Q3 2025 Synaptics Inc Earnings Call
Okay.
Unknown Executive: Good day and thank you for standing by.
Speaker Change: Good day and thank you for standing by welcome to the Synaptics, Inc. Third quarter fiscal year at 175 financial results webcast and conference call.
Unknown Executive: Welcome to the Synaptics Inc 3rd Quarter Fiscal Year 2025 Financial Results webcast and conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded.
Speaker Change: At this time all participants are in a listen only mode. After the speaker's presentation that there'll be a question and answer session to ask a question. During the session you will need to press star one on your telephone you will then have an automated message advising you of hundreds ways to withdraw your question. Please press star one on one again please be advised.
Speaker Change: Today's conference is being recorded I would now like turn the conference over to your first speaker today, Bill Giles Shah head of Investor Relations. Please go ahead.
Munjal Shah: I would now like to hand the conference over to your first speaker today, Munjal Shah, Head of Investor Relations. Please go ahead.
Munjal Shah: Good afternoon, and thank you for joining us today on Synaptics third quarter fiscal 2025 conference. My name is Munjal Shah, and I'm head of With me on today's call are Ken Rizvi, our Interim CEO and Chief Financial Officer. and Nathan, our SVP Intelligence Sensing Division.
Speaker Change: Good afternoon, and thank you for joining us today on Synaptics third quarter fiscal 2025 conference call. My name is Michelle shot.
Speaker Change: Relations with.
Speaker Change: With me on today's call are Ken Frisbee.
Speaker Change: Interim CEO and Chief Financial Officer.
Speaker Change: S V P intelligent sensing division.
Speaker Change: <unk> strategy officer.
Munjal Shah: Venkat Kodavati, SVP Wireless, and Vikram Gupta, SVP of IoT Processors and Chief Product This call is being broadcast live over the web and can be accessed from the investor list. In addition to a copy of our earnings press release detailing our quarterly results, a supplemental slide presentation, and a copy of these prepared... posted on our internet.
Speaker Change: Got it.
Speaker Change: Wireless and Vikram Gupta SVP Iot processors.
Speaker Change: Product.
Speaker Change: This call is being broadcast live over the web.
Speaker Change: It can be accessed from the Investor Relations section of the call.
Speaker Change: At Genoptix Dot com.
Speaker Change: In addition to a copy of our earnings press release detailing our quarterly results.
Speaker Change: The slide presentation and a copy of these prepared remarks.
Speaker Change: Posted on our Investor Relations website.
Munjal Shah: Today's discussion of financial results is presented on a gap basis, along with supplementary results on a non-gap basis. share base compensation. costs and certain other non-cash or recurring Please refer to our earnings press release for a reconciliation of the most directly comparable gap. to the non-gap.
Speaker Change: Today's discussion of financial results is presented on a GAAP basis, along with supplementary results on a non-GAAP basis, which excludes share based compensation acquisition.
Speaker Change: Cost and certain other noncash or recurring for nonrecurring items.
Speaker Change: Please refer to our earnings press release.
Speaker Change: <unk>.
Speaker Change: Directly comparable GAAP financial measures.
Speaker Change: The non-GAAP financial measures presented.
Munjal Shah: Reminder, the matters we are discussing today in our prepared remarks, in our supplement And in response to your questions may contain forward-looking statements. give our current expectations and projections relating to our financial Results of Operations, Plans, Objectives, Future Performance Although Synaptics believes the estimates and assumptions underlying these forward-looking statements to be reasonable. Subject to a number of risks and uncertainties beyond our or we refer you to the company's current and periodic reports files. most recent annual report.
Speaker Change: As a reminder, the matters, we're discussing today in our prepared remarks and supplemental materials and in response to your questions may contain forward looking statements.
Speaker Change: These forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business.
Speaker Change: Also, Synaptics believes the estimates and assumptions underlying these forward looking statements to be reasonable, they are subject to a number of risk and uncertainties beyond our control.
Speaker Change: Therefore, we refer you to the company's current and periodic reports filed with FEC, including a most recent annual report on form 10K and quality report on form 10K for important risk factors that could cause actual results to differ materially from those contained in any
Unknown Executive: Okay. And quarterly... https://www.synapticsinc.com Synaptics Expressly Disclaims Any Obligations Update.
Speaker Change: Except as required by law, Synaptics expressly disclaim any obligation to update this forward-looking information. I will now turn the call over to Ken.
Ken Rizvi: This for Now, turn the call over to Ken. Thanks, Munjal. I'd like to welcome everyone to today's call. I have the pleasure of Vikram, Venkat and Satish joining our call today. We delivered another strong quarter in March with revenues increasing 12% year over year to $267 million. slightly above the midpoint of our guidance. Non-GAAP gross margin came in at 53.5% in line with the midpoint of our guidance, and non-GAAP EPS grew 70% year over year to $0.90, exceeding the midpoint of our guidance. Our core IoT product sales increased 43% year over year to $68 million.
Ken Frisbee: Thanks, Munjal. I'd like to welcome everyone to today's call. I have the pleasure of Vikram, Venkat, and Satish joining our call today. We delivered another strong quarter in March with revenues increasing 12% year over year to $267 million.
slightly above the midpoint of our guidance range.
Ken Frisbee: non-GAAP Gross Margin came in at 53.5% in line with the midpoint of our guidance, and non-GAAP EPS grew 70% year-over-year to 90 cents exceeding the midpoint of our guidance.
Ken Frisbee: Our core IoT product sales increased 43% year-over-year to $68 million. Fuel by strong momentum across both our wireless and processor products.
Ken Rizvi: fuel by strong momentum across both our wireless and processor products. This growth reflects improving demand. The ramp of new design wins and a clearing of prior inventory.
Ken Frisbee: This growth reflects improving demand trends, the ramp of new design wins, and a clearing of prior inventories.
Ken Rizvi: Before we dive into the details of the quarter, I want to take a moment to address the global trade environment. At present, the direct impact of existing and proposed tariff policies Synaptics is minimal. We will continue to monitor potential indirect impacts from supply chain realignments and changes in demand. While the broader implications of these indirect effects remain uncertain. Based on our current lead times and order activity, we currently do not see unusual activity that would suggest a material pull-in or push-out due to tariffs impacting our near-term financial performance. Over the last couple of quarters, we have seen encouraging trends across The improvement in demand that started prior to the announced tariff changes has continued.
