SYNA - Earnings call transcript Q1 2021

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Operator

Good day, and welcome to the Synaptics Inc First Quarter Fiscal 2021 Financial Results Conference Call. [Operator Instructions] Please be advised today's conference is being recorded. I would now like to hand the conference over to your first speaker for today, Mr. Jason Tsai, Head of Investor Relations. Thank you, sir. ahead. go Please

Jason Tsai

our CEO relations be of afternoon on can synaptics.com. Good Michael website My you joining the call for is the today's Butler, me Thank investor This call of first and and quarter, today Head am I Synaptics' Tsai call. accessed our Relations. the fiscal us With at and Hurlston, Jason on are you. and thank Investor XXXX name also the being web Dean CFO. section company's is broadcast President and live over from conference

our supplemental color In have report addition slides investor on filed X-K to additional also presentation, SEC on a on website. these relations slide also of been a today form prepared our current remarks and the posted add to with our copy furnished supplementary have earlier results. as The financial we exhibit an

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

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

projections of business give including our our business, pandemic. and to statements the of expectations our impacts objectives, COVID-XX and on our performance future operations, relating expectations Forward-looking current financial plans, condition, results the potential regarding

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

Michael Hurlston

Thanks, to the financial in more like strong resulted year gross start had to the years. We Synaptics fiscal welcome both drive revenue quarter I'd in Jason, call. completed performance to as quarter We DisplayLink have margins completed for early and Broadcom's IoT better in and and growth our wireless today's ongoing everyone of six to efforts in XXXX seven a acquisitions our the our with first and operating in the strong integrations. years highest than business of margins highest the connectivity fiscal

acquisitions than these performance are better seeing revenue We two and robust already the as of are expected with initial pipelines. well as pleased we design-win

drive to Now talked as of an you business give accelerate as enterprises premium to in opportunities greater product new business. global quarter, on update home. consumers the our IoT, pandemic driven efficiency let our customers deliver ongoing effects about additional for at and our me have last introductions experiences the In we

Dell, processors by We Synaptics, devices, collaborate and help and solutions. customers' DisplayLink audio Poly solutions our Google, new more products remote video range are broad Bose voice robust, our and teleconferencing chipsets cancellation. Powered interface that supplying teams Logitech, echo a including with of edge-SoC solutions, feature effectively enable new feature-rich that from far-field

serve headsets premium seeing that digital audio Our with strong demand primarily customers. are enterprise solutions

top service video at to now their two one its with we AI. SoCs customers. The in two business, service pipeline conferencing includes been Wi-Fi, has wins continues and added and connectivity truly have wireless are half the new that accelerating audio entertainment by Google Audio also We video to smart of design extraordinarily and connectivity are range seeing cameras, more, and is quarter, announced year. speakers XK we product development and enabled to adding over Europe, our providers to and the for began solution will enhanced Nest US in GPS capabilities. shipping powered shipping Bluetooth, displays, new market video grow providers our In Asia the watches design doorbells, also IoT order and in drones. wins edge offer smart chipsets Both Last and and calendar one premium In remarkable that into even is the rapidly. our of our next products start streamers, first designed smart momentum Dolby security the for demand have our e-bikes our quarter, devices in strong in products

as mobile Oppo very market. on OnePlus. including leg to significant we OLED The performance on-cell new As wireless it we believe winning years earlier, virtually by generate power well, to that phones designed every major combination and in said competition given In best controllers off is our comes business initially and us we will mobile, start, growth great do exceeding wins this and come. has continue our handset initial flexible from this panels, a enter for class Synaptics of the projections up using in new a OEMs chips at ultra-low design to for OLED touch significant

