SYNA - Earnings call transcript Q1 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Synaptics First Quarter Fiscal 2018 Conference Call. Today's call is being recorded. And at this time, I would like to turn the conference over to Jennifer Jarman. Please go ahead.

Jennifer Jarman

Thank you, Matt and good afternoon and thank you for joining us today on Synaptics' first quarter 2018 conference call. being from over of the website Synaptics.com. also can web the is at accessed be Investor call broadcast the live and company's This Relations section CEO, call Bergman, With are on Ali, CFO. today's President me and and Wajid Rick

GAAP to close excludes refer also which provide management addition for recurring Please market acquisition-related compensation, issued the cost on In press non-GAAP and other results, non-GAAP or non-cash items. results or a will detailed a reconciliation to release company's the GAAP today basis, share-based supplementary and certain after non-recurring of results.

to Additionally, we statements. would the you like make call, remind conference of Synaptics forward-looking will course this during that

statements condition, business. Forward-looking to expectations operations, relating performance projections our results and our financial give plans, current and of objectives, future

Rick assumptions control, performance any and that periodic prove Synaptics factors those statements. the We filed believes will could to statement. reasonable, number actual with differ turn refer the estimates company's be you results Synaptics' a to risk year ended Rick? to inaccurate. from I the now Synaptics they and any may our this risks future subject our and actual beyond Form may Bergman. reports cause including to suggested Synaptics contained forward-looking from cautions of current the in obligation and to company's to June in XX, disclaims the be any uncertainties differ information. for expressly are Although important for materially materially the results XXXX, call update forward-looking XX-K SEC, fiscal that forward-looking over to

Richard A. Bergman

first revenue IoT $XXX is that first very from pleased major two I the to the everyone during Synaptics our this that drivers million. We growth complete business. to for financial welcome quarter with we're Synaptics. to total to contributions Subsequently, to out will call. of be breaking the period important acquisitions like would I for and report solid a quarter Jennifer, am were pleased fiscal Thanks, today's

our in quarter Consumer whole, expected XX% total for QX. revenue nearly a a our IoT of of in is and represent As QX revenue accounted business to

a bottom On diluted while the per GAAP $X.XX. non-GAAP $X.XX, primarily loss acquisition-related line, we share items, earnings per posted share reflecting was of

slide positive chapter new technology exciting audio an for the our addition to the position diversification quarterly Synaptics, IP an voice, addressable we presentation. You'll of world's is also video this note today. our for X-K our We embarked on these posted The recent have from an supplemental earlier listened supplementary for and earnings feedback interface first our we of next significant transition With filed high financial through in investors company. also base is The the with been as platform believe And human our add expected and extending the slides to SEC advanced acquisitions, drive time, a helpful Form a additional leading into as of exhibit on the our moving current our results. slides presentation expansion market. have total that furnished customer business report to our growth company. that on the and color and

areas. businesses our re-channel the that evaluate to our under-performing legacy resources we've through growth working an of provided and two businesses integrate these to has the opportunity new to As it synergies, and new on exciting been some resulting capitalize are

the our includes to with IoT display displays In around market, and OLED our both in-display addition development Consumer mobile fingerprint for work new Infinity drivers. solutions platform, this

business. down drill around with the specifics mobile starting let's our into Now QX,

to featuring Huawei is six presence adding Samsung to ID phones. to are Galaxy ZenFones. our sensors capacitive X, AQUOS its front, us us for Note more top-tier at of our flagship several fingerprint smartphones, our the These current biometrics while ASUS number models. also selected than OEMs. from featured on from Natural value previously mobile Huawei the fingerprint new high-profile On several of a on several sensors smartphones for include growing chose Sharp ranging models, models announced

While optical on the smartphones, will low-end Android With remain sensors choice flagship by be for win. the sensors capacitive to be capacity our innovation sensors we in replaced most the eventually fingerprint positioned believe broader well early optical, of we market. remain will

And As post our developments interim, remain mass we mentioned in including start are on track the half launch manufacturers. dozen to year. sampling Mobile calendar towards by mass the of solution, display production These the end last World quarter, production customer Chinese a progressing customers over a are optical Congress key cycle. with top-tier the

Huawei product ratios with continues from industry's top products with our displays TouchView displays TDDI various product breadth these models XX:X, technology. products and most world's TouchView brands. fingerprint up on our solutions, Natural a and further both we of including four displays. and the TouchView cover that extending market ID smartphones. with the resolutions HD TDDI shift TDDI broadest to market sensors. featured mobile supporting We of up are portfolio WQHD+, Recently, amorphous expansion solutions display Recently, our extra-long displays all Notably, business and to TDDI aspect Synaptics significant three see support line, new adoption the now silicon over have drive now Infinity the a significant a LTPS, announced include display Infinity of portfolio. now TDDIs we the with TDDI Our announced as dozen latest with towards half our smartphones, TouchView for technologies deployed our IGZO shipping LCD the of to full

many from our quarter the and are launched Sony. products on featured customers latest the Xiaomi, to OLED and solutions, new who include of touch Additional TDDI customers smartphones our Motorola, Google, Jumping in controllers OPPO, OPPO TCL discrete with including our phones Vivo.

phones, into also Huawei, are including controllers latest LCD ZTE models touch Our Xiaomi. from Motorola, high-volume designed and the

design wins driver emerging ramp TDDIs, and drive production. that to our we revenue, with new believe manufacturers On into will leading as strong discrete display a the the in front, position feature be we OLED OLED

continue OLED we are and for last development our milestones are execute DDIC of DDICs. to well sampled pleased key underway on to we display manufacturers, As OLED I quarter, the that on We panel we report drivers. OLED second-generation in development our successfully first OLED mentioned multiple

to sensors, share with move laptop. our PC notebook we XXX audio. who to selected A recent market our Lenovo, and is and fingerprint business, popular touchpad, where win with note its in continue our touchpad for lead Let's design Yoga both fingerprint solutions of

