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SYNAPTICS Inc (SYNA)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 delivered modest beats on revenue and EPS with revenue up 14% YoY to $292.5M and non-GAAP EPS up 35% YoY to $1.09; Core IoT product sales rose 74% YoY as Astra AI-native processors and Wi‑Fi 7/connectivity traction drove momentum . Versus S&P Global consensus, revenue ($292.5M vs $290.2M*) and EPS ($1.09 vs $1.064*), were both slightly ahead (see Estimates Context).
  • Non-GAAP gross margin held at 53.2% (vs 53.5% in Q4), while non-GAAP operating margin improved to 17.6% (from 16.5% in Q4), reflecting mix and operating discipline despite mobile touch supply constraints and ongoing auto softness .
  • Q2 FY26 guidance calls for ~$300M ±$10M revenue, non-GAAP GM ~53.5% ±1%, and non-GAAP EPS ~$1.15 ±$0.15; CFO highlighted lean channel inventories, healthy backlog, and ~12% YoY revenue growth at the midpoint .
  • Strategic catalysts: launch of next-gen Astra SL2600 edge AI processors (sampling; initial revenue 2H CY26), expanding Wi‑Fi 7 portfolio, and a new Qualcomm partnership on touch/fingerprint for mobile and PCs—supporting a strengthening edge-AI narrative into FY26/27 .

What Went Well and What Went Wrong

  • What Went Well

    • Core IoT strength: sales up 74% YoY; broad-based demand across processors and wireless connectivity (design wins in cameras, tablets, POS, UC platforms, wearables) .
    • Execution on AI roadmap: launched next-gen Astra processors; “lead customers have begun sampling… already securing design wins;” initial revenue expected 2H CY26 .
    • Margin/opex discipline: non-GAAP GM 53.2% and non-GAAP opex ~$104M, delivering 17.6% non-GAAP operating margin and 35% YoY EPS growth; quote: “Non-GAAP EPS… $1.09 per share, an increase of 35%” .

  • What Went Wrong

    • Mobile touch underperformed vs internal expectations due to supply chain constraints; sequential lift expected into Q2 as constraints ease (mix guide: mobile touch ~16%) .
    • Automotive remains soft; enterprise recovering but auto demand subdued, tempering Enterprise & Auto segment growth .
    • GAAP loss persisted (–$0.53) driven by acquisition/integration amortization and stock-based comp; Q1 add-backs totaled ~$35.5M (acq), $36.7M (SBC), and $2.5M (restructuring) to reach non-GAAP profitability .

Financial Results

Performance vs estimates and trend

MetricQ3 FY25Q4 FY25Q1 FY26
Revenue ($M) – Actual$266.6 $282.8 $292.5
Revenue ($M) – S&P Consensus$265.0*$280.2*$290.2*
Non-GAAP EPS ($) – Actual$0.90 $1.01 $1.09
Non-GAAP EPS ($) – S&P Consensus$0.8587*$1.0033*$1.0641*
GAAP Gross Margin %43.4% 43.0% 42.6%
Non-GAAP Gross Margin %53.5% 53.5% 53.2%
Non-GAAP Operating Margin %n/a16.5% 17.6%
  • Values with * retrieved from S&P Global.

Segment mix and growth

MetricQ4 FY25Q1 FY26
Revenue Mix – Core IoT30% 35%
Revenue Mix – Enterprise & Auto53% 51%
Revenue Mix – Mobile Touch17% 14%
Core IoT YoY Growth+55% +74%

Select KPIs

KPIQ3 FY25Q4 FY25Q1 FY26
Cash & Equivalents ($M)$360.4 $391.5 $459.9
Cash from Operations ($M)>$74.0 $57.0 $30.2
Inventory ($M)$132.9 $139.5 $143.1
Inventory Daysn/a95 94
DSO (days)n/a41 37
Share Repurchases ($M)$37.9 $16.0 $7.2

Non-GAAP reconciliation (Q1 FY26)

ItemAmount
GAAP Net Loss ($M)$(20.6)
+ Acquisition & Integration Costs ($M)$35.5
+ Share-based Compensation ($M)$36.7
+ Restructuring Costs ($M)$2.5
+ Other non-cash ($M)$0.7
– Other misc income ($M)$(2.3)
– Non-GAAP tax adjustments ($M)$(9.2)
= Non-GAAP Net Income ($M)$43.3
Non-GAAP EPS ($)$1.09

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ2 FY26n/a$300M ± $10M New
GAAP Gross Margin %Q2 FY26n/a43.0% ± 2.0% New
Non-GAAP Gross Margin %Q2 FY26n/a53.5% ± 1.0% New
GAAP OpEx ($M)Q2 FY26n/a$152 ± $4 New
Non-GAAP OpEx ($M)Q2 FY26n/a$106 ± $2 New
GAAP EPSQ2 FY26n/a$(0.50) ± $0.25 New
Non-GAAP EPSQ2 FY26n/a$1.15 ± $0.15 New
Non-GAAP Tax RateQ2 FY26n/a13%–15% New
Non-GAAP Net Interest & OtherQ2 FY26n/a≈$1M expense New
Segment Mix (Core IoT / Ent+Auto / Mobile)Q2 FY26n/a~31% / 53% / 16% New

