Synaptics Incorporated (NASDAQ:SYNA) Q1 2026 Earnings Call Transcript

Synaptics Incorporated (NASDAQ:SYNA) Q1 2026 Earnings Call Transcript November 7, 2025

Operator: Good day, and thank you for standing by. Welcome to the Synaptics First Quarter Fiscal Year 2026 Financial Results Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Munjal Shah, Head of Investor Relations. Please go ahead.

Munjal Shah: Good afternoon, and thank you for joining us today on Synaptics’ first quarter fiscal 2026 conference call. My name is Munjal Shah, and I’m the Head of Investor Relations. With me on today’s call are Rahul Patel, our President and CEO; and Ken Rizvi, our CFO. This call is being broadcast live over the web and can be accessed from the Investor Relations section of the company’s website at synaptics.com. In addition to a copy of our earnings press release detailing our quarterly results, a supplemental slide presentation and a copy of these prepared remarks have been posted on our Investor Relations website. Today’s discussion of financial results is presented on a GAAP financial basis, along with supplementary results on a non-GAAP basis, which excludes share-based compensation, acquisition-related costs, and certain other noncash or recurring or nonrecurring items.

All non-GAAP financial metrics discussed are reconciled to the most directly comparable GAAP financial measures in our press release and supplemental materials available on our Investor Relations website. As a reminder, the matters we are discussing today in our prepared remarks, in our supplemental materials, and in response to your questions may contain forward-looking statements. These forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance, and business. Although Synaptics believes that estimates and assumptions underlying these forward-looking statements to be reasonable, they are subject to a number of risks and uncertainties beyond our control.

Synaptics cautions that actual results may differ materially from any future performance suggested in the company’s forward-looking statements. Therefore, we refer you to the company’s earnings release issued today and our current periodic reports filed with the SEC, including our most recent annual report on Form 10-K and quarterly report on Form 10-Q for important risk factors that could cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements speak only as of the date hereof. Except as required by law, Synaptics expressly disclaims any obligation to update this forward-looking information. I will now turn the call over to Rahul.

Rahul Patel: Thank you, Munjal. Good afternoon, everyone, and thank you for joining our fiscal Q1 2026 earnings call. We had an outstanding start to our fiscal year, delivering strong results that reflect the continued momentum in our business. Revenue in our Core IoT portfolio grew by 74% year-over-year, driving 14% revenue growth for the company. Our strength was broad-based across both processors and wireless connectivity. We delivered strong earnings growth, with non-GAAP earnings per share up 35% year-over-year to $1.09. As a company, we are sharpening our focus and aligning our resources to capture the growing opportunity in Edge AI. In the last quarter, we met with customers across the globe and at our Tech Day here in San Jose.

Those discussions have affirmed my confidence in our ability to strengthen our leadership in this market. By bringing together our unique capabilities in analog mixed-signal, multi-core processing, and advanced wireless connectivity, we are enabling customers to bring intelligence to the Edge. This quarter, we reached a major milestone in our Edge AI roadmap with the successful launch of our next-generation Synaptics Astra Edge AI processors. Astra introduces a new class of AI-native silicon, built from the ground up to power the next wave of intelligent devices at the Edge. These products represent a decisive leap forward in our Edge AI strategy and reflect our strong execution and firm commitment to leadership in this market. Importantly, Astra is not just a standalone product, it brings together Synaptics’ integrated approach to high-performance solutions by incorporating our processing, wireless connectivity, and mixed-signal capabilities.

The response from customers, ecosystem partners, and the media has been very positive for the following reasons: First, we developed the new generation of Astra SL2600 series to enable billions of AI devices at the Edge, from battery-powered devices to high-performance industrial systems. It delivers industry-leading price performance to enable intelligence at the far Edge. Its scalable architecture allows our customers to address a wide range of applications, including those that require multimodal human-machine interface, vision, and voice capabilities across consumer, enterprise and industrial end markets. Customers can future-proof their designs as requirements for multimodal compute, power efficiency, application features, and AI models continue to evolve.

