SYNAPTICS Inc
For the period ended Dec 28, 2024. Filed Feb 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 28, 2024 · Filed Feb 6, 2025
SYNA$116.70+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-28; filed 2024-11-07.
0001628280-24-046335
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-28; filed 2025-02-06.
0000817720-25-000011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 62 previous paragraphs and 71 current paragraphs.
33 unchanged; 23 reworded; 14 added; 5 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report
Gross margin as a percentage of net revenue was 45.7%, or $122.2 million, for the three months ended December 2024, compared with 46.0%, or $109.0 million, for the three months ended December 2023. The net 30 basis point decrease in gross margin for the three months ended December 2024 was primarily due to a decrease in revenue of $9.0 million in revenue from our IP licenses, partially offset by favorable changes in our product mix.
Current report
Research and Development Expenses. Research and development expenses decreased $3.9 million to $164.6 million for the six months ended December 2024, compared with $168.5 million for the six months ended December 2023. The decrease in research and development expenses was primarily driven by a $8.4 million decrease in wages and related costs as a result of the restructuring actions initiated during fiscal 2024 and 2025, and a $4.1 million decrease in project specific costs, partially offset by a $9.2 million increase in variable compensation related to bonus accrual.
Current report
Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $9.8 million to $49.5 million for the three months ended December 2024, compared with $39.7 million for the three months ended December 2023. The increase in selling, general, and administrative expenses was primarily driven by an increase of $6.2 million in stock-based compensation charges primarily related to the departure of certain executive officers from the Company during the second quarter of fiscal 2024 and a $3.7 million increase in variable compensation related to bonus accrual.
Current report
Interest and Other Income. Interest and other income of $8.0 million and $18.3 million for the three and six months ended December 2024 decreased by $2.3 million and $3.0 million, respectively, compared to the same periods a year ago, which was primarily driven by an overall decrease in interest rates on our invested cash and cash equivalents, as well as a reduction in cash balances following the early repayment of the entire Term Loan Facility in November 2024.
Current report
Loss on early extinguishment of debt. In connection with our issuance of the 2031 Notes, we used a portion of the net proceeds from the 2031 Notes, along with our cash on hand, to repay the outstanding balance under our Term Loan Facility. The repayment of the Term Loan Facility was accounted for as a debt extinguishment. The consideration used to extinguish the Term Loan Facility and the carrying value of the Term Loan Facility (including unamortized debt issuance costs) resulted in a loss on early extinguishment of debt of $6.5 million, which is included in "Loss on early extinguishment of debt" within our condensed consolidated statements of operations.
Current report
On August 26, 2024, the United States Tax Court, or the Tax Court issued a unanimous decision in Varian Medical Systems v. Commissioner, holding that a fiscal year taxpayer was entitled to claim a dividend received deduction, or DRD, on certain dividends deemed received during its gap period. The Tax Court also determined that the amount of foreign tax credits, or FTCs, the taxpayer could claim was reduced. During the second quarter of fiscal 2025, we completed a comprehensive analysis of the Tax Court's findings and identified a potential opportunity for us to recover some taxes paid under the U.S. Transition Tax of the 2017 Tax Cuts and Jobs Act, or TCJA. As a result, we decided to file a protective refund claim with the U.S. Internal Revenue Service, or the IRS in fiscal 2025 to preserve our right to seek a refund, contingent upon further developments in related cases or guidance from the IRS. As of the second quarter of fiscal 2025, an $8.9 million tax benefit was recognized based on a more-likely-than-not position, supported by the relevant technical merits of the Tax Court’s decision.
Current report
During the three months ended December 2024 and December 2023, our days sales outstanding was 49 days and 48 days, respectively. Our annual inventory turns stayed consistent at four during the three months ended December 2024 and December 2023.
Current report
Cash used in investing activities for the six months ended December 2023 consisted of $130.0 million paid to Broadcom as a prepayment to acquire developed technologies and to extend the exclusivity for certain products for an additional three-year period, $16.6 million to purchase short-term investments and $17.1 million for purchases of property and equipment, partially offset by $23.9 million in proceeds from the maturities of our short-term investments.
