Synaptics (SYNA) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue reached $267.2M, up 13% year-over-year, with Core IoT products growing 63% and strong contributions from Enterprise & Automotive; Mobile segment declined due to lower demand.

• Non-GAAP EPS was $0.92, up 61% year-over-year; GAAP net income was $1.8M, reversing a prior year loss.

• Leadership transition underway as CEO resigned; interim CEO and board are searching for a permanent replacement.

• Closed a $198M all-cash Broadcom transaction, expanding wireless, Wi-Fi, Bluetooth, UWB, and GPS/GNSS portfolios, expected to add $40M+ in annualized sales and be accretive to non-GAAP EPS.

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

Financial highlights

• Q2 revenue was $267.2M, up 13% year-over-year and 4% sequentially; Core IoT revenue was $61.1M (+63% YoY), Enterprise & Automotive $159.1M (+16.5% YoY), Mobile $47.0M (-25.3% YoY).

• Non-GAAP gross margin was 53.6%; GAAP gross margin was 45.7%.

• Non-GAAP operating margin was 17.3%, up 360 bps year-over-year; GAAP operating loss for Q2 was $15.2M.

• Cash and equivalents at quarter-end were $596.1M; net debt reduced to $832.5M after retiring $582M Term Loan B.

• Cash flow from operations was $24M for the quarter; days sales outstanding 49 days; inventory 87 days.

Outlook and guidance

• Q3 FY25 revenue guidance is $265M at midpoint, with non-GAAP gross margin expected at 53.5% ±1.0% and non-GAAP EPS guidance of $0.85 ±$0.20.

• Revenue mix for Q3 projected as 25% Core IoT, 58% Enterprise & Auto, 17% Mobile.

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

• Guidance incorporates Broadcom asset acquisition, with some fair value assessments pending.

• Management expects restructuring actions to complete by end of FY2025, targeting $16M in charges.