Synaptics Q3 2025 Earnings Report

Synaptics EPS Results

• Actual EPS: $0.90
• Consensus EPS: $0.85
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: $0.53

Synaptics Revenue Results

• Actual Revenue: $266.60 million
• Expected Revenue: $265.03 million
• Beat/Miss: Beat by +$1.57 million
• YoY Revenue Growth: +12.30%

Synaptics Announcement Details

• Quarter: Q3 2025
• Date: 5/8/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 5:00PM ET

Synaptics (NASDAQ:SYNA) develops, markets, and sells semiconductor products worldwide. The company offers AudioSmart for voice and audio processing; ConnectSmart for high-speed video/audio/data connectivity; DisplayLink for transmitting compressed video frames across low bandwidth connections; VideoSmart that enables set-top boxes, over-the-top, streaming devices, soundbars, surveillance cameras, and smart displays; and ImagingSmart solutions. It also provides Natural ID, a fingerprint ID product that is used in notebook personal computers (PCs), PC peripherals, automobiles, and other applications; TouchPad, a touch-sensitive pad that senses the position and movement of one or more fingers on its surface; SecurePad that integrates fingerprint sensor directly into the TouchPad area; ClickPad that offers a clickable mechanical design; and ForcePad. In addition, the company offers ClearPad, which enables users to interact directly with the display on mobile smartphones, tablets, and automobiles; ClearView products that provide advanced image processing and low power technology for displays on smartphones and tablets; and TouchView products, a touch controller and display driver integration product. Further, it provides TouchPad with a pointing stick in a single notebook computer enabling users to select their interface of choice; TouchStyk, a self-contained pointing stick module; ultra-low power edge artificial intelligence platform for battery powered wireless devices; wireless connectivity solutions comprising Wi-Fi, Bluetooth, global positioning system, global navigation satellite system, and ULE; and voice over IP and digital enhanced cordless telecommunications solutions. The company sells its products through direct sales, outside sales representatives, distributors, and resellers to mobile and PC OEMs; IoT OEMs; and automotive and consumer electronics manufacturers. The company was incorporated in 1986 and is headquartered in San Jose, California.

Synaptics Q3 2025 Earnings Call Transcript

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Synaptics Inc. Third Quarter Fiscal Year twenty twenty five Financial Results Webcast and Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there'll be a question and answer session.

[Operator]

To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Munjal Shah, Head of Investor Relations. Please go ahead.

[Munjal Shah, Investor Relations Officer at Synaptics]

Good afternoon, and thank you for joining us today on Synaptics' third quarter fiscal twenty twenty five conference call. My name is Munjal Shah, and I'm Head of Investor Relations. With me on today's call are Ken Rizvi, our interim CEO and chief financial officer Satish Ganesan, our SVP, intelligence sensing division and chief strategy officer Venkat Kodawati, SVP Wireless and Vikram Gupta, SVP of IoT Processors and chief product officer. This call is being broadcast live over the web and can be accessed from the Investor Relations section of the company's website at synaptix.com. In addition to a copy of our earnings press release detailing our quarterly results, a supplemental slide presentation and a copy of these prepared remarks have been posted on our Investor Relations website.

[Munjal Shah, Investor Relations Officer at Synaptics]

Today's discussion of financial results is presented on a GAAP basis, along with supplementary results on a non GAAP basis, which excludes share based compensation, acquisition related costs and certain other noncash or recurring or nonrecurring items. Please refer to our earnings press release for a reconciliation of the most directly comparable GAAP financial measures to the non GAAP financial measures presented. As a reminder, the matters we are discussing today in our prepared remarks, in our supplemental materials and in response to your questions may contain forward looking statements. These forward looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. Although Synaptics believes the estimates and assumptions underlying these forward looking statements to be reasonable, they are subject to a number of risks and uncertainties beyond our control.

