SYNA - Earnings call transcript Q4 2022

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Operator

Thank you for standing by. And welcome to the Synaptics, Inc. Fourth Quarter Fiscal Year 2022 Financial Results Call. [Operator Instructions] After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Thank you. to Investor conference Relations. like Shah, to now of Head would turn over the Munjal I Mr. Shah, go please ahead.

Munjal Shah

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

presentation, of addition a on relations remarks In also posted investor we these supplemental prepared a copy slide our to have website.

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

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

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

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

Michael Hurlston

Thanks, our welcome, which Munjal, in our to We everyone, finish an XX% call. XX% from product a outstanding grew and and business strong mix. one XX% today’s of increased IoT to to year, had

we in continues diversification IoT opportunity four weakness growth we business. range mid-point across to areas last our in As guidance slightly quarter’s offsetting products call. quarter above for June the out, our discussed see of business, the our mobile our with ahead strength IoT play was in particular strategy some our revenue

uncertain our in is quarter’s level. that Our an results portfolio resiliency profitability more consistent our showcase gross environment. non-GAAP providing We maintained the margins prior record generally with diverse demand with

our QX QX grown end-market non-GAAP million company from XXXX also the We XXXX, margin and have been In I to XX%, that line our its compound risk. mobile non-GAAP years XX% importantly, our contributing. gross we day in the has operating our XX% away from most reduced $XX have that with high a rate every margins from by range. million has since business of joined high XX% perhaps annual the operating time, IoT $XXX growth three concentration, to almost It and, shifting to at period, business margins of our end EPS was our most from delivered three-year to guidance Synaptics. X% record non-GAAP improved non-GAAP In in

these drivers a best-in-class businesses. but businesses within customers. grew Last four of variety portfolio. than not highlighted quarter, semiconductor our IoT also a portfolio only growth this and reminder, Together rate year, we range growth an As amazing serves more wide among specific end-markets, of our XX% a IoT

of will moderation and some However, seeing in are segments discuss these takes. the we areas puts and

First, seeing as benefit to available. becomes our readily more and automotive some grow supply we business are continues

win TDDI an becoming more experiencing a expectation strong designs, also electric screen TDDI larger; is is driving ramps share. are as there and customers for market trends but shift see growth one, move our Toyota. existing We accelerating that plays with continue We third, our with size and to have business: in are automotive three general new such higher advantage our to interior; vehicles as increase Ford to and second, consumer technology digitized which a we to in

business, Given the increase. in rate this to growth competition beginning is

such, have up. set positions move design feature and drive in to products that the cost us As we better

a Next, connectivity design Best and single show wireless strength device for protocols continues our device Last the XXXX Thread/Zigbee on wins Connectivity. in pipeline. product our wireless Bluetooth XE, the to of Wi-Fi and Award The chip. business month, TripleCombo both Sensors offers received

from performance. several to transition to where Wi-FiX Google. designs Our in we including the large advantages, of considerable and power OEMs, Production started Wi-FiX XE versus continues business rate and has from range Wi-Fi of have benefit particularly performance Wi-FiX terms with

of wireless for underway our Product strength are products area at numerous companies, has technology. security Another including ULE been ramps ADT.

to our moderation wireless of part about good near-term the feel to continue facing some prospects, in expect long-term see we consumer business. our While we

shown has over last tremendous reality the business year. calendar virtual our Third, growth

We OLED. ahead positions go faster as have refresh screens opportunity significant finer seeing and the market as as in higher Chinese leader are us rates, customers a roadmap types this and pixel begin to such their We remain micro unquestioned well that densities product display launches.

our However, a success of more growth the businesses, and upon dependent IoT our OEM is new end-market ultimately any customers. this is of than

a on forward slowdown is these we be new really launches and drive reporting dependent Our customer to largest in significant will customer near-term. business the this

business interface increasing. as our core to attach its continues application demand to Finally, rate docking PCs station see solid in the video is

incremental see remains improvement high in to our constraints, backlog supply but demand. some service starting Our ability we because to of are

customers purchased the devices end-markets. resilient, For compared by enterprise is more demand consumer to most part, these where are

good seeing with nextgeneration products. are We our traction

For in compression. recently conjunction technology their combining for solution DisplayLink our designed-in was DisplayPort our example, by with hybrid dual-chip solutions StarTech docking

addition, In docking docking be video getting applications Besides wireless about believe additive other as our that automation, TAM. products smart conferencing. opportunity enthusiastic traction to we in will factory video we VR are and such our stations, the interface unique overall headsets monitors, are

and and chip leading winning our Spyder building In business, including Belkin, design-wins is TWS, first and Matters. new including for processor audio technology and momentum headsets conferencing Cable Lenovo, systems. several OEM we Finally, opportunities our processors the in converter with market adapter are protocol Kingston for our at designs market video customers, gaming

with our is Pixel Buds One Pro, extended exciting Google cancellation in wins and noise life. their best-in-class enabling most battery active of capabilities

processors, have new most a We win also at for Cisco. our notably markets penetrating successful video video conferencing been in

