What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-08-23 compared with 2023-08-18 · 323 added, 434 removed, 955 unchanged (44% of the section changed)

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Based on this evaluation, our Chief Executive Officer and Chief Financial Officer, as of June 29, 2024, concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for our company.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013 framework).

Based on our evaluation under the COSO 2013 framework and the satisfactory completion of the remediation actions described below, our management concluded that our internal control over financial reporting was effective, at the reasonable assurance level, as of June 24, 2023.

Based on our evaluation under the COSO 2013 framework, our management concluded that our internal control over financial reporting was effective, at the reasonable assurance level, as of June 29, 2024.

The effectiveness of our internal control over financial reporting, as of June 29, 2024, has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report included herein on page F-2.

Remediated Material Weakness

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

During the quarter ended June 24, 2023, the Company identified a material weakness in internal control related to the identification and monitoring of the sales reporting requirements of a single non-royalty bearing intellectual property license agreement.

The material weakness was primarily due to ineffective risk assessment related to identifying and analyzing risks and ineffective information and communication processes related to identifying and assessing the accuracy of the information used in reporting under certain non-royalty bearing intellectual property license agreements.

As a result of this lack of controls, an immaterial error in financial reporting was identified.

The Company has concluded that the material weakness described above was fully remediated as of June 24, 2023, due to the implementation of specific processes and controls to identify reporting requirements for non-royalty bearing intellectual property license agreements and to monitor the Company’s ongoing compliance with periodic sales reporting in accordance with the terms of such agreements.

These controls were tested and determined to be operating effectively as of June 24, 2023.

Changes in Internal Control Over Financial Reporting

Except for the identified material weakness and remediation described above under the heading “

Remediated Material Weakness ,”

there were no other changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 24, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal year ended June 29, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

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There were no items requiring reporting on Form 8-K that were not reported on Form 8-K during the fourth quarter of the year covered by this Form 10-K.

During the fiscal quarter ended June 29, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f), of the Securities Exchange Act of 1934) adopted , terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

DISCLOSURE REGA RDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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The information required by this Item relating to our executive officers is included in Item 1.

Business –

Information about our Executive Officers.

We have adopted a code of ethics that applies to our chief executive officer, chief financial officer, chief accounting officer, and other senior accounting personnel.

The “Code of Ethics for the CEO and Senior Financial Officers”

is located on our website at www.synaptics.com in the Investor Relations section under Corporate Governance.

Business – Information about our Executive Officers.

We have adopted a code of ethics that applies to our chief executive officer, chief financial officer, principal accounting officer, and other senior accounting personnel.

The “Code of Ethics for the CEO and Senior Financial Officers” is located on our website at www.synaptics.com in the Investor Relations section under Corporate Governance.

We intend to satisfy the disclosure requirement under Item 5.05(c) of Form 8-K regarding any amendment to, or waiver from, a provision of this code of ethics by posting such information on our website, at the address and location specified above.

EXECUTI VE COMPENSATION

The information required by this Item is incorporated herein by reference to the definitive Proxy Statement (particularly under the caption “Executive Compensation”) to be filed pursuant to Regulation 14A of the Exchange Act for our 2023 Annual Meeting of Stockholders.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OW NERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

and “Executive Compensation—Stock-Based Compensation Plan Information”) to be filed pursuant to Regulation 14A of the Exchange Act for our 2023 Annual Meeting of Stockholders.

The information required by this Item is incorporated herein by reference to the definitive Proxy Statement (particularly under the captions “Security Ownership of Principal Stockholders, Directors, and Officers” and “Executive Compensation—Stock-Based Compensation Plan Information”) to be filed pursuant to Regulation 14A of the Exchange Act for our 2024 Annual Meeting of Stockholders.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated herein by reference to the definitive Proxy Statement (particularly under the caption “Certain Relationships and Related Transactions”) to be filed pursuant to Regulation 14A of the Exchange Act for our 2023 Annual Meeting of Stockholders.

