Earnings call transcript Q3 2023

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Operator

Good day, and thank you for standing by. Welcome to the Synaptics Third Quarter Fiscal Year 2023 Financial Results Conference Call. At this time, all participants are in 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.

to Munjal conference Shah. like first to now today, speaker would hand over the your I Please ahead. go

Munjal Shah

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

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

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

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

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

inaccurate. number be beliefs are to and risks of uncertainties a they reasonable, may beyond to prove Synaptics Although, control subject estimates and be assumptions are our and to

obligation with We from including Form suggested could differ current you most actual cause results company's Synaptics important the factors any any Synaptics to the cautions Form risk materially and in to for that actual statements. update filed this on annual information. materially report our periodic future may XX-Q contained statements. results forward-looking disclaims quarterly refer forward-looking SEC on expressly reports to recent XX-K and report in those that any differ company's forward-looking from performance the

the call over to now Michael. will turn I

Michael Hurlston

everyone to today's welcome like I'd Munjal. call. to Thanks,

Our our economic slightly solid above the midpoint EPS margins, fiscal of the was challenging We the third backdrop. strong drove midpoint guidance. a gross range, above against our ultimately of guidance maintained quarter revenue result which

Let recent customer our reported distributor macro our been the virtual we We focused impacting and such business. previously, me reducing as consumer-facing Wi-Fi. have inventories highlighting start events on reality businesses by how are in and

down. have However, by the we been pace draw slower inventory of surprised

Sell we expected hasn’t largely our the through end to forecasts their response demand. to degree further have customers in because returned reduced weakening

a channel reduced shipments in drawdown from our inventory. significantly commensurate have peak While into not we the seen levels, we

the the was toward deterioration enterprise led corporate in end facing reduced headsets. audio change macro such spend, the and unanticipated video of our to confidence as Another IT businesses interface quarter. impacting This

take than deep will inventory these calendar we us Given that dynamics, XXXX. longer will take and initially anticipate bleed the now we recovery forecast into

demand these backlog demand, to are reduce we a concerted with in them challenges, inventories response customers, to to normalized In levels. working allowing to near-term to align effort

are but reducing roadmap services, past have non-essential lowering and period, we to freezing and our outside tightening this decreasing in in opportunities, are acute we spend and product our long-term our get We confidence invest belt spending. until by hiring, continue all

$X Board in increase program, available an repurchase and bringing The market Synaptics’ share to authorization our has fundamental recognizes our potential nearly total approved billion.

We behind is to are our inventory confident us. in digestion return the to once growth ability

that $XX demand will it between in should, profile. is cover in June the say shipping million we below the weaker Given quarter Dean unequivocally even the and where $XXX million business detail, factoring can guide, which

believe is and correction. this current reason inventory enterprise have telephony, no we the improvements beyond last automotive, to structural that share the and three the areas made such as over years taken state product there the Given in persists Wi-Fi

There business. the in are spots bright

from the benefiting products outperform, automotive continue Our to to transition TDDI.

Synaptics funnel, Ford, to and IoT its a continues Toyota, TV. Amazon, BMW, In Samsung, market like Direct new ADT, at billion designs win Cisco, OEMs future Dell, key expand and addition, Verisure, position with $X.X

We technology expect the better our to from areas. emerge advancing in positions current product franchise share downturn shape, in consolidating and

focused activity executing During quarter, introduced Wi-Fi Combo new our stayed We our to plans. We throughput infotainment BT we continued for throughout and designs level second ideal advanced quarter. high-speed connectivity streams. systems, that Wi-Fi won systems. doubles device LE concurrent on and the applications, the audio solution Triple Audio increase multiple high-end for streaming automotive is and for integrates intense multimedia X.X The the

Additionally, Wi-Fi that XE product summer. customers be the we have cost-effective mid-range, new in a will sampling to

believe as bleed has step business still our are business years. billion we in taken three on have a five we off we $X inventory, While that back a to to track

has more grown In fact, XX% funnel Wi-Fi year-over-year. than opportunity our

ramps We enterprise and quarter, customer speakerphones, automotive our and Unify Jabra product gaming new NEC Toyota had several Razer products, and others. among headsets for Lexus solutions, telephony for this and for new TDDI and

in the technology of integration systems. We break SmartVoice are our with product detection ADT glass our offerings also security expanding at

