Q4 2025 Synaptics Inc Earnings Call
Hello, and welcome to synaptics fourth quarter fiscal year, 2025 Financial results conference call.
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It is now my pleasure to introduce munjal sha vice president investor relations.
Good afternoon, and thank you for joining us today on synaptics fourth quarter and fiscal 2025 conference call.
My name is mongal shock. And I am the head of investor relations.
With me on today's call Raul Patel a president and CEO and Kendra's week are CFO.
This call is being broadcast live over the web and can be accessed from the investor relations section of the company's website at synaptics.com.
In addition to a copy of our earnings press release detailing, our quarterly results, a supplemental slide presentation, and a copy of the prepared. Remarks have been posted on our investor relations website.
Today's discussion of financial results is presented on a gaap financial basis, along with supplementary results, on a non-gaap basis, which excludes share based, compensation the acquisition related costs to certain other non-cash or recurring or non-recurring items.
Please refer to our earnings press release for a Reconciliation of the most directly comparable, gaap Financial measures to the non-gaap financial measures presented.
as a reminder, the matters we are discussing today in our prepared remarks, in our supplemental materials, and in response to your questions, may contain forward-looking statements
These forward-looking statements give our current expectations and projections relating to our financial condition. Results of operations, plans, objective future, performance, and business.
All those synaptic beliefs these estimates and assumptions. Underlying this forward-looking statements to be reasonable. They are subject to a number of risks and uncertainties beyond our control.
Synaptics cautions that actual results May differ materially from any future performance suggested in the company's forward-looking statements.
Therefore, we refer you to the company's earnings release issued today, and our current and periodic reports filed with the SEC, including our most recent annual report on form 10K, and quarterly reports on form 10q for important risk, factors. That could cause actual results differ materially from those contained in any forward-looking statement
Paul's overlooking statements speak only as of the date here of all the date, specified, on the call.
Except as required by law, synaptics expressly, disclaims, any obligation to update this forward-looking information?
I will now turn the call over to Rahul.
Thank you munjal. Good afternoon, everyone and thank you for joining our fiscal and Q4 2025 earnings call.
I am excited to speak with you today. I will start with the brief introduction, outline my initial observations and discuss strategic updates for the company.
I will then cover highlights from our fourth quarter and turn the call over to Ken for a financial results and guidance.
I have spent 3 decades driving growth in semiconductor industry, including more than 20 years in senior leadership roles at Qualcomm and broadcom.
This success was built on delivering highly, differentiated products and compelling. Technology roadmap strategically positioning the business for sustained growth Market, leadership and enduring customer relationships.
I am energized by the opportunity to scale synaptics into a much larger and differentiated core iot and Edge, AI, semiconductor Solutions player.
in the past 2 months, I have engaged closely with customers Partners suppliers and our employees to better understand our strengths and opportunities
Synaptics has a strong foundation. In analog mixed signal, multi-core processors and wireless connectivity intellectual property.
I believe that the combination of these 3 capabilities uniquely positioned the company in core iot to deliver long-term value for our stakeholders.
Our engineering Talent, technology portfolio, roadmap of differentiated products, and solutions, and customer intimacy position us, well for leadership and growth.
We are leveraging our strong Foundation to accelerate growth in core iot investing strategically in engineering sharpening. Our go-to Market, execution and delivering, Innovative scalable platforms. That align with our customers, need for performance integration and flexibility.
From Industrial Automation to Smart Home applications. Synaptics is uniquely positioned to capitalize on a vast emerging opportunity.
With unmatched capabilities, in sensing processing and connectivity. We are driving differentiated Solutions, in core iot and Edge, AI.
From my vantage point, our priorities are clear.
We plan to actively pursue opportunities, to expand our share in our existing markets and explore new ones with, with the goal of accelerating growth in our Core iot Business.
We will continue evaluating our product portfolio and shape our products and solutions roadmap that we believe will position us for sustained success over the medium and long term.
We expect to maintain a disciplined execution strategy that prioritizes investments in areas that offer the highest potential for sustained and profitable growth.
