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SYNAPTICS Inc (SYNA)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 delivered solid execution: revenue $282.8M, non-GAAP EPS $1.01, non-GAAP gross margin 53.5%; Core IoT sales grew 55% YoY to ~$84M, driven by wireless and early ramp of new processors .
  • Versus S&P Global consensus, the company posted slight beats: revenue $282.8M vs $280.2M* and EPS $1.01 vs $1.00*; Q1 FY2026 guidance (~$290M ± $10M; non-GAAP EPS ~$1.05 ± $0.15) aligns with consensus* .
  • Board authorized a new $150M share repurchase program, signaling confidence and providing a potential stock-support catalyst amid improving backlog and lean channel inventory .
  • Mix and margin narrative steady: non-GAAP GM held ~53.5% for third consecutive quarter; GAAP GM compressed YoY on acquisition-related amortization and other non-GAAP items; FX added ~$2M to OpEx in Q4 .

Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Core IoT momentum: “Core IoT product sales increased 55% year over year in fiscal Q4 to $84M, fueled by a strong contribution from our wireless portfolio,” with Wi‑Fi 7 gaining traction across IoT, enterprise and automotive; design ramps expected through 2026 .
  • Edge AI platform progress: Astra processors taped out ahead of plan; co-developed neural processor with Google supports transformer-based architectures enabling generative AI at the edge; initial revenue contributions expected in 2026 .
  • Capital allocation: New $150M buyback after $128M repurchased in FY2025 and ~$134M gross debt reduction; management emphasized “disciplined” capital returns alongside strategic investment .

What Went Wrong

  • GAAP profitability optics: GAAP loss per share of $(0.12) in Q4 (vs non-GAAP EPS $1.01) and GAAP GM down YoY to 43.0% due to acquisition/integration costs and other items excluded from non-GAAP results .
  • Auto demand softness and mixed enterprise recovery: Enterprise & automotive revenues improved 4% YoY but fell 3% QoQ; PC refresh not broad-based yet .
  • FX impact: Non-GAAP OpEx slightly above midpoint, mainly due to ~$2M FX impact from a weaker USD, constraining operating leverage .

Financial Results

P&L vs Prior Periods (Quarterly)

MetricQ2 2025Q3 2025Q4 2025
Revenue ($USD Millions)$267.2 $266.6 $282.8
GAAP Gross Margin %45.7% 43.4% 43.0%
Non-GAAP Gross Margin %53.6% 53.5% 53.5%
GAAP EPS ($)$0.05 $(0.56) $(0.12)
Non-GAAP EPS ($)$0.92 $0.90 $1.01

Segment/Mix and KPIs

MetricQ2 2025Q3 2025Q4 2025
Core IoT Revenue ($USD Millions)N/AN/A~$84.0 (55% YoY)
Mix: Core IoT / Enterprise & Auto / Mobile Touch (%)N/AN/A30% / 53% / 17%
Cash & Cash Equivalents ($M)$596.1 $360.4 $391.5
Short-term Investments ($M)— $61.0 $61.0
Receivables ($M)$146.5 $132.0 $130.3
Inventory ($M)$119.5 $132.9 $139.5
DSO (days)N/A45 41
Inventory DaysN/A~95 ~95
Cash from Operations ($M)N/A$74.0 (Q3 commentary) $57.0 (Q4)
Share Repurchases ($M)$74.5 $37.9 $16.0

Results vs Consensus (S&P Global)

MetricQ4 2025 ConsensusQ4 2025 Actual
Revenue ($USD Millions)$280.2*$282.8
Primary EPS ($)$1.00*$1.01
# of Revenue Estimates9*—
# of EPS Estimates9*—

Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q1 FY2026N/A$290 ± $10 New
GAAP Gross Margin %Q1 FY2026N/A42.5% ± 2.0 New
Non-GAAP Gross Margin %Q1 FY2026N/A53.5% ± 1.0 New
GAAP OpEx ($M)Q1 FY2026N/A$147 ± $4 New
Non-GAAP OpEx ($M)Q1 FY2026N/A$105 ± $2 New
GAAP EPS ($)Q1 FY2026N/A$(0.54) ± $0.25 New
Non-GAAP EPS ($)Q1 FY2026N/A$1.05 ± $0.15 New
Non-GAAP Tax Rate (%)Q1 FY2026N/A13–15 (also FY26) New
Non-GAAP Net Interest & Other ($M)Q1 FY2026N/A$1–2 New
Mix: Core IoT / Enterprise & Auto / Mobile Touch (%)Q1 FY2026N/A~32 / 53 / 15 New
Revenue ($M)Q4 FY2025$280 ± $15 $282.8 Delivered slightly above midpoint
Non-GAAP GM %Q4 FY202553.5% ± 1.0 53.5% In line
Non-GAAP EPS ($)Q4 FY2025$1.00 ± $0.20 $1.01 In line