Other We Inspiron ACER and the XXXX features and featuring are X, new as increased increasingly including enterprises PCs, adoption especially to PC hackers. in models Switch our design activity series, security the looking enterprise industry-leading the seeing includes fingerprint XXXX from touchpads. Dell, on protect recent from devices all market, are of our

notebooks, for and stations with we mobility displayed XXXX addition AudioSmart at In And acquired PC Lenovo Lenovo. ThinkPad multiple and HP, IdeaPad and solutions PCs. XXXX XXXX won business our as we've Dell docking of HP's and numerous XXX% platforms well won desktops as PCs,

our is significant The of us In bill in has notebooks. audio helping share devices. garner addition state-of-the-art LG industry-leading more materials a addition, AudioSmart and share technology won of of ASUS XXXX the of

our to automotive, progress in leveraging entire jump portfolio. making product are strong where Let's we

have drivers at and touch and Asia, at touch automotive display now controllers now locations design-ins Tier-Xs major qualified Europe for controllers. a five U.S. OEMs Our including We in European manufacturers major geographic Tier-X discrete of majority display and the key and are our

fingerprint for is to premier one expected these the integration deliver first European of world's Tier-X's a addition, OEM. In automotive

with thrilled road expect solutions. are in several announce fast-moving Synaptics' this on to we in the year We that are market, design half million fiscal place China the cars in wins and region a the

DDIC also and are we another We design-ins excited major announce major while for touch, in Japan, sensor. a to designed OEM our with has OEM that both in have U.S. fingerprint

IoT AudioSmart, which Synaptics our and on ImagingSmart, is this calendar main mobile platforms; to well voice into XXXX. with to automotive is is technology with are Next poised VideoSmart. voice. opportunities which in of building bring With modality market the year comprised we with also interface human we TDDI close will our I'll brought today. up, an my significant overview business, and success in our on of out the the solutions, fastest-growing section the fold, capitalize AudioSmart new market growth three

Our Genie engine within Amazon's way. to Line variety week, industry-leading And Anker speaker. by the signal interface leading we Corporation as background of ecosystems for speaker for a Korea, selected the announced or Alexa smart AudioSmart area its Synaptics for technology Japan, the the to wanting we lever Platinum. Corporation been quarter the interest is products this were services. during by we the speaker-based smart the of of speech AudioSmart featuring separates released speakers brands speech for participating noise, to and develop assistants AudioSmart Early announced selected far-field the for and recognition the the and Alexa its smart subsidiary, growing for from Eufy Naver the vendor AudioSmart-enabled of TicHome with has market, category, FABRIQ Harman Other iLive a new Clova. One Mini Mobvoi voice Korean Chinese quarter, signals is and digital our Chorus for DSP assistant, recommended speech accuracy. virtual market, Line's consumers include Allure, process only Kakao similar last

market. far-field In speaker addition, a NTT for the announced based Japanese DOCOMO bluetooth

products clock addition many a unique docking Amazon by smart station. are from there powered leveraging from and GE, the including to iHome, emerging Several speakers, Alexa, a in are smart lamp market a In Lenovo AudioSmart.

robot has Tencent Q addition, In announced its AudioSmart. video-recognizing with

on focuses as such personal business earbuds. AudioSmart our of piece and audio, headsets Another

latest headsets Beach its wireless for audio SteelSeries, and gaming-focused headsets, Turtle a gaming, its model USB us released the series for featuring companies, technology. CIRCLE a our audio us and for office. selected Plantronics high-performance quarter, the chose Sennheiser amplifiers. headset And During HyperX Xbox including and for GSX

way our in chips smartphone. business to and generate to video Let's this multimedia ImagingSmart maintain leadership directly our new can its our markets. move of side now print SoC IoT leverages from includes and market solid portfolio printer fax printer, solutions you our that This we space. the your core piece on who smart for are consumer HP, solutions the as plug used processing selected where our margins Recent to pocket ecosystem sixth-generation over-the-top for revenue VideoSmart and ImagingSmart security home the activity The set-top the home for this continues entertainment. design and The leverages imaging global to devices, ongoing the VR/AR paradigm box shift viewing these VideoSmart an speakers. featuring and video HDR multimedia release capabilities, XK includes family independent smart boxes, and audio source of experience, integral progress immersive processing media market. video Recent solutions the deep solution Coupled deliver processing in the product in set-top are with solutions advanced area sophisticated platform streaming content material. consume to of people

we universe portfolio, Versatile being speakers. smart our Mini used By for markets. that and rapidly our global beyond its technologies business human we series activity smart that consumer and video addition, presence expand growth top to selected core were are relationships across not audio are design roaring LINK demonstrate is the our and adding home but and brands leading customer Google well in summary, drivers, In incorporating processors also existing off speakers into Harman in important the and Synaptics' base Home JBL new interface wins broaden new that start. continue execute have customer we today In to with only highlighted significantly by growing our IoT also footprint Kardon our smart our the voice, our a

we on very very diversification some and part anticipate integral the within which revenue smart market, are capitalizing a our will become exciting rapidly of profile. home We opportunities

and as with track to further business on San on technology we that, optical market Day key In feature showcasing let With color also DDIC. on our towards on to me on We OLED innovations. we technology delivering it Analyst/Investor our model look demos remain December where well forward providing mobile Jose, here in in our milestones over will fingerprint updates markets and at as addition, products new our Wajid. latest hand XX, the