Second, we introduced Synaptics Torq AI in the new generation of Astra processors. Torq combines a future ready neural processor architecture with open-source compilers, setting a new standard for IoT AI application development. Further, as part of our close collaboration with Google Research, we have integrated their open-source Coral NPU, a machine learning accelerator optimized for energy-efficient AI at the Edge. This silicon-level collaboration enables customers to develop innovative Edge products with AI inference across a broad range of applications. Third, the Synaptics and Google partnership is fundamentally about creating a robust and open software development environment that elevates AI-native Edge IoT product development from a highly fragmented, proprietary ecosystem into a unified, open-source approach.

Developers now have access to multiple flexible and scalable programming frameworks, comprehensive software development kits and tools, and a rich repository of resources that include pre-optimized models, multimodal AI applications, and a curated developer experience supporting a wide range of use cases. Our lead customers have begun sampling the new Astra SL2600 devices, and we are already securing design wins. We expect initial revenue contributions to start in the second half of the calendar year 2026. This marks a significant execution milestone for our engineering and product teams, reflecting their outstanding commitment to innovation. Looking ahead, the AI inference compute opportunity is significant as hybrid compute across the data center and the Edge is taking shape.

We are already seeing strong early traction and a healthy pipeline of customer engagements. We had hundreds of customers and partners join us at our Tech Day, where we showcased Edge AI use cases such as industrial vision, fleet management, home automation, smart appliances, IoT hubs, and robotics. Moving to our wireless connectivity portfolio, we had a solid quarter with strong execution across our strategic priorities. Our Wi-Fi 7 and broad-market solutions are starting to gain traction, and our roadmap remains firmly on schedule. Development of our wirelessly connected microcontroller with AI, all in a monolithic silicon, is advancing as planned, and we look forward to sharing more in the quarters ahead. Across our Core IoT portfolio, we achieved multiple wireless connectivity and processor design wins spanning a diverse range of end markets, including action and sports cameras, educational and commercial tablets, point-of-sale systems, unified communication platforms, operator solutions, and wearables.

We’re also seeing increasing customer commitments in home security systems, Matter-enabled IoT hubs, trackers, AI-enabled wearables, and body cameras. As we continue to invest in our roadmap, execute on our engineering goals, and deepen partnerships with our leading customers, we feel confident in our ability to deliver long-term growth across our processor and wireless connectivity portfolio centered on enabling AI at the Edge. Let me now turn to our mixed-signal technology products. In Enterprise & Automotive, our PC products continue to show steady improvement, and our broader enterprise portfolio continues to recover. We have gained market share over the last year, and we expect the momentum to continue into the current quarter. While we continue to see softness in automotive due to subdued market demand, we are benefiting from the continuation of our existing designs and are actively investing in new innovative automotive solutions that will help increase our silicon content.

In Mobile Touch, we are seeing strong customer traction with our next-generation touch controller, which features a differentiated multi-frequency architecture designed for foldable OLED phones and other large-screen applications. This new design enables thinner and larger panels and integrates advanced sensing and filtering capabilities to effectively manage display noise. It also supports continuous time sensing, offering customers greater design flexibility and more cost-effective integration. We have secured marquee design wins with a top Android phone OEM and we are also seeing strong interest from OEMs in China for smartphones and tablets. We expect these wins to start contributing to revenue in the next fiscal year. Notably, our content in foldable phones will be more than twice that of our current smartphone designs.

As the adoption of foldable phones increases, we are optimistic about the opportunity it creates for Synaptics. Overall, we are seeing steady improvement in our financial performance, with both revenue and EPS increasing sequentially and year-over-year. This progress reflects the strong execution across our organization, particularly from our engineering teams, who continue to deliver on our product roadmap. Our pipeline of opportunities is expanding, and we believe we are well-positioned to build on this momentum. I am confident that our focus, innovation, and disciplined execution can drive long-term growth for Synaptics. I will now turn the call over to Ken to review our first quarter financial results and outlook for our fiscal 2026 second quarter.

Ken Rizvi: Thank you, Rahul, and good afternoon, everyone. I will focus my remarks on our non-GAAP results which are reconciled to GAAP financial measures in the earnings release tables found in the investor relations section of our website. Now let me turn to our financial results for the first quarter of fiscal 2026. Revenue for fiscal Q1 was $292.5 million, above the midpoint of our guidance and up 14% on a year-over-year basis driven by strength from our Core IoT products. The revenue mix in the first quarter was as follows: 35% Core IoT, 51% Enterprise and Automotive, and 14% Mobile Touch products. Core IoT product revenues increased 74% year-over-year, driven primarily by increased demand for our processor and wireless connectivity products.

