Synaptics Incorporated

Hello, and welcome to Synaptic's fourth quarter fiscal year 2025 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand has been raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Munjal Shah, Vice President, Investor Relations.

Good afternoon, and thank you for joining us today on Synaptic's fourth quarter and fiscal 2025 conference call. My name is Munjal Shah, and I am the Head of Investor Relations. With me on today's call are Rahul Patel, a President and CEO. and Ken Rizvi, our CFO. This call is being broadcast live over the web and can be accessed from the investor relations section of the company's website at Synaptics.com. In addition to a copy of our earnings press release detailing our quarterly results, a supplemental slide presentation and a copy of the prepared remarks have been posted on our investor relations website. Today's discussion of financial results is presented on a GAAP financial basis along with supplementary results on a non-GAAP basis, which excludes share-based compensation, acquisition-related costs, and certain other non-cash or recurring or non-recurring items. Please refer to our earnings press release for a reconciliation of the most directly comparable GAAP financial measures to the non-GAAP financial measures presented. As a reminder, the matters we are discussing today in our prepared remarks, in our supplementary materials, and in response to your questions may contain forward-looking statements. These forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. Although Synaptics believes these estimates and assumptions underlying these forward-looking statements to be reasonable, they are subject to a number of risks and uncertainties beyond our control. Synaptics cautions that actual results may differ materially from any future performance suggested in the company's forward-looking statement. Therefore, we refer you to the company's earnings release issued today and our current and periodic reports filed with the SEC, including our most recent annual report on Form 10-K and quarterly report on Form 10-Q for important risk factors that could cause actual results differ materially from those contained in any forward-looking statement. All forward-looking statements speak only as of the date hereof or the date specified on the call. Except as required by law, Synaptics expressly disclaims any obligation to update this forward-looking information. I will now turn the call over to Rahul.

