Synaptics Incorporated Price & Performance (SYNA)

Which excludes share based compensation, acquisition related costs, and certain other Non cash or recurring or non recurring items. Please refer to our earnings press release issued after market close today for a reconciliation of the most directly comparable GAAP financial measures to the non GAAP financial measures presented. Which can be accessed from the InvestorRelationssectionofthecompany'swebsite@synaptics.com Synaptics. Additionally, we would like to remind you that during the course of this conference call, Synaptics will make forward looking statements in our prepared remarks and in our supplemental materials and may make additional forward looking [indiscernible] in response to your questions. These forward looking statements give our current expectations and projections relating to our financial condition results of operation, [indiscernible] future performance and business. Although Synaptics believes the estimated assumptions underlying these forward looking statements to be reasonable, they are subject to a number of risks and uncertainties beyond our control. Synaptics cautions that actual results may differ materially from any future performance suggested in the company's forward looking statements. Therefore, refer you to the company's current periodic reports filed with the SEC. Including our most recent annual report on Form 10 ks and quarterly report on Form 10 Q. For important risk factors that could cause actual results to differ materially from those contained in any forward looking statements.

Except as required by law, Synaptics expressly disclaims any obligation to update this forward looking information. I will now turn the call over You can. Thanks, Manjal. I'd like to welcome everyone today's call. I have the pleasure of Vikram Venkat, and Satish joining our call today. I first want to briefly comment on the news we announced on Monday that Michael Hurlson has stepped down as President and CEO and as a member of our Board of Directors to assume the role of CEO at Lumentum We thank Michael for his invaluable contributions and dedication Synaptics Synaptics, over the last five years, and wish him the best in his future endeavors. The Board has commenced a CEO search and will be considering both internal and external candidates. To ensure seamless execution during this transition, I will be serving as Interim CEO and will work closely with our Executive Chairman, Nelson Chan, our Board and our deep bench of experienced senior leaders to drive the continued execution of our growth strategy. We have a strong foundation and leadership team in place. And remain laser focused on capitalizing on the significant demand for our innovative products and solutions. Our strategy remains the same and has three key [indiscernible] First, we are investing in our core product lines within the enterprise, automotive, and mobile touch markets.

We are confident in the growth prospects of these franchise products as we hold a leadership position as either the number one or number two player in terms of market share in many of these markets. Second, we continue to see tremendous growth opportunities in core IoT specifically in our wireless and processor portfolio. As evidenced by our recent Broadcom agreement, our tuck in acquisition of Packet Craft and our Google partnership we are investing both organically and inorganically to scale and expand capabilities in these high growth areas. And finally, we remain prudent in our allocation of capital. During the second quarter, we retired our term loan B with a convertible note and cash on hand reducing our total debt and cash interest expense. While also returning approximately $75,000,000 of capital back to shareholders via share repurchases. Before I go through the details of our second fiscal quarter, let me comment on our recent Broadcom agreement. This was 198,000,000 all cash transaction funded with cash from our balance sheet. We expect to generate over $40,000,000 in annualized sales and expect the transaction to be slightly accretive to our non GAAP EPS. We have posted slides on our website outlining the transaction benefits.

Let me turn you to Slide four of that presentation. We believe our new agreement with Broadcom, a and further strengthens our leadership in IoT connectivity. As part of the transaction, we expanded our portfolio of industry leading WiFi eight combo devices that include advanced Bluetooth features, additional WiFi seven combo devices, Ultra Wideband or UWB intellectual property next generation GPS GNSS products and combo front end modules. This transaction solidifies in secures our wireless roadmap for the next [indiscernible] [indiscernible] The agreement also importantly expands our field of use allowing our Wi Fi products to compete in ARVR Android smartphones and the consumer audio markets. Substantially increasing our serviceable market Additionally, we are on boarding a highly skilled team of engineers. Positioning us as one of the largest and most qualified teams in cutting edge wireless research and development. Moving to Slide five, as AI continues to evolve at the edge, we believe smartphones will serve as one of the central hubs for controlling multiple edge IoT devices. By expanding our reach into these devices, we now have the ability to enable a complete ecosystem with centralized control at the hub and seamless end to end edge connectivity. We believe we will be one of the first, if not the first to market with WiFi eight technology enabling AI at the edge.