We world’s but products Two great also touch processor with UCC and crossselling pull having the other have in note. carrying one gains, success of success areas In content and video certainly wireless, have are had share UCC our through Finally, technology general, with interface. great Voice had are to of products. products last increases, success other we such using as expansion IP providers. volume over seeing leading customers, our

originally we share. Our better products than are cordless performed and gaining expected far have we market

encouraged four that we pipeline. discrete Flexsense, by a sensors, building positive single customer customer response receiving is typically our initial combines device our chip are Finally, and

softened and in PC our anticipate market mid-teens XXXX. group. product Market calendar further demand move PCs me for on we Let a to has decline

We outperform notebooks. expect demand consumer enterprise in overall PC given to where market to compared higher-end strength trends the better, SKUs, our and are

notebook models. premium user security and Our and the ASIC new in market new use device other products gaining to we is Clickpads experience all latest best-in-class enterprise with HP’s expect their Vulcan OEMs larger ASIC, size this for adopt traction.

starting Touchpads becoming designs larger solutions In addition, to moving from Forcepads. and Clickpad we Haptic see are to

will to from this only expected company’s weaker result in have expect abated, in discussed content, market The forecast resulting further XX% selling We to not business we which of and than as now last and average about a XX% we industry price erosion in transition call in uplifts. next we the the is XX% position revenue. higher performance benefit quarter. conference Mobile have strong our headwinds believe

the were customer, After on year-over-year to to low-end North For business model. continued large has our expect a be down of by sell quarter, we our primarily bottom, basis. business driven handset American the September Mobile at we thinking their at deteriorate approximately XX% through

in model increase. market in see last of remain OLED handset some confident have technology remained focus. we the signs However, market handsets launches with grown position new We to our highlighting the areas consistent, which and positive we flexible touch the mix overall our continues months in in two strength. pace shipments as China of in has our The

OLED revenue incremental from In as we addition, seeing supply our display flexible driver are improves. high-end modest

We exceptional competitive with market. now increased conclude, in several revenues. To fiscal quarter fourth experiencing our year successfully and grew and pressure had we are However, we products, financial organic inorganic participation new introduced limited an and expect performance. acquisition, this and integrated record

opportunities is with customer Our growth portfolio presenting approach an for the to company. cross-sell into vector platforms, multiple us important products

seeing from confident particularly weakening we IoT. near-term in PC, While remain consumer in we some and potential, are primarily headwinds, market confidence, in mobile long-term our

provide repurchasing more in we will his shares. our see result, Dean details a As in own value remarks.

over provide now and him to outlook. to me call review turn results Let the our our

Dean Butler

quarter recently I’ll our and review provide with the Thanks for everyone. afternoon current and year outlook. Michael, then a and recent of our start results to good financial fiscal completed

margin offset net XXXX, year. record XX.X%, of to revenue $X.XX by fiscal our new gross was with year, fiscal our the margin company prior Gross due year-over-year products growth and largely GAAP $X.XX Mobile full-year to billion products, in in partially XX.X% compared for prior record continued products, year-over-year billion new XX% company’s which the up expand of XX% decline. the XXXX the XX% in For to compared a IoT a saw to an for a

up to and value per product Our year our share, prior $XXX.X for year-over-year XXX%. as Non-GAAP prior recently year in or increase income was with growth. fiscal significant of Mobile the a XX%, XX.X% the diluted sequentially compares income per compared to non-GAAP was per midpoint completed quarter the June improvement. our was year $X.XX of of $X.XX margin up share, Revenue million X% compared was million, or and share, $XX.XX PC, to for in record IoT, June and completed Revenue year million a a deliver respectively. we company’s mix for or were declines products $XXX.X and recently product from as quarter $XXX.X higher year above delivering offsetting of year net to was to our per share, to revenue delivered IoT net or million $XX.X for was completed fiscal slightly IoT shifted record XX% the the PC. gross sequential XX% Year-over-year, applications Revenue growth XX%, diluted year-over-year diluted $XXX.X guidance. both IoT also GAAP XX%, million the continue XX% a and customers. of products the $X.XX Mobile diluted the prior

product June demand revenue Our sequentially grew XX% IoT during was year-over-year customer quarter the quarter. strong up and reflecting XX%

