Synaptics(SYNA) - 2025 Q3 - Quarterly Results

Synaptics Third Quarter Fiscal 2025 Results Financial Highlights and Business Outlook The company reported solid Q3 FY2025 results with significant revenue growth driven by Core IoT products and provided a positive outlook for Q4 Q3 Fiscal 2025 Performance Revenue grew 12% year-over-year to $266.6 million, driven by a 43% surge in Core IoT product sales Q3 Fiscal 2025 Performance | Metric | Value | | :--- | :--- | | Net Revenue | $266.6 million | | GAAP Gross Margin | 43.4% | | Non-GAAP Gross Margin | 53.5% | | GAAP Loss per Share | ($0.56) | | Non-GAAP Diluted EPS | $0.90 | - Total revenue increased by over 12% year-over-year, marking the fourth consecutive quarter of YoY growth[2][4] - Growth was driven by Core IoT products, which grew 43% year-over-year and constituted 25% of total sales[2][4] - The company generated over $74 million in cash flow from operations during the third quarter[5] - Approximately 546,000 shares were repurchased for $37.9 million[6] Q4 Fiscal 2025 Outlook The company projects continued revenue growth for Q4, with revenue expected to be in the range of $280 million ± $15 million - The fourth-quarter guidance reflects improving demand trends, with expectations of both sequential and year-over-year revenue growth[5] Q4 Fiscal 2025 Guidance | Metric | GAAP Guidance | Non-GAAP Guidance | | :--- | :--- | :--- | | Revenue | $280M ± $15M | N/A | | Gross Margin | 42.5% ± 2.0% | 53.5% ± 1.0% | | Operating Expense | $150M ± $4M | $103M ± $2M | | Earnings (loss) per share | ($0.68) ± $0.30 | $1.00 ± $0.20 | Consolidated Financial Statements Financial statements show YoY revenue growth but a higher net loss, with a significant decrease in cash due to acquisitions and financing activities Condensed Consolidated Statements of Income Q3 revenue increased year-over-year, but a higher operating loss was driven by an intangible asset impairment charge Condensed Consolidated Statements of Income (In millions, except per share) | (In millions, except per share) | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Net revenue | $266.6 | $237.3 | | Gross margin | $115.8 | $110.3 | | Operating loss | $(26.3) | $(17.4) | | Net loss | $(21.8) | $(18.1) | | Basic loss per share | $(0.56) | $(0.46) | - The company recorded a $13.8 million intangible asset impairment charge in Q3 2025, which was not present in the prior year's quarter[31][32] Condensed Consolidated Balance Sheets Total assets decreased primarily due to a significant reduction in cash and cash equivalents, while liabilities fell from debt reduction Condensed Consolidated Balance Sheets (In millions) | (In millions) | March 2025 | June 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $360.4 | $876.9 | | Total current assets | $712.6 | $1,162.3 | | Total assets | $2,554.3 | $2,825.0 | | Long-term debt | $834.2 | $966.9 | | Total liabilities | $1,167.3 | $1,358.2 | | Total stockholders' equity | $1,387.0 | $1,466.8 | Condensed Consolidated Cash Flows Operating activities generated cash, but this was offset by significant cash usage for acquisitions, debt repayment, and stock repurchases Condensed Consolidated Cash Flows (In millions) | (In millions) | Nine Months Ended March 2025 | Nine Months Ended March 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $84.8 | $70.9 | | Net cash used in investing activities | $(289.0) | $(146.7) | | Net cash used in financing activities | $(313.0) | $(20.4) | | Net decrease in cash and cash equivalents | $(516.5) | $(96.6) | - Key uses of cash in the nine-month period included $198.8 million for a business acquisition, $112.3 million for stock repurchases, and $583.5 million for debt repayment[36] Reconciliation of GAAP to Non-GAAP Financial Measures This section details adjustments from a GAAP net loss of $21.8 million to a non-GAAP net income of $35.3 million for Q3 FY2025 Q3 FY2025 GAAP Net Loss to Non-GAAP Net Income Reconciliation (In millions) | Description | Amount | | :--- | :--- | | GAAP net loss | $(21.8) | | Acquisition and integration related costs | $32.8 | | Share-based compensation | $19.9 | | Intangible asset impairment | $13.8 | | Other adjustments (Restructuring, Legal, etc.) | $1.3 | | Non-GAAP tax adjustments | $(11.4) | | Non-GAAP net income | $35.3 | Q3 FY2025 GAAP EPS to Non-GAAP EPS Reconciliation | Description | Per Share Amount | | :--- | :--- | | GAAP net loss per share | $(0.56) | | Adjustments (Acquisition, SBC, Impairment, etc.) | $1.75 | | Non-GAAP tax adjustments | $(0.29) | | Non-GAAP net income per share - diluted | $0.90 | Use of Non-GAAP Financial Information The company utilizes non-GAAP measures to provide a clearer view of core operating performance by excluding certain non-recurring or non-cash items - The company uses Non-GAAP measures to supplement GAAP results, believing they provide a better view of core operating performance by excluding certain items[13] - Key adjustments include acquisition and integration-related costs, such as amortization of purchased intangibles and legal costs associated with acquisitions[14][15] - Share-based compensation is excluded because it is a non-cash expense and its amount can vary based on market forces beyond the company's control[16] - Other excluded items are intangible asset impairment charges, restructuring costs, site remediation accruals, and legal settlements[17][18][19][20] Cautionary Statement Regarding Forward-Looking Statements Forward-looking statements, including financial guidance, are subject to significant risks and uncertainties that could impact actual results - The press release contains forward-looking statements, including financial guidance for Q4 FY2025, which are not guarantees of future performance[25] - Key risks that could impact future results include macroeconomic uncertainties, supply chain disruptions, dependence on large customers, and industry cyclicality[25] - The company also highlights risks related to global and geopolitical tensions, the ability to retain key personnel during a CEO transition, and the ability to realize benefits from its transaction with Broadcom[25]