SITIME Corp — Call Transcript 2026

Good afternoon and welcome to SiTime's Fourth Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask the question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. We ask that you limit yourself to one question and one follow-up. As a reminder, this conference call is being recorded today, February 4, 2026. I would now like to turn the conference over to Brett Perry of Shelton Group Investor Relations. Brett, please go ahead. Thank you, Jewanda. Good afternoon and welcome to today's conference call to discuss SiTime's fourth quarter and full year 2025 financial results as well as SiTime's proposed acquisition of Renesas' timing business. Joining us on today's call from SiTime are Rajesh Vashist, Chief Executive Officer, and Beth Howe, Chief Financial Officer. Please note, in addition to the respective press releases issued this afternoon, a supplemental slide deck related to the proposed acquisition is available in the investor relations section of the company's website at investors.sitime.com. Before we begin, I'd like to point out that during the course of this call, the company may make forward-looking statements regarding expected future results, including financial position, strategy and plans, future operations, the timing market, and other areas of discussion. It's not possible for the company's management to predict all risks, nor can the company assess the impact of all factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed during this call may not occur, and actual results could differ materially and adversely from those anticipated or implied. Neither the company nor any person assumes responsibility for the accuracy and completeness of the forward-looking statements. The company undertakes no obligation to publicly update forward-looking statements for any reason after the date of today's call to conform statements to actual results or to changes in the company's expectations. For more detailed information on risks associated with the business, we refer you to the risk factors described in the company's annual report on Form 10-K for the year ended December 31, 2024, as well as the company's subsequent filings with the SEC, including the company's quarterly report on Form 10-Q for the quarter ended September 30, 2025. During the call, management will refer to non-GAAP financial measures, which are considered to be an important measure of company performance. These non-GAAP financial measures are provided in addition to and not as a substitute for nor superior to measures of financial performance prepared in accordance with U.S. GAAP. The GAAP to non-GAAP reconciliation includes stock-based compensation expense, amortization of acquired intangibles, and acquisition-related expenses, which include transaction and certain other cash costs associated with business acquisition, as well as changes in the estimated fair value of earn-out liabilities and accretion of acquisition consideration payable. Please refer to the company's press release issued earlier today for a detailed reconciliation between GAAP and non-GAAP financial results. With that, it's now my pleasure to turn the call over to SiTime's CEO, Rajesh. Please go ahead. Thank you, Brett. Good afternoon, everyone. Thank you for joining us today. We have a lot to talk about. We announced exceptional results for 2025, and we also announced a transformational acquisition. I'll begin with our business and our performance, and then I'll turn to the transaction. Q4 2025 was another exceptional quarter for SiTime. We delivered $113.3 million in Q4, up 66% year-over-year, and earnings per share tripled from $0.48 to $1.53. In Q4, every end customer segment grew year-on-year, as did every region. Gross margins in the quarter grew significantly, up 61.2%. I'm particularly pleased about this achievement. In the beginning of 2025, we said we would exit the year at greater than 60% gross margins, and we achieved it. We predicted this expansion of gross margins because we anticipated mixed changes to higher value products, and we reduced new product costs as they moved into volume production. For all of 2025, we delivered $326.7 million, up 61% year-over-year. Every end customer segment and region showed growth. Earnings per share more than tripled from $0.93 to $3.20. Demand remained very strong exiting the year, which is an indication of significant future growth in 2026. While we don't usually discuss our book-to-bill, we wanted to give you a metric of the demand strength across our customer base as we go into a strong year. So our book-to-bill was over 1.5 at the end of Q4, and we have excellent visibility for the year. Channel health remained solid exiting 2025. Distributor and contract manufacturer inventory levels were in line with our target, reflecting strong sell-through and disciplined supply management. Design win momentum remained solid across all end customer segments and regions, another indication of growth in 2026 and beyond. Q4 growth was again led by Comms Enterprise Data Center, CED, business, which grew 160% year-over-year. This marks the seventh consecutive quarter of over 100% year-over-year growth. Additionally, our 2026 CED forecast has grown since our last earnings call, driven by increases in AI CapEx spending. The 2x-4x increase in computing power of the new XPUs, GPUs, CPUs is driving the need for faster networking infrastructure and accelerating the adoption of 1.6 Tb optical modules. Our customers have recently increased their 2026 forecast for our oscillators used in 1.6T optical modules by 50%, which is over and above the increase that we reported in November. This move to 1.6T drives the need for higher clocking frequencies from our oscillators, for which we get higher ASPs or average selling prices. The increase in 1.6T modules notwithstanding, demand for oscillators used in 800G optical module continues to remain strong. In parallel to the increase in bandwidth of networking infrastructure, the hyperscalers are deploying more XPUs for training as well as getting ready for inference. Since November, this trend has driven a 50% increase in 2026 forecast of our Super-TCXOs, which are used in both computing infrastructure and the supporting SmartNICs or Network Interface Cards. SiTime's goal has always been to deliver predictable revenue growth. At IPO, CED was just 12% of our revenue, and then we created a strategic plan to expand it to 40%-50%. Since then, our focused investments in product development as well as customer acquisition have paid off handsomely. CED today makes up 53% of our revenue, and that is exactly where we want to be. I'm also very pleased that a large portion of this revenue comes from high-value products, reflecting the sustained benefit that we bring to our customers. Our CED strategy laid the foundation of our success today, and we're using this as a blueprint for rapid growth in our other businesses. We continue to grow across all other end segments. Aerospace defense, automotive, and industrial are all benefiting from increased adoption of autonomous systems and physical AI, where systems perceive, reason, and interact in the physical world in real time. These systems need accurate positioning, sensor fusion, motor control, and precise synchronization, where precision timing is essential. For example, in humanoid robots, we see up to $20 of a precision timing product, and robotaxis in Level 4 ADAS or self-driving cars require up to $15 of precision timing content. In defense, where worldwide spending is accelerating, our product resilience is driving adoption in a variety of applications. In the next few years, we expect that each of our automotive, defense, and industrial businesses to exceed $100 million annually. Entering 2026, demand drivers remain firmly in place. Our strategy remains unchanged: to lead in high-value precision timing applications, deliver differentiated system-level solutions, and scale our operating model to drive a long-term value creation. The combination of deep engagement in AI infrastructure and broad participation across diverse segments positions us exceptionally well for continued growth. I'm confident in our trajectory and excited about the opportunities ahead. With that, I'll now turn the call over to Beth, our CFO, to review the financial details, after which we'll be happy to take your questions. Thanks, Rajesh. Today, I'll walk through our fourth quarter and full year 2025 results, and then I'll provide our outlook for the first quarter of fiscal 2026. As a reminder, my remarks focus on non-GAAP financial results, which are reconciled to GAAP in our press release. Fiscal 2025 has been a pivotal year for the company, one in which we delivered exceptional revenue growth, expanded gross margins, and demonstrated meaningful operating leverage. Our results reflect the scalability of our operating model, the strength of demand across our target customer segments, and the growing strategic value of our products and solutions. For the full year, revenue reached $326.7 million, an increase of 61% from the prior year. Gross margins for the year were 59.3%, and operating expenses were $135 million. Non-GAAP operating profit was $58.6 million, an increase of $58 million year-over-year, or 18% of revenue. For fiscal 2025, our non-GAAP earnings per share more than tripled to $3.20. Cash flow from operations was $87.2 million for the year, a strong improvement compared to $23.2 million in 2024, reflecting the combined benefit of higher revenue, richer mix, and disciplined expense management. Overall, our momentum reflects a company operating with focus, efficiency, and increasing strategic impact. Turning to our fourth quarter results, Q4 was a milestone quarter for the company, as we surpassed $100 million in quarterly revenue for the first time and generated operating margins of 30%. Revenue in Q4 was $113.3 million, up 66% year over year and 36% sequentially. Revenue was significantly higher than expected as customer demand continued to strengthen in the quarter. Communications Enterprise and Data Center continued to be the primary growth engine, contributing $64.6 million, or 57% of total revenue, and rising 160% year over year. Growth in this segment was broad-based and driven by multiple customers across AI and data centers. Automotive, industrial, and aerospace delivered $24.5 million, or 22% of revenue, increasing 19% year-over-year. Consumer, IoT, and mobile revenue was $24.2 million, or 21% of total revenue, up 7% year-over-year, with our largest consumer customer contributing $17 million for the quarter. Gross margins in Q4 were 61.2%, representing a 240 basis points improvement year-over-year and ending the year above 60% as we had forecast at the beginning of 2025. The increase was primarily driven by continued mix shift toward higher margin products. Improving manufacturing overhead absorption also contributed meaningfully to the margin expansion. Operating expenses for the quarter were $35.5 million, consisting of $19 million in R&D and $16.5 million in SG&A. This was in line with expectations and driven by higher headcount, variable compensation tied to revenue performance, and continued investments to support our long-term roadmap. Operating income for the quarter was $34 million, an increase of $26 million year-over-year, demonstrating strong leverage and discipline in our cost structure as revenue scales. Interest in other income and expense was $7.4 million. Non-GAAP net income was $41.3 million, or $1.53 per share, more than tripled the $0.48 reported a year ago. Now let me turn to the balance sheet. Accounts receivable ended the quarter at $45 million, with Days Sales Outstanding at 36 days, up from 24 days in Q3 as linearity returned to more normal patterns. Inventory declined to $81.7 million from $86.7 million in Q3, driven by customer shipments during the quarter and continued focus on inventory management. During the quarter, we generated $25.4 million in cash from operations. We also invested $12.6 million in capital expenditures. Finally, we paid $42.2 million to Aura, including the final payment for die deliveries. We ended the quarter with strong liquidity position of $808 million in cash and short-term investments. Now let me move to our outlook for the March quarter. Because of the acquisition of Renesas' timing business is not expected to close in Q1, it has no impact on our guidance. Looking ahead to Q1, we expect first-quarter seasonality to be less than our historical average and that our Comms Enterprise Data Center, or CED, business will grow sequentially. Since consumer is typically down seasonally sequentially in the first quarter, the higher mix of CED and the lower mix of consumer is also expected to contribute to stronger gross margins in Q1. Thus, we project revenue in the range of $101 million-$104 million, up roughly 70% year-over-year at the midpoint. Gross margin to be approximately 62%, ± half a point given our expected product mix for Q1. Operating expenses in the range of $39-$40 million. Interest income of approximately $7 million. A share count of 27 million-27.5 million shares. As a result, we expect Q1 non-GAAP earnings per share to be in the range of $1.10-$1.17. With that, I'll hand the call back to Rajesh to discuss our intent to acquire Renesas's Timing Business. Rajesh? Thanks, Beth. To reflect a little bit, over the past two decades, SiTime created the precision timing category and fundamentally transformed the timing market by delivering highly differentiated products that solve customers' tough timing problems. Along the journey, there were a handful of defining inflection points. Acquiring Renesas's timing business is perhaps the largest and one of the most exciting. This business, similar to SiTime, has a differentiated, broad product portfolio, except that's in clocks, where we have a small footprint. Additionally, they have an enviable financial profile, a respected team, and a 30-year heritage that started as ICS, then IDT, and finally Renesas'. We are really glad to have this business as part of SiTime. We've always said that customers need complete timing solutions, which include oscillators, resonators, and clocks. Our oscillators and resonators are semiconductors, MEMS-based, and we have been investing in this technology for the past 20 years. To grow SiTime's clock business, we invested in our own development. In parallel, in 2023, we acquired Aura's clock products, which had leadership IP and 50 clock products. Now, Renesas's timing business takes us to scale in clocking. They are the preeminent brand with 500 highly differentiated clock products. Because they're focused on clocking in CED, industrial, and automotive, they complement our high-performance oscillator revenue. The 160 engineers that come over to SiTime at close give us an opportunity to build an exciting roadmap of products that would not have been previously possible. With this acquisition, our revenue mix continues its transformation and increases scale in CED. On a pro forma basis, our 2025 CED revenue will almost double with Renesas' 2025 AI data center Comms revenue. To this, we'll add our rapid organic growth in 2026 and combine it with their growth. The breadth and diversity of our customers will grow significantly with this acquisition, along with faster access to customers that we would have secured only several years in the future. This acceleration of customers will include 10 hyperscalers, seven AI server leaders, 10 networking and communication vendors, and leading automotive OEMs in Tier 1s and leaders in mobile, IoT, and consumer. On Renesas and SiTime's common customers, there is minimal product overlap, and we have an opportunity to generate new revenue by selling our differentiated oscillators to them. It's an unprecedented opportunity for both SiTime and our customers to collaborate and build on our 20- and 30-year heritage to reach an extraordinary level of success in precision timing. This is also an exceptional business with great financials. It's expected to add $300 million in the 12 months after close, with approximately 70% in gross margins. 75% of the revenue comes from the fast-growing CED segment, which is strategically important to us. It also maintains SiTime's long-term growth rate of 25%-30%. This acquisition is a monumental milestone towards fulfilling our vision to transform the timing market, solve our customers' toughest timing challenges, and accelerate our path to $1 billion in revenue. We see remarkable opportunities ahead, and we are more excited than ever about the future of SiTime. I'll turn the call over to Beth to provide more details. Beth? Thanks, Rajesh. Building on Rajesh's overview of the strategic rationale, I'll walk through how this acquisition strengthens our financial profile and accelerates our long-term growth trajectory. What is most compelling is the alignment between the strategic value of this business and its financial contribution, both of which meaningfully enhance SiTime's scale, profitability, and cash generation capacity. Financially, this acquisition significantly elevates SiTime's revenue profile, margin structure, and cash flow potential. Approximately 75% of the acquired revenue comes from our Comms Enterprise Data Center sector, a fast-growing and strategically important segment for our long-term success. The remainder is diversified across automotive and industrial, further expanding our reach into durable, attractive applications across timing. As we integrate the business, we intend to invest in go-to-market capabilities to fully capture these opportunities. Importantly, as Rajesh mentioned, our long-term annual revenue growth target of 25%-30% remains firmly intact. The acquired portfolio operates with approximately 70% gross margins, reflecting the value and differentiation of the products. This positions SiTime to reach the upper end of our 60%-65% long-term gross margin target more quickly while expanding operating margins to above 30% as we scale and benefit from increased operating leverage. The transaction is also expected to be accretive to SiTime's non-GAAP EPS in the first full year post-close. And finally, with a combination of our organic growth and the attractive profitability of the acquired business, we expect to generate meaningful cash flow. We have structured this transaction to maintain financial strength and flexibility. Under the terms of the agreement, SiTime will acquire certain assets related to the Renesas Timing Business for $1.5 billion in cash and approximately 4.13 million newly issued SiTime shares, subject to potential adjustments and a 15% symmetrical collar determined by the 10-day volume-adjusted weighted average share price as of the three days prior to the execution of the agreement. We plan to finance the cash portion using a combination of cash on hand and approximately $900 million of committed debt financing from Wells Fargo. Given the strong free cash flow generation of the combined business, we have a clear path to reducing leverage to under 2x within 24 months following the closing. The transaction is expected to close by the end of 2026, subject to the satisfaction of customary closing conditions, including applicable regulatory approvals. We are thrilled to announce the intent to acquire this highly complementary preeminent clocking business as we enter the next phase of our transformation. The combination strengthens our strategic position, accelerates our financial performance, and enhances our long-term value creation potential. With that, I'll open the call for questions. Operator? Ladies and gentlemen, as a reminder to ask the question, please press star one one on your telephone, then wait for your name to be announced. To withdraw your question, please press star one one again. We're asked that you limit yourself to one question and one follow-up, and then return to the queue for additional questions. Please stand by while we compile the Q&A roster. Our first question comes from the line of Tore Svanberg with Stifel. The line is open. Yes. Thank you very much, Rajesh and Beth. Congratulations on the strong results, and especially on this highly strategic acquisition. I guess my first question on the core business. So you talked about a Book-to-Bill of 1.5. I know you're not going to give us guidance sort of by segment, but could you give us a sense for where most of those bookings are coming from as those bookings obviously generate revenues for the year? Thank you. Well, it's no surprise that most of those bookings will come from CED because of the tremendous growth in CED. And I think that our customers are seeing the growth going out through the year, through 2026. And many of them are booking in advance of real demand. I don't mean they're ahead of it. I mean they're on top of it. But the others are not lagging behind. We still continue to see our diversified growth in all the other BUs as well. But it just happens to be that just because of its scale, the CED is a bigger portion. Very good. As a follow-up, I had a question on the acquisition and how this is going to play out. Again, it sounds like 75% of the revenue is aligned with your CED mix, which is great. I guess that means that there's end markets or applications that Renesas is targeting that did not come with the acquisition. But you also mentioned that you might be able to participate in some of those with your resonator products. I was just hoping if you could elaborate a little bit on that, especially on the timing of that potential additional growth edge. Thank you. So just to be clear, we're getting 100% of the timing business. Whatever is in the timing business that's called TPD, Timing Products Division, is coming over to SiTime. There isn't any business which is being left behind. The integration possibility that we are exploring through the MoU is a completely different one than timing. As you may know, Renesas' is a prominent player in the MCU business, in the microcontroller business. And there's an opportunity for SiTime's resonators, the Titan family of product, to be integrated in their microcontrollers. And that's the one we're exploring. There's a several billion-dollar revenue that they get from their MCUs, and we are exploring that and being a timing partner to Renesas'. Another way of thinking about this story is that given the fact that the CEO is joining SiTime's board at the closing, this becomes really quite a partnership. This makes sure that not only are we a supplier to them, but we are also a partner to them as we go through the integration process and the TSAs and so on. So that's what gives me a lot of confidence in the success and the integration of this business. Makes a lot of sense. Thank you and congrats again. Thank you. Please stand by for our next question. Our next question comes from the line of Quinn Bolton with Needham & Company. Your line is open. Hi, Rajesh and Beth. I'll offer my congratulations both on the strong results as well as the acquisition. I guess, like Tore wanted to start with a question on the core business. You talked about demand strengthening through the fourth quarter, the book-to-bill of 1.5. You guys have been growing the Comms business at over 100% for seven consecutive quarters. And so I guess, Rajesh, I know you're not guiding to 2026, but certainly feels like the growth engines