[Munjal Shah, Investor Relations Officer at Synaptics]

Synaptics cautions that actual results may differ materially from any future performance suggested in the company's forward looking statements. Therefore, we refer you to the company's current and periodic reports filed with SEC, including our most recent annual report on Form 10 ks and quarterly report on Form 10 Q for important risk factors that could cause actual results to differ materially from those contained in any forward looking statement. Except as required by law, Synaptics expressly disclaims any obligation to update this forward looking information. I will now turn the call over to Ken.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Thanks, Munjal. I'd like to welcome everyone to today's call. I have the pleasure of Vikram, Venkat and Satish joining our call today. We delivered another strong quarter in March with revenues increasing 12% year over year to $267,000,000 slightly above the midpoint of our guidance range. Non GAAP gross margin came in at 53.5%, in line with the midpoint of our guidance and non GAAP EPS grew 70% year over year to $0.90 exceeding the midpoint of our guidance.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Our core IoT product sales increased 43% year over year to $68,000,000 fueled by strong momentum across both our wireless and processor products. This growth reflects improving demand trends, the ramp of new design wins and a clearing of prior inventories. Before we dive into the details of the quarter, I wanna take a moment to address the global trade environment. At present, the direct impact of existing and proposed tariff policies to Synaptics is minimal. We will continue to monitor potential indirect impacts from supply chain realignments and changes in end demand.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

While the broader implications of these indirect effects remain uncertain, based on our current lead times and order activity, we currently do not see unusual activity that would suggest a material pull in or push out due to tariffs impacting our near term financial performance. Over the last couple of quarters, we have seen encouraging trends across the business. The improvement in demand that started prior to the announced tariff changes has continued. Orders are steadily increasing, our backlog is growing, and customer and channel inventories remain lean. That said, we continue to operate with agility and discipline in the face of an evolving macroeconomic landscape.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

We remain closely aligned with our customers to meet their changing needs, and our focus is firmly on the areas within our control. We are executing to our technology road map and growth initiatives, deepening relationships across our customer and partner ecosystem, and maintaining a disciplined approach to costs. Through technology innovation, go to market expansion, and operational excellence, we are positioning Synaptics for long term success. Now let me turn to some highlights in each of our product areas. In wireless, we expanded our Veros connectivity portfolio with the launch of our first broad market device.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

As previously highlighted, this cost effective solution for embedded edge IoT applications opens an incremental $3,000,000,000 in serviceable market opportunity for Synaptics. Our die size is significantly smaller than our high performance solutions, reducing system costs by up to 50% and consuming up to 50% less power while still delivering top level performance. In addition to opening a new SAM for embedded IoT connectivity solutions, we remain committed to maintaining our leadership performance in high performance connectivity. We have launched our first Wi Fi seven device for IoT applications. Our solution is designed to deliver up to two times higher throughput, greater transmit efficiency, and improved load balancing for greater reliability and reduced latency compared to prior Wi Fi generations.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

These enhancements make Wi Fi seven ideally suited for any real time and video intensive applications, such as ultra high definition video streaming, interactive gaming, immersive ARVR, security monitoring, and home and automotive entertainment. Synaptics chips have been purpose built for low power, ultra low latency, and reliable long range performance. We expect initial adoption in high bandwidth applications with broader proliferation into other IoT devices over time. This quarter also marked important advancements in our second core IoT growth vector, processors. Last month at Embedded World in Germany, we extended our AI native Astra platform with the launch of the SR series high performance adaptive MCUs.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

These products feature a novel tiering approach to dynamically manage power depending on inference requirements. The SR series MCUs feature a compact form factor design that helps minimize cost, power consumption, and footprint enabling integration across a wide range of edge IoT applications. We see traction from customers across end markets, including consumer, automotive, and industrial. In addition, our ecosystem investments are beginning to deliver results. ODM partners are building solutions and use cases on our Astra platform and are actively collaborating with OEMs to bring AI enabled products to market.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

We are building on this momentum by investing in our go to market initiatives and adding to our business development and sales teams to drive growth in the edge AI IoT market. In the years since launching our Astra platform, we have made significant progress. Our product development efforts, design wins, and customer engagements are on track. Turning to enterprise and automotive. Our PC products performed slightly better than typical seasonality in the March, reflecting continued market share gains.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