PRINCIPAL ACCOU NTANT FEES AND SERVICES

The information required by this Item is incorporated herein by reference to the definitive Proxy Statement (particularly under the caption “Ratification of Appointment of Independent Auditor”) to be filed pursuant to Regulation 14A of the Exchange Act for our 2023 Annual Meeting of Stockholders.

EXHIBITS AND FINA NCIAL STATEMENT SCHEDULES

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Incorporated by Reference

Agreement and Plan of Merger, dated July 17, 2020, by and among Synaptics Incorporated, DisplayLink Corp., Falcon Merger Sub, Inc., the sellers who became parties thereto and Shareholder Representative Services LLC

Quarterly Report on Form 10-Q

November 5, 2020

Agreement and Plan of Merger by and among DSP Group, Inc., Synaptics Incorporated and Osprey Merger Sub, Inc., dated as of August 30, 2021.

Quarterly Report on Form 10-Q

November 4, 2021

Certificate of Incorporation

Quarterly Report on Form 10-Q

February 21, 2002

Amended and Restated Certificate of Incorporation

Quarterly Report on Form 8-K

October 26, 2023

Certificate of Designation of Series A Junior Participating Preferred Stock

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August 2, 2010

Certificate of Amendment of Certificate of Incorporation of the registrant

Current Report on Form 8-K

December 7, 2004

Certificate of Amendment of Certificate of Incorporation of the registrant

Current Report on Form 8-K

October 22, 2010

Form of Common Stock Certificate

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September 12, 2002

Description of Registrant’s Securities

Annual Report on Form 10-K

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October 27, 2022

Amended and Restated 2019 Equity Inventive Compensation Plan

Current Report on Form 8-K

October 26, 2023

Form of Restricted Stock Unit Award Agreement under the 2019 Equity and Incentive Compensation Plan (for awards granted before July 27, 2021)

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November 1, 2019

Form of Market Stock Unit Award Agreement under the 2019 Equity and Incentive Compensation Plan

Registration Statement on Form S-8

November 1, 2019

Form of Restricted Stock Unit Award Agreement under the 2019 Equity and Incentive Compensation Plan (for awards granted after July 27, 2021)

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August 22, 2022

Form of Market Stock Unit Award Agreement under the 2019 Equity and Incentive Compensation Plan

Filed herewith

2019 Employee Stock Purchase Plan

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November 1, 2019

Amended and Restated 2010 Incentive Compensation Plan, as amended effective on October 30, 2018

Current Report on Form 8-K

November 1, 2018

Form of Non-Qualified Stock Option Agreement for 2010 Incentive Compensation Plan

Annual Report on Form 10-K

August 18, 2017

Form of Incentive Stock Option Agreement for 2010 Incentive Compensation Plan

Current Report on Form 8-K

October 22, 2010

Form of Deferred Stock Award Agreement for 2010 Incentive Compensation Plan

Annual Report on Form 10-K

August 18, 2017

Form of Deferred Stock Award Agreement for Market Stock Units for Amended and Restated 2010 Incentive Compensation Plan

Quarterly Report on Form 10-Q

February 8, 2018

Form of Deferred Stock Award Agreement for Performance Stock Units for Amended and Restated 2010 Incentive Compensation Plan

Quarterly Report on Form 10-Q

February 8, 2018

Change of Control Severance Policy for Principal Executive Officers

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November 17, 2019

Employment Offer Letter, dated October 7, 2019 between the registrant and Dean Butler

Employment Offer Letter, dated May 10, 2024, between the registrant and Ken Rizvi

Filed herewith

Employment Offer Letter, dated December 22, 2023 between the registrant and Lisa Bodensteiner

Quarterly Report on Form 10-Q

February 8, 2024

Employment Offer Letter, dated December 4, 2018 between the registrant and Saleel Awsare

Annual Report on Form 10-K

August 21, 2020

Employment Offer Letter, dated December 16, 2022, between the registrant and Vikram Gupta

Quarterly Report on Form 10-Q

February 8, 2024

Employment offer letter dated October 24, 2019, between the registrant and Satish Ganesan

Filed herewith

Synaptics Incorporated Insider Trading Policy

Filed herewith

List of Subsidiaries

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Furnished herewith

XBRL Instance Document

Filed herewith

XBRL Taxonomy Extension Schema Document

Filed herewith

XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith

XBRL Taxonomy Extension Definition Linkbase Document

Synaptics Compensation Recovery Policy, adopted as of October 23, 2023

Filed herewith

XBRL Taxonomy Extension Label Linkbase Document

XBRL Instance Document

Filed herewith

XBRL Taxonomy Extension Presentation Linkbase Document

Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

Filed herewith

Cover Page Interactive Data File –

The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

Filed herewith

Indicates a contract with management or compensatory plan or arrangement.

Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

A copy of any omitted

schedule will be furnished as a supplement to the Securities and Exchange Commission upon request.

This certification is being furnished solely pursuant to 18 U.S.C.

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and Director (Principal Executive Officer)

/s/ Dean Butler

/s/ Ken Rizvi

Senior Vice President and Chief Financial Officer

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(Principal Financial Officer)

/s/ Kermit Nolan

Corporate Vice President and Chief Accounting

/s/ Esther Song

Vice President and Corporate Controller

August 23, 2024

Officer (Principal Accounting Officer)

(Principal Accounting Officer)

/s/ Nelson C.

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Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Synaptics Incorporated and subsidiaries (the Company) as of June 24, 2023 and June 25, 2022, the related consolidated statements of operations, comprehensive income, stockholders’

equity, and cash flows for each of the fiscal years in the three fiscal year period ended June 24, 2023, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of June 24, 2023, based on criteria established in Internal Control –

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have audited the accompanying consolidated balance sheets of Synaptics Incorporated and subsidiaries (the Company) as of June 29, 2024 and June 24, 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the fiscal years in the three fiscal year period ended June 29, 2024, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of June 29, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 29, 2024 and June 24, 2023, and the results of its operations and its cash flows for each of the fiscal years in the three fiscal year period ended June 29, 2024, in conformity with U.S.

generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 24, 2023 based on criteria established in Internal Control –

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 29, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

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Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

Valuation of inventories

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We identified the valuation of inventories associated with excess, obsolete or unmarketable inventories as a critical audit matter.

A higher degree of auditor judgment was required to evaluate the Company’s estimate of net realizable value for these inventories.

Specifically, there is a high degree of subjectivity in evaluating the effect of any unexpected or sudden declines in market demand which may result from changes to or cancellations of customer orders, rapid product improvements or technological advances, due to the nature of the evidence available related to these factors.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process to develop the estimated net realizable value of inventory.

For a selection of inventory items, we assessed the Company’s assumptions by comparing them to historical activity and demand forecasts.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process to develop the estimated net realizable value of inventory.

For a selection of inventory items, we assessed the Company’s assumptions by comparing them to historical activity and demand forecasts.

As part of the procedure, we considered customer communications, as well as end user and third-party publications.

For a sample of inventory items, we recalculated the required write-downs and compared this to the recorded amounts.

Additionally, we tested a sample of returns which resulted from quality related issues of the Company's products during the year and subsequent to period-end to evaluate if additional write-downs were warranted.

We have served as the Company’s auditor since 2003.

Evaluation of accounting for income tax domestication

As described in Notes 1 and 14 to the consolidated financial statements, the Company revised their corporate entity structure via an intra-group transfer that included the domestication of certain foreign subsidiaries and the onshoring of certain intellectual property.

As a result of the domestication, a deferred tax benefit of $263.0 million was recognized primarily driven by remeasuring certain deferred tax assets, net of deferred tax liabilities based on the U.S.

tax rate in the fourth quarter of fiscal 2024.

We identified the evaluation of accounting for the income tax domestication of certain foreign subsidiaries and the onshoring of certain intellectual property as a critical audit matter.

Evaluating the Company’s application of current tax regulations in various foreign jurisdictions and the impact of those regulations on foreign, U.S.

federal, state and local income tax provisions required complex auditor judgment and the use of tax professionals with specialized skills and knowledge.

Additionally, the evaluation of the realizability of domesticated deferred tax assets required auditor judgment based on the nature of audit evidence available.