Now moving to Slide six. The Broadcom agreement further strengthened of high performance and broad markets IoT applications.

In addition, we now have the foundational technology for UWB which we can integrate into future IoT devices. Finally, our portfolio now includes next generation GPS GNSS devices offering greater accuracy and improved power efficiency, enabling us to further expand our position in markets such as wearables, navigation devices and asset trackers. Moving to Slide seven, As I mentioned, as part of the agreement, we have onboarded a great team of engineers. Since our initial acquisition of wireless assets from Broadcom in 2020, we've made significant strides in establishing leadership in wireless contact and now have built a world class wireless engineering team. Our comprehensive portfolio for Edge AI IoT applications, spans all generation of WiFi devices, Bluetooth, GPS, GNSS and UWP. We believe our cutting edge research and development pushes the limits of performance efficiency and seamless connectivity. In summary, [indiscernible] our Senior Vice President of Wireless worked closely with Broadcom to finalize this strategic transaction adding multiple next generation connectivity products and technologies to our portfolio We are excited to welcome our new team members to Synaptics and look forward to building a bright and successful future together. Separately, on the Edge AI processor fund, we recently announced a collaboration between Google and Synaptics integrating Google's MLIR compliant machine learning core with our industry leading Astra processor line.

The AI solution combines Astra's neural processing engine with Google's standard core We expect both companies to contribute compiler expertise and collaborate on advancing the technology roadmap. This AI solution will be incorporated into our upcoming One of the reasons Google chose Synaptics as a partner is due to our AI technology that is expected to deliver industry leading inference per watt. This partnership speaks to our credibility in this emerging industry and is a validation of investments we have made to deliver high performance ultra low power, Edge AI Solutions. We believe Google will be a strong partner in creating a thriving ecosystem for AI. Attracting AI model developers and driving further proliferation of AI to the edge. We expect our collaboration to create opportunities in future Google and non Google devices, serving this emerging ecosystem. Now let me turn to December results. We delivered another solid quarter of growth with revenues increasing 4% and thirteen percent year over year to $267,000,000 which was slightly above the midpoint of our guidance range led by strength in core IoT and enterprise products. Non GAAP gross margin came in slightly above the midpoint of our guidance at 53.6%. Non GAAP EPS increased 61% year over year to $0.92 and exceeded the midpoint of our guidance.

In core IoT, our product sales increased 63% year over year to $61,000,000 driven by growth in both processor and wireless products Our processor demand is improving. As customer and channel inventory challenges are largely behind us. Additionally, we are collaborating with content providers to develop new AI use cases for operators and ramping new design wins. In wireless, we are sampling Wi Fi seven, in broad market chips with customers. To advance our BOE efforts, we acquired Packet Craft, a provider of advanced embedded BLE software. PacketCraft offers a low latency and compact software stack enabling energy efficiency and economically interconnected systems. With our recent transactions, organic development, growing pipeline and design win momentum, we continue to remain confident in our core IoT growth vectors. Turning to enterprise and automotive. On the enterprise side, we are seeing normal seasonal trends with customers placing orders only when end demand materializes. As a result, while orders and bookings continue to show improvement, they do not yet indicate a refresh cycle. For calendar year 2025, we remain optimistic about enterprise demand due to multiple [indiscernible] Contributions from new products, opportunities to continue to gain market share, lean customer and channel inventories and the potential for a PC refresh cycle.

At CES, we showcased several new technologies including user presence detection, or UPD. Our lead customer has launched new products featuring our solution and we expect them to ramp throughout calendar year 2025. We have also secured our first UPD design win at another major OEM reinforcing our market position. We expect adoption and penetration of UPD technology to increase as customers recognize the value in power savings privacy and security. In automotive, we secured our first smart bridge design win with a customer in China We remain encouraged by the long term potential of this technology given its system level cost savings exceptional contrast ratio in automotive displays, and best in class image quality. Overall, our business has been resilient. However, we would expect to experience similar headwinds As other semiconductor suppliers within the automotive space, as most of our exposure is to U. S. And European customers. For the long term, we believe we are well positioned across major OEMs globally and will continue to pursue and expand opportunities [indiscernible] In mobile touch, we are pleased to say the headwind from our large U. S. Customer is now fully behind us. Looking forward, our primary focus will be on the high end Android smartphone market.