While our top operator we such in IoT also enterprise to set we telephony. existing increasing new continue cross-sell, winning and platforms in portfolio, are sockets boxes as content

and mobile Outside for due of are ahead down increasing working higher is bright with product market strong expected moves position launch customers Overall, OLED expectations high-end with a technology to China, Revenue for Another spot as expect than touch a to into TAM Oppo the portfolio customer screens, higher of volume controllers flexible stronger business. was demand on in ramps. new the tiers. from see seeing our we like product high-end in our was China Korea. we an

The goal. increase number the which our Wireless devices years, opportunities driving new our business. few Infotainment track to To connected our to next over conclude, us business continued the should on and automotive strength keeping near-term are long-term growing to but is significantly secular is in is expected lead in of challenging, content unchanged. cars our

still docking to content drive station and opportunity platform. in wireless in workspaces believe We gains the the

our and innovation, wins, product in portfolio We position new expansion are me with strong giving confidence extremely prospects. in growth an design long-term

community review at over results a financial later long-term for the to regarding our call Investor should I this of Day Dean an mention Before plan quarter third we fourth our strategy the investment that and Fall. outlook, I quarter update turn to

Dean Butler

Thanks everyone. Revenue with recently the Michael, guidance. our results XX% quarter and from good afternoon, provide outlook. million, start then and our revenue respectively. of PC, our financial I’ll were current mid-point quarter the quarter Mobile XX%, was completed for of a March and for the review XX%, and above $XXX March IoT,

basis. down of headwinds. pronounced sequentially, quarter three IoT but our was to most modest year-over-year in is decline as Year-over-year, a X% with consolidated declines face continue was headsets portfolio. Reality, year-over-year XX% on and revenue Virtual end Audio revenue March product March our down macro down quarter across XX%, all areas Wireless, these product products The a markets

our quarter down March In as X% revenue and under-ship XX% sequentially year-over-year down we continued PC, was demand. end to

customer We its market being bottoming process as expect inventories depleted. are to continue PC the

spending of IT trajectory remains the to enterprise corporate calendar the complicating year. However, likely macro recovery the second pressures, due muted half expected in

China new quarter was on down our in than down however, March product customers a than product expectations was and year-over-year XX% revenue XX% sequentially prior sales. Our better as Mobile Mobile, forecasted was experienced basis. better

in in June quarter, as this We the but volatile. demand expect improvement geography end cautious is still continued remain

be intangible includes non-GAAP range, margin continued million March product bit gross strong March and expectation For quarter GAAP guidance $XX.X which our XX.X%, lower costs. but quarter, within margin of mix. was our at to gross our than amortization due share-based $XXX,XXX asset the to XX.X%, a compensation of

expected of and March GAAP operating amortization at company. and amortization million, $XX.X last more as mid-point in the a which $X.X million, quarter is only continued million, our of million $XXX compensation the larger track four expenses of the $XXX.X share-based of was includes March X% diversified expenses to being costs which quarter despite prepaid intangibles up were over and $XXX,XXX. of years operating cost non-GAAP guidance, development

rate year-to-date our a was income million GAAP we XX%. diluted the basis, and quarter, net of March tax rate had income On GAAP $XX.X was In share. or XX% $X.XX per GAAP of tax net our non-GAAP

XX% the quarter one XX% same decrease income the $XX.X prior ago. net quarter million, March quarter year non-GAAP for Our was a a from the decrease and of from