Group year-over-year. Excluding sales were acquisition, the IoT our XX% up DSP approximately organic

measure. annual we quarter in to XX% revenue XX% three end our down and has revenue, almost showcase in more years results is now year-over-year. and these diversified focused XX% sequentially IoT June year any to achievement down billion was growth revenue a the applications. In mentioned, Synaptics over our Michael grown rate the IoT significant at at fiscal last the to X% by As a pivot $X.X success PC, have on our compunding strategy achieved company of

Our lead historically in continue gives ability PC down commercial confidence to high us markets. up our to and through in in mix notebooks

ahead, look PC commercially weighted would we a business we adjust we to customers cautious As pressure downward expect as the to PCs outperform market in overall more expect end our modest buyer, but our market.

to quarter down our through. and believe Mobile burn prior channel, in of to We inventory there been across lower will time product continues likely Smartphone be Chinese take XX% sell-through year-over-year, June a was some revenue smartphone that particularly build-up declined X% has and sequentially Korean the expectations. weak. Our than OEMs

trend limited visibility As for our such, into September when soft this quarter, the might to on demand reverse. with products we mobile remain expect

market. ship than at revenue, and OEM distributors of During through any don’t two we both one end these being specific the customers such, XX% multiple servicing greater OEMs, represent or products XX%, wide as distributors a XX% our and, variety quarter, had approximately of

expenses value quarter GAAP For GAAP the costs. XX% operating the non-GAAP compensation with margin of slightly guidance in XX.X%, of gross maintains company related $XX.X and amortization our million, $XX.X million, million acquisition share-based gross of $X.X was product $X of inventory non-GAAP million new at costs record expenses costs June quarter mix. amortization to million share-based during fair compensation preceding June of $XXX,XXX $XXX quarter. our includes the development below asset which million which of intangibles margin was a mid-point million a strong of an $XXX.X June of $XXX,XXX. June intangible our amortization, benefit and quarter, at of operating adjustment, $X.X the from of momentum range, prepaid consisting and guidance costs were quarter and includes of primarily unexpected foreign restructuring-related our were the quarter which due down exchange of

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

a and quarter setting an of year an per range. Our This $XXX diluted shareholders increase million EPS of of $X.XX, share has June significant our rewarded from was the in quarter the increase ago. from X% guidance a record our non-GAAP non-GAAP the same with the record prior XX% profit above high-end net increase income of quarter in

turns Now balance strong the the days up end million Capital XX XX preceding turning $XXX $XXX to from from due last and $X.X days PC of of flow million and the the Receivables on were of cash million. sheet. equivalents, as operations primarily areas. days, Mobile of to quarter inventory expenditures $X.X was was and sales investments and were increase $XXX cash, from inventory ending balance for million. slowed the short-term quarter We an above in million and XX were million $XXX $XXX quarter hand; days, cash quarter. of with last quarter million June our outstanding were Days of at days depreciation XX have ended inventory

of mentioned, of stock we end our announced buyback Michael million. the As to program, has return quarter to authorization through June an which expect $XXX at previously capital the shareholders available

a inorganic We down we share cash challenged via and to we continue intend shareholders balance, accretive have pursue become paying to given begin more return the and M&A to now debt. to however, opportunities, landscape has cash comfortable repurchases flow outstanding

our of some a are a positive potential. we market experiencing cash is repurchase believe of and our moderate While good share areas return softness, use

anticipate turn revenue in me September $XXX let Now, to to our to September the We be quarter million. for range the of quarter million outlook. $XXX

products further the approximately from up the mix IoT, basis, Mobile and expect expect PC, offsetting in XX%, IoT approximately be XX% XX% and in quarter a to we Mobile and We to grow and our At revenue midpoint, PC. continue products September anticipated XX%, sequential year-over-year declines to respectively. our modestly on partially

remains Our revenue of backlog position guidance. to strong above our the high-end be and continues

we products Reality, additional for applications. customer specifically some color, this and Wireless are of are requests However, some we consumer recent to in add closest pushouts in a change a change subset including behavior cancellations. tied To Virtual phones, seeing seeing Mobile applications, and

to of be XX% to We quarter expected for in margin September to the with expect in gross our XX%. maintain GAAP gross strength the margins, range

