SYNA - Earnings call transcript Q2 2022

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Operator

Good day and thank you for standing by. Welcome to the Synaptics Incorporated Second Quarter Fiscal Year 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now Head hand of would to conference I Shah, Munjal Investor Instructions] like the to over [Operator Relations. Please, go ahead.

Munjal Shah

Thank web accessed also for joining With and Financial me quarter and am the Officer. Michael thank on and the today’s Investor Chief Munjal afternoon call. being live second section Hurlston, Relations. Company’s of is conference fiscal our you. Synaptics’ XXXX broadcast call I our name Shah of on be Head Dean website President us Butler, and Good today My over you Investor Relations at the and from call is can CEO, the This synaptics.com. are

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

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

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

industry. supply of and condition, our our pandemic give shortages projections plans, chain the our expectations financial on potential to results global future affecting operations, the the component the business impacts statements performance Forward-looking current disruption COVID-XX semiconductor currently and business, regarding expectations objectives, and our of and including relating

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

Michael Hurlston

supply gross in to we We Munjal. while I’d XXXX double-digit market finished call. We our on our today’s growth and I with welcome strong to mid-point on the of navigating guidance, achieve. and the to to managing logistics challenges. note what consistently everyone still for XXXX, December calendar Thanks, revenue our in was IoT were updated products. strength delivered improve margin. like capitalized a am proud quarter continuing We able Revenue while opportunities, at of

non-GAAP was as margin turn the gross margin Our our quarterly levels for drove revenue record margin and another record in operating EPS GAAP to company. Higher non-GAAP and and well. gross non-GAAP

drivers, strong many momentum applications. Our particularly growth in we’re remains and seeing IoT

dollars per opportunities robust higher. see products, our platform cross-sell pipeline and remains design-win continued our Our driving we to

talented and connected monitors DSP Our of smart hubs, feature December, solutions. products engineers. IoT new and capable acquisition of wireless and smart configurations, Group this doorbells are than show, introducing and smart announced group cameras, CES we early the customers workplace were a completed our smarter At as home In products are unbelievably semiconductor welcomed more year’s such that several digitally enhanced ever.

us tackling security, computer opportunity promising products of embark learning We will had power wireless, AI. roadmaps machine long-term in more as The on team the that and simple home the we AI voice to areas our well to expect learning on accelerate has product applying DSP serve low edge the vision Group even applications. enabled

already accounts are relationships the were into on we Synaptics’ new is two seeing Synaptics’ bringing technology, technology not seeing strong larger are and of integration customer Group working platforms. on-track DSP the wireless, that we existing particularly sales DSP Group benefits through of and together. previously force teams Our Meanwhile, pull are accessible.

are portfolio. billion products XX% year-over-year IoT now Our a our at the for be piece revenue. to annual run-rate, of growing revenue continues of $X accounts the and milestone XX% growing total Wireless fastest IoT

greater customers New well-suited sockets is network in which are starved high consumption, for being also X. by Wi-Fi IoT IoT other the technology allows same Wi-Fi enables particularly products X units devices The connect transition it to to particularly simultaneously without the low being unlocked powered device a critical begin battery as number any IoT is of network. power because one traffic on the devices. to

high in products our strongest is XX% differentiation competitive efficient Wi-Fi low prior bandwidth because generations than power to power are and efficient compared applications XX% Our more competition. more X

including We categories cameras, wearables, consumer-centric product have design-wins across of a smart displays, other surveillance variety devices. drones, speakers, and smart gaming,

being a congestion. end device wireless expect the band where XE The is to initial Wi-Fi frequency at the year. higher is Triple-Combo the toward revenue of on calendar is there enabling devices based operate product and we industry-first sampled standard Our less

in based our organic are the With double resources, our new target on momentum, again. business, our and revenues making we to deploying wireless engineering we our report now to two to are grow achieving remain taped-out We new strong internal have that confident happy investments products efforts.

to distance lead Interface creating Video the the continue to market products and our latest are field. Our innovations

at this customers. simplifies wireless and was CES work newly Our largest our of solution docking by area the one year announced demonstrated

