Executive Summary

Revenue of $69.5M, up 58% YoY, and above S&P Global consensus of ~$64.7M*; non-GAAP diluted EPS of $0.47 also beat the ~$0.28* consensus. Non-GAAP gross margin expanded to 58.2% (from 57.4% in Q1) on favorable mix and cost improvements .
Communications/Enterprise/Data Center (CED) grew 137% YoY to $36.0M (52% of revenue), driven by AI demand across switches, NICs, optical modules, and active electrical cables; all end markets and regions grew YoY .
Balance sheet strengthened by a follow-on offering that added ~$387.4M net cash; quarter-end cash and short-term investments reached $796.7M with no debt, improving optionality for R&D and customer acquisition .
Q3 guidance: revenue $77–$79M, non-GAAP EPS $0.67–$0.75, gross margin 58–59%, highlighting continued momentum into H2 as CED leads growth, with consumer seasonality expected to support sequential gains .
Stock reaction catalysts: accelerating AI data center content and systems solutions (oscillators + clocks + TimeFabric software with up to 9x more accurate synchronization and 24-hour holdover), plus robust bookings and a healthy funnel .

What Went Well and What Went Wrong

What Went Well

Strong top-line and margin execution: $69.5M revenue (+58% YoY) and non-GAAP GM 58.2%; non-GAAP operating income grew to $7.2M and non-GAAP EPS to $0.47, reflecting operating leverage and mix benefits .
AI-led CED strength: “Revenue from our CED market grew 137% year over year, fueled by AI” and management highlighted broad design-win momentum with Elite oscillators and Cascade clocking across switches, NICs, optical modules, and AECs .
Balance sheet and operations: DSO improved to 35 days (from 42), cash from operations was $15.3M, and CapEx investments support scaling new products; net offering proceeds ~$387.4M further enhance strategic flexibility .

What Went Wrong

GAAP profitability still negative: GAAP net loss of $20.2M (–$0.84 diluted EPS) as stock-based compensation and amortization continue to weigh on reported results .
Mobile/IoT/Consumer flat sequentially despite new content; management reiterated the segment’s inherent volatility and seasonality, and the policy to include designs in guidance only with visibility .
Automotive softness amid mixed macro and tariff dynamics; inventory increased to $84.1M as production ramps for key new products, which PMs may monitor for execution risk .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025	Q2 2025 Consensus*
Revenue ($USD Millions)	$43.9	$60.3	$69.5	$64.7*
Non-GAAP Diluted EPS ($)	$0.12	$0.26	$0.47	$0.28*
GAAP Diluted EPS ($)	$(1.16)	$(1.01)	$(0.84)	N/A
GAAP Gross Margin (%)	49.1%	50.3%	51.9%	N/A
Non-GAAP Gross Margin (%)	57.7%	57.4%	58.2%	N/A
Non-GAAP Operating Income ($USD Millions)	$(2.8)	$2.1	$7.2	N/A

Segment mix and sequential progression:

Segment ($USD Millions, %)	Q1 2025	Q2 2025
CED (52% in Q2)	$29.3	$36.0
Auto/Industrial/Defense (24% in Q2)	$14.1	$16.5
Mobile/IoT/Consumer (24% in Q2)	$16.9	$17.0
Largest end customer	$11.1	$11.8

KPIs:

KPI	Q1 2025	Q2 2025
DSO (days)	42	35
Inventory ($USD Millions)	$82.6	$84.1
Cash & Short-term Investments ($USD Millions)	$398.9	$796.7
Cash from Operations ($USD Millions)	$15.0	$15.3
Capital Expenditure ($USD Millions)	$16.4	$18.3
Non-GAAP Diluted Shares (Millions)	24.412	24.633

Guidance Changes

Q2 guidance (given on Q1 call) versus actual:

Metric	Period	Previous Guidance (Q1 call)	Actual (Q2)	Change
Revenue ($USD Millions)	Q2 2025	~$64.7 mid-point	$69.5	Beat
Non-GAAP Gross Margin (%)	Q2 2025	~Flat vs Q1 (57.4%)	58.2%	Above
Non-GAAP OpEx ($USD Millions)	Q2 2025	$33.0–$33.5	$33.3	In-line
Interest Income ($USD Millions)	Q2 2025	$3.0–$3.4	$4.3	Above
Non-GAAP EPS ($)	Q2 2025	$0.25–$0.31	$0.47	Beat

Current Q3 guidance (given on Q2 call):

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q3 2025	N/A	$77–$79	New
Non-GAAP Gross Margin (%)	Q3 2025	N/A	58–59	New
Non-GAAP OpEx ($USD Millions)	Q3 2025	N/A	$34.0–$34.5	New
Interest Income ($USD Millions)	Q3 2025	N/A	$7.5–$8.0	New
Diluted Shares (Millions)	Q3 2025	N/A	~26.8	New
Non-GAAP EPS ($)	Q3 2025	N/A	$0.67–$0.75	New