Current report
Cash Flows from Financing Activities. Cash used by financing activities for the six months ended December 2024 and December 2023 was $278.2 million and $23.9 million, respectively. Net cash used by financing activities for the six months ended December 2024 consisted of $583.5 million used to repay the remaining outstanding balance of our Term Loan Facility, $74.5 million used to repurchase our common stock, exclusive of excise taxes, $49.9 million used for the payment of capped call transactions associated with our 2031 Notes, partially offset by $439.5 million in net proceeds from issuance of our 2031 Notes.
Current report
2031 Notes. On November 19, 2024 and November 26, 2024, we issued and sold $400.0 million and $50.0 million, respectively, in aggregate principal amount of 0.75% Convertible Senior Notes due 2031, or the 2031 Notes, in a private placement. The 2031 Notes are unsecured, bear interest at a rate of 0.75% per year, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2025, and will mature on December 1, 2031, unless earlier converted, redeemed or repurchased by us.
Current report
The net proceeds from the 2031 Notes were approximately $435.6 million after deducting the debt issuance costs and our estimated offering expenses. We used approximately (i) $67.0 million to repurchase shares of our common stock with which we repurchased 890,484 shares at $75.24 a share, and (ii) $49.9 million to pay the cost of the capped call transactions. Additionally, the remainder of the net proceeds, together with our cash on hand, were used to repay the outstanding balance of our Term Loan Facility.
Current report
In connection with the issuance of the 2031 Notes, we entered into privately negotiated capped call transactions with certain financial institutions. The 2031 Capped Calls are expected to partially offset the potential dilution to our common stock upon any conversion of the 2031 Notes, with such offset subject to a cap based on the cap price.
Current report
Term Loan Facility. In connection with our issuance of the 2031 Notes, we used a portion of the net proceeds from the 2031 Notes, along with our cash on hand, to repay the outstanding balance of our Term Loan Facility.
Removed paragraphs (5)
Previous report
We recognize revenue when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. Nearly all of our revenue, except an inconsequential amount, is recognized at a point in time, either on shipment or delivery of the product, depending on customer terms and conditions.
Previous report
Revenue recognition from the licensing of our IP is dependent on the nature and terms of each agreement. We recognize revenue from the licensing of our IP upon delivery of the IP if there are no substantive future obligations to perform under the arrangement. Sales-based or usage-based royalties from the license of IP are recognized at the later of the period the sale or usage occurs, or the satisfaction of the performance obligation to which some or all of the sales-based or usage-based royalties have been allocated.
Previous report
Interest and Other Income. Interest income of $10.2 million for the three months ended September 2024 decreased by $0.7 million compared to $10.9 for the same period a year ago and is due to the slight decrease in interest rates on our cash and cash equivalents during the three months ended September 2024 compared to the same period a year ago.
Previous report
During the three months ended September 2024, our days sales outstanding was 47 days compared to 42 days at the same period a year ago. Our annual inventory turns was four compared to three during the same period a year ago.
Previous report
Term Loan Facility. In December 2021, we entered into that certain First Amendment and Lender Joinder Agreement to the Credit Agreement, to, among other things, establish a new $600.0 incremental term loan facility, or the Term Loan Facility. The Term Loan Facility was advanced under the Credit Agreement to finance our DSPG acquisition. The Term Loan Facility matures on December 2, 2028. Principal on the Term Loan Facility is payable in equal quarterly installments on the last day of each March, June, September and December of each year, beginning December 31, 2001, at a rate of 1.00% per annum. For three months ended September 2024, we repaid $1.5 million of the principal outstanding on the Term Loan Facility.
