Press Release: Synaptics Reports Second Quarter Fiscal 2021 Results
Synaptics Reports Second Quarter Fiscal 2021 Results
Q2'21 Financial Results and Recent Business Highlights
SAN JOSE, Calif., Feb. 04, 2021 (GLOBE NEWSWIRE) -- Synaptics Incorporated (NASDAQ: SYNA), today reported financial results for its second fiscal quarter ended December 26, 2020.
Net revenue for the second quarter of fiscal 2021 was $357.6 million. GAAP net income for the second quarter of fiscal 2021 was $49.6 million, or $1.36 per diluted share. Non-GAAP net income for the second quarter of fiscal 2021 was $83.8 million, or $2.30 per diluted share.
"Synaptics delivered an outstanding December quarter with revenues exceeding the mid-point of our guidance, and the highest non-GAAP gross margins, net income and EPS in the company's 35-year history," said Michael Hurlston, Synaptics' president and CEO. "Overall, our diversification strategy with a tilt toward IoT and PC is paying dividends with both businesses delivering record revenue in the quarter. IoT now represents our largest business, giving us a stable foundation from which we can more aggressively drive top line growth."
Dean Butler, Chief Financial Officer of Synaptics, added, "For our third fiscal quarter, we see continued strength in our PC business, and expect our IoT business to outperform typical seasonality aided by a robust pipeline of design wins. We anticipate gross margins to remain strong and our revenue mix to continue shifting toward IoT. While supply-chain constraints likely limit further upsides in the near-term, we believe we are well positioned to deliver further improvements in gross margins and profitability over the long term."
For the third quarter of fiscal 2021, the company expects:
*Projected Non-GAAP gross margin excludes $19 million of intangible asset amortization, $1 million of stock-based compensation, and $4 million of inventory fair value adjustments.
**Projected Non-GAAP operating expense excludes $19 million to $22 million of stock-based compensation, up to $1 million of restructuring costs, $2.5 million of prepaid development amortization, and $9 million of intangible asset amortization.
Earnings Call and Supplementary Materials
The Synaptics second quarter and fiscal 2021 teleconference and webcast is scheduled to begin at 2:00 p.m. PT (5:00 p.m. ET), on Thursday, February 4, 2021, during which the company will provide forward-looking information.
To participate on the live call, analysts and investors should dial 833-614-1539 (conference ID: 8899476). Supplementary slides, a copy of the prepared remarks, and a live and archived webcast of the conference call will be accessible from the "Investor Relations" section of the company's Website at https://investor.synaptics.com/.
About Synaptics Incorporated:
Synaptics (Nasdaq: SYNA) is changing the way humans engage with connected devices and data, engineering exceptional experiences throughout the home, at work, in the car and on the go. Synaptics is the partner of choice for the world's most innovative intelligent system providers who are integrating multiple experiential technologies into platforms that make our digital lives more productive, insightful, secure and enjoyable. These customers are combining Synaptics' differentiated technologies in touch, display and biometrics with a new generation of advanced connectivity and AI-enhanced video, vision, audio, speech and security processing. Follow Synaptics on LinkedIn, Twitter and Facebook, or visit synaptics.com.
Use of Non-GAAP Financial Information
In evaluating its business, Synaptics considers and uses Non-GAAP Net Income, which we define as net income excluding share-based compensation, acquisition related costs, and certain other non-cash or recurring and non-recurring items the company does not believe are indicative of its core operating performance as a supplemental measure of operating performance. Non-GAAP Net Income is not a measurement of the company's financial performance under GAAP and should not be considered as an alternative to GAAP net income. The company presents Non-GAAP Net Income because it considers it an important supplemental measure of its performance since it facilitates operating performance comparisons from period to period by eliminating potential differences in net income caused by the existence and timing of share-based compensation charges, acquisition related costs, and certain other non-cash or recurring and non-recurring items. Non-GAAP Net Income has limitations as an analytical tool and should not be considered in isolation or as a substitute for the company's GAAP net income. The principal limitations of this measure are that it does not reflect the company's actual expenses and may thus have the effect of inflating its net income and net income per share as compared to its operating results reported under GAAP. In addition, the company presents components of Non-GAAP Net Income, such as Non-GAAP Gross Margin and Non-GAAP operating expenses, for similar reasons.
As presented in the "Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures" tables that follow, Non-GAAP Net Income and each of the other Non-GAAP financial measures excludes one or more of the following items:
Acquisition/divestiture related costs.
Acquisition/divestiture related costs primarily consist of:
These acquisition/divestiture related costs are not factored into the company's evaluation of its ongoing business operating performance or potential acquisitions, as they are not considered as part of the company's principal operations. Further, the amount of these costs can vary significantly from period to period based on the terms of an earn-out arrangement, revisions to assumptions that went into developing the estimate of the contingent consideration associated with an earn-out arrangement, the size and timing of an acquisition/divestiture, the lives assigned to the acquired intangible assets, and the maturity of the business acquired. Excluding acquisition/divestiture related costs from Non-GAAP measures provides investors with a basis to compare Synaptics against the performance of other companies without the variability and potential earnings volatility associated with purchase accounting and acquisition/divestiture related items.
Share-based compensation expense relates to employee equity award programs and the vesting of the underlying awards, which includes stock options, deferred stock units, market stock units, performance stock units, phantom stock units and the employee stock purchase plan. Share-based compensation settled with stock, which includes stock options, deferred stock units, market stock units, performance stock units and the employee stock purchase plan, is a non-cash expense, while share-based compensation settled with cash, which includes phantom stock units, is a cash expense. Settlement of all employee equity award programs whether settled with cash or stock varies in amount from period to period and is dependent on market forces that are often beyond the company's control. As a result, the company excludes share-based compensation from its internal operating forecasts and models. The company believes that Non-GAAP measures reflecting adjustments for share-based compensation provide investors with a basis to compare the company's principal operating performance against the performance of peer companies without the variability created by share-based compensation resulting from the variety of equity-linked compensatory awards used by other companies and the varying methodologies and assumptions used.
Amortization of prepaid development costs
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February 04, 2021 16:01 ET (21:01 GMT)