XX.X%, ago. XX.X% at XX% same range the than of non-GAAP basis margin expect of the the We higher which XXX approximately to would in mid-point be one quarter points year gross

operating September share-based We expenses to cost in million million, includes quarter expect compensation. intangibles of the amortization, be $XXX the GAAP $XXX and range prepaid which to amortization, development in

income diluted range $X.XX. program annual have be $XXX shares. resetting per fiscal of an long-term be At is new results We non-GAAP June This expected is per as diluted plans to to changed engineering expense our fully million reflects expect share for $X.XX per capabilities quarter and quarter income add not product XX our GAAP share estimated and to point, of to to year. be and in net and in the September this $X.XX a range roadmaps. non-GAAP investment to million sequential in the expense $X.XX below of be to a operating million. company’s of our the $XXX share, range go-to-market to continue the in slightly operating we begin bonus our net anticipated And, on drive hire September our decline to we

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

to Finally, to the with non-GAAP in we This our reflecting turn operator wraps fiscal the expect the fiscal last Operator? XX% tax our of remarks. begin beginning quarter. XXXX be rate call range XX%, now changes we prepared the law I’d up tax long-term to discussed QX, the over to session. like Q&A to

Operator

Certainly. [Operator Instructions] Raji Needham. Gill with

line Your Gary is Securities. Fargo with Mobley Wells open.

open. is line Your

Gary Mobley

taking for Thanks guys. Hey, my question.

I the we apologize the advance fact violate appreciated? of to theme have What common that color bit to the soft -- guys is give off here. I'm are thinking the into if a earnings year? protocols you the much you are I the As so planning call, any season. new much you throughout the a But there visibility of honored year? fiscal just about But of you you balance official If It's a how appreciate in any [indiscernible] the be year start. would Do for? balance can us know,

Michael Hurlston

couple pockets relatively far, good of balance it's over in have Yes. well, Hi, but pretty of remarks, of Dean continue violation a worry, some that Gary. I to as IoT said held of we've quarters softness, so is declines significant China. the generally No business seen We visibility. to pockets mobile primarily we're our business, holding we up strength in well. I business think prepared seeing related last up about lot some question. on as the so don't whole fair does

in sectors some period where is through there get it's uncertainty. a would we before work going the PC mobile really just and say, point got have I to quarter So where I to visibility, think another to this we and probably we be

Gary Mobley

most I your I believe you $XXX an obligations were recent your filed you about million, filing, guys. but which your I is back level go K yet, think I believe purchase Okay. to elevated for if don't

fiscal as they some your question fab is my need higher or from you than be? Do there so ability timing your they we the quantity more areas up Are And than is, partners? did year? you partners? you the more concluded And to with have to them foundry in capacity tick need any negotiate

Dean Butler

is this Gary, Dean. Yes,

on -- just the quick a one quantification. maybe Just of some

any you purchase come we annual. you're of K significant consistent that So in with, movements right filing the in hasn’t couple weeks filed the we’re but suppliers, will a majority don't subset few obligation. been obligations of have yet about on sort vast haven’t have know written you of but out a obligations, capacity? as There do do with to the Michael, -- a talk we a liability want

Michael Hurlston

mean, customer I would the sort two obligations of tied got I we on of those. Gary, the purchase right, think say on other to Obviously, we've back obligations. end things, Yes, those that

chasing where working one good seeing terms balance between we that easing XX still a obligations pockets and operations our can. still some it's been nature. purchase to things about we've on demand in remarks. able nanometer we're being our of supply, to We're is compressed. where nodes seeing that's where as definitely we agreements pass of So feel are overdrive our we prepared other some on the But us having long-term in in There customers we're in said easing that team meet of and to allowing really, areas, where really supply

there well, a as bag little a bit So Gary. of mixed

Gary Mobley

Thanks, guys. Right. color. Appreciate the

Dean Butler

Absolutely.

Operator

Needham. with Gill Raji

is line Your open.