Ken Frisbee: Before we dive into the details of the quarter, I want to take a moment to address the global trade environment. At present, the direct impact of existing and proposed terror policies to synaptics is minimal.
Ken Frisbee: We will continue to monitor potential indirect impacts from supply chain realignments and changes in and demand, while the broader implications of these indirect effects remain uncertain.
Ken Frisbee: Based on our current lead times and order activity, we currently do not see unusual activity that would suggest a material pull-in or push-out due to tariffs impacting our near-term financial
Ken Frisbee: Over the last couple of quarters, we have seen encouraging trends across the business. The improvement in demand that started prior to the announced tear of changes has continued.
Ken Rizvi: orders are steadily increasing, our backlog is growing, and customer and channel inventories remain That said, we continue to operate with agility and discipline in the face of an evolving macroeconomic landscape. We remain closely aligned with our customers. To me, they're changing. and our focus is firmly on the areas within our control. We are executing to our technology roadmap and growth initiative. Deepening relationships across our customer and partner ecosystems. in maintaining a disciplined approach to cost. through technology innovation, go-to-market expansion, and operational ex- We are positioning synaptics for long-term success.
Ken Frisbee: Orders are steadily increasing, our backlog is growing, and customer and channel inventories remain lean. That said, we continue to operate with agility and discipline in the face of an evolving macroeconomic landscape.
Ken Frisbee: We remain closely aligned with our customers to meet their changing needs and our focus is firmly on the areas within our control.
Ken Frisbee: We are executing to our technology road map and growth initiatives, deepening relationships across our customer and partner ecosystem, and maintaining a discipline approach to cost.
Ken Frisbee: Through technology innovation, go-to-market expansion and operational excellence, we are positioning synaptics for long-term success.
Ken Rizvi: Now let me turn to some highlights in each of our product areas. In wireless, we expanded our Veros connectivity portfolio with the launch of our first broad market device. As previously highlighted, this cost effective solution for embedded edge IoT application opens an incremental $3 billion in serviceable market opportunity for Synaptics. Our die size is significantly smaller than our high performance solutions, reducing system costs by up to 50% and consuming up to 50% less power while still delivering top level performance. In addition to opening a new SAM for embedded IoT connectivity solution. We remain committed to maintaining our leadership performance in high-performance connectivity.
Ken Frisbee: Now let me turn to some highlights in each of our product areas. In wireless, we expanded our various connectivity portfolio with the launch of our first broad market device.
Ken Frisbee: opens an incremental $3 billion in serviceable market opportunity for Synaptics.
Ken Frisbee: Our die size is significantly smaller than our high performance solutions reducing system costs by up to 50% and consuming up to 50% less power while still delivering top level performance.
Ken Frisbee: In addition to opening a new SAM for embedded IoT connectivity solutions, we remain committed to maintaining our leadership performance in high performance connectivity.
Ken Rizvi: We have launched our first Wi-Fi 7 device for IoT applications. Our solution is designed to deliver up to two times higher throughput, greater transmit efficiency. in improved load balancing for greater reliability and reduced latency compared to prior Wi-Fi generation. These enhancements make Wi-Fi 7 ideally suited for any real-time and video-intensive application. such as ultra high definition video. Interactive Gaming, Immersive AR VR, Security Monitoring, and Home and Automotive Entertainment. Synaptics chips have been purpose-built for low-power, ultra-low latency, and reliable long-range performance. We expect initial adoption in high-bandwidth applications with broader proliferation into other IoT devices over time.
Ken Frisbee: We have launched our first Wi-Fi 7 device for IoT applications.
Ken Frisbee: Our solution is designed to deliver up to two times higher throughput, greater transmit efficiency, and improved load balancing for greater reliability and reduced latency compared to prior Wi-Fi generations.
Ken Frisbee: These enhancements make Wi-Fi 7 ideally suited for any real time and video intensive applications.
Ken Frisbee: such as Ultra High Definition Video Streaming, Interactive Gaming, Immersive ARVR, Security Monitoring, and Home in Automotive Entertainment.
Ken Frisbee: Synaptics Chiffs have been purpose-built for low power, ultra low latency and reliable long-range performance.
Ken Frisbee: We expect initial adoption in high bandwidth applications with broader proliferation into other IoT devices over time.
Ken Rizvi: This quarter also marked important advancements in our second core IoT growth vector process. Last month at Embedded World in Germany, we extended our AI-native Astra platform with the launch of the SR series high-performance adaptive MCU. These products feature a novel tiering approach to dynamically manage power, depending on inference requirements. The SR Series MCUs feature a compact form factor design that helps minimize cost, power consumption and footprint enabling integration across a wide range of Edge IoT applications. We see traction from customers across end markets, including consumer, automotive, and industrial. In addition, our ecosystem investments are beginning to deliver results.
Ken Frisbee: This quarter also marked important advancements in our second core IOT growth sector processors.
Ken Frisbee: Last month at Embedded World in Germany we extended our AI native astro platform with the launch of the SR Series High Performance Adaptive NCUs.
Ken Frisbee: These products feature a novel-tearing approach to dynamically manage power depending on inference requirements.
Ken Frisbee: The SR Series NCUs feature a compact form factor designed that helps minimize cost, power consumption, and footprint enabling integration across a wide range of edge IoT applications.
Ken Frisbee: We see traction from customers across end markets, including consumer, automotive and industrial.
Ken Frisbee: In addition, our ecosystem investments are beginning to deliver results. ODM partners are building solutions and use cases on our astro-platform and are actively collaborating with ODMs to bring AI-enabled products to market.
Ken Rizvi: ODM partners are building solutions and use cases on our Astra platform and are actively collaborating with OEMs to bring AI enabled products to market. We are building on this momentum by investing in our go-to-market initiatives. and adding to our business development and sales teams to drive growth in the edge AI. In the year since launching our Astra platform, we have made significant progress. Our product development efforts, design wins, and customer engagements are on track.
Ken Frisbee: We are building on this momentum by investing in our go-to-market initiatives and adding to our business development and sales teams to drive growth in the Edge AI IoT market.
Ken Frisbee: In the year since launching our astro platform, we have made significant progress. Our product development efforts, design wins, and customer engagements are on track.
