SYNA 10-K & 10-Q changes, risk factors and insider trading
SYNAPTICS Inc · Nasdaq · Semiconductors & Related Devices · CIK 817720 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Risks Related to Proposed Merger between Synaptics and onsemi”
New heading “The completion of the proposed Merger with onsemi may be delayed or not occur at all for a variety of reasons, including that the Merger Agreement is terminated, and the failure to complete the Merger could adversely affect our business, financial condition and results of operations and the market price of our common stock.”
New heading “The completion of the proposed Merger is subject to the satisfaction or waiver of closing conditions contained in the Merger Agreement, including certain regulatory approvals which may not be received, may take longer than expected or the receipt of which may impose conditions that are not presently anticipated or that cannot be met, and if these closing conditions are not satisfied or waived, the proposed Merger will not be completed.”
New heading “Failure to realize the anticipated benefits of the Merger, delay in realizing those benefits, or significant challenges in integrating our company with onsemi could have an adverse effect on the price of onsemi common stock that our stockholders will own following the completion of the Merger.”
New heading “Uncertainty about the Merger may adversely affect relationships with our customers, suppliers, service providers, partners, consultants, and other business counterparties, whether or not the Merger is completed.”
New heading “As a result of the Merger, our current and prospective employees could experience uncertainty about their future with us or the combined company. As a result, key employees may depart because of such uncertainty or a desire not to remain with onsemi following the completion of the Merger.”
New heading “Restrictions under the Merger Agreement may adversely affect our business and operations.”
New heading “Because the consideration to be received by our stockholders in connection with the Merger will include a fixed number of shares of onsemi common stock, and the market price of such shares has fluctuated and will continue to fluctuate, our stockholders cannot be sure of the value of the consideration they will receive in the Merger.”
New heading “The Merger Agreement contains provisions that could discourage or deter a potential competing acquirer from making a favorable alternative transaction proposal to us and, in specified circumstances, could require us to pay a substantial termination fee to onsemi.”
New heading “Litigation may arise in connection with the Merger, which could be costly, prevent consummation of the Merger, divert management's attention and otherwise materially harm our business.”
New heading “Shares of onsemi common stock to be received by our stockholders as a result of the Merger will have different rights from shares of our common stock.”
New heading “We are exposed to risks related to the use of artificial intelligence by us and our competitors.”
Largest changes
Geopolitical instability, including in the Middle East, Taiwan, or U.S.-China relations, could disrupt access to critical markets or destabilize key supply chain and logistics corridors.see in full comparisonOnForJuneexample,13,the2025,ongoingIsraelconflictlaunched a strike on Iranianand militaryandescalationsnuclear sites, followed by Iranian retaliation. On June 21, 2025,involving theU.S.UnitedconductedStates,targeted air strikes, whichIsrael, IranansweredandwithotherattackscountriesoninU.S.theinterests.MiddleAlthough a ceasefire has been reached, there is no assurance that hostilities will not escalate or recur. This military escalation between IsraelEast andIranbeyondhashave increased geopolitical tensions and uncertainty across the broaderregion.region,Escalationsincluding sanctions and restrictions affecting key transportation routes such as the Suez Canal and the Strait of Hormuz, contributing to volatility in global energy prices. As a result, we may experience disruptions to transportation routes and supply chains, including those involving third-party vendors, as well as higher transportation and logistics costs and broader inflationary pressures, which could adversely affect our revenue and gross margin. The extent and duration of these impacts remain uncertain, and further escalation and continued duration could materially and adversely affect our business and financial results. Continuation or escalations of hostilities could also trigger new or expanded U.S. sanctions or export controls affecting parties or regions with which we do business. The developments could lead to delayed shipments, increased costs, or reduced revenue in impacted markets.
“The Merger Agreement may be terminated under certain circumstances, including (1) by either us or onsemi if the Merger is not completed by June 25, 2027, which date may be extended for up to three periods of three months each, in each case under certain circumstances (the “End Date”), (2) by either us or onsemi if any court or governmental authority of a specified jurisdiction has issued a final non-appealable order or injunction prohibiting the Merger, (3) by onsemi prior to the required Stockholder Vote if our Board of Directors fails to include in our proxy statement its recommendation to …”see in full comparison
“Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements and/or their directors and officers. A negative outcome in any such lawsuit could result in substantial costs to us, including any costs associated with the indemnification of directors and officers. Regardless of the outcome of any future litigation related to the Merger, such litigation may be time-consuming and expensive and may distract our management from running the day-to-day operations of their business. …”see in full comparison
“We are integrating AI and ML technologies into our products, services, and internal processes, including in edge computing, voice and vision interfaces, and wireless connectivity. The rapid pace of AI innovation may challenge our ability to remain competitive if we fail to keep pace with technological developments or if our competitors more effectively deploy AI. We must invest substantial resources to enhance and develop new technologies, including hiring and retaining skilled engineers, adopting advanced tools and scaling R&D. …”see in full comparison
“Litigation may arise in connection with the Merger, which could be costly, prevent consummation of the Merger, divert management's attention and otherwise materially harm our business.”see in full comparison
Tariffs on imported components, especially from Asia, could increase our production costs, disrupt supply chains, or make our products and our customers’ end products less competitive in global markets. For example, insee in full comparisonthe first quarter ofcalendar2025,2025 and 2026, the U.S. government announced new tariffs on imports from several countries, including China, prompting reciprocal tariffs. Tariffs on our customers’ products may reduce their global competitiveness, particularly in China. Some OEMs in our industry have responded with short-term price adjustments and shifted production and sourcing outside of China. Additionally,oninAugustJanuary6, 2025,2026, the U.S. governmentproposedimplemented a100%25% tariff on certain imported semiconductors andchips,chipswithnotpossible exemptionsintended forcompanies that invest in U.S. manufacturing. While stilluse in theproposalU.S.phase,Thesethispolicies and the continued uncertainty and ongoing developments around trade policy could materially impact our sourcing strategy and component costs,depending on scope and implementation. We rely on global foundry partners, many based in Asia, for a significant portion of our silicon. If adopted, these tariffs couldincrease our manufacturing costs or require changes to our supply chain operations. Moreover, these tariffs and any other trade restrictions imposed on our customers or suppliers could adversely affect our financial results and position through reduced demand for our products and solutions, cancelled orders, supply chain disruptions, increased transaction costs, and increased expenses. If the United States’ relationship with countries subject to increased tariffs results in additional trade disputes, trade protection measures, retaliatory actions and increased barriers, policies that favor domestic industries, or increased import or export licensing requirements or restrictions, then our deployment of resources in jurisdictions affected by such measures could be misaligned and our operations may be adversely affected. We are actively evaluating strategies to mitigate such risks, including potential sourcing diversification or partnerships with U.S.-based manufacturers.
Full comparison: every changed paragraph (64)
Risks Related to Proposed Merger between Synaptics and onsemi
The completion of the proposed Merger with onsemi may be delayed or not occur at all for a variety of reasons, including that the Merger Agreement is terminated, and the failure to complete the Merger could adversely affect our business, financial condition and results of operations and the market price of our common stock.
The completion of the proposed Merger with onsemi is subject to customary closing conditions, some of which are beyond our and onsemi’s control, including (1) the approval of the Merger Agreement by the holders of a majority of the shares of our common stock outstanding and entitled to vote (the “required Stockholder Vote”), (2) the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”), and the approval of the Merger under certain other antitrust and foreign investment regimes, (3) the absence of any order, injunction or law of certain jurisdictions prohibiting the Merger, (4) the effectiveness of the registration statement pursuant to which shares of onsemi common stock to be issued in the Merger will be registered with the SEC, (5) the approval for listing on the Nasdaq Global Select Market of shares of onsemi common stock to be issued in the Merger, (6) the accuracy of the other party’s representations and warranties, subject to certain materiality and other standards set forth in the Merger Agreement, (7) compliance in all material respects with the other party’s covenants and other obligations under the Merger Agreement, (8) the absence of a continuing material adverse effect with respect to each of us or onsemi, and (9) the receipt by each party of customary closing tax opinions regarding the intended tax treatment of the Merger. There can be no assurance that the Merger will be completed in the expected timeframe, or at all. Subject to the terms and conditions of the Merger Agreement, the parties have agreed to use reasonable best efforts to take all actions reasonably necessary to consummate the Merger, including obtaining all required or necessary consents, approvals or waivers from third parties, and cooperating to obtain the regulatory approvals necessary to complete the Merger.
The Merger Agreement may be terminated under certain circumstances, including (1) by either us or onsemi if the Merger is not completed by June 25, 2027, which date may be extended for up to three periods of three months each, in each case under certain circumstances (the “End Date”), (2) by either us or onsemi if any court or governmental authority of a specified jurisdiction has issued a final non-appealable order or injunction prohibiting the Merger, (3) by onsemi prior to the required Stockholder Vote if our Board of Directors fails to include in our proxy statement its recommendation to stockholders to vote in favor of the adoption of the Merger Agreement or changes its recommendation, (4) by us prior to the required Stockholder Vote in order to accept a Superior Proposal (as defined in the Merger Agreement) (subject to payment of a termination fee, described below), (5) by either us or onsemi if we fail to receive the required Stockholder Vote at our stockholder meeting (including any adjournments and postponements thereof), or (6) by either party if the other party materially breaches its covenants, or breaches its representations and warranties, in the Merger Agreement such that the applicable conditions to closing would not be satisfied, subject in certain cases to the right of the breaching party to cure the breach. We and onsemi may also terminate the Merger Agreement by mutual written consent.
Upon termination of the Merger Agreement, we, under specified circumstances, including termination by us to accept a Superior Proposal or by onsemi following a change in recommendation by our Board of Directors, will be required to pay onsemi a termination fee of $235.0 million (the “Synaptics Termination Fee”). Additionally, onsemi, under specified circumstances, including termination following an injunction arising in connection with certain antitrust or foreign investment laws, or failure to receive certain required regulatory approvals of specified governmental authorities by the End Date, will be required to pay us a regulatory termination fee of $320.0 million (the “onsemi Regulatory Termination Fee”).
We and onsemi may also be subject to lawsuits or other demands challenging the Merger or certain disclosures made with respect thereto, and adverse rulings in these lawsuits, or the existence or pendency of these matters, may delay or prevent the Merger from being completed or require us or onsemi to incur significant costs to defend or settle these matters. Any delay in completing the Merger could cause us to fail to realize, or to be delayed in realizing, some or all of the benefits that we expect to achieve if the Merger is successfully completed within the expected time frame.
If the Merger is not completed, or if there are delays in completing the Merger, our business, financial condition, results of operations and the market price of our common stock may be adversely affected in a number of ways, including:
•the market price of our common stock may decline to the extent that the current market price reflects an assumption that the Merger will be completed;
•if the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement, we would be required to pay a termination fee as described above;
•we have incurred, and will continue to incur, significant expenses for professional services in connection with the Merger for which we will have received little or no benefit if the Merger is not completed, as well as other significant expenses that may not be recoverable if the Merger is not completed;
•the attention of our management will have been diverted to the Merger rather than our own operations and pursuit of other opportunities that could have been beneficial to us; and
•we may experience negative publicity and/or reactions from our investors, employees, customers, suppliers, distributors and other business partners.
The completion of the proposed Merger is subject to the satisfaction or waiver of closing conditions contained in the Merger Agreement, including certain regulatory approvals which may not be received, may take longer than expected or the receipt of which may impose conditions that are not presently anticipated or that cannot be met, and if these closing conditions are not satisfied or waived, the proposed Merger will not be completed.
Various consents, clearances, approvals, authorizations and declarations of non-objection, or expiration of waiting periods (or extensions thereof), from certain regulatory and governmental authorities in the United States and certain other jurisdictions are conditions to completing the proposed Merger. Regulatory and governmental entities may impose conditions on their respective approvals, in which case lengthy negotiations may ensue among such regulatory or governmental entities, us and onsemi, and we and onsemi may not be required under the terms of the Merger Agreement to accept such conditions. Such conditions, any such negotiations and the process of obtaining such regulatory approvals, consents or clearances, including any potential changes to the terms of the Merger, could have the effect of delaying or preventing the completion of the Merger.
Subject to the terms of the Merger Agreement, we have agreed to use our reasonable best efforts to take all actions necessary to consummate the Merger, including obtaining all required or necessary consents, approvals or waivers from third parties, and cooperating to obtain the regulatory approvals necessary to complete the Merger. Nonetheless, certain conditions to the completion of the Merger are not within our or onsemi’s control, and we cannot predict when or if these conditions will be satisfied (or waived, as applicable). There can be no assurance that all required approvals will be obtained or that all closing conditions will otherwise be satisfied (or waived, if applicable), and, if all required approvals are obtained and all closing conditions are satisfied (or waived, if applicable), we can provide no assurance as to the terms, conditions and timing of such approvals or that the Merger will be completed in a timely manner or at all. Even if regulatory approvals are obtained, it is possible conditions will be imposed that could result in a material delay in, or the abandonment of, the Merger or otherwise have an adverse effect on our business, financial condition, results of operations and the market price of our common stock.
Failure to realize the anticipated benefits of the Merger, delay in realizing those benefits, or significant challenges in integrating our company with onsemi could have an adverse effect on the price of onsemi common stock that our stockholders will own following the completion of the Merger.
We and onsemi have operated and, subject to and until the completion of the Merger, will continue to operate, independently. The success of the Merger, including anticipated benefits and cost savings, will depend, in part, on our and onsemi's ability to successfully integrate our respective operations in a manner that results in various benefits and that does not materially disrupt existing business and strategic relationships or result in a loss of customers. The process of integrating operations could result in a loss of key personnel or cause an interruption of, or loss of momentum in, the activities of one or more of the combined company's businesses. Inconsistencies in standards, controls, procedures and policies could adversely affect the combined company. The diversion of management's attention and any delays or difficulties encountered in connection with the Merger and the integration of our company’s and onsemi's operations could have an adverse effect on the business, financial condition, results of operations and prospects of the combined company. If we and onsemi experience difficulties in the integration process, including those listed above, we may not fully realize the anticipated benefits of the Merger in a timely manner or at all, and the price of onsemi common stock to be issued to our stockholders in the Merger could be adversely affected.
