Synaptics Inc. (SYNA) saw its stock surge by nearly 7% in pre-market trading on November 8, 2024, driven by the company's impressive first-quarter fiscal 2025 earnings results and a promising growth outlook for its Core Internet of Things (IoT) business.
The semiconductor company reported an 8% year-over-year increase in revenue to $257.7 million, fueled by a remarkable 55% surge in its Core IoT product sales. This robust growth in the IoT segment highlights Synaptics' strong positioning in this rapidly expanding market.
Furthermore, Synaptics' profitability soared, with non-GAAP earnings per share (EPS) jumping 56% year-over-year to $0.81. The company's strong financial performance was underpinned by improved gross and operating margins, reflecting its operational efficiency and ability to capitalize on growth opportunities.
Investors were particularly encouraged by the company's Core IoT design pipeline, which has grown nearly 30% since the previous year. This pipeline supports a compounded revenue growth of 25% to 30% over the next five years, indicating significant potential for the Core IoT segment.
Additionally, Synaptics announced that it is on track to sample its first Wi-Fi 7 device designed specifically for the IoT market later this quarter. This positions the company as a potential leading player in the emerging Wi-Fi 7 market for IoT applications.
Synaptics also unveiled plans to return a portion of its cash to shareholders through share repurchases, reflecting its strong financial health and confidence in its future prospects.
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