Raji Gill

my for taking questions. Yes. Thank you

comments talked dig changes respect with you wanted Just some a about deeper to in into to behavior. of the customer little bit

your virtual that's You some wireless little -- about XX% of and headsets. of documented, in weakness now But that's subset bit you softness reality about mobile pockets well in mentioned phones some obviously applications talked of business. been

mobile of side, closer of would these to the You XX% consumer, if the is you kind the types percentage of a tied applications”? to overall so of about if put what in mentioned you revenue “consumer feel that the products is business, total are

Dean Butler

each Raji, you consumer tough of sort in many a our nature. different might as are applications. area and tail imagine tell, to technology enterprise sort long actually IoT has Yes, I versus minority mean, of mix because of it's It's portion of a products

sort Like have closer said has of as observation we So does customers. I products consumer been volatility the remarks, the like prepared from of being a don't it more seeing in specific those VR, consumer, quantification. very we're examples, get of having our centric, right, first is Two to customer a the sort seem base.

mentioned sort has subset you pretty a which then applications. is of phones, been applications, wireless obviously, within and documented. mobile is well And Second long that tailed

Michael Hurlston

VR. bit Yes, Raji, give let a of on me color little sort of

I probably where consumer more very In are of into some is it's to year range break though half think some even America. through that's in relatively that's of in which that for of well a that offsetting some think us North confidence you Dean seen we've can of that are obviously which kind hang read. and we got expect one hard ramps of give a is which that The on are softness wireless, a as event got sell to numbers that products of us I of their said, business part it's down back a we've customer bag couple the give of industrial, our us consumer applications, particular enterprise, different there in sort facing. for documented some have we the mixed end of we of

Raji Gill

Got it.

nicely to of it’s is now It's revenue. XX% highest are up around by So going at margin holding margins of IoT the segment gross of XX%, gross far business company. the the XX% revenue, your

the slowdown are IoT So consumer of of kind maybe if of or able products. the facing be margins? there variability some a should we expecting, is maintain volatility Or kind on of kind, in some margins to you gross time? over those within How

Michael Hurlston

at sort reasonable to areas question a we've mix. the consumer the business But near-term up. And gross some some gross is hold within would that there seeing I expect your back Yes, your point, of some and of would I or expect of got area in industrial mean, potentially. that we're We mix, margin margin gross of we the part to price And you goes to part enterprise some the areas larger the competition. of our think IoT, it overall a mix, first in margins expansion. erosion in that's becomes expect part business

So balance the two year. now I answer the through it we or right minus of an out fiscal parts how you see our balance depending on says that holding think plus as of those play mix, get on up

Dean Butler

offset and would more just sort a calls. Yes, of certainly the and talked I that add we bit input September We one input in forecast doesn't well we continue favor. is to and continue here. at department. for time continue change. you we've our would one quarter gross Raj change, And prior prices. do and do to expect see by that margin We as the IoT on the past probably that's item, quarter Mix next to in prices do changing can can a have in obviously about continues that to to guide in grow, but extremely

Raji Gill

over queue. the could in squeeze internal hop inventory absolute more And I'll grew basis. back on year-over-year in question, if one The I XXXX dollar just an

growing, maybe out revenue XX%, revenue growth. of our doubled is So so is grew revenue inventory growth

about wondering Just How those you're are of the Thanks in for thinking lead times where and products? channel currently so IoT inventory? your particularly thinking IoT kind of how kind inventory, much. you're about

Michael Hurlston

inventory and has a so that given characterize a largely areas inventory question. gross year turns, it's under mobile a exactly What two on inventoried substantially. of inventory way argue revenue I primary the increase around of has Yes, is out sort say the would where coming fair the ago slowed would up. sort not changing catching of, we're products. inventory probably and good level That's the significantly PC just I been days to we're is of

position dial of areas to IoT areas some strong, also we’ll in decent we is be would inventory, So of back what to we and in what do in products. that two our continue we carry top On specifically look move our in of of to backlog pictures in in probably to to change clouding bit times those and continue some a inventory up The does this, look to sort have times a lead start started supply areas. start inventory ends compressed. get has to bit these therefore and as some little of little lead and loosened come of as those as would come

Operator

Your line Susquehanna. next question Rolland of comes from with Chris the

Your line is open.

Chris Rolland

Thanks the guys. question. for Hey,

building terms Some pretty are they think September that's September past And what inventory into do visibility into guys are big perhaps fall for have we December. out we their have guide, and quarter. are of kind in And guess because I decent but the you the coming any then as look I that? September, customers And you of but quarterly I'm Thanks. not thinking trough in back figure steady a get from or like a state segments be a out are -- Those mobile steady when might PC to rate state well? things to trough, what as a as two sorry, normal? would longer trying classify here normal particular, term perspective?

Michael Hurlston

of think where I Chris, to get this we're bottom the is. fair and to trying questions again, Yes. all

where in the exposure it’s very think of still is hard us for to -- handsets Chinese mobile majority our I say.