Uncertainty about the Merger may adversely affect relationships with our customers, suppliers, service providers, partners, consultants, and other business counterparties, whether or not the Merger is completed.
In response to the announcement of the Merger, our existing or prospective customers, suppliers, service providers, partners, consultants, and other business counterparties may:
•delay, defer, or cease entering into a business relationship with us or the combined company;
•terminate their relationships with us or the combined company;
•delay or defer other decisions concerning us or the combined company; or
•seek to change the terms on which they do business with us or the combined company.
Any such delays or changes to terms could materially harm our business or, if the Merger is completed, the business of the combined company. Losses of customers, suppliers, service providers, consultants or other important strategic relationships could have a material adverse effect on our business, financial condition and results of operations. Such adverse effects could also be exacerbated by a delay in the completion of the Merger for any reason, including delays associated with obtaining the requisite regulatory approvals or the approval of our stockholders.
As a result of the Merger, our current and prospective employees could experience uncertainty about their future with us or the combined company. As a result, key employees may depart because of such uncertainty or a desire not to remain with onsemi following the completion of the Merger.
As a result of the Merger, our current and prospective employees could experience uncertainty about their future with us or the combined company, or decide that they do not want to continue their employment with the combined company. As a result, key employees may depart because of such uncertainty or a desire to not remain with onsemi following the completion of the Merger. Losses of officers, key employees or other employees could materially harm our business, results of operations and financial condition. Such adverse effects could also be exacerbated by a delay in the completion of the Merger. We may also experience challenges in hiring new employees during the pendency of the Merger, or if the Merger Agreement is terminated, which could harm our ability to grow our business, execute on our business plans or enhance our operations. If the Merger is consummated, the combined company may be less attractive to current and prospective employees, which could harm the business and prospects of the combined company.
Restrictions under the Merger Agreement may adversely affect our business and operations.
Under the terms of the Merger Agreement, we are subject to certain restrictions on the conduct of our business prior to completing the Merger which may adversely affect our ability to execute certain of our business strategies, including, but not limited to, making material acquisitions, disposing of material assets, entering into material agreements, making capital expenditures in excess of specified amounts, repurchasing our capital stock or other equity securities, issuing additional capital stock or other equity securities, or incurring additional indebtedness (in each case, subject to certain exceptions). These limitations may have adverse effects on our existing or planned relationships with our existing or prospective customers, suppliers, service providers, consultants and employees, which could adversely affect our business and operations prior to the completion of the Merger.
Because the consideration to be received by our stockholders in connection with the Merger will include a fixed number of shares of onsemi common stock, and the market price of such shares has fluctuated and will continue to fluctuate, our stockholders cannot be sure of the value of the consideration they will receive in the Merger.
Under the Merger Agreement, at the effective time of the Merger, each share of our common stock (other than each share of our common stock held in treasury or held or owned by our subsidiaries, onsemi or any of its subsidiaries immediately prior to the effective time of the Merger) issued and outstanding immediately prior to the effective time of the Merger will be cancelled and converted into the right to receive 1.350 fully paid and non-assessable shares of onsemi common stock. The market value of the consideration our stockholders will receive in the Merger will therefore fluctuate with the market price of onsemi common stock. The implied value of the Merger Consideration to our stockholders has fluctuated since the date of the announcement of the Merger Agreement and will continue to fluctuate until the date the Merger is completed, which could occur a considerable amount of time after the date hereof.
onsemi's share price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in onsemi's and our respective businesses, operations and prospects, risks inherent in the respective businesses, changes in market assessments of the likelihood that the Merger will be completed and/or the value that may be generated by the Merger and changes with respect to expectations regarding the timing of the Merger and regulatory considerations. Many of these factors are beyond both our and onsemi's control. In particular, the market price of onsemi common stock has declined since the Merger Agreement was entered into and may continue to decline, which has decreased, and may continue to decrease, the value of the Merger Consideration.
The Merger Agreement contains provisions that could discourage or deter a potential competing acquirer from making a favorable alternative transaction proposal to us and, in specified circumstances, could require us to pay a substantial termination fee to onsemi.
Under the Merger Agreement, we are subject to customary "no-shop" restrictions and are not permitted, subject to certain exceptions set forth in the Merger Agreement, to initiate, solicit or knowingly encourage or facilitate any inquiries or the making of any proposal or offer by or with a third party with respect to an acquisition proposal and to furnish nonpublic information to, or engage in discussions or negotiations with, a third party interested in pursuing an alternative business combination transaction. Further, our Board of Directors has agreed to include in the proxy statement for the Merger its recommendation that our stockholders vote in favor of the Merger, subject to exceptions for superior proposals and other situations where failure to effect a recommendation change would be inconsistent with our Board of Directors' fiduciary duties. Upon the termination of the Merger Agreement under specified circumstances, including, among others, the termination by onsemi in the event of a Change of Recommendation (as defined in the Merger Agreement) by our Board of Directors, we would be required to pay onsemi the Synaptics Termination Fee. Such provisions of the Merger Agreement could discourage or deter a third party that may be willing to pay more than onsemi for our outstanding common stock from considering or proposing such an acquisition of our company.
Litigation may arise in connection with the Merger, which could be costly, prevent consummation of the Merger, divert management's attention and otherwise materially harm our business.
Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements and/or their directors and officers. A negative outcome in any such lawsuit could result in substantial costs to us, including any costs associated with the indemnification of directors and officers. Regardless of the outcome of any future litigation related to the Merger, such litigation may be time-consuming and expensive and may distract our management from running the day-to-day operations of their business. If the Merger is not consummated for any reason, litigation could be filed in connection with the failure to consummate the Merger. Any litigation related to the Merger may result in negative publicity or an unfavorable impression of us, which could adversely affect the price of our common stock, impair our ability to recruit or retain employees, damage our business relationships or otherwise materially harm our operations and financial performance.
Shares of onsemi common stock to be received by our stockholders as a result of the Merger will have different rights from shares of our common stock.
Upon consummation of the Merger, our stockholders will no longer be stockholders of our company, but will instead become stockholders of onsemi, and their rights as stockholders will be governed by onsemi’s certificate of incorporation and bylaws. The terms of onsemi’s certificate of incorporation and bylaws may be materially different than the terms of our amended and restated certificate of incorporation and amended and restated bylaws, which currently govern the rights of our stockholders.
We depend on the Core IoT, Enterprise and Automotive and Mobile product applications markets for a substantial portion of our revenue. These are cyclical, competitive and evolving markets that are subject to volatility, economic risk and uncertain growth, which may materially affect our business, revenue, operating results and financial condition.
As a global company headquartered in the U.S., we are subject to complex and evolving U.S. and foreign laws and regulations governing import, export, trade restrictions and economic sanctions. These restrictions may prohibit sales to certain countries, entities, or individuals, or require export licenses for certain technologies. Many of our customers, suppliers and contract manufacturers are foreign companies or have significant foreign operations, and many of the components used in our products are sourced from Asia.
Tariffs on imported components, especially from Asia, could increase our production costs, disrupt supply chains, or make our products and our customers’ end products less competitive in global markets. For example, in the first quarter of calendar 2025,2025 and 2026, the U.S. government announced new tariffs on imports from several countries, including China, prompting reciprocal tariffs. Tariffs on our customers’ products may reduce their global competitiveness, particularly in China. Some OEMs in our industry have responded with short-term price adjustments and shifted production and sourcing outside of China. Additionally, onin AugustJanuary 6, 2025,2026, the U.S. government proposedimplemented a 100%25% tariff on certain imported semiconductors and chips,chips withnot possible exemptionsintended for companies that invest in U.S. manufacturing. While stilluse in the proposalU.S. phase,These thispolicies and the continued uncertainty and ongoing developments around trade policy could materially impact our sourcing strategy and component costs, depending on scope and implementation. We rely on global foundry partners, many based in Asia, for a significant portion of our silicon. If adopted, these tariffs could increase our manufacturing costs or require changes to our supply chain operations. Moreover, these tariffs and any other trade restrictions imposed on our customers or suppliers could adversely affect our financial results and position through reduced demand for our products and solutions, cancelled orders, supply chain disruptions, increased transaction costs, and increased expenses. If the United States’ relationship with countries subject to increased tariffs results in additional trade disputes, trade protection measures, retaliatory actions and increased barriers, policies that favor domestic industries, or increased import or export licensing requirements or restrictions, then our deployment of resources in jurisdictions affected by such measures could be misaligned and our operations may be adversely affected. We are actively evaluating strategies to mitigate such risks, including potential sourcing diversification or partnerships with U.S.-based manufacturers.
Geopolitical instability, including in the Middle East, Taiwan, or U.S.-China relations, could disrupt access to critical markets or destabilize key supply chain and logistics corridors. OnFor Juneexample, 13,the 2025,ongoing Israelconflict launched a strike on Iranianand military andescalations nuclear sites, followed by Iranian retaliation. On June 21, 2025,involving the U.S.United conductedStates, targeted air strikes, whichIsrael, Iran answeredand withother attackscountries onin U.S.the interests.Middle Although a ceasefire has been reached, there is no assurance that hostilities will not escalate or recur. This military escalation between IsraelEast and Iranbeyond hashave increased geopolitical tensions and uncertainty across the broader region.region, Escalationsincluding sanctions and restrictions affecting key transportation routes such as the Suez Canal and the Strait of Hormuz, contributing to volatility in global energy prices. As a result, we may experience disruptions to transportation routes and supply chains, including those involving third-party vendors, as well as higher transportation and logistics costs and broader inflationary pressures, which could adversely affect our revenue and gross margin. The extent and duration of these impacts remain uncertain, and further escalation and continued duration could materially and adversely affect our business and financial results. Continuation or escalations of hostilities could also trigger new or expanded U.S. sanctions or export controls affecting parties or regions with which we do business. The developments could lead to delayed shipments, increased costs, or reduced revenue in impacted markets.
In addition, if we do not keep pace with rapid technological innovation—such as in AI, ML, edge computing and connectivity—our solutions may become less competitive or obsolete. We must invest substantial resources to enhance and develop new technologies, including hiring and retaining skilled engineers, adopting advanced tools and scaling R&D. Even with investment, our technologies may fail to transition from development to cost-effective production or customers may choose competitors’ solutions due to price, performance or strategic alignment. We are also integrating AI and ML technologies into our products, services and internal processes, including in edge computing, voice and vision interfaces and wireless connectivity. The rapid pace of AI and ML innovations may challenge our ability to remain competitive if we fail to keep pace with technological developments or if our competitors more effectively deploy these technologies. While AI and ML offer opportunities to enhance the functionality and efficiency of our product offerings, they also introduce operational, compliance and reputational risks. These include unintended consequences, such as inaccurate or biased outputs, potential misuse by personnel, vulnerabilities in third-party AI tools and heightened scrutiny under evolving laws and regulations governing data privacy, algorithmic transparency and ethical AI use. The use of AI also may expose us to increased intellectual property risks, including claims of infringement, misappropriation or loss of proprietary information.
Failure to innovate, keep pace with customer expectations and win key design opportunities, convert such opportunities into sales, or offer compelling features at competitive prices,prices could materially harm our market position and financial performance.
We are exposed to risks related to the use of artificial intelligence by us and our competitors.
We are integrating AI and ML technologies into our products, services, and internal processes, including in edge computing, voice and vision interfaces, and wireless connectivity. The rapid pace of AI innovation may challenge our ability to remain competitive if we fail to keep pace with technological developments or if our competitors more effectively deploy AI. We must invest substantial resources to enhance and develop new technologies, including hiring and retaining skilled engineers, adopting advanced tools and scaling R&D. Even with investment, our technologies may fail to transition from development to cost-effective production or customers may choose competitors’ solutions due to price, performance or strategic alignment. While AI and ML technologies offer opportunities to enhance functionality and efficiency, they also present significant risks. These include unintended consequences, such as inaccurate or biased outputs, potential misuse by personnel, vulnerabilities in third-party AI tools and heightened scrutiny under evolving laws and regulations governing data privacy, algorithmic transparency and ethical AI use. Failure to comply with such regulations could result in enforcement actions, fines, or restrictions on our business. Additionally, the use of AI may expose us to intellectual property risks, including claims of infringement, misappropriation, or loss of proprietary information. Any of these risks could adversely affect our business, financial condition, or results of operations.
Our products are not sold directly to end users. Instead, our solutions are integrated into systems sold by OEMs and original design manufacturers (“ODM”),ODMs, often through contract manufacturers that serve them. A significant portion of our revenue is generated from a limited number of large customers. This concentration makes us highly dependent on the purchasing behavior of a few OEMs and ODMs and increases our exposure to revenue volatility. If any of these key customers reduce, cancel or stop placing orders, fail to renew an existing project or contract, or shift to a competing supplier for our high-volume products, our financial results could be adversely affected. The risk is heightened if customers are impacted by operational disruptions or trade restrictions, particularly in jurisdictions such as China. Because contract manufacturers often serve the same OEM, a reduction in demand from that OEM could significantly impact our revenue across multiple customer accounts. The adverse effect could be more substantial if we are unable to offset the loss by generating increased orders from other existing customers or by securing new design wins. Significant reductions in sales to our largest customers, the loss of other major customers, a general decrease in demand, or our failure to expand our customer base, particularly in key markets, would materially impact our future operating results.
Supply chain disruptions can also impact upstream demand for our solutions. Our products are used in complex devices and systems that depend on numerous components. Delays in one part of the chain can lead to a broader reduction in product builds that include our technologies. For example, the current global shortage and elevated pricing of certain memory components across the broader electronics supply chain have, at times, influenced the timing of orders for certain products, particularly for smaller customers. Limited visibility into future availability, timing, increased associated costs, and the potential for these conditions to persist could affect customer development timelines, purchasing behavior, production schedules, booking patterns, and the timing or visibility of orders in future periods. If these conditions persist, our customers’ ability to manufacture their end products may be limited, or they may adjust production schedules, delay product launches, or revise demand forecasts, which in turn could lead them to reduce, delay or cancel orders for our products, even when demand for their end products remains strong. Additionally, the current shortage and resulting price increase for memory components also may lead our customers to increase prices of their end products, which could lead to decreased demand for those products, ultimately negatively impacting orders for our products. If customers delay orders of our products for longer periods of time due to such supply conditions, or hold inventory of our products for longer periods of time, we could experience a decline in our revenue and excess inventory. In addition, we face ongoing risks from component and material shortages. Key inputs, including silicon wafers, substrates, and packaging materials, are sourced from a limited number of foreign suppliers. If these suppliers face capacity constraints, pricing shifts, or economic disruptions, we may be unable to obtain sufficient quantities or meet production timelines.