are there to drive better than your long-term average 25%-30% growth rate in the core business in 2026. And so just wondering, as you think about what the core business can do in 2026, is there any framework you might be able to provide for sort of that overall growth rate in 2026? Well, qualitatively, and I'll have Beth jump in to give you the level of specificity that she wants to give you. Qualitatively, that's absolutely true. We've been growing. We grew in 2024 at 40%. We grew in 2025 at north of 60%. The business continues. You see Google spending. You see Meta spending. There is no stopping in the AI data center world. And then there is the inference part of it, or the LLMs come to physical reality, whether it's humanoid robots or other kinds of ideas around that. So I expect that this is a series of growth years coming from the AI business, even beyond data centers. But I'll let Beth add what she thinks. Sure. Thanks, Rajesh. No, I think we do expect it to continue to be led by our Comms Enterprise Data Center, as Rajesh talked about. As he also alluded, I think we do see opportunities across automotive, industrial, and aerospace, and some specific opportunities, especially within aerospace, off a small base. But given the increase in drones and other kinds of defense applications, we see a lot of opportunity there. And then finally, in the consumer space, we do expect to see continued growth there as some of our design wins ramp in 2026. And so those are all some of the opportunities and tailwinds we see for the year. And so we're really excited about 2026 and where we can go from here in terms of the opportunities. Excellent. The question I had on the acquisition, obviously, Renesas is one of the preeminent players in the clocking business. I'm wondering, on a lot of the boards or sockets where Renesas plays, are they typically paired up with quartz oscillators representing an opportunity for you to cross-sell? Or do you feel like the SiTime MEMS oscillators are already pretty well placed on a lot of the boards where Renesas timing or clock products are currently used? Just trying to get a better sense for how much cross-selling opportunity you see bringing these two businesses under one roof. Yeah, you exactly put your finger on it, Quinn. We have very little. We have some reasonably solid overlap on customers, but typically, on products, there's very little. So to your point, they are designed in clocking where the solution is quartz crystal. And this gives us tremendous opportunity to expose the values of our semiconductor differentiated MEMS-based solutions to the customers and see how we can get design wins for the future. So this is the cross-selling opportunity one way, but there's also a cross-selling opportunity another way because we have design wins in AI, in GPUs, in accelerator cards, and switches where it's not our clock that's in there, the SiTime native clocks. It is either their clock or the clock of another competitor. So that gives us, in the next iteration, it gives us another opportunity to present the customer with a value proposition of an integrated solution. It's, of course, not physically integrated. It is notionally integrated or put together as making it easy for the customer to use it, as well as to get the performance they need, and of course, the source of supply, which is critical in all of these situations where they need to have one source of supply so some things are not out of whack in that. So yeah, clearly, that is the case. Thank you, Rajesh. One last quick one for Beth. On the regulatory front, would you expect to require China SAMR approval to close, or do you think you do not need China SAMR to close the transaction? Thanks for the question. So we are going through the required regulatory processes in the countries that have jurisdiction. At this point in time, we do not expect to need SAMR as part of those regulatory approvals. Perfect. Thank you very much. Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Jim Schneider with Goldman Sachs. Your line is open. Good afternoon. Thanks for taking my question. First of all, on the synergies with Renesas, can maybe talk a little bit more about, within the data center, the specific synergies between your products on the oscillator side and what Renesas is doing, perhaps on the memory side or otherwise? And beyond the cross-sell, do you expect there could be some consolidation of overall board timing content away from other suppliers toward a more holistic solution? In other words, is there a way that you could provide a more holistic solution between the two of you that maybe would be disadvantageous using another supplier? Right. So to be very clear, there is no product other than timing that we are going to be bringing into this. So you mentioned memory somewhat onto the side. We have no influence on that. We have no connection with that. We're only working on one thing and one thing only, which is a timing product division which used to belong to IDT, before that to ICS. So it's a timing business that we are acquiring and our influence is in timing. But the point that you made, Jim, is a very good one, which is that today, we have products that are oscillators and resonators on one side and clocks on the other. With their 160 engineers, with our almost double that number of engineers, I think we would be able to address the issues of density, power, resilience, higher throughput by delivering solutions, by delivering products that are somehow integrated, not just physically integrated, but somehow integrated to deliver vastly superior solutions because the need for performance, for jitter, for high speed, for throughput, for lower latencies, for lower power, those remain undiminished, not just in AI and data centers where they're extreme, but in all other areas, including consumer, including military, aerospace, defense. In terms of the one part of AI where clock is not being used right now, and we'll have to see whether there's a place for it, is in the whole optical networking, in the cabling, in the smart cables, in the retimers. Typically, those are not using clocks. Those are oscillators. Either way, there's an enormous opportunity because, as you know, the market is $11 billion for all timing, and SiTime's only a very small portion of it. Renesas, large as it is, the timing business, it's still also a very small portion of it. There's a significant amount of competitors out there, and it gives us an ability to influence at the highest level, the highest differentiated, most performance-centric customers, allows us to influence that. That's helpful. Thank you. And then relative to the model for 2026, maybe give us a little bit of help on two vectors. One, on the 1.5x Book-to-Bill, can you give us a sense about the duration of that backlog? Is that 6, 12, 18 months or longer? And then separately, talk about what the relative expected growth rate will be in the mobile and consumer business. Do you think you can sort of match the growth rate you put up in 2025? Thank you. Well, maybe I'll start with that one, Jim. So in terms of the Book-to-Bill, I think Rajesh talked about the fact that we are seeing customers maybe book out a little longer, but typically, that's well within 12 months. We see a lot of ordering over the next couple of quarters, but we are seeing some customers book meaningfully in the second half already as well. But I would say definitely weighted to Q1 and Q2 in terms of that. As far as our consumer business, again, there's a lot of activity there, and we've got a design win that we do expect to ramp meaningfully as we go through the year. And so I think that will drive a lot of the performance of that sector. Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Tom O'Malley with Barclays. Your line is open. Hey, guys. Thanks for taking my question. Looking at your long-term gross margin model, 60%-65%, you're saying the acquisition adds potentially to the high end of that. If I look at your business standalone, over the last year, you've had two quarters where your incremental gross margins are dropping through at 68% and 70%. You obviously have a mixed factor that's helping the gross margins in the March quarter. But as we look at 2026, should we be thinking about something a little bit ahead of that original target just because of the mix of business moving more towards AI? Anything you can help us with on the margin side as we look through 2026? So as we think about our, I'll start with our gross margin. So mix will be the biggest driver of gross margins in the year. And so I think there's a couple of factors that are contributing to that. The CED growth and mix clearly is a very favorable component of that mix. And then the other is the consumer business. So in quarters where the consumer business is a lower percentage of the total, that is a tailwind to gross margins. In quarters where you see a stronger mix of consumer, that can be a bit of an offset to those strong CED gross margins. So as we go through the year, I do expect that mix between those two to be the biggest driver of the gross margin in the quarter. And then as I think about operating margin, I do expect to continue to see favorable operating leverage in the model. So I do expect to continue to grow revenue faster than operating expenses. We do want to continue to invest in the business in a disciplined way to really be able to capture all the growth that we've been talking about. And so we do want to make investments both in our go-to-market as well as R&D to continue to have these world-class platforms in order to be able to deliver value to customers. But there is still meaningful operating leverage in the business. Helpful. And then on the acquisition, I just wanted to understand the OpEx side. Could you maybe give us the split of OPEX between R&D and SG&A of the acquired asset? And then when you look at areas where you can see synergies, could you maybe give us some feel for COGS or OpEx where you could see some of the costs coming out? Thank you. In terms of the transaction that we announced today, we are acquiring the assets from Renesas of their timing division, as Rajesh talked about. This is a carve-out, and we are acquiring just those specific assets. Once we close the acquisition, we will be integrating that into our business and our manufacturing operations and taking those over. They have a similar kind of OSAT model as we do. That will be really the focus for us. We'll talk more about the specifics of the model and the cost structure once we get to close. Thank you. Please stand by for our next question. Our next question comes from the line of Chris Caso with Wolfe Research. Your line is open. Yes, thank you. First question is on the business as you go into 2026 with regard to content. And can you speak to the content gains that you realize on the 1.6T platforms? And then what do you think will be the growth rate of those 1.6T platforms? How meaningful is that as a part of your business as you go through 2026, given those content gains? Yeah, Chris, the content gains on the 1.6, I think, is going to be pretty good. It may not be. We mentioned it's in the tens of % up in ASP. And there is an increased number of units being deployed on that, far more than we had thought on our last call in November. So we're very optimistic about that business. But at the same time, our business in other optical modules like 800 we called out continues as well as in some of the lower ones. So I think this is a very healthy business. We are designed into a large number of suppliers in the optical module, but also in the AECs, the active cables, as well as in the retimer business. So the whole networking part of this business of SiTime is very strong. Thank you. As a follow-up, it's just a question on the transaction. And you speak about the combined business staying on your 25%-30% growth targets for the existing business. Obviously, you've been growing at a faster rate than that now. So as you go forward within that 25%-30%, are you expecting—is basically each business growing at that 35% to—I'm sorry, 25%-30% going forward? And maybe you could talk about the growth rate of that business that had been within Renesas in the past. Had that been steadily growing at that 25%-30% rate? Yeah. We've always maintained that resonators I mean, sorry, oscillators are a system business because it has a resonator, and it has a clock. So it's a system business. And in this excuse me again. Oscillators are being used in some places where clocks are not. So for example, in military, aerospace, defense, oscillators tend to be used over that. Earlier, I just mentioned certain use cases in networking in AI, the optical modules and such, where there isn't a use case yet for clocks. But in general, I think, therefore, clocking is a slower growth business than oscillators are. So I think we will get a very good growth rate for the combined business because, as you mentioned, we are indeed in our oscillator-based business, which is most of our business today is quite a high-growth business since 2024. But we think that adding the clocking business, even though it grows at a somewhat slower rate, still keeps growing at such a healthy rate that we are 25%-30%. We're very confident on that for the combined business, that is. Right. Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Sujith Desilva with Roth Capital. Your line is open. Hi, Rajesh. Hi, Beth. Congratulations on this transaction. Great news. I was curious, yeah, and I read the MoU with Renesas' as part of this transaction and, I guess, the integration of the resonator into the microcontroller SoC products of Renesas'. I'm curious, is that ahead of the rest of the industry or other folks? Are you working with other folks on similar efforts? Just curious how that is positioned competitively, that combined business. Yeah. So as you know, thank you. As you know, the Titan family of products is a breakthrough family. There isn't any other resonator in any technology at that level of quality, reliability, size, power, and use case. So many customers, many semiconductor customers, and many system customers are looking at designing it in. And as we have mentioned in the past, it's a somewhat slower design win, particularly when it goes into somebody else's chips, right? So I think it takes a little bit longer to get the design win. Certainly, there's nothing exclusive about this, and we're talking to them. But I think that they are ahead of making this commitment. I think this is, as you see in the remarks by their CEO, Shibata, that they are using this as a way to pivot this sale to SiTime of the timing business and the MoU as a way to pivot deeper into what they are calling their core business, an embedded compute. So I think it's a win-win for both of us. And certainly, as a potential customer of SiTime's, that becomes a bit of a flagship design win if and when it happens. Okay. Helpful color, Rajesh. And then in C, you've talked about it a lot. The usual suspects growing here: pluggables, AECs, retimers. I'm wondering if there's any other applications which are emerging in growth above and beyond those that you'd call out with the strong growth there or whether it remains those kind of the ones we kind of already know, roughly. Yeah. It's the ones we know. There are no new categories, but they're new design wins. And the density we've always maintained our growth story comes from three legs. One is whatever design wins we have, the end product sells more units, right? So that's one. The second is there's an upgrade in functionality from win to win, and there's an upgrade in density of chips used in a particular functionality. So what we are experiencing now in some of these with our native clock products is that there were design wins along with oscillators, and there were more of clocks, and then there were more clocks being used in a design win. So I think that trend continues. And finally, there's a new use case for our products that didn't exist. An example would be an L4, ADAS, or indeed even the retimers, which didn't meet our level of performance some time back. Okay. Great. Thanks, Rajesh. Yep. Thank you. Please stand by for our next question. Our next question comes from the line of Gary Mobley with Loop Capital. Your line is open. Hi, everybody. Let me extend my congratulations as well. I wanted to ask about the strong growth that you're seeing in the ability to support that growth from a supply chain perspective. Are there any capacity constraints that you see now or on the horizon that are causing your ordered lead times to extend? And I guess, conversely, do you see a situation where some of your crystal-based competitors are struggling to fill surging demand, which seems to be industry-wide? And are you able to take advantage of that with your quick turns, I guess, supply chain? We know of no data that shows that crystal suppliers are struggling. It may be, but we don't know that. But what I can say is that just on the merits of the SiTime programmability, SiTime supply chain, the integrity of that, given semiconductors, and specifically the quality and reliability of our products, SiTime is the preferred solution even when there isn't a performance requirement. In fact, we get to charge a premium on our products even when there's no performance simply based on our quality, reliability, support, programmability. We think that we don't have to rely upon anybody's struggle or weakness. We think we rely on our strength. Our value proposition is strong and sustainable, and customers are recognizing that with every passing quarter, if you will. We keep on adding to our customer base, both in existing customers and existing applications, but also new applications. We feel generally very confident in our supply chain. We have had some challenges in the beginning of last year when we were trying to launch new products at the same time when demand was surging. But we're more than caught up in Q3, Q4, and we look forward with a lot of confidence to this year in terms of supply chain. I think the other thing we continue to work very closely with our supply chain partners is we see kind of the industry evolving and are mindful of our costs and working very closely with them to ensure that we can continue to secure the supply that we need and the lines that we need and, again, watch the costs as well as we see the tightening that I think everybody is seeing. Thanks. As a follow-up, I wanted to ask about a few details on the acquisition or the asset carve-out. Just to confirm, this is a fabless business model, and related, is there any foundry crossover? And I just wanted to confirm that most of the engineering team, I presume, is down the street from SiTime's headquarters, correct? Well, starting with the engineering team, it is located mostly in North America. There is a large group in Ottawa, which is the IDT group. Ottawa seems to have, a long time ago, Zarlink also. So there's a nice pool of people that we could hire from in analog design. The next one, as you rightly point out, is right here in South San Jose and available. And the third one, which is rather large as well, is in Tempe, Arizona. And we're looking forward to that as a new location for us. They also have some people in Shanghai, which is new. And then there's people across some parts of Asia in smaller numbers. In terms of the other question, which was around Fabless, actually, it's a really very good match. They are all IDT, and therefore, they are TSMC 0.18 micron, which is fantastic since TSMC is already a great supplier to SiTime. Also, they are with GlobalFoundries in the 55 nm, which is great. On the back end, there's almost complete great connection with ASE and Carsem and some of the others in Asia. We are very confident that we can make the back end and the supply chain work really well. Thanks again. Yep. Thank you. Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to Rajesh for closing remarks. Look, this has been a long time coming, and we've been on this path. When we raised money, many of you asked us what it's for. And we've always been very clear that our next M&A would be in timing. It would be at scale. It would be equal to or better than our gross margins. It would be equal to or better than our net profit margins. And it would not take down the growth rate of 25%-30%, that SiTime's long-term growth model. I think we have fulfilled that on every count. And not only have we been able to get a clocking business, there couldn't be, there isn't one. There isn't a better clocking business than this in the world. The coming together of all of this, by our standards, makes us a big company, but we'd still be a pretty small company in the large timing business. The timing business is $10 billion-$11 billion, and it grows at 5%-6% year-over-year. At the end of these 10 years, we'll probably be $17 billion-$18 billion in size. And SiTime has a long way to go to get to be a large player. Coincidentally or by design, we don't intend to be a large player. We're not a market share game. We're a value differentiation, high-growth game. And so I really look forward, given our spectacular results and our outlook for 2026, plus this new acquisition whenever it closes, to create a billion-dollar company that is solely dedicated to solving tough timing problems of our customers. Timing, as we know, is the heartbeat of all electronics, and SiTime is dedicated to it. Thank you. Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker 6: Good afternoon and welcome to SiTime's Fourth Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask the question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. We ask that you limit yourself to one question and one follow-up. As a reminder, this conference call is being recorded today, February 4, 2026. I would now like to turn the conference over to Brett Perry of Shelton Group Investor Relations. Brett, please go ahead. Good afternoon and welcome to SiTime's Fourth Quarter 2025 Financial Results Conference Call. good afternoon and welcome to sitime's fourth quarter 2025 financial results conference call At this time, all participants are in a listen-only mode. at this time all participants are in a listen-only mode After the speaker's presentation, there will be a question-and-answer session. after the speaker's presentation there will be a question-and-answer session To ask the question during the session, you will need to press star one one on your telephone. to ask the question during the session you will need to press star one one on your telephone You will then hear an automated message advising your hand is raised. you will then hear an automated message advising your hand is raised To withdraw your question, please press star one one again. to withdraw your question please press star one one again We ask that you limit yourself to one question and one follow-up. we ask that you limit yourself to one question and one follow-up As a reminder, this conference call is being recorded today, February 4, 2026. as a reminder this conference call is being recorded today february 4 2026 I would now like to turn the conference over to Brett Perry of Shelton Group Investor Relations. i would now like to turn the conference over to brett perry of shelton group investor relations Brett, please go ahead. brett please go ahead