We the to expect XX more new OLED months. market smartphones with next touch few over than controller come our will

last major announce touch handset OEM had month also controller. by We phones their powered OLED our flagship new our

smartphones several increase. penetration the over expect flexible expect as touch and become OLED the result a our solutions We smartphones to next of technology to based years panel dominant the for

an to we hold based on to part a as base transition remain believe designs. will we LCD and important continue stable the new longer-term that engage this customer portfolio our of smartphones During with continue

growing In from ago. business, strong excited in shipments continue positioned We are leading continue PC and XX% well opportunity sales the to our are up a of controllers around OEMs with world benefit by to with us. laptop confident to smartphone with we touch the to that our we front nearly win OLED are compared our year

constraints about sequentially to to due our that many decline as component temporary ability PC sales originally units customers' XX% did ship as Our expected. delayed

We expect resolved continue to our going and and recent sensors sales our strength touchpads be to quarter. December into this their of fingerprint issue

PC secured a design-wins Our including features a new team number of high-performance that new Chromebook this Acer touchpad. quarter, our

more ship calendar class our XXXX. as devices, These to We next strong developing are Chromebooks, consumer capabilities notebooks. such to are currently while cost-sensitive consumer margins still of which in bring span solutions generation touchpad products to expected high-performance maintaining enterprise and

with which to and will significantly more force as our the of feedback across growth seeing laptop. leading haptic and to are dollar design additional incorporate come. pipeline growth We also touchpads am opportunities larger, strong in indicators of I all our increase each our year the are wins PC by content of businesses fiscal start pleased OEMs intelligent that Overall,

our focus pay deliver relentless dividends forward. operational stronger, company a we able become continues growth on to efficiencies improving as Our profitable going to more resilient

turn the to our outlook. quarter over our call let Dean first review to financials Now me and provide

Dean Butler

everyone. Thanks Michael, and afternoon good to

I'll current then QX. recently financial for fiscal our start for our outlook results review with First, of our provide completed quarter, our a

acquisition the XXst. beginning Before like Broadcom's on IoT to everyone that acquisition our business the July of wireless of on and July closed our DisplayLink of certain we I'd completed I connectivity begin, remind rights at XXrd quarter, first to

the include of mid-point on contribution close. businesses these results given the August their our guidance the Xth respective Revenue date Our quarter the million, our from guidance. for for was of the quarter and $XXX of as September above

decline reflecting fiscal in strong quarter XX% partially up sequentially, quarter X%, included and now mobile by demand TDDI was was a Year-over-year, First prior PC. decline in our revenue still September divested products, Mobile our a IoT our year by revenue as sequential down business. for revenue driven offset

we sequentially IoT XX% ramp and Revenue as customers revenue, divested products had XX% recent PC one-year September revenue an quarter; year-over-year to above XX% quarter, Mobile XX%, from markets acquisitions. from two products and experienced as with and during one the was quarter Mobile continues quarter, was the up now on IOT OEM revenue TDDI sales began down XX% the globally. XX% in as related drive basis compared same the at their demand our vs shortages customers from our is incorporate to our work-from-home the XX%, of XX% was up quarter. products and XX% XX% our Revenue results end and Revenue was During now respectively, year-ago component our and ago. sequentially was XX% our IoT Mobile, some year-over-year year-ago quarter adjusted this business sequentially from down PC large revenue business, two PC contributions from the Revenue modest lows begin up the rebounding from where XX%. as includes our up XX% were we from support from

million, and For quarter asset amortization, XX%, quarter, in of expenses costs; $X.X $X.X $XX.X million; share-based and supply intangible and operating of prepaid share-based of million. were costs margin and includes commitment. gross the costs amortization one-time which acquisition million; $X.X offset $XX.X $X.X charges, of which our on $XXX.X of partially compensation legal of intangibles integration development of million; restructuring GAAP of by costs severance inventory integration million related amortization compensation & the consisting $XXX,XXX and $XXX,XXX acquisition step-up September GAAP million, costs, $X.X recovery of related costs a retention related of previous was million includes in September

share. tax GAAP million, $X.XX a net per loss $X.X expense Our quarter the was loss of we September had GAAP or quarter. a for net the In $X.X of million