Ken Rizvi: Turning to Enterprise and Automotive. Our PC products performed slightly better than typical seasonality in the March quarter, reflecting continued market share gains. Well, we are not factoring in a PC refresh cycle in our expectation. Key drivers such as an aging installed base, Windows 10 end of life, and the rise of AI PCs remain in place. We see opportunities for growth from share gains and higher content. Our user presence detection solution. continues to ramp with our lead customers. And we have expanded our engagement through design wins for next generation AI PCs built on NVIDIA platforms. Additionally, we are seeing traction in expanding this technology into new and adjacent categories.
Ken Frisbee: Turning to Enterprise and Automotive, our PC products perform slightly better than typical seasonality in the March quarter, reflecting continued market share gains.
Ken Frisbee: While we are not factoring in a PC refresh cycle in our expectations, the key drivers, such as an aging installed base, windows 10 end of life, and the rise of AIPC's remain in play.
Ken Frisbee: We see opportunities for growth from share gains and higher content.
Ken Frisbee: Our user-present detection solution continues to ramp with our lead customer, and we have expanded our engagement through design wins for next generation AIPCs built on NVIDIA platforms.
Ken Frisbee: Additionally, we are seeing traction in expanding this technology into new and adjacent categories.
Ken Rizvi: In automotive, we continue to navigate near-term challenges in sluggish Longer term, we expect to benefit from the adoption of OLED screens as well as our innovative bridge technologies to drive growth as customers prioritize system-level cost savings in next generation platforms. In MobileTouch, our primary focus is on the high-end Android smartphone market. continue to drive innovation. with the introduction of next-generation touch controllers featuring a differentiated multi-frequency architecture designed for foldable OLED phones. This new architecture offers low power consumption and low late enabling thinner and larger panels, while incorporating enhanced sensing and filtering capabilities to overcome display noise.
Ken Frisbee: In automotive, we continue to navigate near-term challenges in sluggish demand, longer-term, we expect to benefit from the adoption of OLED screens as well as our innovative bridge technologies to drive growth as customers prioritize system-level cost savings in next-generation platforms.
Ken Frisbee: In Mobile Touch, our primary focus is on the high-end Android smartphone market.
Ken Frisbee: We continue to drive innovation with the introduction of next-generation touch controllers featuring a differentiated multi-frequency architecture designed for foldable OLED phones.
Ken Frisbee: This new architecture offers low power consumption and low latency, enabling thinner and larger panels, while incorporating enhanced sensing and filtering capabilities to overcome display noise.
Ken Rizvi: It also offers continuous time sensing for more flexible and cost effective touch integration. We are currently engaged with multiple OEMs and LCMs and expect the first product based on this technology to launch in calendar Q3. The Android smartphone market has carried strong momentum into 2025, helped in part by China economic subsidies and a mixed shift to premium.
Ken Frisbee: It also offers continuous time sensing for more flexible and cost effective touch integration.
Ken Frisbee: We are currently engaged with multiple OEMs and LCMs and expect the first product based on this technology to launch in calendar Q3.
Ken Rizvi: Now, let me review our third quarter financial results in fourth quarter outlook. I will focus my remarks on our non-GAAP results, which are reconciled to GAAP financial measures in the earnings release tables found in the Investor Relations section of our website. Revenue for fiscal Q3 was $266.6 million, above the midpoint of our guidance, with sequential and year-over-year improvement in core IoT products. Q3 revenues were up 12% on a year-over-year basis and flat sequentially. Revenue mix in the third quarter was as follows. 25% core IO. 58% enterprise and automotive and 17% mobile product. Core IoT product revenues increased 43% year-over-year and 11% sequentially.
Ken Frisbee: Now, let me review our third quarter financial results in fourth quarter outlook.
Ken Frisbee: I will focus my remarks on our non-GAAP results which are reconciled to GAAP financial measures in the earnings release tables found in the Investor Relations section of our website.
Ken Frisbee: Revenue for Fiscal Q3 was $266.6 million. Above the midpoint of our guidance was sequential and year-over-year improvement in core IoT products.
Ken Frisbee: Q3 revenues were up 12% on a year-over-year basis and flat sequentially.
Ken Frisbee: Revenue Mix in the third quarter was as follows, 25% Core IoT, 58% Enterprise and Automotive, and 17% Mobile Products
Core IoT product revenues increased 43% year-over-year and 11% sequentially
Ken Rizvi: Enterprise and automotive product revenues improved 14% year over year, and we're down 3% sequentially, mainly due to continued softness in automotive. Mobile product revenues were down 4% sequentially and 18% year over year as product shipments to a large customer reached end of life. Third quarter non-GAAP gross margin was 53.5% in line with the midpoint of our guidance. Third quarter non-GAAP operating expense was $101 million in line with the midpoint of our guidance. Our non-GAAP operating margin was 15.6%, up approximately 270 base on a year-over-year basis and down 170 basis points. The sequential decline was mainly due to an increase in operating expenses related to our Broadcom transaction as well as incremental variable expenses.
Ken Frisbee: Enterprise and automotive product revenues improved 14% year over year and were down 3% sequentially mainly due to continued softness and automotive.
Ken Frisbee: Mobile product revenues were down 4% sequentially and 18% year-over-year as product shipments to a large customer reached end of life.
Ken Frisbee: Third quarter non-Gapros margin was 53.5% in line with the midpoint of our guidance.
Ken Frisbee: Third quarter, non-GAAP operating expense was $101 million in line with the midpoint of our guidance range.
Ken Frisbee: Our non-GAAP operating margin was 15.6% up approximately 270 basis points on a year-over-year basis and down 170 basis points sequentially.
Ken Frisbee: The sequential decline was mainly due to an increase in operating expenses related to our Broadcom transaction as well as incremental variable expenses.
Ken Rizvi: Non-GAAP net income in Q3 was $35.3 million. and Nongap EPS per diluted share came in above the midpoint of our guidance at $0.90 per share, an increase of 70% on a year-over-year Now let me turn to the ballot. We ended the quarter with approximately $421.4 million in cash, cash equivalents, and short-term investments, down approximately $174.7 million from the prior quarter. Cash flow from operations was $74 million. During the quarter, we spent $198 million on the Broadcom transaction. In addition, we returned $37.9 million in capital through share repurchases, purchasing approximately 546,000. In this fiscal year, we have returned approximately $128 million to shareholders through the repurchase of about 1.8 million shares, or nearly 5% of our total shares.
Ken Frisbee: non-GAAP Net Income in Q3 was $35.3 million, and non-GAAP EPS, Perdiluted Chair, came in above the midpoint of our guidance at $0.90 per share, an increase of 70% on a year-over-year basis.
