Synaptics(SYNA)2024-02-09 01:38Financial Data and Key Metrics Changes - Revenue for the December quarter was 22.5 million, an increase of 11% from the prior quarter, but a 75% decrease from the same quarter a year ago [36] - GAAP gross margin for the December quarter was 46%, while non-GAAP gross margin was 52.5%, at the midpoint of guidance [35][114] - The company expects GAAP operating expenses in the March quarter to be in the range of 135 million [106] Business Line Data and Key Metrics Changes - Mobile product revenue was up 42% sequentially in the December quarter and up 10% year-over-year, driven by demand in the Android ecosystem in China [1] - Core IoT revenue was roughly flat sequentially but down 46% year-over-year, with expectations for growth in the third quarter fiscal 2024 [15] - Enterprise and automotive revenue was down 12% sequentially and down 40% year-over-year, indicating a slowdown in enterprise IT spending [113] Market Data and Key Metrics Changes - The company is experiencing strength in mobile products, particularly with the Samsung Galaxy S24, solidifying its leadership in high-end Android handsets [33] - The enterprise market is characterized by persistent inventory and weaker-than-expected IT spending, impacting higher-margin products [11][23] - The wireless sales funnel is increasing, with new design wins in various sectors, including automotive [21] Company Strategy and Development Direction - The company is focusing investments in Core IoT, particularly in wireless and processor products, with expectations for consistent sequential revenue growth starting in March [20] - The company aims to clear excess inventories and position itself for future growth, particularly in the wireless segment [9][10] - Management believes the business has hit the bottom of the cycle and is stabilizing, with expectations for a gradual recovery [23][114] Management's Comments on Operating Environment and Future Outlook - Management noted that while the company is at the bottom of the cycle, the timing and shape of recovery remain uncertain [10][26] - There is optimism regarding a potential recovery in enterprise spending, but it may take longer than expected [69] - The company expects to see a return to higher and more normalized run rates, particularly in Core IoT [26][76] Other Important Information - The company ended the quarter with 200 million revenue run rate in Core IoT, with expectations for double-digit sequential growth [43][55] Question: How is the enterprise market performing? - The enterprise market is currently experiencing a slowdown due to reduced IT spending, but management believes the long-term demand profile remains unchanged [68][70] Question: What are the expectations for gross margins? - Management believes gross margins have bottomed out and expects a sustained rebound, with guidance for non-GAAP gross margin in the March quarter to be between 52% and 54% [47][119] Question: How is the automotive segment performing? - The automotive segment is seeing a transition from legacy products to TDDI solutions, with new wins at multiple OEMs, although revenue may be choppy in the near term [104]