margin million in than our Now reflects mix two guidance operational represents the five of Synaptics. of million, incredible turning improvements better non-GAAP which integrated $XX.X into an X,XXX gross above continued guidance acquired of past to mid-point below cost of now basis the businesses newly at the expected quarter improvement and structures September quarter. product fully point expenses The of range up the our months reflects costs the quarter of are was non-GAAP increase the end in $X.X September came product non-GAAP a over quarters the during XX.X% Our preceding results: high from operating This operating and our quarter. incremental results. our

for profitable tax to as income share; Our rate was a on sequential the or growth. and $XX.X $X.XX XX% up XX% quarter per diluted million, non-GAAP focus year-over-year was Non-GAAP net the continue we for quarter. increase, XX% September

the acquisitions, and were quarter September $XXX was of from Now, the million, operations ended days of for while preceding by million. two charges. from acquisition-related and turning flow the million. and at $XX million sheet, recent acquisition $XXX cash Capital primarily the Adjusting $X.X we $XXX operations would inventory which of to short-term outstanding balance quarter provided the were cash approximately depreciation million the been due decrease for items, by with inventories days offset $XX million, have investments, and quarter. to of $XXX was during a impact sales partially our the was million XX Receivables expenditures of step-up days, were end related $X.X the includes ending of of million XX quarter cash

backlog for million our we the anticipate well million. customer as Now, as sell-in million quarter, on expected range second turning revenue for timing to in product of sell-through Based to outlook be the to approximately forecasts, of $XXX December mix, patterns, the bookings, our quarter. $XXX subsequent entering and the $XXX quarter December product

IoT quarter Mobile, We would first quarter largest for company's December XX%, respectively. like be mix XX%, mix, are in and that which Mobile surpassing PC revenue the I and the time. to the represent to IoT, expect in highlight XX%, first of percentage the is our expected from to approximately the revenue the products this products

revenue continuing Our and The high-margin and important We drive to concentration represents I for significantly with IoT broad diversification fast-growing growth growth an company, for accelerates to and from our business provide mobile a our our TAM. the targeting of margins gross customer of quarter the GAAP away follow outlook: GAAP now IoT will reduces expect will be XX.X% our XX.X%. in to outlook December longer-term. non-GAAP range opportunity

for includes amortization, which restructuring the in our cost be range stock-based to We in related retention our expenses charges and December costs. million compensation, the and prepaid development program prior intangibles $XXX the to $XXX GAAP of acquisition operating costs, million, completion expect of quarter

quarter second GAAP expect to the first our expense. be quarter We our expense similar GAAP tax for tax to

we in $X.XX. to net share income range second $X.XX Finally, the per quarter to the our expect for of be GAAP

seven XX% between our This for outlook from expect non-GAAP as anticipate in We non-GAAP December the IoT continue XX.X% December improvements. we for quarter: to margin than higher in to Now non-GAAP products be greater achieve marks gross the the quarter XX.X% years to what our be gross to to quarter first drive contributions margins.

expenses December quarter-over-quarter relatively to to We remarks, anticipate offset actions tax range rate improved To built operating to we our to And for operational to period, I share $XX wraps be significant be a Synaptics million prepared range operator the for integrate to over conclude XX%. like expenses the be we enable for in continue achieved of to We year This short Michael strong by the turn strong net are session. while quarter just the stages the up efficiencies we a cost to income flat the in we long-term Operator? joined in of going non-GAAP non-GAAP the ago a have to Non-GAAP profitable quarter fully in start Q&A as Synaptics $X.XX on-going the our and deliver our still $XX and early took million financial to growth expect I'd the delivered controls. over my the profitable acquisitions remain transformation forward. and December now call recent $X.XX related in XXXX the have of share. remarks, in foundation and to milestones range fiscal of anticipated per growth. is diluted per to that will our XX% the

Operator

[Operator comes Instructions] of the Charlie Securities. Anderson from from First line Colliers question