We look forward to providing more details at synaptics analyst Day in 2026.
Moving to our results and business update.
we just completed our fiscal year 2025 with Revenue increasing 12% to 1 billion 1074 million
This growth was driven by strong performance of our core iot products which grew 53% year-over-year and accounted for approximately 1 quarter of total company sales.
As we enter fiscal 2026, we continue to focus on driving Topline growth and increasing earnings while also continuing to invest in our growth initiatives.
For our fiscal fourth quarter, which ended in June, 2025 Revenue was 282.8 Million.
Slightly above midpoint of our guidance and up 14% year-over-year.
Non-gaap gross margin was 53.5% in line with the midpoint of our guidance and non-gaap EPS of $1.01 increased 58% year-over-year and was also in line with the midpoint of our guidance.
Our core iot product sales increased 55% year-over-year in fiscal Q4 to 84 million.
Fueled by a strong contribution from our wireless portfolio.
As we look to the Future, our new synaptics Wi-Fi, 7 Solutions, introduced last quarter are gaining meaningful traction offering a range of products from high performance to low power capabilities.
We see design opportunities across a wide range of customers for iot Enterprise and Automotive applications.
These designs are expected to ramp throughout 2026 and Beyond as customers launch their next generation of products.
We have confidence that synaptics is well positioned to gain market, share during the Wi-Fi, 7 technology. Transition,
To our portfolio of processors, the team has done an excellent job taping out, our latest Edge AI, native Astro processors. This new portfolio integrates a neural processor code developed, with Google research which supports Transformer based architecture.
This enables native execution of generative, AI applications at the edge to support text Video Vision Audio and predictive maintenance workloads.
It supports both current AI use cases and emerging AI models across a broad range of iot applications and delivers high performance and low power consumption at truly disruptive price point.
We believe that tight integration with our Market leading Wireless connectivity Solutions. Enables our customers to implement differentiated
And affordable and applications.
We are making great progress with lead, customers and Engineering samples that are expected this quarter.
We expect initial Revenue contributions to start in the second half of calendar 2026.
While we are seeing strong momentum in product development design wins.
And pipeline expansion for our new platforms. Our existing process of products are also gaining traction.
Benefiting from demand recovery and normalize inventories.
We continue to see our design wins ramping into various deployments at Key customers in 2026.
We have secured a marquee win with a leading audio. OEM
they chose us because of our ability to provide AGI. Ready silicon comprehensive software robust connectivity, broad iot, ecosystem, support and Hardware security.
Overall, our core iot pipeline continues to grow and gain momentum.
Turning to Enterprise and Automotive.
We continue to see modest recovery across our Enterprise portfolio.
While order Trends are improving, we are not seeing a broad-based PC refresh cycle. Just yet in automotive demand remains soft in line with the market segments. While we do not anticipate, a material rear term recovery. We remain confident in the long-term potential driven by our Innovative video, display Bridge Solutions and Adoption of OLED screens.
Finally, Mobile Touch performed better than our initial expectations and delivered solid sequential growth.
Our portfolio is primarily targeted at the high and Android smartphone market where we saw healthy demand across multiple customers.
We are seeing strong traction for our latest such architecture designed for foldable phones and other large screen applications.
We are optimistic about the opportunity as the share of foldable phones. Continue to grow.
We continue to collaborate with multiple oems for their current and next-gen designs.
Overall business continues to improve as orders are steadily increasing the backlog is growing and channel inventories, remain lean.
Our pipeline of proportions continues to expand and we remain confident in our ability, to maintain our position in Enterprise, and Automotive, Mobile touch and drive long-term growth in core iot.
With disciplined execution, we expect to deliver sustainable growth across our portfolio and create long-term shareholder value.
In my time here so far, I have focused on deepening connections with our employees, customers, suppliers, and partners. I'm now looking forward to building strong partnerships with our analysts and investors.
We plan to be on the road in the coming weeks and I hope to meet several of you in person.
I will turn the call over to Ken to review our fourth quarter fiscal year, 2025 Financial results and our fiscal 2026. First quarter Outlook
Thank you role and good afternoon, everyone. 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.