Now, let me turn to the ballad sheet.
Ken Frisbee: We ended the quarter with approximately $421.4 million in cash, cash equivalents and short-term investments, down approximately $174.7 million from the prior quarter.
Cash Flow from Operations with $74 million $1.
Ken Frisbee: During the quarter, we spent $198 million on the Broadcom transaction.
Ken Frisbee: In addition, we returned 37.9 million in capital through share repurchases purchasing approximately 546,000 shares.
Ken Frisbee: In this fiscal year, we have returned approximately $128 million to shareholders through the repurchase of about 1.8 million shares or nearly 5% of our total shares outstanding.
Ken Rizvi: Capital expenditures was $5.4 million and depreciation for the quarter was $7.2 million. Receivables at the end of March were $132 million, and days of sales outstanding were $45 million. down from 49 days last quarter. Our ending inventory balance was $132.9 million, which increased by $13.4 million from the previous quarter.
Ken Frisbee: Receivables at the end of March were $132 million in days of sales outstanding were 45 days down from 49 days last quarter.
Ken Frisbee: Our ending inventory balance was $132.9 million, which increased by $13.4 million from the previous quarter.
Unknown Executive: Calculated days of inventory on our balance sheet were...
Ken Frisbee: The calculated days of inventory on our balance sheet were 96 days.
Ken Rizvi: Now turning to our fourth quarter 2025 guidance. broader macroeconomic conditions remain Influenced by Tariff Policies and the Global Trade Environment While the direct impact of tariffs on our financials has been immaterial, The potential indirect impact on future demand and supply chain remains unclear. based on our current view of the environment. We expect June quarter revenues to be approx. $280 million at the mid plus or minus $15 million. Our guidance for the fourth quarter reflects an expected revenue mix from core IOT, enterprise and automotive, and mobile touch products of approximately 30%, 54%, and 16% respectively. We expect non-GAAP gross margins.
Now, turning to our fourth quarter, 2020-25 guidance.
Ken Frisbee: Broad or macroeconomic conditions remain uncertain, influenced by terrorist policies and the global trade environment.
Ken Frisbee: While the direct impact of tariffs on our financials has been in material, the potential indirect impact on future demand and supply chain remains unclear.
based on our current view of the environment.
Ken Frisbee: We expect June quarter revenues to be approximately $280 million at the midpoint plus or minus $15 million.
Ken Frisbee: Our guidance for the fourth quarter reflects an expected revenue mix from Core IoT, Enterprise and Automotive, and mobile touch products of approximately 30%, 54% and 16% respectively.
Ken Frisbee: We expect non-GAAP gross margin to be 53.5% at the midpoint plus or minus 1%.
Ken Rizvi: at the midpoint, plus or minus 1%. Non-GAAP operating expenses in the June quarter are expected to be $103 million at the midpoint of our guidance. plus or minus $2 million. We expect non-GAAP net interest and other expenses to be approximately $1 million in the fourth quarter and our non-GAAP tax rate to be in the range of 13 to 15 percent. Non-gap net income per diluted share is anticipated to be $1 per share at the midpoint, plus or minus $26. on an estimated $39.3 million fully diluted.
Ken Frisbee: non-GAAP Operating Expenses in the June quarter are expected to be $103 million at the midpoint of our guidance plus or minus $2 million.
Ken Frisbee: We expect non-GAAP net interest in other expenses to be approximately $1 million in the fourth quarter and our non-GAAP tax rate to be in the range of 13 to 15%.
Ken Frisbee: non-GAAP Net income per diluted share is anticipated to be $1 per share at the midpoint plus or minus 20 cents on an estimated 39.3 million fully diluted shares.
Ken Rizvi: To conclude, we delivered a strong quarter and successfully introduced several innovative and differentiated products. continue to monitor and adjust to the evolving macroeconomic and geopolitical landscape. Our design wind momentum remains robust, with key programs progressing through the funnel. We're seeing encouraging signs of market share. and content expansion across our franchise market. And overall, we remained focused on discipline. Strengthening our competitive position and driving long-term shareholder value.
Ken Frisbee: To conclude, we delivered a strong quarter and successfully introduced several innovative and differentiated products. We continue to monitor and adjust to the evolving macroeconomic and geopolitical landscape.
Ken Frisbee: Our Design Win Momentum remains robust with key programs progressing through the funnel.
Ken Frisbee: We're seeing encouraging signs of market share games and content expansion across our franchise markets.
And overall, we remained focused on discipline execution. [inaudible]
Strengthening our competitive position and driving long-term shareholder value
Unknown Executive: This wraps up our prepared remarks.
Ken Frisbee: This wraps up our prepared remarks I'd like to turn the call over to the operator to start the Q&A session.
Unknown Executive: I'd like to turn the call over to the operator to start the Q&A session. Thank you. To ask a question you will need to press star 1 and 1 on your telephone keypad. and wait for your name to be announced. To withdraw your question please press star 1 and 1 again.
Speaker Change: Thank you. To ask a question, you will need to press star 1 and 1 on your telephone keypad
Ken Frisbee: and wait for your name to be announced. To restore your question, please press star 1 and 1 again. Please
Unknown Executive: Please stand by while we compile the Q&A roster. Thank you.
Quinn Bolton: We will now go to our first question. And your first question comes from the line of Quinn Bolton from Needham & Company. Please go ahead. Hey, guys. Nick, on for Quinn. Thanks for taking our questions.
Thank you. We will now go to our first question.
Quinn Bolton: And your first question, consumer line of Quinn Bolton from Needham and Company, please go ahead.
Nick: Thank you guys, Nick on for Quinn. Thanks for taking our questions.
Nick: Could you expand on what drove the strength in core IoT and in both the quarter and the guide, and I guess specifically for June, how much of that strength is coming from either the Wi-Fi 7 ramps that you've talked about previously and or the Broadcom and Pixel-related ramp? I know that the Pixel ramp is expected to be pretty strong in June as well. Thank you. Yeah.
Could you expand on what drove the strength and...
Quinn Bolton: Core IoT, and in both the Quarter and the Guide, and I guess specifically for June , how much of that strength is coming from either the Wi-Fi 7 ramps that you've talked about previously, or the Broadcom and Pixel-related ramp. I know that the Pixel ramp is...
Quinn Bolton: Explained to be pretty strong in June as well. Thank you.