Supply chain disruptions can also impact upstream demand for our solutions. Our products are used in complex devices and systems that depend on numerous components. Delays in one part of the chain can lead to a broader reduction in product builds that include our technologies. In addition, we face ongoing risks from component and material shortages. Key inputs, including silicon wafers, substrates, and packaging materials, are sourced from a limited number of foreign suppliers. If these suppliers face capacity constraints, pricing shifts, or economic disruptions, we may be unable to obtain sufficient quantities or meet production timelines.
We rely on a combination of patents, trade secrets, trademarks, copyrights, and confidentiality agreements to protect our proprietary technologies. However, we cannot be certain that our technologies and products do not and will not infringe issued patents or other third-party proprietary rights. Patents may be challenged, invalidated, or circumvented. Trade secrets may be compromised if confidentiality measures fail or are not consistently applied, and trademark rights may be challenged or unenforceable in certain jurisdictions. Our protection efforts face limitations, particularly in foreign markets such as China, where IP enforcement is less predictable. In the past, we have not always required all employees, consultants, suppliers, or partners to enter into formal written agreementagreements for the protection of our technology including confidentiality or invention assignment agreements, and some may seek to assert rights in our technologies or use them without authorization. The risk of inadvertent disclosure is further heightened by employee use of generative or third-party AI tools. Any claims, with or without merit, could result in significant litigation costs and diversion of resources, including the attention of management, and could require us to enter into royalty or licensing agreements, which may include terms that may not be commercially reasonable, which could have a material adverse effect on our business.
A substantial portion of our revenue is generated from customers located outside the United States, while a significant portion of our operating expenses, including R&D, supply chain and employee compensation, are denominated in foreign currencies such as the New Taiwan dollar, Indian Rupee, Japanese yen, Chinese yuan and Israeli shekel. Although we transact business predominantly in U.S. dollars and we invoice and collect our sales in U.S. dollars, fluctuations in exchange rates can materially impact our results of operations and financial position. A strengthening U.S. dollar could reduce the local currency revenue of our international customers, potentially weakening demand or triggering pricing pressure. Conversely, a weakening of the U.S. dollar could increase our cost of goods sold and operating expenses and cause our overseas vendors to require renegotiation of either the prices or currency we pay for their goods and services. In the future, customers may negotiate pricing and make payments in non-U.S. currencies. If our overseas vendors or customers require us to transact business in non-U.S. currencies, fluctuations in foreign currency exchange rates could affect our cost of goods, operating expenses and operating margins and could result in exchange losses. Moreover, our reliance on contract manufacturers and suppliers based in Asia subjects us to risks if their local currencies appreciate significantly. Exchange rate movements may also lead to gains or losses on intercompany balances, supplier payments or cash held in foreign subsidiaries. Hedging foreign currencies can be difficult, especially if the currency is not freely traded. We cannot predict the impact of future exchange rate fluctuations on our operating results. Prolonged shifts in currency rates may make our products more expensive to produce or less competitive in certain markets. Accordingly, foreign currency fluctuations have and could continue to negatively affect our revenue, gross margins and operating income.
Risks Related to Other Acquisitions and Strategic Alliances
AnyIn addition to the risks described related to the Merger, any other acquisitions or strategic alliances that we undertake could be difficult to execute or integrate, may not achieve expected results, and could disrupt our business or dilute stockholder value.
We may also issue stock, incur debt, or assume contingent liabilities in connection with acquisitions, which could dilute stockholder value or increase our financial risk. If acquired businesses or investments underperform, we may not realize the intended strategic or financial benefits. For example, in fiscal 2025,2026, we recorded a $13.8$6.8 million impairment charge related to technologyin process research and development (“IPR&D”) acquired in fiscal 2024,2025, reflecting changesmanagement’s decision to cease development and commercialization activities for the technology. We also recorded a $5.0 million impairment charge related to the cost method investment due to a significant deterioration in customerearnings demandperformance andof productthe development priorities.investee. Additional impairments may arise if other acquisitions or strategic partnerships do not meet our financial expectations.
We compete in a highly technical industry that requires a workforce with deep domain expertise in areas such as edgeEdge AI, wireless IP, System on a Chip architecture, video processing and embedded firmware. Our future success depends on our ability to recruit, retain and develop highly skilled engineers, program managers and leadership across our global R&D centers, including in the United States, Taiwan, South Korea, Israel and India. The market for semiconductor engineering talent is highly competitive and employee attrition or difficulty hiring in key geographies could delay product development, reduce innovation or harm customer delivery schedules. In addition, restrictive immigration policies, labor market saturation or compensation pressures could affect our access to technical talent. Our compensation programs, which include cash and share-based compensation award components, hashave been instrumental in attracting, hiring, motivating and retaining qualified personnel. Our success depends on our continued ability to use our share-based compensation programs to effectively compete for engineering and other technical personnel and professional talent without significantly increasing cash compensation costs. We may also be impacted if a competitor recruits key employees, or we experience attrition in our senior leadership without adequate succession planning. In addition, in May 2025, we announced the appointment of a new Chief Executive Officer. Transitions in executive leadership may result in strategic business and operational changes, shifts in personnel priorities and/or uncertainty among employees, customers and investors. Any failure to effectively manage this transition, or to retain senior leaders in critical roles across the organization, could impact continuity, delay initiatives or reduce morale. Such turnover can also disrupt long-term customer relationships, strategic execution or internal governance.
Risks Factors Related to Our Future Growth, Capital Requirements and Indebtedness
We have significant outstanding indebtedness, including our 4.000% Senior Notes due 2029 (the “Senior Notes”) and our 0.75% Convertible Senior Notes due 2031 (the “2031 Notes”). We may incur additional debt under our credit agreement or the indentures, which could amplify the risks described below.
The 2031 Notes require us to make cash payments upon conversion or a fundamental change, and we may not have sufficient liquidity to do so. Our ability to make scheduled payments of interest under our 2031 Notes, or to refinance such indebtedness, depends on our future performance, including sufficient cash flow from operations for debt service, which is subject to economic, financial, competitive and other factors beyond our control, including those described in this report. If our operating cash flow is insufficient, we may need to raise additional capital, sell assets, or restructure debt, which will depend on conditions in the capital markets and our financial condition at such time, among other factors, which could result in a default on our debt obligations or other material adverse effects on our business and financial condition. Subject to certain conditions, holders of the 2031 Notes can require us to repurchase their notes. Upon conversion of the 2031 Notes in accordance with their terms, unless we elect to solely deliver shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional shares),shares, we will be required, under the default settlement method, to settle the principal amount of the 2031 Notes in cash, and any conversion involving cash settlement could significantly affect our liquidity.
The trading price of the 2031 Notes may also be volatile due to fluctuations in our common stock price, and there is currently no active trading market for the 2031 Notes. The 2031 Notes are currently convertible at the holders’ option. If the holders of the 2031 Notes elect to convert their notes during this period or any future period in which the notes become convertible, we may be required to make substantial cash payments and/or issue shares of common stock, which could adversely affect our liquidity and result in dilution to our stockholders.
The conversion of some or all of the convertible2031 senior notesNotes would dilute the ownership interests of our existing stockholders to the extent we satisfy our conversion obligation by delivering shares of our common stock. Historically, we have elected to satisfy our convertible2031 senior noteNote conversion obligations through the payment of cash in certain circumstances, the issuance of shares of common stock in other circumstances or a combination thereof, to such convertible2031 senior noteNote holders.
In addition, in connection with the issuance of each series of the convertible2031 senior notes,Notes, we entered into capped call transactions with certain financial institutions to reduce the potential dilution to holders of our common stock upon any conversion or settlement of the convertible2031 notesNotes and/or offset any cash payments we are required to make above the principal amount of such convertible2031 seniorNotes. notes.The Theseterms of the capped call transactions may be subject to adjustment in connection with the Merger. The counterparties to the capped call transactions or their respective affiliates may engage in hedging activities, such as buying or selling our common stock or related derivatives, which could negatively affect the market price of our common stock.
Management's Discussion & Analysis (MD&A)
New heading “Pending Merger with ON Semiconductor Corporation”
New heading “Industry Conditions”
New heading “Impairment of Long-Lived Assets and Intangible Assets”
Largest changes
“As a global company, we are exposed to and impacted by global macroeconomic factors and geopolitical conditions including military conflicts (such as the ongoing conflict involving the United States, Israel, Iran and other countries in the Middle East and beyond), U.S. and foreign government policies, inflation, tariffs, interest rates, foreign exchange fluctuations, potential economic slowdowns, and evolving trade regulations and sanctions. These factors may affect our operating environment, costs and financial results.”see in full comparison
see in full comparisonAsGiven that amajoritysignificant portion of our sales andmanufacturingsupply chain, including outsourced manufacturing, assembly and test operations, occurs outside of theU.S.,United States, we are also exposedtoto, and impactedby global macroeconomic factors, U.S. and foreign government policies and foreign exchange fluctuations. In particular, a substantial portion of our revenue is derived from customers located in international markets, especially in the Asia-Pacific region, including China, Japan, South Korea and Taiwan, where many of our OEM customers and contract manufacturers are based. As a result, fluctuations in foreign exchange rates, especially relative to the U.S. dollar, can materially impact our reported revenue and profitability. We continue to monitorby, changes in international trade policies, particularly increased tariffs and other barriers or restrictions on trade between the United States and other countries, including China.OurBasedcurrent operations suggest limited tariff exposure givenon our current import and exportpractices.practices, we believe our direct tariff exposure remains limited. However, some of our customers and suppliers may beimpacted by evolving tariff regimesaffected depending on their own supply chain strategies and sourcing locations. We continue to monitor for any potential customer and supplier impacts, ranging from supply chainrealignmentsadjustments to changes in end demand. While the broader implications of these activities remain uncertain, based on our current lead times and order activity, wearehave notseeingobservedunusualmaterialactivitychangesthatinwouldordersuggest any accelerationpatterns ordelays in orderstiming due totariffstariffs, the ongoing conflict in the Middle East, or related geopolitical developments that would be likely to impact our near-term financial performance. We will continue to assess theshort-termpotential short- and long-term effects of theseinternational trade policies and restrictionsdevelopments on our financial and operational performance.
“The ongoing conflict in the Middle East has increased geopolitical tensions, including sanctions and restrictions affecting key transportation routes such as the Strait of Hormuz, contributing to volatility in global energy prices. As a result, we may experience disruptions to transportation routes and supply chains, including those involving third-party vendors, as well as higher transportation and logistics costs and broader inflationary pressures, which could adversely affect our revenue and gross margin. …”see in full comparison
“Impairment of Long-Lived Assets and Intangible Assets”see in full comparison
“During the year, we launched multiple products expanding our product portfolios and accelerated our position in Edge AI and wireless connectivity through partnerships and licensing transactions. We are collaborating with Google’s research team to build the next-generation platform for Edge AI devices. We executed an agreement with Broadcom in the third quarter of fiscal 2025 to acquire certain assets and obtain non-exclusive licenses relating to Broadcom’s Wi-Fi technology. We acquired these set of assets in order to solidify our leadership position for end-to-end AI IoT connectivity. …”see in full comparison
As a multinational corporation, we conduct our business in many countries and are subject to taxation in many jurisdictions.see in full comparisonTheOurtaxation of our business is subject to the application of various and sometimes conflictingincome taxlawsestimatesandareregulationsalsoasaffectedwell as multinational tax conventions. Our effective tax rate is highly dependent uponby the geographic distribution of our worldwide earnings or losses, tax laws and regulations in various jurisdictions, tax incentives, the availability of tax credits and loss carryforwards and the effectiveness of our tax planning strategies, which includes our estimates of the fair value of our intellectual property. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty.TaxWelawsusethemselves are subjectjudgment to evaluate the technical merits of tax positions and estimate the amount of tax benefits expected to be sustained upon examination. These estimates may change as a result ofchangesnewin fiscal policy,information, changes inlegislationtaxandlawstheorevolution of regulations,interpretations, courtrulingsdecisions,andaudit developments or settlements with taxaudits. The material jurisdictions in which we are subject to potential examination by tax authorities throughout the world include Japan, Hong Kong, United Kingdom, Israel and the United States.authorities.
Full comparison: every changed paragraph (53)
You should read the following discussion and analysis in conjunction with our financial statements and related notes contained elsewhere in this report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those set forth elsewhere in this report and under “Part I – Item 1A. Risk Factors.”
In this section, we will discuss the results of our operations and changes in financial condition for fiscal 20252026 compared to fiscal 2024.2025. Discussions of our fiscal 20232024 items and year-to-year comparisons between our fiscal 20242025 and 20232024 that are not included in this FormAnnual 10-KReport can be found in “Part II – Item 7. Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our fiscal 20242025 Annual Report on Form 10-K for the fiscal year ended June 29,28, 2024.2025.
We design and deliver AI-native edge solutions that bring AI closer to end users and transform how we engage with intelligent, connected devices, whether at home, at work, or on the move. We are a strategic partner for many global OEMs, offering standard and custom silicon and software platforms for Edge AI, Physical AI, wireless connectivity and human interface technologies. Our Synaptics Astra™ family of processors and wireless solutions combine embedded compute, connectivity, and multimodal sensing to support intuitive, secure, and seamless experiences. Our touch, biometrics, AI-enabled wireless connectivity, video, vision, audio, and speech processing solutions support the next generation of intelligent devices that enhance how people live, work and interact with technology.
