SYNAPTICS Inc Q1 FY2025 earnings call

• Delivered solid Q1 performance with 8% YoY revenue growth, exceeding guidance mid-point. Core IoT sales up 55% YoY, with wireless and processor products driving strength. Core IoT funnel grew nearly 30% since last update, supporting 25%-30% compounded revenue growth over 5 years. - Broad markets chip on track to sample this quarter; Wi-Fi 7 IoT chip expected to sample this quarter. Processors gaining market traction, with Astra products winning awards and funnel growing $300M. - Enterprise & Automotive showing gradual improvement, PC product revenue up high-single-digit percentage. Video interface products improving post inventory reduction. Automotive end market weak. Mobile Touch Controllers strong, new frequency-based Touch Controller introduced. - Plan to return capital via share repurchases.

Revenue for fiscal Q1 was $257.7 million, up 8% year-over-year and above the mid-point of guidance. Segment revenue mix: Core IoT contributed 23%, with revenues up 55% year-over-year and 10% sequentially; Enterprise & Automotive contributed 57%, with revenue up 3% sequentially but down 5% year-over-year; Mobile contributed 20%, with revenue up 14% year-over-year and 3% sequentially.

• Q2 2025 revenue expected ~$265M, mid-point, plus or minus $15M. - Non-GAAP gross margin mid-point 53.5% ±1%. - Non-GAAP operating expense ~$96M mid-point ±$2M. - Non-GAAP net income per diluted share ~$0.85 mid-point ±$0.20 on an estimated 40.5 million fully diluted shares.

• Market slowdown in Automotive. - Delays in adoption of new technologies in Automotive. - Actual results may differ materially from forward-looking statements due to various risks beyond control.

Q: Road maps and timelines for new products, including broad markets chip.

A: Broad markets chip on track to sample this quarter; Wi-Fi 7 IoT chip on track to sample this quarter. Processor schedules holding, with a big one mid-year 2026. BLE strategy tracking behind.

Q: Comparison of Wi-Fi 7 upgrade cycle to past cycles and end-market exposures.

A: Wi-Fi 7 upgrade cycle similar to past, with step function growth in IoT segment. End-market exposure predominantly consumer (65%) and enterprise (35%), little industrial and automotive.

Q: Seasonality impact on March quarter revenue growth and Wi-Fi 7 ASP/margin.

A: Expect seasonality to impact March quarter revenue growth. Wi-Fi 7 has first-mover advantage, ASP uplift ~$1-$2, margin uplift ~8%-10%.

Q: Enterprise recovery profile and pricing.

A: Enterprise showing signs of life, driven by refresh cycles and share gains. Pricing environment not overly challenging, with strong print positions helping hold pricing.

Q: Enterprise recovery profile and Astra platform customer engagement.

A: Enterprise recovery depends on IT budgets, driven by internal factors. Astra platform customer engagement is broad, with products fitting in various end-applications like home security, appliances, etc., and hunting for opportunities across segments.