Let me start with our full-year fiscal 2025 results.
Our growth was mainly driven by our core iot products, which increased 53% for the year.
We also saw a recovery in our enterprise and automotive products, which increased by 7%.
During fiscal 2025, our revenue trends continue to improve, and channel inventories have been reduced to normalized levels.
Non-gaap gross. Margin for fiscal. 2025 came in at 53.6%.
Non-gaap net income for fiscal year. 2025 was 143.9 million or $3.62 per diluted share.
We continue to generate strong cash flow, with fiscal year, 2025 cash, from operations of 142 million.
During the year, we reduced total gross debt by approximately 134 million or 14%.
Repurchase shares of our common stock totaling 128 million and invested approximately 200 million dollars to acquire certain assets from broadcom. In January, enhancing the capabilities in our core iot portfolio.
Now, let me turn to our Q4 results.
Revenue for fiscal Q4, was 282.8 Million above the midpoint of our guidance?
Q4 revenues were up 14% on a year-over-year basis and 6% sequentially.
The revenue mix in the fourth quarter was as follows 30% core iot 53%, Enterprise and automotive and 17% mobile Touch Products.
Core iot product revenues increased 55% year-over-year and 25% sequentially driven primarily by increased demand for our wireless products.
Enterprise and automotive product revenues improved 4% year-over-year, but we're down 3% sequentially, mainly due to continued softness in automotive.
Mobile touch product revenues were higher than expected. Increasing 8% sequentially and were roughly flat on a year-over-year basis.
Fourth quarter, non-gaap growth, margin was 53.5%.
In line with the midpoint of our guidance.
In the fourth quarter, non-GAAP operating expenses were $104.5 million, slightly above the midpoint of our guidance range. This was mainly due to the foreign exchange impact from a weakening U.S. dollar.
We estimate this impact for fourth quarter expense, was approximately $2 million.
Our non-gaap operating margin was 16.5% up approximately 208 basis points on a year-over-year basis, and 95 basis points, sequentially.
In non-GAAP, net income in Q4 was $39.5 million.
Non-GAAP EPS per diluted share came in above the midpoint of our guidance at $111 per share, an increase of 58% year-over-year.
Now, let me turn to the balance sheet.
We ended the fiscal fourth quarter with approximately $452.5 million in cash, cash equivalents, and short-term investments, up approximately $31.1 million from the prior quarter.
Cash flow from operations was 57 million in the fiscal fourth quarter.
And we repurchased 16 million of our shares in Q4.
Our existing share repurchase authorization expired in July of 2025.
On August 5, 2025, our Board of Directors authorized a new repurchase program for up to $150 million of our common stock.
This new authorization, underscores the board's confidence in our long-term strategy, and reflects our continued commitment to delivering shareholder value.
We remain disciplined in our Capital, allocation approach balancing strategic Investments, and growth with opportunistic. Share repurchases.
Capital expenditures was 6.6 million and depreciation for the quarter was 7.1 million.
For the fiscal year, 2025 total capital expenditure was 25.8 million and total depreciation was 28.9 Million.
Million dollars and days of sale outstanding. We're 41 days.
Down from 45 days, last quarter.
Our ending inventory balance was 139.5 Million, which increased by 6.6 million from the previous quarter.
And the calculated days of inventory on our balance sheet or 95 days essentially flat with last quarter.
now, turning to our first quarter of 2026 guidance,
I want to First note that our guidance is subject to the fluid macroeconomic, global trade and tariff environment which remains uncertain at this time.
Please refer to our Safe, Harbor statement in the earnings release and in our supplemental materials.
For q1, we expect Revenue to be approximately 290 million at the midpoint plus or minus 10 million.
Our guidance in the first quarter. Reflects, an expected Revenue, mix from core iot Enterprise, and automotive, and mobile Touch Products of approximately 32% 53%. And 15% respectively,
We expect non-gaap gross margin to be 53.5% at the midpoint plus or minus 1%.