Speaker 2: Thank you, Jewanda. Good afternoon and welcome to today's conference call to discuss SiTime's fourth quarter and full year 2025 financial results as well as SiTime's proposed acquisition of Renesas' timing business. Joining us on today's call from SiTime are Rajesh Vashist, Chief Executive Officer, and Beth Howe, Chief Financial Officer. Please note, in addition to the respective press releases issued this afternoon, a supplemental slide deck related to the proposed acquisition is available in the investor relations section of the company's website at investors.sitime.com. Before we begin, I'd like to point out that during the course of this call, the company may make forward-looking statements regarding expected future results, including financial position, strategy and plans, future operations, the timing market, and other areas of discussion. Thank you, Jewanda. thank you jewanda Good afternoon and welcome to today's conference call to discuss SiTime's fourth quarter and full year 2025 financial results as well as SiTime's proposed acquisition of Renesas' timing business. good afternoon and welcome to today's conference call to discuss sitime's fourth quarter and full year 2025 financial results as well as sitime's proposed acquisition of renesas' timing business Joining us on today's call from SiTime are Rajesh Vashist, Chief Executive Officer, and Beth Howe, Chief Financial Officer. joining us on today's call from sitime are rajesh vashist chief executive officer and beth howe chief financial officer Please note, in addition to the respective press releases issued this afternoon, a supplemental slide deck related to the proposed acquisition is available in the investor relations section of the company's website at investors.sitime.com. please note in addition to the respective press releases issued this afternoon a supplemental slide deck related to the proposed acquisition is available in the investor relations section of the company's website at investors.sitime.com Before we begin, I'd like to point out that during the course of this call, the company may make forward-looking statements regarding expected future results, including financial position, strategy and plans, future operations, the timing market, and other areas of discussion. before we begin i'd like to point out that during the course of this call the company may make forward-looking statements regarding expected future results including financial position strategy and plans future operations the timing market and other areas of discussion It's not possible for the company's management to predict all risks, nor can the company assess the impact of all factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed during this call may not occur, and actual results could differ materially and adversely from those anticipated or implied. Neither the company nor any person assumes responsibility for the accuracy and completeness of the forward-looking statements. The company undertakes no obligation to publicly update forward-looking statements for any reason after the date of today's call to conform statements to actual results or to changes in the company's expectations. It's not possible for the company's management to predict all risks, nor can the company assess the impact of all factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. it's not possible for the company's management to predict all risks nor can the company assess the impact of all factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements In light of these risks, uncertainties, and assumptions, the forward-looking events discussed during this call may not occur, and actual results could differ materially and adversely from those anticipated or implied. in light of these risks uncertainties and assumptions the forward-looking events discussed during this call may not occur and actual results could differ materially and adversely from those anticipated or implied Neither the company nor any person assumes responsibility for the accuracy and completeness of the forward-looking statements. neither the company nor any person assumes responsibility for the accuracy and completeness of the forward-looking statements The company undertakes no obligation to publicly update forward-looking statements for any reason after the date of today's call to conform statements to actual results or to changes in the company's expectations. the company undertakes no obligation to publicly update forward-looking statements for any reason after the date of today's call to conform statements to actual results or to changes in the company's expectations For more detailed information on risks associated with the business, we refer you to the risk factors described in the company's annual report on Form 10-K for the year ended December 31, 2024, as well as the company's subsequent filings with the SEC, including the company's quarterly report on Form 10-Q for the quarter ended September 30, 2025. During the call, management will refer to non-GAAP financial measures, which are considered to be an important measure of company performance. These non-GAAP financial measures are provided in addition to and not as a substitute for nor superior to measures of financial performance prepared in accordance with U.S. GAAP. For more detailed information on risks associated with the business, we refer you to the risk factors described in the company's annual report on Form 10-K for the year ended December 31, 2024, as well as the company's subsequent filings with the SEC, including the company's quarterly report on Form 10-Q for the quarter ended September 30, 2025. for more detailed information on risks associated with the business we refer you to the risk factors described in the company's annual report on form 10-k for the year ended december 31 2024 as well as the company's subsequent filings with the sec including the company's quarterly report on form 10-q for the quarter ended september 30 2025 During the call, management will refer to non-GAAP financial measures, which are considered to be an important measure of company performance. during the call management will refer to non-gaap financial measures which are considered to be an important measure of company performance These non-GAAP financial measures are provided in addition to and not as a substitute for nor superior to measures of financial performance prepared in accordance with U.S. these non-gaap financial measures are provided in addition to and not as a substitute for nor superior to measures of financial performance prepared in accordance with u.s GAAP. gaap The GAAP to non-GAAP reconciliation includes stock-based compensation expense, amortization of acquired intangibles, and acquisition-related expenses, which include transaction and certain other cash costs associated with business acquisition, as well as changes in the estimated fair value of earn-out liabilities and accretion of acquisition consideration payable. Please refer to the company's press release issued earlier today for a detailed reconciliation between GAAP and non-GAAP financial results. With that, it's now my pleasure to turn the call over to SiTime's CEO, Rajesh. Please go ahead. The GAAP to non-GAAP reconciliation includes stock-based compensation expense, amortization of acquired intangibles, and acquisition-related expenses, which include transaction and certain other cash costs associated with business acquisition, as well as changes in the estimated fair value of earn-out liabilities and accretion of acquisition consideration payable. the gaap to non-gaap reconciliation includes stock-based compensation expense amortization of acquired intangibles and acquisition-related expenses which include transaction and certain other cash costs associated with business acquisition as well as changes in the estimated fair value of earn-out liabilities and accretion of acquisition consideration payable Please refer to the company's press release issued earlier today for a detailed reconciliation between GAAP and non-GAAP financial results. please refer to the company's press release issued earlier today for a detailed reconciliation between gaap and non-gaap financial results With that, it's now my pleasure to turn the call over to SiTime's CEO, Rajesh. with that it's now my pleasure to turn the call over to sitime's ceo rajesh Please go ahead. please go ahead

Speaker 8: Thank you, Brett. Good afternoon, everyone. Thank you for joining us today. We have a lot to talk about. We announced exceptional results for 2025, and we also announced a transformational acquisition. I'll begin with our business and our performance, and then I'll turn to the transaction. Q4 2025 was another exceptional quarter for SiTime. We delivered $113.3 million in Q4, up 66% year-over-year, and earnings per share tripled from $0.48 to $1.53. In Q4, every end customer segment grew year-on-year, as did every region. Gross margins in the quarter grew significantly, up 61.2%. I'm particularly pleased about this achievement. In the beginning of 2025, we said we would exit the year at greater than 60% gross margins, and we achieved it. Thank you, Brett. thank you brett Good afternoon, everyone. good afternoon everyone Thank you for joining us today. thank you for joining us today We have a lot to talk about. we have a lot to talk about We announced exceptional results for 2025, and we also announced a transformational acquisition. we announced exceptional results for 2025 and we also announced a transformational acquisition I'll begin with our business and our performance, and then I'll turn to the transaction. i'll begin with our business and our performance and then i'll turn to the transaction Q4 2025 was another exceptional quarter for SiTime. q4 2025 was another exceptional quarter for sitime We delivered $113.3 million in Q4, up 66% year-over-year, and earnings per share tripled from $0.48 to $1.53. we delivered $113.3 million in q4 up 66% year-over-year and earnings per share tripled from $0.48 to $1.53 In Q4, every end customer segment grew year-on-year, as did every region. in q4 every end customer segment grew year-on-year as did every region Gross margins in the quarter grew significantly, up 61.2%. gross margins in the quarter grew significantly up 61.2% I'm particularly pleased about this achievement. i'm particularly pleased about this achievement In the beginning of 2025, we said we would exit the year at greater than 60% gross margins, and we achieved it. in the beginning of 2025 we said we would exit the year at greater than 60% gross margins and we achieved it We predicted this expansion of gross margins because we anticipated mixed changes to higher value products, and we reduced new product costs as they moved into volume production. For all of 2025, we delivered $326.7 million, up 61% year-over-year. Every end customer segment and region showed growth. Earnings per share more than tripled from $0.93 to $3.20. Demand remained very strong exiting the year, which is an indication of significant future growth in 2026. While we don't usually discuss our book-to-bill, we wanted to give you a metric of the demand strength across our customer base as we go into a strong year. So our book-to-bill was over 1.5 at the end of Q4, and we have excellent visibility for the year. Channel health remained solid exiting 2025. Distributor and contract manufacturer inventory levels were in line with our target, reflecting strong sell-through and disciplined supply management. We predicted this expansion of gross margins because we anticipated mixed changes to higher value products, and we reduced new product costs as they moved into volume production. we predicted this expansion of gross margins because we anticipated mixed changes to higher value products and we reduced new product costs as they moved into volume production For all of 2025, we delivered $326.7 million, up 61% year-over-year. for all of 2025 we delivered $326.7 million up 61% year-over-year Every end customer segment and region showed growth. every end customer segment and region showed growth Earnings per share more than tripled from $0.93 to $3.20. earnings per share more than tripled from $0.93 to $3.20 Demand remained very strong exiting the year, which is an indication of significant future growth in 2026. demand remained very strong exiting the year which is an indication of significant future growth in 2026 While we don't usually discuss our book-to-bill, we wanted to give you a metric of the demand strength across our customer base as we go into a strong year. while we don't usually discuss our book-to-bill we wanted to give you a metric of the demand strength across our customer base as we go into a strong year So our book-to-bill was over 1.5 at the end of Q4, and we have excellent visibility for the year. so our book-to-bill was over 1.5 at the end of q4 and we have excellent visibility for the year Channel health remained solid exiting 2025. channel health remained solid exiting 2025 Distributor and contract manufacturer inventory levels were in line with our target, reflecting strong sell-through and disciplined supply management. distributor and contract manufacturer inventory levels were in line with our target reflecting strong sell-through and disciplined supply management Design win momentum remained solid across all end customer segments and regions, another indication of growth in 2026 and beyond. Q4 growth was again led by Comms Enterprise Data Center, CED, business, which grew 160% year-over-year. This marks the seventh consecutive quarter of over 100% year-over-year growth. Additionally, our 2026 CED forecast has grown since our last earnings call, driven by increases in AI CapEx spending. The 2x-4x increase in computing power of the new XPUs, GPUs, CPUs is driving the need for faster networking infrastructure and accelerating the adoption of 1.6 Tb optical modules. Our customers have recently increased their 2026 forecast for our oscillators used in 1.6T optical modules by 50%, which is over and above the increase that we reported in November. Design win momentum remained solid across all end customer segments and regions, another indication of growth in 2026 and beyond. design win momentum remained solid across all end customer segments and regions another indication of growth in 2026 and beyond Q4 growth was again led by Comms Enterprise Data Center, CED, business, which grew 160% year-over-year. q4 growth was again led by comms enterprise data center ced business which grew 160% year-over-year This marks the seventh consecutive quarter of over 100% year-over-year growth. this marks the seventh consecutive quarter of over 100% year-over-year growth Additionally, our 2026 CED forecast has grown since our last earnings call, driven by increases in AI CapEx spending. additionally our 2026 ced forecast has grown since our last earnings call driven by increases in ai capex spending The 2x-4x increase in computing power of the new XPUs, GPUs, CPUs is driving the need for faster networking infrastructure and accelerating the adoption of 1.6 Tb optical modules. the 2x-4x increase in computing power of the new xpus gpus cpus is driving the need for faster networking infrastructure and accelerating the adoption of 1.6 tb optical modules Our customers have recently increased their 2026 forecast for our oscillators used in 1.6T optical modules by 50%, which is over and above the increase that we reported in November. our customers have recently increased their 2026 forecast for our oscillators used in 1.6t optical modules by 50% which is over and above the increase that we reported in november This move to 1.6T drives the need for higher clocking frequencies from our oscillators, for which we get higher ASPs or average selling prices. The increase in 1.6T modules notwithstanding, demand for oscillators used in 800G optical module continues to remain strong. In parallel to the increase in bandwidth of networking infrastructure, the hyperscalers are deploying more XPUs for training as well as getting ready for inference. Since November, this trend has driven a 50% increase in 2026 forecast of our Super-TCXOs, which are used in both computing infrastructure and the supporting SmartNICs or Network Interface Cards. SiTime's goal has always been to deliver predictable revenue growth. At IPO, CED was just 12% of our revenue, and then we created a strategic plan to expand it to 40%-50%. Since then, our focused investments in product development as well as customer acquisition have paid off handsomely. This move to 1.6T drives the need for higher clocking frequencies from our oscillators, for which we get higher ASPs or average selling prices. this move to 1.6t drives the need for higher clocking frequencies from our oscillators for which we get higher asps or average selling prices The increase in 1.6T modules notwithstanding, demand for oscillators used in 800G optical module continues to remain strong. the increase in 1.6t modules notwithstanding demand for oscillators used in 800g optical module continues to remain strong In parallel to the increase in bandwidth of networking infrastructure, the hyperscalers are deploying more XPUs for training as well as getting ready for inference. in parallel to the increase in bandwidth of networking infrastructure the hyperscalers are deploying more xpus for training as well as getting ready for inference Since November, this trend has driven a 50% increase in 2026 forecast of our Super-TCXOs, which are used in both computing infrastructure and the supporting Smart NICs or Network Interface Cards. since november this trend has driven a 50% increase in 2026 forecast of our super-tcxos which are used in both computing infrastructure and the supporting smart nics or network interface cards SiTime's goal has always been to deliver predictable revenue growth. sitime's goal has always been to deliver predictable revenue growth At IPO, CED was just 12% of our revenue, and then we created a strategic plan to expand it to 40%-50%. at ipo ced was just 12% of our revenue and then we created a strategic plan to expand it to 40%-50% Since then, our focused investments in product development as well as customer acquisition have paid off handsomely. since then our focused investments in product development as well as customer acquisition have paid off handsomely CED today makes up 53% of our revenue, and that is exactly where we want to be. I'm also very pleased that a large portion of this revenue comes from high-value products, reflecting the sustained benefit that we bring to our customers. Our CED strategy laid the foundation of our success today, and we're using this as a blueprint for rapid growth in our other businesses. We continue to grow across all other end segments. Aerospace defense, automotive, and industrial are all benefiting from increased adoption of autonomous systems and physical AI, where systems perceive, reason, and interact in the physical world in real time. These systems need accurate positioning, sensor fusion, motor control, and precise synchronization, where precision timing is essential. CED today makes up 53% of our revenue, and that is exactly where we want to be. ced today makes up 53% of our revenue and that is exactly where we want to be I'm also very pleased that a large portion of this revenue comes from high-value products, reflecting the sustained benefit that we bring to our customers. i'm also very pleased that a large portion of this revenue comes from high-value products reflecting the sustained benefit that we bring to our customers Our CED strategy laid the foundation of our success today, and we're using this as a blueprint for rapid growth in our other businesses. our ced strategy laid the foundation of our success today and we're using this as a blueprint for rapid growth in our other businesses We continue to grow across all other end segments. we continue to grow across all other end segments Aerospace defense, automotive, and industrial are all benefiting from increased adoption of autonomous systems and physical AI, where systems perceive, reason, and interact in the physical world in real time. aerospace defense automotive and industrial are all benefiting from increased adoption of autonomous systems and physical ai where systems perceive reason and interact in the physical world in real time These systems need accurate positioning, sensor fusion, motor control, and precise synchronization, where precision timing is essential. these systems need accurate positioning sensor fusion motor control and precise synchronization where precision timing is essential For example, in humanoid robots, we see up to $20 of a precision timing product, and robotaxis in Level 4 ADAS or self-driving cars require up to $15 of precision timing content. In defense, where worldwide spending is accelerating, our product resilience is driving adoption in a variety of applications. In the next few years, we expect that each of our automotive, defense, and industrial businesses to exceed $100 million annually. Entering 2026, demand drivers remain firmly in place. Our strategy remains unchanged: to lead in high-value precision timing applications, deliver differentiated system-level solutions, and scale our operating model to drive a long-term value creation. The combination of deep engagement in AI infrastructure and broad participation across diverse segments positions us exceptionally well for continued growth. I'm confident in our trajectory and excited about the opportunities ahead. For example, in humanoid robots, we see up to $20 of a precision timing product, and robotaxis in Level 4 ADAS or self-driving cars require up to $15 of precision timing content. for example in humanoid robots we see up to $20 of a precision timing product and robotaxis in level 4 adas or self-driving cars require up to $15 of precision timing content In defense, where worldwide spending is accelerating, our product resilience is driving adoption in a variety of applications. in defense where worldwide spending is accelerating our product resilience is driving adoption in a variety of applications In the next few years, we expect that each of our automotive, defense, and industrial businesses to exceed $100 million annually. in the next few years we expect that each of our automotive defense and industrial businesses to exceed $100 million annually Entering 2026, demand drivers remain firmly in place. entering 2026 demand drivers remain firmly in place Our strategy remains unchanged: to lead in high-value precision timing applications, deliver differentiated system-level solutions, and scale our operating model to drive a long-term value creation. our strategy remains unchanged to lead in high-value precision timing applications deliver differentiated system-level solutions and scale our operating model to drive a long-term value creation The combination of deep engagement in AI infrastructure and broad participation across diverse segments positions us exceptionally well for continued growth. the combination of deep engagement in ai infrastructure and broad participation across diverse segments positions us exceptionally well for continued growth I'm confident in our trajectory and excited about the opportunities ahead. i'm confident in our trajectory and excited about the opportunities ahead With that, I'll now turn the call over to Beth, our CFO, to review the financial details, after which we'll be happy to take your questions. With that, I'll now turn the call over to Beth, our CFO, to review the financial details, after which we'll be happy to take your questions. with that i'll now turn the call over to beth our cfo to review the financial details after which we'll be happy to take your questions

