SYNAPTICS Inc

1. Description of Business

We are a leading worldwide developer and fabless supplier of premium mixed signal semiconductor solutions designed to enable people to engage with connected devices and data, and create exceptional experiences throughout the home, at work, in the car and on the go. We provide our customers with sensing, processing and connecting solutions, which represent the three foundational elements of the Internet of Things (“IoT”). We supply connectivity, sensors and AI-enhanced processor solutions to original equipment manufacturers (“OEMs”) that design IoT products and devices for automobiles, enterprise workspace devices, virtual reality, smartphones, tablets and notebook computers.

2. Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, the "SEC", and United States generally accepted accounting principles, "U.S. GAAP." Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to SEC rules and regulations. In our opinion, the financial statements include all adjustments, which are of a normal and recurring nature and necessary for the fair presentation of the results of the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future period. These financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended June 28, 2025.

The condensed consolidated financial statements include our financial statements and those of our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated upon consolidation. Certain reclassifications have been made to the amounts for prior years in order to conform to the current year’s presentation.

Our fiscal year is the 52- or 53-week period ending on the last Saturday in June. Our fiscal 2026 and 2025 are 52-week periods ending June 27, 2026, and June 28, 2025, respectively. The fiscal periods presented in this report are 13-week periods and 39-week periods for the three and nine months periods ended March 28, 2026, and March 29, 2025, respectively. For simplicity, the accompanying condensed consolidated financial statements have been shown as ending on calendar quarter end dates as of and for all periods presented, unless otherwise indicated.

Significant Accounting Policies

There have been no material changes to our significant accounting policies in Note 2 - Basis of Presentation and Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 28, 2025.

Accounting Pronouncements Recently Issued

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes: Improvements to Income Tax Disclosures.” This guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and disclosures of income taxes paid by jurisdiction. We will adopt ASU 2023-09 on a prospective basis in the fourth quarter of fiscal 2026. The adoption of ASU 2023-09 is not expected to have a material effect on our consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Disaggregation of Income Statement Expenses.” This guidance requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. This amendment is effective for our fiscal year ending June 2028 and our interim periods within the fiscal year ending June 2029. We are currently assessing the impact of this guidance on our disclosures.

3. Supplemental Financial Statement Information

Accounts receivable, net

Inventories

Non-current other assets

Accrued liabilities

(1) Amounts include deferred revenue, price discounts and stock rotation rights.

(2) As of March 2026, other accrued liabilities include a $25.0 million license fee payable to a third party. No such amount was payable at June 2025.

4. Net Loss Per Share

The computation of basic and diluted net loss per share was as follows:

The following potentially dilutive securities were excluded from the computation of diluted net loss per share as their effect would have been antidilutive:

5. Prepayment of Intangible Assets

During fiscal 2025, we entered into definitive asset purchase agreements with Broadcom Inc. ("Broadcom") to acquire certain assets and obtain non-exclusive licenses relating to Broadcom’s Wi-Fi Business in the IoT market for aggregate consideration of $200.3 million. As of March 2026, we have not receivedsix roadmap technology intangible assets, which are expected to be delivered at various dates through May 2028. Accordingly, the balance of $96.8 million, which represents the value of those technology intangible assets not yet received, is presented within non-current other assets in our condensed consolidated balance sheets.

6. Cash and Cash Equivalents and Short-Term Investments

The following table summarizes our cash and cash equivalents by category at March 2026 and June 2025:

7. Fair Value Measurements

At March 2026 and June 2025, financial assets measured at fair value on a recurring basis are summarized below:

Our Level 1 financial instruments are traded in active markets, and the fair value is based on quoted market prices for identical instruments. The fair value of our Level 2 fixed income securities is obtained from an independent pricing service, which may use quoted market prices for identical or comparable instruments or model driven valuations using observable market data or inputs corroborated by observable market data. Our marketable securities are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models. We did not have any financial assets requiring Level 3 measurement in the periods presented.

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

We report our financial instruments at fair value with the exception of the 2029 Notes and the 2031 Notes (or collectively with the 2029 Notes, the "Notes," each as defined in Note 9. Debt and Revolving Credit Facility). The estimated fair value of the Notes was determined based on the trading prices of the Notes as of the last day of trading for the periods presented. We use Level 2 measurement criteria to determine the fair value of our Notes as they are not actively traded in markets.