And non-gaap operating expenses in the September quarter, are expected to be 105 million at the midpoint of our guidance plus or minus 2 million.
we also expect non-gaap net, interests and other expenses to be in the range of 1 to 2 million in the first quarter and our non-gaap tax rate to be in the range of 13 to 15% for the first quarter and for fiscal 2026,
Non-gaap net income per diluted share is anticipated to be $15 per share at the midpoint plus or minus -15 cents on an estimated 39.5 million fully diluted shares.
This wraps up our prepared, remarks.
I would like to turn the call over to the operator to start the Q&A session.
Thank you.
As a reminder to ask a question. Please press star, 1 1 1 on your telephone and wait for your name, to be announced to enjoy your question. Please. Press star, 1 1 1 again.
Our first question comes from the line of Kevin Cassidy with rosenblat securities.
Yeah, thanks for taking my question, and congratulations on the great results. Welcome, REO.
Um and my question is for rahula, maybe I'm I'm certain at the analyst day, you'll go into more details but, you know, you had great success in the iot Market at Qualcomm. I just want to know how this strategy might change, uh, as you come to the, uh, synaptics platform.
And thanks for the question. Uh,
Clearly, I think um as I indicated in my prepared, uh remarks I'm really excited by what I see in our portfolio at synaptics and the opportunity to road map at further into something that's going to be even more formidable offering.
Like, uh, you know, if you look at the building blocks in most of the iot systems, you would have a processor, you would have some form of Wireless connectivity, and you would have some natural interface or interface with the physical world, which would be largely mixed signal. Uh, and if you look at these 3 components, they're exactly where synaptics is and its core capabilities. Right now. Mixed signal is been the core competence of the company for almost 4 Decades of its life.
Uh, it's been kind of, uh, definitely delivering best-in-class signal-to-noise ratio solutions. Basically, as you know, in mobile touch for a very long time and many other things along those lines.
Second in processors, they have got a nice presence already in the processor market and with this Google research partnership bringing AI at the Edge by implementing. Not only the neural processing engine but also in collaboration with Google
Is broadcom and they are being built into products. That will be ultimately, delivering at the not so high performance. But extremely low power applications that ultimately build solutions to deliver extremely efficient power, efficient battery life, efficient days of use, efficient Solutions. And so you can see
the opportunity over here is going Beyond selling, uh, piece Solutions as processor or Wireless connectivity, or as some analog, mix signal capability into a solution on a going forward basis. And you'll see lot more of those discussions. Uh, come to the Forefront as we move along in 2026 with the synaptics and that in itself is now opportunity to add lot more silicon content from synaptics in the end product at the customer. And also, uh, wrap it with the right software capabilities, uh, AI model capabilities and potentially help us. Uh grow uh, growth margin from where it is right now where an approach, you know, our long-term models. So as you can tell, I can't stop talking enough about it and I'm truly excited about the opportunity. I had in core iot for the portfolio that synaptics has to offer today and grow from there into the world.
Road map products that we have in plants.
That's great color, thank you for that. Um, and maybe just 1, other is the, you know, are there other building blocks? You might need to acquire uh, to to fill out the
The the whole solution, um, you know, maybe some other types of connectivity aside from the wireless connectivity.
Uh, Kevin I think an excellent question again. I think um you know, um our philosophy and My Philosophy throughout my career has been to be very disciplined financially, right? And not get carried away, right? And I think uh I you know some of these uh uh thoughts are common to Ken as well and how he kind of looks at the business and are investments. So, clearly we have a portfolio organically that can grow. And so, from Investments point of view, our first place is going to be organic, uh, Investments where we can continue to grow products and, you know, develop a road map, that's highly differentiated. I'm very confident that we'll continue to deliver, uh, differentiated products based on everything that we have in our portfolio on a going forward basis, I will not rule out inorganic or portraits to accelerate our growth in core iot as well. And then obviously, you know, we'll do the right thing from Capital allocation point of view. If uh, you know, we
Shortlist capital and obviously, we'll look at ways to return it back to the shareholders. So a very disciplined, um, net net, organically lot to do and I think in the Opex envelope, reasonable Opex envelope, they have where we have to work with, uh, and then also, you know, not shy away from looking at inorganic options, should they help us accelerate our growth in core iot?