While we are not factoring in a PC refresh cycle in our expectations, the key drivers such as an aging installed base, Windows 10 end of life, and the rise of AIPCs remain in play. We see opportunities for growth from share gains and higher content. Our user presence detection solution continues to ramp with our lead customer, and we have expanded our engagement through design wins for next generation AIPCs built on NVIDIA platforms. Additionally, we are seeing traction in expanding this technology into new and adjacent categories. In automotive, we continue to navigate near term challenges and sluggish demand.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Longer term, we expect to benefit from the adoption of OLED screens as well as our innovative bridge technologies to drive growth as customers prioritize system level cost savings in next generation platforms. In mobile touch, our primary focus is on the high end Android smartphone market. We continue to drive innovation with the introduction of next generation touch controllers featuring a differentiated multi frequency architecture designed for foldable OLED phones. This new architecture offers low power consumption and low latency, enabling thinner and larger panels while incorporating enhanced sensing and filtering capabilities to overcome display noise. It also offers continuous time sensing for more flexible and cost effective touch integration.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

We are currently engaged with multiple OEMs and LCMs and expect the first product based on this technology to launch in calendar q three. The Android smartphone market has carried strong momentum into 2025, helped in part by China economic subsidies and a mix shift to premium phones. Now let me review our third quarter financial results and fourth quarter outlook. I will focus my remarks on our non GAAP results, which are reconciled to GAAP financial measures in the earnings release tables found in the Investor Relations section of our website. Revenue for fiscal Q3 was $266,600,000 above the midpoint of our guidance with sequential and year over year improvement in core IoT products.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Q3 revenues were up 12% on a year over year basis and flat sequentially. Revenue mix in the third quarter was as follows: 25% core IoT, 58% enterprise and automotive, and 17% mobile products. Core IoT product revenues increased 43% year over year and 11% sequentially. Enterprise and automotive product revenues improved 14% year over year and were down 3% sequentially, mainly due to continued softness in automotive. Mobile product revenues were down 4% sequentially and 18 year over year as product shipments to a large customer reached end of life.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Third quarter non GAAP gross margin was 53.5%, in line with the midpoint of our guidance. Third quarter non GAAP operating expense was $101,000,000 in line with the midpoint of our guidance range. Our non GAAP operating margin was 15.6%, up approximately two seventy basis points on a year over year basis and down 170 basis points sequentially. The sequential decline was mainly due to an increase in operating expenses related to our Broadcom transaction as well as incremental variable expenses. Non GAAP net income in Q3 was $35,300,000 and non GAAP EPS per diluted share came in above the midpoint of our guidance at $0.90 per share, an increase of 70 on a year over year basis.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Now let me turn to the balance sheet. We ended the quarter with approximately $421,400,000 in cash, cash equivalents, and short term investments, down approximately $174,700,000 from the prior quarter. Cash flow from operations was $74,000,000 During the quarter, we spent a hundred and $98,000,000 on the Broadcom transaction. In addition, we returned 37,900,000.0 in capital through share repurchases, purchasing approximately 546,000 shares. In this fiscal year, we have returned approximately $128,000,000 to shareholders through the repurchase of about 1,800,000.0 shares or nearly 5% of our total shares outstanding.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Capital expenditures was 5,400,000.0, and depreciation for the quarter was 7,200,000.0. Receivables at the March were $132,000,000 and days of sales outstanding were forty five days, down from forty nine days last quarter. Our ending inventory balance was $132,900,000 which increased by 13,400,000.0 from the previous quarter. The calculated days of inventory on our balance sheet were ninety six days. Now turning to our fourth quarter twenty twenty five guidance.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Broader macroeconomic conditions remain uncertain, influenced by tariff policies and the global trade environment. While the direct impact of tariffs on our financials has been immaterial, the potential indirect impact on future demand and supply chain remains unclear. Based on our current view of the environment, we expect June revenues to be approximately $280,000,000 at the midpoint, plus or minus $15,000,000 Our guidance for the fourth quarter reflects an expected revenue mix from core IoT, enterprise and automotive, and mobile touch products of approximately 30%, fifty four %, and 16%, respectively. We expect non GAAP gross margin to be 53.5% at the midpoint plus or minus 1%. Non GAAP operating expenses in the June are expected to be $103,000,000 at the midpoint of our guidance plus or minus $2,000,000 We expect non GAAP net interest and other expenses to be approximately $1,000,000 in the fourth quarter and our non GAAP tax rate to be in the range of 13% to 15%.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Non GAAP net income per diluted share is anticipated to be $1 per share at the midpoint, plus or minus $0.20 on an estimated 39,300,000.0 fully diluted shares. To conclude, we delivered a strong quarter and successfully introduced several innovative and differentiated products. We continue to monitor and adjust to the evolving macroeconomic and geopolitical landscape. Our design win momentum remains robust with key programs progressing through the funnel. We're seeing encouraging signs of market share gains and content expansion across our franchise markets.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