Speaker 1: Thanks, Rajesh. Today, I'll walk through our fourth quarter and full year 2025 results, and then I'll provide our outlook for the first quarter of fiscal 2026. As a reminder, my remarks focus on non-GAAP financial results, which are reconciled to GAAP in our press release. Fiscal 2025 has been a pivotal year for the company, one in which we delivered exceptional revenue growth, expanded gross margins, and demonstrated meaningful operating leverage. Our results reflect the scalability of our operating model, the strength of demand across our target customer segments, and the growing strategic value of our products and solutions. For the full year, revenue reached $326.7 million, an increase of 61% from the prior year. Gross margins for the year were 59.3%, and operating expenses were $135 million. Non-GAAP operating profit was $58.6 million, an increase of $58 million year-over-year, or 18% of revenue. Thanks, Rajesh. thanks rajesh Today, I'll walk through our fourth quarter and full year 2025 results, and then I'll provide our outlook for the first quarter of fiscal 2026. today i'll walk through our fourth quarter and full year 2025 results and then i'll provide our outlook for the first quarter of fiscal 2026 As a reminder, my remarks focus on non-GAAP financial results, which are reconciled to GAAP in our press release. as a reminder my remarks focus on non-gaap financial results which are reconciled to gaap in our press release Fiscal 2025 has been a pivotal year for the company, one in which we delivered exceptional revenue growth, expanded gross margins, and demonstrated meaningful operating leverage. fiscal 2025 has been a pivotal year for the company one in which we delivered exceptional revenue growth expanded gross margins and demonstrated meaningful operating leverage Our results reflect the scalability of our operating model, the strength of demand across our target customer segments, and the growing strategic value of our products and solutions. our results reflect the scalability of our operating model the strength of demand across our target customer segments and the growing strategic value of our products and solutions For the full year, revenue reached $326.7 million, an increase of 61% from the prior year. for the full year revenue reached $326.7 million an increase of 61% from the prior year Gross margins for the year were 59.3%, and operating expenses were $135 million. gross margins for the year were 59.3% and operating expenses were $135 million Non-GAAP operating profit was $58.6 million, an increase of $58 million year-over-year, or 18% of revenue. non-gaap operating profit was $58.6 million an increase of $58 million year-over-year or 18% of revenue For fiscal 2025, our non-GAAP earnings per share more than tripled to $3.20. Cash flow from operations was $87.2 million for the year, a strong improvement compared to $23.2 million in 2024, reflecting the combined benefit of higher revenue, richer mix, and disciplined expense management. Overall, our momentum reflects a company operating with focus, efficiency, and increasing strategic impact. Turning to our fourth quarter results, Q4 was a milestone quarter for the company, as we surpassed $100 million in quarterly revenue for the first time and generated operating margins of 30%. Revenue in Q4 was $113.3 million, up 66% year over year and 36% sequentially. Revenue was significantly higher than expected as customer demand continued to strengthen in the quarter. Communications Enterprise and Data Center continued to be the primary growth engine, contributing $64.6 million, or 57% of total revenue, and rising 160% year over year. For fiscal 2025, our non-GAAP earnings per share more than tripled to $3.20. for fiscal 2025 our non-gaap earnings per share more than tripled to $3.20 Cash flow from operations was $87.2 million for the year, a strong improvement compared to $23.2 million in 2024, reflecting the combined benefit of higher revenue, richer mix, and disciplined expense management. cash flow from operations was $87.2 million for the year a strong improvement compared to $23.2 million in 2024 reflecting the combined benefit of higher revenue richer mix and disciplined expense management Overall, our momentum reflects a company operating with focus, efficiency, and increasing strategic impact. overall our momentum reflects a company operating with focus efficiency and increasing strategic impact Turning to our fourth quarter results, Q4 was a milestone quarter for the company, as we surpassed $100 million in quarterly revenue for the first time and generated operating margins of 30%. turning to our fourth quarter results q4 was a milestone quarter for the company as we surpassed $100 million in quarterly revenue for the first time and generated operating margins of 30% Revenue in Q4 was $113.3 million, up 66% year over year and 36% sequentially. revenue in q4 was $113.3 million up 66% year over year and 36% sequentially Revenue was significantly higher than expected as customer demand continued to strengthen in the quarter. revenue was significantly higher than expected as customer demand continued to strengthen in the quarter Communications Enterprise and Data Center continued to be the primary growth engine, contributing $64.6 million, or 57% of total revenue, and rising 160% year over year. communications enterprise and data center continued to be the primary growth engine contributing $64.6 million or 57% of total revenue and rising 160% year over year Growth in this segment was broad-based and driven by multiple customers across AI and data centers. Automotive, industrial, and aerospace delivered $24.5 million, or 22% of revenue, increasing 19% year-over-year. Consumer, IoT, and mobile revenue was $24.2 million, or 21% of total revenue, up 7% year-over-year, with our largest consumer customer contributing $17 million for the quarter. Gross margins in Q4 were 61.2%, representing a 240 basis points improvement year-over-year and ending the year above 60% as we had forecast at the beginning of 2025. The increase was primarily driven by continued mix shift toward higher margin products. Improving manufacturing overhead absorption also contributed meaningfully to the margin expansion. Operating expenses for the quarter were $35.5 million, consisting of $19 million in R&D and $16.5 million in SG&A. Growth in this segment was broad-based and driven by multiple customers across AI and data centers. growth in this segment was broad-based and driven by multiple customers across ai and data centers Automotive, industrial, and aerospace delivered $24.5 million, or 22% of revenue, increasing 19% year-over-year. automotive industrial and aerospace delivered $24.5 million or 22% of revenue increasing 19% year-over-year Consumer, IoT, and mobile revenue was $24.2 million, or 21% of total revenue, up 7% year-over-year, with our largest consumer customer contributing $17 million for the quarter. consumer iot and mobile revenue was $24.2 million or 21% of total revenue up 7% year-over-year with our largest consumer customer contributing $17 million for the quarter Gross margins in Q4 were 61.2%, representing a 240 basis points improvement year-over-year and ending the year above 60% as we had forecast at the beginning of 2025. gross margins in q4 were 61.2% representing a 240 basis points improvement year-over-year and ending the year above 60% as we had forecast at the beginning of 2025 The increase was primarily driven by continued mix shift toward higher margin products. the increase was primarily driven by continued mix shift toward higher margin products Improving manufacturing overhead absorption also contributed meaningfully to the margin expansion. improving manufacturing overhead absorption also contributed meaningfully to the margin expansion Operating expenses for the quarter were $35.5 million, consisting of $19 million in R&D and $16.5 million in SG&A. operating expenses for the quarter were $35.5 million consisting of $19 million in r&d and $16.5 million in sg&a This was in line with expectations and driven by higher headcount, variable compensation tied to revenue performance, and continued investments to support our long-term roadmap. Operating income for the quarter was $34 million, an increase of $26 million year-over-year, demonstrating strong leverage and discipline in our cost structure as revenue scales. Interest in other income and expense was $7.4 million. Non-GAAP net income was $41.3 million, or $1.53 per share, more than tripled the $0.48 reported a year ago. Now let me turn to the balance sheet. Accounts receivable ended the quarter at $45 million, with Days Sales Outstanding at 36 days, up from 24 days in Q3 as linearity returned to more normal patterns. Inventory declined to $81.7 million from $86.7 million in Q3, driven by customer shipments during the quarter and continued focus on inventory management. This was in line with expectations and driven by higher headcount, variable compensation tied to revenue performance, and continued investments to support our long-term roadmap. this was in line with expectations and driven by higher headcount variable compensation tied to revenue performance and continued investments to support our long-term roadmap Operating income for the quarter was $34 million, an increase of $26 million year- over- year, demonstrating strong leverage and discipline in our cost structure as revenue scales. operating income for the quarter was $34 million an increase of $26 million year- over- year demonstrating strong leverage and discipline in our cost structure as revenue scales Interest in other income and expense was $7.4 million. interest in other income and expense was $7.4 million Non-GAAP net income was $41.3 million, or $1.53 per share, more than tripled the $0.48 reported a year ago. non-gaap net income was $41.3 million or $1.53 per share more than tripled the $0.48 reported a year ago Now let me turn to the balance sheet. now let me turn to the balance sheet Accounts receivable ended the quarter at $45 million, with Days Sales Outstanding at 36 days, up from 24 days in Q3 as linearity returned to more normal patterns. accounts receivable ended the quarter at $45 million with days sales outstanding at 36 days up from 24 days in q3 as linearity returned to more normal patterns Inventory declined to $81.7 million from $86.7 million in Q3, driven by customer shipments during the quarter and continued focus on inventory management. inventory declined to $81.7 million from $86.7 million in q3 driven by customer shipments during the quarter and continued focus on inventory management During the quarter, we generated $25.4 million in cash from operations. We also invested $12.6 million in capital expenditures. Finally, we paid $42.2 million to Aura, including the final payment for die deliveries. We ended the quarter with strong liquidity position of $808 million in cash and short-term investments. Now let me move to our outlook for the March quarter. Because of the acquisition of Renesas' timing business is not expected to close in Q1, it has no impact on our guidance. Looking ahead to Q1, we expect first-quarter seasonality to be less than our historical average and that our Comms Enterprise Data Center, or CED, business will grow sequentially. Since consumer is typically down seasonally sequentially in the first quarter, the higher mix of CED and the lower mix of consumer is also expected to contribute to stronger gross margins in Q1. During the quarter, we generated $25.4 million in cash from operations. during the quarter we generated $25.4 million in cash from operations We also invested $12.6 million in capital expenditures. we also invested $12.6 million in capital expenditures Finally, we paid $42.2 million to Aura, including the final payment for die deliveries. finally we paid $42.2 million to aura including the final payment for die deliveries We ended the quarter with strong liquidity position of $808 million in cash and short-term investments. we ended the quarter with strong liquidity position of $808 million in cash and short-term investments Now let me move to our outlook for the March quarter. now let me move to our outlook for the march quarter Because of the acquisition of Renesas' timing business is not expected to close in Q1, it has no impact on our guidance. because of the acquisition of renesas' timing business is not expected to close in q1 it has no impact on our guidance Looking ahead to Q1, we expect first-quarter seasonality to be less than our historical average and that our Comms Enterprise Data Center, or CED, business will grow sequentially. looking ahead to q1 we expect first-quarter seasonality to be less than our historical average and that our comms enterprise data center or ced business will grow sequentially Since consumer is typically down seasonally sequentially in the first quarter, the higher mix of CED and the lower mix of consumer is also expected to contribute to stronger gross margins in Q1. since consumer is typically down seasonally sequentially in the first quarter the higher mix of ced and the lower mix of consumer is also expected to contribute to stronger gross margins in q1 Thus, we project revenue in the range of $101 million-$104 million, up roughly 70% year-over-year at the midpoint. Gross margin to be approximately 62%, ± half a point given our expected product mix for Q1. Operating expenses in the range of $39-$40 million. Interest income of approximately $7 million. A share count of 27 million-27.5 million shares. As a result, we expect Q1 non-GAAP earnings per share to be in the range of $1.10-$1.17. With that, I'll hand the call back to Rajesh to discuss our intent to acquire Renesas's Timing Business. Rajesh? Thus, we project revenue in the range of $101 million-$104 million, up roughly 70% year-over-year at the midpoint. thus we project revenue in the range of $101 million-$104 million up roughly 70% year-over-year at the midpoint Gross margin to be approximately 62%, ± half a point given our expected product mix for Q1. gross margin to be approximately 62% ± half a point given our expected product mix for q1 Operating expenses in the range of $39-$40 million. operating expenses in the range of $39-$40 million Interest income of approximately $7 million. interest income of approximately $7 million A share count of 27 million-27.5 million shares. a share count of 27 million-27.5 million shares As a result, we expect Q1 non-GAAP earnings per share to be in the range of $1.10-$1.17. as a result we expect q1 non-gaap earnings per share to be in the range of $1.10-$1.17 With that, I'll hand the call back to Rajesh to discuss our intent to acquire Renesas's Timing Business. with that i'll hand the call back to rajesh to discuss our intent to acquire renesas's timing business Rajesh? rajesh