Great. Thank you.
Thank you.
Our next question comes from the line of Christopher Rowland with cesco Hannah.
Hey guys. Uh, thanks for the question. And, uh, and, and perhaps following on Kevin's. Um, so, uh, welcome. Um, my, uh, my questions are going to be a little bit more targeted. Um, so, uh, you know, have you identified, you know, some areas of perhaps product pruning or like low Roi Investments, um, and then, alternatively, have you found? You might have some areas of pricing power or pricing optimization, uh, that you may be able to, um, Implement and um, and then lastly, uh, synaptics has historically not had a great Channel presence.
Uh, have you thought about how to beef that up?
Chris uh, great questions. Thank you.
Uh, first and foremost. Um, absolutely. I think, uh, I in the first couple of months, um, that I have been here, I've looked at, uh, every potential product category that we are in.
I have established a good understanding of
But uh if you give me some time by analyst day, I will present to you very clear uh Direction on what we are going to focus on and what we may. Be focus on having said that.
I'm really, um, excited about the engineering Talent we have in house, and I do believe
Why will we will be making choices? We will have need for some of our engineering talent to be repurposed, in areas that are going to drive us uh, into the growth trajectory especially on core iot.
In terms of Channel.
um,
Our products have just recently started to ramp into customers.
Today, we are in our journey for going from 1015 customers to 100 customers.
The day will be not far in time where we will go from 100 to thousand customers and Beyond thousand customers. From a channel point of view, and we have established along the way when we will start investing in the channel strategy, it is important to formulate a strategy. However, I'm going to be extremely judicious about when we go invest and double down on the channel strategy. And then I think it's going to be more in the realm of, uh, time frame where we will be moving from hundreds of customers to thousands of customers.
And Chris just today, this is Ken just to add on. If you look at our, um, sales team and go to market, engine, that is an area we have been investing in over the last, uh, 6 to 12 months. And we'll continue to invest in that area. As we think about our fiscal 26, in terms of Business Development system, Architects and the like, so we can develop some of these differentiated uh, products and solutions for that customer set.
And uh, to add to what Ken's saying. I think I'll go back to something I uh said earlier.
The drive to sell Solutions.
Effectively helps us increase, total silicon content for every sales effort. And I think that in another way is also helping scale our sgna. And so I think um Chris I think there's multiple ways to become a lot more efficient in our drive, to grow our sales and everything is on the table at this point.
Excellent. Uh, and then uh, this 1's, probably for you can uh, I think in your prepared remarks, you said, uh, order activity, backlog and channel inventory levels have improved. Um, perhaps you can talk a little bit more about that order activity. Like, I, I don't know, like percentage of book versus turn that you need backlog. Anything like book to Bill, Etc. And then the channel inventory levels have improved. I think the Channel's small now.
So do you mean that channel inventories have gone down? Or maybe you could just expand on that. What what you mean? And I, I assume you're filling the channel as you expand the channel. So, this would be a benefit maybe talk about that benefit. Thank you. Perfect. Now, let me and if I don't answer the, the question, just just asked, uh, what I didn't answer here. But, um, first in terms of the order activity, as we we've talked about maybe the last, uh, several quarters. And as we progress through 2025, just the overall, uh, order activity and backlog entering, uh, the quarter has improved, so we have great great, visibility into our September quarter, our q1 and um, the backlog is, is healthy in building as we look at uh, our Q2 as well. So I think those are good Trends and and something we measure Visa V, crawl charts. Uh, you know, each each and every week, in terms of the channel, I would say,
Overall, we're at a very lean Channel, inventories, as a company. We're, we're a preco levels, uh, indeed actually in Q4 our Channel inventory, decreased slightly, uh, from Q3 levels and um, but but we're very lean. So I think if, if we think about the next
Uh 34 quarters or as demand Trends continue to improve. Um you know I would expect if we get back to to normaly that that channel will also replenish but that's not uh being forecasted uh in terms of our September Outlook.