Enterprise & Automotive product revenues were flat year-over-year with strength in our enterprise portfolio offset by softness in Automotive. Mobile Touch product revenues were lower than expected, in part, due to supply chain constraints during the quarter. First quarter non-GAAP gross margin was 53.2%, in line with our guidance range. And first quarter non-GAAP operating expense was $104 million, slightly better than the midpoint of our guidance range. Our non-GAAP operating margin was 17.6%, up approximately 110 basis points sequentially and 90 basis points year-over-year. Non-GAAP net income in Q1 was $43.3 million. And non-GAAP EPS per diluted share came in above the midpoint of our guidance at $1.09 per share, an increase of 35% on a year-over-year basis.

Now, let me turn to the balance sheet. We ended the fiscal first quarter with approximately $459.9 million in cash, cash equivalents, and short-term investments, up approximately $7.4 million from the prior quarter. Cash flow from operations was $30.2 million in the first fiscal quarter. We repurchased $7.2 million of our shares during Q1 and a total of $15 million of our shares through today. Capital expenditures for the first quarter were $12.2 million, in part driven by lab build-outs to support our R&D efforts. Depreciation for the quarter was $7.5 million. Receivables at the end of September were $119.5 million and the days of sales outstanding were 37 days, down from 41 days last quarter. Our ending inventory balance was $143.1 million, which increased by $3.6 million from the previous quarter.

The calculated days of inventory on our balance sheet were 94 days, essentially flat with the last quarter. Now, turning to our second quarter of 2026 guidance. Our guidance is subject to the fluid macroeconomic global trade and tariff environment which continues to remain uncertain at this time. Please refer to our Safe Harbor Statement in the earnings release and in our supplemental materials. For Q2, we expect revenues to be approximately $300 million at the mid-point, plus or minus $10 million. And our guidance for the second quarter reflects an expected mix from Core IoT, Enterprise & Automotive, and Mobile Touch products of approximately 31%, 53%, and 16%, respectively. We expect non-GAAP gross margin to be 53.5% at the mid-point, plus or minus 1%.

And non-GAAP operating expenses in the December quarter are expected to be $106 million at the midpoint of our guidance, plus or minus $2 million. We expect non-GAAP net interest and other expenses to be approximately $1 million and our non-GAAP tax rate to be in the range of 13-15% for the second quarter. Non-GAAP net income per diluted share is anticipated to be $1.15 per share at the mid-point plus or minus $0.15, on an estimated 40.4 million fully diluted shares. This wraps up our prepared remarks. I would like to turn the call over to the operator to start the Q&A session.

Operator: [Operator Instructions] Our first question comes from the line of Ross Seymore of Deutsche Bank.

Q&A Session

Ross Seymore: I guess my first one for Rahul is a little bit of a longer-term one. Congrats on launching the Astra platform. I know you talked about significant interest and that the revenue contribution would start kind of in the second half of next year. Could you give us any idea on the metrics that we could maybe track externally as to the success of that product, whether it be the TAM opportunity down the road or the number of design wins? Any sort of color that we could monitor as to the slope of the growth that you see coming forward with that product?

Rahul Patel: Thank you, Ross, for the question. I think we are really excited about the 2600 series that we launched. As you can tell, from the opening remarks, we have now secured design wins way ahead of when we thought we would be getting award letters, right? Clearly, there’s a very wide range of designs coming into the pipeline as a result of what we are bringing in 2600 series products. And at this point, I’ll share with you that the product is designed in such a way, it future-proofs IoT systems for multiple years, not only from having the ability to run a lot more capability because of the CPU complex as well as the multi-core processing capability, but also from an AI point of view. And we have a SKU map of pin compatible devices that on the same PCB can be swapped for newer capable devices.