Speaker 8: Thanks, Beth. To reflect a little bit, over the past two decades, SiTime created the precision timing category and fundamentally transformed the timing market by delivering highly differentiated products that solve customers' tough timing problems. Along the journey, there were a handful of defining inflection points. Acquiring Renesas's timing business is perhaps the largest and one of the most exciting. This business, similar to SiTime, has a differentiated, broad product portfolio, except that's in clocks, where we have a small footprint. Additionally, they have an enviable financial profile, a respected team, and a 30-year heritage that started as ICS, then IDT, and finally Renesas'. We are really glad to have this business as part of SiTime. We've always said that customers need complete timing solutions, which include oscillators, resonators, and clocks. Thanks, Beth. thanks beth To reflect a little bit, over the past two decades, SiTime created the precision timing category and fundamentally transformed the timing market by delivering highly differentiated products that solve customers' tough timing problems. to reflect a little bit over the past two decades sitime created the precision timing category and fundamentally transformed the timing market by delivering highly differentiated products that solve customers' tough timing problems Along the journey, there were a handful of defining inflection points. along the journey there were a handful of defining inflection points Acquiring Renesas's timing business is perhaps the largest and one of the most exciting. acquiring renesas's timing business is perhaps the largest and one of the most exciting This business, similar to SiTime, has a differentiated, broad product portfolio, except that's in clocks, where we have a small footprint. this business similar to sitime has a differentiated broad product portfolio except that's in clocks where we have a small footprint Additionally, they have an enviable financial profile, a respected team, and a 30-year heritage that started as ICS, then IDT, and finally Renesas'. additionally they have an enviable financial profile a respected team and a 30-year heritage that started as ics then idt and finally renesas' We are really glad to have this business as part of SiTime. we are really glad to have this business as part of sitime We've always said that customers need complete timing solutions, which include oscillators, resonators, and clocks. we've always said that customers need complete timing solutions which include oscillators resonators and clocks Our oscillators and resonators are semiconductors, MEMS-based, and we have been investing in this technology for the past 20 years. To grow SiTime's clock business, we invested in our own development. In parallel, in 2023, we acquired Aura's clock products, which had leadership IP and 50 clock products. Now, Renesas's timing business takes us to scale in clocking. They are the preeminent brand with 500 highly differentiated clock products. Because they're focused on clocking in CED, industrial, and automotive, they complement our high-performance oscillator revenue. The 160 engineers that come over to SiTime at close give us an opportunity to build an exciting roadmap of products that would not have been previously possible. With this acquisition, our revenue mix continues its transformation and increases scale in CED. On a pro forma basis, our 2025 CED revenue will almost double with Renesas' 2025 AI data center Comms revenue. Our oscillators and resonators are semiconductors, MEMS-based, and we have been investing in this technology for the past 20 years. our oscillators and resonators are semiconductors mems-based and we have been investing in this technology for the past 20 years To grow SiTime's clock business, we invested in our own development. to grow sitime's clock business we invested in our own development In parallel, in 2023, we acquired Aura's clock products, which had leadership IP and 50 clock products. in parallel in 2023 we acquired aura's clock products which had leadership ip and 50 clock products Now, Renesas's timing business takes us to scale in clocking. now renesas's timing business takes us to scale in clocking They are the preeminent brand with 500 highly differentiated clock products. they are the preeminent brand with 500 highly differentiated clock products Because they're focused on clocking in CED, industrial, and automotive, they complement our high-performance oscillator revenue. because they're focused on clocking in ced industrial and automotive they complement our high-performance oscillator revenue The 160 engineers that come over to SiTime at close give us an opportunity to build an exciting roadmap of products that would not have been previously possible. the 160 engineers that come over to sitime at close give us an opportunity to build an exciting roadmap of products that would not have been previously possible With this acquisition, our revenue mix continues its transformation and increases scale in CED. with this acquisition our revenue mix continues its transformation and increases scale in ced On a pro forma basis, our 2025 CED revenue will almost double with Renesas' 2025 AI data center Comms revenue. on a pro forma basis our 2025 ced revenue will almost double with renesas' 2025 ai data center comms revenue To this, we'll add our rapid organic growth in 2026 and combine it with their growth. The breadth and diversity of our customers will grow significantly with this acquisition, along with faster access to customers that we would have secured only several years in the future. This acceleration of customers will include 10 hyperscalers, seven AI server leaders, 10 networking and communication vendors, and leading automotive OEMs in Tier 1s and leaders in mobile, IoT, and consumer. On Renesas and SiTime's common customers, there is minimal product overlap, and we have an opportunity to generate new revenue by selling our differentiated oscillators to them. It's an unprecedented opportunity for both SiTime and our customers to collaborate and build on our 20- and 30-year heritage to reach an extraordinary level of success in precision timing. This is also an exceptional business with great financials. To this, we'll add our rapid organic growth in 2026 and combine it with their growth. to this we'll add our rapid organic growth in 2026 and combine it with their growth The breadth and diversity of our customers will grow significantly with this acquisition, along with faster access to customers that we would have secured only several years in the future. the breadth and diversity of our customers will grow significantly with this acquisition along with faster access to customers that we would have secured only several years in the future This acceleration of customers will include 10 hyperscalers, seven AI server leaders, 10 networking and communication vendors, and leading automotive OEMs in Tier 1s and leaders in mobile, IoT, and consumer. this acceleration of customers will include 10 hyperscalers seven ai server leaders 10 networking and communication vendors and leading automotive oems in tier 1s and leaders in mobile iot and consumer On Renesas and SiTime's common customers, there is minimal product overlap, and we have an opportunity to generate new revenue by selling our differentiated oscillators to them. on renesas and sitime's common customers there is minimal product overlap and we have an opportunity to generate new revenue by selling our differentiated oscillators to them It's an unprecedented opportunity for both SiTime and our customers to collaborate and build on our 20- and 30-year heritage to reach an extraordinary level of success in precision timing. it's an unprecedented opportunity for both sitime and our customers to collaborate and build on our 20- and 30-year heritage to reach an extraordinary level of success in precision timing This is also an exceptional business with great financials. this is also an exceptional business with great financials It's expected to add $300 million in the 12 months after close, with approximately 70% in gross margins. 75% of the revenue comes from the fast-growing CED segment, which is strategically important to us. It also maintains SiTime's long-term growth rate of 25%-30%. This acquisition is a monumental milestone towards fulfilling our vision to transform the timing market, solve our customers' toughest timing challenges, and accelerate our path to $1 billion in revenue. We see remarkable opportunities ahead, and we are more excited than ever about the future of SiTime. I'll turn the call over to Beth to provide more details. Beth? It's expected to add $300 million in the 12 months after close, with approximately 70% in gross margins. 75% of the revenue comes from the fast-growing CED segment, which is strategically important to us. it's expected to add $300 million in the 12 months after close with approximately 70% in gross margins 75% of the revenue comes from the fast-growing ced segment which is strategically important to us It also maintains SiTime's long-term growth rate of 25%-30%. it also maintains sitime's long-term growth rate of 25%-30% This acquisition is a monumental milestone towards fulfilling our vision to transform the timing market, solve our customers' toughest timing challenges, and accelerate our path to $1 billion in revenue. this acquisition is a monumental milestone towards fulfilling our vision to transform the timing market solve our customers' toughest timing challenges and accelerate our path to $1 billion in revenue We see remarkable opportunities ahead, and we are more excited than ever about the future of SiTime. we see remarkable opportunities ahead and we are more excited than ever about the future of sitime I'll turn the call over to Beth to provide more details. i'll turn the call over to beth to provide more details Beth? beth

Speaker 1: Thanks, Rajesh. Building on Rajesh's overview of the strategic rationale, I'll walk through how this acquisition strengthens our financial profile and accelerates our long-term growth trajectory. What is most compelling is the alignment between the strategic value of this business and its financial contribution, both of which meaningfully enhance SiTime's scale, profitability, and cash generation capacity. Financially, this acquisition significantly elevates SiTime's revenue profile, margin structure, and cash flow potential. Approximately 75% of the acquired revenue comes from our Comms Enterprise Data Center sector, a fast-growing and strategically important segment for our long-term success. The remainder is diversified across automotive and industrial, further expanding our reach into durable, attractive applications across timing. As we integrate the business, we intend to invest in go-to-market capabilities to fully capture these opportunities. Importantly, as Rajesh mentioned, our long-term annual revenue growth target of 25%-30% remains firmly intact. Thanks, Rajesh. thanks rajesh Building on Rajesh's overview of the strategic rationale, I'll walk through how this acquisition strengthens our financial profile and accelerates our long-term growth trajectory. building on rajesh's overview of the strategic rationale i'll walk through how this acquisition strengthens our financial profile and accelerates our long-term growth trajectory What is most compelling is the alignment between the strategic value of this business and its financial contribution, both of which meaningfully enhance SiTime's scale, profitability, and cash generation capacity. what is most compelling is the alignment between the strategic value of this business and its financial contribution both of which meaningfully enhance sitime's scale profitability and cash generation capacity Financially, this acquisition significantly elevates SiTime's revenue profile, margin structure, and cash flow potential. financially this acquisition significantly elevates sitime's revenue profile margin structure and cash flow potential Approximately 75% of the acquired revenue comes from our Comms Enterprise Data Center sector, a fast-growing and strategically important segment for our long-term success. approximately 75% of the acquired revenue comes from our comms enterprise data center sector a fast-growing and strategically important segment for our long-term success The remainder is diversified across automotive and industrial, further expanding our reach into durable, attractive applications across timing. the remainder is diversified across automotive and industrial further expanding our reach into durable attractive applications across timing As we integrate the business, we intend to invest in go-to-market capabilities to fully capture these opportunities. as we integrate the business we intend to invest in go-to-market capabilities to fully capture these opportunities Importantly, as Rajesh mentioned, our long-term annual revenue growth target of 25%-30% remains firmly intact. importantly as rajesh mentioned our long-term annual revenue growth target of 25%-30% remains firmly intact The acquired portfolio operates with approximately 70% gross margins, reflecting the value and differentiation of the products. This positions SiTime to reach the upper end of our 60%-65% long-term gross margin target more quickly while expanding operating margins to above 30% as we scale and benefit from increased operating leverage. The transaction is also expected to be accretive to SiTime's non-GAAP EPS in the first full year post-close. And finally, with a combination of our organic growth and the attractive profitability of the acquired business, we expect to generate meaningful cash flow. We have structured this transaction to maintain financial strength and flexibility. The acquired portfolio operates with approximately 70% gross margins, reflecting the value and differentiation of the products. the acquired portfolio operates with approximately 70% gross margins reflecting the value and differentiation of the products This positions SiTime to reach the upper end of our 60%-65% long-term gross margin target more quickly while expanding operating margins to above 30% as we scale and benefit from increased operating leverage. this positions sitime to reach the upper end of our 60%-65% long-term gross margin target more quickly while expanding operating margins to above 30% as we scale and benefit from increased operating leverage The transaction is also expected to be accretive to SiTime's non-GAAP EPS in the first full year post-close. the transaction is also expected to be accretive to sitime's non-gaap eps in the first full year post-close And finally, with a combination of our organic growth and the attractive profitability of the acquired business, we expect to generate meaningful cash flow. and finally with a combination of our organic growth and the attractive profitability of the acquired business we expect to generate meaningful cash flow We have structured this transaction to maintain financial strength and flexibility. we have structured this transaction to maintain financial strength and flexibility Under the terms of the agreement, SiTime will acquire certain assets related to the Renesas Timing Business for $1.5 billion in cash and approximately 4.13 million newly issued SiTime shares, subject to potential adjustments and a 15% symmetrical collar determined by the 10-day volume-adjusted weighted average share price as of the three days prior to the execution of the agreement. We plan to finance the cash portion using a combination of cash on hand and approximately $900 million of committed debt financing from Wells Fargo. Given the strong free cash flow generation of the combined business, we have a clear path to reducing leverage to under 2x within 24 months following the closing. The transaction is expected to close by the end of 2026, subject to the satisfaction of customary closing conditions, including applicable regulatory approvals. Under the terms of the agreement, SiTime will acquire certain assets related to the Renesas Timing Business for $1.5 billion in cash and approximately 4.13 million newly issued SiTime shares, subject to potential adjustments and a 15% symmetrical collar determined by the 10-day volume-adjusted weighted average share price as of the three days prior to the execution of the agreement. under the terms of the agreement sitime will acquire certain assets related to the renesas timing business for $1.5 billion in cash and approximately 4.13 million newly issued sitime shares subject to potential adjustments and a 15% symmetrical collar determined by the 10-day volume-adjusted weighted average share price as of the three days prior to the execution of the agreement We plan to finance the cash portion using a combination of cash on hand and approximately $900 million of committed debt financing from Wells Fargo. we plan to finance the cash portion using a combination of cash on hand and approximately $900 million of committed debt financing from wells fargo Given the strong free cash flow generation of the combined business, we have a clear path to reducing leverage to under 2 x within 24 months following the closing. given the strong free cash flow generation of the combined business we have a clear path to reducing leverage to under 2 x within 24 months following the closing The transaction is expected to close by the end of 2026, subject to the satisfaction of customary closing conditions, including applicable regulatory approvals. the transaction is expected to close by the end of 2026 subject to the satisfaction of customary closing conditions including applicable regulatory approvals We are thrilled to announce the intent to acquire this highly complementary preeminent clocking business as we enter the next phase of our transformation. The combination strengthens our strategic position, accelerates our financial performance, and enhances our long-term value creation potential. With that, I'll open the call for questions. Operator? We are thrilled to announce the intent to acquire this highly complementary preeminent clocking business as we enter the next phase of our transformation. we are thrilled to announce the intent to acquire this highly complementary preeminent clocking business as we enter the next phase of our transformation The combination strengthens our strategic position, accelerates our financial performance, and enhances our long-term value creation potential. the combination strengthens our strategic position accelerates our financial performance and enhances our long-term value creation potential With that, I'll open the call for questions. with that i'll open the call for questions Operator? operator

Speaker 6: Ladies and gentlemen, as a reminder to ask the question, please press star one one on your telephone, then wait for your name to be announced. To withdraw your question, please press star one one again. We're asked that you limit yourself to one question and one follow-up, and then return to the queue for additional questions. Please stand by while we compile the Q&A roster. Our first question comes from the line of Tore Svanberg with Stifel. The line is open. Ladies and gentlemen, as a reminder to ask the question, please press star one one on your telephone, then wait for your name to be announced. ladies and gentlemen as a reminder to ask the question please press star one one on your telephone then wait for your name to be announced To withdraw your question, please press star one one again. to withdraw your question please press star one one again We're asked that you limit yourself to one question and one follow-up, and then return to the queue for additional questions. we're asked that you limit yourself to one question and one follow-up and then return to the queue for additional questions Please stand by while we compile the Q&A roster. please stand by while we compile the q&a roster Our first question comes from the line of Tore Svanberg with Stifel. our first question comes from the line of tore svanberg with stifel The line is open. the line is open

Speaker 11: Yes. Thank you very much, Rajesh and Beth. Congratulations on the strong results, and especially on this highly strategic acquisition. I guess my first question on the core business. So you talked about a Book-to-Bill of 1.5. I know you're not going to give us guidance sort of by segment, but could you give us a sense for where most of those bookings are coming from as those bookings obviously generate revenues for the year? Thank you. Yes. yes Thank you very much, Rajesh and Beth. thank you very much rajesh and beth Congratulations on the strong results, and especially on this highly strategic acquisition. congratulations on the strong results and especially on this highly strategic acquisition I guess my first question on the core business. i guess my first question on the core business So you talked about a Book-to-Bill of 1.5. so you talked about a book-to-bill of 1.5 I know you're not going to give us guidance sort of by segment, but could you give us a sense for where most of those bookings are coming from as those bookings obviously generate revenues for the year? i know you're not going to give us guidance sort of by segment but could you give us a sense for where most of those bookings are coming from as those bookings obviously generate revenues for the year Thank you. thank you

Speaker 8: Well, it's no surprise that most of those bookings will come from CED because of the tremendous growth in CED. And I think that our customers are seeing the growth going out through the year, through 2026. And many of them are booking in advance of real demand. I don't mean they're ahead of it. I mean they're on top of it. But the others are not lagging behind. We still continue to see our diversified growth in all the other BUs as well. But it just happens to be that just because of its scale, the CED is a bigger portion. Well, it's no surprise that most of those bookings will come from CED because of the tremendous growth in CED. well it's no surprise that most of those bookings will come from ced because of the tremendous growth in ced And I think that our customers are seeing the growth going out through the year, through 2026. and i think that our customers are seeing the growth going out through the year through 2026 And many of them are booking in advance of real demand. and many of them are booking in advance of real demand I don't mean they're ahead of it. i don't mean they're ahead of it I mean they're on top of it. i mean they're on top of it But the others are not lagging behind. but the others are not lagging behind We still continue to see our diversified growth in all the other BUs as well. we still continue to see our diversified growth in all the other bus as well But it just happens to be that just because of its scale, the CED is a bigger portion. but it just happens to be that just because of its scale the ced is a bigger portion

Speaker 11: Very good. As a follow-up, I had a question on the acquisition and how this is going to play out. Again, it sounds like 75% of the revenue is aligned with your CED mix, which is great. I guess that means that there's end markets or applications that Renesas is targeting that did not come with the acquisition. But you also mentioned that you might be able to participate in some of those with your resonator products. I was just hoping if you could elaborate a little bit on that, especially on the timing of that potential additional growth edge. Thank you. Very good. very good As a follow-up, I had a question on the acquisition and how this is going to play out. as a follow-up i had a question on the acquisition and how this is going to play out Again, it sounds like 75% of the revenue is aligned with your CED mix, which is great. again it sounds like 75% of the revenue is aligned with your ced mix which is great I guess that means that there's end markets or applications that Renesas is targeting that did not come with the acquisition. i guess that means that there's end markets or applications that renesas is targeting that did not come with the acquisition But you also mentioned that you might be able to participate in some of those with your resonator products. but you also mentioned that you might be able to participate in some of those with your resonator products I was just hoping if you could elaborate a little bit on that, especially on the timing of that potential additional growth edge. i was just hoping if you could elaborate a little bit on that especially on the timing of that potential additional growth edge Thank you. thank you

Speaker 8: So just to be clear, we're getting 100% of the timing business. Whatever is in the timing business that's called TPD, Timing Products Division, is coming over to SiTime. There isn't any business which is being left behind. The integration possibility that we are exploring through the MoU is a completely different one than timing. As you may know, Renesas' is a prominent player in the MCU business, in the microcontroller business. And there's an opportunity for SiTime's resonators, the Titan family of product, to be integrated in their microcontrollers. And that's the one we're exploring. There's a several billion-dollar revenue that they get from their MCUs, and we are exploring that and being a timing partner to Renesas'. Another way of thinking about this story is that given the fact that the CEO is joining SiTime's board at the closing, this becomes really quite a partnership. So just to be clear, we're getting 100% of the timing business. so just to be clear we're getting 100% of the timing business Whatever is in the timing business that's called TPD, Timing Products Division, is coming over to SiTime. whatever is in the timing business that's called tpd timing products division is coming over to sitime There isn't any business which is being left behind. there isn't any business which is being left behind The integration possibility that we are exploring through the MoU is a completely different one than timing. the integration possibility that we are exploring through the mou is a completely different one than timing As you may know, Renesas' is a prominent player in the MCU business, in the microcontroller business. as you may know renesas' is a prominent player in the mcu business in the microcontroller business And there's an opportunity for SiTime's resonators, the Titan family of product, to be integrated in their microcontrollers. and there's an opportunity for sitime's resonators the titan family of product to be integrated in their microcontrollers And that's the one we're exploring. and that's the one we're exploring There's a several billion-dollar revenue that they get from their MCUs, and we are exploring that and being a timing partner to Renesas'. there's a several billion-dollar revenue that they get from their mcus and we are exploring that and being a timing partner to renesas' Another way of thinking about this story is that given the fact that the CEO is joining SiTime's board at the closing, this becomes really quite a partnership. another way of thinking about this story is that given the fact that the ceo is joining sitime's board at the closing this becomes really quite a partnership This makes sure that not only are we a supplier to them, but we are also a partner to them as we go through the integration process and the TSAs and so on. So that's what gives me a lot of confidence in the success and the integration of this business. This makes sure that not only are we a supplier to them, but we are also a partner to them as we go through the integration process and the TSAs and so on. this makes sure that not only are we a supplier to them but we are also a partner to them as we go through the integration process and the tsas and so on So that's what gives me a lot of confidence in the success and the integration of this business. so that's what gives me a lot of confidence in the success and the integration of this business

