Synaptics Bounces Back

On Nov. 7,

First-quarter sales were $417.4 million, up 8% year over year and down 2% sequentially. We note the increase over last year can be attributed to the inclusion of consumer Internet of Things revenue. With its recent acquisitions, Synaptics now breaks down revenue from mobile, PC, and Internet of Things, which were 70%, 16%, and 14%, respectively. We anticipate the Internet of Things business driving incremental growth in the near term, led by solutions found in the Amazon Echo and Google Home products. GAAP gross margins fell from 29.7% last quarter to 27.4% this quarter, due to the amortization of intangible assets and inventory fair value adjustment.

Management expects second-quarter revenue to be at a midpoint of $430 million, led by Internet of Things (estimated to be 24% of total sales). Going forward, the second quarter is poised to be seasonally strong for Internet of Things, which we attribute to the strong outlook for home Internet of Things products during the holidays.

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