And so that scale of technology that’s been deployed here in this family of products is very compelling to a wide range of applications. We are seeing from home applications to industrial applications, from things like fleet management applications to robotics, lots of interest. And we have secured designs. And so when I say secured design, we’ve got a board letters already as we sample the part. I would not be surprised if we go to production sooner than what we had planned for, given the success that we are experiencing in the bring up with the product. And given that, I would anticipate our pipeline would develop very nicely over time over the next few months. Having said that, specifically to respond to your question, at some point, we will give you an update on the pipeline in the form of the size of the funnel.

And when I say size of the funnel, I would be specifically talking about design that have been awarded to Synaptics and not the broader marketplace where people talk about the opportunity. We’ll be very specific about the designs that have been awarded to Synaptics and the designs that are going into production with Synaptics through that award process. And so that is where we are going to go in terms of giving the ability to track our success with our processor line of products. I believe we are maybe a couple of quarters away from where we can start opening up and giving you that update. The intent also is to give you this update periodically, right? And so I’ll keep you apprised of our progress on a going-forward basis. And so give us a couple of quarters or maybe a little bit less than that, and we’ll get back to you with how we’re going to track the method and the periodicity with which we’ll be providing an update.

Ross Seymore: And I guess as my follow-up, a little bit of a nearer-term question, perhaps for Ken or Rahul for you, if you wanted to answer. But lots of intersegment volatility versus your original expectations. The Core IoT up-sided significantly, the Mobile Touch down-sided a bit. Can you just talk about what drove those and perhaps how that applies to the guidance that you’re implying for the fiscal second quarter as well?

Ken Rizvi: Sure, Ross. I mean it’s a good question. So in the prepared remarks, we did see — I’ll touch base on the Mobile Touch products. There were some supply constraints there. So that’s why you’re seeing some increase here as we move from the September quarter actuals to the December quarter guide. And then when we look at the Core IoT business, if we just step back and look over the last 7 quarters or so, I think we’ve been averaging something like 50% plus year-over-year growth on a quarterly basis. So we’ve seen very strong growth in that Core IoT segment, driven by what Rahul commented earlier, both processors and the connectivity business. And so there’s always some movement from a customer dynamic standpoint that can move quarter-to-quarter. But if you look holistically, we’ve done very well in terms of the growth rates on a year-over-year basis and very happy not only with the September results overall, but how we’ve guided in December.

Rahul Patel: Yes. Just to add to what I think, Ross, I think even in the near term, if you look at the September quarter and you extrapolate from the guide, you combine the 2 quarters and you look at the half, first half of the year versus the first half of the year — fiscal year ’25. We are north of 60% growth year-over-year. And so a little variation here or there, but the growth remains consistent. And I would add that we feel very comfortable with our guide of 25% to 30% growth for the fiscal year ’26. And so looking at all parameters and the fact that if you look at the actual dollars, we are now at a run rate of $400 million in IoT revenues on an annual basis. It’s a substantial amount of business. It is growing at a very good clip rate, and we are further excited about the opportunity that our newer products are going to bring to the table.

I would also add that the road map is very solidly building out. I did talk in my prepared remarks that we are building a product that is going to be wireless connectivity processor and AI integrated in a single die. And so this thing is going to go into multiple applications. It’s going to broaden the coverage of end markets for us as a result between what we have launched in silicon as of now and what is coming in our pipeline in the next couple of quarters.

Operator: Our next question comes from the line of Neil Young of Needham & Company.

Neil Young: So I just wanted to follow-up. You talked about some of those end markets that you’re achieving design wins in. Specifically, are you seeing any outsized strength in any of those markets that you listed? If so, what do you think is driving that? And then on the longer term, which end markets do you see becoming the largest? And then I have a follow-up.

Rahul Patel: Yes. I think our big area of focus right now is to tap into the existing markets. However, on a going-forward basis, as AI and the need for AI comes to the far end of the Edge, which we believe is “in design phases in many places,” as you can tell from the AR glasses to many wearable devices to many things that you would have from home automation point of view, we see our marketplace expanding dramatically and in a place where we’ll be highly differentiated. And so I’m very excited about markets where at the far end of the Edge, where AI plays a huge role for human machine interface and multimodal processing with voice, vision, and other computes for AI inference, along with industrial applications, such as robotics, humanoids. So the gamut is fairly wide open in terms of applications as we have designed our product and software platform.

Neil Young: And then looking into the second quarter, if you were to force rank the sequential growth across the enterprise, PC and Auto, how do you see each of those markets shaking out? And then if you could maybe talk about what’s driving the strength or weakness in each of those markets.