The carrying amounts and estimated fair values of the Notes were as follows for the periods presented:

8. Goodwill and Acquired Intangibles, Net

Goodwill

The following table represents the change in our goodwill balance for the nine and twelve month periods ended March 2026 and June 2025, respectively:

Acquired Intangibles, Net

The following table summarizes the net carrying amounts, excluding fully amortized intangible assets:

The following table presents details of amortization for the periods presented:

The following table presents the estimated future amortization expense associated with our finite-lived intangible assets as of March 2026:

9. Debt and Revolving Credit Facility

Our total debt outstanding consisted of the following:

2031 Convertible Senior Notes

On November 19, 2024, and November 26, 2024, we issued and sold $400.0 million and $50.0 million, respectively, in aggregate principal amounts of unsecured 0.75% Convertible Senior Notes due 2031 (“2031 Notes”) in a private placement.

Contractual interest expense and amortization of debt issuance costs on the 2031 Notes were as follows:

2029 Notes

In March 2021, we issued $400.0 million in aggregate principal amount of senior notes due June 15, 2029 (“2029 Notes”).

Contractual interest expense and amortization of debt issuance costs on the 2029 Notes were as follows:

Term Loan Facility

In December 2021, we entered into a first amendment and lender joinder agreement to our credit agreement, to, among other things, establish a new $600.0 million incremental term loan facility (“Term Loan Facility”). The Term Loan Facility was repaid entirely in the second quarter of fiscal 2025 and, accordingly, there wasno interest expense and amortization of debt issuance costs thereon during the three months ended March 2025. For the nine months ended March 2025, contractual interest expense and amortization of debt issuance costs on the Term Loan Facility was $19.2 million.

Revolving Credit Facility

We have $350.0 million available under a revolving credit agreement, as amended (“Revolving Credit Facility”), with a maturity date to be the earlier of (i) November 21, 2029, and (ii) ninety-one (91) days prior to any maturity of the 2029 Notes. Additionally, the Revolving Credit Facility provides a $25.0 million sublimit for letters of credit and a $25.0 million sublimit for swingline loans. As of March 2026, there was no balance outstanding under the Revolving Credit Facility.

The Revolving Credit Facility bears interest, at our election, at a Base Rate plus an Applicable Margin or Adjusted Term SOFR, as defined in the Revolving Credit Facility agreement. We are required to pay a commitment fee on any unused commitments which is determined on a leverage-based sliding scale ranging from 0.175% to 0.25% per annum. The unused commitment fees on the Revolving Credit Facility and amortization of issuance costs thereon were $0.3 million for each of the three months ended March 2026 and March 2025, and were $1.2 million and $0.7 million for the nine months ended March 2026 and March 2025, respectively.

The Revolving Credit Facility contains various restrictive covenants, includingtwo financial covenants which limit the consolidated total net leverage ratio and the consolidated net interest coverage ratio. As of March 2026, we remain in compliance with the restrictive covenants.

Maturities

As of March 2026, principal maturities of our Notes were as follows:

10. Leases

As of March 2026 and June 2025, the components of leases are as follows:

Supplemental cash flow information related to leases is as follows:

As of March 2026, the weighted average remaining lease term was 5.43 years, and the weighted average discount rate was 5.21%.

For the three months ended March 2026 and March 2025, we recorded operating lease expense of $3.3 million and $3.1 million, respectively. For the nine months ended March 2026 and March 2025, we recorded operating lease expense of $9.6 million and $9.6 million, respectively. Our short-term leases are immaterial, and we do not have finance leases.

Future minimum lease payments for the operating lease liabilities were as follows:

11. Indemnifications and Contingencies

Indemnifications

In connection with certain agreements, we are obligated to indemnify the counterparty against third party claims alleging infringement of certain intellectual property rights. We have received in the past, and may receive in the future, notices from third parties that claim our products infringe their intellectual property rights. We cannot be certain that our technologies and products do not, and will not, infringe issued patents or other proprietary rights of third parties. Any infringement claims, with or without merit, could result in significant litigation costs and diversion of management and financial resources, including the payment of damages, which could have a material adverse effect on our business, financial condition and results of operations. We accrue for liabilities arising from indemnifications when it is both probable that we will incur the loss and we can reasonably estimate the amount of the loss or range of loss.

We have also entered into indemnification agreements with our officers and directors. Maximum potential future payments under these agreements cannot be estimated because these agreements generally do not have a maximum stated liability. However, historical costs related to these indemnification provisions have not been significant.

Legal Proceedings

From time to time, we are subject to various claims and legal proceedings, either asserted or unasserted, that arise in the ordinary course of business. We accrue for loss contingencies when it is both probable that we will incur the loss and we can reasonably estimate the amount of the loss or range of loss. While we currently believe that resolving claims against us, individually or in the aggregate, will not have a material adverse impact on our business, financial condition or results of operations, these matters are subject to inherent uncertainties, and our view of these matters may change in the future.