In Q2, we saw revenue growth from China OEMs benefiting from an increasing mix of flexible OLED screen technology. The Android market saw solid recovery in 2024 and we expect to see continued growth in 2025 as the Android ecosystem gains share In industry incentives, drive higher demand. Now let me turn to our second quarter financial results and the third quarter outlook.

I will focus my remarks on our non GAAP results, which are reconciled to GAAP financial measures our earnings release tables found in the Investor Relations section of our website. Revenue for fiscal Q2 was $267,200,000.0 above the midpoint of our guidance with sequential and year over year improvement in both core IoT and enterprise in automotive. Q2 revenues were up 13% on a year over year basis and up 4% sequentially. Revenue mix in the second quarter was as follows: 23% core IoT, 59% enterprise and automotive and 18% mobile touch products.

Core IoT product revenues increased 63% year over year and 3% sequentially. Enterprise and automotive product revenue improved 17% year over year and 8% sequentially.

Mobile touch product revenue was down 7% sequentially 25% year over year as product shipments to a large U. S. Customer have reached end of life. Second quarter non GAAP gross margin was 53.6% slightly above the midpoint of our guidance. Second quarter non GAAP operating expense was $97,100,000 slightly above the midpoint of our guidance range primarily due to the inclusion of the Packet Craft acquisition as well as incremental variable expenses during the quarter. Our non GAAP operating margin strengthened again in the second quarter coming in at 17.3% up approximately three sixty basis points and 60 basis points sequentially driven by improved revenue and continued operating expense controls. Non GAAP net income in Q2 was $36,600,000 Non GAAP EPS per diluted share came in above the midpoint of our guidance. At $0.92 per share. An increase of 61% on a year over year basis and 14% sequentially. [indiscernible] Now let me turn to the balance sheet. We ended the quarter with approximately $596,000,000 of cash and cash equivalents, down approximately $258,000,000 from the prior quarter.

We fully retired our $582,000,000 Term Loan B during the quarter, The total face value of debt decreased to $850,000,000 from $982,000,000 at the end of the September quarter.

In addition, we returned $74,500,000 in capital through share repurchases this quarter. Purchasing approximately 1,000,000 shares. Cash flow from operations was $24,000,000 As a reminder, subsequent to the quarter end, we did use $198,000,000 of our cash for the Broadcom transaction. Let me provide some details on our refinancing this past quarter.

In November, we issued $450,000,000 of convertible notes due in 02/1931. We also purchased a cap call to mitigate dilution and economically protect us up to a stock price of approximately $150 The table in our supplemental slides outlines the dilution mitigation benefit of this CAF call.

We used the proceeds from our convertible offering and cash from our balance sheet to completely retire our $582,000,000 term loan.

Capital expenditures were $4,700,000 and depreciation for the quarter was $7,400,000 Receivables at the December were $146,500,000 and days of sales outstanding forty nine days. Our ending inventory balance was 100 and in line with the prior quarter. The calculated days of inventory on our balance sheet were eighty seven days. Now turning to our third quarter of fiscal twenty twenty five, guidance We expect revenues to be approximately $265,000,000 at the midpoint plus or minus $15,000,000 Our guidance includes a partial quarter of contribution from our recent of Broadcom assets.

Our guidance for the third quarter reflects an expected revenue mix from core IoT enterprise and automotive, and mobile touch products of approximately 255817% respectively. We expect non GAAP gross margin to be 53.5% at the midpoint plus or minus 1%. Non GAAP operating expenses in the March are expected to be $101,000,000 at the midpoint of guidance plus or minus $2,000,000 The increase in operating expenses is primarily due to headcount related expenses from our Packet Craft acquisition and Broadcom transaction as well as incremental variable expenses. We expect non GAAP net interest and other expense to be approximately $1,000,000 in the third quarter. And our non GAAP tax rate to be in the range of 13% to 15%. Non GAAP net income per diluted share is at the midpoint plus or minus point $20 on an estimated 39,500,000.0 fully diluted shares. To conclude, with a leading share position in several end markets. We have an experienced leadership team that is laser focused on driving our product roadmap and business priorities. Our pipeline and our design wins continue to improve. We are gaining market share and continue to drive innovation with new products. We remain committed to driving long term sustainable growth for the company.