Wajid Ali

$XXX.X a was multimedia the quarter, revenues when Revenue of the midpoint Marvell slightly above we million, Rick. guidance September the adjust of for business our Thanks, for range XX-week million. period, $XX.X

and the our increased acquisitions. IoT in revenue revenue as for demand display Conexant of partially PC Year-over-year, reflecting offset X%, well up from products. product businesses, an reflecting capacitive fingerprint was an quarter Marvell reduced for product as increase our down driver was IoT quarter primarily X% demand revenue by again in sequentially, acquisitions our revenue First multimedia and September from increase solutions,

the three During XX%. revenue threshold the XX%, quarter, above had XX% customers we and at XX%

between Conexant IoT, of acquisitions we out PC businesses the With products, of multimedia our mix our break business, the historical into to begin and mobile Marvell IoT. certain reclassifying revenue will and mobile including

September XX%, compared IoT mobile, reflected IoT XX% Revenue the were quarter. down year-ago up corresponding I non-GAAP and XX% provide released in was call, XX% the of Revenue down sequentially quarter. XXX% and sequentially, in compared Revenue XX% of September XXX% level As with in the XX% results, sequentially products from and respectively up from and presentation will X% of quarter. the advance PC certain year-over-year. and was this the quarter high now results. revenue GAAP products review products will materials from PC, with and from mobile year-ago our with was follow a

GAAP For XX.X%, September which asset compensation or In cost expenses million, September quarter loss intangibles margin million, GAAP restructuring million of of consisting gross per of intangible $XXX.X and value and of we net amortization, post-acquisition the of had program share-based includes million, charges, the were was a million the transitory includes cost. our share. $XX.X $XXX,XXX million, $XX.X in $X.XX adjustment September fair $X.X quarter, million of $XX.X operating share-based and severance-related $XX amortization compensation inventory cost. GAAP cost $X.X acquisition-related quarter, of of which and compensation

Now of September quarter turning non-GAAP results. to our certain

Our increase share, gross X% up high was quarter. operating non-GAAP per the $XX.X non-GAAP came September Non-GAAP the the but our operating cost income above as the of up of sequential primarily midpoint Non-GAAP include did our business was September year-over-year. end margin operating range decline, million guidance, acquired XX% or the incremental quarter and The reflects of mix. million, the our guidance expenses $XX preceding primarily of product costs. September $XXX.X the quarter million quarter slightly businesses. overall for expenses were diluted guidance above in multimedia Marvell not from $X.XX a net the reflects XX.X%

at Turning of quarter our recent common used our two related includes offset repurchase of $XXX debt for fair million, depreciation program, of million cash $XX.X used turns quarter $XXX by million the quarter. we a approximately approximately million, quarter sheet, DSOs provided adjustments. proceeds acquisitions, were partially million. with end X.X the of September and primarily of were and $XXX of $XXX from decrease the stock the $XX.X days, million was while of which the were balance was decrease during were to under the ended shares for of Receivables $XX XX value $XXX preceding million in inventories inventory the million The operations. purchase net cash, for to six, million $XX million $XX cash million stock were Capital $XXX expenditures and by and million

we color the provide outlook, Before review I to want some on our planned restructuring.

in two the place and are business and recognizing structure. of completion the acquisitions we With that changes carefully core markets, reviewed cost our methodically and operating taking our

operating exiting result structure, approximately review, reduce million actions with annualized of a take and our together synergies savings we will from intend that of acquisitions, $XX the As our cost fiscal to XXXX. streamline anticipate and

and forecasts, to revenue $XXX We as $XXX anticipate December this bookings, of well mix, for anticipate quarter, the product as range expected on also IoT, December investments the typically sell-in frontend-loaded offsetting to product subsequent the approximately incremental customer we our timing quarter million. be sell-through backlog in partially million of million $XXX in savings. Based patterns entering

We to and quarter in in for will be of outlook and mix particular a Consumer the We to GAAP now restructuring provide XXXX mobile, as the loss with expect period, to the our approximately I year expected range market respectively. $XX.X billion. our follow the of data. and challenging $XX and approximately revenue well charge million charges Due an quarter, be will stock-based to quarter fingerprint, the in be Also, capacitive include to a the million products PC we'd anticipate to now $XXX for at second $XXX XX% fiscal from compensation capacitive December will to significant design a operating revenue December expect range for million. like non-GAAP expenses the outlook quarter we to $X are million. customer, $X $X.X as the for data million, fingerprint be the million December update outlook GAAP in XX-week provide to in year. XX% XX%, IoT

operating charges $XX of will approximately include million intangibles million quarter approximately $XX in In of reflected sales. expenses addition, GAAP amortization, will non-cash which for be December cost of

inventory In to are reflected expected now be adjustments provide quarter. approximately to value I non-GAAP $XX cost $XX sales to addition, fair outlook our December in data of be will million. million for

We expect non-GAAP to gross XX%. between margin in be the December XX% quarter to

the to associated quarter-over-quarter our million expect We reflecting first million, incremental non-GAAP operating costs during in quarter $XXX to increase approximately to with that acquisitions the quarter. were completed expenses December $XXX

range in XXXX I quarters anticipate for remarks, the $X.XX share and first quarterly share. of per second current operating turn tax diluted future our We shaping back To of fiscal fiscal my Non-GAAP will rate to the up XX%. now anticipated our activities the We non-GAAP be range anticipated. as realized. be expect long-term to in outlook our are net per quarter to as in year of to is restructuring half roughly XX% Rick. decrease $X.XX expenses conclude based quarter, the to call the on December income is for to first the quarter the over results for