12. Common Stock Share-Based Compensation

Stock Repurchase Program

We have a Board-approved stock repurchase program authorizing repurchases of up to $150.0 million of our common stock. This program does not have an expiration date; however, we will periodically review the authorization to assess its continued appropriateness in light of our capital allocation priorities and market conditions. The number of shares repurchased and the timing of repurchases depend on the level of our cash balances, general business and market conditions and other factors, including alternative investment opportunities.

During the three and nine months ended March 2026, we repurchased $39.0 million and $82.6 million of our common stock, respectively, and $67.4 million remains available for future stock repurchases under the stock repurchase program.

Share-Based Compensation

Share-based compensation recognized in our condensed consolidated statements of operations was as follows:

Share-Based Compensation Plan Activity

Restricted Stock Units (RSUs)

RSUs granted generally vest ratably overtwo tothree years from the vesting commencement date. RSU activity was as follows:

The unrecognized share-based compensation cost of our outstanding RSUs was approximately $172.8 million as of March 2026, which will be recognized over a weighted average period of approximately 1.81 years.

Market Stock Units (MSUs)

MSU activity was as follows:

The unrecognized share-based compensation cost of our outstanding MSUs was approximately $13.8 million as of March 2026, which will be recognized over a weighted average period of approximately 1.69 years.

Performance Stock Units (PSUs)

PSU activity was as follows:

The unrecognized share-based compensation cost of our outstanding PSUs was approximately $11.8 million as of March 2026, which will be recognized over a weighted average period of approximately 0.97 years.

Employee Stock Purchase Plan

Shares purchased, weighted average purchase price, cash received, and the aggregate intrinsic value for employee stock purchase plan purchases during the nine months ended March 2026, were as follows:

13. Income Taxes

We account for income taxes under the asset and liability method. The provision for income taxes recorded in interim periods is based on our estimate of the annual effective tax rate applied to year-to-date income before provision for income taxes, adjusted for discrete items required to be recognized in the period in which they are incurred. In each quarter, we update our estimate of the annual effective tax rate, and if the estimated annual tax rate changes, we make a cumulative adjustment in that quarter. Our quarterly tax provision and our quarterly estimate of the annual effective tax rate can be subject to volatility due to several factors, including our ability to accurately forecast annual income before provision for income taxes in each of the tax jurisdictions in which we operate.

The benefit from income taxes of $7.2 million and $12.0 million for the three and nine months ended March 2026, respectively, represented estimated federal, foreign, and state income taxes. The effective tax rate for the three and nine months ended March 2026 diverged from the combined U.S. federal and state statutory tax rate primarily due to the benefits from foreign-derived deduction eligible income, research and development tax credits, and foreign income taxed at lower rates, partially offset by non-deductible share-based compensation and non-deductible officer compensation.

The effective tax rate for the three months ended March 2025 is closely aligned with the combined U.S. federal and state statutory tax rate. The slight variance primarily results from non-deductible share-based compensation, partially offset by foreign income taxed at lower rates. The effective tax rate for the nine months ended March 2025 diverged from the combined U.S. federal and state statutory tax rate primarily due to one-time tax benefits recorded during the six months ended December 2024, including a $14.1 million deferred tax benefit from a U.S. “check-the-box” election for our Israel subsidiary, and an $8.9 million benefit related to the fiscal 2018 deemed repatriation liability under the U.S. Tax Cuts and Jobs Act, or TCJA, following a U.S. Tax Court decision in Varian Medical Systems, Inc. v. Commissioner. The divergence also reflects a deferred tax benefit from an inventory transfer and foreign income taxed at lower rates. These benefits were partially offset by non-deductible share-based compensation and non-deductible officer compensation.

The total liability for gross unrecognized tax benefits related to uncertain tax positions decreased $0.6 million during the nine months ended March 2026, to $44.1 million, and was included in other long-term liabilities on our condensed consolidated balance sheets. If recognized, the total gross unrecognized tax benefits would reduce the effective tax rate on income from continuing operations. Accrued interest and penalties related to unrecognized tax benefits as of March 2026 were $4.5 million; this balance increased by $0.3 million compared to June 2025. We classify interest and penalties as components of income tax expense. Any prospective adjustments to our unrecognized tax benefits will be recorded as an increase or decrease to income tax expense and cause a corresponding change to our effective tax rate. Accordingly, our effective tax rate could fluctuate materially from period to period.

Our major tax jurisdictions are the United States, Hong Kong SAR, Japan, Israel and the United Kingdom. From fiscal 2018 onward, we remain subject to examination by one or more of these jurisdictions.