CharlieAnderson

got terms IoT I bit congrats about that maybe performing taking being go time, up. sounds the you of our expectation there little for if you that in ask maybe here. the questions follow over my if the strong of about Broadcom? Then But wonder acquisitions on to well. talk could and terms commentary. strong just so in you about IoT, continued progress that talk thanks forward bought rate gross I've business and trajectory anything the both how trend I from in Yes, you to a want like wanted then or of expect a else It is the results obviously

MichaelHurlston

Hey, Charlie, our Broadcom yes, the We've no, obviously exceeded far wireless about thanks for super good the business that's feels compliments. expectations.

made was where feel But into when design where broad and we of design It's into terms the my I around number drones that golf It's based initial we're that traditional made other getting telecommunications going now the think I broad good And going in we comments remarks. effect outstripping products which we're about million. I Google customers some our it's in we acquisition far and to some of the this up going. so wins, that think see picked base things range customers. ebikes, going of we were wins finders, that nature. $XX

So happy balance the performing. for how going think year. is that it's a of story - we're good really, business quarters be to I we this with are the across really us four And

DeanButler

a and our of by that's lot two products. maybe performing that the quarter products, Charlie, driven video extremely recent around some are would in Yes, I being audio home results products, base conferencing, But adjacencies add acquisitions telecommunication, many well. both from business guidance really our designs our of around work

CharlieAnderson

that That's Great, extra color. for thank excellent. you

I you and pandemic next work market I of any it whatever be year, the Thanks. as remind finishing PC thinking of So challenges there. from follow supply here. uncertain up, rest we in out we September looks be great. sort strong just there. share to about navigate be us should Maybe on it's the have for know identified market, you going times was year, PC thoughts obviously some then of this my can we're here like the curious the in the quarter. enter situation end you the if how home could But But if

MichaelHurlston

previously of had this the we calendar see run about to better into that said think think we that year. can I mean, quarter now And I I even probably we next runway. and continuing try. extending that's first up feel I'll holding

We believe state. will continue to eventually return of steady that to more this a

the I in lot I And case. think correctly indicates the think business. that's you of a said, December guide, as the strength PC

we normal to quarter. return into runway will is the news. I keeps the see in that here the it again, just some think more seeing which continuing good it point, a signs But quarter. at keeps I March that continue which June rate run We're extending even think

Operator

Next from question Raji comes from Gill Needham.

RajiGill

the XX.X%. on congrats margins Excellent on margins. as December XX% Question the so well. job gross gross Yes, guidance, exceeding for

we've story? with stage about of of kind kind As another mix XXXX gross Now fiscal to we how that gross year should the given kind of think XX% margin? PCs, margin with XXXX? throughout exceeded the progress And have, you the mobile, that range, the in IoT, of there respect next fiscal year business and you leg is

DeanButler

Raji. good Yes, it's question, a

mean, So XX% not legs our to really, not we're That it's gross but is, sustainable us, target, to But not on our certainly there. little we what It'll points quarters, It room X,XXX more although around, stopping it. a really point. We're is XX% which and can't as keep And other satisfied the of do points we've over I stopping increased and we for five that little we've we kicking adding, off satisfied holding, late. have a always been do on that's said business we think keep quarter. running. on level element certainly at were the there's some is probably carries really, margins one not a two getting think here. that's with higher growth IoT basis

DeanButler

continued margin, shift I think, is two the And us. I said things hand two mix in Dean is two think for One I go the happened in remarks, improvement IoT. gross the and toward mean, good Raji, have his hand. on

emphasis keep growth the be business running, want but the to around of we and our that. business want to Our the kind of IoT we PC business driver. strong; business at lot have IoT our We a mobile is put obviously

So be the see continues as tailwind we good long pretty that a good gross as margin true, - to on story. pretty

RajiGill

units touch up, market. How rate XXXX? excellent to any in smartphone And from do of kind OLED designs in about that sense are are number of the coming on OLED flagship of terms generated OLED of - the of the has smartphone XG Want you which in sense well kind And year? Do in And just in cycle this my rates they smartphones? go hand upgrade we your customer. in follow as tied as of terms have these phenomenal hand? are been, the XX the attach what controllers attached they we're are that of momentum get seeing XG in that being to new think the