EPS quarter. of per mid-point was range above net with our higher $X.XX non-GAAP Our the interest guidance the during diluted share of income

ended from share of cash increase $XXX hand, and the quarter cash, million. $XX equivalents, by short-term on under Partially balance Now We during offset the an preceding million our operations the the of million million of with flow quarter used to turning with of $XXX investments from $XX quarter. repurchase sheet. cash cash program

repurchases million. Michael $XXX for bringing our of authorization approved an As million an $XXX billion to share available total plan with $X.X Board the mentioned, has additional

capital steadfast be to continue We in allocation philosophy. our

in our Our for is management, we cash the debt best extremely shareholders. return to share repurchases, and and continue usage balance allocate long-term tuck healthy acquisitions seeking sheet potential between

too of five million from inventory last was quarter in the quarter XX March for depreciation quarter at reduction outstanding demand once sales our and days and million of forecasts end down $XXX inventory again a the down million. XXX $XX below far days last million days given $XX anticipate out turns. the were our of inbound of was were a days, purchases. expenditures Capital reduction Days inventory were cautious new of million inventory XXX, $X.X $XXX but exceed shipments of quarter. as Receivables once were further ending drawing We XX are and June

inventory macro anticipated. recovery situation forecasts, on for focus with quarter. levels, trough weigh share we me on is than The lowering longer markets to outlook their customer’s has demand levels. taking Even where in reached let Now, squarely the our June continues our to close originally

of to inventory, sequential $XXX quarter for approximately XX% Given customer to range of the further million, June the need the mid-point. million the at we revenue $XXX burn a to in decline be expect

PC, XX%, decline to in revenue the experienced and be a result quarter the our acute inventory XX%, position IoT, in expect quarter. approximately June are XX% based to disproportionally IoT expected most products We and and the Mobile as have from respectively. customers mix

aggressive occurring in areas. these Our holdbacks most shipment are

before customers inventory balance deplete of We calendar the throughout expect year of their returning many these normal to run rates. the

are June back products close product but June to launches, likely decline Mobile new the quarter trough modest growth. while quarter demand, as the seemingly increase to these our products PC plus levels, expected are customers moves to in during

a to previous decline quarter the IoT our non-GAAP XX% the margin products to range gross expect As margin a expect XX% quarter to GAAP And in these mix. the for we comparable mix are result from represented gross XX%. where prior of periods of June dynamics, be a XX%, lower and range to of the in

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

June $XX We in million be to to non-GAAP the March expense million, the the consistent $XXX in quarter quarter. operating with range expect of

XXXX. over outside the actions having cutting freezing Synaptics and taking to expense reducing strong We expanded we ultimately investment four remain and prove despite hiring, stance maintain services, X% committed controls, since levels to be past will opportunities discretionary temporary. lower by are to our our prudent long-term to spending the areas growth We discipline drive continue focused for spend. which company our our therefore including years revenue believe only expense has

be As per to quarter to of per fully per basic a million June net in loss the share GAAP and of diluted estimated expected to the $X.XX an share non-GAAP in income range result, be diluted to is share, is on net XX $X.XX range shares. anticipated $X.XX $X.XX

unchanged expect net range expect to to to quarter finally, XX of $X we remain rate the the non-GAAP non-GAAP interest June tax our million. be expense We for XX%. And approximately in

Q&A the operator like to up now call Operator? to remarks. session. prepared to I’d wraps our turn This the over start the

Operator

you. time, Cassidy [Operator will of Thank comes first Rosenblatt a conduct Kevin question At from Our Securities. session. Instructions] question-and-answer this we

now is line open. Your

Kevin Cassidy

of that is that's forward, you the of is mix the long-term you're going and revenue factor XX%, midpoint for other this question. IoT gross some guidance should in Thank somewhere the expecting or XX% target? to come the as out there we XX% your be assume going taking your we the target, margin With long-term range about at being my meaning this

Dean Butler

Kevin. So good question,

think the XX% we between We not to you product XX%, this think once got this specifically, at the would expect areas return our rates. is largely to mix driven. mix back goes level. of mix run which it IoT it I maintain three right, is normal We --

three think So you're of is line margin you're experiencing impact that mix what I the as now sort areas, between item. on shifted the seeing product has the

Kevin Cassidy

more? inventory you though but to Are come level or internal And is elevated just down that to is And inventory, it's your did this that history. even it Great. compared down, comfortable maybe with going come Okay. why or in it from you the down level on -- shift guess, are internally? the maybe I just with and work you've shipped going and cutting from your inventory inventory is back what optimal suppliers to wafers