Ken Rizvi: Hey, Nick. It's Ken Rizvi. Thanks for the question. Thanks for the support. So if you look at the core IoT business, a lot of that was driven by our wireless growth. It's a couple of factors. One, we continue to see pretty strong demand from our existing product and portfolio. You highlighted Wi-Fi 7. That's really towards the tail end of this calendar year and really a 2026 driver of the business. And then as we look at the Broadcom acquisition, as we talked before in our previous earnings call, our anticipation was that would add about $10 million a quarter, plus or minus.
Quinn Bolton: Hey Nick, it's Ken Rizvi. Thanks for the question and thanks for the support. So if you look at the core IoT business, a lot of that was driven by our wireless growth.
Speaker Change: It's a couple of factors. One, we continue to see pretty strong demand from our existing product and portfolio. You highlighted Wi-Fi 7, and that's really towards the tail end of this calendar year and really a 2026 driver of the business.
Quinn Bolton: and then as we look at the Broadcom acquisition, as we talked before in our previous earnings call, our anticipation was that would add about...
Nick: There's some puts and takes in any given quarter. And if you recall, in our previous quarter, we were expecting something like $5 million. And in our guide, you can assume it was closer to that $10 million plus type of amount. Helpful. Thank you.
Quinn Bolton: 10,000, a quarter, plus or minus, there are some puts and takes
Quinn Bolton: in any given quarter, and if you recall, in our previous quarter, [inaudible]
Quinn Bolton: We were expecting something like $5 million and in our guide you can assume it was closer to that 10 million plus type of run rate.
Unknown Executive: And then previously, you've talked about your human present detection win with Dell, and you talked about it again in the prepared comments. Now, I believe Lenovo was able to switch from a competing FPGA-based solution to a Microsoft-based software software. Thank you. only solutions.
Quinn Bolton: Hopefully, thank you. And then previously you've talked about your human present detection when with Dell and you talked about it again in the prepared comments. Now, I believe Lenovo was able to switch from a competing FPGA based solution to a Microsoft based software.
Unknown Executive: So kind of two questions. Do you see incremental opportunities to win versus FPGA based solutions with that UPD? And on the other side, do you see rising competition from this software only based solution in that application? Thanks. Yeah, sure. Good, good, good question.
Quinn Bolton: Only Solution. So kind of two questions. Do you see incremental opportunities to win versus FPGA based solutions with that UPD? And on the other side, do you see rising competition from this software only based solution in that application? Thanks.
Ken Rizvi: And I'll also turn it over to Vikram here is with us. But if you look at our UPD or HPD portfolio, what we've said before is with one of the large OEMs, we have essentially swept most of the SKUs, if not all of the SKUs there, and are penetrating one of the other OEMs. So we have two of the three large OEMs and continue to proliferate that technology and that platform. Relative to FPGAs out there, we have a much lower cost, much more power efficient die, which is helpful for these types of applications and also enables our customers to develop some unique software capabilities that really enhance the user experience there.
Quinn Bolton: Yes sure, good good good question and I'll also turn it over to Vikram here is is with us but if you look
Vikram Gupta: at our UPD or HPD portfolio. What we've said before is with one of the large OEMs we have essentially swept most of the SKUs if not all of the SKUs there.
Vikram Gupta: and our penetrating one of the other OEM. So, we have two of the three...
Vikram Gupta: large OEMs and continue to proliferate that technology and that platform relative to FPGA's out there. We have a much lower cost, much more power efficient.
Vikram Gupta: Die, which is helpful for these types of applications and also enables our customers to develop some unique software capabilities that really enhance.
Vikram Gupta: In terms of the software piece, I don't know, Vikram, if you had a comment. The one thing I would add about the software-based solution is that boundaries. We have a pretty strong roadmap of software features that we are enabling using the power of that ASIC. And we expect... forward much faster than what others can keep up with regards to a pure software-ready solution. And we're already seeing the effects in terms of the shared... Thank you very much. Thanks. Thank you.
Vikram Gupta: The user experience there. In terms of the software piece, I don't know, Vikram, if you had a comment on that.
Vikram Gupta: The only thing I would add about the software-based solution is that we are pushing the boundaries of the technology with this dedicated chip that we have. And we have a pretty strong roadmap of software features that we are enabling.
on using the power of that ASIC.
Vikram Gupta: and we expect that we'll be able to continue to push.
Vikram Gupta: The features set forward much faster than what others can keep up with regards to a pure software resolution.
and we're already seeing the effects.
Vikram Gupta: in terms of the shares that we're gaining at the OEMs that Ken mentioned.
So we feel very confident about it.
about a road map in that regard. . .
Thank you very much [inaudible]
Thanks, Nick.
Thank you.
Krish Sankar: Your next question comes from the line of Krish Sankar from TD Cowan. Please go ahead. Yeah, thanks for taking my question. Ken, the first question I had is, you know, given all the tariff-related macro concerns, you kind of said that it doesn't have any much impact yet. I'm kind of curious, have you seen any translation into how your order book or linearity is trending in June? And if you can extrapolate how to think about, you know, beyond June, if you have any view into September or beyond. Sure, Krish. Hey, thanks for the question. So if you look, one, if you look at our Q3 results, I mean, excellent results, really strong performance across the board here.
Speaker Change: Your next question comes from the line of Krish Sankar from TD Cowan, please go ahead.
Krish Sankar: Yeah, thanks for giving me a question. Can the first question I had is, you know, given all the data-related macro concerns, you kind of said that it doesn't have any much impact yet. But I'm curious, has that ever seen any...
Krish Sankar: Translations into how you order book or linearity is trending in June and if you can extrapolate how to think about you know beyond June , if you have any view into September or beyond.
Speaker Change: Sure, Krish. Hey, thanks for the question. So if you look, one, if you look at our Q3 results, I mean, excellent results, really strong performance.
Ken Rizvi: I have the three GMs and the entire Synaptics team really, really did a good job to execute in our most recent quarter. And if you look at the guide, we have very good visibility into our June guidance, right? And so the backlog levels entering the quarter, the overall bookings are very healthy. If we look even into September, I would say the starting backlog and the bookings rates are all healthy. I would say the only item which is news over the last quarter, and it is impacting everybody, is the uncertainty around tariffs and what that could mean to end demand.
Across the board here, I have the three GMs.
Speaker Change: and the entire Synaptics team really did a good job to execute.