MichaelHurlston

I think flexible yes. OLED, simply a Most XG tied your - question the answer OLED is every of to is panel second most is to handset.

we said, OLED the first is and that your this of question Now the is seeing pushing that that being down stack. what part are flexible skew was the

phones rate. So see from more very are at makers go on-cell news us. that's OLED Chinese flexible, we're saturated that tier. now increasing pushed stack. for we pretty about we seeing high to the talked comments starting attach in the but see premium high handset think skew It's the down OLED end, And flexible prepared that the to we're that's end to going the an good we And be we where mid remarks

RajiGill

smartphone terms And in just TDDI update industry? a in on of solution and any how the the the that OLED dynamics change will follow up that

MichaelHurlston

and Touch Obviously, our hinted We, the somewhere And talk would $X. in controllers impacted ASPs in been I Touch top of an our sort display I about at controllers. OLED we've driver controllers' DDIC. of our there's this up mix line talking dollar-ish we And and as about shifts sort if we on ratio ASP because think comments. Touch between is say towards that

think for help. customers introductions. I And getting traction, to do OLED Raji, up for to some got we introduce DDIC DDIC track we're next business that. could we our And job, seeing vehicle some we again, we've think mid kind that that we But year have get alone. is interesting still and around to that of Our think new those just do our going to on TDDI, are actually as best to some products we're of set also

Operator

Next Rosenblatt. Kevin the comes from question from Cassidy line of

KevinCassidy

attach the that Yes, my of thanks those chance Europe. congratulate the for on Congratulations gross you two great question your or service in Asia taking line, you new new also that especially rate on with some the that. And I and the Any providers question. just that of SOC? is have products there's margin on results, any

MichaelHurlston

question, Good Kevin.

think just I the it's SOC.

But in see we about, asset to Broadcom I are being the both to with able in the of our the what are we acquisition think cases, couple we it's edge-SoC. particularly the talked you SOC. with starting announcement wireless just

of got really, these reason wireless actually I play. in well it's a remainder it's the But business disaggregated. think of year. - across do And strong of we the pipeline in a pretty for is there; to going we've that's two that's really cases, us more think bundled our part the

KevinCassidy

Okay, far of great. Or your they, was, they you spaced how kind And a quarter? you out? guess two touched on of funnel my follow these I Are designs. two more are every as up wins new wins had cadence along for question since

MichaelHurlston

we in really accelerate. service market. we about of provider good the things mean, think I couple I a feel

consumer try have types a are from new get out more of as the they set providers We into devices. skews coming to service that of

performance are the voice streamers leg to set our got off that some we start can in set good niche are think coming And coming be customers core box are more conferencing that also far-field the our we're in market. out. us point. top we out, interesting over up an products cost feeling well. significant that The well introduce giving those and in a capability we've trajectory that hit We coming top to panels set mix; we're as wins box. about combination the But got think of clicking got is sound seem right video we new display markets. You've out, video our you've good bars pretty audio doing And got to there. top you've getting And

talking year. mixed going accelerate keep you our to as but is this the I of a it's business in that across we story, trajectory remaining think quarters to So

Operator

the Ambrish Srivastava Next question line Capital comes of markets. from from BMO

JamisonCrone

in from Thanks Hi, this for Ambrish. is Jamison the taking guys, question. calling

the you So quarter. the for your wins well guys with design looking next with mobile impressive seems to forward, larger diversification. you are plans I is you about thing guidance portfolio to But IoT on revenue It way long-term ask guys do first wanted is anticipate guidance? larger very like of forward be this going continue and and than a to portion your beyond

DeanButler

good question. Jameson, Yes,

our So we rolled out has earlier this year of there, This a vision component the prior potential forward. to have of quarter largest margin profit growth gross IoT. think focus where It's we've and actually is where the garner we driving IoT And our continue going That's that our going mobile forward. exceeded position. first can we IoT business potential. that to the going we contribution on the gotten actually we to greatest are most, revenue

our So revenue do in the largest be yes, see portion forward. of IoT going short we to continue order,

