Synaptics(US:SYNA)2024-02-07 16:00Financial Performance - Net revenue for the first quarter of fiscal 2024 was $237.0 million, a decrease of 32.9% compared to $353.1 million in the same period last year[122]. - Net revenue for the three months ended December 2023 was $237.0 million, a decrease of $116.1 million, or 32.9%, compared to $353.1 million for the same period in 2022[125]. - For the six months ended December 2023, net revenue was $474.7 million, down $326.5 million, or 40.8%, from $801.2 million in the prior year[126]. - The company reported a net loss of $9.0 million, compared to a net income of $22.0 million in the same quarter last year, representing a 140.9% decline[122]. Revenue Breakdown - Enterprise and Automotive product applications revenue fell to $136.6 million, down 39.6% from $226.0 million year-over-year[122]. - Core IoT product applications revenue decreased by 46.3% to $37.5 million from $69.8 million in the prior year[122]. Gross Margin - Gross margin for the quarter was $109.0 million, a decline of 41.6% compared to $186.7 million in the same quarter last year[122]. - Gross margin for the three months ended December 2023 was 46.0%, down from 52.9% in the same period last year, reflecting a 690 basis point decrease[127]. Expenses - Research and development expenses were $82.0 million, down 8.2% from $89.3 million year-over-year[122]. - Research and development expenses for the three months ended December 2023 decreased to $82.0 million, down from $89.3 million in the prior year[131]. - Selling, general, and administrative expenses decreased by 6.4% to $39.7 million from $42.4 million in the previous year[122]. - Selling, general, and administrative expenses for the three months ended December 2023 decreased to $39.7 million, compared to $42.4 million for the same period in 2022[133]. Cash Flow and Liquidity - Cash and cash equivalents as of December 2023 were $846.1 million, a decrease of $78.6 million from $924.7 million as of June 2023[141]. - Operating activities generated $84.6 million in cash during the six months ended December 2023, down from $128.5 million in the same period last year[143]. - Cash used in investing activities during the six months ended December 2023 was $139.8 million, compared to $18.8 million in the prior year[145]. - Cash used in financing activities for the six months ended December 2023 was $23.9 million, a significant decrease from $115.0 million in the same period of 2022[147][148]. - The company believes existing cash, anticipated cash flows, and available credit will be sufficient to meet working capital needs for at least the next 12 months[155]. Debt and Obligations - The company paid $8.0 million in interest expense on $400.0 million senior notes due 2029 for the six months ended December 2023[150]. - As of December 2023, there was no balance outstanding under the $250 million revolving credit facility[151]. - The company repaid $4.5 million of the principal outstanding on the $600.0 million Term Loan Facility during the six months ended December 2023[152]. - Total contractual obligations as of December 2023 amounted to $1,481.2 million, with $66.1 million due within one year[157]. - A hypothetical 1% increase or decrease in interest rates would result in a quarterly interest expense change of approximately $1.5 million based on the outstanding balance of the Term Loan as of December 2023[162]. Acquisitions - The company acquired technology assets from Broadcom for $130.0 million in July 2023[116]. - The acquisition of Emza in October 2022 was completed for a total consideration of $15.8 million[117]. - The company made a $130.0 million prepayment to Broadcom to acquire developed technologies and extend product exclusivity for an additional three years[145]. - The company has registered $100.0 million of common and preferred stock for issuance related to acquisitions[154]. Future Outlook - The company anticipates a potential rebound in demand extending into late calendar 2024 and beyond due to current economic conditions[119]. Inventory and Sales - Days sales outstanding improved to 48 days from 65 days year-over-year, while annual inventory turns increased from three to four[144]. Foreign Earnings - The undistributed earnings of foreign subsidiaries may incur state and foreign taxes if repatriated, impacting cash flows[156].