Synaptics Incorporated (SYNA) Cash Flow Statement

The OCF/NI ratio of -0.15 in 2026Q4 reflects a massive one-time impairment or write-down that depressed net income, while operating cash flow stayed positive. Across the last ten quarters, net income totaled roughly -$250M, yet operating cash flow summed to approximately $340M, suggesting that earnings quality is heavily influenced by non-cash items like depreciation, amortization, and stock-based compensation. Investors should interpret the gap as a sign that the company's cash-generating ability is more resilient than the income statement suggests, but the reliance on non-cash adjustments warrants monitoring for sustainability.

The FCF trajectory shows a clear V-shaped recovery: from -$22.7M in 2024Q3 to $55.3M in 2026Q4, with the last three quarters averaging $27.8M. This recovery appears tied to the 11.4% year-over-year revenue growth and stable capex intensity around 4% of revenue, which is modest for a fabless semiconductor firm. However, the FCF margin of 18.0% remains below the 21.6% peak in 2024Q4, suggesting that while the trend is positive, it has not yet fully recovered to prior highs, and the negative net income in the same period indicates that FCF is not yet translating into shareholder earnings.

The capex-to-revenue ratio has remained tightly range-bound between 1.8% and 4.2%, with no significant step-up in investment despite the IoT and automotive pivot. This suggests that growth is being pursued through acquisitions and R&D rather than fixed asset expansion, as evidenced by the $198M acquisition in 2025Q3. The low capital intensity implies that free cash flow conversion should be structurally high, but the negative operating margins indicate that the real cost burden lies in operating expenses, not capex, which investors should factor into any valuation model.

The working capital line has been the most volatile component of operating cash flow, with positive contributions in only three of the last ten quarters. The negative swings in 2026Q1-Q3 (totaling -$101.8M) suggest that the company is building inventory or extending receivables to support the revenue growth, which may be a deliberate strategy to secure supply for design wins. However, the positive $13.7M in 2026Q4 hints at a normalization, but investors should monitor whether inventory obsolescence reserves become necessary given the rapid pace of technology change in the PC and mobile segments.

The buyback activity has been inconsistent, with $74.5M in 2025Q2 and $39M in 2026Q3, but no repurchases in 2025Q1 and 2024Q3, suggesting opportunistic use of cash rather than a committed return program. The $198M acquisition in 2025Q3, likely for IoT or automotive assets, underscores the capital deployment strategy focused on growth through M&A. Given the negative net income and the need to preserve cash for integration risks, the lack of dividends is unsurprising, but the buyback pace may be unsustainable if operating cash flow does not continue to improve.

The divergence between net income and operating cash flow is stark, with OCF exceeding net income by roughly $590M over the period. This gap is primarily attributable to stock-based compensation (averaging $31M per quarter), depreciation and amortization (averaging $34M per quarter), and one-time impairments, which are non-cash but reduce reported earnings. While this suggests that the company is generating real cash despite accounting losses, investors should be cautious: the reliance on SBC and D&A to bridge the gap means that cash flow quality is dependent on the sustainability of these non-cash adjustments, and the negative net income may signal underlying economic losses that cash flow temporarily masks.