In the latest earnings call, CEO Michael Hurlston highlights the solid performance of revenue, up 8% year-over-year driven by Core IoT product sales. Core IoT funnel has grown nearly 30% in a year, supporting a revenue growth of 25% to 30% over the next five years. New products and designs are contributing to growth in wireless and processor segments.
Chip back from fab for broad markets, high-performance Wi-Fi gaining market share, and processors winning industry awards. Astra products recognized in Machine Learning and Deep Learning. Growing interest in AI hub connecting multiple devices. Enterprise & Automotive segments showing improvement, with PC product revenue increasing. Expectations of increased demand in 2025.
Revenue from video interface products improving compared to last year. Products still below normal run-rate but expected to see growth in 2025 due to technology upgrades. New product, Carrera, to enable more displays and faster charging. DisplayLink Pro supports ARM-based PCs. Automotive segment facing market slowdown, Mobile segment seeing strength in Touch Controllers with new frequency-based controller introduced.
Progress in Core IoT, gaining share in high-performance Wi-Fi. Enterprise product sales growing, with potential for improved margins based on end demand. Planned capital deployment focused on share repurchases. Continued focus on innovation and expansion across various segments to drive growth and market share. In the first quarter of fiscal 2025, revenue for the company was $257.7 million, up 8% year-over-year, with Core IoT products increasing 55%, Enterprise & Automotive products improving 3%, and Mobile products up 14%. Non-GAAP operating income was 16.7%, with non-GAAP EPS at $0.81 per share, up 56% year-over-year.
The company ended the quarter with $854 million in cash and cash equivalents, with $11.4 million used in operations primarily due to cash taxes. Days sales outstanding were 47 days, and inventory balance was $119.6 million to support customer demand for the second quarter. The company is focusing on investing in organic growth, M&A, and returning capital to shareholders.
For the second quarter of 2025, the company expects revenues to be approximately $265 million, with a revenue mix from Core IoT, Enterprise & Automotive, and Mobile products at 24%, 59%, and 17% respectively. Non-GAAP gross margin is expected to be 53.5%, with non-GAAP net income per diluted share anticipated to be $0.85 at the mid-point. The company expects another quarter of sequential revenue growth in Q2.
Despite internal inventory challenges, the company has lean channel inventory and is managing expenses while investing for long-term growth. The company is prepared for a Q&A session with analysts, with a focus on road maps and timelines for new products, including a broad markets chip. Michael Hurlston, CEO of Broadcom, confirms that the company’s chip timelines remain on target, with Wi-Fi 7 and broad markets chips set to sample this quarter. Revenue projections for broad markets in 2028 are tracking well, expected to contribute $150-200 million. Edge AI processors are in production with a major release scheduled mid-year next year.
Hurlston highlights the growth potential in Core IoT, with high-performance Wi-Fi driving near-term revenue growth. Contributions from broad markets chips are expected to start in 2026, with processor initiatives contributing meaningful revenue in 2027. BLE strategy is tracking behind, with plans to accelerate opportunities to meet revenue projections for 2028.
Kevin Cassidy from Rosenblatt Securities inquires about the Wi-Fi 7 upgrade cycle. Hurlston explains the expected step function increase in IoT segment penetration from 0% to 20-25% in fiscal 2026, with gradual growth to 50% over two to three years. Legacy Wi-Fi standards will still play a role, with Wi-Fi 8 likely to follow a similar adoption curve. The market for Wi-Fi 7 shipments is expected to gradually increase, with Wi-Fi 6 still holding a significant share. End-market exposure for the company is primarily consumer-focused, with minimal industrial and automotive presence. Seasonality may impact revenue growth in the March quarter, especially in the PC space. A first-mover advantage in Wi-Fi 7 could result in an ASP and margin uplift, potentially lasting for a year before increased price competition. Enterprise demand is showing signs of stabilization, with a 3% growth quarter-to-quarter. Pricing environment across processor and wireless segments remains stable, with some potential pressure from Asian competitors. The increase in revenue for IT products is driven by refresh cycles and new devices with compelling use cases. Despite potential seasonality, the company remains cautiously optimistic about future growth. Pricing pressure is manageable, with some pockets of challenge in certain areas. Strong print positions help mitigate pricing pressure in some markets.
Enterprise segment shows signs of life, driven by new features and market share gains. Margins depend on product mix, with potential for improvement in video interface, audio, and enterprise telephony products. IT spending increases could positively impact margins in 2025. Customer engagement for Astra platform is broad, with unique low-cost, low-power products catering to various applications like home security, appliances, and industrial use. Exploration process to narrow focus on specific segments expected by first or second quarter next year. Synaptics emphasizes the potential for growth in the market, offering plug-and-play processors with AI capabilities at no extra cost. The company expresses excitement for future investor conferences. The Motley Fool advises caution, noting Synaptics is not among their top 10 stock picks for potential high returns. The article encourages independent research and includes a disclosure policy.
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3. Reuters: The Federal Reserve announced plans to start tapering its bond-buying program in response to rising inflation. The central bank will gradually reduce its monthly purchases of Treasury bonds and mortgage-backed securities.: Synaptics (SYNA) Q1 2025 Earnings Call Transcript