This wraps up our prepared remarks. I'd like to turn the call over to the operator start the Q and A session.

Certainly. Our first question comes from the line of Quinn Bolton from Needham and Company. Your question please.

Hey guys, it's Neil Young on for Quinn Bolton. Thanks taking the question. So you talked about the $40,000,000 in annualized sales from the Broadcom from the Broadcom transaction. Is that coming more into the core IoT segment or more into mobile? Any color would be appreciated. Yes, sure. Neil, thanks. This is Ken Risby. Thanks for the question. That will actually all fall into the core IoT segment because it's primarily wireless technologies. Okay, great. Thanks. And then specific areas that are driving the improvement in bookings and orders in enterprise? Maybe any areas of weakness within that you wanted to call out as well?

Say that again. Re ask the question there.

Yes, sorry. So you talked about the improvement in bookings and orders within enterprise. So I was wondering if you wanted to call out any specific areas that are driving the improvement? And then on on the flip side, any areas of weakness within enterprise?

Yes, I would say it is fairly broad. We did talk about broadly speaking on the peripheral side, we're starting to see some good traction there. And look, Neil, if I just step back and think about the entire business, I feel so much better [indiscernible] than maybe six months ago in terms of our visibility. Overall for the entire business. One, we have very lean inventories overall at or below COVID levels. And then two, even in this kind of slower growth economic environment, I definitely see a path for us to grow sequentially about $10,000,000 plus or minus sequentially throughout this calendar year. I think we're in very good shape I see a path there. Could it be slightly more in any given quarter? Or slightly less? The answer is yes. But we have a good path of growth ahead of us as we think out over the next four quarters through the end of this calendar year. And so we're feeling very good about the business overall. That's inclusive of the enterprise space. And specifically in the core IoT space. Where we'll see some benefit this quarter from the Broadcom acquisition. We'll get the full benefit here starting in the June quarter.

But we're very optimistic about the overall business. The only area I would say that that is still a bit sluggish, we talked about this on the formal transcript is around the automotive space.

That's embedded in the comments I just outlined.

Great.

Thank you.

Thank you. And our next question comes from the line of Kevin Cassidy from Rosenblatt Securities. Your question please.

Yes. Thanks for taking my question and congratulations on the great quarter and the great transaction.

And I wanted to learn a little more about the transaction of the products you have now licensed and now especially the entry into the Android market and the ARVR market Can you say, are there designs in progress in those markets that maybe we'll be coming to production, say, in the second half of this year or near term anyway? Yes. So Kevin, one, thank you for the support. Two, I think we also feel like this is a great transaction It further extends the strength that we have in our overall core IoT segment specifically around our wireless portfolio. If you look at the revenue ramp, we've talked about a $40,000,000 plus opportunity about $10,000,000 plus a quarter We get the full benefits starting in the June quarter here. And you can expect us to continue to ramp our revenue, not only with the existing an ability to ramp that technology with new customers especially as we look into calendar year '26 and calendar year 2027. From a technology standpoint, What do we get? We get a a WiFi [indiscernible] [indiscernible] We get advanced GNSS and GPS technology. We get IP around the UWB portfolio. And then we get front end modules.

So all of these things are actually to our overall portfolio.

In addition, we get some WiFi seven technology that's in production today. Servicing that Android related customer.

I don't know, Venkat, do you want to add anything terms of the context?

No, I think you covered it.

Ken, the only other thing I would add is that we're also getting a great set of team engineers as part of this transaction that will help us become one of the largest teams for the IoT segment. Perfect. Anything else, Kevin?

