Synaptics (SYNA) Q1 2025 earnings summary

Executive summary

• Q1 FY25 revenue reached $258M, up 8.4% year-over-year and 4% sequentially, driven by 55% growth in Core IoT and strong performance in Mobile, while Enterprise & Automotive declined.

• Non-GAAP EPS increased 56% year-over-year to $0.81, while GAAP net loss narrowed to $23.1M ($0.58 per share), reflecting improved gross margin and lower R&D expenses.

• New product introductions and design wins in wireless, processors, and video interface segments, including Astra platform's 2024 EDGE Award, are fueling growth.

• Inventory headwinds have eased, and restructuring actions in Q1 FY25 incurred $14.2M in charges to focus on growth initiatives and reduce costs.

• Core IoT design pipeline expanded nearly 30% year-over-year, supporting a projected 25%-30% compounded revenue growth over the next five years.

Financial highlights

• Q1 revenue: $257.7M–$258M; Core IoT contributed 22%–23%, Enterprise & Automotive 57%–59%, Mobile 17%–20%.

• Non-GAAP gross margin: 53.9%; GAAP gross margin: 46.9%.

• Non-GAAP net income: $32.5M; non-GAAP EPS: $0.81 per share; GAAP net loss: $23.1M.

• Cash and equivalents: $853.6M–$854M; cash used in operations: $11.4M, impacted by a one-time $30M IP onshoring tax payment.

• Inventory: $119.6M; days sales outstanding: 47 days, down from 52 last quarter.

Outlook and guidance

• Q2 FY25 revenue guidance: $265M at midpoint (±$15M); sequential growth expected.

• Q2 non-GAAP gross margin: 53.5% at midpoint (±1%); non-GAAP EPS: $0.85 at midpoint (±$0.20).

• Revenue mix for Q2: 24% Core IoT, 59% Enterprise & Automotive, 17% Mobile.

• Management expects macroeconomic headwinds, including supply chain constraints, inflation, and global political unrest, to continue impacting demand.

• Continued focus on expense management and investment for long-term growth.