Speaker 11: Makes a lot of sense. Thank you and congrats again. Makes a lot of sense. makes a lot of sense Thank you and congrats again. thank you and congrats again

Speaker 8: Thank you. Thank you. thank you

Speaker 6: Please stand by for our next question. Our next question comes from the line of Quinn Bolton with Needham & Company. Your line is open. Please stand by for our next question. please stand by for our next question Our next question comes from the line of Quinn Bolton with Needham & Company. our next question comes from the line of quinn bolton with needham & company Your line is open. your line is open

Speaker 7: Hi, Rajesh and Beth. I'll offer my congratulations both on the strong results as well as the acquisition. I guess, like Tore wanted to start with a question on the core business. You talked about demand strengthening through the fourth quarter, the book-to-bill of 1.5. You guys have been growing the Comms business at over 100% for seven consecutive quarters. And so I guess, Rajesh, I know you're not guiding to 2026, but certainly feels like the growth engines are there to drive better than your long-term average 25%-30% growth rate in the core business in 2026. And so just wondering, as you think about what the core business can do in 2026, is there any framework you might be able to provide for sort of that overall growth rate in 2026? Hi, Rajesh and Beth. hi rajesh and beth I'll offer my congratulations both on the strong results as well as the acquisition. i'll offer my congratulations both on the strong results as well as the acquisition I guess, like Tore wanted to start with a question on the core business. i guess like tore wanted to start with a question on the core business You talked about demand strengthening through the fourth quarter, the book-to-bill of 1.5. you talked about demand strengthening through the fourth quarter the book-to-bill of 1.5 You guys have been growing the Comms business at over 100% for seven consecutive quarters. you guys have been growing the comms business at over 100% for seven consecutive quarters And so I guess, Rajesh, I know you're not guiding to 2026, but certainly feels like the growth engines are there to drive better than your long-term average 25%-30% growth rate in the core business in 2026. and so i guess rajesh i know you're not guiding to 2026 but certainly feels like the growth engines are there to drive better than your long-term average 25%-30% growth rate in the core business in 2026 And so just wondering, as you think about what the core business can do in 2026, is there any framework you might be able to provide for sort of that overall growth rate in 2026? and so just wondering as you think about what the core business can do in 2026 is there any framework you might be able to provide for sort of that overall growth rate in 2026

Speaker 8: Well, qualitatively, and I'll have Beth jump in to give you the level of specificity that she wants to give you. Qualitatively, that's absolutely true. We've been growing. We grew in 2024 at 40%. We grew in 2025 at north of 60%. The business continues. You see Google spending. You see Meta spending. There is no stopping in the AI data center world. And then there is the inference part of it, or the LLMs come to physical reality, whether it's humanoid robots or other kinds of ideas around that. So I expect that this is a series of growth years coming from the AI business, even beyond data centers. But I'll let Beth add what she thinks. Well, qualitatively, and I'll have Beth jump in to give you the level of specificity that she wants to give you. well qualitatively and i'll have beth jump in to give you the level of specificity that she wants to give you Qualitatively, that's absolutely true. qualitatively that's absolutely true We've been growing. we've been growing We grew in 2024 at 40%. we grew in 2024 at 40% We grew in 2025 at north of 60%. we grew in 2025 at north of 60% The business continues. the business continues You see Google spending. you see google spending You see Meta spending. you see meta spending There is no stopping in the AI data center world. there is no stopping in the ai data center world And then there is the inference part of it, or the LLMs come to physical reality, whether it's humanoid robots or other kinds of ideas around that. and then there is the inference part of it or the llms come to physical reality whether it's humanoid robots or other kinds of ideas around that So I expect that this is a series of growth years coming from the AI business, even beyond data centers. so i expect that this is a series of growth years coming from the ai business even beyond data centers But I'll let Beth add what she thinks. but i'll let beth add what she thinks

Speaker 1: Sure. Thanks, Rajesh. No, I think we do expect it to continue to be led by our Comms Enterprise Data Center, as Rajesh talked about. As he also alluded, I think we do see opportunities across automotive, industrial, and aerospace, and some specific opportunities, especially within aerospace, off a small base. But given the increase in drones and other kinds of defense applications, we see a lot of opportunity there. And then finally, in the consumer space, we do expect to see continued growth there as some of our design wins ramp in 2026. And so those are all some of the opportunities and tailwinds we see for the year. And so we're really excited about 2026 and where we can go from here in terms of the opportunities. Sure. sure Thanks, Rajesh. thanks rajesh No, I think we do expect it to continue to be led by our Comms Enterprise Data Center, as Rajesh talked about. no i think we do expect it to continue to be led by our comms enterprise data center as rajesh talked about As he also alluded, I think we do see opportunities across automotive, industrial, and aerospace, and some specific opportunities, especially within aerospace, off a small base. as he also alluded i think we do see opportunities across automotive industrial and aerospace and some specific opportunities especially within aerospace off a small base But given the increase in drones and other kinds of defense applications, we see a lot of opportunity there. but given the increase in drones and other kinds of defense applications we see a lot of opportunity there And then finally, in the consumer space, we do expect to see continued growth there as some of our design wins ramp in 2026. and then finally in the consumer space we do expect to see continued growth there as some of our design wins ramp in 2026 And so those are all some of the opportunities and tailwinds we see for the year. and so those are all some of the opportunities and tailwinds we see for the year And so we're really excited about 2026 and where we can go from here in terms of the opportunities. and so we're really excited about 2026 and where we can go from here in terms of the opportunities

Speaker 7: Excellent. The question I had on the acquisition, obviously, Renesas is one of the preeminent players in the clocking business. I'm wondering, on a lot of the boards or sockets where Renesas plays, are they typically paired up with quartz oscillators representing an opportunity for you to cross-sell? Or do you feel like the SiTime MEMS oscillators are already pretty well placed on a lot of the boards where Renesas timing or clock products are currently used? Just trying to get a better sense for how much cross-selling opportunity you see bringing these two businesses under one roof. Excellent. excellent The question I had on the acquisition, obviously, Renesas is one of the preeminent players in the clocking business. the question i had on the acquisition obviously renesas is one of the preeminent players in the clocking business I'm wondering, on a lot of the boards or sockets where Renesas plays, are they typically paired up with quartz oscillators representing an opportunity for you to cross-sell? i'm wondering on a lot of the boards or sockets where renesas plays are they typically paired up with quartz oscillators representing an opportunity for you to cross-sell Or do you feel like the SiTime MEMS oscillators are already pretty well placed on a lot of the boards where Renesas timing or clock products are currently used? or do you feel like the sitime mems oscillators are already pretty well placed on a lot of the boards where renesas timing or clock products are currently used Just trying to get a better sense for how much cross-selling opportunity you see bringing these two businesses under one roof. just trying to get a better sense for how much cross-selling opportunity you see bringing these two businesses under one roof

Speaker 8: Yeah, you exactly put your finger on it, Quinn. We have very little. We have some reasonably solid overlap on customers, but typically, on products, there's very little. So to your point, they are designed in clocking where the solution is quartz crystal. And this gives us tremendous opportunity to expose the values of our semiconductor differentiated MEMS-based solutions to the customers and see how we can get design wins for the future. So this is the cross-selling opportunity one way, but there's also a cross-selling opportunity another way because we have design wins in AI, in GPUs, in accelerator cards, and switches where it's not our clock that's in there, the SiTime native clocks. It is either their clock or the clock of another competitor. Yeah, you exactly put your finger on it, Quinn. yeah you exactly put your finger on it quinn We have very little. we have very little We have some reasonably solid overlap on customers, but typically, on products, there's very little. we have some reasonably solid overlap on customers but typically on products there's very little So to your point, they are designed in clocking where the solution is quartz crystal. so to your point they are designed in clocking where the solution is quartz crystal And this gives us tremendous opportunity to expose the values of our semiconductor differentiated MEMS-based solutions to the customers and see how we can get design wins for the future. and this gives us tremendous opportunity to expose the values of our semiconductor differentiated mems-based solutions to the customers and see how we can get design wins for the future So this is the cross-selling opportunity one way, but there's also a cross-selling opportunity another way because we have design wins in AI, in GPUs, in accelerator cards, and switches where it's not our clock that's in there, the SiTime native clocks. so this is the cross-selling opportunity one way but there's also a cross-selling opportunity another way because we have design wins in ai in gpus in accelerator cards and switches where it's not our clock that's in there the sitime native clocks It is either their clock or the clock of another competitor. it is either their clock or the clock of another competitor So that gives us, in the next iteration, it gives us another opportunity to present the customer with a value proposition of an integrated solution. It's, of course, not physically integrated. It is notionally integrated or put together as making it easy for the customer to use it, as well as to get the performance they need, and of course, the source of supply, which is critical in all of these situations where they need to have one source of supply so some things are not out of whack in that. So yeah, clearly, that is the case. So that gives us, in the next iteration, it gives us another opportunity to present the customer with a value proposition of an integrated solution. so that gives us in the next iteration it gives us another opportunity to present the customer with a value proposition of an integrated solution It's, of course, not physically integrated. it's of course not physically integrated It is notionally integrated or put together as making it easy for the customer to use it, as well as to get the performance they need, and of course, the source of supply, which is critical in all of these situations where they need to have one source of supply so some things are not out of whack in that. it is notionally integrated or put together as making it easy for the customer to use it as well as to get the performance they need and of course the source of supply which is critical in all of these situations where they need to have one source of supply so some things are not out of whack in that So yeah, clearly, that is the case. so yeah clearly that is the case

Speaker 7: Thank you, Rajesh. One last quick one for Beth. On the regulatory front, would you expect to require China SAMR approval to close, or do you think you do not need China SAMR to close the transaction? Thank you, Rajesh. thank you rajesh One last quick one for Beth. one last quick one for beth On the regulatory front, would you expect to require China SAMR approval to close, or do you think you do not need China SAMR to close the transaction? on the regulatory front would you expect to require china samr approval to close or do you think you do not need china samr to close the transaction

Speaker 1: Thanks for the question. So we are going through the required regulatory processes in the countries that have jurisdiction. At this point in time, we do not expect to need SAMR as part of those regulatory approvals. Thanks for the question. thanks for the question So we are going through the required regulatory processes in the countries that have jurisdiction. so we are going through the required regulatory processes in the countries that have jurisdiction At this point in time, we do not expect to need SAMR as part of those regulatory approvals. at this point in time we do not expect to need samr as part of those regulatory approvals

Speaker 7: Perfect. Thank you very much. Perfect. perfect Thank you very much. thank you very much

Speaker 6: Thank you. Thank you. thank you

Speaker 8: Thank you. Thank you. thank you

Speaker 6: Please stand by for our next question. Our next question comes from the line of Jim Schneider with Goldman Sachs. Your line is open. Please stand by for our next question. please stand by for our next question Our next question comes from the line of Jim Schneider with Goldman Sachs. our next question comes from the line of jim schneider with goldman sachs Your line is open. your line is open

Speaker 5: Good afternoon. Thanks for taking my question. First of all, on the synergies with Renesas, can maybe talk a little bit more about, within the data center, the specific synergies between your products on the oscillator side and what Renesas is doing, perhaps on the memory side or otherwise? And beyond the cross-sell, do you expect there could be some consolidation of overall board timing content away from other suppliers toward a more holistic solution? In other words, is there a way that you could provide a more holistic solution between the two of you that maybe would be disadvantageous using another supplier? Good afternoon. good afternoon Thanks for taking my question. thanks for taking my question First of all, on the synergies with Renesas, can maybe talk a little bit more about, within the data center, the specific synergies between your products on the oscillator side and what Renesas is doing, perhaps on the memory side or otherwise? first of all on the synergies with renesas can maybe talk a little bit more about within the data center the specific synergies between your products on the oscillator side and what renesas is doing perhaps on the memory side or otherwise And beyond the cross-sell, do you expect there could be some consolidation of overall board timing content away from other suppliers toward a more holistic solution? and beyond the cross-sell do you expect there could be some consolidation of overall board timing content away from other suppliers toward a more holistic solution In other words, is there a way that you could provide a more holistic solution between the two of you that maybe would be disadvantageous using another supplier? in other words is there a way that you could provide a more holistic solution between the two of you that maybe would be disadvantageous using another supplier

Speaker 8: Right. So to be very clear, there is no product other than timing that we are going to be bringing into this. So you mentioned memory somewhat onto the side. We have no influence on that. We have no connection with that. We're only working on one thing and one thing only, which is a timing product division which used to belong to IDT, before that to ICS. So it's a timing business that we are acquiring and our influence is in timing. But the point that you made, Jim, is a very good one, which is that today, we have products that are oscillators and resonators on one side and clocks on the other. Right. right So to be very clear, there is no product other than timing that we are going to be bringing into this. so to be very clear there is no product other than timing that we are going to be bringing into this So you mentioned memory somewhat onto the side. so you mentioned memory somewhat onto the side We have no influence on that. we have no influence on that We have no connection with that. we have no connection with that We're only working on one thing and one thing only, which is a timing product division which used to belong to IDT, before that to ICS. we're only working on one thing and one thing only which is a timing product division which used to belong to idt before that to ics So it's a timing business that we are acquiring and our influence is in timing. so it's a timing business that we are acquiring and our influence is in timing But the point that you made, Jim, is a very good one, which is that today, we have products that are oscillators and resonators on one side and clocks on the other. but the point that you made jim is a very good one which is that today we have products that are oscillators and resonators on one side and clocks on the other With their 160 engineers, with our almost double that number of engineers, I think we would be able to address the issues of density, power, resilience, higher throughput by delivering solutions, by delivering products that are somehow integrated, not just physically integrated, but somehow integrated to deliver vastly superior solutions because the need for performance, for jitter, for high speed, for throughput, for lower latencies, for lower power, those remain undiminished, not just in AI and data centers where they're extreme, but in all other areas, including consumer, including military, aerospace, defense. In terms of the one part of AI where clock is not being used right now, and we'll have to see whether there's a place for it, is in the whole optical networking, in the cabling, in the smart cables, in the retimers. Typically, those are not using clocks. Those are oscillators. With their 160 engineers, with our almost double that number of engineers, I think we would be able to address the issues of density, power, resilience, higher throughput by delivering solutions, by delivering products that are somehow integrated, not just physically integrated, but somehow integrated to deliver vastly superior solutions because the need for performance, for jitter, for high speed, for throughput, for lower latencies, for lower power, those remain undiminished, not just in AI and data centers where they're extreme, but in all other areas, including consumer, including military, aerospace, defense. with their 160 engineers with our almost double that number of engineers i think we would be able to address the issues of density power resilience higher throughput by delivering solutions by delivering products that are somehow integrated not just physically integrated but somehow integrated to deliver vastly superior solutions because the need for performance for jitter for high speed for throughput for lower latencies for lower power those remain undiminished not just in ai and data centers where they're extreme but in all other areas including consumer including military aerospace defense In terms of the one part of AI where clock is not being used right now, and we'll have to see whether there's a place for it, is in the whole optical networking, in the cabling, in the smart cables, in the retimers. in terms of the one part of ai where clock is not being used right now and we'll have to see whether there's a place for it is in the whole optical networking in the cabling in the smart cables in the retimers Typically, those are not using clocks. typically those are not using clocks Those are oscillators. those are oscillators Either way, there's an enormous opportunity because, as you know, the market is $11 billion for all timing, and SiTime's only a very small portion of it. Renesas, large as it is, the timing business, it's still also a very small portion of it. There's a significant amount of competitors out there, and it gives us an ability to influence at the highest level, the highest differentiated, most performance-centric customers, allows us to influence that. Either way, there's an enormous opportunity because, as you know, the market is $11 billion for all timing, and SiTime's only a very small portion of it. either way there's an enormous opportunity because as you know the market is $11 billion for all timing and sitime's only a very small portion of it Renesas, large as it is, the timing business, it's still also a very small portion of it. renesas large as it is the timing business it's still also a very small portion of it There's a significant amount of competitors out there, and it gives us an ability to influence at the highest level, the highest differentiated, most performance-centric customers, allows us to influence that. there's a significant amount of competitors out there and it gives us an ability to influence at the highest level the highest differentiated most performance-centric customers allows us to influence that