Awesome. Thank you guys.
Thank you.
In our next question, comes from the line of Chris Sankar with TD Cowen.
On Enterprise, I'm going to use how sustainable this is, given the fact that its spending budgets are still very tepid. How should we think about December or March quarter revenue trends? Overlaying any kind of seasonality we should expect.
Sure Chris. Good question. So I I would say we we typically have uh visibility 3 to 6 months and and within that 3 month, window fairly healthy visibility. So as we think about the September quarter, um we're we're guiding to that 290 at the midpoint and and you can assume we have, uh, pretty good line of sight, uh, to to that midpoint in the range around it. Um, and as we think about the December quarter, we're we're building that visibility. So, what I can say, is the backlog levels, um, you know, starting, uh, from this, this period in, in looking into December, look, look healthy. And as we get through this quarter, we'll start to build that visibility even further. Um, historically, as we think about the March quarter, um, you know, still a little early to call, there's typically some seasonality, uh, in the business, um, especially as we as we think about some of the consumer,
Oriented markets. So uh, historically, we would expect some seasonality in the March quarter. We're not guiding for that, uh, today. But that would be the typical pattern as we think about the March quarter.
Super helpful Ken. Uh, and then just as a follow up for Rahul, uh, I understand, I'm going to talk more about the strategy, the analyst day. But, you know, you kind of mentioned about scaling synaptics larger focus more on organic. I'm kind of curious synaptics historically has not had strengths in industrial iot. Is it a segment? Do you think it's worth pursuing? Or is it tough to get traction organically, or maybe have to do an acquisition or is it something that doesn't make sense for synapses? Thank you.
yeah, I think uh, Chris uh,
First and foremost, thank you for, you know, welcoming me. I appreciate that. Um,
regarding your question, you know, I would draw your attention to our mixed signal analog capabilities along with uh,
AI at the processor and if you'll net it out, right? You would see opportunity in within the core iot that would yield applications like, you know, Factory Control, process control, charging infrastructure, EV charging infrastructure. Um, you know, point of sale scanners drones robotics, uh, as you kind of go down that list.
And a lot of these applications will scale into industrial iot as well, right? And so, we will build platforms that will be able to scale across the entire landscape of opportunities from industrial iot to Consumer iot. And I I'm very confident, I think based on the capabilities that we have especially in our processors. If you look at our, the class of processors that we are building, uh we are building microprocessor class which is a little bit higher performance, lot more core processors, you know, application specific core processing in there in combination with. If you look at our SKU map on the processes, they'll go all the way to, you know, uh, very inexpensive value oriented mcus. And so you can see the scale going from industrial iot to Consumer iot as a result.
Thanks well. Very helpful. Thank you.
Thank you.
Our next question comes from the line of Peter paying with JP Morgan.
Yeah thanks for taking my questions and welcome bro. Um just when you look at just your 3 business segments, where do you any any kind of color on whether you're going to prioritizing certain segments and where do you think synaptics is in terms of this transformation journey to to
To an iot company. Is there a certain?
you know, is diversity or something that you're considering
Um, maybe we'll start there.
well, I think, um,
uh, thank you for us.
um, Peter, um
Let's start with the last question, first. Yeah, I I am looking at all assets and product categories Within synaptics.
I'm also being very judicious about the core engineering capabilities associated with all products, uh, and categories that we are in today. Having said that, uh,
I value.
A lot, the analog mix signal capability that this company has and it's been core to this company for a very long time.
Purposing of that capability in context of core iot is extremely valuable and highly differentiating versus many of the core iot players in the marketplace. And so, while there may be deemphasis on certain product categories, I do believe, um, the product portfolio capabilities, especially core, engineering capabilities are extremely valuable and will repurpose them. As we see needed to grow organically, our Core iot Business, right? I think that's the way I'm, uh, parsing the portfolio and the capabilities in the company. Um,
in terms of, uh, giving you more color on what, uh, product categories, remain with the company, what? Gets deemphasized or divested. Um, you will see a lot more color at the analyst day.