We and of prime enter a workplace our processor end-users about potential is and opportunity. enterprises. this market, expertise. traction our for as in excited the the case new adapter connectivity, solution The as combining technologies protocol of productivity ability for converter In flexible are video early to multiple a example compression market class this improved seeing of new configurations product are it and we wireless completely cross-sell we enables

have a TAM or dozen design next over now in two wins introduced and few open devices that which have up ramping We recent quarters so quarters. additional the

growth consumption single-chip footprint a overall win power continued headsets and design is market lowers by solution traction that reality reduces and virtual XX%. XX% momentum. differentiated revenue in by seeing terrific We're with offering Our

the across board winning manufacturers VR in China. are many We including

XXX a of rate ensure display is performing hertz. only for headsets allows smoothness of than total A highest for in realistic high refresh market with and greater higher and rates solution it rates critical supports is VR those are is resolution Our the of as both refresh latency motion, frame design that essential technology to a XK custom first the for that the experience. more lower and

leading achieved our our and market in the infancy such of market as we our Automotive, strength run future and newer feel position, revenue to refresh in is transition confident its annual technologies micro-OLED. rate and higher In We million quarters even roadmap $XXX features are rates, display roadmap. goal still potential ahead in to two The plan. continuing resolutions that a about well invest of of as as the we

are at Our Automotive in and OEMs designed OEMs TDDI six production in we across seeing more Europe into than products and now ramps XX are models car XX-plus Asia.

of much very are small in We implementation. increasing discrete relatively well of than market is share the our And a TDDI-based is rapidly. devices mix though these higher positioned share our because solutions

are designs being nearly all fact new initiated TDDI In technology. around

learning complete believe of feature simple now neural more decoders have the driving processors processor models general that device complex microcontrollers. We intelligence capability. purpose ultra-low a We solutions edge every rather that that need from video extensions will range on intelligent, for artificial products to power networking Moving to suite machine consumer technology. high-performance our become task-specific than run with

event video detection and processors applications, targeted low-power Group of DSP and use at are cases. audio AI Our the addition with edge

being are and voice processors monitors integrated low into boast compelling of docking and designed power family features, smart tablets, combination AudioSmart Our and headsets, cancellation a of consumption. noise stations

high-performance series a SoC single signage, and conferencing applications processing neural and CPU, bars software-enriched such GPU as smart video network unit video combines systems. sound a and smart complex Our into

and utilizing of feature models processors the Lenovo machine learning customer in both to tablets. Katana one At our levels. run its announced Katana our ability first voice power significant low very CES, we at Finally, vision

long-term market prospects. excited by in low-power growth We continuing AI are indicators encouraged edge remain about early and its the

on the of move is level XXXX. PC be to a Let expect shipments Within mix, strong we commercial in for expectation XXXX our our which plays the that, calendar applications. year the of product years same part bigger After market market to as demand about at strength. me to two growth, remain to

comply of of PCs gaining technology Haptic design reducing calendar SPXXX-XXX the NIST XXX-bit and device the innovation. and is It the CES, customers launched PC. year. standard the because expect we major share during first our encryption, size device larger latest began it all our to in design in shipping threats external in this We feature our with quarter the to on are and with the We At that enables capability. TouchPads system-on-chip

quarters, Finally, the from OEMs the few using as in launched touch didn’t technology Mobile, the many expected. new smartphone of but it manufacturers Chinese demand end models in materialize appears our for some last

other the the we hand, flexible our yet driver units which began shipping of in new for quarter Synaptics. production display growth high-end another OLED vector On adds

areas new let the incremental general, our of prevalent where update getting. quick growing supply portfolio case, design tight. supply give me in conclude, supply any I are our faster remains a our Before outpacing are In on significantly newer, wins chain. constraints In most we are

strong was of We We core conclude, yet chain, new through both in calendar the and company. our we in developing facets to wafers set top-line all corporate to records executing series revenue in Meanwhile, in supply continue of challenges all back quarters grow quarter, for particularly product categories To the end, the to by margins. gross of financial expect persist multiple around a another QX business. well XXXX. entirely

to me quarter to and Dean provide second results turn call outlook. the our let our over Now, financial review

Dean Butler

afternoon to and everyone. Michael, Thanks, good

of to Group like team December guidance the X, QX which begin, way. remind the impact well I acquisition, and that QX new include XXXX. of this DSP Before everyone Integration under our closed is I’d results on

