Synaptics (SYNA -0.96%), a leader in human interface semiconductor products for IoT, PC, and mobile devices, released its fourth quarter fiscal 2025 results on August 7, 2025. The headline news: GAAP revenue reached $282.8 million in the fourth quarter of fiscal 2025, Revenue slightly exceeded analyst expectations for the quarter, reaching $282.8 million, while Non-GAAP earnings per share (EPS) of $1.01 narrowly exceeded the anticipated $1.00. Core IoT product sales grew by 53% year-over-year in fiscal 2025, but profitability on a GAAP basis declined in fiscal 2025, driven by ongoing high acquisition and integration costs, which are excluded from non-GAAP results. The quarter’s overall results showcased strong momentum in Core IoT, with product sales increasing 43% year-over-year in the third quarter. but highlighted ongoing pressures in automotive and continued reliance on non-GAAP adjustments for reported profitability.
| Metric | Q4 2025 | Q4 2025 Estimate | Q4 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.01 | $1.00 | $0.64 | 57.8 % |
| Revenue (GAAP) | $282.8 million | $280.2 million | $247.4 million | 14.3 % |
| Gross Margin (Non-GAAP) | 53.5 % | 53.4 % | 0.1 pp | |
| GAAP Net (Loss) / Income | $(4.7) million | $208.3 million | (102.3 %) | |
| EPS (GAAP) | $(0.12) | N/A | -118.8 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q3 2025 earnings report.
Understanding Synaptics’ Business and Strategic Focus
Synaptics designs semiconductor solutions that enable intuitive touch, voice, and vision experiences across consumer electronics. Its technologies appear in devices ranging from smart home hubs and wearables, to personal computers and automotive touchscreens. The company operates under a fabless semiconductor model, outsourcing manufacturing to third parties while focusing its internal capabilities on research, design, and system integration.
Recent strategy centers on Core IoT (Internet of Things) solutions, with a major push into wireless connectivity, embedded edge applications, and AI-enabled devices. Success factors include innovation in low-power wireless chips, expansion of the product portfolio for AI-native applications, and a disciplined approach to acquiring emerging technologies, including recent deals for GPS and AI vision assets.
Quarter Highlights: Revenue, Segment Momentum, and Cost Pressures
Revenue grew 12% year-over-year. The main driver was Core IoT, the line of chips and platforms for smart connected devices, which delivered 55% growth in the fourth quarter. Management attributed much of this advance to new product launches, such as low-power Wi-Fi 7 chips for IoT and the Astra SR-series microcontrollers (MCUs)—specialized processors capable of AI calculations at device level.
Share gains in the enterprise PC segment were due to features like AI-powered touchpads and human presence detection chips for laptops. However, the automotive segment continued to underperform, with management calling out persistent sluggishness in demand and slower adoption for new vehicle interface technologies. The mobile product lines shifted focus toward high-end Android smartphones, launching new touch controllers designed for foldable OLED phones.
Profitability outcomes varied by metric. Non-GAAP gross margin was stable at 53.5% in the third quarter. However, GAAP gross margin slipped to 43.0% in the fourth quarter. Non-GAAP net income was $39.5 million in the fourth quarter, but on a GAAP basis, the company posted a net loss of $4.7 million in the fourth quarter. This shift was largely due to $29.4 million in acquisition and integration charges in the fourth quarter and ongoing restructuring costs.
During fiscal 2025, Synaptics spent $128 million repurchasing approximately 1.8 million shares, representing nearly 5% of total shares outstanding. A new $150 million repurchase authorization was approved on August 5, 2025. Cash and equivalents (GAAP) declined to $391.5 million as of June 2025, down from $876.9 million a year earlier, reflecting acquisition costs, debt repayment, and these share repurchases. Gross debt was reduced by 14%, ending at $834.8 million at the end of the fourth quarter compared to the prior year period.
Product Innovations and Strategic Expansion
The company’s investment in R&D remains central to its growth plans. In the fourth quarter, GAAP research and development expenses were $93.6 million, supporting the launch of Wi-Fi 7 chips engineered for IoT use cases. These products feature lower power consumption and smaller size compared to earlier generations. The Astra SR-series is a new family of adaptive microcontrollers, enabling real-time artificial intelligence at the device “edge”—that is, without constant reliance on central cloud servers. This technology targets customer needs in edge intelligence across consumer, automotive, and industrial sectors.
Core IoT’s rapid expansion follows acquisitions of GPS and visual sensing assets from Broadcom (in February 2023) and Emza (in October 2022), both completed in fiscal 2023. Management reported that the Broadcom purchase contributed close to $10 million in quarterly revenue in the fourth quarter, with plans to leverage this for entry into new use cases such as augmented reality and consumer audio. These integration efforts, while costly ($97.5 million in GAAP acquisition and integration-related costs for fiscal 2025), are intended to broaden the company’s market beyond its traditional strongholds.
Segment visibility outside Core IoT remains limited, with continued softness in automotive and only moderate progress in enterprise and mobile. While design win momentum is strong in areas like Edge AI—chips embedded in PCs and touchpads for AI features—growth remains heavily concentrated in IoT. Management emphasized that further success in automotive and enterprise will depend on customer adoption of new technologies.
The company did not declare or alter any dividend, and it remains focused on returning capital via share repurchases. Synaptics does not currently pay a dividend.
Looking Forward: Guidance and Investor Considerations
Management provided forward guidance for the first quarter of fiscal 2026, projecting GAAP revenue of $290 million, plus or minus $10 million. This outlook equates to approximately 13% revenue growth from the first quarter of fiscal 2025. Non-GAAP gross margin is expected to remain stable at 53.5%, and non-GAAP EPS is forecast at $1.05, within a range of $0.15 for the first quarter. On a GAAP basis, a loss per share of $0.54 is anticipated for the first quarter, signaling ongoing adjustments for acquisition and integration expenditures.
The company emphasized that backlog and bookings remain strong, and channel inventories are lean. Core IoT continues to drive the top line. However, leadership noted macroeconomic risk factors, such as supply chain and tariff issues, but stated that no material impacts have been seen yet. In future quarters, attention will focus on cost discipline, recovery in automotive, and continued expansion in Core IoT. Synaptics does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