We've where As through the in seeing that seen month-over-month remarks increases. prepared up. is I in some we’re sell life signs market indicated of of sort ticked

where going about take we there positive offsetting such to The mix are However, where ultimately burn is understand area, display think thing type, it's more bottoms and is out. which have one for off I we've there. that a -- that's this how as we you coming uptick us toward to I'm like strength. concerned to this flexible and sort hard the levels and We an got In more of see have shifting know long event you, again, slightly that inventory handsets more OLED PC is do online.

necessarily facing the our sort commercially a of consumer I positive we're pulls more hearing competitors channel, our and that inventory As puts think of and of there you offsetting is big some mix. the do, seen have that in have we're we facing event more haven't

us gave. to just the of for guide hard we sort quarter very again So beyond

signs, but positive positive of terms on if you know, that. more don't bleed, some tough signs than any inventory Some it's in have balance, call. Dean, I to

Dean Butler

think comments would are the just to comfortable economy bit kind I where I going customers right. of choppiness, echo start customers lot until headed, is think from board. of I mean, of, little reacting macro. probably I a overall that's the across a Michael’s Yes, And get to on think and be there's these I the

Chris Rolland

sale And the good for was guys. [indiscernible] And on perhaps than potentially had thinking expected. R&D And it believe focused seemed so OpEx all then there? connectivity internal it and or for we be is you investment that quarter development the Broadcom would my OpEx, does again might that XX unrelated, here? up your What better of be the business around any are I the of this rest that related XXXX? is Thanks, purchaser and you updates on? in up then like there or guys pretty that IP one year potentially in next Are

Dean Butler

we me Broadcom to Chris, on quarter around the track take What have Yes, spoke impact in been bit nothing we just pretty in OpEx, unexpected FX remarks the excluding benefit quarter, the prepared we is, sort OpEx what is let and let saw June OpEx my Michael sort guided. invest would I'll in is WiFi. a I one, really an line continue little on to we're still with what FX changed had business. had the in previously it OpEx in to first comment of we actually you the

fiscal OpEx of the resetting was of that really September, is for plans sort bonus and around So FX. guide what that accruals year of a and of the you see Guiding in into new all the sort on an range company resetting that. the unexpected

of the WiFi? I of really every from sort talk typically want and changed and has you probably side, So to the thesis. nothing that grow hire sort about we do kind plans, Michael, would would per on of continue see year our OpEx say to you

Michael Hurlston

that, attached to not ended sale, that they Yes, Broadcom, contract the end got three business is there at understand way this don't of circumstance when that hard on got the but the there It's they if no the could it's lot It's that the business to point would do segment business it are say hard business at taking at seeing a something of when as me third particular that is understand if be know mean, dynamics Chris, least people sell might there up time there what when it. you we a getting that were, I obviously we we there this resell somebody as to the to for at to can't. got would else indeed class and it so up we it exclusion was, will. creative attached for I buyer on there I a year IoT of IoT it's no in won't this now no a Whereas around. is what would working out business, There to this buy what was anymore. the we be again products no understand here's the it say reads, me the for keep are they now, not zone, business whereas to people time -- we buyer

Chris Rolland

run would year? Dean. for Michael. what OpEx think be -- Jan, the year Dean, for just Thanks, clarification through next And Just remainder do in from you to of the a for understand December trying terms of the thanks. rate

Dean Butler

Yes, of just September know, sort for and quarterly. step I guide at look up the modestly you would of sort just,

Chris Rolland

Thanks, guys.

Operator

Sankar Krish Cowen. with

open. is line Your

Unidentified Analyst

a seems Hey, in I guys. on strong exposure. you (ph) is [Eddie] Reality that pipeline a have for This It segment. your Krish. have question Virtual

percentage once in year. those a Thank ramp, you. assuming big should the as So happen of next Reality Virtual which programs back half can I'm How IoT? of become

Michael Hurlston

Dean, the you it. think see Munjal a big one bit mean, market we prepared said that out when well that to is which seconds I'll what does. maybe on is maybe we first talk half I this on question, two put the how I second how business dependent little as the broke of the Yes, can we remarks really and give in

really sized now, sort a how up have to market, big relatively three giant terms end in customers well in call position the the products. this in -- TAM, these we actually customer We going market. how And of optimistic customers it's dependent our will quickly. come well we're equally depending see one we're goes, you online to here of sell-through we're going how end on there's But two how really, right selling really think but totally call one do or that that on you in

line. we're a have think It's on. that one we differentiated product So we focused

add continue market, out? know, to initially much develop don’t as the Dean, where some for. broke probably can to the reports market to on ultimately you are. market sizing that in continue you We color want we guesses as and but the I products of the optimistic We're to lead the dependent we size really guesses were it on