$XX Group successfully migrated all the have on and and platform DSP major our Synaptics to million track. processes systems cost operating synergies are We

for quarter our Moving demand includes XX%, the fiscal IoT with at continuing Group respectively, the products by the we XX% December on the midpoint DSP growth December in approximately revenue by which was XX%, and were driven and to aided XX% PC, one-month company’s XX%, in was up partly million, for are of Year-over-year, Mobile IoT Revenue efforts. quarter. Revenue second focus quarter the strong where was quarter our was revenue, guidance. revenue and up of contribution. IoT, the our $XXX to the from sequentially results, updated acquisition

Our the and with IoT XX% up product XX% revenue increased sequentially. compared year-ago quarter

to at Our area a all almost milestone momentum and this billion continues annual $X peers outpace in run-rate. is revenue now

at components due XX% X% sequentially by timing customers. was down product was PC supply-chain to and shortages for down declined Our certain of impacted Mobile and revenue and revenue our year-over-year PC programs. certain year-over-year continuing

six as Our PC last we been to has see continue a demand over relatively the market. flat nine to commercial months stable

year-over-year customer. revenue Mobile transition and product a to declined a X% Our product on sequentially comparison XX% a with due certain declined

During XX%. we two quarter, XX% greater the revenue had and at XX% customers of than

million, includes record million were of costs $XX.X the $X.X $XX.X the $XX.X value transaction of was $X.X of For our XX.X%, costs, prepaid million, intangible amortization compensation gross costs million. $XXX.X inventory which $X.X and of GAAP million December intangibles costs and asset December acquisition restructuring-related expenses margin includes of share-based of adjustment, related amortization costs. a at fair million quarter, million of of compensation and share-based development consisting quarter million GAAP $X.X which of operating company in amortization,

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

to turning our Now, non-GAAP results.

range, from margin strong mix a Our as a December non-GAAP at highest XX.X% prices. through reflecting up quarter company guidance low-end the inclusion value and and record of quarter December to DSP preceding at our expenses the while operating at of million of quarter $XX.X was high-end passing we continued were due the changing our prioritize guidance input of our Group. new million, the gross products non-GAAP $X.X

per non-GAAP record the for an the tax Synaptics. from drive XX% record million, earnings the diluted of XX% is expense XX% income prior our We growth shareholders. December an same was for our of was in Non-GAAP continues $XX.X margin of operating from quarter on was quarter a $X.XX which quarter another net non-GAAP profitable quarter. $XXX.X million the quarter of to increase the as in year had for non-GAAP EPS Our positive and share focus increase ago;

ended flow $XXX strong and the cash acquired result million $XXX was We last sales which $XXX equivalents, Now at of up turning short-term to balance slightly the sheet. and as investments the days & cash on with days, of were outstanding $XXX quarter quarter. were operations Group from transaction. from investments million the an hand, of preceding part of as million inclusion of the increase cash from quarter and cash, million a XX of of DSP Receivables, end the December, XX of

$X.X We for the million. inventory our our to last higher one depreciation than approximately DSP XX constraints adds. depress to our our high-end desired was of M&A Similar quarter strong work-in-progress inventory be to as our inventory, our from customers’ Capital backlog quarter Normalizing of quarter revenue revenue the sequential last at chain to our to was up was in and the expect still while includes million. Despite excluding days when backlog for price met constrained to signal of remain we the now expenditure Further, XX, for inventories in March revenue the accounting was continue as an our pipeline Group growing ability $XXX were quarter, which and were projections step-up. low for Our has Group, range forecasts be material below to demand level. any be would purchase and increase, position end. it increase at above supply supply full days million. the as and are we DSP quarter our and given expanded This we continues is start quarter this $XXX XX the $XXX of of related shipping service demand. inventory inventory range backlog ending $X.X million last inclusion includes the million we inventory quarter our ago, limiting anticipate guidance

quarter peers. growing faster at and on significantly XX%, XX% basis market IoT, year-over-year broader faster XX%, be our of March than our and mid-point, revenue all XXX% to expect We products mix almost PC from IoT products Mobile focused and We approximately anticipate the respectively. in than the a the our IoT

