Core Insights - Synaptics and Qualcomm have entered a strategic partnership to enhance Touch and Fingerprint Sensor Technology across mobile and compute industries, aiming to improve security and performance in AI PC and mobile platforms [1][5]. Industry Trends - The demand for flexible OLED displays is projected to increase from approximately 600 million units in 2025 to over 800 million units by 2030, driven by the growth in smartphones, tablets, and wearables [2]. - The collaboration between Synaptics and Qualcomm is expected to facilitate seamless integration of touch and fingerprint systems, unlocking advanced AI features that enhance security and user experience [2]. Technological Advancements - The partnership aims to combine Synaptics' AI-ready touch and fingerprint sensing with Qualcomm's compute and biometric security capabilities, promoting secure and intuitive user experiences in AI PCs [3]. - Synaptics' Natural ID™ capacitive-based fingerprint solutions integrate secure biometrics and advanced encryption, designed for applications requiring strong security and ease of use [4]. Strategic Goals - The collaboration is intended to simplify integration for mobile OEMs and panel makers, accelerating time to market in the expanding OLED ecosystem [2]. - By merging their strengths in human interface, AI, and compute technologies, Synaptics and Qualcomm aim to redefine user interactions with devices, enhancing intelligence, security, and performance [5].

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Core Insights - Synaptics reported revenue of $292.5 million for the quarter ended September 2025, marking a year-over-year increase of 13.5% [1] - The earnings per share (EPS) for the same period was $1.09, compared to $0.81 a year ago, indicating significant growth [1] - The reported revenue exceeded the Zacks Consensus Estimate of $289.37 million by 1.08%, while the EPS also surpassed the consensus estimate of $1.06 by 2.83% [1] Revenue Breakdown - Revenue from Core IoT product applications was $103.6 million, exceeding the average estimate of $92.63 million from two analysts [4] - Revenue from Enterprise and Automotive product applications was $147.7 million, slightly below the average estimate of $152.63 million from two analysts [4] - Revenue from Mobile product applications was $41.2 million, which was lower than the average estimate of $43.77 million based on two analysts [4] Stock Performance - Synaptics shares have returned +2.7% over the past month, outperforming the Zacks S&P 500 composite's +1.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Revenue for fiscal Q1 2026 was $292.5 million, reflecting a 14% year-over-year increase, driven by strong performance in core IoT products [15][16] - Non-GAAP earnings per share increased by 35% year-over-year to $1.09 [5][16] - Non-GAAP gross margin for Q1 was 53.2%, consistent with guidance [16] Business Line Data and Key Metrics Changes - Core IoT portfolio revenue grew by 74% year-over-year, contributing significantly to overall revenue growth [5][15] - Enterprise and automotive product revenues remained flat year-over-year, with strength in the enterprise segment offset by softness in automotive [15][16] - Mobile touch product revenues were lower than expected due to supply chain constraints [16] Market Data and Key Metrics Changes - The revenue mix for Q1 was 35% from core IoT, 51% from enterprise and automotive, and 14% from mobile touch products [15] - The company is seeing increasing customer commitments in various markets, including home security systems and AI-enabled wearables [11][12] Company Strategy and Development Direction - The company is focusing on capturing opportunities in edge AI, with the launch of the next-generation Synaptics Astra edge AI processors [6][10] - The Astra processors are designed to enable a wide range of applications, including industrial systems and consumer devices, emphasizing a scalable architecture [8][10] - The company aims to integrate processing, wireless connectivity, and mixed-signal capabilities to provide comprehensive solutions [6][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the AI-inference compute opportunity, with a healthy pipeline of customer engagements [10][14] - The company anticipates initial revenue contributions from the Astra SL2600 devices to begin in the second half of calendar year 2026 [9][10] - Management highlighted the importance of maintaining a disciplined execution strategy to drive long-term growth [14][74] Other Important Information - The company ended Q1 with approximately $459.9 million in cash and short-term investments, reflecting a $7.4 million increase from the previous quarter [16] - Capital expenditures for Q1 were $12.2 million, primarily for R&D efforts [17] Q&A Session Summary Question: Metrics to track Astra platform success - Management indicated that design wins for the Astra platform are ahead of expectations and will provide updates on the pipeline in the future [22][24] Question: Intersegment volatility and guidance implications - Management noted supply constraints in mobile touch products and strong growth in core IoT, maintaining confidence in guidance for Q2 [26][30] Question: Strength in specific end markets - Management highlighted the potential for significant growth in AI applications at the edge, particularly in consumer and industrial markets [34][36] Question: Growth expectations in enterprise, PC, and automotive - Management expects sequential growth in enterprise and automotive segments, driven by recovery in enterprise and ongoing design wins [37][70] Question: Opportunities in mobile market - Management acknowledged the potential for mobile OEMs to build their own app processors, presenting opportunities for Synaptics in wireless connectivity [40][41] Question: Update on high-volume shipments for MCU and combo chip products - Management confirmed that the SL2600 series will enter production in the second half of calendar 2026, with revenue expected to ramp up thereafter [43][44] Question: Expansion into industrial markets - Management is actively engaging with customers in industrial applications, although consumer markets are expected to ramp up faster [52][55] Question: Core technologies needed for edge AI portfolio - Management emphasized a strategy focused on open-source solutions and partnerships, while remaining open to acquisitions to enhance capabilities [61][65] Question: Signs of improvement in enterprise and automotive business - Management noted improving channel inventories and market share gains in the enterprise segment, with expectations for continued growth [68][70]

