Synaptics — Q1 Fiscal 2027 Earnings Summary

Financial Performance

• Net revenue was $294.0 million, up 1% year-over-year from $292.5 million.
• GAAP net loss was $17.7 million ($0.45 per basic and diluted share), compared to a GAAP net loss of $20.6 million ($0.53 per share) in the prior year period.
• Non-GAAP net income was $51.5 million ($1.26 per diluted share), compared to $43.3 million ($1.09 per diluted share) in the prior year period.
• GAAP gross margin was 47.8%, compared to 42.6% in the prior year period.
• Non-GAAP gross margin was 54.3%, compared to 53.2% in the prior year period.
• GAAP operating loss was $12.7 million, compared to an operating loss of $23.2 million in the prior year period.
• Non-GAAP operating income was $62.0 million, compared to $51.5 million in the prior year period.
• Cash and cash equivalents were $367.7 million as of September 2026, down from $442.5 million at the beginning of the period.
• Total debt (current and long-term) was $838.0 million ($440.1 million current, $397.9 million long-term) as of September 2026.
• Net cash used in operating activities was $15.5 million, compared to net cash provided by operating activities of $30.2 million in the prior year period.
• Net cash used in investing activities was $28.1 million, primarily driven by $25.0 million in purchases of intangible assets.
• Net cash used in financing activities was $30.9 million, primarily due to equity compensation payments.

Guidance and Future Outlook

• Synaptics will not provide forward-looking financial outlook or host a quarterly earnings conference call due to the pending acquisition by onsemi.

Business Segments and Product Lines

• Launched the Synaptics Astra SR200 series, a new class of microcontrollers (xMCU), enabling larger AI models and richer multimodal workloads to run on-device.
• Expanded the Synaptics Coralboard ecosystem in partnership with Google Research, making it generally available through partners.
• Announced that Synaptics' capacitive tactile sensing (CTS) module and Astra Edge AI processors are now supported by NVIDIA Isaac Sim and Holoscan platforms.
• Entered into a licensing agreement for automotive LCD TDDI technology.
• Management noted broader opportunities for tactile sensing controllers and video interface products in robotics.
• Smartphone softness impacted touch and wireless products during the quarter.

Market and Competitive Landscape

• Revenue was affected by supply constraints and memory-related demand dynamics across multiple markets.
• The company is focusing on higher-value areas and growing in Physical AI and Edge AI.
• New customers are showing growing interest in processor and wireless technologies leveraging Edge AI development platforms.
• The company faces industry-wide tightness in memory chips, which may affect customer development timelines and production schedules.

Risks and Challenges

• Risks related to the completion of the proposed merger with onsemi, including the potential failure to obtain regulatory or stockholder approvals.
• Dependence on solutions for the Core IoT and Edge AI market for a substantial portion of revenue.
• Volatility in net revenue from Core IoT and Edge AI product applications due to competition and market cyclicality.
• Constraints or imbalances in the availability of critical components, specifically memory chips, and associated cost increases.
• Global macroeconomic and geopolitical conditions, including trade tensions and regional conflicts, which may adversely affect customer demand.
• Dependence on a limited number of suppliers and subcontractors, including manufacturing capacity constraints.

Management Commentary and Tone

• CEO Rahul Patel stated the company delivered "another quarter of strong design activity and customer engagement in Edge and Physical AI."
• Management expressed confidence in building a pipeline in targeted growth markets and positioning the company for profitable, long-term growth.
• The tone acknowledged current headwinds from supply constraints and smartphone softness while emphasizing strategic focus on higher-value areas.

Other Key Points

• On October 1, 2026, onsemi and Synaptics entered into an Amended and Restated Agreement and Plan of Merger, restructuring the previously announced all-stock transaction into an all-cash acquisition.
• The definitive agreement to acquire Synaptics was originally entered into on June 25, 2026.
• Acquisition and integration-related costs for the quarter were $19.1 million in cost of revenue and $8.2 million in operating expenses, totaling $27.3 million in operating costs (plus $2.3 million in amortization).
• Restructuring costs for the quarter were $8.1 million.
• Share-based compensation totaled $37.0 million in operating expenses.
• The company holds $872.3 million in goodwill and $191.4 million in acquired intangible assets as of September 2026.
• Total stockholders' equity was $917.9 million as of September 2026.