Management reiterated a pathway to 60% gross margin for the core business as revenue scales and new products improve cost/yields .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI/Datacenter momentum	Q4: “significant gains due to precision timing in AI” ; Q1: CED up 198% YoY, strong 800G → 1.6T upgrade cycle; AEC adoption; broad platform engagement	CED +137% YoY; strong Elite & Cascade content; system-level solutions across switches, NICs, optical, AEC; robust bookings and funnel	Strengthening
Product performance (Elite/Cascade/Chorus/Symphonic)	Q1: Cascade and Chorus platform strategy; Symphonic launched for 5G/mmWave/GNSS; higher ASPs	Elite family leading; Symphonic ASP uplift; systems approach increases dollar content (e.g., customized clocks)	Expanding mix/ASP
Supply chain & execution	Q1: wafer and production ramps for new products	Inventory up modestly to support ramps; DSO improved sequentially	Improving operations
Tariffs/macro	Q1: limited pull-ins; bookings strong beyond 90-day tariff window	Auto softness; industrial and aerospace/defense strength; macro/tariff mixed but diversified exposure helps	Mixed but resilient
Software (synchronization)	Q1: IEEE 1588 software to add value and pricing power	TimeFabric launched: up to 9x more accurate sync vs quartz; 24-hour holdover; broad infra applicability	Strategic enabler
Consumer/mobile	Q1: strong growth; largest customer +76% YoY; visibility approach to guidance	Flat seq.; policy clarified; expect H2 seasonality uplift	Volatile but improving H2
Automotive/industrial/defense	Q1: double-digit growth; Chorus traction	Auto softness; industrial and aerospace/defense accelerating; autonomy (L3+/L4) opportunity longer term	Mixed near term, strong LT

Management Commentary

“We delivered revenue of 69.5 million… Gross margin increased to 58.2%. EPS increased to $0.47… In today’s world of significant AI growth, our data center customer segment continues to lead our growth significantly.” — Rajesh Vashist, CEO .
“In CED… Elite family of oscillator products… along with our Cascade Clocking family… drove strong design win momentum across switches, NIC cards, optical modules and AECs.” — Rajesh Vashist .
“Non-GAAP gross margin was 58.2%, up 80 bps sequentially, driven by favorable product mix and improving product costs… Q2 non-GAAP net income was $11.6 million or $0.47 per share.” — Beth Howe, CFO .
“Q3 revenue of $77–$79M… gross margins 58–59%… OpEx $34.0–$34.5M… interest income $7.5–$8.0M… diluted shares ~26.8M… non-GAAP EPS $0.67–$0.75.” — Beth Howe .
“TimeFabric… delivers up to 9X more accurate time synchronization than quartz-based solutions… and proprietary holdover extension to 24 hours.” — Company press release .

Q&A Highlights

Segment growth cadence: Management expects CED to be the strongest grower in the back half; consumer typically stronger in Q3/Q4 due to seasonality; auto/industrial/defense to grow with stronger aerospace and industrial traction .
Mobile guidance policy: Consumer/mobile is volatile; management includes new designs in guidance when visibility is sufficient, clarifying how launches affect the outlook .
Macro/tariffs: Some auto softness; industrial and aerospace/defense are strong; diversified premium product exposure reduces macro sensitivity .
Systems content and ASP: Systems approach (oscillators + customized clocks) increases dollar content; Symphonic drives higher ASPs by solving multiple board-level problems .
Hyperscaler ASIC platforms: Similar content opportunities as merchant GPU platforms; penetration varies by hyperscaler; architectural advantages more accessible via merchant silicon ecosystems .

Estimates Context

Q2 2025 results versus S&P Global consensus: Revenue $69.5M vs ~$64.7M*; non-GAAP diluted EPS $0.47 vs ~$0.28*; both beats underscore AI-led demand and improving mix .
Q3 2025 guidance brackets consensus: Revenue guidance $77–$79M vs consensus ~$78.1M*; EPS guidance $0.67–$0.75 vs consensus ~$0.71*; margin guidance 58–59% is consistent with sequential improvement path .

Metric	Q3 2025 Guidance	Q3 2025 Consensus*
Revenue ($USD Millions)	$77–$79	~$78.1*
EPS (non-GAAP, $)	$0.67–$0.75	~$0.71*

*Values retrieved from S&P Global.

Key Takeaways for Investors

AI data center content is the primary growth engine; CED revenue rose 137% YoY and comprised 52% of Q2 sales, with systems solutions expanding dollar content across networking and accelerator platforms .
Execution improved: sequential non-GAAP gross margin expansion (58.2%) and operating leverage delivered a strong EPS beat vs consensus, suggesting upside from mix and cost/yield gains .
H2 setup positive: Q3 guidance points to continued sequential growth; consumer seasonality and CED strength should support top-line, with margin guidance holding near 58–59% .
Strategic software lever: TimeFabric enhances synchronization accuracy up to 9x vs quartz and extends holdover to 24 hours, deepening differentiation and pricing power in AI/5G infrastructure .
Balance sheet optionality: ~$387.4M net proceeds from follow-on offering and $796.7M cash/ST investments provide capacity for R&D acceleration and customer acquisition in priority markets .
Watch risks: GAAP losses persist; mobile can be volatile and flat sequentially; auto softness and tariff dynamics require monitoring, though diversified premium exposure mitigates downside .
Near-term trading: Positive estimate beats and incremental guidance may support momentum; focus on design-win flow in AI networking (switches/NICs/optical/AECs) and margin trajectory toward the 60% core target .

SITIME Corp (SITM)·Q2 2025 Earnings Summary