March GAAP in XX.X%. quarter to margin gross of the the for our expect XX.X% We to range be

expect We to of amortization, and share-based $XXX for to March restructuring the quarter charges compensation, development transaction costs, $XXX our acquisition-related prepaid the and range operating GAAP includes in expenses costs. in be million, which intangibles cost million

expected per share, to the income in the to $X.XX net GAAP our Finally, is be $X.XX. range for March quarter, of

quarter. Now, outlook March our non-GAAP for

March quarter. We into expect our gross non-GAAP margin continue momentum to the

notable the would of the greatest XX% non-GAAP XX.X%, expect the which representing gross stories expansion XX.X% milestone one margin range and achievement in We gross margin of to of semiconductor the success at mid-point be a across industry.

delivery to constraints We robust continuing expect to continue and while prioritizing our focus prices. mix supply chain a input and to navigate and changing positive

the We expect quarter add organic now million, range of in acquisition, opportunities. to the increase $XXX of from expenses to our while quarter related non-GAAP to continuing the operating Group $XXX full be expense March December we a an our million self-fund DSP quarter as to in growth

be to interest the expect approximately in non-GAAP $X our quarter. March expense We million

related to the is As debt financing our closing to Group acquisition. higher expense the reminder, due interest a DSP

continue long-term Instructions] be to you. range We to Our the Needham & from range be per XX million of turn per fiscal shares. operator income XX%. $X.XX the the fully I’d wraps rate for to our comes anticipated call estimated for Non-GAAP in Raji Thank first in the is This quarter session. to to [Operator our non-GAAP prepared share, an diluted Gill $X.XX of XXXX to Q&A over Operator? to like tax the now to start with question share up net the March on diluted Company. remarks. XX% expect

open. now is line Your

Raji Gill

the growth of some March the Yes, XX% you're growth. could up which you results. quarter the and year-over-year if the thank in the growth Question subsegments in that and I'm that the saw on stellar expecting you maybe wondering XXX%. driving of The describe quarter on you congratulations is IoT. IoT

those fiscal kind XXXX? adding only quarter instance of For IoT I'm would you're headsets growing to progressing about IoT you within those last how areas of segment particular quarter you March year think number but of reality the segments we wireless throughout kind mentioned in automotive kind just how talking the about curious and faster not virtual connectivity.

Michael Hurlston

think But Obviously, big we would as that doing remarks fact Chinese space, in pretty the is actually on And I Raji and would well. about talked growth we're in online that's drivers. really be to everywhere I that that prepared think good now and starting are the question VR Yes. have a volumes. some we the winning that the goggles I pick the come drive goggles. customer large being three your first touched

So, we feel good there.

Second And discrete -- and TDDI. world display in and display relatively a one while drivers touch touch we share. to discrete that participated we're had from discrete we is the these And issue on you market low drivers display touched drivers, discrete of going there chips is touch automotive. and

touched to TDDI, share units the begins do expect that have high tip And as winning really toward the the standalone also the As and a our there preponderance then there. to are market we're we market the you products we're the last really becomes which that combos driving It's well. going then that is and on ship, we wireless of of results. our products GPS one mix WiFi-Bluetooth

really three are those So, areas. the

too. businesses other doing our course pretty Of well are

not fact could that the point single showing area to that portfolio In weakness. was in IoT I there's a

Raji Gill

spoke excellent to And the And on hear. situation we that's the supply remains tight. then last situation, supply time

are partners. You foundry process the your in of consolidating

that many a you the had mentioned as process as in consolidating You in few. of partners, those you're foundry to XX past had the but

goes some the mobile-orientated broadly you're new first, the chips? you you're to new going your focusing, that WiFi capacity you'll update able you protocol the are the chips capacity I the Are be of products year that confident for more supplier to get you and how an areas versus in getting the are get relationship. And – So wanted on? terms at get to as of, looking extra

Michael Hurlston

Yeah. supply the guidance it Again, on supports future, can the incremental excellent and the certainly following. that absolutely like we mean, keeps right. I that in touched about question optimistic We Raji, we say the I remarks. get said, feel prepared you're us

these challenges new supply. our all incremental our are outstripping growth get Our biggest us, for areas ability to because demand is

So in see see see even WiFi. automotive. adapters. the and that see in these backlog that goggles. We VR his some talked in that in remarks, We I accumulation We in Dean think protocol about that we

new these supply. here we've of the all effectively we're are outlined. we're there, gives So get to in be got we've to up growth that some going vector But we incremental able where that, this difficulty areas, keeping confidence with of most having that categories and and products, supply continue able on to us

