SiTime Corporation

Good afternoon and welcome to SciTimes first quarter 2021 financial results conference call. At this time, all participants are in a listen only mode. At the conclusion of today's conference call, instructions will be given for the questions and answer session. If anyone needs assistance at any time during the conference call, please press the star key followed by the zero on your touch tone phone. As a reminder, this conference call is being recorded today, Tuesday, May 4th, 2021. I would now like to turn the call over to Leanne Seavers of Shelton Group Investor Relations. Leanne, please go ahead.

Good afternoon and welcome to Sidetime's first quarter 2021 financial results conference call. On the call from Sidetime are Rajesh Vashist, Chief Executive Officer, and Art Chadwick, Chief Financial Officer. 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 is 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 statement. 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 statement. The company undertakes no obligation to publicly update forward-looking statements for any reason after the date of this call to conform these statements to actual results or to changes in the company's expectations. For more detailed information on risks associated with our business, we refer you to the risk factors described in our 10-K filed on February 16th, 2021, as well as the company's subsequent filings with the SEC. Also during this call, we will refer to certain non-GAAP financial measures, which measure of company performance. These non-GAAP financial measures are provided in addition to and not as a substitute for or superior to measures of financial performance prepared in accordance with U.S. GAAP. The only difference between GAAP and non-GAAP results is stock-based compensation expense. Please refer to the press release issued today for a detailed reconciliation between GAAP and non-GAAP financial results. Now I'd like to turn the call over to Rajesh. Please go ahead.

Thank you, Leigh Ann. Good afternoon and thank you for joining on today's call. I am pleased to report that the first quarter was another solid quarter with revenues of $35.5 million, representing growth of more than 63% year-over-year and above the high end of our guidance. Coming off of a very strong fourth quarter, we have continued to see increasing order rates for our timing solutions. There are several reasons for SciTime's tremendous year-over-year growth. First of all, we're the only semiconductor company that is solely focused on timing, as we have mentioned a few times. We're also the only company to offer all high-volume timing categories, oscillators, clocks, and resonators. Moreover, we're committed to developing the higher-value products that solve difficult timing problems. We use the systems-level approach that is supported by a deep expertise in MEMS, in analog, packaging, and algorithms. As a result, products like Elite and Emerald perform up to 20 times better than our competitors. Customers recognize this focus and the value that we bring to them, and they place the trust in us. As an example of this trust, during Q1, we secured more than 40 design wins for Elite, Emerald, and the Endura product line, which is in comms or communications applications such as 5G, small sales, remote radio heads, and optical modules as well. In aerospace defense applications such as satellite communications, GNSS, and transponders. In each of these applications, the SITEM device was chosen because it solved a very specific problem, and we believe that this is only the start of our journey with these customers. As we have deep technical engagements with key customers, we understand the customer's roadmap, which enables us to develop better, major, what we call platform products. As leaders, we also uncover specific opportunities that can be addressed by a rapid release strategy, which we call derivative products, which are simpler modifications of our existing platforms. Driven by more stringent future technical requirements in communications and cloud infrastructure, automotive, and mobile IoT, we plan to expand into higher value oscillators and clocks over the next three to five years, and we expect to deliver over 100 platforms and derivatives in that timeframe. About a year ago, we re-evaluated our pricing strategy and decided to change prices on our lower margin business, primarily in the applications where we had offered shorter lead times. We've expanded that effort to more applications in 2021, where we'll see the full-year benefit of that. As an example, on one of our popular product families, the ASP, or average selling price, increased by 20% from 2020 to 2021. All other gross margin improvement efforts, such as products mix changes, which are in favor of higher ASP products, and lower product costs, continue strongly, of course, as well. In the current tight supply chain environment, CyTIME's fabulous model and product programmability continue to provide significant differentiations. As a reminder, CyTIME's products are 100% programmable and we can be more responsive than our competitors who are reliant on the quartz-based fixed frequency solutions. Customers are also taking comfort in having a non-overlapping supply chain from CyTIME and many of them have approached us recently to help in their supply chain environments. We have selectively engaged with about 25 key customers where we believe we provide exceptional value and are developing multi-year commitments with them. Also, in anticipation of the rising demand, customers are also placing orders much earlier. In fact, more than half of our bookings in Q1 2021 were for deliveries which were five to 12 months out in the future, which gives us unprecedented visibility into 2021 revenue. We believe that as customers experience the benefits of using Sitem technology, they tend not to go back to their older quartz-based solutions, and this results in even more opportunities in the future. From a longer-term perspective, and looking at the entire semiconductor industry, I believe that we are in a golden age and we expect it to continue for the next few years. At SciTime, we believe that we also have a multi-year growth opportunity in timing specifically as connected devices proliferate in all parts of our lives. In order to pack more features and functionality, these devices need timing chips with higher precision, smaller size, and higher resilience and other features. As the leading provider, of high value timing, side time can only stand to gain tremendously from this key trend. With that, I'll now turn the call over to Art to discuss the first quarter results in more detail and provide our outlook for the second quarter of 2021. Art?