Synaptics (SYNA) Q2 2025 earnings summary

Executive summary

• CEO Michael Hurlston resigned, with CFO Ken Rizvi appointed interim CEO and a search for a permanent replacement underway.

• Strategic focus remains on core product lines in Enterprise, Automotive, and Mobile Touch, with significant growth opportunities in Core IoT, supported by acquisitions and partnerships including Broadcom and Google.

• Completed a $198M all-cash Broadcom transaction, expanding wireless portfolio, expected to add $40M+ in annualized sales and be accretive to non-GAAP EPS.

• Collaboration with Google to integrate MLIR-compliant machine learning core into Astra processors, enhancing Edge AI capabilities.

• Repurchased approximately one million shares for $74.5M, returning capital to shareholders.

Financial highlights

• Q2 FY25 revenue reached $267.2M, up 13% year-over-year and 4% sequentially, led by Core IoT and Enterprise & Automotive.

• Non-GAAP gross margin was 53.6%, slightly above guidance midpoint; GAAP gross margin was 45.7%.

• Non-GAAP EPS was $0.92, up 61% year-over-year and 14% sequentially; GAAP EPS was $0.05.

• Core IoT product sales grew 63% year-over-year to $61M; Enterprise & Automotive up 17% year-over-year; Mobile Touch revenue declined 25% year-over-year.

• Cash and equivalents at quarter-end were $596M; total debt reduced to $832.5M after retiring $582M Term Loan B.

Outlook and guidance

• Q3 FY25 revenue guidance is $265M midpoint, including partial Broadcom contribution; non-GAAP gross margin expected at 53.5% midpoint.

• Non-GAAP EPS guidance for Q3 is $0.85 per share at midpoint.

• Sequential revenue growth anticipated through calendar 2025, driven by Core IoT and Broadcom assets.

• Guidance reflects seasonality but anticipates continued year-over-year growth.