Dean Butler

down Maybe June a to continue come a that inventory on into as look that. internal just beyond couple and do bit comments Yeah. to our probably little forward We of we one. expect

to we on Our be What into doing days channel. inventory days. XX goal are is shipping sort typical we're cutting hold about now certainly closer we're versus would to XXX of back where on

cut inventory inbound So sort balance. a back from we've in way our of keep in to our suppliers considerable on that

being On cost that turn the sort back cautious bit a a the don't we demand little flip hey, does get side, are of bad situation. when we in on,

So we sort little the of quarters. come I net-net, to down are it. eye continues a close of bit keeping it on a probably next But over think couple

Kevin Cassidy

you. Thank Great. Okay.

Operator

question. One for our next moment

next Raji Our question from Company. comes with Needham & Gill

Rajvindra Gill

questions. question for taking IoT my sequentially. you A down on the Yes. business, Thank XX%

are a last we of at IoT with least customers. in the quarter, respect bottom felt to purge we at inventory the that two quarters, the You mentioned consumer kind of terms last

So we're taking be longer enterprise to I then seeing, softness kind And in side. to appears the gets of guess, purge. to that

on portion enterprise just of business, So IoT? of there a or the of a quantify as sales to that way of percentage is percentage kind IoT the

assume that the going year. are set to be And I budgets the for would IoT

demand? not of that consumer of get should what's the the that anticipate to of sense on the in IoT, recovery I want of and wireless, indications will think in inventory enterprise any of portion just terms kind you. a in we when So going consumer we bottom do sell-through IoT Thank a business?

Dean Butler

around or of of of characterization sort a me IoT, let within inventory chunk sort end of we as market consumers, the so dynamics of some Michael, the do about what's you enterprise sizable of pretty market the Yeah. rough sort these? of to that size same they Rajiv, both kind few you of asked you make the enterprise. just nearly size give is of Roughly size talk up a want in a maybe service.

Michael Hurlston

I in Raji, -- mean you think right got it I Yes. your remarks.

docking look point your we've to you and at you haven't seeing in If enterprise recovery telephony, at a there seen softness look consumer. stations, just the we

is when by the for around significant been the that's guys, then in weakness definitely So where worst. consumer handful we we've updated last additional of was hanging over obviously enterprise of you the but it compounded turn last taken that weeks. kind That's the fairly seen a

Rajvindra Gill

Right.

of if at terms the kind XX%, offsets you've guess level. from the in business of higher past, gross is IoT know costs at on other Okay. to occasions implement? fact TSMC, the more the gross in margins in and the with question is if trough as XX% declines downside I would And then that at numerous there IoT But articulated the to I just or floor. still hopefully combined input trying be there there are more -- the we keep a that XX% Obviously, you floor. margin that could is the see is

Dean Butler

next against like And play going to quarters mix. have out move our two step probably the enterprise term that's inventory that corrections, near margins gross portion down, that IoT to a of in with a going over the couple customers Rajiv, is would us play say, an good mix here. the I from effect that, margin gross being really of there's taking plays what how factors in on how is end the Well, here

normal to sort and the of think to levels inventory the very we're good get demand and I XX% that is at But this continue note and important correction, level is is through of feel about. thing sort right we when continuing target the back to right believe its we

the near is really the pluses out term, minus. of mix or plays sort hey, really of how sort So

cost. There's bit the input a on little

a to concern. So continues input bit cost of be

the that. kind So Unfortunately, we of it's to passed of on that customers. to work likely through an be it's be able environment less to many

So term. of I change significant a it be headwind. sort that's as But of long to we think little a -- a going wouldn't bit like there's about

Rajvindra Gill

And then lastly…

Michael Hurlston

Raji, Yeah. to your point.

add the floor. business feel place to the the we and what the kind is structurally, I is in same Just said, of think to XX% Dean

the if near-term look way XX%. But I be to is think still out you choppiness. going about think it potentially to some there's right

Rajvindra Gill

Got it.