We are a leading worldwide developer and fabless supplier of premium mixed signal semiconductor solutions. We develop solutions that integrate the audio, touch and vision interfaces with embedded processing capabilities that are paired with wireless connectivity. We believe our results to date reflect the combination of our customer focus and the strength of our intellectual property and our engineering know-how, which allow us to develop or engineer products and solutions that meet the demanding design specifications of our OEMs.
In fiscal 2025,2026, we achieved revenue growth with net revenue increasing 12%11.4% to $1,197.2 million compared to $1,074.3 million compared to $959.4 million in fiscal 2024.2025. The growth was primarily driven by strongan executionincrease in net revenue in our Core IoT product category.applications. Net revenue from Core IoT ofwas $272.4$389.7 millionmillion, increasedincreasing by 53%43.1% compared to $177.6$272.4 million a year ago.ago, and included the contribution from our Broadcom transaction. This growth was fueled primarily by strongan demandincrease forin units sold coupled with an increase in average selling prices due to our wireless connectivity products and the inclusion ofproduct sales from our Broadcom transaction.mix. Enterprise and Automotive net revenue ofwas $610.1$641.1 millionmillion, increasedincreasing by 7%5.1% compared to $570.0$610.1 million a year ago. The net increase was primarily driven by growthhigher acrossunit sales, a better product mix, and increased license revenue from certain of our enterprise product portfolio, partially offset by a decrease in automotive revenue due to softness in the automotive sector.IP. Mobile net revenue ofwas $191.8$166.4 millionmillion, decreaseddecreasing by 9%13.2% compared to $211.8$191.8 million a year ago, primarily asdue to lower average selling prices and a resultdecrease in license revenue from certain of theour end-of-life shipments to a large U.S. mobile customer.IP.
During the year, we launched multiple products expanding our product portfolios and accelerated our position in Edge AI and wireless connectivity through partnerships and licensing transactions. We are collaborating with Google’s research team to build the next-generation platform for Edge AI devices. We executed an agreement with Broadcom in the third quarter of fiscal 2025 to acquire certain assets and obtain non-exclusive licenses relating to Broadcom’s Wi-Fi technology. We acquired these set of assets in order to solidify our leadership position for end-to-end AI IoT connectivity. Acquiring these assets allows us to expand our portfolio of Wi-Fi 8 combination devices that include advanced Bluetooth features, additional Wi-Fi 7 combination devices, ultrawide band intellectual property (which we can integrate into future IoT devices) and combination front-end modules. This transaction expands our field of use, allowing all our Wi-Fi products to compete in AR/VR, Android smartphones and consumer audio markets and secures our wireless roadmap for the next five years. We introduced the S3930 touch controller, featuring multi-frequency-region parallel sensing and the industry’s smallest high-performance footprint. This innovation enables consistent, low-latency touch performance in ultra-thin, bendable devices. The new solution is more cost-effective for applications such as foldable phones and large screens.
Cash, cash equivalents and short-term investments at the end of fiscal 2025 and fiscal 2024 totaled $391.5 million and $876.9 million, respectively. Our net total debt outstanding at the end of fiscal 2025 was $834.8 million compared to $972.9 million at the end of fiscal 2024. We repaid our $582.0 million Term Loan Facility through a combination of a $450.0 million convertible senior note offering and balance sheet cash. We executed a capped call transaction to mitigate dilution up to a stock price of $150.48.
Cash and cash equivalents at the end of fiscal 2026 and 2025 totaled $442.5 million and $391.5 million, respectively. During fiscal 2025,2026, we returned $128.3$92.7 million to shareholders through repurchase of approximately 1.81.3 million shares.shares Ourunder the share repurchase program expired in July 2025 and a new repurchase program of $150.0 million was authorized thereafter, with no expiration date.program.
Pending Merger with ON Semiconductor Corporation
On June 25, 2026, we entered into the Merger Agreement, by and among Synaptics, onsemi and Merger Sub, pursuant to which the Merger will be effected, with Synaptics surviving as a wholly-owned subsidiary of onsemi. Subject to the terms and conditions set forth in the Merger Agreement, at the Effective Time, by virtue of the Merger, each share of Synaptics common stock outstanding immediately prior to the Effective Time, subject to limited exceptions in the Merger Agreement, will be converted into the right to receive 1.350 validly issued, fully paid and non-assessable shares of common stock of onsemi. No fractional shares of onsemi common stock will be issued in connection with the Merger. Instead, any Synaptics stockholder who would otherwise be entitled to receive a fractional share of onsemi common stock will instead receive a cash payment (without interest) equal to such fraction multiplied by the “Average Parent Stock Price,” which is defined in the Merger Agreement as the average of the volume-weighted average trading prices per share of onsemi common stock on the Nasdaq Global Select Market on each of the five consecutive trading days ending on (and including) the trading day that is three trading days prior to the closing date (as reported by Bloomberg L.P. or another authoritative source mutually selected by the parties). The transaction is expected to close in mid-2027, subject to customary closing conditions, including approval by Synaptics stockholders and the receipt of required regulatory approvals.
As a global company, we are exposed to and impacted by global macroeconomic factors and geopolitical conditions including military conflicts (such as the ongoing conflict involving the United States, Israel, Iran and other countries in the Middle East and beyond), U.S. and foreign government policies, inflation, tariffs, interest rates, foreign exchange fluctuations, potential economic slowdowns, and evolving trade regulations and sanctions. These factors may affect our operating environment, costs and financial results.
The ongoing conflict in the Middle East has increased geopolitical tensions, including sanctions and restrictions affecting key transportation routes such as the Strait of Hormuz, contributing to volatility in global energy prices. As a result, we may experience disruptions to transportation routes and supply chains, including those involving third-party vendors, as well as higher transportation and logistics costs and broader inflationary pressures, which could adversely affect our revenue and gross margin. The extent and duration of these impacts remain uncertain, and further escalation and continued duration could materially and adversely affect our business and financial results.
AsGiven that a majoritysignificant portion of our sales and manufacturingsupply chain, including outsourced manufacturing, assembly and test operations, occurs outside of the U.S.,United States, we are also exposed toto, and impacted by global macroeconomic factors, U.S. and foreign government policies and foreign exchange fluctuations. In particular, a substantial portion of our revenue is derived from customers located in international markets, especially in the Asia-Pacific region, including China, Japan, South Korea and Taiwan, where many of our OEM customers and contract manufacturers are based. As a result, fluctuations in foreign exchange rates, especially relative to the U.S. dollar, can materially impact our reported revenue and profitability. We continue to monitorby, changes in international trade policies, particularly increased tariffs and other barriers or restrictions on trade between the United States and other countries, including China. OurBased current operations suggest limited tariff exposure givenon our current import and export practices.practices, we believe our direct tariff exposure remains limited. However, some of our customers and suppliers may be impacted by evolving tariff regimesaffected depending on their own supply chain strategies and sourcing locations. We continue to monitor for any potential customer and supplier impacts, ranging from supply chain realignmentsadjustments to changes in end demand. While the broader implications of these activities remain uncertain, based on our current lead times and order activity, we arehave not seeingobserved unusualmaterial activitychanges thatin wouldorder suggest any accelerationpatterns or delays in orderstiming due to tariffstariffs, the ongoing conflict in the Middle East, or related geopolitical developments that would be likely to impact our near-term financial performance. We will continue to assess the short-termpotential short- and long-term effects of these international trade policies and restrictionsdevelopments on our financial and operational performance.
Industry Conditions
The continuing constrained availability and elevated pricing of certain memory components across the broader electronics supply chain have, at times, influenced the timing of orders for certain products, particularly for smaller customers. These conditions did not have a material impact on our results of operations during fiscal 2026; however, limited visibility into future availability, timing, increased associated costs, and the potential for these conditions to persist, could affect customer development timelines, purchasing behavior, production schedules, booking patterns, and the timing or visibility of orders in future periods. We continue to monitor these conditions and their potential impact on customer demand and ordering behavior.
Percentages may not reconcile due to rounding.
Net revenue was $1,197.2 million for fiscal 2026 compared with $1,074.3 million for fiscal 2025 compared with $959.4 million for fiscal 2024,2025, an increase of $114.9$122.9 million, or 12.0%.11.4%. Of this net revenue, $610.1$641.1 million, or 56.8%,53.5%, was from Enterprise and Automotive product applications, $272.4$389.7 million, or 25.4%,32.6%, was from the Core IoT product applications market and $191.8$166.4 million, or 17.8%,13.9%, was from the Mobile product applications market. Revenue increased in most of our product applications in fiscal 2025.2026. Net revenue from Enterprise and Automotive product applications increased as$31.0 million, primarily driven by higher unit sales (1.9%), a resultbetter product mix, and increased license revenue from certain of our IP. Net revenue from Core IoT product applications increased $117.3 million, driven by an increase in units sold (which increased 10.4%25.8%) and an increase in average selling prices (which increased 2.4%) due to our product sales mix compared to the same period a year ago. The increase in revenue from Enterprise and Automotive product applications was partially offset by a decrease of $30.0 million in revenue from the licensing of certain of our IP. The increase in net revenue from Core IoT product applications was driven by an increase in units sold (which increased 40.8%) and an increase in average selling prices (which increased 8.9%8.0%) due to our product sales mix compared to the same period a year ago, inclusive of the contribution from the Broadcom transaction. Net revenue from Mobile product applications decreased primarily due to a decrease in units sold (which decreased 1.8%) and a decrease in average selling prices (which decreased 10.3%8.1%) asand overalllower demand decreased for our products in the mobile market compared to the same period a year ago. The decrease inlicense revenue from Mobile product applications was partially offset by an increase of $4.5 million in revenue from the licensing of certain of our IP.
Gross margin as a percentage of net revenue was 44.7% in fiscal 2025 compared with 45.8% in fiscal 2024. The decrease in gross margin was driven by an increase in amortization expense primarily related to the intangible assets we acquired from Broadcom and a decrease in revenue from the licensing of certain of our IP. For additional information, see “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 7. Goodwill and Acquired Intangible Assets.”
Gross margin as a percentage of net revenue remained flat at 44.7% in fiscal 2026 and fiscal 2025. Because we sell our technology solutions in designs that are generally unique or specific to an OEM customer’s application, gross margin varies on a product-by-product basis, making our cumulative gross margin a blend of our product specific designs. As a fabless manufacturer, our gross margin percentage is generally not materially impacted by our shipment volume. Under most circumstances, revenue from license-based arrangements is fully accretive to our gross margin.
Research and Development Expenses. Research and development expenses increased $10.5$35.0 million, to $346.8$381.8 million, for fiscal 20252026 compared with $336.3$346.8 million in fiscal 2024.2025. The increase in research and development expenses primarily reflected aan $19.8$18 million increase in variableshare-based compensation related to bonus accruals and a $7.9 million increase in stock-based compensation charges primarily driven by the charges related to the awards granted to the Broadcom employees we onboarded during the third quarter of fiscal 2025. These increases were partially offset by2025, a $16.3$10.6 million decreaseincrease in payrollpersonnel-related relatedcosts, costsand primarilya driven$3.9 bymillion the restructuring action we initiatedincrease in theproject firstspecific quarter of fiscal 2025.costs.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $19.0$18.0 million, to $180.3$198.3 million, for fiscal 20252026 compared with $161.3$180.3 million in fiscal 2024.2025. The increase in selling, general and administrative expenses primarily reflected a $11.6$15.6 million increase in variableshare-based compensation relatedprimarily attributable to bonusforfeitures accruals,associated awith $8.3the departures of certain executives in the third quarter of fiscal 2025, which did not recur in fiscal 2026, and $10.9 million increase in professional service fees primarily related to the pending merger with onsemi. Selling, general and administrative expenses in fiscal 2025 included professional service fees of $3.3 million related to the Broadcom transaction we executed in the third quarter of fiscal 2025 and the refinancing of our Term Loan Facility in the second quarter of fiscal 2025 and a $4.5 million unfavorable impact from exchange rates on foreign currencies,currencies partially offset by a $8.1 million decreaserecorded in stock-basedfiscal compensation2025, chargeswhich primarilydid relatednot to an increaserecur in net forfeitures from the departure of certain executive officers from the Company compared to fiscal 2024.2026.
Restructuring Costs. Restructuring costs primarily reflect employee severance costs and facilities consolidation costs related to the restructuring action we initiatedexecuted in thefiscal first2026 quarter of fiscaland 2025. These headcount-related costs included personnel in operations, research and development and selling, general and administrative functions. Restructuring costs incurred in fiscal 20252026 and fiscal 20242025 were $16.9$3.3 million and $10.5$16.9 million, respectively. See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 19. Restructuring Activities.”
Interest and Other Income, net. Interest and other income decreased by $15.8 million, to $11.1 million, in fiscal 2026 compared with $26.9 million in fiscal 2025. The decrease was primarily driven by a decrease in interest income of $13.2 million due to the overall reduction in invested cash balances following the early repayment of our incremental term loan facility, which was scheduled to mature in December 2028 (“Term Loan Facility”), in November 2024 and the cash paid for the Broadcom acquisition in January 2025. The decrease also included an impairment charge of $5.0 million from a cost method investment during the fourth quarter of fiscal 2026, partially offset by miscellaneous other income of $2.3 million relating to a refund of amounts we paid previously to a third party recorded during the first quarter of fiscal 2026.
Interest and Other Income. Interest and other income decreased $15.4 million, to $26.9 million in fiscal 2025 compared with $42.3 million in fiscal 2024. The decrease was primarily driven by an overall decrease in our invested cash and cash equivalents of approximately $400.0 million.
Interest Expense. Interest expense primarily includes interest on our debt and amortization of debt discount and issuance costs. Interest expense decreased by $25.5$16.4 million to $23.4 million during fiscal 2026 as compared to $39.8 million during fiscal 2025 as compared to $65.3 million during fiscal 2024.2025. The decrease was primarily driven by the early repayment of the Term Loan Facility in November 2024. During fiscal 2025 and 2024,2025, the interest expense on the Term Loan Facility was $18.7 million and $46.1 million, respectively.million. The Term Loan Facility was repaid with the net proceeds received from the issuance of the 2031 Notes, which bears a significantly lower interest rate of 0.75%. See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 8. Debt and Revolving Credit Facility.”
