Synaptics Reports 12.7% Revenue Growth to $267.2 Million in Latest Quarter

Synaptics Incorporated reported a net revenue of $267.2 million for the three months ended December 28, 2024, marking a 12.7% increase from $237.0 million in the same period last year. For the six months ended December 2024, revenue reached $524.9 million, up 10.6% from $474.7 million in the prior year. The company achieved a gross margin of $122.2 million, or 45.7% of net revenue, for the latest quarter, slightly down from 46.0% a year earlier. The net income for the quarter was $1.8 million, a significant improvement from a loss of $9.0 million in the same quarter of 2023.

The financial performance reflects notable changes compared to the previous fiscal period, particularly in the Enterprise and Automotive product applications, which generated $159.1 million, a 16.5% increase year-over-year. The Core IoT segment saw a substantial revenue increase of 62.9%, driven by higher unit sales and average selling prices. Conversely, the Mobile product applications experienced a decline, with revenue dropping 25.3% due to decreased demand and lower average selling prices.

Strategically, Synaptics has made significant moves, including the issuance of $450 million in Convertible Senior Notes due 2031, which will help finance operations and support share repurchases. The company also repurchased $74.5 million worth of its common stock during the six months ended December 2024. Additionally, Synaptics announced an asset purchase agreement with Broadcom to acquire certain assets related to an Android customer for $198 million, which is expected to enhance its product offerings in the IoT and Android ecosystem.

Operationally, Synaptics reported a total employee headcount of approximately 1,200 as of December 2024, reflecting ongoing restructuring efforts aimed at improving efficiency and reducing costs. The company has also initiated restructuring actions that are expected to incur approximately $16 million in charges, with $15 million already recorded in the first half of fiscal 2025. The restructuring is part of a broader strategy to align the business with market conditions and focus on key growth initiatives.

Looking ahead, Synaptics remains cautiously optimistic about its financial outlook, despite potential challenges posed by macroeconomic factors and geopolitical tensions, including the ongoing Israel-Hamas conflict. The company anticipates continued revenue growth driven by its Core IoT and Enterprise and Automotive segments, while also managing costs and enhancing operational efficiencies. The successful execution of its strategic initiatives, including the integration of new technologies and products, will be critical to achieving its long-term objectives.