And overall, we remain focused on disciplined execution, strengthening our competitive position and driving long term shareholder value. This wraps up our prepared remarks. I'd like to turn the call over to the operator to start the Q and A session.

[Operator]

Thank you. Thank you. We will now go to our first question. And your first question comes from the line of Quinn Bolton from Needham and Company. Please go ahead.

[Quinn Bolton, Senior Analyst at Needham & Company]

Hey, guys. Nick on for Quinn. Thanks for taking our questions. Could you expand on what drove the strength in core IoT in both the quarter and the guide? And I guess, specifically for June, how much of that strength is coming from either the WiFi seven ramps that you've talked about previously or the and or the Broadcom and Pixel related ramp?

[Quinn Bolton, Senior Analyst at Needham & Company]

I I know that the Pixel ramp is expected to be pretty strong in June as well. Thank you.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Yeah. Hey, Nick. It's Ken Rizvi. Thanks for, thanks for the question. Thanks for the support.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

So if you look at the core IoT business, you know, a lot of that that was driven by our wireless growth. It's it's a couple of factors. One, we continue to see pretty strong demand from our existing product and portfolio. You highlighted WiFi seven. That's really towards the tail end of this calendar year and really a 2026 driver of the business.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

And then as we look at the Broadcom acquisition, as we talked before in our previous earnings call, our anticipation was that would add about 10,000,000 a quarter plus or minus. There there's some puts and takes in any given quarter. And if you recall, in our previous quarter, we were expecting something like $5,000,000. And in our guide, you can assume it was closer to that that 10,000,000 plus type of run rate.

[Quinn Bolton, Senior Analyst at Needham & Company]

Helpful. Thank you. And then previously, you've talked about your human present detection win with Dell, and and you talked about it again in the prepared comments. Now I believe Lenovo was able to switch from a competing FPGA FPGA based solution to a Microsoft based software only solution. So kinda two questions.

[Quinn Bolton, Senior Analyst at Needham & Company]

Do you see incremental opportunities to win versus FPGA based solutions with that UPD? And

[Quinn Bolton, Senior Analyst at Needham & Company]

on

[Quinn Bolton, Senior Analyst at Needham & Company]

the other side, do you see rising competition from this software only based solution in that application? Thanks.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Yeah. Sure. Good good good question, and I'll also turn it over to Vikram here who's who's with us. But if you look at our UPD or HPD portfolio, what we've said before is with one of the large OEMs, we have essentially swept, most of the SKUs, if not all of the SKUs there and are penetrating one of the other OEMs. So we have two of the three large OEMs and and continue to proliferate, that technology in that platform.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Relative to FPGAs out there, we we have a much lower cost, much more power efficient die, which is helpful for these types of applications and also enables our customers to develop some unique software capabilities that really enhance the user experience there. In terms of the software piece, I don't know, Vikram, if you wanna comment on that.

[Vikram Gupta, Chief Product Officer, Senior VP & General Manager of IoT Processors at Synaptics]

The only thing I would add about the software based solution is that we are pushing the boundaries of the technology with this dedicated chip And we have a pretty strong roadmap of software features that we're enabling on using the the power of that ASIC. And we expect that we'll be able to continue to push the feature set forward much faster than what others can keep up with regards to a pure software solution. And we're already seeing the effects in terms of the share that we're gaining at the OEMs that Ken mentioned. Mentioned.

[Vikram Gupta, Chief Product Officer, Senior VP & General Manager of IoT Processors at Synaptics]

So we feel very confident about our road map in that regard.

[Operator]

Your next question comes from the line of Chris Sankar from TD Cowen. Please go ahead.