Speaker Change: in our most recent quarter. And if you look at the guide, we have very good visibility.
into our June guidance.
Speaker Change: and so the backlog levels entering the quarter, the overall bookings are very healthy.
Speaker Change: If we look even into September , I would say the starting backlog and the bookings rates are all healthy. I would say the only item, which is news over the last quarter, and it is impacting everybody is the uncertainty around tariffs and what that could mean.
Ken Rizvi: I think that's the question that we're looking out as we look beyond the horizon. But if you look over the last couple of quarters, one of the things that I've highlighted, not only the backlog in the bookings But if we look at the inventory levels through the DISTE channel, those still remain very lean. So I think all of the fundamentals are there. And the only question that we have, along with other semiconductor suppliers, is what is that potential impact of tariffs to end demand? And so we're just continuing to monitor that. We're working with our customers, continuing to work with our suppliers.
Speaker Change: to End of Man. I think that's the question that we're looking out as we look beyond the horizon. But if you look over the last couple of quarters, one of the things that I've highlighted, not only the backlog in the bookings,
Speaker Change: But if we look at the inventory levels through the Disney Channel, those still remain very lean. So I think all of the fundamentals are there and the only question that we have along with other semiconductor suppliers.
is what is that potential impact? [inaudible]
of Terrace II and Demand.
Speaker Change: And so we're just continuing to monitor that. We're working with our customers, continue to work with our suppliers, but I would say into the horizon, meeting as we think about our June quarter and how things are progressing even into the September quarter, things are looking very healthy.
Ken Rizvi: But I would say into the horizon, meaning as we think about our June quarter and how things are progressing even into the September quarter, things are looking very healthy. Got it. Thanks for that, Ken. And then as a quick follow up, you kind of mentioned in the March quarter, you saw Better Than Seasonal Enterprise TC product because of share gains. And you talk about further share gains and maybe higher content. Can you talk a little bit about where are those share gains coming from and how to think about it going forward, both on the share gain and the higher content side?
Speaker Change: Got a thanks with it, Ken, and then there's a quick follow-up [inaudible]
Speaker Change: You kind of mentioned in the March quarter you saw better than season enterprise PC products because of sharegames
Satish: Sure, and I'll probably have Satish answer this as well, but if you looked on the PC side, we've done a great job this year overall in terms of working with the three largest OEMs in terms of Dell, HP, and Lenovo. With one of those players, we have gained actually a reasonable amount of share as we progressed based on not only the innovation that we delivered to them, but the quality and the cost of our solutions. And so we're still looking to further that as we think about 2016. Just to add on to what Ken said, the innovations that Ken is talking about, you know, we talk about AI a lot.
Speaker Change: Sure, and I'll also probably have to teach answer this as well, but if you look on the PC side, we've done a great job this year overall in terms of working with the three.
Speaker Change: Largest OEMs in terms of Dell HP and Lenovo. With one of those players we have gained actually a reasonable amount of share as we progressed, based on not only the innovation that we delivered to them but quality and the cost of our solutions.
Speaker Change: So, we're still looking to further that as we think about 26 and beyond. So, Tisha? Yeah, just to add on to what Ken said. The innovations that Ken is talking about. We talk about AI a lot, so we introduce a lot of AI elements.
Ken Rizvi: So we introduce a lot of AI elements. into our touchpads and fingerprints and such. And that helped us gain share at all these customers and we expect to continue that trend. Got it. Thanks a lot, folks. Thank you.
Satish: into our touch pads and fingerprints and such. And that helped us gain share of some of these customers and we expect to continue the trend going forward.
Thanks a lot folks, thank you.
Christopher Rolland: Your next question comes from the line of Christopher Rolland from Susquehanna. Please go ahead. Hi, guys. Thanks for the question. Just maybe a quick clarification to start. Ken, did you reconfirm the $10 million a quarter increase through the year in the model? Did I hear that? No. What I did say, Chris, is a couple of things. One is in this quarter, super strong results in our most recent quarter. If you look at the guide, also, I think a good trajectory guiding to $280 million at the midpoint. And if you look at the fundamentals, so what are those fundamentals?
Thank you.
Speaker Change: Your next question comes from the line of Christopher Rolland from Susquehanna, please go ahead.
Speaker Change: Hi guys, thanks for the question. Just maybe a quick clarification to start. Ken, did you reconfirm the 10 million, a quarter increase through the year in the model? Did I hear that?
Speaker Change: Now, what I did say, Chris, is a couple of things. One is, you know, in this quarter, super strong results in our most recent quarter. If you look at the guide, also I think a good trajectory, guiding to 280 million at the midpoint.
Speaker Change: And if you look at the fundamentals, so what are those fundamentals? The backlog, the booking rates.
Ken Rizvi: The backlog, the booking rates, all of those are trending in the right direction, even as we look into our September quarter. All good signs. I think the only thing that is different right now versus, let's say, three months ago is the uncertainty around the tariffs and what that could mean to end demand. If you look at the fundamentals, however, the business is performing very well. The fundamentals are very healthy. We look at the inventory and the channel, very healthy, very lean. So all of those things are goodness in terms of the overall business. But we have to also be cognizant of the fact that there is a lot of uncertainty around tariffs.
All of those are trending in the right direction in the right direction.
Speaker Change: Even as we look into our September quarter, all good signs, I think the only thing that is different right now versus let's say three months ago is the uncertainty around the terrace and what that could mean.
Speaker Change: to End Demand. If you look at the fundamentals, however, the business is performing very well.
The fundamentals are very healthy. [inaudible]
Speaker Change: We look at the inventory and the channel, very healthy, very lean, so all of those things are goodness in terms of the overall business.
Speaker Change: But we have to also be cognizant of the fact that there is a lot of uncertainty around terrorists. We have not seen any impact to our business thus far, but we just need to continue to monitor that.
Ken Rizvi: We have not seen any impact to our business thus far, but we just need to continue to Okay, and so if not for these terrorists, are we still on track for the 10, less than the 10, above the 10 per quarter? How would you size that up? Yeah, I won't give any specifics. Even last quarter, we provided as a framework. And you can see that both our most recent results here, Krish, and even into the June quarter, are very healthy, right? We went from 267 here in our most recent quarter to guiding to 280 at the midpoint in our June quarter.
Okay, and...
Speaker Change: So if not for these terrorists, are we still on track for the 10, less than the 10, above the 10 per quarter?
Like, how would you size that up?
