Synaptics Incorporated Q4 FY2025 earnings call

Management Statement and Operational Highlights:

• Leveraging analog mixed signal, multi-core processors, and wireless connectivity intellectual property to position Synaptics in Core IoT.
• Fiscal 2025 revenue increased 12% to $1.074 billion, driven by Core IoT products growing 53% YOY.
• Fiscal Q4 2025 revenue was $282.8 million, up 14% YOY, with non-GAAP gross margin 53.5% and non-GAAP EPS $1.01.
• Synaptics Wi-Fi 7 solutions gaining traction with design opportunities across IoT, enterprise, and automotive.
• Astra processors with Google Research partnership taped out, initial revenue in H2 2026.
• Enterprise & Automotive showing modest recovery, Mobile Touch with sequential growth.

Segment Performance:

• Core IoT: In fiscal 2025, Core IoT products grew 53% year-over-year and accounted for approximately 1/4 of total company sales. In fiscal Q4 2025, Core IoT product sales increased 55% year-over-year to $84 million, making up 30% of Q4 revenue.
• Enterprise & Automotive: In fiscal 2025, Enterprise & Automotive products increased by 7%. In fiscal Q4 2025, Enterprise & Automotive product revenues improved 4% year-over-year but were down 3% sequentially, making up 53% of Q4 revenue.
• Mobile Touch: In fiscal Q4 2025, Mobile Touch product revenues were roughly flat on a year-over-year basis but increased 8% sequentially, making up 17% of Q4 revenue.

Guidance:

• Fiscal 2026 Q1 revenue expected to be approximately $290 million at midpoint, plus or minus $10 million.
• Non-GAAP gross margin expected to be 53.5% at midpoint, plus or minus 1%.
• Non-GAAP operating expenses expected to be $105 million at midpoint of guidance, plus or minus $2 million.
• Non-GAAP net income per diluted share anticipated to be $1.05 per share at midpoint, plus or minus $0.15.

Risks:

• Forward-looking statements subject to risks and uncertainties beyond control, actual results may differ materially from forward-looking statements.

Question and Answer: Q: How might the IoT strategy change at Synaptics compared to Qualcomm?

A: Rahul noted Synaptics has mixed signal, processors, and wireless connectivity capabilities, and the opportunity to sell solutions rather than piece parts, with more details to come at Analyst Day.

Q: Are there areas of product pruning or pricing optimization?

A: Rahul is evaluating product categories, with more clarity at Analyst Day; Ken mentioned investing in sales team and go-to-market.

Q: How sustainable is enterprise revenue growth with tepid IT spending?

A: Ken said there's healthy visibility 3-6 months out, backlog is healthy, but March quarter typically seasonally down.

Q: Update on Astra processor funnel and ramp?

A: Ken said the funnel is growing nicely, with traction from Astra processors, more details at Analyst Day or next earnings call.