Reworded paragraphs (23)
Previous wording
This Quarterly Report on Form 10-Q for the quarter ended September 28, 2024 (this “Report”) contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business, can be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements may include words such as “expect,” “anticipate,” “intend,” “believe,” “estimate,” “plan,” “target,” “strategy,” “continue,” “may,” “will,” “should,” variations of such words, or other words and terms of similar meaning. All forward-looking statements reflect our best judgment and are based on several factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Such factors include, but are not limited to the following: our dependence on our solutions for the Core IoT and Enterprise and Automotive product applications market for a substantial portion of our revenue; risks related to the volatility of our net revenue from our solutions for Core IoT and Enterprise and Automotive product applications; our dependence on one or more large customers; our exposure to industry downturns and cyclicality in our target markets; the risk that our product solutions for new markets will not be successful; risks related to our expectations regarding technology and strategic investments and the anticipated timing or benefits thereof; our ability to execute on our cost reduction initiatives and to achieve expected synergies and expense reductions; our ability to maintain and build relationships with our customers; our dependence on third parties to maintain satisfactory manufacturing yields and deliverable schedule; the risk that our indemnification obligations for third party claims could result in substantial costs; uncertainty surrounding macroeconomic factors in the U.S., and globally, impacting the supply chain environment, inflationary pressure, workforce reductions, regional instabilities and hostilities (including the Israel-Hamas war) and the other risks as identified in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” sections of our Annual Report on Form 10-K for the fiscal year ended June 29, 2024, and other risks as identified from time to time in our SEC reports. Forward-looking statements are based on information available to us on the date hereof, and we do not have, and expressly disclaim, any obligation to publicly release any updates or any changes in our expectations, or any change in events, conditions, or circumstances on which any forward-looking statement is based. Our act…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This Quarterly Report on Form 10-Q for the quarter ended December 28, 2024 (this “Report”) contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business, can be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements may include words such as “expect,” “anticipate,” “intend,” “believe,” “estimate,” “plan,” “target,” “strategy,” “continue,” “may,” “will,” “should,” variations of such words, or other words and terms of similar meaning. All forward-looking statements reflect our best judgment and are based on several factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Such factors include, but are not limited to the following: our dependence on our solutions for the Core IoT and Enterprise and Automotive product applications market for a substantial portion of our revenue; risks related to the volatility of our net revenue from our solutions for Core IoT and Enterprise and Automotive product applications; our dependence on one or more large customers; our exposure to industry downturns and cyclicality in our target markets; the risk that our product solutions for new markets will not be successful; risks related to our expectations regarding technology and strategic investments and the anticipated timing or benefits thereof; our ability to execute on our cost reduction initiatives and to achieve expected synergies and expense reductions; our ability to maintain and build relationships with our customers; our dependence on third parties to maintain satisfactory manufacturing yields and deliverable schedule; the risk that our indemnification obligations for third party claims could result in substantial costs; uncertainty surrounding macroeconomic factors in the United States, or the U.S., and globally, impacting the supply chain environment, inflationary pressure, workforce reductions, regional instabilities and hostilities (including the Israel-Hamas war) and the other risks as identified in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” sections of our Annual Report on Form 10-K for the fiscal year ended June 29, 2024, and other risks as identified from time to time in our SEC reports. Forward-looking statements are based on information available to us on the date hereof, and we do not have, and expressly disclaim, any obligation to publicly release any updates or any changes in our expectations, or any change in events, conditions, or circumstances on which any forward-looking statem…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
India, Israel, Japan, Korea, Poland, Switzerland, Taiwan, the U.K., and the U.S., we are well positioned to provide local sales, operational, and engineering support services to our existing customers, as well as potential new customers, on a global basis.
Current wording
Many of our customers have manufacturing operations in China, and many of our OEM customers have established design centers in Asia. With our global presence, including offices in China, France, Germany, Hong Kong, India, Israel, Japan, Korea, Poland, Switzerland, Taiwan, the U.K., and the U.S., we are well positioned to provide local sales, operational, and engineering support services to our existing customers, as well as potential new customers, on a global basis.
Previous wording
Interest and other expense, net, primarily reflects interest expense on our Senior Notes (as defined herein), Term Loan Facility (as defined herein) and revolving line of credit as well as the amortization of debt issuance costs and discount on our debt, partially offset by interest income earned on our cash and cash equivalents.
Current wording
Interest and other expense, net, primarily reflects interest expense and amortization of debt issuance costs on our 2031 Notes, Senior Notes and the Term Loan Facility and loss on early extinguishment of debt. See Note 12. Debt for additional information. The interest and other expense, net, is partially offset by interest income earned on our cash and cash equivalents.
Previous wording
There have been no significant changes in our critical accounting policies and estimates during the three months ended September 2024, compared with our critical accounting policies and estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended June 29, 2024.
Current wording
There have been no significant changes in our critical accounting policies and estimates during the six months ended December 2024, compared with our critical accounting policies and estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended June 29, 2024.
