Precision timing solutions leader SiTime Corp (SITM.US) saw its shares jump more than 11% in pre-market trading on Thursday. The significant rise followed the company's release of far better-than-expected financial results for the fourth quarter of fiscal 2025 and the announcement of a major acquisition set to reshape the industry landscape.
The earnings report surpassed expectations across key metrics. SiTime reported adjusted earnings per share of $1.53 for the fourth quarter, significantly exceeding the consensus estimate of $1.21. Quarterly revenue reached $113.3 million, not only beating expectations of $101.91 million but also representing substantial growth of 66% year-over-year and 36% sequentially. The gross margin improved to 61.2%, also exceeding the company's prior guidance.
For the full 2025 fiscal year, SiTime's revenue totaled $326.7 million, a 61% increase from $202.7 million in fiscal 2024. Non-GAAP net profit was $82.6 million, with diluted earnings per share of $3.20.
The Communications, Enterprise, and Datacenter (CED) business unit was the standout performer, marking the seventh consecutive quarter of year-over-year growth exceeding 100%. In the fourth quarter, the segment's revenue surged 160% year-over-year to $64.6 million, accounting for 57% of total revenue.
Chief Executive Officer Rajesh Vashist noted, "The company's growth in the fourth quarter and full year 2025 was broad-based, spanning all end customer markets and geographies. Looking ahead to 2026, we expect the broad-based growth momentum, driven by our CED business, to continue."
Chief Financial Officer Beth Howe added that the quarter was a milestone, as the company achieved quarterly revenue exceeding $100 million for the first time and generated an operating margin of 30%. The company ended the period with strong liquidity, holding $808 million in cash and short-term investments.
**Accelerating Towards a $1 Billion Goal**
Alongside the earnings release, SiTime announced it will acquire timing business-related assets from Renesas Electronics for $1.5 billion in cash and approximately 4.13 million shares of SiTime common stock. This acquired business is projected to contribute approximately $300 million in revenue within 12 months of the deal's closing, with a gross margin around 70%.
Management stated that this acquisition will significantly accelerate the company's progress toward its $1 billion revenue target and is expected to be accretive to non-GAAP earnings per share in the first full year after completion. The transaction is anticipated to close before the end of 2026, pending regulatory approvals.
On the earnings conference call, Vashist described the deal as "a milestone in achieving our vision to change the timing market, solve customers' toughest timing challenges, and accelerate our path to $1 billion in revenue."
**Financial Outlook**
For the first quarter of 2026, the company provided optimistic guidance. It expects revenue between $101 million and $104 million, representing approximately 70% year-over-year growth at the midpoint. The gross margin is projected to be around 62%, with non-GAAP EPS expected to be in the range of $1.10 to $1.17.
Vashist revealed that the book-to-bill ratio at the end of the fourth quarter was above 1.5, expressing confidence in full-year visibility. Howe also emphasized that seasonal impacts in the first quarter are expected to be below historical averages, and the CED business is projected to continue sequential growth.
Vashist reaffirmed that the company's long-term target of 25% to 30% annual revenue growth remains firmly intact. With sustained strong demand from AI data centers, and the anticipated cross-selling opportunities, customer expansion, and synergies from the Renesas timing business acquisition, the company expressed strong confidence in its future growth.
Analysts on the earnings call generally displayed a positive sentiment, focusing on the core business growth drivers and post-acquisition synergies. Management exhibited strong confidence, detailing integration strategies and cross-market sales opportunities following the acquisition. Compared to the previous quarter, the focus shifted from optimism about organic growth and the product pipeline to enthusiasm and a forward-looking outlook driven by the planned acquisition of the Renesas timing business.