JamisonCrone

follow and up. Perfect, then

for is guidance million. to around excluding your down $XXX imply TDDI. think, year-over-year, at mobile even looking be would Just going that mobile, This I

tends I'm we longer-term seasonality curious going why about little when sequentially, if to as trends? think so, well this be to mostly the it's is that divesture? just how should forward So up seasonally on mobile TDDI And as due

DeanButler

for an mobile excluding Yes, XX%. a remarks adjusted to it prepared TDDI on up business year-over-year so our actually I the basis, alluded in

versus display historically, have do we're LCD transition little of think Touch But a the I drivers. controllers OLED the look. between from So a bit on more trajectory we right year-on-year

revenue transition for which drivers, bit a from. controllers around these a now. can there's that display grow stable us of base right So Touch a base our nice But there's a has LCD nice we

Operator

the SIG. Christopher comes from question from Rowland Next of line

ChristopherRowland

DisplayLink, the is contribution I one or what you XXXX. the broke update And then out quarter. also, XXXX maybe, if revenue about kind on on we've get growth think I around seen an and go quarter talked My is Hey, to could guys, of year-over-year there. DisplayLink. looking like, congrats with wondering what for guys question the But nice rate run you was we

to it that bought I he I that for the think and correctly. I Thanks. million, XX-Q but just sure million, I said reconcile $XXX quickly, read read make think just wanting that $XXX it and

DeanButler

Yes.

one. me let Chris, quick accounting a First, just you give

million. purchase price was So yes, $XXX the

On for acquired that the of is one between Q, it'll purchase was company cash actually which it. say part one, a the the the when million difference $XXX we

that So versus the that difference, we market that closed when cash as business. think about acquired we cap value enterprise

that's basic the bridge. So

I can that the breakdown. think see Q, you in

to we're of now, which of to that course, market. that updates, from bit DisplayLink to of there DisplayLink in do and deal transaction. sort and from we continues volatile the contribution market. announced what right is can how are, for of your bit little the then be volatility too business it's be, is a is had you seem PCs, when that from to might somewhat a PC on we this quarter into QX, perspective, home market And attached evolves, around how On for growth say par it work our does that as getting a a see our PC, well, within year full it's expected, PC us businesses, early what There course, in dynamic in and QX,

So about give little to year full a for us it'd on like. looks early But guidance be it. do we sort of I that think feel what good

MichaelHurlston

Yes, remember, starts Chris, X. our fiscal year July

those panels it So wins are perfect we're go. is of little addition to we have said, that said video conferencing, kinds panels one appearing like we've conferencing for the about that say of I video to video we've prepared in interesting Dean of launching, offers the DisplayLink, talked year-end compression got a and set remarks. the these ways way these around technology everywhere in bit is People Paulie What that what that the through developed and you pap are of got quarter December, actually, DisplayLink applications. Bose only about

won in So that this and traditional the new when we DisplayLink layer seen like we've design technologies appreciate quite we appreciable. get it's had more very into station fairly but didn't number we as certainly docking the nice we've business, the then And of the strength fit, where conferencing very, a wins acquired good team seen business. video applications

ChristopherRowland

a Great, Dean, just And Michael. thank Thank that the appreciate follow on things. you, clarification, as you. of up, side PC

PC temporary And You is And example? a Thanks. where go things go side? this to talked a chain Is that content constraint, for more on today. are like detail you haptics, PC Or talked in about then OEM? Michael, there? And we perhaps itself? also, component increase we when can today? about dollar we more Where the this supply something that