Previous wording
As a majority of our sales and manufacturing occurs outside of the United States, we are exposed to and impacted by global macroeconomic factors, U.S. and foreign government policies and foreign exchange fluctuations. There is uncertainty surrounding macroeconomic factors in the U.S., and globally, characterized by the supply chain environment, inflationary pressure, higher interest rates, and workforce reductions. We believe these macroeconomic conditions, including conservative corporate spending on information technology hardware, coupled with the global political climate and unrest, including the ongoing Israel-Hamas war, continue to be the primary drivers for the overall slowdown in orders from our customer base. We continue to believe a rebound in demand is likely to extend into late calendar 2024. In addition, although we currently do not believe inflation in the costs of goods will have a material impact on our results of operations, it is possible that elevated inflation could increase our cost of goods sold and/or operating expenses and reduce our gross profit and net income. Further, despite the recent downward trend in interest rates, they remain elevated and may fluctuate, continuing to impact our borrowing costs on our variable rate Term Loan Facility and could potentially limit our borrowing capacity if a future acquisition opportunity requiring financing presents itself.
Current wording
As a majority of our sales and manufacturing occurs outside of the U.S., we are exposed to and impacted by global macroeconomic factors, U.S. and foreign government policies and foreign exchange fluctuations. In recent years, there has been uncertainty surrounding macroeconomic factors in the U.S., and globally, characterized by the supply chain environment, inflationary pressure, higher interest rates, workforce reductions as well as geopolitical developments, including regional conflicts and trade tariff developments. While certain conditions have been improving during fiscal 2025, including deceleration of inflation and lowering of interest rates in certain geographies, there continues to be uncertainty regarding overall macroeconomic conditions and increased geopolitical tensions. Although we have seen improvements in revenues in the first half of fiscal 2025 compared to the same periods a year ago, our operational and financial performance may be adversely impacted if these global conditions continue to remain unstable. In addition, although we currently do not believe inflation in the costs of goods will have a material impact on our results of operations, it is possible that elevated inflation could increase our cost of goods sold and/or operating expenses and reduce our gross profit and net income.
Previous wording
Net revenue was $257.7 million for the three months ended September 2024, compared with $237.7 million for the three months ended September 2023, an increase of $20.0 million, or 8.4%. Of this net revenue, $147.6 million, or 57.3%, was from Enterprise and Automotive product applications, $50.5 million, or 19.6%, was from Mobile product applications, and $59.6 million, or 23.1%, was from Core IoT product applications. Revenue increased in most of our product applications for the three months ended September 2024. Net revenue from Mobile product applications increased due to an increase in units sold (which increased 1.5%) and $10.5 million in revenue from a license of certain of our IP, or the IP license, partially offset by a decrease in average selling prices (which decreased 11.3%), as overall demand increased for our products in the mobile market. Net revenue from Core IoT product applications increased due to an increase in units sold (which increased 90.2%), partially offset by a decrease in average selling prices (which decreased 18.6%) due to our product sales mix compared to the same period a year ago. Net revenue from Enterprise and Automotive product applications decreased as a result of a decrease in units sold (which decreased 1.5%), partially offset by an increase in average selling prices (which increased 17.3%) due to our product sales mix compared to the same period a year ago and a decrease of $27.0 million in revenue from a license of certain of our IP.
Current wording
Net revenue was $267.2 million for the three months ended December 2024, compared with $237.0 million for the three months ended December 2023, an increase of $30.2 million, or 12.7%. Of this net revenue, $159.1 million, or 59.5%, was from Enterprise and Automotive product applications, $47.0 million, or 17.6%, was from Mobile product applications, and $61.1 million, or 22.9%, was from Core IoT product applications. Revenue increased in most of our product applications for the three months ended December 2024. Net revenue from Core IoT product applications increased due to an increase in units sold (which increased 20.5%), as well as an increase in average selling prices (which increased 35.2%) due to our product sales mix compared to the same period a year ago. Net revenue from Enterprise and Automotive product applications increased as a result of an increase in units sold (which increased 22.7%), partially offset by a decrease in average selling prices (which decreased 2.9%) due to our product sales mix and a decrease in revenue of $3.0 million from the licensing of certain of our IP compared to the same period a year ago. Net revenue from Mobile product applications decreased due to a decrease in units sold (which decreased 12.3%), a decrease in average selling prices (which decreased 5.8%), as overall demand decreased for our products in the mobile market, and a decrease in revenue of $6.0 million from the licensing of certain of our IP compared to the same period a year ago.
Previous wording
Gross margin as a percentage of net revenue was 46.9%, or $120.9 million, for the three months ended September 2024, compared with 45.1%, or $107.1 million, for the three months ended September 2023. The net 180 basis point increase in gross margin for the three months ended September 2024 was primarily due to favorable changes in product mix and lower costs related to excess obsolescence reserve charges and share-based compensation charges partially offset by a net decrease in revenue from our IP licenses.