Yes, sorry, I had a little trouble hearing that answer, but yes, because I think you've mentioned what I'm going to ask next about maybe with all this MiFi just say wireless connectivity that will help you sell your processes into the AI network edge market. And what percentage of would you say your [indiscernible] Wireless connectivity customers can adopt your processors also? Vikram, do you want to and Vikram and Venkat, do you want to take this call? Or this question?

Go ahead. Yes. So I think the way we see it is actually this transaction helps us create create really good solutions that we can offer for the IoT and the edge AI space we have always been stressing the combination of our processes and connectivity together and that story actually seems to be resonating across the board The wireless portfolio is definitely in the full position right now, but as the processes are rolling out, we're seeing a pull even in the other direction. So we expect this trend to actually continue as we look ahead. Okay, great.

Thank you.

Thank you. And our next question comes from the line of Krishnan Sinke from TD Yes.

Hi. Thanks for taking my question and congrats on the good results.

Ken, the first question I had is when I look at your revenue, you're kind of getting this $250,000,000 or minus $50,000,000 revenue run rate for almost like eight quarters or two years now.

So if you strip out this Broadcom deal, I'm curious, are we just waiting for the cycle to inflect? Or do you see any kind of infection coming imminently because I'm just wondering, is this something Synaptics can do to outperform or generate alpha through the cycle compared to what we have been in this kind of a lull for like two years? And then I have a follow-up.

This is a good question. And so if you if you look at where the business now is, I feel very comfortable with the path ahead. Obviously, we can't call things out two years. But if you look at the trajectory of the business here, through calendar year 2025, We have much better visibility now than we did just even six months ago.

And what I can say is I feel like we have a direct path be able to grow the business from these levels. So we're we guided to $265,000,000 But I think sequentially as we look out for the rest of this calendar year, There's definitely a path even in a low growth environment to grow kind of $10,000,000 or so sequentially in calendar year Q2. In the calendar year Q3, and calendar year Q4. So I think those are great signs in terms of where the business is at. And if you look even where we were a year ago.

And one thing just to highlight, the business is up about 13% sequentially on a revenue basis. But our earnings which are important, are up 61%. So we've been able to show Good revenue growth and better earnings growth in a slower growth environment. And I think part of our story here is that we have a number of great franchise businesses that we highlighted where we're either number one or number two in a lot of critical markets in the enterprise space in the automotive space and in the mobile space. And we have this ability beyond that to really inflect our growth especially as we look out into calendar year 'twenty six and 'twenty seven, when you think about our core IoT segment, the Broadcom transaction augments our growth but If you look at the capabilities we have within Core IoT around wireless, here as we think about this year and into next year, And then as we think about fiscal twenty twenty seven, the ability to ramp the processor business with Astra specifically, Those are really great storylines for the company. And it's an ability for us to grow above the market rates for our other end markets.

So feel like we're in a great position here Obviously, we went through a very challenging period post COVID. The business stabilized and bottomed about a year ago. And now we're on this path for steady growth here. And at least over the next three quarters through the end of this calendar year, I see a direct line of growth potential here. In a slow growth economic environment. If things get better, obviously going to do much better. And so very comfortable as we sit today. Got you. Got you. Thanks for that explanation, Ken. Just a clarification and a follow-up question. The $10,000,000 incremental revenue in June is that part of the $40,000,000 run rate from the Broadcom acquisition?

Yes. So there is some in there, right, because we do get a quarter of benefit. This quarter, we're only going to get a partial quarter given when the transaction closed. And next year next quarter, we'll get a full quarter of benefit from June and then onward from there. [indiscernible] be normalized. On a sequential basis, when you look at it, post June, it will be fully baked in.

So September, December will be everything will be organic when you look at the sequential basis. And just one clarification on the comment, when you said 13%, it was 13% year over year growth.

Yes, yes, got it. Got it.

And then just like the follow-up to that is, the Google deal announced how to think about the quarterly revenue contribution? When will it start contributing to your top line? And along the same path, if I bake in Broadcom and Google is it fair to assume sequentially June should be up from March September should be up from June and so on.