Speaker 5: That's helpful. Thank you. And then relative to the model for 2026, maybe give us a little bit of help on two vectors. One, on the 1.5x Book-to-Bill, can you give us a sense about the duration of that backlog? Is that 6, 12, 18 months or longer? And then separately, talk about what the relative expected growth rate will be in the mobile and consumer business. Do you think you can sort of match the growth rate you put up in 2025? Thank you. That's helpful. that's helpful Thank you. thank you And then relative to the model for 2026, maybe give us a little bit of help on two vectors. and then relative to the model for 2026 maybe give us a little bit of help on two vectors One, on the 1.5x Book-to-Bill, can you give us a sense about the duration of that backlog? one on the 1.5x book-to-bill can you give us a sense about the duration of that backlog Is that 6, 12, 18 months or longer? is that 6 12 18 months or longer And then separately, talk about what the relative expected growth rate will be in the mobile and consumer business. and then separately talk about what the relative expected growth rate will be in the mobile and consumer business Do you think you can sort of match the growth rate you put up in 2025? do you think you can sort of match the growth rate you put up in 2025 Thank you. thank you

Speaker 1: Well, maybe I'll start with that one, Jim. So in terms of the Book-to-Bill, I think Rajesh talked about the fact that we are seeing customers maybe book out a little longer, but typically, that's well within 12 months. We see a lot of ordering over the next couple of quarters, but we are seeing some customers book meaningfully in the second half already as well. But I would say definitely weighted to Q1 and Q2 in terms of that. As far as our consumer business, again, there's a lot of activity there, and we've got a design win that we do expect to ramp meaningfully as we go through the year. And so I think that will drive a lot of the performance of that sector. Well, maybe I'll start with that one, Jim. well maybe i'll start with that one jim So in terms of the Book-to-Bill, I think Rajesh talked about the fact that we are seeing customers maybe book out a little longer, but typically, that's well within 12 months. so in terms of the book-to-bill i think rajesh talked about the fact that we are seeing customers maybe book out a little longer but typically that's well within 12 months We see a lot of ordering over the next couple of quarters, but we are seeing some customers book meaningfully in the second half already as well. we see a lot of ordering over the next couple of quarters but we are seeing some customers book meaningfully in the second half already as well But I would say definitely weighted to Q1 and Q2 in terms of that. but i would say definitely weighted to q1 and q2 in terms of that As far as our consumer business, again, there's a lot of activity there, and we've got a design win that we do expect to ramp meaningfully as we go through the year. as far as our consumer business again there's a lot of activity there and we've got a design win that we do expect to ramp meaningfully as we go through the year And so I think that will drive a lot of the performance of that sector. and so i think that will drive a lot of the performance of that sector

Speaker 5: Thank you. Thank you. thank you

Speaker 6: Thank you. Please stand by for our next question. Our next question comes from the line of Tom O'Malley with Barclays. Your line is open. Thank you. thank you Please stand by for our next question. please stand by for our next question Our next question comes from the line of Tom O'Malley with Barclays. our next question comes from the line of tom o'malley with barclays Your line is open. your line is open

Speaker 10: Hey, guys. Thanks for taking my question. Looking at your long-term gross margin model, 60%-65%, you're saying the acquisition adds potentially to the high end of that. If I look at your business standalone, over the last year, you've had two quarters where your incremental gross margins are dropping through at 68% and 70%. You obviously have a mixed factor that's helping the gross margins in the March quarter. But as we look at 2026, should we be thinking about something a little bit ahead of that original target just because of the mix of business moving more towards AI? Anything you can help us with on the margin side as we look through 2026? Hey, guys. hey guys Thanks for taking my question. thanks for taking my question Looking at your long-term gross margin model, 60%-65%, you're saying the acquisition adds potentially to the high end of that. looking at your long-term gross margin model 60%-65% you're saying the acquisition adds potentially to the high end of that If I look at your business standalone, over the last year, you've had two quarters where your incremental gross margins are dropping through at 68% and 70%. if i look at your business standalone over the last year you've had two quarters where your incremental gross margins are dropping through at 68% and 70% You obviously have a mixed factor that's helping the gross margins in the March quarter. you obviously have a mixed factor that's helping the gross margins in the march quarter But as we look at 2026, should we be thinking about something a little bit ahead of that original target just because of the mix of business moving more towards AI? but as we look at 2026 should we be thinking about something a little bit ahead of that original target just because of the mix of business moving more towards ai Anything you can help us with on the margin side as we look through 2026? anything you can help us with on the margin side as we look through 2026

Speaker 1: So as we think about our, I'll start with our gross margin. So mix will be the biggest driver of gross margins in the year. And so I think there's a couple of factors that are contributing to that. The CED growth and mix clearly is a very favorable component of that mix. And then the other is the consumer business. So in quarters where the consumer business is a lower percentage of the total, that is a tailwind to gross margins. In quarters where you see a stronger mix of consumer, that can be a bit of an offset to those strong CED gross margins. So as we go through the year, I do expect that mix between those two to be the biggest driver of the gross margin in the quarter. So as we think about our, I'll start with our gross margin. so as we think about our i'll start with our gross margin So mix will be the biggest driver of gross margins in the year. so mix will be the biggest driver of gross margins in the year And so I think there's a couple of factors that are contributing to that. and so i think there's a couple of factors that are contributing to that The CED growth and mix clearly is a very favorable component of that mix. the ced growth and mix clearly is a very favorable component of that mix And then the other is the consumer business. and then the other is the consumer business So in quarters where the consumer business is a lower percentage of the total, that is a tailwind to gross margins. so in quarters where the consumer business is a lower percentage of the total that is a tailwind to gross margins In quarters where you see a stronger mix of consumer, that can be a bit of an offset to those strong CED gross margins. in quarters where you see a stronger mix of consumer that can be a bit of an offset to those strong ced gross margins So as we go through the year, I do expect that mix between those two to be the biggest driver of the gross margin in the quarter. so as we go through the year i do expect that mix between those two to be the biggest driver of the gross margin in the quarter And then as I think about operating margin, I do expect to continue to see favorable operating leverage in the model. So I do expect to continue to grow revenue faster than operating expenses. We do want to continue to invest in the business in a disciplined way to really be able to capture all the growth that we've been talking about. And so we do want to make investments both in our go-to-market as well as R&D to continue to have these world-class platforms in order to be able to deliver value to customers. But there is still meaningful operating leverage in the business. And then as I think about operating margin, I do expect to continue to see favorable operating leverage in the model. and then as i think about operating margin i do expect to continue to see favorable operating leverage in the model So I do expect to continue to grow revenue faster than operating expenses. so i do expect to continue to grow revenue faster than operating expenses We do want to continue to invest in the business in a disciplined way to really be able to capture all the growth that we've been talking about. we do want to continue to invest in the business in a disciplined way to really be able to capture all the growth that we've been talking about And so we do want to make investments both in our go-to-market as well as R&D to continue to have these world-class platforms in order to be able to deliver value to customers. and so we do want to make investments both in our go-to-market as well as r&d to continue to have these world-class platforms in order to be able to deliver value to customers But there is still meaningful operating leverage in the business. but there is still meaningful operating leverage in the business

Speaker 10: Helpful. And then on the acquisition, I just wanted to understand the OpEx side. Could you maybe give us the split of OPEX between R&D and SG&A of the acquired asset? And then when you look at areas where you can see synergies, could you maybe give us some feel for COGS or OpEx where you could see some of the costs coming out? Thank you. Helpful. helpful And then on the acquisition, I just wanted to understand the OpEx side. and then on the acquisition i just wanted to understand the opex side Could you maybe give us the split of OPEX between R&D and SG&A of the acquired asset? could you maybe give us the split of opex between r&d and sg&a of the acquired asset And then when you look at areas where you can see synergies, could you maybe give us some feel for COGS or OpEx where you could see some of the costs coming out? and then when you look at areas where you can see synergies could you maybe give us some feel for cogs or opex where you could see some of the costs coming out Thank you. thank you

Speaker 1: In terms of the transaction that we announced today, we are acquiring the assets from Renesas of their timing division, as Rajesh talked about. This is a carve-out, and we are acquiring just those specific assets. Once we close the acquisition, we will be integrating that into our business and our manufacturing operations and taking those over. They have a similar kind of OSAT model as we do. That will be really the focus for us. We'll talk more about the specifics of the model and the cost structure once we get to close. In terms of the transaction that we announced today, we are acquiring the assets from Renesas of their timing division, as Rajesh talked about. in terms of the transaction that we announced today we are acquiring the assets from renesas of their timing division as rajesh talked about This is a carve-out, and we are acquiring just those specific assets. this is a carve-out and we are acquiring just those specific assets Once we close the acquisition, we will be integrating that into our business and our manufacturing operations and taking those over. once we close the acquisition we will be integrating that into our business and our manufacturing operations and taking those over They have a similar kind of OSAT model as we do. they have a similar kind of osat model as we do That will be really the focus for us. that will be really the focus for us We'll talk more about the specifics of the model and the cost structure once we get to close. we'll talk more about the specifics of the model and the cost structure once we get to close

Speaker 6: Thank you. Please stand by for our next question. Our next question comes from the line of Chris Caso with Wolfe Research. Your line is open. Thank you. thank you Please stand by for our next question. please stand by for our next question Our next question comes from the line of Chris Caso with Wolfe Research. our next question comes from the line of chris caso with wolfe research Your line is open. your line is open

Speaker 3: Yes, thank you. First question is on the business as you go into 2026 with regard to content. And can you speak to the content gains that you realize on the 1.6T platforms? And then what do you think will be the growth rate of those 1.6T platforms? How meaningful is that as a part of your business as you go through 2026, given those content gains? Yes, thank you. yes thank you First question is on the business as you go into 2026 with regard to content. first question is on the business as you go into 2026 with regard to content And can you speak to the content gains that you realize on the 1.6T platforms? and can you speak to the content gains that you realize on the 1.6t platforms And then what do you think will be the growth rate of those 1.6T platforms? and then what do you think will be the growth rate of those 1.6t platforms How meaningful is that as a part of your business as you go through 2026, given those content gains? how meaningful is that as a part of your business as you go through 2026 given those content gains

Speaker 8: Yeah, Chris, the content gains on the 1.6, I think, is going to be pretty good. It may not be. We mentioned it's in the tens of % up in ASP. And there is an increased number of units being deployed on that, far more than we had thought on our last call in November. So we're very optimistic about that business. But at the same time, our business in other optical modules like 800 we called out continues as well as in some of the lower ones. So I think this is a very healthy business. We are designed into a large number of suppliers in the optical module, but also in the AECs, the active cables, as well as in the retimer business. So the whole networking part of this business of SiTime is very strong. Yeah, Chris, the content gains on the 1.6, I think, is going to be pretty good. yeah chris the content gains on the 1.6 i think is going to be pretty good It may not be. it may not be We mentioned it's in the tens of % up in ASP. we mentioned it's in the tens of % up in asp And there is an increased number of units being deployed on that, far more than we had thought on our last call in November. and there is an increased number of units being deployed on that far more than we had thought on our last call in november So we're very optimistic about that business. so we're very optimistic about that business But at the same time, our business in other optical modules like 800 we called out continues as well as in some of the lower ones. but at the same time our business in other optical modules like 800 we called out continues as well as in some of the lower ones So I think this is a very healthy business. so i think this is a very healthy business We are designed into a large number of suppliers in the optical module, but also in the AECs, the active cables, as well as in the retimer business. we are designed into a large number of suppliers in the optical module but also in the aecs the active cables as well as in the retimer business So the whole networking part of this business of SiTime is very strong. so the whole networking part of this business of sitime is very strong

Speaker 3: Thank you. As a follow-up, it's just a question on the transaction. And you speak about the combined business staying on your 25%-30% growth targets for the existing business. Obviously, you've been growing at a faster rate than that now. So as you go forward within that 25%-30%, are you expecting—is basically each business growing at that 35% to—I'm sorry, 25%-30% going forward? And maybe you could talk about the growth rate of that business that had been within Renesas in the past. Had that been steadily growing at that 25%-30% rate? Thank you. thank you As a follow-up, it's just a question on the transaction. as a follow-up it's just a question on the transaction And you speak about the combined business staying on your 25%-30% growth targets for the existing business. and you speak about the combined business staying on your 25%-30% growth targets for the existing business Obviously, you've been growing at a faster rate than that now. obviously you've been growing at a faster rate than that now So as you go forward within that 25%-30%, are you expecting—is basically each business growing at that 35% to—I'm sorry, 25%-30% going forward? so as you go forward within that 25%-30% are you expecting—is basically each business growing at that 35% to—i'm sorry 25%-30% going forward And maybe you could talk about the growth rate of that business that had been within Renesas in the past. and maybe you could talk about the growth rate of that business that had been within renesas in the past Had that been steadily growing at that 25%-30% rate? had that been steadily growing at that 25%-30% rate

Speaker 8: Yeah. We've always maintained that resonators I mean, sorry, oscillators are a system business because it has a resonator, and it has a clock. So it's a system business. And in this excuse me again. Oscillators are being used in some places where clocks are not. So for example, in military, aerospace, defense, oscillators tend to be used over that. Earlier, I just mentioned certain use cases in networking in AI, the optical modules and such, where there isn't a use case yet for clocks. But in general, I think, therefore, clocking is a slower growth business than oscillators are. So I think we will get a very good growth rate for the combined business because, as you mentioned, we are indeed in our oscillator-based business, which is most of our business today is quite a high-growth business since 2024. Yeah. yeah We've always maintained that resonators I mean, sorry, oscillators are a system business because it has a resonator, and it has a clock. we've always maintained that resonators i mean sorry oscillators are a system business because it has a resonator and it has a clock So it's a system business. so it's a system business And in this excuse me again. and in this excuse me again Oscillators are being used in some places where clocks are not. oscillators are being used in some places where clocks are not So for example, in military, aerospace, defense, oscillators tend to be used over that. so for example in military aerospace defense oscillators tend to be used over that Earlier, I just mentioned certain use cases in networking in AI, the optical modules and such, where there isn't a use case yet for clocks. earlier i just mentioned certain use cases in networking in ai the optical modules and such where there isn't a use case yet for clocks But in general, I think, therefore, clocking is a slower growth business than oscillators are. but in general i think therefore clocking is a slower growth business than oscillators are So I think we will get a very good growth rate for the combined business because, as you mentioned, we are indeed in our oscillator-based business, which is most of our business today is quite a high-growth business since 2024. so i think we will get a very good growth rate for the combined business because as you mentioned we are indeed in our oscillator-based business which is most of our business today is quite a high-growth business since 2024 But we think that adding the clocking business, even though it grows at a somewhat slower rate, still keeps growing at such a healthy rate that we are 25%-30%. We're very confident on that for the combined business, that is. But we think that adding the clocking business, even though it grows at a somewhat slower rate, still keeps growing at such a healthy rate that we are 25%-30%. but we think that adding the clocking business even though it grows at a somewhat slower rate still keeps growing at such a healthy rate that we are 25%-30% We're very confident on that for the combined business, that is. we're very confident on that for the combined business that is

Speaker 3: Right. Thank you. Right. right Thank you. thank you

Speaker 6: Thank you. Please stand by for our next question. Our next question comes from the line of Sujith Desilva with Roth Capital. Your line is open. Thank you. thank you Please stand by for our next question. please stand by for our next question Our next question comes from the line of Sujith Desilva with Roth Capital. our next question comes from the line of sujith desilva with roth capital Your line is open. your line is open

Speaker 9: Hi, Rajesh. Hi, Beth. Congratulations on this transaction. Great news. I was curious, yeah, and I read the MoU with Renesas' as part of this transaction and, I guess, the integration of the resonator into the microcontroller SoC products of Renesas'. I'm curious, is that ahead of the rest of the industry or other folks? Are you working with other folks on similar efforts? Just curious how that is positioned competitively, that combined business. Hi, Rajesh. hi rajesh Hi, Beth. hi beth Congratulations on this transaction. congratulations on this transaction Great news. great news I was curious, yeah, and I read the MoU with Renesas' as part of this transaction and, I guess, the integration of the resonator into the microcontroller SoC products of Renesas'. i was curious yeah and i read the mou with renesas' as part of this transaction and i guess the integration of the resonator into the microcontroller soc products of renesas' I'm curious, is that ahead of the rest of the industry or other folks? i'm curious is that ahead of the rest of the industry or other folks Are you working with other folks on similar efforts? are you working with other folks on similar efforts Just curious how that is positioned competitively, that combined business. just curious how that is positioned competitively that combined business