We performed a sensitivity analysis to assess the impact of changes in key assumptions used to estimate the projected future taxable income.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s income tax process, including controls related to management’s application of tax laws and regulations to the domestication and evaluation of the realizability of related deferred tax assets.

We evaluated the positive and negative evidence used in assessing whether the deferred tax assets were more likely than not to be realized in the future.

This included evaluating the Company’s current

and cumulative taxable income and analyzing the Company’s estimates of future taxable income by comparing forecasted revenue to the financial budgets approved by the board of directors, historical performance, and external expectations for industry performance.

We involved tax professionals with specialized skills and knowledge, who assisted in evaluating the Company’s interpretation and application of tax laws and regulations related to the domestication by reviewing third party opinions and other relevant evidence used by management to support its position.

We have served as the Company’s auditor since 2003.

Santa Clara, California

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Short-term investments

Accounts receivable, net of allowance for credit losses of $ 5.0 and $ 6.0 at June 2023 and 2022, respectively

Accounts receivable, net

Inventories, net

Prepaid expenses and other current assets

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Right-of-use assets

Deferred tax assets

Non-current other assets

LIABILITIES AND STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

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Income taxes payable

Operating lease liabilities

Other accrued liabilities

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Long-term debt

Operating lease liabilities, non-current

Other long-term liabilities

Total liabilities

Commitments and contingencies

Stockholders' Equity:

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120,000,000 shares authorized, 69,683,991 and 68,687,511 shares issued,

and 38,571,072 and 39,621,179 shares outstanding, at June 2023 and 2022, respectively

39,567,552 and 38,571,072 shares outstanding, at June 2024 and June 2023, respectively

Additional paid-in capital

Treasury stock:

30,116,439 and 28,124,621 common shares at June 2023 and 2022, respectively, at cost

Accumulated other comprehensive loss

30,116,439 common shares at June 2024 and June 2023, at cost

Retained earnings

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Acquired intangibles amortization

Intangible asset impairment charge

Restructuring costs

Gain on sale of audio technology assets

Total operating expenses

Operating income

Operating (loss)/income

Interest and other income

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Gain from sale and leaseback transaction

Income before provision for income taxes and equity investment gain (loss)

Provision for income taxes

Equity investment gain (loss)

(Loss)/income before provision for income taxes

(Benefit)/provision for income taxes

Equity investment gain

Net income per share:

Shares used in computing net income per share:

Shares used in computing net income:

See accompanying notes to consolidated financial statements.

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(in millions)

Other comprehensive income (loss)

Other comprehensive income, net of tax

Unrealized gain/(loss) on available-for-sale-securities

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SYNAPTICS INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except share amounts)

Comprehensive

Stockholders'

Income (loss)

Additional Paid-In Capital

Treasury Stock

Accumulated Other Comprehensive Income

Retained Earnings

Total Stockholders' Equity

Balance at June 2021

Other comprehensive loss

Issuance of common stock for share-based award compensation plans

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Balance at June 2022

Other comprehensive loss

Other comprehensive income

Issuance of common stock for share-based award compensation plans

Treasury stock issued for redemption of convertible notes

Payroll taxes related to net share settlement of share-based awards

Share-based compensation attributable to acquisition

Common stock repurchased

Share-based compensation

Balance at June 2023

Other comprehensive income

Issuance of common stock for share-based award compensation plans

Payroll taxes related to net share settlement of share-based awards

Common stock repurchased

Share-based compensation

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Acquired intangibles amortization

Gain on sale of audio technology assets

Gain on sale and leaseback transaction

Loss on redemption of convertible notes

Deferred taxes

Amortization of convertible debt discount and issuance costs

Amortization of right-of-use assets

Amortization of cost of development services

Provision for inventory excess and obsolescence

Equity investment (gain) loss

Foreign currency remeasurement (gain) loss

Intangible asset impairment charge

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable, net

Inventories, net

Prepaid expenses and other current assets

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Proceeds from sale of assets