Raji Gill

Great. driving if margins But the how much been segments form a couple talk next can squeeze phenomenal PC contribution step the XX% increases. about of within the passing you about DSP, putting question margins few that cost queue. expansion imply could And have more what's that DSP I margin gross is different The the the having. just last price margin input that you're you of talk and that IoT could both Perhaps of Obviously, the about is The that talked in it in March, the in know years. I'll even the one increases? I aside price does improving. question, in, back just fundamental basis. for XX% on you mobile is

at Thank you all? margins. would to So the how your margins be you. if would discuss But neutral I is price that can affecting assume

Dean Butler

Raji. Yeah,

our it many quarter pricing, up price all should around customers. end of mix. be as has that's pass where largely into the So, gone is March input what the I'd margin guide we've neutral. as had Really, the increase I it of on say certainly, margin to But thought along margin-neutral. mean, we pricing

margins on portfolio of market as areas our all a the of margin areas. really selling grow, one continues the for as to portfolio product products us. premium accretive focus number areas our time, their versions the have all those are improving So has IoT that been actually are of But in of been over

many the of in more going after in PC, premium we're IoT. and the So of premium devices areas course in mobile, premium things

our been seeing And so going of couple fundamental that's and of really the you're over years, that's last what into March. shift here sort

Raji Gill

very much. you Thank Great.

Michael Hurlston

Thanks, Raji.

Operator

Thank you.

Our Rolland Susquehanna. next question comes with from Christopher

is line open. Your

Unidentified Analyst

Son you Doug my Chris. on Hi. for This for thank is question. And actually [Ph] taking

question just earlier. want on So, supply up to I follow the

companies locking You one And your wafers. said wafers number or heavily the around we've way just investing into either in is seen constraint actually CapEx in other advance. some

here. something more considering, Thank this is that just a on bit elaborate So and you're strategy could you if you. your

Michael Hurlston

Yeah.

for work at not If say to has agreements. key to up increment with sense company I fabless a wafer we we to where I We're board. course into across CapEx obviously enter and think out not a of consumer these universal. then we our consistent the that supply. I sort tactic and subject not into strictly it that's makes -- runs lock looking partners to the we're of think the semiconductor are most the supply it we try agreements those so long-term line. would that's this to can part, We're we cost will mean into been of goods se. entering per

never-ending look long-term it So agreements. at I alluded it's as doing can opportunity to you said and see obviously increment battle. we cases supply. we will entertain where what And and certain our to we in We're a

Unidentified Analyst

And handset the than being Chinese as a market Great. talked then follow-up weaker expected. about also you

you market end fiscal year? are of how back demand this So here half into seeing the the

Michael Hurlston

there's like softness. talked think smaller then it's calls. in to a the in our feel position portfolio I our the mean, for now. China, It's sockets. obviously our the roadmap. is some in harder mobile I what's of part part Korea of We And in us obviously, good Yeah. our We're smaller determine. sell-through. There believe We both previous of majority portfolio. now us and certainly winning we've that's for to But as a touch about seems

good minute Dean this overall OLED I highest we've comment. of we're talked his new of is end display to ago in a being very this of driver. the mix. launch think it OLED It's it and Dean example the sub-XX% talked after trying I'd a got upside, driver. the market. it. mobile very of go a say display general our about And about high-end the on In

so, And content at sell more to phone. we an each high and in the per have opportunity now, handset particularly end

Unidentified Analyst

Thank you.

Operator

Thank you.

comes Derek Our from Colliers next Soderberg Securities. with question

line Your is open.

Derek Soderberg

my ULE. start Hi Actually I with questions. to want taking guys. Thanks for

have service some nice U.S. in large wins Europe. provider You the and

Just path curious what's that And that path Is integrate the how out ecosystem it progressing. chipsets best cross-selling? build-out What's sort is build ULE? or other ULE to wondering, into simply to best for ecosystem? driving in of sort of the growth

Michael Hurlston

Good question.

there it depends on think that ecosystem. where the in it I -- goes

at with types really So door is customer. sensors, our of of points North conducive range to will ULE-only go these ramp things. bandwidth we're just the beginning to specific opportunity end likely the window sensors the into as itself is longer be one technology And that lower American