Dean Butler

since a quite yes, it out. it Yes, revenue to in about quantification, at give quarters actually a was had It couple had of time little of couple rate we million sort growing started since that when us. talking reported it broke rapidly we grown, $XX back, had of we public, about A a VR, of a first just years. this for run been business year Eddie, point for bit

larger market so now. And does Maybe obviously where much is it's on dependent this go. really

reaches I business market said, the its could potential in really many pretty Michael think if be that sizable us it people a for the As future. expect

Unidentified Analyst

guys. Thanks, Great.

Operator

Kevin Cassidy Rosenblatt. with

line Your is open.

Kevin Cassidy

thanks pulling up. for and times for these tough keeping these and taking numbers margins Yes, congratulations on gross question my out

business mobile ever still that looking you're you what Chinese or consider revenue As uptick you're XX% going that of to though, exiting the an is sure Would down with you're to be -- not? -- going there's and whether not the market? the OEMs at

Michael Hurlston

overall to the lot we to or It's I question, then tie technology a grown an really of mean, throwing certainly us. last we've redeploy us it's I think couple how there's Kevin. accretive is cash. between years. in top been automotive from a It's for off a business It's over of It we then disappointed in and problem what mobile line for perspective great do VR. the is obviously

leverage a can to than and respects are discussion quite important one be, that look it what a and get mobile at that continue engineering we our from positive us be where that bit might really to honestly options we but that apparent. of that we in some and lot so it's more a might complication redeploy evaluate into it's several complicates other And areas

Dean Butler

joined, the just sort couple managed and what the is been have I Michael we a since and been lens of that's continue way. taken I on, strategic has one where to focus we've we manage last of you've mobile, years. seen add to that of proposition focused lot on is value over obviously IoT as different is, sort of Kevin, other Yes, would which our a thing to And

differentiation are and talked But think some mobile, business. to had I that be prosecute we'll continue to synergies have we in other have important. value strategically where about it areas Michael in does that our that of

Kevin Cassidy

you I can to in -- that -- Yes, for if how you have maybe market? barriers Okay. the could the especially about and competitive automotive that see automotive competitors talk

Michael Hurlston

And you display this mean, I have of the state-of-the-art concept big is TDDI. one, really have Kevin, state-of-the-art drivers and to touch.

seeing are come we're ratio. trying what is differentiate the do with customers to to we're in to We local contrast has which and do to trying dimming,

You see, we're introducing around that. products

knobs can put larger enable introducing introducing without some we itself products, feature enable the as screen the cars we're on sets we're some that As cost names some products lower that and that. into such going can said, you I -- of

a number looking a we we keep we So standpoint edge the and that think deploy that think of of we've our happening cost by keep that able performance ahead contrast bumping cars, dynamics will have range OLED there's are been standpoint. long then competition to there. advantage and from a is both a And things to different feature ratio,

great a keeps both just and that's largely touch that very for fact market need a at state-of-the-art bay. us, that driver competitors state-of-the-art display So you

Kevin Cassidy

Thank Great. see. I you.

Michael Hurlston

Good Kevin. speaking. Thanks,

Operator

Vijay Rakesh Mizuho. with

Your line is open.

Vijay Rakesh

Michael. Yes. Hi, Deane and

you between Just link IoT if you -- and a pretty you IoT a segments? DSP obviously, the there mix way stuff if be the what how automotive, if automotive between group of display ballpark were et would quick to you exposure and or consumer But have industrial a that side, some enterprise is question to at cetera. on up -- between or would there the and look the different can break good mix kind

Dean Butler

Yes.

think I call, do last major don't think And the, reiterate growth call I we of, these, areas color the sort is good that of, growth break are the what just out know, four into that give mean, So driving to that sort what of Vijay, IoT. we that you [indiscernible] areas. sort this sort up we actually to talk four everybody majority in try makes actually remarks the of sub within that Michael's about technologies, I prepared drivers. of base on revenue from of And enough change. stat

are they year-on-year account those XX% of well for businesses and account majority the You tremendously so for growth, doing IoT.

