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01/10 16:00
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A indicate strong financial performance, with significant growth in core IoT sales and strategic investments in new products like WiFi 7 and the Astra platform. The company's commitment to shareholder value through share repurchases and debt reduction is also positive. While there are some uncertainties around specific strategies, the overall outlook is optimistic with improved order activity and backlog. Given the company's market cap and these factors, a positive stock price movement of 2% to 8% is expected over the next two weeks.
Revenue for fiscal year 2025 $1.074 billion, a 12% increase year-over-year, driven by strong performance of Core IoT products which grew 53%.
Revenue for fiscal Q4 2025 $282.8 million, a 14% increase year-over-year and 6% sequentially, driven by increased demand for wireless products.
Core IoT product sales for fiscal Q4 2025 $84 million, a 55% increase year-over-year, fueled by strong contribution from the wireless portfolio.
Non-GAAP gross margin for fiscal Q4 2025 53.5%, in line with guidance midpoint.
Non-GAAP EPS for fiscal Q4 2025 $1.01, a 58% increase year-over-year, in line with guidance midpoint.
Enterprise & Automotive product revenues for fiscal Q4 2025 4% increase year-over-year but a 3% sequential decline, mainly due to continued softness in automotive.
Mobile Touch product revenues for fiscal Q4 2025 Flat year-over-year but an 8% sequential increase, driven by healthy demand in the high-end Android smartphone market.
Non-GAAP operating margin for fiscal Q4 2025 16.5%, an increase of approximately 208 basis points year-over-year and 95 basis points sequentially.
Cash flow from operations for fiscal year 2025 $142 million, reflecting strong cash generation.
Total gross debt reduction for fiscal year 2025 $134 million or 14%, showcasing disciplined financial management.
Share repurchases for fiscal year 2025 $128 million, reflecting commitment to shareholder value.
Capital expenditures for fiscal year 2025 $25.8 million, with total depreciation at $28.9 million.
Core IoT Products: Core IoT products grew 53% year-over-year, accounting for 25% of total sales. Wireless portfolio contributed significantly, with Wi-Fi 7 solutions gaining traction across IoT, enterprise, and automotive applications. New Edge AI native Astra processors were introduced, co-developed with Google Research, supporting generative AI applications at the edge.
Mobile Touch: Targeted at high-end Android smartphones, including foldable phones. Delivered solid sequential growth and saw healthy demand across multiple customers.
Market Expansion in Core IoT: Synaptics is leveraging its analog mixed signal, multi-core processors, and wireless connectivity IP to expand in industrial automation and smart home applications. The company is pursuing opportunities to expand its share in existing markets and explore new ones.
Revenue Growth: Fiscal 2025 revenue increased 12% to $1.074 billion, driven by Core IoT products. Fiscal Q4 revenue was $282.8 million, up 14% year-over-year.
Profitability: Non-GAAP gross margin for fiscal 2025 was 53.6%. Fiscal Q4 non-GAAP EPS increased 58% year-over-year to $1.01.
Cash Flow and Debt Reduction: Generated $142 million in cash from operations in fiscal 2025. Reduced gross debt by $134 million and repurchased $128 million in shares.
Strategic Focus on Core IoT: Investing in engineering, go-to-market execution, and scalable platforms to align with customer needs. Focused on delivering innovative solutions in Core IoT and Edge AI.
Portfolio Optimization: Evaluating product portfolio to position for sustained success. Acquired assets from Broadcom to enhance Core IoT capabilities.
Automotive Demand: Demand in the automotive sector remains soft, and no material near-term recovery is anticipated. This could impact revenue and growth in this segment.
Enterprise Portfolio: While order trends are improving, there is no broad-based PC refresh cycle yet, which could limit growth in the enterprise segment.
Foreign Exchange Impact: A weakening U.S. dollar has led to increased operating expenses, with a $2 million impact in Q4 alone.
Macroeconomic and Trade Environment: The macroeconomic, global trade, and tariff environment remains uncertain, posing risks to revenue and operational stability.
Inventory Levels: Ending inventory balance increased by $6.6 million, which could indicate potential challenges in inventory management or demand forecasting.
Automotive and Enterprise Recovery: Recovery in these segments is modest and not broad-based, which could limit overall growth potential.
Revenue Projections: For Q1 fiscal 2026, Synaptics expects revenues to be approximately $290 million at the midpoint, plus or minus $10 million. The revenue mix is anticipated to be 32% Core IoT, 53% Enterprise & Automotive, and 15% Mobile Touch products.
Gross Margin: Non-GAAP gross margin for Q1 fiscal 2026 is expected to be 53.5% at the midpoint, plus or minus 1%.
Operating Expenses: Non-GAAP operating expenses for Q1 fiscal 2026 are expected to be $105 million at the midpoint, plus or minus $2 million.
Net Income and EPS: Non-GAAP net income per diluted share for Q1 fiscal 2026 is anticipated to be $1.05 per share at the midpoint, plus or minus $0.15.
Core IoT Growth: Synaptics plans to accelerate growth in Core IoT by investing in engineering, enhancing go-to-market execution, and delivering scalable platforms. The company expects its new Wi-Fi 7 solutions to ramp throughout 2026 and beyond, with initial revenue contributions from Astra processors starting in the second half of calendar 2026.
Enterprise & Automotive Outlook: Modest recovery is expected in the Enterprise portfolio, but no broad-based PC refresh cycle is anticipated. Automotive demand remains soft, with no material near-term recovery expected.
Mobile Touch Outlook: Synaptics sees strong traction for its latest touch architecture designed for foldable phones and large screen applications, with optimism about growth as the share of foldable phones increases.
Share Repurchase Authorization: On August 5, 2025, the Board of Directors authorized a new repurchase program for up to $150 million of common stock. This new authorization reflects the Board's confidence in the company's long-term strategy and commitment to delivering shareholder value. The previous share repurchase authorization expired in July 2025.
The earnings call presents mixed signals. While there is optimism in product development, particularly in Core IoT and Mobile Touch, the Enterprise & Automotive outlook is weak. Financial guidance is strong, but the Q&A reveals uncertainties, especially regarding strategic partnerships and regulatory impacts. The lack of clarity on certain issues tempers the potential positive sentiment. Given the company's market cap, the stock is likely to remain stable with minor fluctuations, resulting in a neutral prediction.
The earnings call reveals a strong outlook in Core IoT growth and design wins for the Astra platform, despite supply constraints in Mobile Touch. The Q&A highlights consistent growth in IoT, sequential growth in Enterprise and Auto, and opportunities in mobile and industrial markets. The financials indicate healthy cash flow and stable inventory. Although management was vague on some specifics, the overall sentiment and strategic initiatives suggest a positive trajectory, especially with a market cap of $3.4 billion, indicating a likely stock price increase of 2% to 8%.
The earnings call summary and Q&A indicate strong financial performance, with significant growth in core IoT sales and strategic investments in new products like WiFi 7 and the Astra platform. The company's commitment to shareholder value through share repurchases and debt reduction is also positive. While there are some uncertainties around specific strategies, the overall outlook is optimistic with improved order activity and backlog. Given the company's market cap and these factors, a positive stock price movement of 2% to 8% is expected over the next two weeks.
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