[Krish Sankar, Managing Director at Cowen and Company]

Yes. Thanks for taking my question. Ken, the first question I had is, given all the tariff related macro concerns, you kind of said that it's not doesn't have any much impact yet. Kind of curious, has it have you seen any translation into how your order book or linearity is trending in June? And if you can extrapolate how to think about you know, beyond June, if you have any view into September or beyond.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Sure, Krish. Hey. Thanks for the the question. So if you look, one, if you look at our q three results, I mean, results, really strong performance across the board here. I have the three GMs, and the entire Synaptics team really, really did a good job to execute, in our most recent quarter.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

And if you look at the guide, we have very good visibility into our June guidance. Right? And so the backlog levels entering the quarter, the overall bookings are very healthy. If we look even into September, I would say the starting backlog and the and the and the bookings rates are all healthy. I would say the only item which is is news, over the last quarter and and is impacting everybody is the uncertainty around tariffs and and what that could mean to end demand.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

I think that's the the question that we're looking out as we look beyond, the horizon. But if you look over the last couple of quarters, one of the things that I've highlighted, not only the the backlog and the bookings, but if we look at the inventory levels through the disti channel, those still remain very lean. So I think all of the fundamentals are there, and the only question that that we have along with other semiconductor suppliers is what is that potential impact of tariffs to end demand? And so we're just continuing to monitor that. We're working with our customers, continue to work with our suppliers.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

But I would say in into the horizon, meaning as we think about our June and how things are progressing even into the September, things are looking very healthy.

[Krish Sankar, Managing Director at Cowen and Company]

Got it. Thanks for that, Ken. And then as a quick follow-up, you kind of mentioned in the March, you saw better than seasonal enterprise PC products because of share gains and you talked about further share gains and maybe higher content. Can you talk a little bit about where are those share gains coming from and how to think about it going forward both on the share gain and the higher content side?

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Sure. And and I'll I'll also probably have Satish answer this as well. But if you looked on the PC side, we've done a great job this year overall in terms of working with the three largest OEMs in terms of Dell, HP, and Lenovo. With one of those players, we have gained actually a reasonable amount of share as we progressed, based on not only the the innovation that we deliver to them, but the quality and the cost of our solutions. And so we're still looking to further that as we think about, '26 and beyond.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Satish?

[Satish Ganesan, Chief Strategy Officer, Senior VP & General Manager of Intelligent Sensing Division at Synaptics]

Yeah.

[Satish Ganesan, Chief Strategy Officer, Senior VP & General Manager of Intelligent Sensing Division at Synaptics]

Just to add on to what Ken said, the innovations that Ken is talking about, you know, we talk about AI a lot. So we introduced a lot of AI elements into our touchpads and fingerprints and such, and that helped us gain share with all these customers, and we expect to continue the trend going forward.

[Krish Sankar, Managing Director at Cowen and Company]

Got it. Thanks a lot, folks. Thank you.

[Operator]

Thank you. Your next question comes from the line of Christopher Rolland from Susquehanna. Please go ahead.

[Christopher Rolland, Senior Equity Analyst at SIG Group]

Hi, guys. Thanks for the question. Just maybe a quick clarification to start. Ken, did you reconfirm the $10,000,000 a quarter increase through the year in the model? I hear that?

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

No. What I did say, Chris, is is a couple things. One is, you know, in this quarter, super strong results in our most recent quarter. If you look at the guide, also, I think a good trajectory guiding to 280,000,000 at the midpoint. And if you look at the fundamentals, so what are those fundamentals?

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

The backlog, the booking rates, all of those are are trending in the right direction even as we look into our September. All good signs. I think the only thing that is different right now versus, let's say, three months ago is the uncertainty around the tariffs and what that could mean to end demand. If you look at the fundamentals, however, the business is is performing very well. The fundamentals are very healthy.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

We look at the inventory in the channel, very healthy, very lean. So all of those things are are goodness in terms of the overall business. But we have to also be cognizant of the fact that there is a lot of uncertainty around tariffs. We have not seen any impact to our business, thus far, but we just need to continue to monitor that.

