SiTime Corporation

Good afternoon and welcome to CITIME second 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 question 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, Wednesday, August 4, 2021. I would now like to turn the call over to Leon Sievers of Shelton Group Investor Relations. Leon, please go ahead.

Good afternoon, and welcome to Sidetime's second quarter 2021 financial results conference call. On the call from Sidetime are Rajesh Vishisht, 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 positions, 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 other 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 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 16, 2021, as well as the company's subsequent violence with the SEC. Also during the call, we will refer to certain non-GAAP financial measures, which we consider to be an important 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 our GAAP and non-GAAP financial results. I'd now like to turn the call over to Roshesh. Please go ahead.

Thank you, Leanne. Good afternoon, and thank you for joining in today's call. We had a truly exceptional quarter. Our results reflect a fundamental acceleration in our growth trajectory, and I would say a leap forward by a year in our revenue. Increasingly, we have clear evidence that the conversion to side-time silicon men's timing solution has shifted into a high gear with existing and new designs. Over the past three quarters, Our year-over-year growth rate has increased from more than 40% in the fourth quarter of last year to more than 60% in the first quarter of this year, and now to more than double in this quarter. We view this as a clear validation of our strategy. The rapid adoption of new technologies that need precision timing and CITAM's unique focus on this sector has accelerated market adoption of our products. The programmability of a product, combined with the quality and fabulous model flexibility, continue to bring back these customers who now understand their value proposition even more clearly. For example, in the automotive segment, customer design-ins have taken off. There's an increased need for high-performance timing solutions because of EVs or electric vehicles, ADAS, automated driving, and connectivity, these use supporting elements like radar, LIDAR, cameras, domain control units, and those have surged. In fact, the number of timing devices in a vehicle has increased dramatically to more than 50 devices today and continues to grow. We now believe that automotive at CITAN could represent a $100 million business over the next few years. We're also seeing similar adoption trends in data center and enterprise, which also has the potential to become a $100 million business in the next few years because of cloudification. As cloud services providers expand and add new features, timing, particularly precision timing, becomes critical for increasing bandwidth and lowering latency. Increasing performance requires more electronics, such as 100G, 400G optical modules, in data centers where our SIT 9501 family is being adopted at a very brisk rate because of its size and performance. The need for low latency is also driving new features such as time synchronization in servers where Elite and Emerald families continue to be designed in. To further quantify the enduring acceleration of Citon's business, our design wins have doubled sequentially in the automotive, industrial, and aerospace markets, and increased by 40% in the communications and enterprise segments. As stated earlier, our unique systems approach to timing delivers products that quote-unquote just work. Customers like the fact that we're taking care of their precision timing needs, which are generally not their expertise. They further appreciate CITAM's programmable architecture that allows them to qualify a single part and configure it in multiple ways. Last quarter, I mentioned how we had taken steps to re-evaluate our pricing strategy and increase pricing on some products. We can see those benefits here in Q2. We've also secured long-term pricing agreements with customers at a rapid pace in Q2, and I expect that this trend to continue as our customers focus on securing supply for the next 12 to 24 months. Sitem's fabulous semiconductor supply chain allows us to quickly respond to change in customer demand, which is an advantage over quartz, which is limited by the capex-heavy manufacturing. I'm pleased to know that we are well supported by our suppliers. Our strategy of close partnership with WaferFabs has been rewarded as our partners view Sitem as a growth opportunity and in addition to the TAM or total available market. they continue to find more capacity to help us to meet our growth and our customer demand. We've also expanded our partnership with our assembly and test houses where we have doubled our test capacity and already secured the capacity needed to meet demand for 21 and 2022. As I last said, I believe we are in the golden age of semiconductors and in particular, a multi-year high growth opportunity in the precision timing market where Sitem uniquely excels. We have demonstrated our ability to execute on this need for high performance, programmable timing solutions across 300 applications in the past few years. In summary, we're seeing the scaling of Sitem's business. This forward shift is leading to a sustainable acceleration of our business. We're on our way to living up to our full potential And I'm very excited about that. I'll now turn the call over to Art to discuss the second quarter results in more detail and provide outlook for the third quarter of 2021.