Financial Data and Key Metrics Changes - Revenue for fiscal Q1 was $292.5 million, up 14% year over year, driven by strength in core IoT products [18] - Non-GAAP earnings per share increased by 35% year over year to $1.09 [7][20] - Non-GAAP gross margin was 53.2%, in line with guidance [19] - Non-GAAP operating margin improved to 17.6%, up approximately 110 basis points sequentially [20] Business Line Data and Key Metrics Changes - Core IoT product revenues grew by 74% year over year, primarily due to increased demand for processors and wireless connectivity [6][19] - Enterprise and automotive product revenues were flat year over year, with strength in the enterprise portfolio offset by softness in automotive [19] - Mobile touch product revenues were lower than expected due to supply chain constraints [19] Market Data and Key Metrics Changes - The revenue mix for Q1 was 35% from Core IoT, 51% from Enterprise and Automotive, and 14% from Mobile Touch products [18] - The company is seeing increasing customer commitments in home security systems, Matter-enabled IoT hubs, and AI-enabled wearables [12] Company Strategy and Development Direction - The company is focusing on capturing opportunities in Edge AI, with the successful launch of the next-generation Tenaptics Astra Edge AI processors [7][8] - Astra processors are designed to enable a wide range of applications, including multimodal human-machine interfaces and AI inference [9][10] - The company is committed to an integrated approach to high-performance solutions, combining processing, wireless connectivity, and mixed-signal capabilities [8][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to strengthen leadership in the Edge AI market, with a healthy pipeline of customer engagements [11] - The company expects initial revenue contributions from Astra products to start in the second half of calendar year 2026 [11] - Management anticipates continued growth in the core IoT segment, projecting 25% to 30% growth for fiscal year 2026 [33] Other Important Information - The company ended Q1 with approximately $459.9 million in cash and cash equivalents, up $7.4 million from the prior quarter [20] - Capital expenditures for Q1 were $12.2 million, driven by lab build-outs to support R&D efforts [21] Q&A Session Summary Question: Metrics to track the success of the Astra platform - Management indicated that design wins have been secured ahead of schedule and will provide updates on the pipeline and awarded designs in the coming quarters [25][26][29] Question: Intersegment volatility and guidance implications - Management noted supply constraints in mobile touch products and strong growth in core IoT, maintaining confidence in guidance for the second quarter [31][32] Question: Strength in end markets and future growth - Management highlighted strong interest in AI applications at the edge and expects significant growth in markets such as robotics and home automation [38] Question: Opportunities in mobile and potential for more OEMs - Management acknowledged the opportunity presented by mobile OEMs building their own application processors, which could enhance demand for Synaptics' wireless connectivity products [43] Question: Status on high volume shipments for MCU and combo chip products - Management confirmed that the SL2600 series is in the sampling stage and expected to go into production in the second half of calendar 2026 [47][48] Question: Growth drivers in enterprise and automotive segments - Management noted strength in the enterprise segment and anticipated a rebound in automotive, driven by upgrade cycles and market share gains [75]