Yes. So let me answer that. So the Google collaboration is really about the partnership and validation of our Astra platform. Nothing changes in terms of of the forecast that we've outlined to investors in terms of the ramp, but still in that fiscal twenty twenty seven timeframe.

This just further solidifies the relationship with a large partner that is proliferating AI into edge applications and the edge ecosystem. If you look at the sequential in terms of so when we think about the revenue and revenue run rate, The Broadcom piece is part of my earlier comments. So in our guide here, [indiscernible] this quarter, we have a partial portion of the Broadcom revenue, we'll get the full portion here starting the June.

And as I mentioned before, as I think about it today and the lower growth environment, I would think about sequential growth from here. Without giving guidance. Into June about $10,000,000 more and then another $10,000,000 into September and another $10,000,000 into December. So think we have a good path for growth. If the economic environment improves, hopefully we'll do better. But But I feel very comfortable in terms of where the business is positioned today, how the backlog is shaping up, where inventories are and how our product portfolio is shaping up for not only this year, but as we think about 2026.

Awesome. Thank you, Ken, for the incremental color. Thank you. Appreciate Thank you. And our next question comes from the line of Christopher Rolland from Susquehanna. Your question please.

Hey, Ken. Thanks for the question.

So, yes, I guess my first one is around the Broadcom piece. I know this you've kind of talked about this being core IoT. But exactly how meaningful can mobile be over time And the reason I bring that up is there was a belief that Broadcom really wasn't interested in long tail mobile they were really just focused on one, maybe 1.5, And there could be this pretty big opportunity for combo chips and other across the long tail.

Of mobile. And so I was wondering if you could weigh in on that Op opportunity. And if maybe three or four years from now, do you think mobile will be larger from this deal? Or do you think Coro IoT will be larger from this deal? Thank you. Hey, Chris, that's a great question. And if you look at our announcement, one of the benefits that we received as part of this transaction is the expansion of the field of use. So we're now able to go into that ARVR segment consumer audio and importantly the Android smartphone segment. So going forward, I think there will be significant opportunities for us As we think about 2026 and 2027, in terms of penetrating some of these other Android accounts on the smartphone side. So that will be a focus of the team. Still early days given that we just closed the transaction this quarter. But definitely an area of focus for us as we think about the next [indiscernible] to four years. Know Venkat, do you want to add to that?

Yes. I think other markets that we will be able to address with this technology will be in the IoT space like automotive, and ARVR glasses and earbuds and many other accessories. So it's just not going to be mobile, but it's also going to be [indiscernible] on the high end, high performance segment. That will be part of the IoT and our organic development in the broad markets will start to actually kick in In FY 'twenty six and 'twenty seven, I mean, the calendar year 'twenty six and 'twenty seven, that will help us grow even [indiscernible] the IoT wireless Okay, great. And I don't know if you wanted to to chime in on that question about what will be bigger a few years out, mobile or IoT, but I would appreciate that. And then if you could also talk about, let's say, UW that you're getting in this deal as well. I didn't know Broadcom had a great presence there. If you could maybe talk about about that opportunity and engagements and and how meaningful you think that could be on revenue as well? Thank you.

Yes. So if you look at the breakout, I think it's too early to call Chris between opportunity within core IoT. Obviously, those are both areas we'll continue to look at and prosecute over the next couple of years. If you look at UWB, I think Venkat, I'll let you answer this one here.

Yes. Chris, I think UWB is just an IP at this point. But the good thing about it is in the advanced seven nanometer process node, which should help us both coming up with a standalone product or integrated combo which will be needed for the high end IoT segment as well as the Androids ecosystem as well.

You're going to integrate that into WiFi Bluetooth?

At some point. As we look at these markets, I think as the UWB gets more traction, in the Android ecosystem, we will definitely consider that as well as building a standalone product and this Actually, will be very helpful for us to go after those markets.

Yes.

And I think just to highlight, right now, if you look at it, it's the IP that we get as part of this transaction And so And so that's what we will look at developing over the next couple of years. A lot of this will be dependent on where the market is. And the use of this technology. But the key piece is that we get the IP and we can proliferate that with our existing team and be able to develop that over the next several years.

Fantastic. Thanks guys.