Speaker 8: Yeah. So as you know, thank you. As you know, the Titan family of products is a breakthrough family. There isn't any other resonator in any technology at that level of quality, reliability, size, power, and use case. So many customers, many semiconductor customers, and many system customers are looking at designing it in. And as we have mentioned in the past, it's a somewhat slower design win, particularly when it goes into somebody else's chips, right? So I think it takes a little bit longer to get the design win. Certainly, there's nothing exclusive about this, and we're talking to them. But I think that they are ahead of making this commitment. Yeah. yeah so So as you know, thank you. so as you know thank you As you know, the Titan family of products is a breakthrough family. as you know the titan family of products is a breakthrough family There isn't any other resonator in any technology at that level of quality, reliability, size, power, and use case. there isn't any other resonator in any technology at that level of quality reliability size power and use case So many customers, many semiconductor customers, and many system customers are looking at designing it in. so many customers many semiconductor customers and many system customers are looking at designing it in And as we have mentioned in the past, it's a somewhat slower design win, particularly when it goes into somebody else's chips, right? and as we have mentioned in the past it's a somewhat slower design win particularly when it goes into somebody else's chips right So I think it takes a little bit longer to get the design win. so i think it takes a little bit longer to get the design win Certainly, there's nothing exclusive about this, and we're talking to them. certainly there's nothing exclusive about this and we're talking to them But I think that they are ahead of making this commitment. but i think that they are ahead of making this commitment I think this is, as you see in the remarks by their CEO, Shibata, that they are using this as a way to pivot this sale to SiTime of the timing business and the MoU as a way to pivot deeper into what they are calling their core business, an embedded compute. So I think it's a win-win for both of us. And certainly, as a potential customer of SiTime's, that becomes a bit of a flagship design win if and when it happens. I think this is, as you see in the remarks by their CEO, Shibata, that they are using this as a way to pivot this sale to SiTime of the timing business and the MoU as a way to pivot deeper into what they are calling their core business, an embedded compute. i think this is as you see in the remarks by their ceo shibata that they are using this as a way to pivot this sale to sitime of the timing business and the mou as a way to pivot deeper into what they are calling their core business an embedded compute So I think it's a win-win for both of us. so i think it's a win-win for both of us And certainly, as a potential customer of SiTime's, that becomes a bit of a flagship design win if and when it happens. and certainly as a potential customer of sitime's that becomes a bit of a flagship design win if and when it happens

Speaker 9: Okay. Helpful color, Rajesh. And then in C, you've talked about it a lot. The usual suspects growing here: pluggables, AECs, retimers. I'm wondering if there's any other applications which are emerging in growth above and beyond those that you'd call out with the strong growth there or whether it remains those kind of the ones we kind of already know, roughly. Okay. okay Helpful color, Rajesh. helpful color rajesh And then in C, you've talked about it a lot. and then in c you've talked about it a lot The usual suspects growing here: pluggables, AECs, retimers. the usual suspects growing here pluggables aecs retimers I'm wondering if there's any other applications which are emerging in growth above and beyond those that you'd call out with the strong growth there or whether it remains those kind of the ones we kind of already know, roughly. i'm wondering if there's any other applications which are emerging in growth above and beyond those that you'd call out with the strong growth there or whether it remains those kind of the ones we kind of already know roughly

Speaker 8: Yeah. It's the ones we know. There are no new categories, but they're new design wins. And the density we've always maintained our growth story comes from three legs. One is whatever design wins we have, the end product sells more units, right? So that's one. The second is there's an upgrade in functionality from win to win, and there's an upgrade in density of chips used in a particular functionality. So what we are experiencing now in some of these with our native clock products is that there were design wins along with oscillators, and there were more of clocks, and then there were more clocks being used in a design win. So I think that trend continues. And finally, there's a new use case for our products that didn't exist. Yeah. yeah It's the ones we know. it's the ones we know There are no new categories, but they're new design wins. there are no new categories but they're new design wins And the density we've always maintained our growth story comes from three legs. and the density we've always maintained our growth story comes from three legs One is whatever design wins we have, the end product sells more units, right? one is whatever design wins we have the end product sells more units right So that's one. so that's one The second is there's an upgrade in functionality from win to win, and there's an upgrade in density of chips used in a particular functionality. the second is there's an upgrade in functionality from win to win and there's an upgrade in density of chips used in a particular functionality So what we are experiencing now in some of these with our native clock products is that there were design wins along with oscillators, and there were more of clocks, and then there were more clocks being used in a design win. so what we are experiencing now in some of these with our native clock products is that there were design wins along with oscillators and there were more of clocks and then there were more clocks being used in a design win So I think that trend continues. so i think that trend continues And finally, there's a new use case for our products that didn't exist. and finally there's a new use case for our products that didn't exist An example would be an L4, ADAS, or indeed even the retimers, which didn't meet our level of performance some time back. An example would be an L4, ADAS, or indeed even the retimers, which didn't meet our level of performance some time back. an example would be an l4 adas or indeed even the retimers which didn't meet our level of performance some time back

Speaker 9: Okay. Great. Thanks, Rajesh. Okay. okay Great. great Thanks, Rajesh. thanks rajesh

Speaker 8: Yep. Yep. yep

Speaker 6: Thank you. Please stand by for our next question. Our next question comes from the line of Gary Mobley with Loop Capital. Your line is open. Thank you. thank you Please stand by for our next question. please stand by for our next question Our next question comes from the line of Gary Mobley with Loop Capital. our next question comes from the line of gary mobley with loop capital Your line is open. your line is open

Speaker 4: Hi, everybody. Let me extend my congratulations as well. I wanted to ask about the strong growth that you're seeing in the ability to support that growth from a supply chain perspective. Are there any capacity constraints that you see now or on the horizon that are causing your ordered lead times to extend? And I guess, conversely, do you see a situation where some of your crystal-based competitors are struggling to fill surging demand, which seems to be industry-wide? And are you able to take advantage of that with your quick turns, I guess, supply chain? Hi, everybody. hi everybody Let me extend my congratulations as well. let me extend my congratulations as well I wanted to ask about the strong growth that you're seeing in the ability to support that growth from a supply chain perspective. i wanted to ask about the strong growth that you're seeing in the ability to support that growth from a supply chain perspective Are there any capacity constraints that you see now or on the horizon that are causing your ordered lead times to extend? are there any capacity constraints that you see now or on the horizon that are causing your ordered lead times to extend And I guess, conversely, do you see a situation where some of your crystal-based competitors are struggling to fill surging demand, which seems to be industry-wide? and i guess conversely do you see a situation where some of your crystal-based competitors are struggling to fill surging demand which seems to be industry-wide And are you able to take advantage of that with your quick turns, I guess, supply chain? and are you able to take advantage of that with your quick turns i guess supply chain

Speaker 8: We know of no data that shows that crystal suppliers are struggling. It may be, but we don't know that. But what I can say is that just on the merits of the SiTime programmability, SiTime supply chain, the integrity of that, given semiconductors, and specifically the quality and reliability of our products, SiTime is the preferred solution even when there isn't a performance requirement. In fact, we get to charge a premium on our products even when there's no performance simply based on our quality, reliability, support, programmability. We think that we don't have to rely upon anybody's struggle or weakness. We think we rely on our strength. Our value proposition is strong and sustainable, and customers are recognizing that with every passing quarter, if you will. We keep on adding to our customer base, both in existing customers and existing applications, but also new applications. We know of no data that shows that crystal suppliers are struggling. we know of no data that shows that crystal suppliers are struggling It may be, but we don't know that. it may be but we don't know that But what I can say is that just on the merits of the SiTime programmability, SiTime supply chain, the integrity of that, given semiconductors, and specifically the quality and reliability of our products, SiTime is the preferred solution even when there isn't a performance requirement. but what i can say is that just on the merits of the sitime programmability sitime supply chain the integrity of that given semiconductors and specifically the quality and reliability of our products sitime is the preferred solution even when there isn't a performance requirement In fact, we get to charge a premium on our products even when there's no performance simply based on our quality, reliability, support, programmability. in fact we get to charge a premium on our products even when there's no performance simply based on our quality reliability support programmability We think that we don't have to rely upon anybody's struggle or weakness. we think that we don't have to rely upon anybody's struggle or weakness We think we rely on our strength. we think we rely on our strength Our value proposition is strong and sustainable, and customers are recognizing that with every passing quarter, if you will. our value proposition is strong and sustainable and customers are recognizing that with every passing quarter if you will We keep on adding to our customer base, both in existing customers and existing applications, but also new applications. we keep on adding to our customer base both in existing customers and existing applications but also new applications We feel generally very confident in our supply chain. We have had some challenges in the beginning of last year when we were trying to launch new products at the same time when demand was surging. But we're more than caught up in Q3, Q4, and we look forward with a lot of confidence to this year in terms of supply chain. We feel generally very confident in our supply chain. we feel generally very confident in our supply chain We have had some challenges in the beginning of last year when we were trying to launch new products at the same time when demand was surging. we have had some challenges in the beginning of last year when we were trying to launch new products at the same time when demand was surging But we're more than caught up in Q3, Q4, and we look forward with a lot of confidence to this year in terms of supply chain. but we're more than caught up in q3 q4 and we look forward with a lot of confidence to this year in terms of supply chain

Speaker 1: I think the other thing we continue to work very closely with our supply chain partners is we see kind of the industry evolving and are mindful of our costs and working very closely with them to ensure that we can continue to secure the supply that we need and the lines that we need and, again, watch the costs as well as we see the tightening that I think everybody is seeing. I think the other thing we continue to work very closely with our supply chain partners is we see kind of the industry evolving and are mindful of our costs and working very closely with them to ensure that we can continue to secure the supply that we need and the lines that we need and, again, watch the costs as well as we see the tightening that I think everybody is seeing. i think the other thing we continue to work very closely with our supply chain partners is we see kind of the industry evolving and are mindful of our costs and working very closely with them to ensure that we can continue to secure the supply that we need and the lines that we need and again watch the costs as well as we see the tightening that i think everybody is seeing

Speaker 4: Thanks. As a follow-up, I wanted to ask about a few details on the acquisition or the asset carve-out. Just to confirm, this is a fabless business model, and related, is there any foundry crossover? And I just wanted to confirm that most of the engineering team, I presume, is down the street from SiTime's headquarters, correct? Thanks. thanks As a follow-up, I wanted to ask about a few details on the acquisition or the asset carve-out. as a follow-up i wanted to ask about a few details on the acquisition or the asset carve-out Just to confirm, this is a fabless business model, and related, is there any foundry crossover? just to confirm this is a fabless business model and related is there any foundry crossover And I just wanted to confirm that most of the engineering team, I presume, is down the street from SiTime's headquarters, correct? and i just wanted to confirm that most of the engineering team i presume is down the street from sitime's headquarters correct

Speaker 8: Well, starting with the engineering team, it is located mostly in North America. There is a large group in Ottawa, which is the IDT group. Ottawa seems to have, a long time ago, Zarlink also. So there's a nice pool of people that we could hire from in analog design. The next one, as you rightly point out, is right here in South San Jose and available. And the third one, which is rather large as well, is in Tempe, Arizona. And we're looking forward to that as a new location for us. They also have some people in Shanghai, which is new. And then there's people across some parts of Asia in smaller numbers. In terms of the other question, which was around Fabless, actually, it's a really very good match. Well, starting with the engineering team, it is located mostly in North America. well starting with the engineering team it is located mostly in north america There is a large group in Ottawa, which is the IDT group. there is a large group in ottawa which is the idt group Ottawa seems to have, a long time ago, Zarlink also. ottawa seems to have a long time ago zarlink also So there's a nice pool of people that we could hire from in analog design. so there's a nice pool of people that we could hire from in analog design The next one, as you rightly point out, is right here in South San Jose and available. the next one as you rightly point out is right here in south san jose and available And the third one, which is rather large as well, is in Tempe, Arizona. and the third one which is rather large as well is in tempe arizona And we're looking forward to that as a new location for us. and we're looking forward to that as a new location for us They also have some people in Shanghai, which is new. they also have some people in shanghai which is new And then there's people across some parts of Asia in smaller numbers. and then there's people across some parts of asia in smaller numbers In terms of the other question, which was around Fabless, actually, it's a really very good match. in terms of the other question which was around fabless actually it's a really very good match They are all IDT, and therefore, they are TSMC 0.18 micron, which is fantastic since TSMC is already a great supplier to SiTime. Also, they are with GlobalFoundries in the 55 nm, which is great. On the back end, there's almost complete great connection with ASE and Carsem and some of the others in Asia. We are very confident that we can make the back end and the supply chain work really well. They are all IDT, and therefore, they are TSMC 0.18 micron, which is fantastic since TSMC is already a great supplier to SiTime. they are all idt and therefore they are tsmc 0.18 micron which is fantastic since tsmc is already a great supplier to sitime Also, they are with GlobalFoundries in the 55 nm, which is great. also they are with globalfoundries in the 55 nm which is great On the back end, there's almost complete great connection with ASE and Carsem and some of the others in Asia. on the back end there's almost complete great connection with ase and carsem and some of the others in asia We are very confident that we can make the back end and the supply chain work really well. we are very confident that we can make the back end and the supply chain work really well

Speaker 4: Thanks again. Thanks again. thanks again

Speaker 8: Yep. Yep. yep

Speaker 6: Thank you. Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to Rajesh for closing remarks. Thank you. thank you Ladies and gentlemen, I'm showing no further questions in the queue. ladies and gentlemen i'm showing no further questions in the queue I would now like to turn the call back over to Rajesh for closing remarks. i would now like to turn the call back over to rajesh for closing remarks

Speaker 8: Look, this has been a long time coming, and we've been on this path. When we raised money, many of you asked us what it's for. And we've always been very clear that our next M&A would be in timing. It would be at scale. It would be equal to or better than our gross margins. It would be equal to or better than our net profit margins. And it would not take down the growth rate of 25%-30%, that SiTime's long-term growth model. I think we have fulfilled that on every count. And not only have we been able to get a clocking business, there couldn't be, there isn't one. There isn't a better clocking business than this in the world. Look, this has been a long time coming, and we've been on this path. look this has been a long time coming and we've been on this path When we raised money, many of you asked us what it's for. when we raised money many of you asked us what it's for And we've always been very clear that our next M&A would be in timing. and we've always been very clear that our next m&a would be in timing It would be at scale. it would be at scale It would be equal to or better than our gross margins. it would be equal to or better than our gross margins It would be equal to or better than our net profit margins. it would be equal to or better than our net profit margins And it would not take down the growth rate of 25%-30%, that SiTime's long-term growth model. and it would not take down the growth rate of 25%-30% that sitime's long-term growth model I think we have fulfilled that on every count. i think we have fulfilled that on every count And not only have we been able to get a clocking business, there couldn't be, there isn't one. and not only have we been able to get a clocking business there couldn't be there isn't one There isn't a better clocking business than this in the world. there isn't a better clocking business than this in the world The coming together of all of this, by our standards, makes us a big company, but we'd still be a pretty small company in the large timing business. The timing business is $10 billion-$11 billion, and it grows at 5%-6% year-over-year. At the end of these 10 years, we'll probably be $17 billion-$18 billion in size. And SiTime has a long way to go to get to be a large player. Coincidentally or by design, we don't intend to be a large player. We're not a market share game. We're a value differentiation, high-growth game. And so I really look forward, given our spectacular results and our outlook for 2026, plus this new acquisition whenever it closes, to create a billion-dollar company that is solely dedicated to solving tough timing problems of our customers. The coming together of all of this, by our standards, makes us a big company, but we'd still be a pretty small company in the large timing business. the coming together of all of this by our standards makes us a big company but we'd still be a pretty small company in the large timing business The timing business is $10 billion-$11 billion, and it grows at 5%-6% year-over-year. the timing business is $10 billion-$11 billion and it grows at 5%-6% year-over-year At the end of these 10 years, we'll probably be $17 billion-$18 billion in size. at the end of these 10 years we'll probably be $17 billion-$18 billion in size And SiTime has a long way to go to get to be a large player. and sitime has a long way to go to get to be a large player Coincidentally or by design, we don't intend to be a large player. coincidentally or by design we don't intend to be a large player We're not a market share game. we're not a market share game We're a value differentiation, high-growth game. we're a value differentiation high-growth game And so I really look forward, given our spectacular results and our outlook for 2026, plus this new acquisition whenever it closes, to create a billion-dollar company that is solely dedicated to solving tough timing problems of our customers. and so i really look forward given our spectacular results and our outlook for 2026 plus this new acquisition whenever it closes to create a billion-dollar company that is solely dedicated to solving tough timing problems of our customers Timing, as we know, is the heartbeat of all electronics, and SiTime is dedicated to it. Thank you. Timing, as we know, is the heartbeat of all electronics, and SiTime is dedicated to it. timing as we know is the heartbeat of all electronics and sitime is dedicated to it Thank you. thank you

Speaker 6: Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect. Ladies and gentlemen, that concludes today's conference call. ladies and gentlemen that concludes today's conference call Thank you for your participation. thank you for your participation You may now disconnect. you may now disconnect