Richard A. Bergman

covered up Thanks, takeaways today, we've Wajid. from lot just to key we call. emphasize open the ground today's floor the audience, a And before few of like I'd so to a

the about through the The first midst very is IoT opportunities that in Consumer are our new high-growth of and have a we we our business is transition, excited markets.

products year. the optical a of go start fingerprint expected fiscal will in half into key to In the with to soon, our second be in-display production addition, driver

expected fiscal year, will Lastly, call course to that, TDDI improve to to discrete business. With over helping display operator the a over which start to start the we session. in our the growth, the QX in we renewal Q&A the turn the offset should declines now driver in of anticipate and

Operator

Thank you.

now question. and to will with our Stone from We This move Company. will Please be first Cowen ahead. go Rob

Robert W. Stone

start plans. the fingerprint I Rick, Hi, guys. in-display wanted with to

I a win come one heard is number appear market? that into the be this phone, correctly, of of think quarter. you by customer like to Mobile the you're might first Congress. do going And with this products other World if So, discussions you're Will it that sounded those start World then design quarter production in with expecting out Congress? before the production customers, for When the to mass meant after out you end Mobile but are that's in

Richard A. Bergman

for questions. marketplace in calendar the is our of the year, product phone, Thanks see we'll Rob. certainly Congress. device terms Yes, ship balance in to would the before I and assembled begin of to the the where as and gets Hi, World first our phone Mobile production then through into a imminent, initial that then expect units,

cycles, have mobile to know one fall. the everyone the roughly phones behind little a there. is that there's those the balance two Mobile now. final Mobile of we're aside you setting World a out the As working different following well to the from couple manufacturers, shifted a design in Congress it little the is roughly And and high-volume wins the one then stages major bit focusing from the World Congress spring, large markets, are market, the of And OEMs, kind on with seems

Robert W. Stone

your revenue now was like year. the that on or revenue of second, How grow the potential about optical for capacitive for growth do customer fingerprint sensors. one sounds the the fingerprint Okay. rest fingerprint the It enough drivers about business? talked flat. the for for the of at full-year in capacitive the guidance you high-volume you described less had year? being feel year, sensors And onset originally more you a I is to sensor design of think – And loss a then

Richard A. Bergman

No, Rob. product we out don't specific our lines, break

the fingerprint So just market. commentary a on more little capacitive

certainly pretty it expected. that strengths become I of to in for think part our some it's that lessen well a participate commoditized, certainly It's But investments script. kind alluded known that intention we phones. everybody the and the of we marketplace. high-volume to the it's tough ASPs our to in segment, of relatively are pretty can parts with phone area declining the than continue market's it, maybe in high-volume particular quicker the There as and is

On well much favor greatly the particular security the PC strong sensors are actually architecture. as our fingerprint side, as more larger quite where we the with certainly they actually

are not kind in of see we So the line. And that area solution. overall in couple strength. How growing fiscal now up and that general, back-half in then all we're about tougher do up we from our of strength going things what fingerprint And in. of segments participating adds versus optical I'm sure, year looking little but excited we're the as too that an starting but of forward, a volume our last in as product fingerprint the mentioned, market, it year, will to certainly

Robert W. Stone

Great. jump in I'll Thanks. back queue. the

Operator

we'll time, Stifel. Cassidy this hear with from At Kevin

Kevin Edward Cassidy

Thanks for my question. taking

You increases good the kind of mentioned, in seemed like you PC revenue. what and the increases? content Is had it strength that driving is content

Richard A. Bergman

story. Yeah, you there's strength whole content And explain bit a little increase that general, a notebook know, us. Kevin, market, for the but obviously, that's in of story as the doesn't in

As I And, that system, fingerprint the more we're course, open really heavily. different the supplier but market where Rob's Mobile market system. very serves are bit of it it's question, mentioned little PCs a is a contained only a enterprise offers on sensor. secure just

to OEMs as they customers, as our again the which encryption PC the try our is sensors which really certain in a there technologies, solution, products into the is So squeeze customers we Match-in-Sensor and the offer providers PC-focused just to what favor architectural major really other to want the approach, market. unique their particular degree where mobile generally are our fingerprint mobile which then well with PC

Kevin Edward Cassidy

the it to a a design a to capacitive sensor? was it fingerprint solution out, it maybe lower-priced to changeover bring won was that just go Okay. loss, I Great. And as back XD just or

Richard A. Bergman

I'm with sensor. XD what not getting at you're sure the

Kevin Edward Cassidy

Facial recognition, sorry.

Richard A. Bergman

and times fingerprint answer it the not up, solution and But to certain segments that participate capacitive your are decisions our question so margin Certain to straight profile choose prevailed. within was of Okay. all participate on. complicated, these we'll terms where

Kevin Edward Cassidy

Okay. very much. Thank you

Operator

of Capital Vinh now move John will to We Markets. KeyBanc

John Vinh

Hi. Thanks my for taking question.

on a Just follow-up question sensing. XD

by seen not deploying does XD forward. going but or consider flagship does you sensing omitting XD that terms Are and your as launch I'm of sort fingerprint of curious are Cupertino have fingerprint to market any just sensor sensing, Now a thoughts customers that seeing sensor, to in forward? we've what going the phone opt have a

Richard A. Bergman

Hi, John. Great question.