Current wording
Gross margin as a percentage of net revenue was 46.3%, or $243.1 million, for the six months ended December 2024, compared with 45.5%, or $216.1 million, for the six months ended December 2023. The net 80 basis point increase in gross margin for the six months ended December 2024 was primarily due to favorable changes in product mix and lower costs related to excess obsolescence reserve charges and share-based compensation charges, partially offset by a net decrease of $25.5 million in revenue from our IP licenses.
Previous wording
Research and Development Expenses. Research and development expenses decreased $5.2 million to $81.3 million for the three months ended September 2024, compared with $86.5 million for the three months ended September 2023. The decrease in research and development expenses was primarily driven by a $4.9 million decrease in wages and related costs as a result of the restructuring action initiated during the first quarter of fiscal 2025.
Current wording
Research and Development Expenses. Research and development expenses increased $1.3 million to $83.3 million for the three months ended December 2024, compared with $82.0 million for the three months ended December 2023. The increase in research and development expenses was primarily driven by a $6.3 million increase in variable compensation related to bonus accrual, partially offset by a $3.5 million decrease in wages and related costs as a result of the restructuring actions initiated during fiscal 2024 and 2025.
Previous wording
Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $7.7 million to $50.0 million for the three months ended September 2024, compared with $42.3 million for the three months ended September 2023. The increase in selling, general, and administrative expenses was primarily driven by a $3.8 million increase in professional fees related to certain corporate projects and a $3.2 million unfavorable impact from exchange rates on foreign currencies.
Current wording
Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $17.5 million to $99.5 million for the six months ended December 2024, compared with $82.0 million for the six months ended December 2023. The increase in selling, general, and administrative expenses was primarily driven by a $5.6 million increase in variable compensation related to bonus accrual, a $4.6 million increase in stock-based compensation charges primarily related to the departure of certain executive officers from the Company during the second quarter of fiscal 2024, a $3.0 million increase in professional service fees related to various corporate projects and strategy and a $1.9 million unfavorable impact from exchange rates on foreign currencies.
Previous wording
Acquired Intangibles Amortization. Amortization of acquisition-related intangibles of $24.6 million for the three months ended September 2024 increased by $1.3 million, or 5.6%, compared to $23.3 million for the same period a year ago. The increase is primarily related to the amortization of certain intangible assets we received from Broadcom and placed into service during the fourth quarter of fiscal 2024.
Current wording
Acquired Intangibles Amortization. Amortization of acquisition-related intangibles decreased $0.1 million, or 2.6%, and $1.8 million, or 19.1%, for the three and six months ended December 2024, respectively, compared to the same periods a year ago. The decrease is primarily related to the amortization of customer related intangible assets and acquired trademarks from the Displaylink acquisition which were fully amortized by the end of fiscal 2024.
Previous wording
Interest expense. Interest expense primarily includes interest on our debt and amortization of debt discount and issuance costs. Interest expense decreased by $0.2 million to $16.1 million for three months ended September 2024 as compared to $16.3 million for the same period a year ago. The decrease in interest expense is primarily driven by a slight decrease in interest rates on our $600 million incremental Term Loan Facility in the first quarter of fiscal 2025 compared to the same period a year ago.
Current wording
Interest expense. Interest expense primarily includes interest on our debt and amortization of debt issuance costs. Interest expense for the three and six months ended December 2024 of $12.4 million and $28.5 million, respectively, decreased by $4.0 million and $4.2 million, respectively, compared to the same periods a year ago. The decrease in interest expense is primarily driven by a decrease of approximately 50 basis points in the interest rate on our $600.0 million incremental Term Loan Facility during the first half of fiscal 2025 compared to the same period a year ago, as well as the early repayment of the entire Term Loan Facility in November 2024 with the net proceeds received from the issuance of the 2031 Notes, which bears a significantly lower interest at a rate of 0.75%. See Note 12. Debt for additional information.
Previous wording
The Organization for Economic Co-operation and Development (OECD) introduced Pillar Two Model Rules for a global minimum tax of 15% applicable to large multinational corporations. Many countries in which we have business operations, including the United Kingdom, Switzerland, and Japan, have implemented certain aspects of Pillar Two, which become effective to our company in fiscal 2025. The OECD and the implementing countries are expected to keep refining their laws and issue more guidance. Based on the current legislation, Pillar Two did not affect our effective tax rate or cash flows for the first three months of fiscal 2025. We will continue to evaluate the potential impact of these tax law changes on future reporting periods.
