Business Highlights

• GAAP net income and EPS were $5.0 million and $0.14, respectively
• Non-GAAP net income of $52.3 million
• Non-GAAP EPS of $1.49
• Completed the divestiture of mobile LCD TDDI business for $120 million

SAN JOSE, Calif., – May 7, 2020 – Synaptics Incorporated (NASDAQ: SYNA), the leading developer of human interface solutions, today reported financial results for its third quarter ended March 28, 2020.

Net revenue for the third quarter of fiscal 2020 was $328.1 million. GAAP net income for the third quarter of fiscal 2020 was $5.0 million, or $0.14 per diluted share. Non-GAAP net income for the third quarter of fiscal 2020 was $52.3 million, or $1.49 per diluted share. (See below under the heading “Use of Non-GAAP Financial Information” and the attached table for a description and a reconciliation of GAAP to Non-GAAP financial measures.)

“Our focus on improving mix and controlling costs led to better than expected profitability in the March quarter despite revenue being slightly lower than anticipated as the initial impact from COVID-19 affected the supply chain and end-demand,” said Michael Hurlston, president and chief executive officer, Synaptics. “We continue to invest in our product portfolio with the goal to further improve margins and expect to remain well positioned with our customers when demand normalizes.”

Cash at March 28, 2020 was $472 million. Cash flow from operations during the third quarter of fiscal 2020 was $48 million.

Business Outlook
Dean Butler, chief financial officer of Synaptics, added, “With the TDDI divestiture completed, we are entering into the June quarter with a backlog of $240 million. Taking into consideration greater market uncertainty due to the ongoing impact from COVID-19, we believe that subsequent bookings, customer forecasts and product sell-in and sell-through patterns will result in revenue for the fourth quarter of fiscal 2020 to be in the range of $260 to $290 million. Based upon this guidance, we expect the revenue mix from mobile, IoT and PC products to be approximately 45 percent, 23 percent and 32 percent respectively.”

For the fourth quarter of fiscal 2020, the company expects:

*Projected Non-GAAP gross margin excludes $8.0 million of intangible asset amortization, $0.8 million of stock-based compensation, and $0.1 million of retention program costs.

**Projected Non-GAAP operating expense excludes $17 million to $19 million of stock-based compensation, $4 million to $5 million of restructuring costs, $3 million of retention program costs, and $3 million of intangible asset amortization.

Earnings Call and Supplementary Materials
The Synaptics third quarter and fiscal 2020 teleconference and webcast is scheduled to begin at 2:00 p.m. PT (5:00 p.m. ET), on Thursday, May 7, 2020, during which the company will provide forward-looking information.

Speakers:

• Michael Hurlston, President and Chief Executive Officer
• Dean Butler, Chief Financial Officer
• Jason Tsai, Head of Investor Relations

To participate on the live call, analysts and investors should dial 800-458-4148 (conference ID: 8994577). 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/.