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SITIME Corp (SITM)·Q3 2025 Earnings Summary

Executive Summary

  • Beat on both revenue and EPS: Q3 revenue $83.57M vs S&P consensus $78.08M*, non-GAAP EPS $0.87 vs $0.71*; non-GAAP gross margin expanded to 58.8% . Exceptional CED (Communications, Enterprise & Data Center) growth (+115% YoY) was the primary driver .
  • Q4 guidance implies continued acceleration: revenue $100–$103M, non-GAAP GM 60.0–60.5%, opex $35–$36M, interest income $7–$7.5M, diluted shares ~27M, EPS $1.16–$1.21 .
  • FY25 outlook raised: management now expects >50% YoY revenue growth for 2025 (vs “at least 40%” signaled in Q2) on AI/CED momentum and broad-based demand .
  • Strategic catalysts: clock funnel quadrupled to ~$300M, introduction of Titan resonator platform (adds $400M SAM today, trending to $1B by 2028), positioning for higher content across AI infrastructure and upcoming 1.6T optical module cycle .

What Went Well and What Went Wrong

What Went Well

  • CED outperformance and mix shift: CED revenue $42.1M (+115% YoY) and 51% of mix; drove margin expansion and operating leverage .
  • Gross margin trajectory: Q3 non-GAAP GM 58.8% with Q4 guide to 60–60.5%, benefiting from higher-ASP AI/CED products and scale; CFO reiterated 60%+ target .
  • Strategic pipeline: clock funnel quadrupled to ~$300M; new ramps in 1.6T optical modules with demand doubling and higher oscillator ASPs; bookings “exceptionally strong” .

Select quotes:

  • “Q3 2025 was a milestone quarter… revenue of $83.6 million… EPS… $0.87. Exceptionally strong bookings…”
  • “Our funnel is growing rapidly as well, particularly in clocks where it has quadrupled to $300 million in the past year.”
  • “For Q4 we expect… gross margins of 60 to 60.5%...”

What Went Wrong

  • GAAP losses persist: despite strong non-GAAP profitability, GAAP net loss was $(8.0)M in Q3; stock-based comp and amortization are significant adjustments .
  • Seasonality remains: CFO still expects typical Q4→Q1 seasonal downtick, which may temper early-2026 run-rate optics .
  • Near-term timing of new vectors: clocks to meaningfully pull oscillators “a year to year-and-a-half” out; Titan resonators likely late 2026/2027 revenue – strategic but not near-term P&L .

Financial Results

Core P&L Trends (non-GAAP where noted)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($M)$60.31 $69.49 $83.57
Gross Margin % (non-GAAP)57.4% 58.2% 58.8%
Operating Income ($M, non-GAAP)$2.07 $7.16 $15.44
Diluted EPS (non-GAAP)$0.26 $0.47 $0.87

Q3 2025 vs S&P Global Consensus

MetricActualConsensusNotes
Revenue ($M)$83.57 $78.08*Beat; AI/CED strength drove upside
EPS (non-GAAP)$0.87 $0.71*Beat; mix and scale benefits

Values marked with * are from S&P Global consensus estimates.

Segment Breakdown – Q3 2025

SegmentRevenue ($M)YoY GrowthMix
Communications, Enterprise & Data Center (CED)$42.1 +115% 51%
Auto/Industrial/Defense (AID)$20.2 +14% 24%
Mobile/IoT/Consumer$21.3 +4% 25%
Largest consumer end customer$15.3 ——

Q3 2025 KPIs

KPIQ3 2025
Cash from Operations$31.4M
Capex$5.1M
Cash & Short-Term Investments$809.6M
DSO24 days
Inventory$86.7M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ4 2025N/A$100–$103M New
Non-GAAP Gross MarginQ4 2025N/A60.0–60.5% New
Non-GAAP OpexQ4 2025N/A$35–$36M New
Interest IncomeQ4 2025N/A$7–$7.5M New
Diluted SharesQ4 2025N/A~27M New
Non-GAAP EPSQ4 2025N/A$1.16–$1.21 New
FY25 Revenue Growth OutlookFY 2025≥40% (Q2 commentary) >50% Raised