Current wording
The Organization for Economic Co-operation and Development, or OECD, introduced Pillar Two Model Rules for a global minimum tax of 15% applicable to large multinational corporations. Many countries in which we have business operations, including the United Kingdom, Switzerland, and Japan, have implemented certain aspects of Pillar Two, which become effective to our company in fiscal 2025. The OECD and the implementing countries are expected to keep issuing more guidance and refining their laws. Based on the current legislation, Pillar Two had no impact on our effective tax rate or cash flows for the first six months of fiscal 2025. We will continue to evaluate the potential impact of these tax law changes on future reporting periods.
Previous wording
Our cash and cash equivalents were $853.6 million and $876.9 million as of September 2024 and June 2024, respectively, representing a decrease of $23.3 million. The decrease in cash and cash equivalents during three months ended September 2024 was due to cash used in operating activities of $11.4 million, cash used in investing activities of $9.1 million and cash used in financing activities of $3.5 million.
Current wording
Our cash and cash equivalents were $596.1 million and $876.9 million as of December 2024 and June 2024, respectively, representing a decrease of $280.8 million. The decrease in cash and cash equivalents during six months ended December 2024 was driven by cash used in financing activities of $278.2 million related to full repayment of our Term Loan Facility, repurchases of our common stock and payment of capped call transactions, partially offset by net proceeds from the issuance of the 2031 Notes (as defined below).
Previous wording
We consider almost all of the earnings of our foreign subsidiaries as not indefinitely invested overseas and have made appropriate provisions for income or withholding taxes that may result from a future repatriation of those earnings. As of September 2024, $405.7 million of cash and cash equivalents was held by our foreign subsidiaries. If these funds are needed for our operations in the United States, we would be able to repatriate substantially all of these funds without a material impact on our provision for income taxes.
Current wording
We consider almost all of the earnings of our foreign subsidiaries as not indefinitely invested overseas and have made appropriate provisions for income or withholding taxes that may result from a future repatriation of those earnings. As of December 2024, $304.7 million of cash and cash equivalents was held by our foreign subsidiaries. If these funds are needed for our operations in the United States, we would be able to repatriate substantially all of these funds without a material impact on our provision for income taxes.
Previous wording
Cash Flows from Operating Activities. Cash used by operating activities during the three months ended September 2024 was $11.4 million compared with cash provided by operating activities of $45.4 million during same period a year ago. For the three months ended September 2024, the primary operating activities were adjustments for non-cash charges of $47.5 million and a net change in operating assets and liabilities of $35.8 million. The net change in operating assets and liabilities was attributable to a decrease in income taxes payable primarily related to tax payments of approximately $31.2 million made to various tax jurisdictions, the payment of our annual bonus of approximately $11.5 million and payments of approximately $10.6 million related to the restructuring actions we initiated during the first quarter of fiscal 2025 and in the fourth quarter of fiscal 2024.
Current wording
Cash Flows from Operating Activities. Cash provided by operating activities during the six months ended December 2024 was $11.4 million compared with cash provided by operating activities of $84.6 million during same period a year ago. For the six months ended December 2024, the primary operating activities were adjustments for non- cash charges of $97.3 million and a net change in operating assets and liabilities of $64.6 million. The net change in operating assets and liabilities was attributable to a decrease in income taxes payable primarily related to tax payments of approximately $46.2 million made to various tax jurisdictions, a $4.9 million decrease in accounts payable due to the timing of payments made to our vendors, and an increase of $3.9 million in accounts receivable due to an increase in sales and the timing of collections received from our customers.
Previous wording
Cash Flows from Investing Activities. Cash used by investing activities during the three months ended September 2024 and September 2023 was $9.1 million and $150.1 million, respectively. Net cash used in investing activities for the three months ended September 2024 consisted of $9.1 million for purchases of property and equipment.
Current wording
Cash Flows from Investing Activities. Cash used by investing activities during the six months ended December 2024 and December 2023 was $14.6 million and $139.8 million, respectively. Net cash used in investing activities for the six months ended December 2024 consisted of $13.8 million for purchases of property and equipment.