Rahul Patel: Yes. So I would say, as we look at — you mentioned Enterprise, PC, Auto. So we don’t break out the details in those categories. But if you look at the Enterprise and Auto market, as we highlighted on the prepared remarks, we’re seeing strength in the enterprise space overall. There’s been a nice recovery as we think about on a year-over-year basis, how that’s trended. And as we head into the December quarter, you can look at our guide that we’re expecting that enterprise and auto space to be up sequentially September through December, which shows some nice sequential growth and growth overall. So that specific area, I would say, as we look into September, more driven by the Enterprise segment, and we would expect some continued strength as we move into December.

Operator: And our next question comes from the line of Christopher Rolland of Susquehanna.

Christopher Rolland: Congrats on the results. I guess probably, Rahul, for you, as it comes to mobile, you guys have, I think, one major mobile player using your combo chips. But can you talk about possibilities for more, particularly handset OEMs potentially doing their own APs or elsewhere? And how possible are these opportunities for you guys?

Rahul Patel: Yes, Chris, excellent question. And you’re absolutely right on the money in terms of the opportunity ahead for us in mobile. Clearly, there are many mobile phone OEMs that are going down the path of building their own apps processor, and that effectively presents an opportunity for players like ourselves who have clearly very solid wireless connectivity product to offer; however, don’t have the ability to play in a “bundle” with apps processor offering, becomes an opportunity for us with a provisioning of very differentiated market-leading wireless connectivity for phone OEMs who want to build phones and tablets and use wireless connectivity from Synaptics basically. And so we are very excited about that opportunity.

We are also engaging with many OEMs in this area. I would also add, you did not ask, but very similar connectivity product can be extended to multiple other marketplaces because of the high-performance connectivity capability it brings to the table. And so there is also leverage going into high-performance set-top boxes, automotive, and other marketplaces with that level of wireless connectivity. And so there’s clearly opportunity for us to leverage our strength in wireless connectivity beyond IoT marketplace with mobile and other places basically for wireless connectivity that’s going to be high performance.

Christopher Rolland: And you were speaking about your road map for new products in the prior question. You also mentioned Astra that you could potentially pull that in. I think it was a 2027 high-volume timetable for shipments. But I was wondering if you could update us in terms of the status on high-volume shipments for the MCU plus combo chip product you are talking about. And perhaps I think you have a broad markets MCU on your road map as well.

Rahul Patel: Yes. I think, Chris, again, an excellent question, and thanks for asking this. The product that — first and foremost, let me — I think you asked about 2 products. We have what I call is a microprocessor class product, which is the product that we just launched, and it’s in the hands of multiple customers in sample stages, and we are getting design awards for. That is the SL2600 series of products or family of products. Those go into production in second half calendar 2026. That’s when we start seeing the first revenue realization basically from those products. We would be seeing clearly a lot more momentum and revenue growth as we go from end of ’26 — calendar ’26 into ’27 and beyond. The highly integrated MCU class processor plus Wi-Fi 7 and Bluetooth integrated monolithic die implementation will sample in the second half of ’26.

And more likely, you will see at the earliest revenues in the second half of calendar ’27 and, obviously, it will ramp from there. And that’s what I had discussed in my prepared remarks. Having said that, the teams are building the next generation of products. We also have a semi-custom solution that is targeted for a major customer in the works, and it is expected to sample in the fall time period to that major customer. And so those are the big products that are in flight, and there are a couple of others that are in early stages of design. So the road map is building out very nicely from where we are with Astra line of products and the MCU class of products.

Christopher Rolland: That semi-custom sounds interesting. You’re going to have to tell us more next time.

Operator: Our next question comes from the line of Kevin Cassidy of Rosenblatt Securities.

Kevin Cassidy: Congratulations on the great results. Just to dig in a little more on the Core IoT and that strong growth you’re seeing. On the wireless side, are you seeing — is the growth being driven by more units? Or is it — is there a strong upgrade cycle giving you a higher ASP?

