SYNAPTICS Inc Q4 FY2024 earnings call

• Stabilized revenue in FY2024 with incremental growth despite muted end-demand. - Cleared inventory issues plaguing previous quarters. - Core IoT showed significant growth, primarily driven by wireless, with a broad-market device taped out having 50% power reduction and 40% die size decrease. - Wi-Fi 7 device ahead of schedule, expected to sample customers end of coming quarter. - Smart embedded processors like Astra gaining traction, with software made generally available. - Operator solutions product family ramping with new customers in Japan. - Enterprise & Automotive products improved, PC products seasonally better. - Mobile products affected by seasonal trends.

For fiscal 2024, net revenue was $959 million, down 29% from prior year. In Q4 2024, revenue was $247.4 million, above guidance midpoint. Core IoT product revenue was up 63% YOY and 15% sequential, contributing 22% of Q4 revenues. Enterprise & Automotive product revenue was up 2% YOY and 7% sequential, contributing 58% of Q4 revenues. Mobile product revenue was down 6% YOY and 11% sequential, contributing 20% of Q4 revenues.

• Q1 2025 revenue expected ~$255 million, midpoint of guidance range. - Non-GAAP gross margin expected at midpoint of 53.5% ±1%. - Non-GAAP operating expense expected at midpoint of $96 million ±$2 million. - Non-GAAP net interest and other expense expected ~$6.0 million. - Non-GAAP tax rate expected in range of 13-15% due to domestication of foreign subsidiaries and onshoring of IP. - Non-GAAP net income per diluted share anticipated at midpoint $0.75 ±$0.20 on ~40.3 million fully diluted shares.

• Uncertainties in end-demand recovery affecting product segments' growth. - Macro-economic factors impacting IT spending on personal hardware and automotive adoption of new technology. - Risks that forward-looking statements may not materialize due to unforeseen factors beyond control.

Q: Kevin Cassidy asked about enterprise spending and video interface revenue, with Michael Hurlston responding that video interface business came up this quarter, and IT budgets get reset in late November/early December, expecting better handle on back half. Also asked about AIPC exposure, with Michael Hurlston stating generally neutral but seeing opportunity to add connectivity content on ARM-based PCs.

Q: Quinn Bolton inquired about sequential growth in Core IoT business and AI PC upgrade cycle impact, with Michael Hurlston stating expected strong sequential growth in Core IoT and AI PC upgrade cycle not yet seen but PC buying pulling through other products as a tailwind.

Q: Krish Sankar asked about Wi-Fi growth range and impact of system integrator partnerships, with Michael Hurlston responding Wi-Fi business expected to grow double digits, and system integrators helping reach broader customers more quickly in both wireless and processor businesses.

Q: Peter Peng asked about inventory digestion and gross margin trajectory, with Michael Hurlston stating shipping below end demand and gross margin affected by product mix, with enterprise/automotive above 57% and processors/wireless at or below, mobile below.

Q: Jason Gitts asked about IT budget impressions and gross margin levers, with Michael Hurlston stating no visibility on other companies' budgets but looking at pricing levers and mix as key drivers for gross margin improvement