And that's So be like controlling I certainly the the technologies will combine all thing ULE-only. think get things is in get endpoints. surveillance sensor the ultimately cameras. into the in Where into opportunity to hub, opportunities you you an

So And we to of are really that phase combo should bring progresses ULE super looking Wi-Fi combos those create sockets. our cross-selling cross-selling, at market into defensible certainly a the we then first socket. as some we'll sort into chip evaluate Bluetooth in

door combo close open ever it to out say function go don't highest sensors. know solution volume a I As single I of of will sensors have because and you the at piece these window type break that

Derek Soderberg

got it, it. Got

build. a of quarter, But for I Any inventory IoT mentioned going sell-through of follow-up of visibility that, your the portion customers? great. from you that think been Obviously been to it's any PC? are like out on in would year? of there factoring good into for growth mobile. has visibility the some my be up do there's And March you As channel softness inventories guys looks data expectations any it some larger have into beyond you nicely. shape Anything that internal that how you and for some into in

Dean Butler

inventory inventory what Yeah, have really can say any the buildup We individual I partners, limited within don't customers' very our end say, Derek area. inventory visibility I in we is probably remains But channel specific into positions. see low. would

the us. have mobile match PC on. continues I set that think for Outside has exception we touched occasional of don't see anything weakened IoT. specific recently issues. you in one is to actually That in that,

how think you've But just that factories. inventory on and they pull their look It like doesn't others I heard from through an inventory that. around to is us. that up down to

Derek Soderberg

it. guys. Got Thanks

Dean Butler

Yeah.

Operator

Thank you.

question Anthony Stoss Craig-Hallum. Our with next comes from

Your is line open.

Anthony Stoss

love into Hi taking congrats, seasonal especially think content gross growth. expansion XX% or Also it's or do in that two guys. see My remarkable. below from Any line? with for do go then you the going in of XX% you quarter above where And IoT your -- to phenomenal from on guys heading pretty hear Thanks. be with you content improving years can more How that is I'd market? the just margin Dean, June on much roughly products Michael, share? for side to that thoughts what to you the or or supply constraints. view on

Michael Hurlston

ramping the us being pull I automotive. about VR new us. for is have Tony, growth we've vectors actually say the we businesses businesses you in from really discretes actually where Those I Yeah. gotten new would about really wireless, and we've the are while long the b,ut talk for mean IoT particularly automotive, growth just the been talked solution. into playing categories the new our where TDI the for to a consider shift if business,

areas I'd historic our do rate -- our share. businesses In say, long other the of feel pull. revenue So kind line in been we the of that's run core taking in terms like we've

really long really of I'd revenue say, growth like new can we and franchise that feel of strongly and mine. run play to are veins we go the new But categories into continues and that's business, these in coming that interface video are Our business. creating terms a pull,

Dean Butler

around we backlog Tony if We I question, you constraints on supply out But taking our our suppliers. looking this would sort the And get for more, But sort us. supply are at say, which concern take your what maybe could quarter, certainly March strong. extremely of a was we're beyond point. not the March would second beyond is constraints of it from certainly questions

a sit In we it backlog was today, what fact, higher ago. than quarter as is here actually

can sort of outstripping you and December with now continues despite having out. the coming this in great be So quarter of shipments as guidance then read going are that orders strong. a that net to March sort in despite And quarter, new

of not concerned we're out and March. we So sort here beyond look as sitting

Anthony Stoss

a little follow-up if quick have Then bit Okay. a with Shifting gears Michael. into side. I auto could the

connectivity any entered I'm You in auto? if anything details seeing the on traction can you on the curious, you're really side. guys recently have or share

Michael Hurlston

quite mean not Yes, but think looking haven't at obviously, I for auto entered we there. Tony, right. connectivity We're I that's

more into products, wearable has at varieties. something gadgets look different Automotive type been focus video we through we're like more a lot of want the types transfer products, we but Our remains feel point of if consumer go this on could kind in of a window to, these mode. of of we

Anthony Stoss

thank Got Great. it. you. And

Michael Hurlston

Thanks, Tony

Dean Butler

Tony. Thanks,

Operator

Thank you.