Rahul Patel: So Kevin, excellent question. On the wireless side, we are in a ramp-up phase basically. And so the contribution to the revenue is broad-based. And so it’s a lot of new designs that are going into production that are contributing. So I can’t tell you exactly today there is one particular market segment that’s pushing the envelope more than the other. However, I do believe in 2 or 3 quarters from now, things would get to a steady place in terms of one marketplace emerging as a faster-growing segment than the other. And at that point, we’ll be able to highlight where the growth is primarily coming from. But at this point, broad-based ramp-up stage, both in wireless as well as connectivity.

Kevin Cassidy: Yes, on the enterprise side, are you seeing any potential for a refresh cycle in docking stations? Or is the growth going to come just from PC components?

Rahul Patel: I think, Kevin, as we look at that overall enterprise space, I would expect actually both areas as we think about calendar year 2026. I think what we’ve talked about on previous calls, we haven’t seen this year any step function in terms of PC and enterprise upgrades. It’s been more steady in terms of the growth. It’s been positive, but more steady. And I think that’s the opportunity as we look into calendar year ’26 if we see a significant upgrade cycle as a result of either Windows 10 or just the longevity of the PCs, which the last time we’ve had a significant upgrade was back in that ’21, ’22 period. So that’s an opportunity for us as we think about calendar year ’26.

Operator: Our next question comes from the line of Peter Peng of JPMorgan.

Peter Peng: Congratulations on the results. The first question I have is just on expanding into outside your core consumer markets now into industrials, especially with the SL2600 launch and then also the broad markets. Maybe if you can just an update on the initiative there as you kind of build out that channel on that long tail of customers.

Rahul Patel: Yes. I think, Peter, first of all, thank you. And then a great question. And so one thing I would share with you is we just put up some of the demonstrations that we had on our Tech Day on our YouTube channel. And so it just probably went live yesterday. It will be great if you guys can check it out. I think you will see some of the industrial applications with our processors being demoed over there from a robotic arm that effectively is developed by a partner that has our touch controller in the palm and multiple instances of touch co1ntroller. It’s got our processor, Astra processor in there and it’s got our wireless connectivity as well. And so you can see, as a result, the potential of our products. I have said this in my last quarterly call that the combination of our analog mixed signal capabilities in the company and our connectivity along with the processor presents a total solution capability that goes from human machine interface to processing with AI inference capability, and it was — it is on display in that demo that we have at our Tech Day.

And it’s a video of that demo as well on YouTube channel, along with multiple demos. We also have a demo of fleet management with our Astra processors on our YouTube channel. And so the other nature of these markets is such that consumer ramps much faster than industrial. And so we expect industrial to be lagging consumer in our ramp in the IoT business versus consumer ramps up faster and refresh cycles, refresh cycles happen much faster as well versus industrial. And so the capability in our product line, the engagement in building out solutions to support industrial applications is absolutely underway. And engagement with our customers is also underway. It’s just that the designs for industrials will come a little later in a sizable manner versus consumer.

Peter Peng: And then maybe if you can — I think there’s a lot of optimism about smart glasses and so forth. Maybe you can just talk about your engagement and what kind of content opportunities do you think you can have in this opportunity?

Rahul Patel: Yes. I think I really don’t want to kind of tip a whole lot on this topic, but you are touching a sweet spot for Synaptics’ Astra line of products on a going-forward basis. With the product capabilities that I described earlier in the earlier question, clearly, the scale at which the volume needs to experience economic value is out there to be delivered by a solution supplier like Synaptics. And that in itself is a huge opportunity for us that we have our eyes set on in not just AR glasses, but also many variable opportunities on a going-forward basis. The combination of general purpose CPU with the optimal GPU, with the optimal audio processor, with the optimal vision processor and all working with a newer processor embedded.

And also, like I said in my prepared remarks, taking the Coral NPU, open-source Coral NPU made available by Google, collaborating with Google to build out that system in the Astra 2600 series is an indication of exactly where we could be going for the variable sets of applications, AR glasses being one of them. And we are really excited about that opportunity, largely because the economic value equations that get addressed through Astra line of products is today up for grabs basically in the marketplace.

Operator: Our next question comes from the line of Robert Mertens of TD Cowen.