Acquisition of businesses, net of cash and cash equivalents acquired

Acquisition of business, net of cash and cash equivalents acquired

Advance payment on intangible assets

Proceeds from sale of audio technology assets

Proceeds from maturity of investments

Proceeds from sale of investments

Purchase of short-term securities

Purchases of short-term investments

Purchases of property and equipment

Receipt of liquidation payment on equity investment

Purchase of intangible assets

Proceeds from sale of equity method investment

Cost method investment

Net cash used in investing activities

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Repurchases of common stock

Repayment on line of credit borrowings and debt

Repayment of debt

Payment for redemption of convertible notes

Refundable deposit paid to vendor

Return of deposit received from vendor and other

Net cash provided by (used in) financing activities

Net cash (used in)/provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

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Purchases of property and equipment in current liabilities

Receipt of intangible assets from advance payment made in previous fiscal year

Receipt of intangible assets from advance payments

See accompanying notes to consolidated financial statements.

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Organization and Summary of Significant Accounting Policies

We are a leading worldwide developer and fabless supplier of premium mixed signal semiconductor solutions changing the way humans engage with connected devices and data, engineering exceptional experiences throughout the home, at work, in the car and on the go.

Our current served markets include Internet of Things, or IoT, personal computer, or PC, and Mobile.

We deliver complete chip, firmware and software semiconductor solutions that allow our customers to seamlessly integrate advanced functions into their end products.

We are a leading worldwide developer and fabless supplier of premium mixed signal semiconductor solutions that enable people to engage with connected devices and data, engineering 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, or IoT.

We supply connectivity, sensors, and AI-enhanced processor solutions to original equipment manufacturers, or OEMs, that design IoT products and devices for automobiles, enterprise workspace devices, virtual reality, smartphones, tablets, and notebook computers.

Basis of Presentation and Principles of Consolidation

Our fiscal year is the 52- or 53-week period ending on the last Saturday in June.

Accordingly, every fifth or sixth fiscal year will have a 53-week period.

The additional week in a 53-week year is added to the first quarter, making such quarter a 14-week period.

The fiscal years presented in this report were 52-week periods ended June 24, 2023, June 25, 2022, and June 26, 2021.

Our fiscal 2024 is a 53-week period ending June 29, 2024, and our fiscal 2023 and 2022 were 52-week periods ending on June 24, 2023 and June 25, 2022, respectively.

For simplicity, the accompanying consolidated financial statements have been shown as ending on calendar quarter end dates as of and for all periods presented, unless otherwise indicated.

The consolidated financial statements are presented in accordance with U.S.

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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

Certain reclassifications have been made to the amounts for prior years in order to conform to the current year’s presentation.

Use of Estimates

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We classify our investments in debt securities as available-for-sale and record these investments at fair value.

Investments with an original maturity of three months or less at the date of purchase are considered cash equivalents, while all other investments are classified as short-term based on management’s intent and ability to use the funds in current operations.

Unrealized gains and losses are reported as a component of other comprehensive income (loss).

Realized gains and losses are determined based on the specific identification method, and are reflected as other income (expense), net in our Consolidated Statements of Operations.

Realized gains and losses are determined based on the specific identification method, and are reflected as interest and other expense, net, in our Consolidated Statements of Operations.

We regularly review our investment portfolio to identify and evaluate investments that have indicators of possible impairment.

Some of the factors we consider include, but are not limited to, the following:

the length of time and extent a security’s fair value has been below its cost, the financial condition and near-term prospects of the investee, the credit quality of the security’s issuer, likelihood of recovery and our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in value.

For our debt instruments, we also evaluate whether we have the intent to sell the security or it is more likely than not that we will be required to sell the security before recovery of its cost basis.

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We apply fair value accounting for all financial assets and liabilities that are required to be recognized or disclosed at fair value in the Consolidated Financial Statements.

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair value is defined as the price that would be received from selling an

SYNAPTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

determining the fair value measurements for assets and liabilities, we consider the principal or most advantageous market in which we would transact, and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

When determining the fair value measurements for assets and liabilities, we consider the principal or most advantageous market in which we would transact, and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

The carrying amounts reported in the consolidated financial statements approximate the fair value for cash, accounts receivable, accounts payable and accrued liabilities due to their short-term nature.

Intangible assets, property and equipment, and goodwill are measured at fair value on a non-recurring basis if impairment is indicated.