Financial Performance - Q1 2026 revenue reached $292.5 million, a 14% year-over-year increase[5] - Core IoT revenue experienced substantial growth, increasing by 74% year-over-year[5,6] - Non-GAAP EPS grew by 35% year-over-year, reaching $1.09[5,18] - Non-GAAP gross margin was 53.2%[6,16] - Cash flow from operations amounted to $30 million[16] Revenue Breakdown - Q1 2026 revenue distribution: Mobile contributed $41 million, Core IoT $104 million, and Enterprise & Auto $148 million[15] - Core IoT revenue accounted for 35% of the total revenue in Q1 2026[23] Q2 2026 Guidance (Non-GAAP) - Revenue is projected to be $300 million, with a variance of ± $10 million[31] - Gross margin is expected to be 53.5%, with a variance of ± 1.0%[31] - Operating expenses are estimated at $106 million, with a variance of ± $2 million[31] - EPS is forecasted to be $1.15, with a variance of ± $0.15[31] - Revenue mix forecast: Core IoT 31%, Enterprise & Auto 53%, and Mobile 16%[31]

Revenue Performance - Net revenue for the first quarter of fiscal 2026 was $292.5 million, a 13.5% increase from $257.7 million in the same period last year[97]. - Revenue from Core IoT product applications surged by 73.8%, driven by a 64.1% increase in units sold and a 5.9% rise in average selling prices[97][102]. - Revenue from Mobile product applications decreased by 18.4%, primarily due to a $10.5 million drop in licensing revenue despite a 21.4% increase in units sold[97][102]. - The Enterprise and Automotive product line generated $147.7 million, remaining flat compared to the previous year, with a 9.0% increase in units sold offset by an 8.2% decrease in average selling prices[101][102]. Financial Metrics - Gross margin decreased to 42.6% from 46.9% year-over-year, primarily due to increased amortization of acquired intangible assets and reduced revenue from licensing[98][103]. - Operating expenses totaled $147.8 million, a slight decrease from $149.3 million in the prior year, with research and development expenses rising to $94.4 million[101][106]. - Net loss for the quarter was $20.6 million, compared to a net loss of $23.1 million in the same quarter last year[101]. - Interest expense decreased significantly to $5.8 million from $11.7 million in the prior year due to the early repayment of the Term Loan Facility[112]. Cash Flow and Liquidity - Cash and cash equivalents increased to $459.9 million, up $7.4 million from $452.5 million as of June 2025[99]. - As of September 2025, cash and cash equivalents increased to $459.9 million from $391.5 million in June 2025, reflecting a positive cash flow trend[117]. - Cash provided by operating activities for the three months ended September 2025 was $30.2 million, a significant improvement compared to cash used of $11.4 million in the same period last year[119]. - Cash flows from investing activities showed a positive shift with $48.8 million provided, compared to cash used of $9.1 million in the prior year, primarily due to $61.0 million in proceeds from short-term investments[121]. - Financing activities resulted in cash used of $10.4 million for the three months ended September 2025, up from $3.5 million in the same period last year, mainly due to $7.2 million in common stock repurchases[122]. - The company had $350.0 million available under its revolving credit facility with no outstanding balance as of September 2025[123]. Operational Efficiency - Days sales outstanding improved to 37 days in September 2025 from 47 days in September 2024, indicating better collection efficiency[120]. - The company reported a decrease of $31.6 million in accrued liabilities primarily related to annual bonus payments during the three months ended September 2025[119]. Future Outlook - The company continues to monitor global macroeconomic factors and trade policies that may impact its operations and financial performance[100]. - The effective tax rate and cash flows were not materially impacted by the Pillar Two Model Rules or the OBBBA legislation for the first three months of fiscal 2026[114][115]. - The company believes existing cash, anticipated cash flows, and available credit will be sufficient to meet working capital and cash requirements for at least the next 12 months[125]. Commitments - Unconditional purchase commitments totaled $41.1 million as of September 2025, with $27.2 million due for the remainder of fiscal 2026[124].