Previous wording
Cash Flows from Financing Activities. Cash used by financing activities for the three months ended September 2024 and September 2023 was $3.5 million and $18.1 million, respectively. Net cash used by financing activities for the three months ended September 2024 consisted of $11.3 million used for payroll taxes on the delivery of the underlying shares for share-based awards, partially offset by $7.7 million proceeds from issuance of shares primarily under the employee stock purchase plan.
Current wording
Net cash used by financing activities for the six months ended December 2023 consisted of $29.6 million used for payroll taxes on the delivery of the underlying shares for share-based awards, partially offset by $8.5 million in proceeds from issuance of shares.
Previous wording
Common Stock Repurchase Program. As of April 2023, our board had cumulatively authorized $2.3 billion for our common stock repurchase program, which will expire in July 2025. The program authorizes us to purchase our common stock in the open market or in privately negotiated transactions, depending upon market conditions and other factors. The number of shares purchased, and the timing of purchases, are based on the level of our cash balances, general business and market conditions, and other factors. Common stock purchased under this program is held as treasury stock. From April 2005 through September 2024, we purchased, net of issuances for settlement of our convertible notes, 30,116,439 shares of our common stock in the open market for an aggregate cost of $878.0 million. During the nine months ended September 2024, we did not repurchase shares of our common stock. As of September 2024, the remaining available authorization under our common stock repurchase program was $893.9 million.
Current wording
Common Stock Repurchase Program. As of April 2023, our board had cumulatively authorized $2.3 billion for our common stock repurchase program, which will expire in July 2025. The program authorizes us to purchase our common stock in the open market or in privately negotiated transactions, depending upon market conditions and other factors. The number of shares purchased, and the timing of purchases, are based on the level of our cash balances, general business and market conditions, and other factors. Common stock purchased under this program is held as treasury stock. From April 2005 through December 2024, we purchased, net of issuances for settlement of our convertible notes, 31,103,558 shares of our common stock in the open market for an aggregate cost of $952.4 million. During the six months ended December 2024, we repurchased $74.5 million shares of our common stock. As of December 2024, the remaining available authorization under our common stock repurchase program was $819.4 million.
Previous wording
Senior Notes. In March 2021, we completed an offering of $400.0 million aggregate principal amount of 4.0% senior notes due 2029, or the Senior Notes, in a private offering. The Senior Notes were issued pursuant to an Indenture, dated as of March 11, 2021, by and among our company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee. The Senior Notes requires bi-annual interest only payments in June and December of each year. For the three months ended September 2024, we did not pay any interest on the Senior Notes.
Current wording
Senior Notes. In March 2021, we completed an offering of $400.0 million aggregate principal amount of 4.0% senior notes due 2029, or the Senior Notes, in a private offering. The Senior Notes were issued pursuant to an Indenture, dated as of March 11, 2021, by and among our company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee. The Senior Notes requires bi-annual interest only payments in June and December of each year. For the six months ended December 2024, we paid interest expense of $8.0 million on the Senior Notes.
Previous wording
Bank Credit Facility. On March 16, 2023, we entered into the Second Amendment, and on July 28, 2023, we entered into the Third Amendment to our Credit Agreement, dated March 11, 2021. The Second Amendment replaces the LIBOR-based interest rate applicable to borrowings under the Credit Agreement with SOFR-based interest rate. The Third Amendment provides that the consolidated interest coverage ratio financial covenant only applies if, as of the last day of any fiscal quarter, our aggregate cash and cash equivalents balance is less than $450.0 million. The Credit Agreement provides for a revolving credit facility in a principal amount of up to $250.0 million, which includes a $20.0 million sublimit for letters of credit and a $25.0 million sublimit for swingline loans. Under the terms of the Credit Agreement, we may, subject to the satisfaction of certain conditions, request increases in the revolving credit facility commitments in an aggregate principal amount of up to $150.0 million to the extent existing or new lenders agree to provide such increased or additional commitments, as applicable. Future proceeds under the revolving credit facility are available for working capital and general corporate purposes. As of September 2024, there was no balance outstanding under the revolving credit facility.
Current wording
Bank Credit Facility. On November 21, 2024, we entered into the Fourth Amendment to our Credit Agreement. The Fourth Amendment extends the maturity date of the Credit Agreement and, among other things, increases the revolving commitments from $250.0 million to $350.0 million. Under the terms of the Fourth Amendment we may, subject to the satisfaction of certain conditions, request increases in the revolving credit facility commitments in an aggregate principal amount of up to $170.0 million. Future proceeds under the revolving credit facility are available for working capital and general corporate purposes. As of December 2024, there was no balance outstanding under the revolving credit facility.