The interest rate on our bank debt is variable, which is subject to change from time-to-time to reflect a market interest rate;

accordingly, the carrying value of our bank debt approximates fair value.

The interest rate on our term loan is variable, which is subject to change from time-to-time to reflect a market interest rate.

Fair Value Measurements for additional information.

Concentration of Credit Risk

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We sell our products to contract manufacturers that provide manufacturing services for OEMs, to some OEMs directly, and to distributors.

We extend credit based on an evaluation of a customer’s financial condition, and we generally do not require collateral.

The following customers accounted for more than 10% of our accounts receivable balance as of the end of fiscal 2024 and 2023:

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Allowance for Credit Losses

We maintain allowances for credit losses resulting from the inability of customers to meet their financial obligations.

We maintain allowances for expected credit losses resulting from the inability of customers to meet their financial obligations.

On an ongoing basis, we evaluate the collectability of accounts receivable based on a combination of factors.

In circumstances in which we are aware of a specific customer’s potential inability to meet its financial obligation, we record a specific reserve of the credit loss against amounts due.

In addition, we make judgments and estimates on the collectability of accounts receivable based on our historical bad debt experience, customers’

creditworthiness, current economic trends, recent changes in customers’

payment trends, and deterioration in customers’

operating results or financial position.

In circumstances in which we are aware of a specific customer’s potential inability to meet its financial obligation, we record a specific reserve of the credit loss against amounts due.

In addition, we make judgments and estimates on the collectability of accounts receivable based on our historical bad debt experience, customers’ creditworthiness, current economic trends, recent changes in customers’ payment trends, and deterioration in customers’ operating results or financial position.

If circumstances change adversely, additional credit loss allowances may be required.

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acquired intangibles amortization;

fair value adjustments associated with acquired businesses;

inventory fair value adjustments associated with acquired businesses;

inventory write-downs and losses on purchase obligations;

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We remeasure foreign currency expenses at the weighted average exchange rate in the month that the transaction occurred.

These foreign currency transactions and remeasurement gains and losses, resulted in a net loss of $ 2.3 million in fiscal 2023, a net gain of $ 5.6 million in fiscal 2022 and a net loss of $ 1.4 million in fiscal 2021 .

These foreign currency transactions and remeasurement gains and losses, resulted in a net gain of $ 0.7 million in fiscal 2024, a net loss of $ 2.3 million in fiscal 2023 and a net gain of $ 5.6 million in fiscal 2022 .

Gains and losses resulting from foreign currency transactions are included in selling, general, and administrative expenses in the consolidated statements of operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

We elected not to perform the qualitative assessment and performed the quantitative goodwill impairment test in fiscal 2023 .

Based on the impairment analysis performed in the fourth quarter of each year presented, the fair value of our reporting units exceeded their carrying values and no goodwill impairment was recognized.

We performed the qualitative and quantitative goodwill impairment test in fiscal 2024 and 2023, respectively.

Based on the impairment analysis performed in the fourth quarter of each year presented, no goodwill impairment was recognized.

Intangible Assets

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If the carrying amount of the asset exceeds its estimated undiscounted future cash flows, we recognize an impairment charge in an amount by which the carrying amount of the asset exceeds the fair value of the asset.

Assets to be disposed of would be separately presented in the consolidated balance sheets and reported at the lower of the carrying amount or fair value less costs to sell and would no longer be depreciated.

The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheets.

No impairment of long-lived assets was recognized for fiscal 2023, 2022, and 2021 .

During fiscal 2024, we recorded a $ 16.0 million impairment charge on an indefinite-lived intangible asset.

We determine if an arrangement is a lease at inception.

Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

Operating lease ROU assets also include any initial direct costs and prepayments less lease incentives.

