Synaptics(US:SYNA)2024-05-10 00:53Financial Data and Key Metrics Changes - Revenue for the March quarter was $237.3 million, slightly above the mid-point of guidance, with year-over-year revenue down 27% but flat compared to the prior quarter [16][17] - GAAP gross margin was 46.5%, while non-GAAP gross margin was 52.9%, in line with guidance [20] - GAAP net loss for the March quarter was $18.1 million, or $0.46 per basic share, while non-GAAP net income was $21 million, a 72% decrease year-over-year [22] Business Line Data and Key Metrics Changes - Core IoT revenue increased 26% sequentially but was down 49% year-over-year [17] - Enterprise & Automotive revenue was roughly flat quarter-over-quarter, down 30% year-over-year [9][18] - Mobile product revenue was up 33% year-over-year but down 12% from the prior quarter due to seasonality [18] Market Data and Key Metrics Changes - The wireless products drove Core IoT revenue 26% higher compared to the prior quarter, with design wins in various sectors starting to ramp [8] - Automotive TDDI products saw strong demand, with design wins at several OEMs in North America and Europe [11] - The enterprise segment is experiencing suppressed demand, particularly in hardware and accessories, with IT spending at historically low levels [10] Company Strategy and Development Direction - The launch of the Astra processor platform targets a $20 billion silicon market opportunity for edge IoT devices, emphasizing AI integration [6][16] - The company is focusing on cross-selling initiatives, leveraging wins in video processors and collaboration devices to drive revenue [7] - There is an expectation of continued double-digit growth in Core IoT products as channel inventories normalize and demand improves [25] Management's Comments on Operating Environment and Future Outlook - Management noted that while inventory levels have normalized, demand remains lower than expected, particularly in the enterprise segment [31][36] - The company anticipates a gradual recovery in demand as enterprise spending returns, with expectations for revenue in the June quarter to be in the range of $230 million to $260 million [24][25] - Management expressed confidence in the wireless business returning to previous revenue levels as new products and design wins come online [58][60] Other Important Information - The company is in the process of searching for a new CFO, with discussions ongoing with qualified candidates [15] - The Astra platform's success at Embedded World generated significant customer interest across various industries [5][6] Q&A Session Summary Question: Inventory normalization and challenges - Management indicated that inventory has been worked down, with challenges primarily related to demand, particularly in the enterprise segment [31][32] Question: Legacy DDIC product impact - Management expects the legacy DDIC drag to decrease significantly by the second half of the year, potentially hitting zero by the fourth quarter [33][34] Question: Signs of recovery in demand - Management believes that natural demand is significantly higher than current levels and expects a pull-up in numbers as enterprise spending returns [36][39] Question: Wireless connectivity revenue and growth - Management confirmed confidence in returning to a $200 million revenue run rate for wireless, with new products and design wins expected to drive growth [58][60] Question: Mobile revenue outlook - Management indicated that mobile revenue is likely to remain flattish, with potential growth opportunities in the mid-tier Android space [61][63]