Ackerman comes question with next from Our Cowen. Karl

open. line Your is

Karl Ackerman

offering I'm spoke both that components One customers? which one allow questions OLED curious afternoon. complements your significant mobile Two to and for me how offering. your OLED to you Good for think for Dean. and broaden about integrating new now shipping about of you Michael, those touch please. controller may you Yes. drivers, Michael, past display

Michael Hurlston

Yes, that. Karl. about we've I talked mean

product a I mobile when phones. OLED here, for TDDI got think we talked I high-end first about

Right in OLED our calls discrete previous we now, it discrete display and this of I a think not a talked drivers. most of real drivers we on display OLED I say, would As -- is we TDDI solution. bandwidth doing in saw opportunity got about family occupied into

has circuit and products there, kinds drivers. where the of to the priority match driver. on process investigate been entry for opportunity are because We things the there's display nuance all us engineering touch little And requires the in up of folds, of discretes we a the see the opening allocation flips, the quicker bit a on that like to new terms a path better The display in that simply continue it TDDI.

we're spending time. that's say where I'd our So

technologies. two ultimately your to end think, Although I point, combining you up will the

Karl Ackerman

the this to gave the function these how this designed there models models number will ramping of into, about if car ramp Understood. way is Thank is all you they today, step over next? I'm you. Are correct. a and or year the think time of Dean, you're Thanks. first

Michael Hurlston

the gave. that just I numbers Karl, mean, let me Yes, we explain

designed think, characterize they're ramping different innings in production. into six a being in discrete not as there's of tried design-ins, are to or the display early of out that's are future. shift as we're manufacturers, than touch, the models really to certainly, of at wins, if point. prepared that rather all this we tipping to really XX market driver, we design those Their said the discrete-based. TDDI. said discrete we're I XX-plus so And now, that a designs Most I most go not starting TDDI-based discrete units new see but still today lot remarks, in And

Dean Butler

And just data Karl. you quick point one for

have We previously about talked models. sort XX-plus of

here And the is now update it's XX. sort of

adding it's incrementally our previously. we So that model count have

Karl Ackerman

Thank Helpful. you.

Operator

Thank you.

Securities. Rosenblatt from comes Garrigan question next Kevin Our with

is open. Your line

Kevin Garrigan

for smartphone smartphones? on second XXXX flexible questions what for for of and first the my Garrigan half has is And changed me the in Kevin Android my landscape touch the these lately? guys. flexible My idea in point launches. rate an let This the new new Kevin competitive calendar you us OLED inflection OLED Can market congrats. give of adoption one an is there's taking Cassidy. echo of expected Thanks coming Hi, for

Michael Hurlston

Yes.

the I short number is flexible OLED think dramatically, our that. and something displays not are of sense increasing, that increasing but I'd of say

to we flexible to OLED, and the a OLED advantage So strength mix controllers. touch definitely flexible is have in going continue

way the opportunity our of the end to there Chinese displays second in displays. mobile good. think characterized Korean the business we displays, as shift driver, driver So we tips have Chinese then the that pretty the the in is as SKU we've the And the in to feel highest of And we it's kind market from again, that display sell stack.

Kevin Garrigan

dollar just more announced view cannibalistic current kind And kind content us a sense in line, what wireless or the should it for is give station helpful. reference That's it. of of as station a as product you docking is market you follow-up, wireless a guys increase product expansion? stocking we this wired and Got Can versus of the to you design. your

Michael Hurlston

it's market a think both. there's of whole I'd say, it's definitely got but going set. think I Yes. I we to little some bit open new also be cannibalization, to mean, features up a

And a that of these tens both. we're up docks. of content bit of wire think at side dollars on one, I second steps it's then dock think one I the the looking traditional on wireless So a from go to to

XX. the but don't of something know exact I So numbers, it's north

Kevin Garrigan

very congrats. Thanks Okay. and helpful. guys Perfect. That’s

Michael Hurlston

you. Thank

Dean Butler

Kevin. Thanks,

Michael Hurlston

Kevin. Thanks,

Operator

Thank you.

Martin Oppenheimer. from next with Yang question comes Our

Your line open. is

Martin Yang

should a GAAP quarter trend the another afternoon. read maybe lighter are taking and than have down. feels Can GAAP it's question guidance this How Dean. question. your for Thanks I good for about what December and reasons guidance. also the in the and margin is slight the talk margin tad gross quarter in we that – March the into Hi, past much you step one like being the for It behind trend? previous

Dean Warren

Yes, question, good Martin.