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY2025)Previous Mentions (Q3 FY2025)Current Period (Q4 FY2025)Trend
Core IoT growth+63% YoY; Broadcom agreement accelerates Edge AI +43% YoY; IoT ~25% of sales +55% YoY in Q4; ~30% of sales; wireless-led Strengthening
Wi‑Fi 7Strategic Broadcom agreement Product launches incl. Wi‑Fi 7 Gaining meaningful traction; design ramps in 2026 Building
Astra Edge AIEarly positioning; roadmap emphasis Pipeline expanding; funnel update to come Taped out; Google co-dev; genAI at edge; 2026 revenue start Execution advancing
Enterprise & AutoStable/improving trends; seasonality ahead Recovery modest; 4% YoY, -3% QoQ; auto soft Modest recovery; PC refresh not broad-based; auto soft Cautious
Mobile TouchGuidance seasonality Better than expected; +8% QoQ; flat YoY Sequential softness into Q1, but overall revenue still grows via IoT Mixed
Supply chain/channelImproving trends Inventories normalized Backlog visibility; lean channel inventories (pre‑COVID levels) Healthy
Macro/trade/tariffsNoted in outlookNoted in outlook Guidance subject to fluid macro trade/tariffs Ongoing risk
Capital allocationBuybacks ($74.5M) Buybacks ($37.9M) New $150M authorization; $16M repurchased in Q4 Shareholder-friendly

Management Commentary

  • CEO strategic focus: “Accelerate growth in Core IoT with an emphasis on Edge AI, deliver on our product roadmap, and maintain operational discipline… position Synaptics for sustainable, long-term growth.”
  • On Wi‑Fi 7 and processors: “We have confidence that Synaptics is well positioned to gain market share during the Wi‑Fi 7 technology transition” and “new… Astra processors integrate a neural processor co-developed with Google Research… enabling native execution of generative AI applications at the edge.”
  • CFO on financial strength: “We continue to generate strong cash flow… reduced total gross debt by approximately $134M… invested approximately $200M to acquire certain assets from Broadcom… revenue for Q4 was $282.8M… Non-GAAP EPS $1.01.”

Q&A Highlights

  • Core IoT strategy and channel: Management aims to scale from tens to hundreds to thousands of customers; channel investments will be judicious and timed to scale efficiently; selling solutions to increase silicon content and SG&A efficiency .
  • Backlog and inventory: Improved order activity and backlog into Q1 and building into Q2; channel inventories are lean (pre‑COVID levels) and decreased slightly in Q4 .
  • Seasonality/pull-ins: March (fiscal Q3) typically seasonally down; mobile touch demand strong in Q4 but expected to be slightly down in Q1; difficult to parse pull-ins vs incentives .
  • Margin trajectory: Path back to high-50s GM driven by mix optimization and differentiated solutions; Astra processors expected to help long-term margin mix .
  • Design funnel and marquee win: Astra funnel “growing very nicely”; marquee audio OEM win on predecessor chip leveraging embedded AI for high-fidelity synchronized audio .

Estimates Context

  • Q4 FY2025 beats: Revenue $282.8M vs $280.2M*; Primary EPS $1.01 vs $1.00*; 9 estimates for both revenue and EPS* .
  • Q1 FY2026: Guidance ($290M ± $10M; non-GAAP EPS ~$1.05 ± $0.15) broadly aligns with consensus revenue ~$290.2M* and EPS ~$1.06*, suggesting limited near-term estimate revisions absent new macro or mix changes .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Core IoT is the growth engine: +55% YoY in Q4 and guided to continue powering sequential growth into Q1; Wi‑Fi 7 and processors underpin multi-year design ramps .
  • Edged AI differentiation: Astra taped-out early with Google co‑developed NP; expect revenue contribution in 2026—key to margin mix and strategic positioning .
  • Execution stability: Three quarters around ~53.5% non-GAAP GM and in-line delivery vs guidance; backing with improving backlog and lean channel inventories .
  • Capital returns: New $150M buyback provides downside support and signals confidence while debt reduced ~$134M in FY2025 .
  • Watch auto and PC cycles: Auto remains soft; enterprise recovery modest; broader PC refresh not yet underway—mix shifts will influence margin trajectory .
  • Near-term trading: Modest consensus beats and buyback announcement are supportive; catalysts include Wi‑Fi 7 customer ramps and further Astra disclosures (funnel updates next earnings or Analyst Day) .
  • Medium-term thesis: Edge AI at the IoT, integrated connectivity + compute platforms, and solution selling should drive share gains and margin expansion toward long-term targets .

Appendix: Non-GAAP Adjustments Noted

  • Exclusions include acquisition/integration-related costs (amortization of intangibles, inventory fair value adjustments), share-based compensation, restructuring, intangible impairments, site remediation, legal settlement accruals, loss on extinguishment of debt, other non-cash items, and non-GAAP tax adjustments; FY2025 GAAP GM 44.7% vs non-GAAP GM 53.6% reflects these items .