SYNAPTICS Inc
For the period ended Mar 29, 2025. Filed May 8, 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.
Mar 29, 2025 · Filed May 8, 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 2024-12-28; filed 2025-02-06.
0000817720-25-000011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-29; filed 2025-05-08.
0000817720-25-000041
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 71 previous paragraphs and 84 current paragraphs.
37 unchanged; 27 reworded; 18 added; 7 removed; 0 previous and 2 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 (18)
Current report
Intangible asset impairment charges during the third quarter of fiscal 2025 were $13.8 million. We recorded an impairment charge related to a license of certain intellectual property. See Note 8. Goodwill and Acquired Intangible Assets in the notes to the consolidated financial statements for additional information.
Current report
Acquisitions
Current report
Broadcom Mobile Android Wi-Fi Business
Current report
On January 19, 2025, we entered into definitive asset purchase agreements with Broadcom to acquire certain assets and obtain non-exclusive licenses relating to, Broadcom’s existing Mobile Android Wi-Fi Business in the IoT market, for an aggregate consideration of $198.0 million in cash, which closed on January 30, 2025. We also entered into transition agreements with Broadcom, under which both parties will provide one another with certain transition services (including one year inventory supply agreement in which Broadcom will facilitate Synaptics to place purchase orders with respective suppliers). For further discussion of the Broadcom Mobile Android Wi-Fi Business acquisition, see Note 4. Acquisitions, included in the consolidated financial statements contained elsewhere in this report.
Current report
We acquired these set of assets from Broadcom in order to solidify our leadership position for end-to-end AI
Current report
Internet of Things (IoT) connectivity and expand our ability to service the Android™ ecosystem. As part of the
Current report
transaction, we expand our portfolio of Wi-Fi 8 combination devices that include advanced Bluetooth features, additional
Current report
Wi-Fi 7 combination devices, ultrawide band intellectual property (which we can integrate into future IoT devices), and
Current report
combination front-end modules. This transaction expands our field of use, allowing all our Wi-Fi products to compete in
Current report
AR/VR, Android smartphones and consumer audio markets. As a result of this transaction, we expect to generate over
Current report
$40.0 million in annualized sales in our Core IoT product category.
Current report
Macroeconomic Conditions and Regulations
Current report
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. We continue to monitor changes in international trade policies, particularly increased tariffs and other barriers or restrictions between the United States and other countries, including China. Our current operations suggest limited tariff exposure given our current import and export practices. However, some of our customers and suppliers may be impacted by evolving tariff regimes depending on their own supply chain strategies and sourcing locations. We continue to monitor for any potential customer and supplier impacts, ranging from supply chain realignments to changes in end demand. While the broader implications of these activities remain uncertain, based on our current lead times and order activity, we are not seeing unusual activity that would suggest material pull-in or push-out of orders due to tariffs that would be likely to impact our near-term financial performance. We will continue to assess the short- and long-term effects of these international trade policies and restrictions on our financial and operational performance.
Current report
Intangible asset impairment charge. Intangible asset impairment reflects an impairment charge of $13.8 million related to a license of certain intellectual property. See Note 8. Goodwill and Acquired Intangible Assets in the notes to the consolidated financial statements for additional information on intangible asset impairment charge.
Current report
Interest expense of $34.3 million for the nine months ended March 2025, decreased by $14.5 million compared to the same period a year ago and was primarily driven by the early repayment of the Term Loan Facility in November 2024. During the nine months ended March 2025 and March 2024, the interest expense on the Term Loan facility was $19.2 million and $35.8 million, a decrease of $16.6 million year-over year. The Term Loan Facility was repaid 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.
Current report
Cash Flows from Operating Activities. Our cash generated from operating activities primarily relate to cash collections from our customers, payments for inventory purchases and payments for employee- related expenditures.
Current report
Operating activities during the nine months ended March 2024 generated $70.9 million. For the nine months ended March 2024, the primary operating activities were adjustments for non-cash charges of $176.8 million and a net change in operating assets and liabilities of $23.2 million. The net change in operating assets and liabilities was primarily attributable to a $20.1 million decrease in accounts receivable primarily related to the normal variations in the timing of collections and billings, an $8.7 million decrease in gross inventories as we continue our efforts to control inventory investment while turning over the inventories we accumulated during the first half of fiscal 2023 and a $22.8 million increase in accounts payable due to the timing of payments made to our vendors, partially offset by a $20.3 million decrease in accrued compensation primarily related to the payment of our annual bonus in the first quarter of fiscal 2024 and a $46.9 million decrease in income taxes payable.