Earnings Call Themes & Trends

TopicQ-2 (Q2’25)Q-1 (Q1’25)Current (Q3’25)Trend
AI/CED momentumCED +137% YoY; strong design-win and content expansion in switches/NICs/optical/AEC; sequential growth into H2 New products (Elite RF, Symphonic) driving broad strength CED +115% YoY; bookings “exceptionally strong”; 1.6T optical demand doubling; higher ASPs Accelerating
Supply chain/lead timesProgrammability/supply chain keep up with demand —No hoarding; rumors of optical/substrate tightness but not constraining SITM Stable/manageable
Gross margin trajectory58.2% non-GAAP; upward with mix/scale 57.4% non-GAAP 58.8% non-GAAP; guide 60–60.5% Improving
SeasonalityQ4→Q1 seasonality persists despite mix shift —Expect seasonal Q4→Q1 dip Unchanged
Product roadmapElite/Cascade; higher system content Symphonic mobile clock gen Titan resonator platform; clock funnel ~$300M; more 1.6T content Broadening
M&A/portfolio scale——Interested in M&A for scale; atomic clocks too far out near-term Active exploration

Management Commentary

  • “Q3 2025 was a milestone quarter… revenue of $83.6 million… EPS more than doubling to $0.87. Exceptionally strong bookings reinforce our outlook for continued growth momentum.”
  • “Our funnel is growing rapidly… particularly in clocks where it has quadrupled to $300 million in the past year.”
  • “We’re very excited to introduce the Titan platform… entry into the $4 billion standalone resonator market… opens an incremental $400 million SAM today, expected to grow to $1 billion by 2028.”
  • “For Q4 we expect revenue of $100 to $103 million, gross margins of 60 to 60.5%, operating expenses of $35 to $36 million… [and] EPS… $1.16 to $1.21 per share.”

Q&A Highlights

  • Titan economics and timing: ASPs ~$0.20 or below given unit scale; gross margins “in the 60% regime and… probably higher”; meaningful revenue not until late 2026/2027 .
  • M&A stance: open to transactions that add scale and near-term impact; atomic clock assets viewed as longer-dated revenue .
  • Gross margin drivers: mix toward CED with attractive ASP/margins plus scale/cost improvements; 60%+ target reiterated .
  • Demand visibility and components: no evidence of hoarding; heard of optical/substrate tightness but not impeding SITM; strong volume increases .
  • Seasonality: despite mix shift, still expect Q4→Q1 seasonality; large-customer order timing can move between quarters .
  • Go-to-market: deepening with hyperscalers and semiconductor partners; expanding footprint across US/Asia/Europe; watching new ecosystem entrants (e.g., Oracle, OpenAI) .

Estimates Context

  • Q3 2025: Beat revenue ($83.57M vs $78.08M*) and non-GAAP EPS ($0.87 vs $0.71*), supported by CED outperformance and mix .
  • Q4 2025: Guidance brackets consensus (revenue $100–$103M vs $101.53M*; EPS $1.16–$1.21 vs $1.20*), with GM uplift to 60–60.5%, implying continued operating leverage .
  • Revisions watch: upward bias to GM/EPS tracks; revenue guide effectively in line with consensus; FY25 growth outlook raised to >50% may pull Street higher on FY totals .

Values marked with * are from S&P Global consensus estimates (Values retrieved from S&P Global).

Key Takeaways for Investors

  • Momentum intact and broadening: triple-digit CED growth with strengthening AI infrastructure tailwinds and increasing system content support continued outperformance into Q4 .
  • Margin inflection: Q4 GM guide to 60–60.5% suggests a new margin plateau, underpinning EPS scalability as volumes rise .
  • Mix and pipeline: clock funnel ~$300M and 1.6T optical module ramp (with higher oscillator ASPs) provide multi-quarter visibility; 2026 confidence rising .
  • Quality of beats: Q3 beats were mix/scale-driven rather than one-off; bookings strength and regional breadth (double-digit growth across regions) add durability .
  • Medium-term catalysts: Titan opens a high-volume, high-margin resonator vector (late 2026/2027), enhancing SITM’s uniqueness as a full-stack timing supplier .
  • Watch risks: GAAP losses persist due to SBC and amortization; typical Q4→Q1 seasonality remains; external component tightness (optical/substrate) bears monitoring though not yet constraining SITM deliveries .
  • Positioning: Guidance essentially in line with Street on revenue and EPS, but higher GM profile and raised FY25 growth outlook (>50% YoY) are likely the incremental stock catalysts .