Synaptics Incorporated Q2 FY2026 earnings call

• Delivered solid Q2 results with 13% YoY revenue growth, driven by 53% YoY growth in Core IoT products. Non-GAAP earnings per share increased 32% YoY to $1.21.
• CES 2026 was successful, showcasing technologies like Google's Gemma 3 on Synaptics multimodal processors, Wi-Fi sensing, and a robotic hand using Synaptics products.
• Traction in robotics, including engagement with a leader building humanoids using Synaptics touch controllers and interface bridge.
• Astra multimodal microprocessors gaining interest for open source architecture, power efficiency, and AI capabilities. Engagements with leading security/controls, smart home appliance, and industrial partners.
• Expanding partner ecosystem, including collaboration with Toradex and adding a European industrial partner. Sampling 2 new products: Astra MCU with connectivity and Synaptics connectivity SoC.
• Focus on edge AI portfolio expansion, with plans to share additional design wins. Combining processors and connectivity teams for better alignment.

Total company revenue increased 13% year-over-year. Core IoT product revenues increased 53% year-over-year, contributing 31% to the revenue mix. Enterprise and automotive product revenues were up modestly year-over-year, accounting for 53% of the revenue mix. Mobile touch product revenues increased 3% year-over-year, making up 16% of the revenue mix.

• Q3 2026 revenues expected ~$290M (+/-$10M). Revenue mix: Core IoT ~32%, enterprise and automotive ~54%, mobile touch ~14%.
• Non-GAAP gross margin midpoint 53.5% (+/-1%). Non-GAAP operating expenses ~$106M (+/-$2M).
• Non-GAAP net income per diluted share midpoint $1 (+/-$0.15) on an estimated 40.6 million fully diluted shares.

Q: Ross Seymore asked about supply issues in mobile and PC and Astra traction.

A: Rahul Patel stated mobile premium tier is stable; Ken Rizvi clarified supply issues specific to Synaptics' touch products. Rahul noted Astra expected revenue contribution in calendar 2027 and is accretive to gross margin.

Q: Thomas O'Malley inquired about guidance and gross margins.

A: Ken Rizvi said Q3 gross margin guidance is mid-53% range, 53.5% midpoint, driven by product mix.

Q: Travis Poulin asked about automotive and seasonality.

A: Ken Rizvi said automotive is a small portion, historically June quarter typically up from March. Starting backlog for Q4 up vs Q3.

Q: Neil Young asked about Astra pipeline by end market.

A: Rahul Patel said Astra pipeline growing fast, consumer pipeline larger than industrial, with strong SKU map and IP capability.

Q: Christopher Rolland asked about memory issues and channel effects.

A: Ken Rizvi said mobile touch is small, channel inventories lean; June quarter shows healthy backlog.

Q: Kevin Cassidy asked about PC enterprise and wireless connectivity.

A: Rahul Patel said enterprise PC refresh and market share gain; wireless connectivity in PC not pursued due to platform play constraints.

Q: Robert Mertens asked about Astra customer mix and channel inventory.

A: Rahul Patel said consumer initial ramp, industrial later; Ken Rizvi said channel inventories lean and normalized.

Q: Peter Peng asked about semi-custom projects and engagement criteria.

A: Rahul Patel said semi-custom anchored to large OEMs' vision, building software stacks and reference designs, with focus on hybrid compute and edge AI.