Provision (Benefit)/Provision for Income Taxes. The provision (benefit)/provision for income taxes of $(65.7)$411.4 million and $(250.265.7) million in fiscal 20252026 and 2024,2025, respectively, represented estimated federal, foreign and state income taxes. The effective tax rate for fiscal 20252026 diverged from the combined U.S. federal and state statutory tax rate primarily due to a one-timesignificant non-cash tax benefit related to a U.S. “check-the-box” election made for our Israel subsidiary, favorable tax effects from the U.S. inclusion of foreign income, foreign earnings taxed at lower rates and a tax benefitexpense associated with the fiscalestablishment 2018of a full valuation allowance against our U.S. transitionfederal deferred tax underassets. theThis Taxexpense Cuts and Jobs Act (“TCJA”) resulting from a recent U.S. Tax Court decision in Varian Medical Systems, Inc. v. Commissioner. These benefits werewas partially offset by non-deductiblethe share-basedbenefits compensationfrom research and limitationdevelopment ontax thecredits deductibilityand offoreign-derived adeduction certaineligible officer’s compensation.income. See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 16. Income Taxes.”
On July 4, 2025, subsequent to the end of our fiscal 2025, the One Big Beautiful Bill ActAct, (“OBBBA”)or OBBBA, was signed into law. ThisThe legislation includes a permanent extension and modification of certain provisions under the TCJA.Tax WeCuts areand Jobs Act of 2017. Provisions effective for Synaptics beginning June 29, 2025, were reflected in the processCompany’s ofincome evaluatingtax provision for fiscal 2026 and did not have a material impact on the potentialeffective impacttax ofrate theor cash flows. We will continue to monitor forthcoming U.S. Treasury and Internal Revenue Service guidance related to OBBBA onand ourassess financialpotential statementsimplications for future reporting periods.
The Organization for Economic Co-operation and Development, or OECD, introduced Pillar Two model rules for a global minimum tax of 15% applicable to large multinational corporations. Many countries in which we have business operations, including the United Kingdom, Hong Kong, Switzerland, and Japan, have implemented certain aspects of Pillar Two. The OECD and the implementing countries are expected to continue issuing guidance and refining their laws. Based on the latest legislation, Pillar Two had immaterial impact on our effective tax rate or cash flows for fiscal 2026. We will continue to evaluate the potential impact of these developments as additional guidance is issued and further local enactments occur.
Our cash and cash equivalents were $442.5 million as of the end of fiscal 2026 compared with $391.5 million as of the end of fiscal 20252025, comparedan with $876.9 million asincrease of the end of fiscal 2024, a decrease of $485.4$51.0 million. The decreaseincrease in cash and cash equivalents was driven by cash provided by operating activities of $149.4 million, partially offset by cash used in financing activities of $331.4$111.5 million primarily related to full repayment of our Term Loan Facility and repurchases of our common stock,stock partiallyduring offsetfiscal by net proceeds from the issuance of the 2031 Notes (as defined below) and cash used in investing activities of $297.9 million primarily related to our asset purchase agreement with Broadcom.2026.
We consider almost all earnings of our foreign subsidiaries as not indefinitely reinvested overseas and have made appropriate provisions for income or withholding taxes that may result from a future repatriation of those earnings. As of the end of fiscal 2025,2026, $341.3$254.8 million of cash and cash equivalents was held by our foreign subsidiaries. If these funds are needed for our operations in the United States, we will be able to repatriate these funds without a material impact on our provision for income taxes.
Cash Flows from Operating Activities. Operating activities during fiscal 20252026 generated $142.0$149.4 million compared with $135.9$142.0 million net cash generated in fiscal 2024.2025. In fiscal 2025,2026, net cash provided by operating activities was the primarily driven by our results of operations, adjusted for non-cash charges of $219.0$728.3 million,million primarily related to deferred taxes due to an establishment of valuation allowance against U.S. deferred tax assets, share-based compensation costs, and acquired intangible amortization, and net cash outflows of $29.2$88.1 million from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities relate to a decrease of $30.9 million in incomeother taxesaccrued payableliabilities primarily associated with customer related to net tax payments of approximately $43.3 million made to various tax jurisdictions andliabilities, an increase in net inventoryinventories of $25.1$17.1 million, related to the availability of supply and the impact of variations between forecasted and actual demand, offsetand byan a decreaseincrease in accounts receivable of $12.3$33.7 million, primarily related to the timing of collections and billings, and an increase of $31.5 million in accrued compensation primarily related to the accrual of our annual bonus.billings.
Cash Flows from Investing Activities. Net cash usedprovided inby investing activities for fiscal 20252026 was $297.9$13.0 million compared with cash used in investing activities of $157.7$297.9 million during fiscal 2024.2025. Net cash usedprovided inby investing activities for fiscal 20252026 primarily consisted of $200.3 million we paid to acquire certain assets and obtain non-exclusive licenses relating to Broadcom’s Wi-Fi technology and the purchase of $61.0 million in proceeds from maturities of short-term investments.investments which were not subsequently reinvested in short-term investments, partially offset by purchases of property and equipment of $48.0 million.
Cash Flows from Financing Activities. Net cash used in financing activities for fiscal 20252026 was $331.4$111.5 million compared with $25.1$331.4 million used in financing activities for fiscal 2024.2025. Net cash used byin financing activities for fiscal 20252026 primarily consisted of $583.5 million used to repay the remaining outstanding balance of our Term Loan Facility, $128.3$92.7 million used to repurchase our common stock, exclusive of excise taxes,stock and $49.9$48.4 million used for payroll taxes in connection with the paymentdelivery of cappedthe callunderlying transactionsshares associatedfor withshare-based our 2031 Notes,awards, partially offset by $439.5$17.2 million in net proceeds from the issuance of our 2031common Notes.shares primarily under our employee stock purchase plan and $14.0 million from the refund of a deposit previously paid to a vendor.
Our aggregate principal debt obligations were $850.0 million as of June 20252026 and mature at various dates through December 2031. In connection with our issuance of the 2031 Notes, we used a portion of the net proceeds from the 2031 Notes, along with our cash on hand, to repay the outstanding balance of our Term Loan Facility.
The net carrying amount of our 2031 Notes, which have an aggregate principal balance of $450.0 million maturing in 2031, of $439.6 million is presented in the current portion of long-term debt in our consolidated balance sheets as of June 2026. During the fourth quarter of fiscal 2026, the last reported sale price per share of our common stock exceeded 130% of the conversion price for at least 20 trading days during the 30 consecutive trading days of the calendar quarter, which caused the 2031 Notes to be convertible by the holders for the calendar quarter ending September 30, 2026.
The net carrying amount of our Senior Notes, which have an aggregate principal balance of $400.0 million maturing in 2029, of $397.7 million is presented in long-term debt in our consolidated balance sheets as of June 2026.
Working Capital Needs. We believe our existing cash and cash equivalents, anticipated cash flows from operating activities and available credit under our revolving credit facility will be sufficient to meet our working capital and other cash requirements, including small tuck-in acquisitions, and our debt service obligations for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue, the timing and extent of spending to support product development efforts, costs associated with restructuring activities net of projected savings from those activities, costs related to protecting our intellectual property, the expansion of sales and marketing activities, the timing of introduction of new products and enhancements to existing products, costs to ensure access to adequate manufacturing, costs of maintaining sufficient space for our workforce, the continuing market acceptance of our product solutions, our common stock repurchase program and the amount and timing of our investments in, or acquisitions of, other technologies or companies. Further equity or debt financing may not be available to us on acceptable terms. If sufficient funds are not available or are not available on acceptable terms, our ability to fund our future long-term working capital needs, take advantage of business opportunities or to respond to competitive pressures could be limited or severely constrained.
We recognize revenue upon the transfer of control of goods to our customers in an amount that reflects the consideration we expect to receive. Our pricing terms are negotiated independently with each customer on a stand-alone basis. In evaluating the transaction price, we assess whether it is subject to adjustment or refund, such as stock rotation rights, price protection or volume-based incentives, and we estimate the resulting variable consideration accordingly. Although such arrangements occur in limited circumstances, they require judgment to determine the net consideration to which we expect to be entitled. We estimate variable consideration based on the historical data and experience with returns, rebates and credits. We believe these amounts to be immaterial to total revenue and do not anticipate significant changes to our estimates. This estimate qualifies as a critical accounting estimate due to the subjective judgments required to assess variable consideration and the potential impact on revenue recognition timing and amount, even if the current magnitude of such estimates is limited.
We fully reserve for inventories and non-cancellable purchase orders for inventory deemed obsolete. We perform periodic reviews of inventory items to identify excess inventories on hand by comparing on-hand balances and non-cancellable purchase orders to anticipated usage usingbased on recent historical activity as well as anticipated or forecasted demand. We also record a charge to cost of revenue for estimated losses for inventory we are obligated to purchase from our contract manufacturers when such losses become probable from customer delays, order cancellations or other factors.
Impairment of Long-Lived Assets and Intangible Assets
We assess the impairment of long-lived assets and definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount of long-lived assets may not be recoverable. We assess the impairment of indefinite-lived intangible assets annually, and more frequently, if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Circumstances which could trigger a review include, but are not limited to the following:
•Significant decreases in the market price of the asset;
•Significant adverse changes in the business climate or legal factors;
•Accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset;
•Current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and
•Current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.
Whenever events or changes in circumstances suggest that the carrying amount of long-lived assets and intangible assets may not be recoverable, we estimate the future cash flows, undiscounted and without interest charges, expected to be generated by the asset from its use or eventual disposition. If the sum of the expected undiscounted future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Significant management judgment is required in the forecasts of future operating results that are used in the discounted cash flow method of valuation. These significant judgments may include future expected revenue, expenses, capital expenditures and other costs, discount rates and whether or not alternative uses are available for impacted long-lived assets.
We estimate our income taxes in each of the jurisdictions in which we operate. The determination of our income tax provision requires significant judgment and estimates, including the amount and timing of taxable income by jurisdiction, the tax treatment of transactions, the realizability of deferred tax assets, uncertain tax positions and the expected resolution of tax examinations.
Our most significant income tax estimate relates to the realizability of deferred tax assets and the related valuation allowance. Assessing the need for a valuation allowance for deferred tax assets requires judgment and analysis in evaluating all available positive and negative evidence, including cumulative earnings or losses over the most recent three-year period, recent operating results, the scheduled reversal of existing taxable temporary differences, projected future taxable income, and prudent and feasible tax planning strategies. We record a valuation allowance when it is more likely than not that some or all of a deferred tax asset will not be realized. Our projections of future taxable income by jurisdiction are based on management’s estimates of future operating results, the timing and amount of taxable income, reversals of temporary differences and available tax-planning strategies. These estimates may differ from actual results. Changes in our projections or in the weight assigned to available evidence could result in a material increase or decrease in the valuation allowance and related income tax expense.
When assessing the need for a valuation allowance all positive and negative evidence is analyzed, including our ability to carry back net operating losses to prior periods, the reversal of deferred tax liabilities, tax planning strategies and projected future taxable income. Accordingly, as of June 2026, we had recorded a full valuation allowance on our net U.S. deferred tax assets based on our assessment that it is more likely than not that the deferred tax asset will not be realized. As a result of the losses incurred in fiscal 2026, we had a three-year cumulative loss, which represents significant negative evidence regarding the ability to realize deferred tax assets.
We estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual tax exposure together with assessing temporary differences resulting from the differing treatment of certain items for tax return and financial statement purposes. We recognize income taxes using an asset and liability approach. This approach requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. The measurement of current and deferred taxes is based on the provisions of enacted tax law and the effects of future changes in tax laws or rates are not anticipated.
Evaluating the need for a valuation allowance for deferred tax assets requires judgment and analysis of all positive and negative evidence available, including recent earnings history and taxable income in recent years, reversals of deferred tax liabilities, projected future taxable income and tax planning strategies to determine whether all or some portion of the deferred tax assets will not be realized. Using available evidence and judgment, we establish a valuation allowance for deferred tax assets when it is determined that it is more likely than not that they will not be realized. Valuation allowances have been provided primarily against state research and development credits and certain capital losses of foreign subsidiaries. A change in the assessment of the realizability of deferred tax assets may materially impact our tax provision in the period in which a change of assessment occurs.
As a multinational corporation, we conduct our business in many countries and are subject to taxation in many jurisdictions. TheOur taxation of our business is subject to the application of various and sometimes conflictingincome tax lawsestimates andare regulationsalso asaffected well as multinational tax conventions. Our effective tax rate is highly dependent uponby the geographic distribution of our worldwide earnings or losses, tax laws and regulations in various jurisdictions, tax incentives, the availability of tax credits and loss carryforwards and the effectiveness of our tax planning strategies, which includes our estimates of the fair value of our intellectual property. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. TaxWe lawsuse themselves are subjectjudgment to evaluate the technical merits of tax positions and estimate the amount of tax benefits expected to be sustained upon examination. These estimates may change as a result of changesnew in fiscal policy,information, changes in legislationtax andlaws theor evolution of regulations,interpretations, court rulingsdecisions, andaudit developments or settlements with tax audits. The material jurisdictions in which we are subject to potential examination by tax authorities throughout the world include Japan, Hong Kong, United Kingdom, Israel and the United States.authorities.
What changed in the latest 10-Q
Risk Factors
We refer you to the Company’s risk factors set forth in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended June 28, 2025, for material risks that may affect our business. There have been no material changes from the risk factors previously disclosed.
No wording changes found in this section (only numbers or dates changed in 1 paragraph).