So, the to as you authentication they there's multiple and have and know, different minuses. approaches, approaches pluses

haven't We motion, you're the to optical it'll be solution, immediately available our into than fully nothing on soon. simpler opening unveiled there's your And me, very or bam, but simple your to do touch screen. applications a screen,

think least at a customer also I Cost the in so interest optical see we we've what reason, for in that and is factor, solution. our seen on. broader tremendous availability base,

I or Asia other recognition. and several over XD away or honestly from authentication for I our in and just I solution proceeding China places haven't last seen can say, other facial was anyone either in back our approaches the weeks, So optical with

John Vinh

well ahead of $XXX products, $XXX about on I of think the into classified products, that. doing And like in you're follow-up for And Conexant, questions in It suggests bit on $XX us fiscal question going in IoT. you It can the next million seems and previously roughly give to to Great. guidance million legacy about quarter. revenues my in Marvell you're revenues had like Thanks. a IoT is, color Synaptics kind implied talked little Couple Marvell is of more IoT? you types there the looks that one, Conexant million do XXXX you

in You're I'm on any a pace, wondering million have XXXX. sort outlook of rate. if you at fiscal that obviously, updates to $XX run

Richard A. Bergman

Okay. I'll the start at and let end. Wajid some then add commentary

but quite of In had products, our because revenue. them simply, of a a We've represented percent automotive. featured investments couple mentioned they areas. them, was in the prominently, area we've few terms of haven't One

display to we're fingerprint So, doing everything to touch. from drivers

switching display most fingerprints heard potentially commentary future. adding quickly that you to revenue. the voice touch and was driver But part, the over and For my that from in it's as

about we've through ago area. some acquisition technology building been was product another we fairly IDT, talked video that area the actually business. about a to other up haven't years slowly we specifically line interesting five a in high-speed be that The And from SerDes

As Marvell great with that acquired. the we acquired technology you or products that a pairing imagine, can we it's just

So business. all it sense our of put into to those made certainly IoT

look forward, you're time learned yes, acquisitions the it Now, call, due million diligence number at is as of of doing we while last We've million. here we a correct, perfect. at were from $XXX to this we far kind Synaptics, bracketed process on $XXX from

And of was a our natural announcement, conservatism kind so, we when first course did factor. there's sense one of of

other we're design getting types wins. of The frankly, was, factor all

minutes heard about getting the smart the in talking all me great in We're different five about Amazon spend speakers ecosystem. Google You the doing around We're world. the ecosystem.

is Our set-top business box doing well.

of don't a give was how we outlook on it be. we to little know So big a want than surprise pleasant I business the could our is kind bit that that a And bigger what portrayed in October if call. phone

Wajid Ali

add, QX both would businesses. strong that of I those thing seasonally is one is for a The John, quarter

the we Rick but probably So, into talked that'll design QX, by QX and about earlier. moving see will some seasonality be wins offset that

a million point $XXX on annualized an run time, now. everything in this is wouldn't certainly as handle it it's seeing trending nicely. but rate at business rate reaching So, I that three classify run it on basis up we're based the right

Operator

this at time, Paul from take with a JPMorgan. And question we'll Coster

Paul Coster

Yeah.

the half in of TDDI think year. talked back I you the about reaccelerating

think say heard correct? associated OLED? that. with I capacitive that it you is I plus capacitive or touch And Is

Richard A. Bergman

Yes.

the products was release of fiscal size Not new growth do in the the to build see growth half and of QX. those the we kick of we see QX weeks in the both you was year of ago, but say kind they we've displays. press QX over then I but our excuse pretty what is these some in subsequent into are quarters, as script and into on, spectacular, over going and QX QX we start a kind so a to given QX, which expect all – as that four second we business we year, then heard Paul, couple the us a So, introduced me, LCD and had the mentioned a type business saw of bit ago, flat,

In till calendar is the OLED terms TDDI, that. to of year, don't expect even end next the sample of our timeframe we we've that provided on rough

Paul Coster

from the Okay. then to talked and fingerprint. misspoke. can that you've the separate technologies? I in-display those synonymous Got you other with Or sorry, Is with I'm optical it. OLED? two adoption to move And

Richard A. Bergman

Yeah, one, Rob, caught Paul. this excuse on actually, you me, or me

to for is an option about You be solution, doesn't to actually were OLED specifically us. we've in-display our But for And talked our in-display. today correct. have are comments There partnership displays. be my which optical about OXi, continues that really with

Paul Coster

Thank you very it. Got much. Okay.

Operator

this we'll to & Gill move with At time, Needham Rajvindra Company.

Rajvindra S. Gill

for taking my questions. thanks Yeah,

So, wondering fiscal year reorganize the this was but you you cost also more Wajid, restructure, business it could million that if restructuring of relates I provide acquisitions, exiting the could to further the that. on to along kind $XX as the if of on drivers, growth wonder elaborate any broader XXXX, on detail savings plan

Wajid Ali

of fiscal we those and back business, through targets at that we've look the Yeah, agreed Sure. on we for acquisitions two of done acquisitions mean the kind so two natural had Sure. beginning year. took synergy of our a had, I at the course some

we affected the deterioration in the those a recognized little some product the lines by for needed do As we fingerprint that capacitive the product earlier, in about we that decline line more Rick talked of that demand. saw bit are to

than headroom of context, invest not synergy the year. XX% we bit the it our will into it but it IoT are originally the product allow And reduction it's less that us those more planned beginning business. of little to our workforce. to of to in extend we some put only To had going a at So, lines, prune affects

earlier, some that fact the better You the were asked alluding doing business expected. heard that doing than to much probably of had much being both really questions we – the businesses than is the better are

we to And that we lines. can product we opportunity some of there a into sure so see make lot those and shift resources want

create So, do doing by some room some can we to reductions, that.