Got it. Okay, perfect. And then just maybe a more near-term.
Question. Um, is there any?
signs of demand hold forward and you alluded uh, you know, some
Typical seasonal Trends in March, what is typical seasonality to you guys?
Yeah. Why don't Peter, why don't I take that if if you if you look at the seasonality, um, question as we think about March, I think is what you have. Typically it would be, it would be down because of some of the, uh, consumer applications. And so we, we would normally see that down. We're not calling or guiding guiding for that. Today, we got only 1 quarter ahead, uh, but um, in a normal environment, you can see the March quarter, uh, our fiscal Q3 seasonally down.
Um, so I think that that was 1 of your questions and the other 1 was around pull in. Um, so if you look at pawns, I would say. It's, it's, it's difficult for us to gauge, um, the demand, uh, versus any potential Poland. Uh, you can see that maybe in certain markets, uh, like the mobile market, uh, we had strong demand in our fiscal Q4 and there are some incentives and other things in play, uh, globally. That may be, that that it may cause demand to to improve as a result of those incentives. And that may have helped you for, uh, you can see. We're guiding for that segment to be down slightly for Mobile touch into our fiscal q1. And so, I would say in general, uh, we feel like we're we're kind of shipping towards demand, uh, and in certain markets like the Mobile touch Market,
Market. Um, it's tough to say, is there any poll ahead or is that as a result of some of the incentives that are in place globally?
Peter, if I may add to what Ken's saying, I think. Um,
To draw your attention. I think uh, despite sequentially mobile being uh uh softer.
Than Q4 uh as Peter said as U Can indicated that. Uh, it could be largely because of some incentives. I mean at this point however our total revenue continues to grow in fiscal q1 and it is largely fueled by the growth in core iot which is sequentially growing quarter or quarter and in q1, again, year-over-year, we are potentially growing north of 50%. And so this new product initiative, new segment focused is definitely helping us uh deliver the sequential growth in uh, fiscal q1.
Despite uh, you know what, maybe uh a soft uh uh fiscal q1 for Mobile touch.
Thank you.
Thank you. And our next question comes from the line of
Jacob grand staff with meizuo.
Hey guys, this is Jake on for bj at mizuho. Thanks for letting me ask a question and we'll welcome as well. Um, first 1's going to be on margins. Um, you got it at flat quarter over quarter, that'll be the third straight quarter with GMS at about 53 and a half percent.
At the last analyst day, you guys targeted 57% for margins. Can you walk us through the puts and takes to get back into that high 50% range? Would it just be an acceleration of enterprise Auto, or is there something else we should think about to get back to that level? Thanks.
The overall.
A very good results. Uh not only on the margin side but you can see that fall through uh to earnings as well. Um as we think about the margin profile, a lot of this has to do with the mix profile uh and the es and flows of that mix profile over time. So uh if we think about uh improving the margin profile from here, it will be a combination of of mix within mix and and certain of our product categories. And I think also longer term our ability to continue to differentiate uh our capabilities Visa V Solutions and products. I think that's that can be a driver of margin improvement over uh over over the the mid and longer term period.
Vijay, if I may add, this is Rahul. Thank you for welcoming me um as as Ken said and to be very specific.
Um,
in my prepared remarks, I touched on some of the new product launches, especially the Astro family of products as we bring EDI
Capability in Hardware, through neural processing. And along with, uh, the Transformer support that has been done with, uh, uh, Google research, and collaborating between the 2 engineering teams.
It will potentially help us, uh, take the margin mix up as that product mix comes, uh, together and moves more in the direction of the processors and wireless connectivity solutions, right? And so, uh, we will be looking at, uh, you know, a roadmap of growing gross margin over time. And so, you know, what we have suggested earlier, um, is that long-term gross margin are not outside the realm of possibility, and we'll give you a lot more update at the Analyst Day as to how we get there.