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Management's Discussion & Analysis (MD&A)
Largest changes
“As a global company, we are exposed to and impacted by global macroeconomic factors and geopolitical conditions including military conflicts (such as the ongoing conflict involving the United States, Israel, Iran and other countries in the Middle East and beyond), U.S. and foreign government policies, inflation, tariffs, interest rates, foreign exchange fluctuations, potential economic slowdowns, and evolving trade regulations and sanctions. These factors may affect our operating environment, costs and financial results.”see in full comparison
“The ongoing conflict in the Middle East has increased geopolitical tensions, including sanctions and restrictions affecting key transportation routes such as the Strait of Hormuz, contributing to volatility in global energy prices. As a result, we may experience disruptions to transportation routes and supply chains, including those involving third-party vendors, as well as higher transportation and logistics costs and broader inflationary pressures, which could adversely affect our revenue and gross margin. …”see in full comparison
see in full comparisonAllThese forward-looking statementsreflectare based on ourbestcurrentjudgmentassumptions and expectations as of the date of this Report and arebasedsubjectontoassumptionsrisks andseveraluncertainties,factors relating to our operations and business environment, allmany of which are difficult to predict andmany of which are/or beyond our control.SuchKnownfactorstrends and uncertainties that may cause actual results to differ materially include,butamongareothers:not limited to, the following:global macroeconomicuncertainties in the U.S.andglobally,geopolitical conditions, includingthose arising fromtrade tensions, tariffs, inflation, military conflicts (such as those involving the United States, Russia, Ukraine, Israel, Iran and other countries in the Middle East and beyond), and market volatility, which may adversely affect customer demand for our products, purchasing behavior, and the timing and visibility of orders; variability in demand across our target end markets; constraints or imbalances in the availability of certain component parts, including the current industry-wide tightness in memory chips that are used in combination with our products, as well as associated cost increases (to us and our customers), which may affect customer development timelines, production schedules, purchasing behavior, booking patterns, and the timing or visibility of orders for our solutions; risks related to our continued dependence on our solutions for the Core IoT and Enterprise and Automotive product applications market for a substantial portion of our revenue; risks related to the volatility of our net revenue from our solutions for Core IoT and Enterprise and Automotive product applications, including competition from new or established IoT and wireless service companiesorand fromthosecompetitors with greater resources; our dependence on and/or loss of one or more large customers for a substantial portion of our revenue, and the loss of commitments from, contracts with, or a significant reduction in orders from, one or more of our major customers could have a material adverse effect on our revenue and operating results; and our exposure to industry downturns and cyclicality in our target markets.
see in full comparisonAsGiven that amajoritysignificant portion of our sales andmanufacturingsupply chain, including outsourced manufacturing, assembly and test operations, occurs outside of theU.S.,United States, we are also exposedtoto, and impactedby global macroeconomic factors, U.S. and foreign government policies and foreign exchange fluctuations. We continue to monitorby, changes in international trade policies, particularly increased tariffs and other barriers or restrictions on trade between the United States and other countries, including China.OurBasedcurrent operations suggest limited direct tariff exposure givenon our current import and exportpractices.practices, we believe our direct tariff exposure remains limited. However, some of our customers and suppliers may beimpacted by evolving tariff regimesaffected depending on their own supply chain strategies and sourcing locations. We continue to monitor for any potential customer and supplier impacts, ranging from supply chainrealignmentsadjustments to changes in end demand. While the broader implications of these activities remain uncertain, based on our current lead times and order activity, wearehave notseeing unusual activity that would suggestobserved material changes intheorder patterns or timingof orders from our customersdue totariffstariffs, the ongoing conflict in the Middle East, or related geopolitical developments that would be likely to impact our near-term financial performance. We will continue to assess the potential short- and long-term effects of theseinternational trade policies and restrictionsdevelopments on our financial and operational performance.
“Restructuring Costs. Restructuring costs primarily reflect employee severance costs related to the restructuring of our operations and to improving efficiencies in our operational activities. These headcount-related costs included personnel in research and development and selling, general and administrative functions. See "Item 1. Condensed Consolidated Financial Statements (Unaudited) - Notes to Condensed Consolidated Financial Statements - Note 16. Restructuring Activities for additional information.”see in full comparison
Net revenue wassee in full comparison$595.0$889.2 million for thesixnine months endedDecemberMarch2025,2026, compared with$524.9$791.5 million for thesixnine months endedDecemberMarch2024,2025, an increase of$70.1$97.7 million, or13.4%. Of this net revenue, $308.8 million, or 51.9%, was from Enterprise and Automotive product applications, $89.4 million, or 15.0%, was from Mobile product applications, and $196.8 million, or 33.1%, was from Core IoT product applications.12.3%. Revenue increased in most of our product applications for thesixnine months endedDecemberMarch20252026 compared with thesixsame period a year ago. Net revenue from Enterprise and Automotive product applications increased by $16.3 million and primarily was driven by higher units sold (which increased 1.7%), an increase in license revenue from certain IP and the release of a customer rebate liability, partially offset by a decrease in average selling prices (which decreased 3.7%) due to our product sales mix. Excluding the license revenue and the release of a customer rebate liability, net revenue for the nine months endedDecemberMarch2024.2026 from Enterprise and Automotive product applications would have decreased year-over-year. Net revenue from Core IoT product applications increasedduebyto$96.9anmillionincreaseandinprimarily was driven by higher units sold (which increased48.2%40.8%), inclusive of the contribution from the acquired business completed in fiscal 2025, and an increase in average selling prices (which increased7.3%5.7%) due to our product sales mix compared to the same period a yearago, inclusive of the contribution from the the acquired business completed in fiscal 2025. Net revenue from Enterprise and Automotive product applications increased primarily due to higher license revenue from certain IP, partially offset by a decrease in average selling prices (which decreased 4.9%) due to our product sales mix while units shipped remained flat compared to the same period a yearago.Excluding the impact of this license revenue, net revenue for the six months ended December 2025 from Enterprise and Automotive product applications would have declined year-over-year.Net revenue from Mobile product applications decreased by $15.5 million due toa decrease inlower average selling prices (which decreased12.6%12.0%) andlowera decrease in license revenue from certain of our IP, partially offset by an increase in units sold (which increased17.6%9.3%).Excluding the impact of this lower license revenue, net revenue from Mobile product applications would have increased year-over-year.
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This Quarterly Report on Form 10-Q for the quarter ended DecemberMarch 27,28, 20252026 (this “Report”) contains forward-looking statements thatwithin arethe subjectmeaning toof the safe harborsharbor createdprovisions underof the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements givereflect our current expectations and projections relating toregarding our financial condition, results of operations, plans, objectives, future performance and business, and can be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements may include words such as “expect,” “anticipate,” “intend,” “believe,” “estimate,” “plan,” “target,” “strategy,” “continue,” “may,” "commit," “will,” “should,” variations of such words, or other words and terms of similar meaning.
AllThese forward-looking statements reflectare based on our bestcurrent judgmentassumptions and expectations as of the date of this Report and are basedsubject onto assumptionsrisks and severaluncertainties, factors relating to our operations and business environment, allmany of which are difficult to predict and many of which are/or beyond our control. SuchKnown factorstrends and uncertainties that may cause actual results to differ materially include, butamong areothers: not limited to, the following:global macroeconomic uncertainties in the U.S. and globally,geopolitical conditions, including those arising from trade tensions, tariffs, inflation, military conflicts (such as those involving the United States, Russia, Ukraine, Israel, Iran and other countries in the Middle East and beyond), and market volatility, which may adversely affect customer demand for our products, purchasing behavior, and the timing and visibility of orders; variability in demand across our target end markets; constraints or imbalances in the availability of certain component parts, including the current industry-wide tightness in memory chips that are used in combination with our products, as well as associated cost increases (to us and our customers), which may affect customer development timelines, production schedules, purchasing behavior, booking patterns, and the timing or visibility of orders for our solutions; risks related to our continued dependence on our solutions for the Core IoT and Enterprise and Automotive product applications market for a substantial portion of our revenue; risks related to the volatility of our net revenue from our solutions for Core IoT and Enterprise and Automotive product applications, including competition from new or established IoT and wireless service companies orand from thosecompetitors with greater resources; our dependence on and/or loss of one or more large customers for a substantial portion of our revenue, and the loss of commitments from, contracts with, or a significant reduction in orders from, one or more of our major customers could have a material adverse effect on our revenue and operating results; and our exposure to industry downturns and cyclicality in our target markets.
Additional factors include risks related to the success and timing of new product solutions for existing or new markets; our ability to successfully execute on our strategy to develop integrated solutions including audio, touch, and vision interfaces with embedded processing and wireless connectivity for customer adoption; risks related to our expectations regarding technology and strategic investments and the anticipated timing or benefits thereof; historical and continued decreases in our average selling prices due to changes in our product sales mix and decreased revenue from our mobile product applications; our ability to attract and retain key talent necessary to drive our strategic initiatives, including our Edge AI strategies, in a highly competitive industry; our ability to execute on our cost reduction initiatives and to achieve anticipated synergies and expense reductions; our ability to maintain and build relationships with our customers; our dependence on and/or interruption or loss of, a limited number of suppliers and subcontractors, including suppliers’ manufacturing capacity constraints, the ability of these third parties to maintain satisfactory manufacturing yields and delivery schedules; the risk that our indemnification obligations for third-party claims could result in substantial costs; risks and uncertaintyuncertainties related to regional instabilities and hostilities, as well as global conflicts, such as those in the Middle East, economic volatility, and regulatory changes, any of which could disrupt our supply chain, elevate ourincrease costs, and undermine the competitiveness of our offerings, requiring operational adjustments, such as reductions in force, or otherwise adversely affecting our financial condition and operating results; changes in export restrictions and laws affecting the Company’s trade and investmentsinvestment activities; and the other risks as identified in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” sections of our Annual Report on Form 10-K for the fiscal year ended June 28, 2025, and in our other risksreports asfiled identifiedwith the SEC from time to time in our SEC reports.time. Forward-looking statements are based on information available to us onas of the date hereof, and we do not have, and expressly disclaim, any obligation to publicly release any updates or any changes in our expectations, or any change in events, conditions, or circumstances on which any forward-looking statement is based, except as required by law. Our actual results and the timing of certain events could differ materially from the forward-looking statements. These forward-looking statements do not reflect the potential impact of any mergers, acquisitions, or other business combinations that have not been completed as of the date of this filing.
Net revenue in the secondthird quarter of fiscal 2026 was $302.5$294.2 million and was 13.2%10.4% higher than net revenue compared to the same period a year ago. This was primarily due to an increase in net revenue in our Core IoT product applications, which increased 52.5%30.8% compared to the same period a year ago, primarily driven by an increase in units sold and an increase in average selling prices due to our product sales mix, inclusive of the contribution from the Broadcom transaction.mix.
Gross margin for the three months ended DecemberMarch 2026 and March 2025 and December 2024 was 43.5%45.3% and 45.7%,43.4%, respectively. The decrease in gross marginincrease was primarily duedriven toby anfavorable increaseproduct insales mix and lower amortization ofexpense on certain acquired intangible assets primarilythat fromhave reached the developed technologies we acquired from Broadcom during fiscal 2025, partially offset by an increase in revenue from the licensingend of certaintheir ofuseful our IP.lives.
As of DecemberMarch 2025,2026, our aggregate cash and cash equivalents and short-term investments of $437.4$404.4 million decreased by $15.1$48.1 million compared to June 2025. During the three months ended DecemberMarch 2025,2026, we generated $29.8$21.8 million of cash from operating activities, and we returned $36.4$39.0 million to stockholders through the repurchase of common stock under our stock repurchase program.
As a global company, we are exposed to and impacted by global macroeconomic factors and geopolitical conditions including military conflicts (such as the ongoing conflict involving the United States, Israel, Iran and other countries in the Middle East and beyond), U.S. and foreign government policies, inflation, tariffs, interest rates, foreign exchange fluctuations, potential economic slowdowns, and evolving trade regulations and sanctions. These factors may affect our operating environment, costs and financial results.
The ongoing conflict in the Middle East has increased geopolitical tensions, including sanctions and restrictions affecting key transportation routes such as the Strait of Hormuz, contributing to volatility in global energy prices. As a result, we may experience disruptions to transportation routes and supply chains, including those involving third-party vendors, as well as higher transportation and logistics costs and broader inflationary pressures, which could adversely affect our revenue and gross margin. The extent and duration of these impacts remain uncertain, and further escalation and continued duration could materially and adversely affect our business and financial results.
AsGiven that a majoritysignificant portion of our sales and manufacturingsupply chain, including outsourced manufacturing, assembly and test operations, occurs outside of the U.S.,United States, we are also exposed toto, and impacted by global macroeconomic factors, U.S. and foreign government policies and foreign exchange fluctuations. We continue to monitorby, changes in international trade policies, particularly increased tariffs and other barriers or restrictions on trade between the United States and other countries, including China. OurBased current operations suggest limited direct tariff exposure givenon our current import and export practices.practices, we believe our direct tariff exposure remains limited. However, some of our customers and suppliers may be impacted by evolving tariff regimesaffected depending on their own supply chain strategies and sourcing locations. We continue to monitor for any potential customer and supplier impacts, ranging from supply chain realignmentsadjustments to changes in end demand. While the broader implications of these activities remain uncertain, based on our current lead times and order activity, we arehave not seeing unusual activity that would suggestobserved material changes in theorder patterns or timing of orders from our customers due to tariffstariffs, the ongoing conflict in the Middle East, or related geopolitical developments that would be likely to impact our near-term financial performance. We will continue to assess the potential short- and long-term effects of these international trade policies and restrictionsdevelopments on our financial and operational performance.
The currentcontinuing constrained availability and elevated pricing dynamics forof certain memory components across the broader electronics supply chain have, at times, influenced the timing of orders for certain products, particularly for smaller customers. ThisThese conditionconditions did not have a material impact on our results for the quarter; however, given limited visibility into future availability andavailability, timing, as well as increased associated costs, theyand maythe potential for these conditions to persist, could affect customer development timelines, purchasing behavior, production schedules, booking patterns, and the timing or visibility of orders in future periods. We continue to monitor these conditions and their potential impact on customer demand and ordering behavior.
Percentages may not reconcile due to rounding.