MichaelHurlston

it. supply In about issues. of maybe I'll sort all in second a entire a the $XX in sell take somewhere three-inch OEM. the inch $X by chain certain And bit two Dean talk instances, we range. touchpad to the part touchpad, the And maybe traditional can to will of PC a little

pads times As these described talking get you're ASPs the are about that into haptics order force that involved, of on higher. we three with you and larger

good the our increasing So that And prevalent rate. attach at it's by are other somewhere see step a are we And rate, Those attach OEMs of get. very think content But on to significant business can step PC you the in that we all. today order that up trend context, we follow. about increasing that an in in that Mac; don't can participate we up set feel Xx. trying a can in we that's

up very step very, pretty think but So increase. that'll again, right are attach it's big we a And, us. for now, rates small

DeanButler

to question lot supply mid is be September It side what was around the had quarter couple shortages a notice of chain. will took issues, supply components and OEM did seemed off to initial Yes, on their within remain really weeks, What that of quarter having that we end and in they were noticed at September expectations. softness the continues a say PC strong. Chris we to where the recent of relative our We getting I quarter, chain. they and components the backlog business of where like and your that needed, the on seemed it our our again, all

probably issues. them term was that there think just transitory we was a So short causing component

Operator

Barrett from Research. from question Next Harrison comes the line Arete of

HarrisonBarrett

for Hi, question, thanks taking guys. my

if much stable significant you we mentioned Is existing take finally And with the in forward the PC, settles? here? some move? your an when staying that XXXX. business longer? calendar are is coming think into so Or along you that move stronger all So going run this your after for in which going Do you then, business dust PC puts clearly higher Chromebooks opportunistic rate

MichaelHurlston

Fair question.

historically coupled we have now components, indexed are about with be notebooks represents we we to Chromebook of the heavily haven't fingerprint been sensors. primarily we Chris what and trying commercial opportunity we some share, the the higher market and touchpads because content which to notebooks. in gain, think with I'd historically, to performance that And that on in opportunity the is is haptics and last say do our going us consumer that in general are your a market particular. think degrees, see gain then that And touchpads call, played force, an there. up share for her growth larger Chromebooks in sort talked market there a And to existing increase base, Chromebook I to as segment point, of not pick a particularly

in to believe So back PC normal, a of it the that's grow as keep not something it's settle it we we that where no continue. we could in potentially calling of half mean, a I see we base declining slowing, just have feel signs the we dynamic opportunity year won't far a new will so potentially, that do be off to changing eventually like

been that Harrison. cautious us, in terms we've some So of to providing color. in cautiousness growth certainly But dynamic, there's unique

HarrisonBarrett

looking at up, a follow very million? flat. you back quarter as are do from you're above Thanks, think margins OpEx this just you guide, this at plus that's takes at then there, And $XX December think looking helpful. do level much Or pretty you at just this the keep seeing at XX% then EBIT it can the there stage, to When implied forward? road you're And going down a looking XX%?

DeanButler

this going think And we've these even this recent down on the We've below revenue math, anytime question? prior acquisitions; level, the right, really Michael it the $XX part company that soon. so or absorb we XX% we gotten you're it That's a to structure are drive a forward the the getting joined. the of of of board points hold you XX And are and we many depend I Michael acquisitions, on OpEx actually plus continue are been say two can for down the that that And $XX since changing at there? midpoint, question, million I if to and significant position EBIT those is million of job think would before cost get down the sort now you don't EBIT $XX yes, Yes, We've across mark. below the is we operating of mark, see at I companies minus, to we if rationalize have can to and is I the $XX not around scale think there XX% as the million on semiconductor mark a starting company. can sort to margin below do non-GAAP to is scale. our done million the I landscape, view. side get the on; look to going and the IoT it that your hit great roughly and we

so of comes there get rates, we margins, business, which to higher IoT to and to our it would gross growth And us gross sort level. specifically that faster to love scale with

Operator

comes Oppenheimer. from the line of question Next Yang Martin from

MartinYang

Hi, thank question. taking you for my

opportunity. on First Chromebook your

was You your more products? improvements, or a Is Chromebook mentioned design market to that reasonable for you that to can that attack operating different margin. at a with due efficiency, this due

MichaelHurlston

other these goes the the of is drives it's pads not operational only good headline we've done efficiency; out job componentry our I say operations cost it, focusing of would our team, Martin, and taking that cost it. both. around lead but in IC on that all the a

the up design But for So cost-efficient I'd a say that's also more headline. well. with that's we came lead as helped And Chromebooks.