Note: CFO added that at the midpoint guidance implies ~12% YoY revenue growth for Q2 FY26 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3–Q4 FY25)Current Period (Q1 FY26)Trend
Edge AI / Astra roadmapTaped out next-gen Astra; integrating Google Research NPU; initial revenue in 2026; strong pipeline Launched next-gen Astra; sampling to lead customers; securing design wins; initial revenue 2H CY26 Accelerating
Wireless connectivity (Wi‑Fi 7)Wi‑Fi 7 introduced; gaining traction; expected to ramp through 2026+ “Solid quarter”; Wi‑Fi 7 and broad market solutions gaining traction; roadmap on schedule Improving
Segment dynamics (Enterprise/Auto)Enterprise recovering; auto soft; Q4 mix 53% E&A Enterprise strength continues; auto softness persists; Q2 mix guide 53% E&A Stable (auto soft)
Mobile touchStronger Q4; foldables content opportunity Q1 below plan due to supply constraints; sequential lift expected; next-gen controller wins; content >2x in foldables Near-term constrained; medium-term positive
Channel/backlogLean channel; backlog improving entering Q1 “Channel inventories remain lean” and Q2 backlog healthy Stable/constructive
Open ecosystem / GoogleAstra integrates Google Coral NPU; open-source approach Reiterated open software toolchain; Google collaboration central to differentiation Consistent
New partnershipsn/aQualcomm partnership on touch + ultrasonic FP for mobile/PCs (post-quarter) New positive

Management Commentary

  • Strategic focus on Edge AI at the far edge: “Astra introduces a new class of AI-native silicon… built from the ground up to power the next wave of intelligent devices at the edge… lead customers have begun sampling… already securing design wins” — Rahul Patel, CEO .
  • Pipeline/design funnel disclosure plan: “We will be very specific about the designs that have been awarded… give you an update on the pipeline… a couple of quarters away” — CEO .
  • Core IoT momentum: “Over the last seven quarters… averaging something like 50%+ year-over-year growth… driven by processors and the connectivity business” — Ken Rizvi, CFO .
  • Medium-term growth drivers: integrated MCU+Wi‑Fi 7+BT monolithic die sampling 2H CY26; earliest revenue 2H CY27; semi-custom solution sampling in fall to a major customer — CEO .

Q&A Highlights

  • Tracking Astra success: Management plans to disclose awarded design funnel metrics in coming quarters to enable external tracking of Astra adoption and ramp .
  • Segment volatility: Q1 upside in Core IoT and downside in Mobile Touch due to supply constraints; combining Q1+Q2, Core IoT 1H FY26 growth >60% YoY, supporting confidence in 25–30% FY26 Core IoT growth guide (management tone) .
  • Enterprise vs Auto: Enterprise continues to recover and gain share; auto remains sluggish; management expects sequential growth in Enterprise & Auto into Q2 .
  • Mobile opportunities: Engagements with handset OEMs doing in-house APs open doors for SYNA’s standalone high-performance wireless; strong interest beyond IoT (set-top, auto) .
  • Margin path: Near-term GM stable ~53.5% non-GAAP; over time, mix shift to processors/connectivity solutions and Edge-AI features expected to support higher margins (detail at Analyst Day) .

Estimates Context

  • Q1 FY26 vs S&P Global consensus: Revenue $292.5M vs $290.2M*; EPS $1.09 vs $1.0641* — both slight beats.
  • Q2 FY26 guidance vs S&P Global consensus: Midpoint revenue $300.0M vs $300.1M*; non-GAAP EPS $1.15 vs $1.1489* — essentially in line (mid).
  • FY outlook markers: FY26 EPS consensus ~4.34* and FY27 ~5.31*; management reiterated confidence in Core IoT growth and product ramps into CY26/27 .
  • Values with * retrieved from S&P Global.
PeriodRevenue ActualRevenue ConsensusEPS ActualEPS Consensus
Q1 FY26$292.5M $290.2M*$1.09 $1.0641*
Q2 FY26 (Guide Mid)$300.0M $300.1M*$1.15 $1.1489*

Key Takeaways for Investors

  • Core IoT is the growth engine (74% YoY in Q1) and drives the narrative into FY26/27 with Astra sampling and Wi‑Fi 7 rollouts; monitor awarded design-win funnel disclosures over next 1–2 quarters for traction proof points .
  • Profitability quality improving: stable non-GAAP GM ~53% and rising non-GAAP operating margin to 17.6% despite mix headwinds; focus on solution selling (processors + connectivity) underpins medium-term margin expansion potential .
  • Near-term setup: Q2 guide is in line with consensus and implies ~12% YoY growth with lean channels and healthy backlog—de-risking the 1H FY26 trajectory .
  • Watch mobile touch normalization: supply constraints weighed on Q1; sequential improvement guided in Q2; foldable content opportunity (>2x content) could add leverage in FY27 .
  • Auto remains a drag; enterprise steady: any evidence of auto recovery in H2 or PC refresh uplift in CY26 would be incremental upside to the mix .
  • Strategic partnerships (Google Research enabling open AI toolchains; new Qualcomm collaboration on touch/fingerprint) broaden ecosystem reach and support design-win velocity across mobile/PC and edge AI endpoints .
  • Stock drivers: cadence of Astra design-win announcements, Wi‑Fi 7 customer ramps, signs of auto stabilization, and consistent delivery vs in-line guides should influence multiple expansion and estimate revisions .