Thank you. And our next question comes from the line of David Lejoeff Mizuho. Your question please. Hi, thanks for the question. I'm on for Vijay and Mizo.

First one, I was wondering on your Aastra Google platform, has that prior $300,000,000 changed and maybe related to the recent accelerated deep seek hype with like smaller and more performing models. I know you guys your models right now like millions of parameters, but just wondering if that has accelerated?

Yes. So one of the things that thanks for the question, by the way.

Is Ken. One of the questions or one of the items that we did talk about on our last call was the pipeline for Astra. And we talked about it being $300,000,000 or so that continues to grow. So the interest not a surprise, continues to grow. As people think about applications and the proliferation of AI2 the edge. So it's an we won't provide specifics on the pipe But what I can say is that there continues to be strong interest across a variety of applications and to use this Astra technology as the chipset at the edge. But maybe Vikram, you want to comment further just on on the trends that you're seeing at a very high level.

No, I think you've covered it. The thing that I would say is that subsequent to the Google announcement, we have seen even more traction with our customer base. So the funnel is growing definitely faster and Again, it's been a validation coming from a really important hyperscaler of our technology, which is actually helping it And just to add to your Deep Sea comment, that's another you are actually spot on that given what DeepSpeak has been able to show there is going to be a proliferation of models going all the way from the high end down to the edge and that just benefits And the other aspect, which is being highlighted by Deepseak is the fact that they relied on the open source community and that's something that they're also stressing with the collaboration, which is [indiscernible] to us as a silicon player All of this is going to definitely help catalyze our move into the AI Perfect.

Thank you. And I guess my follow-up, I wanted to ask your user presence at Bell, a 10% to 15% attach rate. Has that changed? Is your new win at the other OEM similar, different? Yes, any color there would be great.

Yes. So one of the things that we did highlight at CES was this UPD technology. And so what we talked about on the formal transcript the fact that we've penetrated one account, we don't name names. And we've now penetrated another large account in the compute space. And so it just is a a data point and shows the traction that we're gaining with our UPD technology. As we expand from one OEM into another very large OEM. We won't talk about the exact penetration rates but I think what you can take from this is that we're continuing to expand our capabilities within that space and continuing to win market share at new OEMs. I think those are both positive signs not only for the adoption of this technology, but for Synaptics as a supplier. I don't know Satish, if you want to add to this.

No, Ken, I think you answered it appropriately. Our goal here on the PC cycle is to increase the number of components that we sell within the PC And like Ken said, we are not talking about attach rates specifically here.

But the traction we are getting is pretty good. And we are bullish about the technology.

Thank you. Thank you. And our next question comes from the line of Peter Peng from JPMorgan. Your question please.

Hey guys, good job on the execution and thanks for taking my question. I want to go back to the incremental $10,000,000 revenue per quarter. Maybe if you can just rank order the top three or four things that are giving you confidence at this early juncture of being able to drive this kind of growth?

Yes, sure, Peter. I think it's a good question, right. We don't provide guidance more than one quarter ahead, but we wanted to provide some context [indiscernible] and it's a couple of factors. One, I would just say, if you look at the visibility we have based on backlog and bookings, those continue to improve especially where we were from six months ago. So definitely feel much more comfortable with the visibility that we have over the next few quarters. Number two, would say from an inventory standpoint, it's one of the things that we have highlighted and talked about in [indiscernible] But inventories are very lean right now. Not only for us, but I think other suppliers as well. I think that's a good sign because as you think about demand trends now We are now seeing those demand trends impact our revenues, whereas before some of those demand trends were just pulling from the distribution channel And so those are good signs for us And then the third one is just continued build out of our portfolio. We're starting to and continue to see ramps especially in the core IoT segment and specifically around the wireless side. This goes beyond the Broadcom acquisition.

And so continuing to see momentum there as well as our other franchise businesses. One of the things that maybe we don't highlight enough is that we have strong number one or number two positions in a lot of key markets targeting enterprise, automotive and the mobile space. And so we continue to execute on growing our share and continue to execute On new product development and that's the confidence I have as I look out over the next three quarters or so.