Certain of the data used in our condensed consolidated statements of operations for the periods indicated, together with comparative absolute and percentage changes in these amounts, were as follows:
Net revenue was $294.2 million for the three months ended March 2026, compared with $266.6 million for the three months ended March 2025, an increase of $27.6 million, or 10.4%. Revenue increased in most of our product applications for the three months ended March 2026 compared with the same period a year ago. Net revenue from Enterprise and Automotive product applications increased by $14.2 million and primarily was driven by higher units sold (which increased 5.2%) and the release of a customer rebate liability, partially offset by a decrease in average selling prices (which decreased 1.7%) due to our product sales mix compared to the same period a year ago. Net revenue from Core IoT product applications increased by $20.8 million and was primarily driven by higher units sold (which increased 27.1%), inclusive of the contribution from the business acquisition completed in fiscal 2025, and an increase in average selling prices (which increased 2.9%) due to our product sales mix compared to the same period a year ago. Net revenue from Mobile product applications decreased by $7.4 million and was primarily driven by lower units sold (which decreased 5.7%) and a decrease in average selling prices (which decreased 11.2%), due to lower demand and unfavorable product mix.
Net revenue was $302.5 million for the three months ended December 2025, compared with $267.2 million for the three months ended December 2024, an increase of $35.3 million, or 13.2%. Of this net revenue, $161.1 million, or 53.3%, was from Enterprise and Automotive product applications, $48.2 million, or 15.9%, was from Mobile product applications, and $93.2 million, or 30.8%, was from Core IoT product applications. Revenue increased in all of our product applications for the three months ended December 2025 compared with the three months ended December 2024. Net revenue from Core IoT product applications increased due to an increase in units sold (which increased 32.0%), and an increase in average selling prices (which increased 9.6%) due to our product sales mix compared to the same period a year ago, inclusive of the contribution from the acquired business completed in fiscal 2025. Net revenue from Enterprise and Automotive product applications increased primarily due to higher license revenue from certain IP, partially offset by a decrease in units sold (which decreased 8.2%), and a decrease in average selling prices (which decreased 1.3%) due to our product sales mix compared to the same period a year ago. Excluding the impact of this license revenue, net revenue for the three months ended December 2025 from Enterprise and Automotive product applications would have declined year-over-year. Net revenue from Mobile product applications increased due to an increase in units sold (which increased 14.5%), partially offset by a decrease in average selling prices (which decreased 10.4%) due to our product sales mix compared to the same period a year ago.
Net revenue was $595.0$889.2 million for the sixnine months ended DecemberMarch 2025,2026, compared with $524.9$791.5 million for the sixnine months ended DecemberMarch 2024,2025, an increase of $70.1$97.7 million, or 13.4%. Of this net revenue, $308.8 million, or 51.9%, was from Enterprise and Automotive product applications, $89.4 million, or 15.0%, was from Mobile product applications, and $196.8 million, or 33.1%, was from Core IoT product applications.12.3%. Revenue increased in most of our product applications for the sixnine months ended DecemberMarch 20252026 compared with the sixsame period a year ago. Net revenue from Enterprise and Automotive product applications increased by $16.3 million and primarily was driven by higher units sold (which increased 1.7%), an increase in license revenue from certain IP and the release of a customer rebate liability, partially offset by a decrease in average selling prices (which decreased 3.7%) due to our product sales mix. Excluding the license revenue and the release of a customer rebate liability, net revenue for the nine months ended DecemberMarch 2024.2026 from Enterprise and Automotive product applications would have decreased year-over-year. Net revenue from Core IoT product applications increased dueby to$96.9 anmillion increaseand inprimarily was driven by higher units sold (which increased 48.2%40.8%), inclusive of the contribution from the acquired business completed in fiscal 2025, and an increase in average selling prices (which increased 7.3%5.7%) due to our product sales mix compared to the same period a year ago, inclusive of the contribution from the the acquired business completed in fiscal 2025. Net revenue from Enterprise and Automotive product applications increased primarily due to higher license revenue from certain IP, partially offset by a decrease in average selling prices (which decreased 4.9%) due to our product sales mix while units shipped remained flat compared to the same period a year ago. Excluding the impact of this license revenue, net revenue for the six months ended December 2025 from Enterprise and Automotive product applications would have declined year-over-year. Net revenue from Mobile product applications decreased by $15.5 million due to a decrease inlower average selling prices (which decreased 12.6%12.0%) and lowera decrease in license revenue from certain of our IP, partially offset by an increase in units sold (which increased 17.6%9.3%). Excluding the impact of this lower license revenue, net revenue from Mobile product applications would have increased year-over-year.
Gross margin as a percentage of net revenue was 43.5%,45.3%, with gross margin of $131.7$133.3 million, for the three months ended DecemberMarch 2025,2026, compared with 45.7%,43.4%, with gross margin of $122.2$115.8 million, for the three months ended DecemberMarch 2024.2025. The 220190 basis point decreaseincrease in gross margin as a percentage of net revenue for the three months ended DecemberMarch 20252026 primarily was primarily due to favorable product sales mix, the increaserelease of a customer rebate liability and a decrease in amortization of certain acquisition-related intangible assets wethat acquiredhave from Broadcom during fiscal 2025, partially offset by an increase in revenue fromreached the licensingend of certaintheir ofuseful our IP.lives.
Gross margin as a percentage of net revenue was 43.1%,43.8%, with gross margin of $256.3$389.6 million, for the sixnine months ended DecemberMarch 2025,2026, compared with 46.3%,45.3%, with gross margin of $243.1$358.9 million, for the sixnine months ended DecemberMarch 2024.2025. The net 320150 basis point decrease in gross margin as a percentage of net revenue for the sixnine months ended DecemberMarch 20252026 was primarily duedriven toby the increase in amortization of acquisition-related intangibles on the intangible assets we acquired from Broadcom during fiscal 2025,intangibles, partially offset by an increase in revenue from the licensing of certain of our IP.IP and the release of a customer rebate liability.
Research and Development Expenses. Research and development expenses increased $11.8$5.9 million to $95.1$94.5 million for the three months ended DecemberMarch 2025,2026, compared with $83.3$88.6 million for the three months ended DecemberMarch 2024.2025. The increase in research and development expensesprimarily was driven by higher personnel-related costs, including a $2.9$4.1 million increase in wages and related costsexpenses primarily relateddue to an increase inincreased headcount driven by the employees we acquired from Broadcom during fiscal 2025,and a $5.9$3.8 million increase in stock-basedshare-based compensationcompensation. chargesThese primarilyincreases relatedwere topartially awardsoffset issuedby toa the workforce we acquired from Broadcom during fiscal 2025 and $1.2$1.5 million increasedecrease in softwarevariable maintenance fees.compensation.
Research and Development Expenses. Research and development expenses increased $24.9$30.8 million to $189.5$284.0 million for the sixnine months ended DecemberMarch 2025,2026, compared with $164.6$253.2 million for the sixnine months ended DecemberMarch 2024.2025. The increase in research and development expensesprimarily was driven by ahigher $12.3personnel-related millioncosts, increaseincluding inan stock-based compensation charges primarily related to awards issued to the workforce we acquired from Broadcom during fiscal 2025, a $4.8$8.9 million increase in wages and related costsexpenses relateddue to an increase inincreased headcount primarily driven by the employees we acquired from Broadcom during fiscal 2025, and a $3.3$16.0 million increase in projectshare-based specificcompensation, costsas andwell newas chipa development.$3.6 million increase in project-specific costs.
Selling, General, and Administrative Expenses. Selling, general, and administrative expenses decreasedincreased $1.7$14.9 million to $47.8$49.6 million for the three months ended DecemberMarch 2025,2026, compared with $49.5$34.7 million for the three months ended DecemberMarch 2024.2025. The decreaseincrease was driven by share-based compensation, which increased $16.0 million, primarily attributable to forfeitures associated with the departures of certain executives in selling,the general,third andquarter administrativeof expensesfiscal 2025, which did not recur in the current period. This increase was primarilypartially drivenoffset by a decrease of $1.2$1.8 million in professionalvariable service fees related to certain corporate projects incurred during the second quarter of 2024, with no such projects during the three months ended December 2025.compensation.
Selling, General, and Administrative Expenses. Selling, general, and administrative expenses decreasedincreased $5.5$9.4 million to $94.0$143.6 million for the sixnine months ended DecemberMarch 2025,2026, compared with $99.5$134.2 million for the sixnine months ended DecemberMarch 2024.2025. The decrease in selling, general, and administrative expensesincrease was primarily driven by ashare-based decreasecompensation, which increased $14.3 million, primarily attributable to forfeitures associated with the departures of $4.2certain executives in the third quarter of fiscal 2025, which did not recur in the current period. This increase was partially offset by an $8.2 million decrease in professional service feesfees, relatedprimarily due to variousreduced corporate projectsproject andactivity costs relatedcompared to refinancing our Term Loan B facility that we incurred during the sixsame monthsperiod endeda Decemberyear 2024, with no corresponding corporate projects during the six months ended December 2025.ago.
Acquired Intangibles Amortization. Amortization of acquisition-related intangibles primarily relates to customer relationships and favorable supply contract intangible assets we acquired in previous fiscal years and remained consistent during the three and six months ended December 2025 compared to the same period a year ago.
Restructuring Costs. Restructuring costs primarily reflect employee severance costs related to the restructuring of our operations and to improving efficiencies in our operational activities. These headcount-related costs included personnel in research and development and selling, general and administrative functions. See "Item 1. Condensed Consolidated Financial Statements (Unaudited) - Notes to Condensed Consolidated Financial Statements - Note 16. Restructuring Activities for additional information.
Interest and other income. Interest and other income (expense) and other, net. Interest income/(expense) and other, net, includeincludes interest income and expense, unused commitment fees and amortization of issuance costsearned on our revolvinginvested creditcash facility, the 2031 Notes and 2029 Notesbalances and other miscellaneous income or charges.income.
Interest and other income. Interest and other income includeswas interest income earned on our invested cash balances and other miscellaneous income. Interest and other income of $3.6 million decreased by $4.4$3.3 million for the three months ended DecemberMarch 2025,2026, a decrease by $1.4 million compared to the same period a year ago. The decrease was primarily driven by an overall reduction in our invested cash balances following the early repayment of our Term Loan Facility in the second quarter of fiscal 2025 and the cash paid for the Broadcom acquisition in the third quarter of fiscal 2025.
Interest and other income ofwas $9.9 million decreased by $8.4$13.2 million for the sixnine months ended DecemberMarch 2025,2026, a decrease of $9.8 million compared to the same period a year ago. The decrease was primarily driven by a decrease$11.9 million reduction in interest income of $10.7 million due to the overall reduction inlower invested cash balances following the early repayment of our Term Loan Facility in the second quarter of fiscal 2025 and the cash paid for the Broadcom acquisition in the third quarter of fiscal 2025, partially offset by a $2.3 million increase in miscellaneous other income relating to a refund of amounts we paid previously to a third party.
Interest expense. Interest expense primarily includes interest expense on our debt, unused commitment fees on our revolving credit facility and amortization of debt issuance costs.
Interest expense was $5.8 million for the three months ended March 2026, and remained flat compared to the same period a year ago. See "Item 1. Condensed Consolidated Financial Statements (Unaudited) - Notes to Condensed Consolidated Financial Statements - Note 9. Debt and Revolving Credit Facility" for additional information.
Interest expense. Interest expense primarily includes interest expense on our debt, unused commitment fees on our revolving credit facility and amortization of debt issuance costs. Interest expense of $6.0 million for the three months ended December 2025, decreased by $6.3 million compared to the same period a year ago, which was primarily driven by the early repayment of our Term Loan Facility in the second quarter of fiscal 2025. During the three months ended December 2024, the interest expense and amortization of debt issuance costs on the Term Loan facility was $7.5 million. The Term Loan Facility was repaid with the net proceeds received from the issuance of the 2031 Notes, which bear a significantly lower interest at a rate of 0.75%. See "Note 9. Debt" for additional information.
Interest expense. Interest expense primarilywas includes interest expense on our debt, unused commitment fees on our revolving credit facility and amortization of debt issuance costs. Interest expense of $11.8$17.6 million for the sixnine months ended DecemberMarch 2025,2026, decreaseda bydecrease of $16.7 million compared to the same period a year ago,ago. whichThe decrease primarily was primarily driven by the early repayment of the Term Loan Facility in November 2024.2024, which reduced interest expense relative to the prior year period. During the sixnine months ended DecemberMarch 2024, the2025, interest expense and amortization of debt issuance costs onrelated to the Term Loan facilityFacility waswere $19.4$19.2 million. The Term Loan Facility was repaid with the net proceeds received from the issuance of the 2031 Notes, which bear a significantly lower interest at a rate of 0.75%. See "Item 1. Condensed Consolidated Financial Statements (Unaudited) - Notes to Condensed Consolidated Financial Statements - Note 9. Debt and Revolving Credit Facility" for additional information.
Benefit from Income Taxes. The benefit from income taxes was $7.2 million and $5.6 million for the three months ended March 2026 and March 2025, respectively. The increase primarily was due to a favorable one-time adjustment from a multiyear research and development credit study and the impact of U.S. inclusion of foreign income.
BenefitThe benefit from Incomeincome Taxes. Income tax benefittaxes was $2.7$12.0 million and $4.8$44.6 million for the three months and sixnine months ended DecemberMarch 2025, respectively, compared with $27.8 million2026 and $39.0March million for the three and six months ended December 2024,2025, respectively. The decrease in income tax benefitprimarily was primarily due to the absence of several significant one-time tax benefits recognized in the prior-year period, including a $14.1 million deferred tax benefit from a U.S. “check-the-box” election” for our Israel subsidiary to be treated as a U.S. disregarded entity for U.S. federal income tax purposessubsidiary, and an $8.9 million tax benefit related to ourthe fiscal 2018 U.S. one-time deemed repatriation liability under the U.S. Tax Cuts and Jobs Act, or TCJA, following thea U.S. Tax Court decision in Varian Medical Systems, Inc. v. Commissioner, both of which were recognized during the three months ended December 2024, as well as a $7.7 million deferred tax benefit related to inventory reserves transferred from foreign subsidiaries to the United States recognized during the sixnine months ended DecemberMarch 2024.2025. See "“Item 1. Condensed Consolidated Financial Statements (Unaudited) - Notes to Condensed Consolidated Financial Statements - Note 13. Income Taxes” for additional information.