and Dean, in queue. I'll question, step last back the Just

for running talked of controls. sequentially I kind $XXX in guidance But past. about a million the OpEx. You been guess, kind spending total OpEx around flat in the And you've OpEx terms of roughly is of quarter

So where $XXX of is are expecting in the year, progress OpEx throughout the significant revenue to need of kind million decline given you where spending at? controls, lower should kind we as or the be business we operate the

Dean Butler

Yeah.

million dynamics to there's a the has term, OpEx $XXX I think that mean of fiscal the some to There's I kind target of near new headwind. we continue a this mark. probably resetting a going cross boundary. for year around we're bit as of of couple

so of and little trying sort we sort business any bit. the inventory on And rate rate. run work to at correction for if run mitigate and correction keep to it through is and not inventory the the OpEx up not we're want a flat, this the least of do size Really, what real down

Michael Hurlston

Yeah.

I higher understand We Raji $XXX we think it's right? that's we is, tried rate to is don't as the revenue outline. million, to believe important that run that than significantly something believe structural

big the are terms point the OpEx, few is things of persist I that modifications see some we and around the changes appropriate. in but going on we to and definitely that think a from do there edges business, of wouldn't If we'll So nature be line. structural change there suddenly, as this on expect us make I

Rajvindra Gill

Thank it. you. Got

Operator

up as moment our next we bring question. One

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

Anthony Stoss

things. two love more. to Dean, Michael, I'd Hi, hear

Wi-Fi the IoT that you either And breakout also two the wanted quarter When to have closed quarter, something commentary be just a solution. confirm guys if slipped in talk I about revenue into deal or March? sizable? of that designs to from December from your actually March So or that's that adding will

Michael Hurlston

think Good to we're Wi-Fi one, probably again, question, turn going Tony. about is, the I business I calendar mean, the the on XXXX. that way corner

We rate get back levels level just dig But get have a we the point, pre-inventory on wins rate wins was And to layering then inventory I design to pretty in these we our -- out start early sometime to your XXXX. run we fiscal levels business from. run grow third, that think fiscal appreciable start fourth, calendar to late in the of some back our We from the seeing situation it we early have. and buildup. probably

things a that with operators got We've lot of applications consumer with of good applications, some in enterprise on going Dean of business some discussed. the the that

So confident, but layering so and pretty start XXXX. early inventory, design with we in now through we've continue to which break first masked expect got I'd to these that it's then in be right and wins,

Dean Butler

second you this Tony, a last question And in IoT deal quarter's had talked we on about call. that

expected make That in we then quarter. the So the close. March but quarter, deal update December milestone in we was did inspected gave didn't

So we completed all the necessary milestones there.

as deal close March did told that put so that we quarter. it that so in we everyone, in guide And our the

Anthony Stoss

then little on And deals of a you outside bit solution PCs. detection to outside about of new having that to us presence the Dell teased last beyond play call, PCs? report Panasonic it. Got conference role and Anything a

Michael Hurlston

Good material to Nothing report, Tony. question.

of we're -- what statement. this is long-range think I a and sort

the beyond computer applications. that I other interesting using power into that presence types a the we think vision. is but types PC. that, computer -- necessitate built think and looking expand states and this have that of tailored I computer power applications essentially, other detection, we low to to on then need for is platform from a that make is, vision. that pretty We're decisions solution use can where have what of We that areas low we're vision camera PCs expand do mean, to are

So of idea. that's kind the

Obviously, our and we to area the expand footprint vision. in even vision want computer computer

term got the think the do it OEMs. nothing kind able but across of right. to base, there in We You've be to OEM We're better down to report. should near two we

Anthony Stoss

you. it. guys. Thank Best Got luck, of

Michael Hurlston

Tony. Thanks,

Operator

our for moment One question. next

next Our Susquehanna. Rolland with Christopher from question comes

Christopher Rolland

Thanks guys. Hey, question. for the

some that's take kind your anything. just in shipment you back back because interesting the that So wondering of about hold talked topic kind of, people handle in the hold industry there, you of which how don't and them to strongly an there philosophy wouldn't was I guys you And are forced I cases kind to urge take shipment? but that? it, say what are