Vijay Rakesh

you see almost M&A you saw have our looking that Got -- your it. where XX, be earnings, which platform? out do is I or improve to target. now are a the getting of IoT or are But and would opportunities pretty And you would then is broaden for good IoT And you XX% portfolio. still you look if -- what

Michael Hurlston

plank big We've the taken well that We done a are our synergies Vijay. almost of difficult it's every growth mean, with that plan. over think platform is he now and the I'd pretty we've forth. And case in. forth relatively started terms about M&A. putting acquisitions inorganic I and when environment it and is that maximized Yes, say I think right I we've operating put in a I definitely, for the Dean that right we share in alluded of talking Dean to think delivered what buyback, now What I actually

had Our we now. think if our it's incredibly right do to in that a some price. share correction deal, incredibly why cheap put is had big obviously stock we a time is to Butler We buyback. think low. signaling pretty valuation Meanwhile, is for stock Mr. a we've first in That's the appetite

Some of had not competitors ours. our all corrections much as probably as

perspective now just is financial the difficult. environment from a M&A right So

Vijay, brought part. IoT most it We like valuation area primarily, there that see could the to make are continue cross I in problem add have to think you because look other and to for pieces in the in things nothing sell, we we're of if this breadth that we really identified able might sense, but and power

Vijay Rakesh

Thank you. Great. it. Got

Operator

BMO. with Srivastava Ambrish

Your open. line is

Ambrish Srivastava

distribution on question and channel, and into had that Dean. I a you. thank Mike visibility Hi,

the given visibility channel that please us can that sales? sales understand then, And what top And inventory two the us just channel remind help what's First, percent distribution then also you. Thank of some your and into just is customers of sense distribution? you is? so distrivution what

Dean Butler

Yes.

is customers. distribution traditional First relatively sort Many OEM small. distribution our sort of, are of sizing, of customers on

us that of if distributors, the sense sort demand the logistics providers sort So we use OEM it of really traditional in you distributors XX% range. in probably creation. sort some think aren't that and are are sort are between There about of doing that

sort to is They happening an of the out That pull inventory their we've actually bit, when in up I of the probably on change. distributors depending either is carry to some more them little probably little that of push starts area a customers of customers macro that sort another of component. do what's distribution and or position distributors seen The think wanting that's a of inventory So distribution sort to through their the partners. utilize macro? viewpoint

Michael Hurlston

of cost more inventory higher a disti it's than a areas, much In how say distis little are carrying a to mixed it's Dean I'd Ambrish much on as definitely and cut trying is some back have. at maybe they top to our whole, add kind business the as as They I want the normal a bag. color inventory probably moment. Dean. said don't on have bit mean, unfortunately like of of bit

trying a they're little obviously to risk bit. de So

is business, type distributors. even the automotive, So saying, we're docking some JIT on then wireless passed parts of there's normalized shipment from of like almost little, we're parts as pressure we've it's basically it's station, there and the light in levels, and very But very through that. areas been against to cut actually a our other shipping business, basis of almost in

kind depend segment I by does more it's little could bit So us add, segment. it give but of a wish of a we a really for mixed you clarity, bit

Ambrish Srivastava

helpful. No, I Thank think this you, is guys.

Operator

with Yang Martin Oppenheimer.

Your is open. line

Martin Yang

to Dean. and If some taking you follow-up areas in dollar the highest the four contribution. my Michael product the Are those Hi, for can is of segment by IoT? the four drivers. key representative not, also segment a rank highlighted of IoT top The question on growth contributors Thanks four question. maybe revenue you

Dean Butler

IoT. probably the the VR. is Yes, sort would a I than be as top of within bigger say a would the processors would exception bucket is only Martin. That are say, of they sort I certainly I general swap four only mean,

Martin Yang

Got it.

So media the you referring to SoC are part?

Michael Hurlston

-- there's there. prepared things if -- mean, a Yes, the I there's that Martin, remarks, on that of you bunch a are in

We have video processors are audio process, in the there. edge, we do have the

that voice three over IP. We that probably is today. Those have sum said, our if are kind product up collection those UCC Dean larger areas processors VR are collectively, you of as than

Martin Yang

Got it. you. Thank

Michael Hurlston

Thanks, question. Martin. Good

Operator

for I Q&A. time to the concludes call This over final remarks. will Synaptics now allotted Management the for turn

Michael Hurlston

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

Operator

results call. Synaptics, financial quarter the XXXX year participation. concludes thank fiscal you Inc. for We This fourth your

You may disconnect. now

Synaptics (SYNA) 5 Aug 222022 Q4 Earnings call transcript