Synaptics(US:SYNA)2023-11-10 01:49Financial Data and Key Metrics Changes - Revenue for the September quarter was $237.7 million, a 5% increase compared to the previous quarter and above the midpoint of prior guidance [14][35] - Year-over-year revenue decreased by 47%, indicating a significant decline compared to the same quarter last year [34] - Non-GAAP net income for the September quarter was $20.3 million, a 4% increase from the prior quarter but an 85% decrease year-over-year [18][34] - GAAP net loss for the quarter was $55.6 million, translating to a GAAP net loss of $1.43 per share [18] Business Line Data and Key Metrics Changes - Core IoT revenue increased by 15% sequentially but was down 66% year-over-year, indicating a significant inventory accumulation that is nearing depletion [15] - Enterprise revenue was up 9% sequentially but down 47% year-over-year, driven by recovery in PC product shipments [35] - Mobile product revenue decreased by 15% sequentially and 10% year-over-year, with modest improvements in Android shipments [16] Market Data and Key Metrics Changes - The Enterprise & Automotive segment saw a sequential revenue increase of 9%, primarily due to improved PC product shipments [35] - The Mobile end market remains volatile, with two customers contributing over 10% of revenue [36] Company Strategy and Development Direction - The company is focused on executing Core IoT opportunities and expanding its addressable market, with multiple design wins and new product introductions [13][27] - The company anticipates a recovery starting in calendar 2024, with expectations for Enterprise inventories to normalize [13][25] - The introduction of new products, such as the SYN43756E and DVF120, is aimed at enhancing the product portfolio and addressing high-performance IoT applications [8][9] Management's Comments on Operating Environment and Future Outlook - Management believes the business has stabilized and is optimistic about a recovery in 2024, although visibility on the recovery's strength is limited [13][25] - There is confidence that Enterprise inventories will return to normal levels, which should improve overall product mix and margins [13][25] - Management noted that customer interest and design wins remain strong, indicating potential for future growth [12] Other Important Information - The company ended the quarter with $824 million in cash and short-term investments, down from the previous quarter [55] - Cash flow from operations was $45 million, with capital expenditures of $6.7 million [55] Q&A Session Summary Question: Where are the pockets of inventory in the Enterprise segment? - Management indicated that there are still high inventory levels in the Enterprise segment, particularly in docking stations and headsets, but some recovery is expected [21][60] Question: What is the outlook for gross margins? - Management stated that the current gross margin issues are primarily mix-driven, with expectations for improvement as the Enterprise segment recovers [62] Question: How does the rising PC demand correlate with Enterprise recovery? - Management confirmed that the rising PC demand is a solid indicator of Enterprise recovery, as their products are closely tied to corporate spending [72][76] Question: What is the target for inventory days? - Management indicated a target of around 75 days for inventory, but they will be cautious not to cut inventory too aggressively [69][71] Question: How is the company managing operations in Israel amid current challenges? - Management reported that less than 10% of employees have been called to military duty, and they are managing operations effectively by backfilling roles with engineers from other regions [78]