Current report
Cash Flows from Investing Activities. Cash used by investing activities during the nine months ended March 2025 and March 2024 was $289.0 million and $146.7 million, respectively. Net cash used in investing activities for the nine months ended March 2025 primarily related to $198.0 million we paid to acquire certain assets and obtain non-exclusive licenses relating to, Broadcom’s existing Mobile Android Wi-Fi Business in the IoT market and the purchase of $61.0 million in short-term investments.
Removed paragraphs (7)
Previous report
Current Economic Conditions
Previous report
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 report
The Israel-Hamas War
Previous report
Although our employees in our Israel office have the ability to work remotely and business continuity plans are in place to address any medium- or long-term disruptions that could result from the closure of this office, the office closure and general effects of employees operating in a region at war could have a negative impact on our operations. Further, a number of our employees in Israel are members of the military reserves who have been subject to activation in response to the war, and it is possible that these employees may be re-activated if the Israel-Hamas war continues or expands further throughout the Middle East region. While we also have business continuity plans in place to address the safety of our employees and continue product development in the event of reduced employee availability in the region during the war, it could affect the timing of projects in the short-term as work is shifted to other team members where necessary. If these conditions continue or worsen, they could adversely impact our future financial and operating results.
Previous 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.
Previous report
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 report
$100 Million Shelf Registration. We have registered an aggregate of $100.0 million of common stock and preferred stock for issuance in connection with acquisitions, which shares will generally be freely tradeable after their issuance under the Securities Act unless held by an affiliate of us, in which case such shares will be subject to the volume and manner of sale restrictions of Rule 144 of the Securities Act.
Reworded paragraphs (27)
Previous 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.
Current wording
This Quarterly Report on Form 10-Q for the quarter ended March 29, 2025 (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,” "commit," “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: macroeconomic uncertainties in the U.S. and globally, including those caused by trade tensions and tariffs, resulting in supply chain disruptions, inflation, and market volatility, which may adversely affect our products and those of our customers and suppliers, resulting in reduced customer demand, component availability constraints, cost increases (both to us and our customers), supply chain disruption, and stock price volatility; risks related to our continued 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; risks and uncertainty related to regional instabilities and hostilities (including the conflict in the Middle East), economic volatility, and regulatory changes, any of which could disrupt our supply chain, elevate our costs and undermine the competitiveness of our offerings, requiring operational adjustments, such as reductions in force, or otherwise adversely affecting our financial condition…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Our research and development expenses include costs for supplies and materials related to product development, as well as the engineering costs incurred to design ASICs and human experience solutions for OEM customers prior to and after our OEMs’ commitment to incorporate those solutions into their products. In addition, we expense in-process research and development projects acquired as part of a business acquisition, which have not yet reached technological feasibility, and which have no foreseeable alternative future use. We continue to commit to the technological and design innovation required to maintain our position in our existing markets, and to adapt our existing technologies or develop new technologies for new markets.
Current wording
Our research and development expenses include costs for supplies and materials related to product development, as well as the engineering costs incurred to design ASICs and human experience solutions for OEM customers prior to and after our OEMs’ commitment to incorporate those solutions into their products. We continue to commit to the technological and design innovation required to maintain our position in our existing markets, and to adapt our existing technologies or develop new technologies for new markets.
Previous 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.
Current wording
There have been no significant changes in our critical accounting policies and estimates during the nine months ended March 2025, 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
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.
Current wording
Net revenue was $266.6 million for the three months ended March 2025, compared with $237.3 million for the three months ended March 2024, an increase of $29.3 million, or 12.3%. Of this net revenue, $153.8 million, or 57.7%, was from Enterprise and Automotive product applications, $45.3 million, or 17.0%, was from Mobile product applications, and $67.5 million, or 25.3%, was from Core IoT product applications. Revenue increased in most of our product applications for the three months ended March 2025. Net revenue from Core IoT product applications increased due to an increase in units sold (which increased 18.1%), as well as an increase in average selling prices (which increased 20.8%) 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 9.2%) as well as an increase in average selling prices (which increased 4.6%) due to our product sales mix. Net revenue from Mobile product applications decreased due to a decrease in units sold (which decreased 10.8%) as well as a decrease in average selling prices (which decreased 8.2%), as overall demand decreased for our products in the mobile market.
Previous wording
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.