14. Revenue

The majority of our revenue is generated from product shipments to our customers. A summary of our product categories is as follows:

•Core IoT: Includes products for Wireless and Processor Solutions.

•Enterprise and Automotive: Includes products for PC Touch Pad, PC Fingerprint, Video Interface Solutions and Automotive Solutions.

•Mobile: Includes products for Touch and Display Solutions for Mobile phone applications.

Disaggregation of revenue

Net revenue by product category was as follows:

Net revenue by geographic region, based on the billing location of our customers, for the periods presented was as follows:

Net revenue by customer whose revenue represented 10% or more of our total net revenue for the periods presented was as follows:

*Less than 10%

At March 2026, four customers comprised a total of 48% of our accounts receivable, and three customers comprised a total of 45% of our accounts receivable at June 2025.

Our contract liabilities are comprised of deferred revenue and primarily relate to our obligation to transfer goods, services or licenses of our IP to customers for which we have received consideration. Contract liabilities were $8.0 million and $16.2 million as of March 2026 and June 2025, respectively, and are presented as part of customer-related liabilities in accrued liabilities in the accompanying condensed consolidated balance sheets. During the three months ended March 2025, we recognized $0.2 million in revenue related to contract liabilities outstanding as of the beginning of such period. We didnot recognize any such revenue during the three months ended March 2026. During the nine months ended March 2026 and March 2025, we recognized $10.1 million and $13.7 million, respectively, in revenue related to contract liabilities, which was outstanding as of the beginning of each period.

During the three months ended March 2026, we recognized an increase in net revenue of $8.9 million as a result of the change in estimated amount of variable consideration to which we were entitled based on the terms of our contracts. The significant change primarily was due to the resolution of a rebate arrangement with a customer that was under negotiation in prior periods and was formally concluded in the current period.

15. Segment and Other Information

Segment reporting

We operate inone segment — the development, marketing and sale of semiconductor products used in electronic devices and products. This determination is based on the management approach, which designates internal information regularly available to the chief operating decision maker (“CODM”) for making decisions and assessing performance as the source of determination of our reportable segment. Our CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis for the purpose of making operating decisions and assessing financial performance.

The CODM uses consolidated net income (loss), as reported in our consolidated statements of operations, as the measure of profit or loss to allocate resources and assess performance. Financial forecasts and budget-to-actual results used by the CODM to assess performance and allocate resources, as well as those used for strategic decisions related to headcount and capital expenditures, are also reviewed on a consolidated basis. The CODM considers the impact of the significant segment expenses in the tables below when deciding whether to reinvest profits or pursue strategic mergers and acquisitions.

The measure of segment assets is reported on the consolidated balance sheet as total assets. The CODM does not review segment assets at a level other than that presented in the accompanying consolidated balance sheets.

The following table presents the calculation of segment net loss as follows:

(1) Adjusted cost of revenue is cost of revenue adjusted for intangible asset amortization and share-based compensation as follows:

(2) Adjusted operating expenses is operating expenses comprised of research and development and selling, general and administrative expenses adjusted for share-based compensation, intangible asset amortization, restructuring and impairment related charges as follows:

(3) Other segment expenses primarily include restructuring charges, legal and vendor related charges and settlements, acquisition and integration related costs, amortization of debt issuance costs and loss on early extinguishment of debt.

16. Restructuring Activities

We continuously evaluate our operations to reduce costs and increase profitability, increase operational efficiencies and gain synergies from our previous acquisitions and align our business in response to market conditions.

A summary of restructuring costs as presented in our condensed consolidated statements of operations is as follows:

The following table presents the beginning and ending restructuring liability balances for each restructuring action:

(1) Lease termination costs of $0.8 million were recorded directly to the condensed consolidated statements of operations during the six months ended December 2025 and were not included in the restructuring liability balance above.

Fiscal 2026 Restructuring Plan

A restructuring plan was initiated during the first quarter of fiscal 2026 (“Fiscal 2026 Restructuring Plan”) to streamline and optimize resources and to reduce operating costs. Restructuring charges under this plan are mainly comprised of severance and one-time termination benefits. We completed all actions under this restructuring plan in the second quarter of fiscal 2026.

Fiscal 2025 Restructuring Plan

A restructuring plan was initiated during the first quarter of fiscal 2025 (“Fiscal 2025 Restructuring Plan”) primarily intended to focus on key growth initiatives, reduce costs and align our business in response to market conditions. Restructuring charges were mainly comprised of severance and one-time termination benefits and lease termination costs. As of the first quarter of fiscal 2026, all actions under the Fiscal 2025 Restructuring Plan have been completed.