Michael Hurlston

Chris, and talked I we've kind the And to eventually, comes expected think I we corner of clearly the to weakness I time to piper that times a happened. we that by has of obviously situation the enterprise hasn't think turn right? compounded mean I been guys calling, you And Yeah. think couple talked now-ish that here. the when last

allow bandage So the we're this settle the at rip our view and there. state And of demand I current to off point really is in. think

by to to more from more but obviously, be and It's to pretty the out, this we and better long allowing unfortunately a peak term. bleed believe jamming allowing significant drop, now into settle happen will trough, that through off channel not the

you're settle to some distributors we out. same they churn here think some slightly they And need and and of decided, thing heard we seen and discussing, certainly this remember it took describing we behaviors let those with but a of with causes that. partners and different you're path the causes remember channel things I that, that look, and that churn customers,

Christopher Rolland

follow-up Thank overall. you. a maybe And then

which in Why it this like at go happen why do back it there and in hitting feels why to IoT, Was now? this in in happened? they shortages should terms inventory were for coming So does the this particular, buildup, you the point in consumer? were why -- of we cycle overordering? out this the like did think time Almost is be way or

Michael Hurlston

simply add? to know, ago, this semiconductor And I and everybody there there there Yeah. but don't you back point, several be be to drawdown. want thinking to a I shortages. did think by No, our going were Certainly, there expected drawdown goes to Dean, think I goes now. to was back your been when drawdown, quarters it hasn't it a

Dean Butler

is, I their of Yeah. ratcheted customers sort supply crunch. forecast of just I up the would say sort as thing the during mean only

to way. I forecast change reticent little are suppliers as in bit a think us rapid their into a customers

you sort that honestly, of quarters So chain a than at I relative see caused way the of has a sort ago. supply slower think pace ratcheting of much to sort is just down few along of and expected, what at this we the move what sort slow to had

Christopher Rolland

color. great That’s Thanks.

Operator

One moment question. next for our

Our next question comes TD Krish from Cowen. with Sankar

Hadi Orabi

guys. question. Hey, for Krish. of discontinuing taking This reports is their for my products. Eddy There were Thanks Halo Amazon

Our at understanding is that exposure you some point. had there

accurate? First, is is second And how to have is case due I through in that a follow-up, that much that please. of weakness the IoT And line? product

Michael Hurlston

think had Yeah. to I right, you Eddy. Halo. it got We exposure

is, Our sell because understanding it it is well. canceled didn't very

So never was It took of all had terms not at revenue exposure we off. material. in there really any

even talking probably in we're an perspective, captures that that a the inventory to thumbnail of there. from not it's driver it So inventory the

Hadi Orabi

That's Michael. color. you, Thank great

that the it, weakness you inventory some due behavior demand amount What And to from ago. a competitive foundry a more in or capacity you. of confident pressures huge of of some is another competitors? competitive IoT part opportunities year good makes pressure frame to is because concerned from are there did versus investors other that have some carry suppliers to more irrational way Thank you the to maybe and as versus weakness walk one end away weakness is related increased

Michael Hurlston

has calls least At question. good losses. increased. we've competition, a Again, know, far as I outlined Pricing on we as previous no I have Yeah. this think

about least lost single haven't as we at But as socket. I a know, there's question no far So that.

our an pricing for does is our this with mix be is for margin from that and won't is it Rajiv. due out enterprise by hit So pricing, some there we hold that in margin be talked the time. high competition And it's gross which there's we're all to about end the -- nothing gross stuff again, perspective, increase on hit, time will though that's quite XX% related even we'll mark a on to we even business, back think able to this

Hadi Orabi

Great. Thank you, Michael.

Michael Hurlston

Thanks, Hadi.

Operator

Fargo. McCurry our Nancy with question for moment question. next comes our Wells from next One And

Ashley McCurry

Is there there are resiliency McCurry for Wells versus pricing in And Ashley in decline This in pressure? in by trade-off versus is Hi. Gary areas terms terms quarter? about Mobley next Curious the going you thinking of at where you guys on quarter-over-quarter unit more are Fargo. of the volume guys guide? How your into are dynamics pricing? that driven seeing any ASP

Dean Butler

Yeah.