Current wording
Net revenue was $791.5 million for the nine months ended March 2025, compared with $712.0 million for the nine months ended March 2024, an increase of $79.5 million, or 11.2%. Of this net revenue, $460.5 million, or 58.2%, was from Enterprise and Automotive product applications, $142.8 million, or 18.0%, was from Mobile product applications, and $188.2 million, or 23.8%, was from Core IoT product applications. Revenue increased in most of our product applications for the nine months ended March 2025. Net revenue from Core IoT product applications increased due to an increase in units sold (which increased 35.9%), as well as an increase in average selling prices (which increased 12.3%) 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 9.6%), and an increase in average selling prices (which increased 6.1%) 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 8.1%), and a decrease in average selling prices (which decreased 7.6%), 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.
Previous wording
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 wording
Gross margin as a percentage of net revenue was 43.4%, or $115.8 million, for the three months ended March 2025, compared with 46.5%, or $110.3 million, for the three months ended March 2024. The net 310 basis point decrease in gross margin for the three months ended March 2025 was primarily due to the increase in amortization of acquisition-related intangibles on the intangible assets we acquired from Broadcom in the third quarter of fiscal 2025.
Previous 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.
Current wording
Gross margin as a percentage of net revenue was 45.3%, or $358.9 million, for the nine months ended March 2025, compared with 45.8%, or $326.4 million, for the nine months ended March 2024. The net 50 basis point decrease in gross margin for the nine months ended March 2025 was primarily due to the increase in amortization of acquisition-related intangibles on the intangible assets we acquired from Broadcom in the third quarter of fiscal 2025.
Previous wording
Because we sell our technology solutions in designs that are generally unique or specific to an OEM customer’s application, gross margin varies on a product-by-product basis, making our cumulative gross margin a blend of our product specific designs. As a fabless manufacturer, our gross margin percentage is generally not materially impacted by our shipment volume. Under most circumstances, revenue from license-based arrangements are accretive to our gross margin.
Current wording
Because we sell our technology solutions in designs that are generally unique or specific to an OEM customer’s application, gross margin varies on a product-by-product basis, making our cumulative gross margin a blend of our product specific designs. As a fabless manufacturer, our gross margin percentage is generally not materially impacted by our shipment volume. Under most circumstances, revenue from license-based arrangements is accretive to our gross margin.
Previous wording
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 wording
Research and Development Expenses. Research and development expenses increased $5.2 million to $88.6 million for the three months ended March 2025, compared with $83.4 million for the three months ended March 2024. The increase in research and development expenses was primarily driven by a $5.3 million increase in variable compensation related to our bonus accrual, $3.5 million increase in stock-based compensation charges primarily related to awards issued to the workforce we acquired from Broadcom in the third quarter of fiscal 2025, partially offset by a $5.2 million decrease in wages and related costs as a result of the restructuring actions initiated during fiscal 2024 and 2025.
Previous 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.
Current wording
Research and Development Expenses. Research and development expenses increased $1.3 million to $253.2 million for the nine months ended March 2025, compared with $251.9 million for the nine months ended March 2024. The increase in research and development expenses was primarily driven by a $14.5 million increase in variable compensation related to our bonus accrual, partially offset by a $13.6 million decrease in 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 $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 wording
Selling, General, and Administrative Expenses. Selling, general, and administrative expenses decreased $5.8 million to $34.7 million for the three months ended March 2025, compared with $40.5 million for the three months ended March 2024. The decrease in selling, general, and administrative expenses was primarily driven by a decrease of $12.9 million in stock-based compensation charges primarily related to forfeitures from the departure of certain executive officers during the third quarter of fiscal 2025, partially offset by a $3.2 million increase in variable compensation related to bonus accrual and a $1.9 million increase in professional service fees associated with the Broadcom transaction we executed in the third quarter of fiscal 2025.
Previous 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.
Current wording
Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $11.7 million to $134.2 million for the nine months ended March 2025, compared with $122.5 million for the nine months ended March 2024. The increase in selling, general, and administrative expenses was primarily driven by a $8.8 million increase in variable compensation related to our bonus accrual, a $6.4 million increase in professional service fees related to the Broadcom transaction we executed in the third quarter of fiscal 2025 and the refinancing of our Term Loan B in the second quarter of fiscal 2025, a $2.4 million unfavorable impact from exchange rates on foreign currencies, partially offset by a $8.3 million decrease in stock-based compensation charges primarily related to net forfeitures relating to the departure of certain executive officers from the Company compared to the same period a year ago.
Previous 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.
Current wording
Acquired Intangibles Amortization. Amortization of acquisition-related intangibles increased $0.5 million, or 12.5% for the three months ended March 2025 compared to the same period a year ago, which is primarily related to the amortization on customer relationship and favorable supply contract intangible assets we acquired from Broadcom during the third quarter of fiscal 2025. Amortization of acquisition-related intangibles decreased $1.3 million, or 9.7%, for the nine months ended months ended March 2025, compared to the same periods a year ago. The decrease is primarily related to the amortization of customer related intangible assets and acquired trademarks which were fully amortized by the end of fiscal 2024, partially offset by an increase of $0.6 million in amortization on the customer relationship intangible asset we acquired from Broadcom during the third quarter of fiscal 2025.