[Christopher Rolland, Senior Equity Analyst at SIG Group]

Okay. And so if not for these tariffs, are we still on track for the 10, less than the 10, above the 10 per quarter? Like, how how would you size that up?

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Yeah. I won't give any specifics. Even even last quarter, we didn't we we provided as a framework, and and you can see that both our most recent results here, Chris, and even into the June are very healthy. Right? We went from, two sixty seven here in our most recent quarter to guiding to two eighty, at the midpoint in our June.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

So a very good trajectory. I think across the board, the businesses are performing well. I would say the only, area of headwinds that we've we've highlighted over the last couple quarters and and still with us today is around the automotive space.

[Christopher Rolland, Senior Equity Analyst at SIG Group]

Excellent. And perhaps if you could talk about the the Broadcom acquisition, where we stand. I think you said 40,000,000 of annualized revenue from the sale. Are you able to add any additional to that? Are you seeing any additional uptake particularly on the mobile side?

[Christopher Rolland, Senior Equity Analyst at SIG Group]

And yeah. If you have any other kind of design wins or traction there, would love to hear about it as well.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Yeah. I mean, now that all of that is embedded into our core IoT business, Chris, I would say if you if you step back and look at the acquisition and look at the assets and really, the people that joined us as a result of that acquisition, it's a fantastic, transaction for Synaptics. It opens up a lot of doors in the long term in terms of SAM expansion. When we think about ARVR, when we think about smartphones, when we think about consumer audio, these are all areas that are a new SAM potential for us, and we would expect to prosecute those over the next three to five years.

[Christopher Rolland, Senior Equity Analyst at SIG Group]

Thanks, and congrats.

[Operator]

Thank you. Your next question comes from the line of Kevin Cassidy from Rosenblatt Securities. Please go ahead.

[Kevin Cassidy, Senior Research Analyst at Rosenblatt Securities]

Yes. Thanks for taking my question. And I'll also say congratulations on the continued momentum. Just the WiFi seven low power and, you know, for IoT applications, can can you give us a description of what's happening in the competitive landscape? Is there anyone else that's targeting the IoT market like this, or are they all just taking the, you know, standard Wi Fi seven and and adding it onto and and just trying to sell it to IoT companies?

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Yeah. Let me let me turn it over to our expert, our GM, Zankat here. He can answer some of the specifics.

[Venkat Kodavati, Senior VP & GM of Wireless Products at Synaptics]

Yeah. I think on the competitive landscape, I mean, we are the first one to introduce Wi Fi seven to IoT market, and we are focused on some of the video applications to start with, but using very low power. I think we are advanced process node. We are using advanced process node to bring down the power and also using some signal processing techniques to make the overall power consumption much lower than anybody out there. So I think I cannot comment exactly where the competition stands, but we stand much better than anybody else out there.

[Venkat Kodavati, Senior VP & GM of Wireless Products at Synaptics]

That's all I can say at this point.

[Kevin Cassidy, Senior Research Analyst at Rosenblatt Securities]

Okay. Great. Sounds good. And then just with the you know, on your Astra platform with the introduction of deep seq and other optimized LLMs, have you seen an increase in demand based on those? Or, I guess what's the drivers in that market?

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Yeah, I would say so one overall, and I'll turn it over to Vikram here. But if you look at the pipeline of activity, it continues to grow and the interest level continues to grow. And how I would think about deep DeepSeek and and others is it brings down the overall cost of compute, which means that, compute at the edge can be even further proliferated, and these applications at the edge become more important, which which really fits where we're targeting our solutions in our ICs. And, Vikram, you wanna add to that?

[Vikram Gupta, Chief Product Officer, Senior VP & General Manager of IoT Processors at Synaptics]

Yeah. I mean, I so with DeepSea, they've just shown that, you know, you can run advanced models, you know, in a format that's suitable for the edge, and that just plays to our advantage. And to your specific question about have you seen any uptake around around our solutions because of it, absolutely, in certain geos, there is definitely more interest on on trying to move AI to the edge faster, and we are we are having a number of different engagements across a variety of applications.

[Kevin Cassidy, Senior Research Analyst at Rosenblatt Securities]

Okay. Sounds great. Thanks.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Hey. Thanks, Kevin.