Previous wording
Working Capital Needs. We believe our existing cash and cash equivalents, anticipated cash flows from operating activities, anticipated cash flows from financing activities, and available credit under our revolving credit facility, will be sufficient to meet our working capital and other cash requirements, including small tuck-in acquisitions, and our debt service obligations for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue, the timing and extent of spending to support product development efforts, costs associated with restructuring activities net of projected savings from those activities, costs related to protecting our intellectual property, the expansion of sales and marketing activities, timing of introduction of new products and enhancements to existing products, costs to ensure access to adequate manufacturing, costs of maintaining sufficient space for our workforce, the continuing market acceptance of our product solutions, our common stock repurchase program, and the amount and timing of our investments in, or acquisitions of, other technologies or companies. Further equity or debt financing may not be available to us on acceptable terms. If sufficient funds are not available or are not available on acceptable terms, our ability to fund our future long-term working capital needs, take advantage of business opportunities or to respond to competitive pressures could be limited or severely constrained.
Current wording
Working Capital Needs. We believe our existing cash and cash equivalents, anticipated cash flows from operating activities, anticipated cash flows from financing activities, and available credit under our revolving credit facility, will be sufficient to meet our working capital and other cash requirements, and our debt service obligations for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue, the timing and extent of spending to support product development efforts, costs associated with restructuring activities net of projected savings from those activities, costs related to protecting our intellectual property, the expansion of sales and marketing activities, timing of introduction of new products and enhancements to existing products, costs to ensure access to adequate manufacturing, costs of maintaining sufficient space for our workforce, the continuing market acceptance of our product solutions, our common stock repurchase program, and the amount and timing of our investments in, or acquisitions of, other technologies or companies. Further equity or debt financing may not be available to us on acceptable terms. If sufficient funds are not available or are not available on acceptable terms, our ability to fund our future long-term working capital needs, take advantage of business opportunities or to respond to competitive pressures could be limited or severely constrained.
Previous wording
(1)Represents the principal and interest payable through the maturity date of the underlying contractual obligation.
Current wording
(1)Represents the interest and principal payable through the maturity date of the underlying contractual obligation.
Previous wording
The amounts in the table above exclude gross unrecognized tax benefits related to uncertain tax positions of $44.6 million. As of September 2024, we were unable to make a reasonably reliable estimate of when cash settlement with a taxing authority may occur in connection with our gross unrecognized tax benefit.
Current wording
The amounts in the table above exclude gross unrecognized tax benefits related to uncertain tax positions of $44.4 million. As of December 2024, we were unable to make a reasonably reliable estimate of when cash settlement with a taxing authority may occur in connection with our gross unrecognized tax benefit.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net revenue was $524.9 million for the six months ended December 2024, compared with $474.7 million for the six months ended December 2023, an increase of $50.2 million, or 10.6%. Of this net revenue, $306.7 million, or 58.4%, was from Enterprise and Automotive product applications, $97.5 million, or 18.6%, was from Mobile product applications, and $120.7 million, or 23.0%, was from Core IoT product applications. Revenue increased in most of our product applications for the six months ended December 2024. Net revenue from Core IoT product applications increased due to an increase in units sold (which increased 47.8%), as well as a increase in average selling prices (which increased 7.4%) due to our product sales mix compared to the same period a year ago. Net revenue from Enterprise and Automotive product applications increased as a result of a increase in units sold (which increased 9.8%), and an increase in average selling prices (which increased 6.8%) due to our product sales mix compared to the same period a year ago. The increase in revenue from Enterprise and Automotive product applications was partially offset by a decrease of $30.0 million in revenue from the licensing of certain of our IP. Net revenue from Mobile product applications decreased due to a decrease in units sold (which decreased 6.5%), and a decrease in average selling prices (which decreased 8.2%), as overall demand decreased for our products in the mobile market compared to the same period a year ago. The decrease in revenue from Mobile product applications was partially offset by an increase of $4.5 million in revenue from the licensing of certain of our IP.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Many of our customers have manufacturing operations in China, and many of our OEM customers have established design centers in Asia. With our global presence, including offices in China, France, Germany, Hong Kong,