Speaker Change: Yeah, I won't give any specifics, even last quarter we didn't, we provided as a framework, and you can see that both our most recent results are Chris and even into the June quarter are very healthy, right? We went from...
Speaker Change: 267 here in our most recent quarter to guiding to 280.
Ken Rizvi: So a very good trajectory, I think across the board, the businesses are performing well. I would say the only area of headwinds that we've, we've highlighted over the last couple quarters and still with us today is around the automotive.
Speaker Change: at the midpoint in our June quarter. So a very good trajectory, I think, across the board. The businesses are performing well. I would say the only area of headwinds that we've highlighted over the last couple quarters and still with us today is around the automotive space.
Ken Rizvi: Excellent. And perhaps if you could talk about The Broadcom acquisition, where we stand, I think you said $40 million of annualized revenue from the sale. Are you able to add any additional to that? Are you seeing any additional uptake, particularly on the mobile side? And yeah, if you have any other kind of design wins or traction there, I would love to hear about it as well. Yeah, I mean, now that all of that is embedded into our core IoT business, Chris, I would say if you step back and look at the acquisition and look at the assets and really the people that joined us as a result of that acquisition, it's a fantastic transaction for Synaptics.
Excellent. And perhaps if you could talk about…
Speaker Change: The Broadcom acquisition, where we stand, I think you said 40 million of annualized revenue from the sale, are you able to add any additional to that? Are you seeing any additional...
Speaker Change: Update, particularly on the mobile side. And yeah, if you have any other kind of design winds or traction there, I would love to hear about it as well.
Speaker Change: Yeah, I mean now that all of that is embedded into our core IoT business, Chris, I would say if you step back
Speaker Change: and look at the acquisition and look at the assets and really the people that joined us as a result of that acquisition. It's a fantastic.
Kevin Cassidy: It opens up a lot of doors in the long term in terms of SAM expansion. When we think about ARVR, when we think about smartphones, when we think about consumer audio, these are all areas that are a new SAM potential for us, and we would expect to prosecute those over the next three to four years. Thanks and congrats. Thank you. Your next question comes from the line of Kevin Cassidy from Rosenblatt Securities, please go ahead. Yeah, thanks for taking my question. And I'll also say congratulations on the continued momentum. Just the Wi-Fi 7 low power and you know, for IoT applications, can you give us a description of what's happening in the competitive landscape?
Speaker Change: Transaction for Synaptics. It opens up a lot of doors in the long-term in terms of Sam expansion. When we think about ARVR, when we think about smartphones, when we think about consumer audio. These are all areas that are a new Sam potential for us.
Speaker Change: and we would expect to prosecute those over the next three to five years.
Thanks and congrats [inaudible]
Thank you.
Speaker Change: Your next question comes from the line of Kevin Cassidy from Rosenblatt Securities, please go ahead.
Kevin Cassidy: Thanks for taking my question and I'll also say congratulations on the continued momentum.
Speaker Change: Just the Wi-Fi 7 low power and for IOT applications, can you give us a description of what's happening in the competitive landscape?
Venkat Kodavati: Is there anyone else that's targeting the IoT market like this? Or are they all just taking the standard Wi-Fi 7 and adding it onto and just trying to sell it to IoT companies?
Speaker Change: Is there anyone else that's targeting the IoT market like this or are they all just taking the standard Wi-Fi 7 and adding it on to and just trying to sell it to IoT companies? Yeah, let me turn it over to our expert, our GM, Venkat here. He can answer some of the specifics.
Venkat Kodavati: Yeah, let me let me turn it over to our expert or GM Venkat here. He can answer. Yeah, I think on the competitive landscape, I mean, we are the first one to introduce Wi-Fi 7 to IoT market. We are focused on some of the video applications to start with, but using very low power. I think we are advanced process node, we are using advanced process node to bring down the power and also using some signal processing techniques. make the overall power consumption much lower than anybody else. So I think I cannot comment exactly where the competition stands, but we stand much better than anybody else out there.
I think.
Venkat: Yeah, I think on the company to landscape, I mean, we are the first one to introduce Wi-Fi 7 to IoT market, and we are focused on some of the video applications to start with, but using very low power. I think we are advanced process node, we are using advanced process node to bring down the power.
Venkat: Make the overall power consumption much lower than anybody out there. So I think I cannot comment exactly where the competition stands but we stand much better than anybody else out there. That's all I can say at this point.
Venkat Kodavati: That's all I can say.
Unknown Executive: Okay, great. Sounds good.
Unknown Executive: And then just with the, you know, on your Astra platform, with the introduction of DeepSeq and other optimized LLMs, have you seen an increase in demand based on those? Or, you know, I guess, what's the what's the drivers in that market? Yeah, I would say so.
Okay, great. Sounds good.
Speaker Change: and then just with the, you know, on your Astro platform.
Speaker Change: with the introduction of deep seek and other optimized LLMs. Have you seen an increase in demand based on those, or I guess what's the drivers in that market?
Unknown Executive: So one overall, and I'll turn it over to Vikram here. But if you look at the pipeline of activity, it continues to grow and the interest level continues to grow. And how I would think about Deep, Deep Seek and others is it brings down the overall cost of compute, which means that compute at the edge can be even further proliferated. And these applications at the edge become more important, which which really fits where we're targeting our solutions in our Did Vikram you want to add to that? Yeah, I mean... just shown that, you know, you can run advanced models, you know, in a format.
Vikram Gupta: Yeah, I would say so so one overall and I'll turn it over to Vikram here, but if you look at the pipeline of activity it continues to grow and the interest level continues to grow.
and how I would think about...
Deep Seek, and others, it brings down...
Vikram Gupta: The overall cost of compute, which means that compute at the edge can be even further proliferated and these applications at the edge become more important which really fits where we're targeting our solutions in our ICs.
Vikram Gupta: Vikram, you want to add to that? Yeah, I mean, so the deep-seag they've just shown that, you know, you can run advanced models.
Vikram Gupta: and a format that's suitable for the edge and that just plays to our advantage. [inaudible]
Unknown Executive: Specific question the board around our solutions because of it, absolutely in certain geos.
Speaker Change: And your special question about have we seen any uptake around our solutions because of it absolutely in certain geos? There is definitely more interest.
Speaker Change: on trying to move AI to the edge faster and we are having a number of different engagements across a variety of applications.
and Michael Hurlston. Thank you.