Rajvindra S. Gill

In market sufficient fact for Chinese, fact up the the XXXX, them whether panel landscape and Japanese, you other really use non-Samsung into them that it OLED, already makers, guess, this. Samsung a partner Rick, calendar would to penetrate on kind the amount words, my market, how the you're that that presume panel OLED order OLED of DDIC mind DDIC has the I own ramp capacity to the competitive at end would be capitalize that product penetrate unlikely in in of market? to into sampling do and of in and dependent with the to And, its would given the other given transition Samsung the on I to characterize very have for you makers besides on panel that

that So I describe wondering if was process. you could

Richard A. Bergman

Sure.

that the half I are in been think patience. cautioned the we've characterized almost Well, dependent we cautioned we've of then second XXXX. who certainly our panel now and we which for on drivers is ramping sampling mostly year, we've a OLED manufacturers XXXX OLED in

from their So the a I given. this that change – that been forward. other any that volume XXXX that calendar referencing calendar second a real going from or initial but see we've it's really are production, forecast guys XXXX is beginning I'm half there's perspective, couple don't Certainly

working and with we're them. So,

flagships seen if the they're like some displays, you've pretty that of detailed in the OEMs recent think displays. quality because about of the reviews I the on analysis you'll see have

to So, OLED applies at of it's the And being pick to OLED LCDs the those really our player talked a main of higher-end the the right driver about manufacturers history important in market, which given we've the display lot apply IPs also manufacturing. that partner. very that long

work continue the ramp months. so, XX they manufacturers next with up OLED And to over hand-in-hand we'll as the

Rajvindra S. Gill

you. Thank

Operator

We from Research. Arete will Brett Simpson now with hear

Brett Simpson

wanted very about know September of, can and division, Thanks. see different for again I fiscal help maybe in for sounds mobile decline in you're just like the of it moving guiding with the for down mobile much. business in there's the growing, just and it December. seen to happening in is just the that parts, mobile? outlook quarter thanks year I talk up the fingerprint? TDDI the of lot don't us and because if on products DDIC what's business, half talk And business. but follow second but a can Yeah, you terms maybe you We've you how the about

Richard A. Bergman

about for quantitative the of could talked that math then Wajid and $XXX blanks start that of in maybe Certainly do some we've of start says fill I'll a the can success leave. our with Again, I December business, it's Okay. just IoT you the quarter, million. the north our

everyone the means, it's you smartphones, tail about So, as knows, what that billion well off us last growth excited positioned X.X pretty because year. on as our reached that we're treated units is this mobile of seven has the well call as know, over a we've starting to inherent really years, platform. next growth but Mobile as very

that, to things over a that fingerprint display business. the we of of capacitive down. customer there's expect the major our business also go hence that in first type part have we that substantially our going of offset Likewise, have up and we know you've optical we all though, is moved half put, the year. has up, some of year, of DDIC things pick for Conversely half fiscal seen the different quarters. to second We've years, go in last investment coming as In a fiscal business our couple our that So, as on our impact of that that. down there's to TDDI, a has that couple and

But impact, going out but product to size its different got So, continue really we've Synaptics. fiscal it business be and not be business that It in in-display us growth vehicle a anymore, year the we IoT again, stand, has we're and of forward break means our TDDI to hang could there we certainly a where certainly mobile expect solution OLED invested going lines will grow. in with won't the our for a see big well. given to our but good continue that what by you to solid as for

Brett Simpson

Thank how process you. display just talk business any the OLED. vendors And focused And meaningful display when you got maybe Thank a Can qualifications What do do I follow OLED up, been you've makers. for Rick, more just, you you've Chinese that whole progress on on works? you. think think Synaptics? or expect And OLED in becomes you about XXXX? with quick a calendar

Richard A. Bergman

the were a the calendar tail bringing at customers end sampling I of of year process almost this as said, beginning right started up We started, they Well, year. last ago. And displays. year,

OLED cheer display was pretty was was when solid. a They're we're the were with up through would work that lines. and working process be bring noted, manufacturers. going through we'll there we those big it manufacturing all as And, display past come this whole our of in So it, to drivers and Chinese would customers happy. And with Japanese working their again, A them. the lot with and up to display you months over general continue

half say for terms right production begin second there when mass meaningful be XXXX, would of but other it's when again, it initial panels. the In calendar we'll us, becomes of I manufacturers their of OLED those

Brett Simpson

very much. Thank you

Operator

We will now with Vijay move to Mizuho. Rakesh

Vijay Raghavan Rakesh

is the I And you Yeah, looking guide math. quarter, the said mobile the fingerprint that primarily the do TDDI just guys. weakness down like December growing, hi, – and it just about DDIC? simple Is when sequentially, know at looks I is XX% that side from weakness

Wajid Ali

But is to that those related had happening the of also some one it activities particular transition related declining softness business that right. that's customer related Both we that be is the some areas this Probably switch-over of are Vijay, to than may more of to expected. seeing Yes, capacitive and fingerprint is suppliers. declining. are of that

Vijay Raghavan Rakesh

to that – that the it the it's full-year Or and the you year-on-year? DDIC like still Does side? of guided incorporate do the And just you on ex down it it. is – business most significantly expect looks fingerprint acquisitions, flat grow Got now, year-on-year.

Wajid Ali

earlier think that going not we're a level. I line mentioned at So comment Rick product

year-over-year not But growth we such fiscal that a probably are in-display for out is see exiting year-over-year growth. may we the one I quarter-over-quarter think point see plans we or QX. the should our thing versus should that level, year, year-on-year maybe on

So to And probably details go into that's currently plans more we what on our are. don't want that.