Previous wording
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 wording
Interest and Other Income. Interest and other income of $4.6 million decreased by $5.7 million for the three months ended March 2025, compared to the same period 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 and Broadcom acquisition in January 2025.
Previous 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.
Current wording
Interest expense. Interest expense primarily includes interest on our debt and amortization of debt issuance costs. Interest expense of $5.7 million for the three months ended March 2025, decreased by $10.5 million compared to the same period a year ago, which was primarily driven by the early repayment of the Term Loan Facility in November 2024. During the three months ended March 2024, the interest expense on the Term Loan facility was $11.9 million. The Term Loan Facility was repaid 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, 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.
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 latest legislation and our current estimate, Pillar Two had no impact on our effective tax rate or cash flows for the first nine 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 $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).
Current wording
Our cash and cash equivalents were $360.4 million and $876.9 million as of March 2025 and June 2024, respectively, representing a decrease of $516.5 million. The decrease in cash and cash equivalents during nine months ended March 2025 was driven by cash used in financing activities of $313.0 million related to full repayment of our Term Loan Facility, repurchases of our common stock, partially offset by net proceeds from the issuance of the 2031 Notes (as defined below) and cash used in investing activities of $289.0 million primarily related to our asset purchase agreement with Broadcom.
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 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.
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 March 2025, $254.1 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 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.
Current wording
Cash provided by operating activities during the nine months ended March 2025 was $84.8 million compared with cash provided by operating activities of $70.9 million during same period a year ago. For the nine months ended March 2025, the primary operating activities were adjustments for non-cash charges of $161.0 million and net cash outflows of $33.1 million from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities relate to a decrease in income taxes payable primarily related to tax payments of approximately $43.0 million made to various tax jurisdictions and a decrease in accounts receivable primarily related to the timing of collections and billings, offset by an increase of $19.1 million in accrued compensation primarily related to the accrual of our annual bonus and an increase of $17.5 million in net inventories. Our inventory levels will vary based on the availability of supply and the impact of variations between forecasted and actual demand.
Previous wording
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 wording
During the three months ended March 2025 and March 2024, our days sales outstanding was 45 days and 55 days, respectively. Our annual inventory turns stayed consistent at four during the three months ended March 2025 and March 2024.
Previous wording
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 wording
Cash used in investing activities during the nine months ended March 2024 was $146.7 million. Net cash used in investing activities for the nine months ended March 2024 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 $26.1 million for purchases of property and equipment, partially offset by $26.0 million in proceeds from the maturities of our short-term investments.
Previous wording
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 wording
Cash Flows from Financing Activities. Cash used by financing activities for the nine months ended March 2025 and March 2024 was $313.0 million and $20.4 million, respectively. Net cash used by financing activities for the nine months ended March 2025 consisted of $583.5 million used to repay the remaining outstanding balance of our Term Loan Facility, $112.3 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.
Previous 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.
Current wording
Cash used in financing activities during thenine months ended March 2024 was$20.4 million. Net cash used by financing activities for the nine months ended March 2024 consisted of $33.7 million used for payroll taxes on the delivery of the underlying shares for share-based awards, partially offset by $15.9 million 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 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.
Current wording
Common Stock Repurchase Program. As of April 2023, our board of directors 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 March 2025, we purchased, net of issuances for settlement of our convertible notes, 31,649,301 shares of our common stock in the open market for an aggregate cost of $990.3 million. During the nine months ended
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 six months ended December 2024, we paid interest expense of $8.0 million 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 nine months ended March 2025, we paid interest expense of $8.0 million on the Senior Notes.
Previous wording
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 wording
The net proceeds from the 2031 Notes were approxim ately $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.
Previous 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.
Current wording
The amounts in the table above exclude gross unrecognized tax benefits related to uncertain tax positions of $44.7 million. As of March 2025, 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 (2)
Current report — wording carried from elsewhere
Interest and other income of $23.0 million for the nine months ended March 2025 decreased by $8.4 million, compared to the same period a year ago, which was primarily driven by an overall decrease in interest rates and a decrease in 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 and Broadcom acquisition in January 2025.
Current report — wording carried from elsewhere
March 2025, we repurchased 1,532,862 shares of our common stock in the open market for an aggregate cost of $112.3 million. As of March 2025, the remaining available authorization under our common stock repurchase program was $781.6 million.