On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was signed into law. The legislation includes a permanent extension and modification of certain provisions under the 2017 TCJA. Provisions effective for Synaptics beginning June 29, 20252025, were reflected in the Company’s income tax provision for the sixnine months ended DecemberMarch 20252026 and are not expected to have a material impact on the effective tax rate or cash flows. We will continue to monitor forthcoming U.S. Treasury and Internal Revenue Service guidance related to OBBBA and assess potential implications for future reporting periods.
The Organization for Economic Co-operation and Development, or OECD, introduced Pillar Two Model Rules for a global minimum tax of 15% applicable to large multinational corporations. Many countries in which we have business operations, including the United Kingdom, Hong Kong, Switzerland, and Japan, have implemented certain aspects of Pillar Two. The OECD and the implementing countries are expected to continue issuing more guidance and refining their laws. Based on the latest legislation and our current estimate, Pillar Two had no impact on our effective tax rate or cash flows for the first sixnine months of fiscal 2026. We will continue to evaluate the potential impact of these developments as additional guidance is issued and further local enactments occur.
Our cash and cash equivalents were $437.4$404.4 million and $391.5 million as of DecemberMarch 20252026 and June 2025, respectively.
We consider almost all of the earnings of our foreign subsidiaries as not indefinitely invested overseas and have made appropriate provisions for income or withholding taxes that may result from a future repatriation of those earnings. As of DecemberMarch 2025,2026, $278.6$277.3 million of cash and cash equivalents was held by our foreign subsidiaries. If these funds are needed for our operations in the United States, we would be able to repatriate substantially all of these funds without a material impact on our provision for income taxes.
Cash Flows from Operating Activities. CashNet cash provided by operating activities during the sixnine months ended DecemberMarch 20252026 was $60.0$81.8 million compared with cash provided by operating activities of $11.4$84.8 million during same period a year ago. For the sixnine months ended DecemberMarch 2025,2026, the primary operating activities were adjustments for non-cash charges of $155.7$227.0 million and net cash outflows of $60.3$101.8 million from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities relate to aan decreaseincrease of $35.7$32.2 million in accruedaccounts liabilities primarilyreceivable related to the accrualtiming of collections and paymentbillings and an increase of our$20.8 annualmillion bonus,in net inventories. Our inventory levels will vary based on the availability of supply and the impact of variations between forecasted and actual demand. In addition, there was a decrease of $5.2$18.9 million in accounts payable due to the timing of payments made to our vendors and an increase of $18.4 million in net inventories in anticipation of increased demand in our wireless products in the second half of fiscal 2026.vendors.
During the three months ended DecemberMarch 20252026 and DecemberMarch 2024,2025, our days sales outstanding was 3950 days and 4945 days, respectively. Our annualAnnualized inventory turns stayeddecreased consistent atto approximately fourthree duringfor the three months ended DecemberMarch 20252026, andcompared Decemberto 2024.approximately four for the same period a year ago.
Cash Flows from Investing Activities. CashNet cash provided by investing activities during the six months ended December 2025 was $37.2 million compared to cash used by investing activities of $14.6$25.3 million during the samenine periodmonths aended yearMarch ago.2026, The increasewhich primarily relatesconsisted toof $61.0 million in proceeds from maturities of short-term investments which were not subsequently reinvested in short-term investments, partially offset by an increase inand purchases of property and equipment of $35.7 million, primarily driven by expansion in certain of our facilities from our Broadcom transaction in the third quarter of fiscal 2025.
Net cash used by investing activities was $289.0 million during the nine months ended March 2025, which primarily consisted of $198.8 million, the majority of which we paid to acquire certain assets from Broadcom and the purchase of $61.0 million in short-term investments.
Cash Flows from Financing Activities. Net cash used by financing activities was $93.9 million for the nine months ended March 2026, which primarily consisted of $82.6 million in repurchases of our common stock and $32.7 million used for payroll taxes on the delivery of the underlying shares for share-based awards, partially offset by a $14.0 million refund of deposit previously paid to a vendor.
Net cash used by financing activities was $313.0 million for the nine months ended March 2025, which primarily consisted of $583.5 million used to repay the remaining outstanding balance of our Term Loan Facility, $112.3 million used to repurchase our common stock, exclusive of excise taxes, and $49.9 million used for the payment of capped call transactions associated with our 2031 Notes, partially offset by $439.5 million in net proceeds from issuance of our 2031 Notes.
Cash Flows from Financing Activities. Cash used by financing activities for the six months ended December 2025 and December 2024 was $51.1 million and $278.2 million, respectively. The decrease was primarily driven by $583.5 million used to repay the remaining outstanding balance of our Term Loan Facility during the six months ended December 2024, partially offset by net cash proceeds from issuance of our 2031 Notes, net of payments for capped calls and debt issuance costs thereon of $385.2 million during the six months ended December 2024, as well as a decrease of $30.9 million in repurchases of our common stock.
We have $350.0 million available under our revolving credit facility with a maturity date to be the earlier of November 2029 or three months prior to any maturity of our 2029 Notes. As of DecemberMarch 2025,2026, there was no balance outstanding under this facility.
As of DecemberMarch 2025,2026, our principal long-term debt obligations were $850.0 million.
As of December 2025, we had unconditional purchase commitments of $29.0 million, of which $15.1 million are for the remainder of fiscal 2026. We work continually with our suppliers and partners on the timing of payments and deliveries of purchase commitments, taking into account business conditions.
Working Capital Needs. We believe our existing cash and cash equivalents, anticipated cash flows from operating activities and available credit under our revolving credit facility, will be sufficient to meet our working capital and other cash requirements, and our debt service obligations for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue, the timing and extent of spending to support product development efforts, costs associated with restructuring activities net of projected savings from those activities, costs related to protecting our intellectual property, the expansion of sales and marketing activities, timing of introduction of new products and enhancements to existing products, costs to ensure access to adequate manufacturing, costs of maintaining sufficient space for our workforce, the continuing market acceptance of our product solutions, purchases we make under our common stock repurchase program, and the amount and timing of our investments in, or acquisitions of, other technologies or companies. Further equity or debt financing may not be available to us on acceptable terms. If sufficient funds are not available or are not available on acceptable terms, our ability to fund our future long-term working capital needs, take advantage of business opportunities or to respond to competitive pressures could be limited or severely constrained.
There have been no significant changes in our critical accounting estimates during the sixnine months ended DecemberMarch 2025,2026, compared with our critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended June 28, 2025.
SYNA insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 24 filings (5 insiders, 15 trade dates, 49,396 shares, about $5.3M; 24 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -49,396 (purchases minus sales); net value about -$5.3M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-25 | Song Esther |
Open-market sale |
147 | $100.00 | $14.7K |
| 2026-09-21 | Patel Rahul G. |
Open-market sale |
2,276 | $93.83 | $213.6K |
| 2026-09-18 | Bodensteiner Lisa |
Open-market sale |
334 | $92.63 | $30.9K |
| 2026-09-18 | Song Esther |
Open-market sale |
63 | $92.63 | $5.8K |
| 2026-09-17 | Bodensteiner Lisa |
Shares withheld for tax |
782 | $91.12 | $71.3K |
| 2026-09-17 | Song Esther |
Shares withheld for tax |
138 | $91.12 | $12.6K |
| 2026-09-17 | Ganesan Satish |
Shares withheld for tax | 147 | $91.12 | $13.4K |
| 2026-08-25 | Gupta Vikram |
Open-market sale |
2,300 | $94.06 | $216.3K |
| 2026-08-25 | Gupta Vikram |
Open-market sale |
1,977 | $95.00 | $187.8K |
| 2026-08-19 | Patel Rahul G. |
Open-market sale |
2,276 | $105.39 | $239.9K |
| 2026-08-18 | Gupta Vikram |
Open-market sale |
1,167 | $103.58 | $120.9K |
| 2026-08-18 | Gupta Vikram |
Open-market sale |
1,477 | $104.69 | $154.6K |
| 2026-08-18 | Gupta Vikram |
Open-market sale |
1,633 | $102.77 | $167.8K |
| 2026-08-18 | Bodensteiner Lisa |
Open-market sale |
2,156 | $104.63 | $225.6K |
| 2026-08-18 | Bodensteiner Lisa |
Open-market sale |
1,700 | $102.54 | $174.3K |
| 2026-08-18 | Bodensteiner Lisa |
Open-market sale |
2,200 | $103.47 | $227.6K |
| 2026-08-18 | Song Esther |
Open-market sale |
96 | $103.55 | $9.9K |
| 2026-08-18 | Song Esther |
Open-market sale |
164 | $104.78 | $17.2K |
| 2026-08-18 | Song Esther |
Open-market sale |
177 | $102.73 | $18.2K |
| 2026-08-17 | Patel Rahul G. |
Grant/award |
33,927 | — | — |
| 2026-08-17 | Patel Rahul G. |
Shares withheld for tax |
15,302 | $110.58 | $1.7M |
| 2026-08-17 | Patel Rahul G. |
Grant/award |
85,574 | — | — |
| 2026-08-17 | Rizvi Ken |
Shares withheld for tax | 17,251 | $110.58 | $1.9M |
| 2026-08-17 | Rizvi Ken |
Grant/award | 31,720 | — | — |
| 2026-08-17 | Rizvi Ken |
Grant/award | 15,479 | — | — |
| 2026-08-17 | Ganesan Satish |
Grant/award | 15,267 | — | — |
| 2026-08-17 | Ganesan Satish |
Shares withheld for tax | 15,954 | $110.58 | $1.8M |
| 2026-08-17 | Ganesan Satish |
Grant/award | 30,643 | — | — |
| 2026-08-17 | Gupta Vikram |
Grant/award |
34,622 | — | — |
| 2026-08-17 | Gupta Vikram |
Shares withheld for tax |
17,705 | $110.58 | $2.0M |
| 2026-08-17 | Gupta Vikram |
Grant/award |
15,267 | — | — |
| 2026-08-17 | Bodensteiner Lisa |
Grant/award |
28,545 | — | — |
| 2026-08-17 | Bodensteiner Lisa |
Grant/award |
13,189 | — | — |
| 2026-08-17 | Bodensteiner Lisa |
Shares withheld for tax |
14,218 | $110.58 | $1.6M |
| 2026-08-17 | Song Esther |
Shares withheld for tax |
972 | $110.58 | $107.5K |
| 2026-08-17 | Song Esther |
Grant/award |
4,711 | — | — |
| 2026-07-27 | Gupta Vikram |
Open-market sale |
360 | $114.20 | $41.1K |
| 2026-07-20 | Gupta Vikram |
Open-market sale |
10 | $115.54 | $1.2K |
| 2026-07-20 | Gupta Vikram |
Open-market sale |
350 | $114.76 | $40.2K |
| 2026-07-20 | Patel Rahul G. |
Open-market sale |
500 | $115.79 | $57.9K |
| 2026-07-20 | Patel Rahul G. |
Open-market sale |
2,486 | $115.11 | $286.2K |
| 2026-07-20 | Patel Rahul G. |
Open-market sale |
1,568 | $114.15 | $179.0K |
| 2026-07-20 | Bodensteiner Lisa |
Open-market sale |
284 | $114.62 | $32.6K |
| 2026-07-20 | Bodensteiner Lisa |
Open-market sale |
166 | $115.56 | $19.2K |
| 2026-07-17 | Gupta Vikram |
Shares withheld for tax |
1,488 | $114.05 | $169.7K |
| 2026-07-17 | Patel Rahul G. |
Shares withheld for tax |
19,898 | $114.05 | $2.3M |
| 2026-07-17 | Ganesan Satish |
Shares withheld for tax | 1,465 | $114.05 | $167.1K |
| 2026-07-17 | Rizvi Ken |
Shares withheld for tax | 1,473 | $114.05 | $168.0K |
| 2026-07-17 | Bodensteiner Lisa |
Shares withheld for tax |
1,052 | $114.05 | $120.0K |
| 2026-06-18 | Bodensteiner Lisa |
Open-market sale |
334 | $138.28 | $46.2K |
| 2026-06-18 | Song Esther |
Open-market sale |
126 | $138.28 | $17.4K |
| 2026-06-17 | Bodensteiner Lisa |
Shares withheld for tax |
783 | $133.53 | $104.6K |
| 2026-06-17 | Song Esther |
Shares withheld for tax |
138 | $133.53 | $18.4K |
| 2026-06-17 | Ganesan Satish |
Shares withheld for tax | 147 | $133.53 | $19.6K |
| 2026-05-28 | Song Esther |
Open-market sale |
600 | $139.10 | $83.5K |
| 2026-05-28 | Song Esther |
Open-market sale |
357 | $143.32 | $51.2K |
| 2026-05-28 | Song Esther |
Open-market sale |
2,601 | $142.70 | $371.2K |
| 2026-05-28 | Song Esther |
Open-market sale |
2,714 | $141.75 | $384.7K |
| 2026-05-28 | Song Esther |
Open-market sale |
1,361 | $140.58 | $191.3K |
| 2026-05-28 | Song Esther |
Open-market sale |
1,200 | $137.61 | $165.1K |
Well-known investors holding SYNA (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| D. E. Shaw & Co. | 2026-06-30 | 0 | $63.1M | 0.04% | New position |
| PRIMECAP Management | 2026-06-30 | 456,000 | $56.6M | 0.03% | Added 2% |
| Millennium Management (Israel Englander) | 2026-06-30 | 0 | $30.3M | 0.02% | No change |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 126,227 | $15.5M | 0.01% | Reduced 28% |
| Oaktree Capital Management (Howard Marks) | 2026-06-30 | 0 | $14.3M | — | Sold out |
| First Eagle Investment Management | 2026-06-30 | 112,646 | $14.0M | 0.02% | New position |
| Millennium Management (Israel Englander) | 2026-06-30 | 109,915 | $13.7M | 0.01% | New position |
| Two Sigma Investments | 2026-06-30 | 67,339 | $8.4M | 0.01% | Added 3% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 25,265 | $3.1M | 0.0% | Reduced 81% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 22,163 | $2.8M | 0.0% | Added 572% |
| D. E. Shaw & Co. | 2026-06-30 | 6,903 | $857.6K | 0.0% | New position |