Vijay Raghavan Rakesh

it. Thanks. Got

Operator

take with a from Oppenheimer. now question Uerkwitz Andrew We'll

Andrew Uerkwitz

this Rick, for at drivers Hey. that LCD had traditional another away earlier for year socket. customer display once customers your those taking you. of from Thanks, those you even the foresee least question. how And my relationships from into with gentlemen, the rest large you and companies? business you the large OEMs customers two next there switching or Do being moving Thank year? two XX% mentioned are

Richard A. Bergman

how dependency wins. business. couple from in I've their messages of highlighted with you different large To we've a mentioned, question. Again, quarter important particular grow is thanks heard we and degree, that can lines for in help the of IoT of little Well, down our design we a and very clearly Diversification That's a up shareholders, next we that coming terms the our would and for product are we've as in what go big and of taking. and this we results the customers fortunes our one us. certain stability is the in out of diversification quarter kind And more that. means that's steps had why

to that become OEM small So, or that want customers two doesn't – large revenue. other whether we contributors mean those to our

certainly, of the business, We that other case. our have parts to make to grow the

the OEMs. relationships We all great with have

change needs products. sometimes their And for

customers. we pick major Sometimes up new

us, AR/VR for for alluded customers not those couple in not customers Home they're small as Google to earlier but we've today. us. the that the space I are mentioned Certainly of as So, XX% well they

And so now up of market, and go what rapidly. just growing down are parts more in kind certain of the

don't question, expect in broader product well. customers or in really the us. major that keep above But little customers XX% we So, we'll below, I those are interested for mind, quite Whether to to XX% we for our have if as us, getting customers, a see. portfolio and they're heart to wait of your been know have, be I'm customers the continue but

Andrew Uerkwitz

in one base? change division, Thanks. R&D now support presumably customer In Thanks, Rick, an broader the you IoT typically entire that. much brought sales customers. and for follow-up on said and then IoT. a handful you've And a just mobile, How has which that of has

Richard A. Bergman

to keep about then four or what to forth. But It's up relationship you you where about, three Naver And course Japan talked and significantly Amazon Microsoft And Google. Tencent with where certain and a so U.S. me, of Apple, our then different you Korea actually to speaker you there's market, there Asia, the and operating tough the it's have the heard assistant or a degree, model. go we've Baidu. market, digital with to and certainly Live, because options there's which go everyone smart talks with

sales a broad to So force. worldwide have much we more have

sales for anticipated. we most So, in the IoT kept we accommodate team. Conexant business the part, than to the building their we're that of higher now up acquisition, levels And

on at a So, very in pretty a of set requirement actually small we Synaptics, terms focused of had sales low OEMs.

Now sales we're developing that force, automotive. for worldwide also

this set. broader have product we well, So,

So to have this channel. great it's

new we of course, existing So, at had certainly Synaptics. we this that but our with, can leverage channel the also products of products, IoT worldwide, kind that's

Andrew Uerkwitz

as Great. Thank I the color always. you, really appreciate guys.

Operator

Sepenzis We will now go Northland. to with Tom

Tom Sepenzis

thanks Hey, for me squeezing in.

on Just quarter, servicing interest the $X million the convertible? new is in about housekeeping, was the that the normal the rate

Wajid Ali

was expense the interest interest But quarter. the a $X.X cash about expense higher. the during bit No, little million was

Tom Sepenzis

strong I market, in in a the the set-top And of box just companies you. are then, weak that set-top weak Thank we've seen of that growth have from, component companies bought. the box that pretty segments you're number quarters think, you and IoT seeing Okay. of what December. had outlooks both market, for terms seeing you're But across obviously the in

customer churn So, of maybe cord, and just cable the how that's you impacting this and the if talk market. caused guys. by about the could that A being lot cutting is

that So how business? this do Marvell you impacting see

Richard A. Bergman

getting we're this questions some great afternoon. Again,

is, of thing caution versus would rest I first world. The U.S.

it's So it's there is in a Asia certain phenomenon is in the going Africa, different, here Europe, but on different, U.S., different.

providers so world on. levels varying the of So, the success around service are and

to of want think box boxes. manufacturers that too, smart other set-top is The course I up as of aspect the them bring

and and content for security, the on. many such of assistants things home or so doing directly course whether cable as So, it's other digital personal managing

comes the in at the it, prepared the degree is part So that have home. whatever, to go out certain Synaptics about what now nice call architecture we a to we're

market, ends Conexant. more applicable, solutions. So smart if SoC multimedia from course, DSPs central If then have are business of up speakers that hub have the we for from the the got set-top being box we our the we solutions

So we're somewhat architectural independent.

And home. why Marvell, the for smart we Conexant. questions, got the know solutions have of I We why a lot

the around emerging start are as you once one at the to think we to world, architectures grows. the of smart home that I best market this positioned the different of advantage take look companies are

Tom Sepenzis

Thank you much. very

Operator

now Redstone. with We'll Summit Jagadish Iyer from hear

Jagadish K. Iyer

Two question. questions. my taking for thanks Yeah,

with we months? of, should the about try these high-end, low-end how follow-up. think have next China of mid-end I you And XX First, we look as Chinese sustainability and partnership in of between to inroads as your over how smartphones make biometrics with is kind terms smartphone a Rick, the in at going makers? OXi Then

Richard A. Bergman

Sure.

sorting lot low-end the phones. So, have we then out OLED. China call is whole a somewhat of, and ways market as are in some mainstream flagship you it, Not phones have the phones that

go the solution. optical and at just So eliminate wants in least phones authentication awkwardness the quite certain a OLED And button to optical phone capacitive our has of is to home to solution back from course a in-display or is displays. elegant. it. perspective, tremendous seeing interest edge-to-edge the in or of the The biometric in-display the what we're Everyone

see I again, So, you'll tremendous that's demand, what there. think

solution capacitive the is cost course, of However effective. very fingerprint

for some really It's point capacitive beat cost to So see the market, solutions, for I time. solutions. for hard quite lower-end of kind the that think you'll bimodal capacitive

So, was me our intention if again. markets. is to then play half in question, for both there of you those could the the of second And repeat it

Thank OXi. Oh, Sorry. you.