Got it. And then We talked a lot about the revenue implications of the transaction. Maybe you can a little bit on the margin front and maybe how that could be beneficial or impact your margin mix going forward?

Yes, I think look, we don't comment on a go forward basis You saw the margin guide here for our next quarter I think the midpoint right at about 53.5% I think that's a reasonable range. A lot of this will depend on the mix. And I would say even the mix within the mix right. So we're not going to forecast that margin as we think about June, September, December quarters. What we wanted to try to outline is just where and how the trajectory of the business is sequentially. As we think about the next few quarters. And that's look, things can change. We're in a lower growth environment. But we feel pretty strongly that we have a great path to grow here throughout this calendar year. Could there be more revenues in one quarter and less than another? Absolutely. But we have a good path here and a good backlog and bookings trend to support that.

Perfect. Thank you guys.

Thank you. And our final question for today comes from the line of Martin Yang from Oppco. Your question please.

Hi, thank you for taking my question.

I'm curious about your thought of immediate synergy between your position in the high end premium touch and the Android community for wireless Broadcom brought you do you see any bottleneck opportunities in the near term to media term?

And any way for you to expand your aggregate presence among the Android OEMs?

Yes. So if you look at the history of the company, We have a strong presence in the touch market. And a strong history there. And if you look for today's growth rate in terms of the mobile space, Today, we're very much focused on the high end Android market. That's the go forward path. And I think with this acquisition of these Broadcom assets, we're now able to have a complementary portfolio of not only the touch but also Wi Fi and next generation Wi Fi, especially as we think about Wi on a go forward basis. So from a customer standpoint, same types of customers that we've been servicing for the last several years and more than a decade here terms of the Android platforms globally. But now we have an incremental ability to service them with Wi Fi chipsets and wireless technology on a go forward basis. So very exciting for us. Early days, right? So I want to make sure that's outlined, but very exciting as we think about 2026, but really 2027 and beyond win those designs and gain further scale. But Venkat or Satish, anything else?

Yes, I can add, right. So in general, I think there was a question earlier as well, what do we do about the long tail and InTouch we are shipping in a premium segment of Android phones across all of these customers and we have a presence at each of these customers And the reason we win is because of the differentiated technology that we have for these high end flexible OLED screens I think with the wireless acquisition, we have similar differentiated technology So it gives us the ability to go tackle and address these with the same set of vendors that we are already very familiar So it presents a good opportunity for us [indiscernible] to expand our presence at these customers.

Thank you. I have one more question on the PC market recovery. So if we assume PC or high NTC demand comes back in '25 or '26, Is there any way to look at the different product segments UPD, [indiscernible] do they come back in the same pace or is there any or even video interface included any one of the product categories will recover at a faster pace than market?

Yes.

So if I look at the overall PC space, I mean what we have seen is some seasonal trends. But looking back over the last year, we've seen a nice steady improvement in both the PC and the peripheral market. Think one of the things that that we should highlight is we also continue to gain share with one of the large OEMs And so that's helped us as we think about the business. There'll still be some seasonal trends in any given quarter. But we continue to win share and continue to grow the revenue base there. The one thing that we did highlight on the formal presentation is that we still haven't seen this refresh cycle. So if you just look back typically, enterprises refresh in every four years or every five years. And so we haven't seen this significant upgrade that we would expect or maybe some investors expect Could it happen later in 2025? The answer is it could. We're just not seeing it today. But the reality is sometime between '25 and '26, we would expect that a lot of the large enterprises will start to refresh their enterprise PCs and along with that should come a lot of peripheral refreshes as well.

But Satish, do you want to add to this?

Yes, Ken, you answered very well already. In general, we are trying to gain share in that market by doing new technologies and infusing AI into touch pads, fingerprints and so on. But the effects of those will be seen later. In the short term, I think we'll continue to see and track the seasonal trends of PCs.

And like Ken said, should the refresh cycle happen, we can see an upside. But right now, it's seasonal trend that we continue to see.

Thank you very much.

It for me.

Thank you. This does conclude the question and answer session as well as today's program. Thank you, ladies and gentlemen, for your participation. You may now disconnect. Good day.