Robert Mertens: This is Robert Mertens on the line for Krish Sankar. I guess, just the first one, I know we talked a lot about your strategy going into Edge AI applications. But are there any core technologies that you think you need to develop either in-house or small tuck-in acquisitions or working with partners to bring into your Edge AI portfolio to be more attractive to the broader customer base, whether it’s ultra-low power processing side or integration of your connectivity suite. Just anything there would be really helpful.

Rahul Patel: Yes, Robert, excellent question. I think our strategy has been largely to enable best-in-class solution for our customers. And in many situations, it would mean that we would provide a total solution. In some situations, it would mean that we may provide a processor, and the customer may choose some other components to build out the solution. And so we are fairly open in our engagement with our customers. Having said that, the biggest differentiation in our processor strategy is to not go down this path of building out walled gardens. We are a firm believer in open-source. Our software development platforms support multiple open-source communities. Our ability to enable our customers to work with the vast ecosystem of models that are being developed for various applications in form of AI inference capabilities is to enable them to bring those to our platforms much more easily and with very little effort from Synaptics’ team.

And so, this is our strategy to operate at scale. And this strategy is developed in combination with Google Research. And so here, you have a company that also believes in open-source and enabling the software ecosystem, supporting the Synaptics approach in the bigger picture. And so that is how we are differentiating ourselves versus some of the peer set in the marketplace that have gone down this path of owning software development platforms. And effectively, in our opinion, it holds us back from scaling faster and enabling our customer base and the developer community as a result. And so that is our largest strategy. Having said that, we are always going to be on the lookout for opportunities to inorganically fuel our growth in IoT. And that option is definitely on the table.

Robert Mertens: If I could just have one final question. Sorry about that. Just real quick, looking into your Enterprise and Automotive business, I know you’ve mentioned that the channel inventories have been improving over the last couple of quarters. Backlog levels seem to be normalizing. So just in that framework, what sort of other signs of improvement on a quarterly basis do you see there? I know you expected to rebound a bit into the December quarter. Is that something you expect to continue through the beginning of next year? Or is that more just pull-ins from various projects?

Ken Rizvi: So I would say, overall, if you looked at the Enterprise and Automotive segment, within that, the Enterprise segment has done better over the last years, it has continued to improve. I think automotive has been more sluggish, but the enterprise piece has really performed nicely over the last 12 months or so. And I think as we think about and look forward into calendar year ’26, which is not too far away, the one other opportunity that’s out there is around some of the upgrade cycles and not only for the PCs, but as you think about RTO activities and the like and as people refresh the workstations, those are great opportunities for Synaptics as well. So we’re excited about that business in terms of the share that we have and the franchise positions we have, and there’s some great opportunities ahead of us as we think about 2026.

Rahul Patel: Just to add to what Ken indicated, I think a couple of other things. In the Enterprise segment, we are gaining market share in the PC business, right? And that, despite the market being largely flat to GDP-like growth, we are seeing strength in our business and largely driven by the share gains. And it is something that goes back to our analog mixed signal capabilities in the company. And we continue to do well in that regard versus our peer set in the marketplace. And it’s also showcased extremely well in Mobile Touch as well. As in my prepared remarks, I indicated, right, clearly, our product — our newer generation product that is targeted for the next generation of phones that would launch in the second half calendar 2026 time period showcases how different and differentiating is our analog mixed signal capability in our products and especially in touch area.

And I think we continue to do well. We continue to invest very judiciously and bring out really good products that are effectively helping us increase total silicon content in the phone as well. And so really excited about what that business is capable of bringing to the table in the second half of calendar 2026 and beyond.

Operator: I’m showing no further questions at this time. I’ll now turn it back to President and CEO, Rahul Patel, for closing remarks.

Rahul Patel: Before we conclude, I would like to reiterate that the Synaptics team executed very well this quarter. We strengthened our leadership position in Edge AI with the launch of our new generation of AI-native Astra processors, and we continue to innovate on the next-generation of processors, wireless connectivity and mixed-signal products and solutions planned for delivery in calendar 2026 and beyond. Our financial results reflect our ongoing commitment to disciplined execution. I want to thank all my teammates in engineering and across Synaptics for their dedication and hard work in delivering on our commitments. Equally importantly, I would like to thank all our shareholders for their continued support of Synaptics. I look forward to connecting with many of you at upcoming industry events and conferences. Have a great rest of the day.

Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.