Synaptics Incorporated (SYNA) - 10-Q Summary
Business Context and Reporting Period
This filing covers the quarterly period ended March 28, 2026 (Fiscal Q3 2026). Synaptics is a fabless supplier of mixed signal semiconductor solutions for the Internet of Things (IoT), focusing on sensing, processing, and connecting solutions for automotive, enterprise, mobile, and consumer electronics markets. The company operates as a single reportable segment.
Key Financial Metrics
| Metric | Q3 2026 | Q3 2025 | 9 Months 2026 | 9 Months 2025 |
|---|---|---|---|---|
| Net Revenue | $294.2M | $266.6M | $889.2M | $791.5M |
| Gross Margin | $133.3M (45.3%) | $115.8M (43.4%) | $389.6M (43.8%) | $358.9M (45.3%) |
| Operating Loss | $(12.7M) | $(26.3M) | $(51.0M) | $(69.9M) |
| Net Loss | $(8.0M) | $(21.8M) | $(43.4M) | $(43.1M) |
| Diluted EPS | $(0.21) | $(0.56) | $(1.12) | $(1.09) |
| Cash & Equivalents | $404.4M | $360.4M | $404.4M | $360.4M |
| Long-Term Debt | $836.7M | $834.8M | $836.7M | $834.8M |
| Operating Cash Flow (9mo) | $81.8M | $84.8M | $81.8M | $84.8M |
Material Changes vs. Prior Period
- Revenue Growth: Q3 revenue increased 10.4% year-over-year, driven by a 30.8% surge in Core IoT applications (due to higher unit sales and mix) and a 9.2% increase in Enterprise and Automotive. Mobile revenue declined 16.3% due to lower demand and unfavorable mix.
- Margin Expansion: Gross margin improved by 190 basis points to 45.3% in Q3, attributed to favorable product mix and reduced amortization on acquired intangibles that reached the end of their useful lives.
- Expense Management: Operating expenses increased slightly to $146.0M, primarily due to higher share-based compensation ($39.7M vs $19.9M prior year) and increased R&D headcount. Notably, the company recorded no intangible asset impairment charges in Q3 2026, compared to $13.8M in Q3 2025.
- Profitability: Net loss narrowed significantly to $8.0M from $21.8M in the prior year quarter, reflecting revenue growth and the absence of prior-year impairment charges.
Outlook, Risks, and Unusual Items
- Capital Allocation: The company repurchased $39.0M of common stock in Q3. Approximately $67.4M remains available under the $150M repurchase program.
- Acquisition Integration: The company continues to integrate assets acquired from Broadcom (Wi-Fi business). $96.8M of prepayments for intangible assets not yet received are recorded as non-current assets.
- Geopolitical Risks: Management highlights exposure to global conflicts (Middle East), trade tensions, and tariffs, which could disrupt supply chains and increase logistics costs. However, no material impact on near-term order patterns has been observed.
- Supply Chain: Constraints in memory chip availability continue to influence order timing for some customers, though this did not materially impact Q3 results.
- Tax Environment: The effective tax rate was impacted by one-time benefits in the prior year (e.g., "check-the-box" election) that did not recur. The new "One Big Beautiful Bill Act" (OBBBA) was signed in July 2025 but is not expected to materially impact the effective tax rate.
Investor Verification Checklist
- Revenue Quality: Verify the sustainability of the Core IoT growth, which was driven by both unit volume and price increases.
- Share-Based Compensation: Assess the impact of the significant increase in share-based compensation ($115.1M for 9 months) on future operating margins.
- Debt Structure: Confirm the status of the $850M principal debt (2029 and 2031 Notes) and compliance with leverage covenants.
- Mobile Segment: Monitor the continued decline in the Mobile segment, which has dropped from 18.0% of revenue (9mo 2025) to 14.3% (9mo 2026).
- Intangible Assets: Review the amortization schedule for the $209.6M in acquired intangible assets, as this remains a significant non-cash expense impacting operating income.