Jagadish K. Iyer

OXi.

Richard A. Bergman

under-glass be only. to So, OXi primarily intended was

OXi, be of phone. not the would And so hope edge-to-edge of the that bezel phone. the initially was the when an display; you under-glass we on it would see the front be engaged in But area would with

discussed, the LCD board, bezel area both away phones. I is and OLED across kind of going As for just the

of effort So that parts the a of we're lot to market. of to retargeting kind apply different

is type OXi of in of what quite the, some So industrial call, we'd or successful market. immigration

the you like on opportunities, over a you the of use there. months, in where phones And certainly have So been there's the could area. for glass we're fingerprint supporting lot that then announced the that a last for through-glass example, back, have actually phone, few the solution of back

of market seeing interest that And the solution. so in for type we're

Jagadish K. Iyer

I just on few quarters, been And Okay. acquisition. the as a follow a it's Conexant up, guess,

these of some would on of devices, the generally that to vis-a-vis, how can at to we nominally how of reduction context Thank over terms it the should terms kind in big in think is you increase for you content a about next, one look we two So years? home see, provide picture it ASP say, have to a you.

Richard A. Bergman

know I quarters we if our several belt. Okay. under don't have

have We several our under months belt.

longer ones, lives. project the environment, are. hard. what pretty the actually a to are which ASPs base. sticky And more be kind And the product. growing is product gaming more it's life for they mentioned, it customer or a some it's market certainly audio have It's business. headsets dispersed going I much rapidly cycles with in a pretty for this The of So applications clearly enterprise example depends But long of

declines ASP that would the seen would us historically having in in phones anticipate So, I the market. than be much we've higher audio

Jagadish K. Iyer

Thank That's you. good.

Operator

to move now Charlie & Company. will Dougherty We with Anderson

Charlie Lowell Anderson

Yeah. Good afternoon. Thanks for taking my questions.

is year-over-year of So sensors tens millions of Wajid, in sort was math. you generate that secondly, growth thought since fingerprint brought quarter, implies dollars forward kind that you today up the the revenue? of my I And those is right? sort that How for I that would is interesting fluid? of and programs that to first, contribution of it looking locked fourth or by describe in of you're guess how

Wajid Ali

the there, you're Charlie. so Yeah, math with right

in Like year as I'll customer It be the launch be shipments as expect fiscal there of imply calendar a some panel those a QX him going think minuses working or the will in are customers on the revenue QX pluses of end little depending QX is on I we World of Mobile shifty having talked So earlier, start think where dollars could up months this whether because April. Rick March where and millions on quite Congress. business number product relevant will QX. closely we But metric, sense then between to post worth of and and probably bit exit mass who shipments. that the Rick? and to lined production manufacturers exiting comment well, tens let with of well would and as a we're with we're up in-display one with about

Richard A. Bergman

approaches. status would going And, on the those, overall qualification talk is particular But the right about always decision, good. change well. to make testing has customers, to phones. phases phone process progress and I can final the a it with to in forward whether alternative to with the testing just say launch or final yeah, fundamentally we're move have they time But is these in-display been the I they market, caution quickly very things so where But the up

Charlie Lowell Anderson

your sort over were for if is wonder how what when this look you IoT businesses couple of outlook years, peers then on the you Great. follow sort up, a few to growth I they And extent as Thanks. a have of the IoT large profile those next your you bought of the wonder growing IoT outlined out business. of you. them, the I rate growth of have I know for – business business a thought semiconductor on multiyear some new

Wajid Ali

Yeah.

it's call, businesses, be the annualized closer And would initial an we to the had million. we million comments our when we run basis. can on we've Charlie, said more bought clearly So, see that we all annualized the $XXX I year rate the that when on everybody towards call, on $XXX $XXX million think thought something had trending to made based this

a or the already beating from as engagement a we standpoint, a would divisions to our seems head our bought businesses. XX% the win rate as standpoint, design for marketing year those be of first So, from customer to first how that to sales busy when on XX%. horizon head we're well point the above growth to Everything the that close we mentioned of

seems for pass it Rick. level growth So, certainly, the those that support activity to to businesses. I'll of rate

Richard A. Bergman

analyst of tell a use a questions, our new to as as promise this can in areas. I demos you more well And existing than the our have as afternoon. normally We've that lot of we lot this And a we have. interest areas come covered can there's territory day. I will our pitch to No. lot guess, investor and I'll a I by

is exciting along area the certainly, you can and certainly is and in normal demos. terms phone voice videos demos, As notebook imagine, with our of

the session you'd as additional four-hour to the questions So, we'll on as able XXth. all questions answer ask be during well that

Operator

turn session. At And additional remarks. this to this over Q&A the management back time, any will conclude I'll for it

Richard A. Bergman

Well, thank again, you.

Jose. it. appreciate to today. We here forward Just Thank a December in certainly really look seeing very questions everybody great you much. XX deal of on San We

Wajid Ali

Bye.

Operator

for call. again, And that your all Thank does participation. conclude you today's

Synaptics (SYNA) 7 Nov 172018 Q1 Earnings call transcript