But an a the of part, costs it's say out we've it's most been take So been able I'd for basis. operational little on that bit to both.

MartinYang

supply affecting bottlenecks. potential see you any also potential Do and on IoT? And or like component mobile another constraints chain question it. Got other of segments your

MichaelHurlston

that, Martin. But supply that's any think color. think Dean factors gist seen. the spots some your supply about don't But contemplates seen in that I I question, there continue far, I shortages, we've our segment tight tight external are guide component not don't semiconductor in Dean the we've say quarter. And I we, we've around obviously that PC spots. We chain would the blip itself. has the of work chain, last talked semiconductor So the some know to seen we external definitely than the if in of anything other

DeanButler

we'd don't wouldn't can out specifically are on were other see anything that there we right what But Yes, industry semiconductor an us, highlight. if see shortages the side chain now. there supply necessarily it surprise from that landscape, given we that

MartinYang

without looks Got tell PC us it. you the like to for able Would December constraints? would how

MichaelHurlston

for a December PC know our fulfill - factored able there with from we align specifically, of vendors. that's today demand December guidance. the PC we quarter are quarter. for We what any that don't into in our for and the we of We, So we constraints out think the all suppliers we the to can

Operator

line of from Jason The last Securities. the question Mizuho comes from Getz

JasonGetz

my on I to from comments taking Hey, a earlier. want couple of thanks question. for up follow just

if care margins from the skews. any moving that flexible gross premium and may wondering stack you down I that you're to any You the impacts pressure overhead then down seeing there mid skew move have? as was to mentioned your had ASP

MichaelHurlston

as move ASP think our and good. a in gross stack. Yes, characterized little we've are. there I business pressure as skew down We've overall mean you previous the is of margin bit there in the I done is calls well,

in So high-end And we're into bit ASP than as even there's down, phones. cost going I on be move the pressure up to think pressure, relatively yes, holding sensitive you the well. down you're more areas. moving more with a But see you

JasonGetz

as I to and Broadcom expected you last mentioned about the had quarter you $XX quarter, up, then the And a DisplayLink September add thanks. follow think million line. top to businesses Great,

like but kind better an if a mix where of I legacy was give Sounds in in OpEx versus September little for wondering see it you came bit and they that you of going came idea how than forward? that, and could

MichaelHurlston

it do What And bit out actually businesses way. than guide, out last couple out the we're first closed prior given in of We expected. time guide sort see for a say Yes, these had doing to in weeks I they of where we are on we better as combined going a think I businesses, on specifically numbers came either I breaking these we mean it basis forward. the surprised just the broke businesses on we our we incorporated. that What was announcement. little what not is right we our been have quarter, expected. these originally September will a surprised weren't forward going

good only point. vantage say our news would I So from

Jason Tsai

over Thank for all I'll turn now Michael questions. you the back the to call Hurlston. Mr.

Michael Hurlston

you of during you joining lot. look the us We a I'd at today. to investor like our all thank virtual conferences forward speaking upcoming Thanks for to quarter.

Operator

for Ladies and conference you concludes gentlemen, call. Thank this participating. today's

disconnect. now may You

Jason Tsai	Head of Investor Relations
Michael Hurlston	President and Chief Executive Officer
Dean Butler	Chief Financial Officer
Charlie Anderson	Colliers Securities
Raji Gill	Needham and Company
Kevin Cassidy	Rosenblatt
Jamison Crone	BMO Capital Markets
Christopher Rolland	Susquehanna International Group
Harrison Barrett	Arete Research Services LLP
Martin Yang	Oppenheimer
Jason Getz	Mizuho Securities

Synaptics (SYNA) 5 Nov 202021 Q1 Earnings call transcript