Financial Performance - Net revenue for Q1 fiscal 2026 was $292.5 million, representing a 14% year-over-year increase[2] - GAAP net loss for Q1 fiscal 2026 was $20.6 million, or a loss of $0.53 per basic share[2] - Non-GAAP net income for Q1 fiscal 2026 was $43.3 million, or $1.09 per diluted share[2] - Net revenue for the three months ended September 2025 was $292.5 million, an increase of 13.5% compared to $257.7 million in September 2024[28] - Operating loss for the quarter was $23.2 million, an improvement from a loss of $28.4 million in the same quarter last year[28] - Net loss for the quarter was $20.6 million, compared to a net loss of $23.1 million in September 2024[28] - Non-GAAP net income for the quarter was $43.3 million, up from $32.5 million in the same period last year[30] Revenue Projections - The company expects approximately $300 million in revenue for Q2 fiscal 2026, with a projected year-over-year growth of about 12%[6] Margins - Projected GAAP gross margin for Q2 fiscal 2026 is 43.0% ± 2.0%[6] - Non-GAAP gross margin for Q2 fiscal 2026 is expected to be 53.5% ± 1.0%[6] - Gross margin for the same period was $124.6 million, representing 42.6% of revenue, down from 46.9% in the previous year[30] Cash and Assets - Cash and cash equivalents at the end of the period increased to $459.9 million from $391.5 million at the beginning of the period[32] - Total assets decreased slightly to $2,577.1 million from $2,584.4 million in June 2025[26] - Total liabilities decreased to $1,176.5 million from $1,189.5 million in June 2025[26] Research and Development - Research and development expenses increased to $94.4 million, up from $81.3 million in the same quarter last year[30] Strategic Initiatives - The company achieved a key milestone with the launch of next-generation Astra processors, aimed at intelligent Edge applications[3] - The backlog for the quarter is reported to be healthy, indicating solid demand[4] - The company plans to continue returning capital to stockholders through share repurchases while investing in organic growth initiatives[4] Non-Cash Operating Items - Non-cash operating items for the quarter were $77.6 million, compared to $47.5 million in September 2024[32] Core Product Performance - Core IoT product sales surged by 74% year-over-year, reaching their highest level in three years[4]

Core Financial Performance - Synaptics reported net revenue of $292.5 million for Q1 fiscal 2026, reflecting a 14% year-over-year increase from $257.7 million in Q1 fiscal 2025 [2][28] - The company experienced a GAAP net loss of $20.6 million, or $0.53 per basic share, compared to a loss of $23.1 million, or $0.58 per share, in the same quarter last year [2][28] - Non-GAAP net income for the quarter was $43.3 million, translating to $1.09 per diluted share, up from $32.5 million, or $0.81 per diluted share, in Q1 fiscal 2025 [2][30] Product and Market Developments - Core IoT product sales surged by 74% year-over-year, marking the highest level in three years, which significantly contributed to the overall revenue growth [3][4] - The launch of the next-generation Astra processors, designed for intelligent Edge applications, was a key milestone for the company during the quarter [3][4] - The company hosted a successful Tech Day, showcasing its technology leadership in processors, wireless connectivity, and mixed-signal solutions for Edge AI applications [3] Business Outlook - The CFO indicated that the company expects approximately 12% year-over-year revenue growth in the fiscal second quarter, continuing a trend of increasing revenues for six consecutive quarters [4] - The company maintains a healthy backlog and lean channel inventories, positioning itself well for future growth [4] - Synaptics plans to invest in key organic growth initiatives while returning capital to stockholders through share repurchases [4] Financial Metrics - For the second quarter of fiscal 2026, Synaptics anticipates revenue of approximately $292.5 million, with a GAAP gross margin of 42.6% and a non-GAAP gross margin of 53.2% [5][6] - Projected operating expenses are expected to be around $152 million, with non-GAAP operating expenses estimated at $106 million [5][6] - The company reported a gross margin of 43.0% for the first quarter, with non-GAAP gross margin reaching 53.5% [5][6]

Core Insights - Semiconductor companies are expected to report strong performance in Q3 2025, driven by solid demand and a 15.8% quarter-over-quarter increase in global semiconductor sales to $208.4 billion [1][10] Industry Performance - The semiconductor industry is benefiting from robust sales growth across various products, including microprocessors, memory chips, and advanced driver assistance systems [3] - Demand from hyperscalers, cloud service providers, and AI companies is driving the rise in microchip sales, with significant capital expenditure directed towards acquiring more powerful chips [4] - Inventory normalization among industrial and automotive customers, particularly in the Chinese electric vehicle market, is contributing to sales growth [5] Company-Specific Insights - nLight is expected to report revenues of $62.49 million, an 11.3% increase year-over-year, with strong performance in the Aerospace and Defense market [8][9] - Applied Optoelectronics anticipates revenues of $119.91 million, an 84.1% increase year-over-year, driven by demand in Datacenter and CATV businesses [12][13] - Diodes expects revenues of $392.5 million, a 12.1% increase year-over-year, supported by demand in AI-related applications and the China EV market [15][16][17] - Nova's revenues are projected to increase, benefiting from rising demand in logic and advanced packaging segments, with a bottom line estimate of $2.12 per share, a 21.8% year-over-year increase [18][19][20] - Synaptics anticipates revenues of $289.4 million, a 12.3% increase year-over-year, with strong momentum in its Core IoT business and new product launches [22][23][24]