Synaptics(SYNA) - 2026 Q2 - Quarterly Report

Revenue Performance - Net revenue for Q2 fiscal 2026 was $302.5 million, a 13.2% increase from $267.2 million in Q2 fiscal 2025, driven by a 52.5% increase in Core IoT product applications[103][109] - For the six months ended December 2025, net revenue was $595.0 million, a 13.4% increase from $524.9 million in the same period last year[110] Product Contributions - Core IoT product applications generated $93.2 million, accounting for 30.8% of total net revenue, with units sold increasing by 32.0% and average selling prices rising by 9.6%[109][111] - Enterprise and Automotive product applications contributed $161.1 million, or 53.3% of net revenue, despite an 8.2% decrease in units sold and a 1.3% decrease in average selling prices[109][111] - Mobile product applications accounted for $48.2 million, or 15.9% of net revenue, with units sold increasing by 14.5% but average selling prices decreasing by 10.4%[109][111] Gross Margin - Gross margin for Q2 fiscal 2026 was 43.5%, down from 45.7% in Q2 fiscal 2025, primarily due to increased amortization of acquired intangible assets[104] - Gross margin for the three months ended December 2025 was 43.5%, down from 45.7% in the same period of 2024, with gross margin amounting to $131.7 million compared to $122.2 million[112] - For the six months ended December 2025, gross margin was 43.1%, a decrease from 46.3% in the prior year, with gross margin of $256.3 million compared to $243.1 million[113] Operating Expenses - Operating expenses totaled $146.8 million, representing 48.5% of net revenue, compared to 51.4% in the same quarter last year[108] - Research and development expenses increased by $11.8 million to $95.1 million for the three months ended December 2025, driven by higher wages and stock-based compensation related to Broadcom acquisitions[115] - Selling, general, and administrative expenses decreased by $1.7 million to $47.8 million for the three months ended December 2025, primarily due to lower professional service fees[117] Cash Flow and Liquidity - The company generated $29.8 million in cash from operating activities during the quarter, with cash and cash equivalents totaling $437.4 million[105] - Cash provided by operating activities for the six months ended December 2025 was $60.0 million, significantly up from $11.4 million in the same period a year ago[132] - Cash provided by investing activities during the six months ended December 2025 was $37.2 million, compared to cash used of $14.6 million in the prior year[134] - As of December 2025, cash and cash equivalents were $437.4 million, an increase from $391.5 million in June 2025[130] - The company had $350.0 million available under its revolving credit facility as of December 2025, with no outstanding balance[136] Market Conditions - The company continues to monitor macroeconomic conditions and trade policies that may impact customer demand and supply chain dynamics[106] - The current constrained availability of certain memory components may influence future order timing and customer development timelines[107] Financial Commitments - Unconditional purchase commitments as of December 2025 totaled $29.0 million, with $15.1 million due for the remainder of fiscal 2026[137] Interest Expense - Interest expense for the three months ended December 2025 was $6.0 million, a decrease of $6.3 million compared to the same period in 2024, attributed to the early repayment of the Term Loan Facility[124]