Synaptics Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Neil Young - Needham & Co. - Analyst : Hey, guys. It's Neil Young on for Quinn Bolton. Thanks for taking the question. So you talked about the $40 million in annualized sales from the Broadcom transaction. Is that coming more into the core IoT segment or more into Mobile? Any color would be appreciated.

Question: Neil Young - Needham & Co. - Analyst : Okay, great. Thanks. And then any specific areas that are driving the improvement in bookings and orders and enterprise? Maybe any areas of weakness within that you wanted to call out, as well.

Question: Neil Young - Needham & Co. - Analyst : Yeah. 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 the flip side, any areas of weakness within enterprise? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 10:00PM, SYNA.OQ - Q2 2025 Synaptics Inc Earnings Call

Question: Neil Young - Needham & Co. - Analyst : Great. Thank you.

Question: Kevin Cassidy - Rosenblatt Securities - Analyst : 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 AR/VR market. Can you say -- are there designs in progress in those markets that maybe would be coming to production, say in the second half of this year or near term, anyway?

Question: Kevin Cassidy - Rosenblatt Securities - Analyst : Yeah. Sorry, I had a little trouble hearing that answer. But yeah, because that I think you've mentioned what I'm going to ask next about, maybe with all this Wi-FI or just say wireless connectivity, that it will help you sell your processors into the AI network edge market. And you know, what percentage of -- it would you say your wireless connectivity customers can adapt your processes also.

Question: Kevin Cassidy - Rosenblatt Securities - Analyst : Okay. Great. Thank you.

Question: Krish Sankar - TD Cowen - Analyst : Yeah. Hi. Thank you to 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 being in this $250 million-plus amount, $50 million revenue run rate for almost like eight quarters or two years now. So if we strip out this Broadcom deal, I'm curious, are we just waiting for the cycle to inflect? Or do you see any kind of inflection coming imminently? Because I'm just wondering -- is this something Synaptics can do to outperform or generate out of the cycle compared to what we've been in this kind of a lull for like two years and then a follow up?

Question: Krish Sankar - TD Cowen - Analyst : Got you. Got you. Thanks for that explanation, Ken. Just a clarification, the follow-up question. The $10 million incremental revenue in June quarter, is that part of the $40 million run rate from the Broadcom acquisition?

Question: Krish Sankar - TD Cowen - Analyst : And then --

Question: Krish Sankar - TD Cowen - Analyst : Yeah. Yeah. I got it. Got it. Thanks a lot, Munjal. And I just like to 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 sequence in June should be up from March, September, [should have] from June and so on?

Question: Krish Sankar - TD Cowen - Analyst : Awesome. Thank you again for the incremental color. Thank you. Appreciate it. Thank you.

Question: Christopher Rolland - Susquehanna Financial Group - Analyst : Hey, Ken, thanks for the question. So yeah, 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 customers. 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 opportunity. And if maybe, three or four years from now, do you think Mobile will be larger from this deal? Or do you think [coal] IoT will be larger from this deal? Thank you.

Question: Christopher Rolland - Susquehanna Financial Group - Analyst : Okay, great. And I don't know if you wanted 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 UWB 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 that opportunity and engagements and how meaningful you think that could be on revenue as well. Thank you.

Question: Christopher Rolland - Susquehanna Financial Group - Analyst : You're going to integrate that into Wi-FI Bluetooth?

Question: Christopher Rolland - Susquehanna Financial Group - Analyst : Fantastic. Thanks, guys.

Question: David Lee - Mizuho Securities USA Inc. - Analyst : Hi, thanks for the question. I'm on for Vijay of Mizuho. First one, I was wondering on your Astra Google platform. Has that prior $300 million funnel changed and maybe related to the recent accelerated deep seek hype with like smaller more performer model? I know you guys -- your models right now like millions of parameters. But just wondering if that has accelerated?

Question: David Lee - Mizuho Securities USA Inc. - Analyst : Thank you. And I guess my follow up, I wanted to ask your user presence at Dell at 10% to 15% hatch rate? Is -- has that changed? Is your new one at the other OEM, similar, different? Yeah. Any color that would be great.

Question: David Lee - Mizuho Securities USA Inc. - Analyst : Thank you.

Question: Peter Peng - JP Morgan - Analyst : Hey guys, good job on the execution. And thanks for taking my question. I want to go back to the incremental $10 million 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.

Question: Peter Peng - JP Morgan - Analyst : Got it. And then we talked a lot about the revenue implications of the transaction. Maybe you can touch a little bit on the margin front and maybe how that is -- could be beneficial or impact, your margin mix going forward?

Question: Peter Peng - JP Morgan - Analyst : Perfect. Thank you, guys. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 10:00PM, SYNA.OQ - Q2 2025 Synaptics Inc Earnings Call

Question: Martin Yang - Oppenheimer & Co. - Analyst : Hi, thank you for taking my question. I'm curious about your thought of immediate synergy between your position, the high-end premium touch. And the Android opportunity for wireless that Broadcom brought you. Do you see any bundling opportunities in the near term to immediate term? And any way for you to expand your aggregate presence among the Android OEMs?

Question: Martin Yang - Oppenheimer & Co. - Analyst : Thank you. I have one more question the PC market recovery. So if we assume PC or high-end PC demand comes back in '25 or '26. Is there any way to look at the different product segments, UPD sensors, a touch pad. Do they come back in the same pace? Or is there any one or even video video interface included? Any one of the product categories will recover at a faster pace than market? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 10:00PM, SYNA.OQ - Q2 2025 Synaptics Inc Earnings Call

Question: Martin Yang - Oppenheimer & Co. - Analyst : Thank you very much. That's it for me.