GAAP is a notable Synaptics. margin quarter as is well So for gross December the that know first the thing to actually for record the

record sort trading more it's side the the The March of is time. even GAAP for be and influenced So at the in going highly by margin same DSPG gross so GAAP the acquisition. line on into the and December to guide non-GAAP

inclusions step a GAAP-only are that number GAAP-related run value there side. amortizations So will in the up of inventory intangible through on

you're a effect sort until amortization to get schedule. that So you initial of going for see of through couple that quarters

Martin Yang

perfect. Got it. That’s

you. Thank Okay.

Dean Warren

Martin. Yes. Thanks,

Operator

comes with from next our Simpson question And you. Arete Thank Research. Brett

open. line is Your

Brett Simpson

margins. to wanted Yes. I Thanks non-GAAP very ask the about much. gross

lot generally margins. are you a the a of peers portfolio of industry And certainly your has of still gains. look performance fantastic there's this at a few of I lot one the been playing – would years. it's like the consumer last been offer, bigger history where have And in we terms over a When and the in lot lower the structurally improvement of a would areas You you in see. mentioned gross normally the of semis jumps the than lower – are returns

question my so to new the Thanks. start And fantastic. are is sustainable of gross mature? that the business really how been And performance but the of the returns highlight you has categories the particularly – across margin some business

Michael Hurlston

line. I'll mean of to over the Dean. Yes. then we it turn and margin Obviously, sustainability the I about take first comment feel maybe the good gross

because mostly our ability ASPs gives a we we've to got in a of you're markets at auto a that the of feel performance of level which enhancement play there's right sell think than quarter there's rates in the off structurally But I going worked Dean gross that's margin it's on. and to level to we've every since obviously, not It's is that point. improved we something and really are do differentiation, level us quite bit I integration and question. mean It's we've seen. on a consumer at like We the been competitors. improve higher together. something where some we've almost going end I while worked We of we do got no like think sustainable. I feel at here level competition, the

Dean Warren

sort our at think I consumer a of portions and of point premium take that not that's just margin Brett, fact. our as necessarily Yes. true markets largely across aimed low end is characterizing is to broadly important are products the

in transport, We're the for processors going X and the about that's our connectivity, Wi-Fi that video doing at after cutting-edge decode-encode capabilities any of with mobile, we instance and the features, marketplace, today – we type and Wi-Fi areas audio wireless right? edge, our products. high-end AI We're into Even standard in integrating of commercial are things XE fact, designs talked laptops. now In go high-end to with of on lower wired power some solutions video a PC form unique factor. competitor after PC the haptics than transport

the side therefore engineering things where at the margin. customer can that is Synaptics it's we can bring base mobile gross a high-end again flagship valued extract On in is the the flexible fact by aimed and type reasonable mobile OLED devices valued and

So but I Brett. to generalizing the overly think it it think It's way about as not about sort premium that's think of necessarily the you areas.

Brett Simpson

talk seen And perspective that. about And can. guess, you They've is seeing if how guide, generally maybe one on when prices they been of at on is just quite should raising passing Thanks for big XXXX. your of or pricing March how pricing. your much a big a those give you Thanks. increase Can cost chipmakers we're that going of And they TSMC a quarter foundries. increases. on I into are that we've increase? sales dealing follow-up that meaningfully Okay. foundries. you're as with look maybe lot

Dean Butler

Yeah.

quarter we've I known customers. past we've the to quarters our pass changes do along And change increases straightforward any March in So pretty prices we're input incorporated no for And we think guide. that have different from been many of our peers. largely price that. We before pricing our seen these end quarter,

And phenomenon. And when input so supply actually XXX, that changes you outstrip prices ASP largely as in it change this is right, actually economics will conjunction. demand an see

So, we change. yeah, guide. continue along fully it's our if input into so to continue been incorporated were passing and in But to that we have successful March to prices do

Brett Simpson

Got Thanks much. it. very

Brett Simpson

Brett. problem, No Yeah.

Operator

hand the Thank like comments. closing conference And further this at to for I'm currently questions. Mr. I'd you. no back showing Hurlston time over Michael to

Michael Hurlston

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

Operator

today's concludes your call. conference for Thank participation. This you

wonderful Everyone day. a disconnect. now have may You

Synaptics (SYNA) 4 Feb 222022 Q2 Earnings call transcript