[Operator]

Thank you. Your next question comes from the line of Peter Peng from JPMorgan. Please go ahead.

[Peter Peng, Equity Research Analyst at JP Morgan Chase & Co]

Hey, guys. Good job on the quarter end guide, and thanks for taking my question. Just wondering when would we expect more of a synchronized growth in your end markets? If I look at just the quarter, even the guide, a lot of this is driven by your core LTE. So maybe we look at in the back half of the year, would we expect the growth to be continue to be led by Core IoT?

[Peter Peng, Equity Research Analyst at JP Morgan Chase & Co]

Or do you see some enterprise or perhaps your mobile start contributing to the sequential growth?

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

I still think as we guide only one quarter ahead, Peter, but I would say the core IoT business and and product lines did well here in our March. And if you look at the guide, we're expecting nice sequential growth and year over year growth into the June. And even if you just look holistically, at the core IoT business, I think we've now grown five consecutive quarters sequentially. June would mark the sixth sequential quarter of growth. So really nice momentum in that in that overall business, and and product line.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

If you look at the other, areas like enterprise and automotive, I would say on the enterprise and automotive side, with both PCs and some of the peripherals and video interface and the like, we we are doing very well. I would say the the one thing that we've highlighted that's that's continued, into our March results and part of our June guide is that we're still seeing automotive, very sluggish, right, in in terms of the demand profile. We'll see how that plays out for the rest of this, calendar year, but that, in my mind, will continue to remain fairly sluggish. And even with with that, we're we're seeing nice growth trends in our June relative to our March. And then on the mobile side, you know, we're finally through that large customer and the end of life there with the team's done a great job in terms of really targeting the high end Android market.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

We talked about in in our in our, formal, presentation about the fact that we are continuing to to innovate, especially with this multi frequency touch, device here. And in that space, customers come to us because we are the leaders, on the technology front. And so would say if you think about that business long term, I think we have a good starting point from here. And over the next three to five years, we're gonna continue to grow it.

[Peter Peng, Equity Research Analyst at JP Morgan Chase & Co]

Got it. Thanks. And then just on your broad market, historically, you guys have, pretty concentrated customers, and now we're going to the broad markets where there's a long tailed customers. I guess in terms of just getting the marketing and sales and working with the right distribution, where are you in that stage?

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

Yeah. I would say, we're we're in the in the early innings of our go to market strategy. If you look, we, have done a fantastic job over time in terms of the larger and, larger scale customers in terms of developing those one on one relationships for, let's say, our top 20 or so customers. One of the things that we have highlighted over the last, three or four months is investments on the go to market side, both on the business development front in terms of adding a team and resources there, also all of the collateral that goes along with servicing a larger account profile, and we'll continue to make those investments here. So as you think about, not only, the rest of our fiscal twenty five, but as we head into fiscal twenty twenty six, we'll continue to make those investments, on the go to market engine, because that's gonna produce some fruit on a long term basis for us.

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

And, Vikram, do you

[Ken Rizvi, Senior VP, Interim CEO & CFO at Synaptics]

have anything

[Vikram Gupta, Chief Product Officer, Senior VP & General Manager of IoT Processors at Synaptics]

for that? Oh, I was just gonna say that the other aspect is that the investment in our partners is actually also paying off. You indicated in your opening remarks, Ken, about how some of the ODMs you're working with are working with OEMs, and there have been some really exciting opportunities that have come up through that. And so we will continue to invest in the partner network as

Participants

Executives

• Munjal Shah, Investor Relations Officer
• Ken Rizvi, Senior VP, Interim CEO & CFO
• Vikram Gupta, Chief Product Officer, Senior VP & General Manager of IoT Processors
• Satish Ganesan, Chief Strategy Officer, Senior VP & General Manager of Intelligent Sensing Division
• Venkat Kodavati, Senior VP & GM of Wireless Products

Analysts

• Quinn Bolton, Senior Analyst at Needham & Company
• Krish Sankar, Managing Director at Cowen and Company
• Christopher Rolland, Senior Equity Analyst at SIG Group
• Kevin Cassidy, Senior Research Analyst at Rosenblatt Securities
• Peter Peng, Equity Research Analyst at JP Morgan Chase & Co