Awesome. Appreciate the color. And that's a good segue into my second question. So, I wanted to ask about Astra. We talked last quarter, I think you mentioned a $300 million incremental design funnel from Astra. So, just wondering what that looks like now and how quickly you guys think you can ramp wins, because you mentioned revenue starting in the second half of 2026. Thanks again, guys.
I think the September quarter of the last year um just for background. We'll provide the the puddle, the funnel needless to say is is growing very nicely. We we typically will provide an update once a year so you can assume here uh I believe next quarter or at the analyst day is the next time. We'll provide an update on the funnel but we're getting great traction. I think as Rahul stated in the prepared
Marks, if you look at this uh next generation of of Astra processor that that is coming out uh and taped out were super excited about the capabilities. The customers are excited about the capabilities and that's where we're. We're seeing some great traction but we'll give you more specifics here. Um, here, over the next kind of 3 to 6 months, either on our next earnings call or or perhaps at that analyst day. But needless to say, we're, we're we're seeing great Traction in a great, build of the pipeline.
I think, uh, VJ, I think, uh, we are very comfortable right now with, uh, our long-term, uh, growth projections, uh, on core in the core IoT market segment, right? And so that ultimately, you know, obviously will, you know, give you a lot more color as can indicated, uh, in the next 3 to 6 months. But uh, that is, uh, very promising right now and it's, uh, by the day I think, uh, you know, our pipeline continues to grow.
Thank you.
In our next question comes from the line of Nick Doyle with Neiman company.
Hey guys, thanks for taking my questions. Also, welcome Rahul, and congrats on the successful Aster tape-out. I think that was executed a bit ahead of expectations. That Core IoT audio OEM marquee wins – I mean, you listed the reasons why, but could you just expand?
On that win, you know, how are you able to win so quickly after the first tape out? What does that Audio? Customer really need that you're offering. And what kind of other opportunities are you looking at near-term for that, Astra SOC, thanks.
Um nick uh first and foremost, thank you. Um,
I'll just provide some clarification, I think, uh,
For that. Audio OEM was with the predecessor chip uh and that had some elements of uh, AI processing through the audio processor capability. That was embedded in that uh, silicon and um
Uh, you know, I want to be careful, not uh, shedding a whole lot of light because then I will be spilling the beans on our end customer. It's a brand brand name in North America. And, uh, you know, they are very well known for delivering high-end speaker systems and uh, or Wireless connectivity. And so, you know, you can, you know, you can find 2 or 3 of them. And the 1 of the big ones is, uh, where, uh, this design is going. Having said that? I think there's a lot of, uh, AI capability, uh, built into the implementation that helps, uh, uh, create a lot more synchronization of audio capability, without compromising, on High Fidelity quality, uh, along with, uh, the software that we provide to our customers, in this equation, uh, of uh, you know, audio synchronously at High Fidelity levels basically and I'll just leave it that. Uh, and when the time is right, I think we'll definitely
Lie. Uh, share more details on this. But you get a sense of where these capabilities that we are embedding in. Our products are going to be valued and differentiated versus a typical MCU or a microprocessor that today is available in the marketplace.
Yeah, that's helpful. Um,
Near-term. I mean, very strong core iot growth embedded in the guide. I mean, what's driving? That is that more Wi-Fi, more Bluetooth, um, you know, things some market growth there and that's what's driving it. Like, any more color would be really helpful. Thanks.
Uh, the majority of the
Growth is largely coming from our W, Wireless and Wi-Fi, 7, uh, also, you know, our new processors are ramping up. And so in combination, these 2 are driving majority of the go growth in core iot today.
Thank you.
Thank you.
And I'm sure no further questions. So, with that, I'll hand the call back over to president and CEO Rahul Patel for any closing remarks.
Thank you, Andrew. Before we conclude, I would like to reiterate that I am confident in our path forward as synaptics stands at the Forefront of core iot and Edge AI innovation.
I want to express my sincere gratitude to all our employees.
For their unwavering dedication.
And to our customers, partners, and shareholders, for their continued support and trust in us.
Thank you very much.
Ladies and gentlemen, thank you for participating. This does conclude today's program and you may now disconnect