Unknown Executive: Okay, sounds great.
Unknown Executive: Thanks.
Unknown Executive: Hey, thanks, Kevin.
Okay, sounds great. Thanks. Hey, thanks, Kevin.
Unknown Executive: Thank you.
Peter Peng: Your next question comes from the line of Peter Peng from JP Morgan. Please go ahead. I still think, as we said, that we guide only one quarter ahead, Peter, but I would say the core IOT business and product lines did well here in our March quarter. And if you look at the guide, we're expecting nice sequential growth and year-over-year growth into the June quarter. And even if you just look holistically at the core IOT business, I think we've now grown five consecutive quarters sequentially. June would mark the sixth sequential quarter of growth. So really nice momentum in that overall business and product line.
Thank you.
Speaker Change: Your next question, close to the line of Peter Peng from JP Morgan, please go ahead.
Peter Peng: Hey guys, good job on the quarter end guide, and thanks for taking my question.
Peter Peng: You know, just wondering when would we expect a more of a synchronized growth in your markets? So if I look at just the quarter, even the kind of lot of this is driven by your core out T.
Peter Peng: So maybe we look at in the back half of the year, would we expect, you know, the growth to be continue to be led by a quarrelty or do you see some enterprise perhaps your mobile start, you know, sub contributing to the sequential growth? [inaudible]
Speaker Change: I still think as we see that we guide only one quarter ahead, Peter, but I would say the core IoT business and product lines did well.
Peter Peng: here in our March quarter. And if you look at the guide, we're expecting nice.
Peter Peng: Sequential Growth, and Year Over Year Growth into the June quarter. And even if you just look holistically at the core IOT business, I think we've now grown five consecutive quarters sequentially.
June would mark the 6th sequential quarter of growth. So,
Peter Peng: really nice momentum in that overall business and product line. If you look at the other areas like Enterprise and Automotive, I would say on the Enterprise and Automotive side,
Ken Rizvi: If you look at the other areas like enterprise and automotive, I would say on the enterprise and automotive side, with both PCs and some of the peripherals and video interface and the like, we are doing very well. I would say the one thing that we've highlighted that's continued into our March results and part of our June guide is that we're still seeing automotive very sluggish, right, in terms of the demand profile. We'll see how that plays out for the rest of this calendar year, but that, in my mind, will continue to remain fairly sluggish. And even with that, we're seeing nice growth trends in our June quarter relative to our March quarter.
with both PCs and some of the peripherals.
Peter Peng: Video Interface and like. We are doing very well. I would say the one thing that we've highlighted that's continued.
Peter Peng: into our March results and part of our June guide is that we're still seeing automotive very sluggish, right, in terms of the demand profile. We'll see how that plays out for the rest of this calendar year, but
That in my mind will continue to remain fairly sluggish.
and even with that we're seeing nice growth trends. [inaudible]
in our June Quarter relative to our March Quarter.
Ken Rizvi: And then on the mobile side, you know, we're finally through that large customer and the end of life there with the team's done a great job in terms of really targeting the high-end Android market. We talked about it in our formal presentation about the fact that we are continuing to innovate, especially with this multi-frequency touch device here. And in that space, customers come to us because we are the leaders on the technology front.
Peter Peng: And then on the mobile side, we're finally through that large customer in the end of life there with the teams done a great job in terms of really targeting the high end.
Peter Peng: Android Market. We talked about it in our formal presentation about the fact that we are continuing to innovate, especially with this multi-frequency touch.
Peter Peng: Device here and in that space customers come to us because we are the leaders on the technology front and so I would say if you think about that business long term I think we have a good starting point from here and over the next three to five years we're going to continue to grow it [inaudible]
Ken Rizvi: And so I would say if you think about that business long-term, I think we have a good starting point from here, and over the next three to five years, we're going to continue to grow.
Unknown Executive: Got it, thanks.
Ken Rizvi: And then just on your broad market, historically, you guys have, you know, pretty concentrated customers. And now we're going to the broad markets where, you know, there's a long tail of customers, I guess, in terms of just, you know, getting the, you know, the marketing and sales and working with the right distribution, where are you in that stage? Yeah, I would say, we're in the still in the early innings of our go to market strategy. If you look, we have done a fantastic job over time in terms of the larger and larger scale customers in terms of developing those one on one relationships for, let's say, our top 20 or so customers.
You got it. Thanks.
Speaker Change: And then just on your broad market, historically you guys have pretty concentrated customers and now we're going to the broad markets where there's a long tail of customers. I guess in terms of just getting the marketing and sales and working with the right distribution, where are you in that stage?
Speaker Change: Yeah, I would say we're still in the early endings of our go-to-market strategy.
Speaker Change: If you look, we have done a fantastic job over time in terms of the larger scale customers in terms of developing those one-on-one relationships for let's say our top 20 or so customers.
Ken Rizvi: One of the things that we have highlighted over the last three or four months is investments on the go to market side, both on the business development front in terms of adding a team and resources there. Also, all of the collateral that goes along with servicing a larger account profile. And we'll continue to make those investments here. So as you think about not only the rest of our fiscal 25, but as we head into fiscal 2026, we'll continue to make those investments on the go to market engine, because that's going to produce some fruit on a long term basis.
Speaker Change: One of the things that we have highlighted over the last three or four months is investments on the go to market side.
Speaker Change: Both on the business development front in terms of adding a team and resources there Also all of the collateral that goes along with servicing a larger account profile
Speaker Change: and we'll continue to make those investments here. So, as you think about not only the rest of our fiscal 25 but as we head into fiscal 2026, we'll continue to make those investments.
Speaker Change: on the go-to-market engine because that's going to produce some fruit on a long-term basis for us.
Unknown Executive: and Dan Corker. And there have been some really exciting...
Speaker Change: and Vikram Gupta, Dan? I'm just going to say that the other aspect is that the investment in our partners is actually also paying off. You indicated in your open agreements, Ken, about how some of the OEMs you're working with are working with OEMs, and there have been some really exciting opportunities that have come up through that.
Speaker Change: and so we will continue to invest in the partner network as well.
Unknown Executive: Thank you.
Unknown Executive: That concludes the Q&A session and this also concludes today's conference call. Thank you for participating.
Thank you.
Speaker Change: That concludes the Q&A session and this also concludes today's conference call. Thank you for participating, you may now disconnect.
Unknown Executive: You may now disconnect.
Speaker Change: [music].