So perspective, on in there is think our it's Ashley, driven. a largely this unit time, I on least not, demand question, great elasticity trade-off from ASP. your At at to at the answer point

So your in demand. environment you're is lowering ASP in this spurring

So really, unit we it's almost see entirely is, what driven.

think from competitors, coming Now just bit areas a as little on is pressure and sort ASP Michael on, the there last very question, from a of it's spoke of I few where we've of ASPs true. that they sort what so will demand, competitors times spur get seen of desperation, that you some far their but do in start lowering if is hasn't been

Ashley McCurry

earnings cost are increase foundry call along And relatedly, quote about how and you this those talked on their seeing customers? week are people that increased guys still you see passing

Dean Butler

not foundry I mean the did passing little crunch. where down, increase still all it’s We To couple are are in the certainly that along of in foundry small pretty successful discrete seeing pockets is pricing. last pockets. degree actually we been supply to in months, same that pricing we in during the haven’t but actually there date, coming prices,

So I near term. in wouldn’t the expect ability along pass prices here of sort input increased to the

a I calendar of going be probably my throughout think headwind if bit guess. to a is that’s anything, ‘XX

Ashley McCurry

Thank you.

Operator

next for our One moment question.

with next comes Martin Our question from OpCo. Yang

Martin Yang

the Can maybe talk were where Hi. highlighted does [indiscernible] Is Thank taking is where verticals come growth. front driving you growth? question I loan about year growth My that the that Wi-Fi question. for there your on from? you any particular

Michael Hurlston

Martin. see Thanks, across the We strength Yeah. portfolio.

application driven, I'd largely set-top boxes, in less Wi-Fi at I is, our that things you characterized business is high-performance driven video think here say if operator driven. applications, before What look more and streamers, nature. customer cameras, of of kind as it's we've

Tier very say, start this into we that customers. X verticals. across significant I'd those think host products, lot these I whole of some customers new, mean, some are We a have driving moving various We and of activity of that supply could a customers

by lots it then big I end our X today, mean to ships module or one really guy lots module -- lots And we characterized if you only business customers. that one are Wi-Fi of Tier different at products to look these and customer.

us I to over us to the online next customers handful that to think is, in what's that prepared remarks, the over or we changing for my billion years. expect said so to this year business three here we're continue $X next come larger of a going that, gives as there's towards build I now confidence five

is So it's it probably than driven. application driven necessarily more customer

Martin Yang

it. Got

make So that understood. I sure just to

that So Tier OEM already X module maker? customer you you is that had one versus have,

Michael Hurlston

I Martin. That's makes obviously lots a what our one we of decent Wi-Fi right, a and lots different mean have up but big revenue. OEM -- has big we Yeah. chunk would call of customers, have I one

continue is expect chunk with well We to module to then that another And this guy. maker. do big

and So big we over relatively that our business get are poles kind pulls of have We two big bit. four in five expect three, guys to next here little the

Martin Yang

larger or makers? that And other come would OEM customers from module

Michael Hurlston

are are OEMs. These OEMs. specifically So these

us up mostly to that's only partners It's we'd partner more to pretty point, business. booted But we'll on customer we a customer OEMs. really refer Wi-Fi in capability like here, our module for bring we this do as as We OEMs. expect well. a base. Although expansion, all one Today, I on module we've have engineered been to serve to couple a when be that it's the bringing expect your additional effective distributed that channel channel really

Martin Yang

you, Thank it. Michael. Got

Operator

to like Hurlston would turn comments. final Michael for back now it to I

Michael Hurlston

Day we'll conferences in thank all you you. do forward our during the of Thanks, Sean We our investor and Thank joining during and course, Analyst to us of today. look to fall. quarter, to in I'd the that speaking you for like upcoming

Operator

Thank does conference. in This the you today's program. for conclude participation your

disconnect. now may You

Synaptics (SYNA) 3 May 232023 Q3 Earnings call transcript