Thank you, Munjal. Good afternoon, everyone, and thank you for joining our fiscal and Q4 2025 earnings call. I am excited to speak with you today. I will start with a brief introduction, outline my initial observations and discuss strategic updates for the company. I will then cover highlights from our fourth quarter and turn the call over to Ken for financial results and guidance. I have spent three decades driving growth in semiconductor industry, including more than 20 years in senior leadership roles at Qualcomm and Broadcom. At Qualcomm, I led the IoT business, scaling it from under $1 billion to multi-billion dollars. This success was built on delivering highly differentiated products and compelling technology roadmaps, strategically positioning the business for sustained growth, market leadership, and enduring customer relationships. I am energized. by the opportunity to scale Synaptics into a much larger and differentiated core IoT and edge AI semiconductor solutions player. In the past two months, I have engaged closely with customers, partners, suppliers, and our employees to better understand our strengths and opportunities. Synaptics has a strong foundation in analog mixed signal, multi-core processors, and wireless connectivity intellectual property. I believe that the combination of these three capabilities uniquely position the company in core IoT to deliver long-term value for our stakeholders. Our engineering talent, technology portfolio, roadmap of differentiated products and solutions, and customer intimacy position us well for leadership and growth. We are leveraging our strong foundation to accelerate growth in core IoT, investing strategically in engineering, sharpening our go-to-market execution, and delivering innovative, scalable platforms that align with our customers' need for performance, integration, and flexibility, from industrial automation to smart home applications. Synaptics is uniquely positioned to capitalize on a vast emerging opportunity. With unmatched capabilities in sensing, processing, and connectivity, we are driving differentiated solutions in Core IoT and Edge AI. From my vantage point, our priorities are clear. We plan to actively pursue opportunities to expand our share in our existing markets and explore new ones with with the goal of accelerating growth in our core IoT business. We will continue evaluating our product portfolio and shape our products and solutions roadmap that we believe will position us for sustained success over the medium and long term. We expect to maintain a disciplined execution strategy that prioritizes investments in areas that offer the highest potential for sustained and profitable growth. We look forward to providing more details at Synaptics' analyst day in 2026. Moving to our results and business update. We just completed our fiscal year 2025 with revenue increasing 12% to $1,074,000,000. This growth was driven by strong performance of our core IoT products, which grew 53% year over year and accounted for approximately one quarter of total company sales. As we enter fiscal 2026, we continue to focus on driving top-line growth and increasing earnings while also continuing to invest in our growth initiatives. For our fiscal fourth quarter, which ended in June 2025, revenue was $282.8 million, slightly above midpoint of our guidance and up 14% year over year. Non-GAAP gross margin was 53.5% in line with the midpoint of our guidance and non-GAAP EPS of $1.01 increased 58% year over year and was also in line with the midpoint of our guidance. Our core IoT product sales increased 55% year-over-year in fiscal Q4 to $84 million, fueled by a strong contribution from our wireless portfolio. As we look to the future, our new Synaptics Wi-Fi 7 solutions introduced last quarter are gaining meaningful traction, offering a range of products from high performance to low power capabilities. We see design opportunities across a wide range of customers for IoT, enterprise, and automotive applications. These designs are expected to ramp throughout 2026 and beyond as customers launch their next generation of products. We have confidence that Synaptics is well positioned to gain market share during the Wi-Fi 7 technology transition. Moving on to our portfolio of processors. The team has done an excellent job taping out our latest Edge AI native Astra processors. This new portfolio integrates a neural processor co-developed with Google Research, which supports transformer-based architecture. This enables native execution of generative AI applications at the Edge to support text, video, vision, audio, and predictive maintenance workloads. It supports both current AI use cases and emerging AI models across a broad range of IoT applications and delivers high performance and low power consumption at truly disruptive price point. We believe that tight integration with our market leading wireless connectivity solutions enables our customers to implement differentiated and affordable end applications. We are making great progress with lead customers and engineering samples are expected this quarter. We expect initial revenue contributions to start in the second half of calendar 2026. While we are seeing a strong momentum in product development, design wins, and pipeline expansion for our new platforms, our existing processor products are also gaining traction, benefiting from demand recovery and normalized inventories. We continue to see our design wins ramping into various deployments at key customers in 2026. We have secured a marquee win with the leading audio OEM. They chose us because of our ability to provide agile, ready, Silicon comprehensive software, robust connectivity, broad IOT ecosystem support and hardware security. Overall, Our core IoT pipeline continues to grow and gain momentum. Turning to enterprise and automotive, we continue to see modest recovery across our enterprise portfolio. While auto trends are improving, we are not seeing a broad-based PC refresh cycle just yet. In automotive, demand remains soft in line with the market segment. While we do not anticipate a material near-term recovery, We remain confident in the long-term potential driven by our innovative video display bridge solutions and adoption of OLED screens. Finally, mobile touch performed better than our initial expectations and delivered solid sequential growth. Our portfolio is primarily targeted at the high Android smartphone market, where we saw healthy demand across multiple customers. We are seeing strong traction for our latest touch architecture designed for foldable phones and other large screen applications. We are optimistic about the opportunity as the share of foldable phones continue to grow. We continue to collaborate with multiple OEMs for their current and next-gen designs. Overall, business continues to improve as orders are steadily increasing. the backlog is growing and channel inventories remain lean. Our pipeline of opportunities continues to expand and we remain confident in our ability to maintain our position in enterprise and automotive mobile touch and drive long-term growth in core IoT. With disciplined execution, we expect to deliver sustainable growth across our portfolio and create long-term shareholder value. In my time here so far, I have focused on deepening connections with our employees, customers, suppliers, and partners. I'm now looking forward to building strong partnerships with our analysts and investors. We plan to be on the road in the coming weeks, and I hope to meet several of you in person. I will turn the call over to Ken to review our fourth quarter, fiscal year 2025 financial results, and our fiscal 2026 first quarter outlook.