to a net loss of $23.9 million, offset by a change in operating assets and liabilities of $2.2 million and by non-cash expenses of $36.7 million. Non-cash expenses were mainly related to stock-based compensation expense, depreciation and amortization, change in fair value of sales based earnout liability, accretion of acquisition consideration payable, inventory write-down and net change in unrealized interest on held to maturity investments. The changes in operating assets and liabilities resulted in cash used primarily due to an increase in inventories as we built our wafer inventory levels, increase in accounts payable and accrued expenses primarily due to timing of accrued payroll and related benefit payments, partially offset by a decrease in our accounts receivables due to timing of shipments and a decrease in prepaid expenses and other assets due to timing of payments.

Current wording

In the six months ended June 30, 2025, net cash provided by operating activities of $30.4 million was primarily due to a net loss of $44.1 million and change in operating assets and liabilities of $3.2 million, offset by non-cash expenses of $77.7 million. Non-cash expenses were mainly related to stock-based compensation expense, depreciation and amortization, change in fair value of sales based earnout liability, accretion of acquisition consideration payable, inventory write-down and net change in unrealized interest on held to maturity investments. The changes in operating assets and liabilities resulted in cash used primarily due to an increase in inventories as we built our wafer inventory levels, increase in accounts payable and accrued expenses primarily due to timing of accrued payroll and related benefit payments, and an increase in prepaid expenses and other assets due to timing of payment to vendors, partially offset by a decrease in our accounts receivables due to timing of shipments.

Previous wording

In the three months ended March 31, 2025, net cash provided by investing activities was $36.2 million. We paid $124.5 million to purchase short-term investments in held-to-maturity securities. We paid $16.4 million largely to purchase manufacturing equipment and intangibles to support the general business operations. These payments were offset by purchases of $177.1 million of short-term investments in held-to-maturity securities.

Current wording

In the six months ended June 30, 2025, net cash used in investing activities was $247.4 million. We paid $635.8 million to purchase short-term investments in held-to-maturity securities. We paid $34.7 million largely to purchase manufacturing equipment and intangibles to support the general business operations. These payments were offset by proceeds of $423.2 million generated from held-to-maturity securities.

Previous wording

Our financing activities have primarily consisted of payments of withholding taxes on restricted stock units and payment of acquisition related consideration and earnouts. During the three months ended March 31, 2025, we paid tax withholdings on behalf of employees for net share settlement of $13.5 million, and paid earnouts of $5.0 million related to the Aura transaction.

Current wording

Our financing activities have primarily consisted of proceeds from issuance of shares, payments of withholding taxes on RSUs, and payment of acquisition related consideration and earnouts. During the six months ended June 30, 2025, we sold 150,000 shares of our common stock through Stifel under the Sales Agreement resulting in net proceeds to the Company of $29.7 million, after deducting underwriting discounts and commissions of $0.6 million and deferred offering costs of $0.3 million. Further, we completed a follow-on public offering on June 27, 2025, in which we issued and sold 2,012,500 shares of our common stock, resulting in net proceeds to us of $387.3 million after deducting underwriting discounts and commissions of $14.1 million and deferred offering costs of $1.1 million, including deferred offering costs of $1.0 million unpaid as at June 30, 2025. We also paid tax withholdings on behalf of employees for net share settlement of $27.3 million, and paid earnouts of $6.3 million related to the Aura transaction.

Previous wording

Our condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of these financial statements and accompanying disclosures requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and the accompanying notes. The Securities and Exchange Commission (the "SEC"), has defined a company’s critical accounting estimates as estimates that are most important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have identified our most critical accounting estimates to be as follows: (1) revenue recognition (2) business combinations, and (3) inventory. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information not presently available. Actual results may differ significantly from these estimates if the assumptions, judgments, and conditions upon which they are based turn out to be inaccurate. Management believes that there have been no significant changes to the items that we disclosed as our critical accounting estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 14, 2025.

Current wording

Our condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of these financial statements and accompanying disclosures requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and the accompanying notes. The Securities and Exchange Commission (the "SEC"), has defined a company’s critical accounting estimates as estimates that are most important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have identified our most critical accounting estimates to be as follows: (1) revenue recognition (2) business combinations, and (3) inventory. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information not presently available. Actual results may differ significantly from these estimates if the assumptions, judgments, and conditions upon which they are based turn out to be inaccurate. Management believes that there have been no significant changes to the items that we disclosed as our critical accounting estimates in Management’s