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Inventory obligations

Operating lease liabilities

As of the end of fiscal 2024 and 2023, other long-term accrued liabilities consisted of the following (in millions):

Operating lease liabilities, long-term

Deferred tax liability

Deferred tax liabilities

Income taxes payable, long-term

Share-Based Compensation

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Share-Based Compensation

We charge the estimated fair value less actual forfeitures to earnings on a straight-line basis over the vesting period of the entire underlying award, which is generally three or four years for our restricted stock units, or RSU, awards, three years for our market stock units, or MSU, awards, three years for our performance stock units, or PSU, awards, and up to one year for shares purchased under our 2019 employee stock purchase plan.

for our market stock units, or MSU, awards, three years for our performance stock units, or PSU, awards, and up to one year for shares purchased under our 2019 employee stock purchase plan.

We estimate the fair value of market-based MSUs at the date of grant using a Monte Carlo simulation model and amortize those fair values over the requisite service period, which is generally three years .

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We capitalize acquisition-related costs and fees associated with asset acquisitions and immediately expense acquisition-related costs and fees associated with business combinations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values.

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When determining the fair values of assets acquired and liabilities assumed, we make significant estimates and assumptions, especially with respect to intangible assets.

Critical estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from customer relationships and acquired developed technology and discount rates.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from customer relationships and acquired developed technology and discount rates.

Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ materially from estimates.

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Accounting Pronouncements Issued But Not Yet Adopted

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848.

ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024.

Effective March 16, 2023, we transitioned our credit and loan agreements from LIBOR to the Secured Overnight Financing Rate, or SOFR.

We are currently evaluating the timing of adoption and impact, if any, of this standard on our consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805):

Accounting for Acquired Contract Assets and Contract Liabilities”

which improves comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination by providing consistent recognition guidance.

This standard is effective for fiscal years beginning after December 15, 2022.

We will adopt this standard in the first quarter of our fiscal 2024 and do not expect it to have a material impact on our consolidated financial statements.

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2023-07, “Segment Reporting:

Improvements to Reportable Segment Disclosures.” This guidance requires disclosure of incremental segment information on an annual and interim basis.

This amendment is effective for our fiscal year ending June 2025 and our interim periods within the fiscal year ending June 2026.

We are currently assessing the impact of this guidance on our disclosures.

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.

This amendment is effective for our fiscal year ending June 2026.

We are currently assessing the impact of this guidance on our disclosures.

Net Income Per Share

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Share-based awards

These share-based awards were not included in the computation of diluted net income per share because the proceeds received, if any, from such share-based awards combined with the average unamortized compensation costs, were greater than the average market price of our common stock, and therefore, their effect would have been antidilutive.

Our basic net income per share amounts for each period presented have been computed using the weighted average number of shares of common stock outstanding.

Our diluted net income per share amounts for each period presented include

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

the weighted average effect of potentially dilutive shares.

We used the “treasury stock”

method to determine the dilutive effect of outstanding share-based awards and convertible notes.

Our basic net income per share amounts for each period presented have been computed using the weighted average number of shares of common stock outstanding.

Our diluted net income per share amounts for each period presented include the weighted average effect of potentially dilutive shares.

We used the “treasury stock” method to determine the dilutive effect of outstanding share-based awards and convertible notes.

Property and Equipment

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Construction in progress

Up to 5 years

Accumulated depreciation and amortization

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Asset Acquisition

During the first quarter of fiscal 2024, we entered into an amendment to our wireless license agreement with Avago Tech nologies (“Broadcom”), to license four developed technology products and to extend the exclusivity period of certain developed technologies that were previously licensed from Broadcom in July 2020 for an aggregate consideration of $ 130.0 million.

As of June 2024, we have obtained control of three of the four technology products and the three-year extension period to exclusively license previously acquired developed technology intangible assets.

Accordingly, the relative fair value of $ 87.5 million for those technology products is presented as acquired intangible assets in our consolidated balance sheets.

The fair value of the remaining technology product of $ 42.5 million for which we have not yet obtained control is an advance payment on intangible assets and is presented within other long-term assets in our consolidated balance sheets.

During the third quarter of fiscal 2023, we completed the acquisition of certain developed technology intangible assets from Broadcom for an aggregate consideration of $ 30.0 million, which was paid in cash in the previous fiscal year.

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Pro forma results of operations for this acquisition have not been presented because they are not material to our consolidated results of operations, either individually or in the aggregate.

DSP Group, Inc.

On August 30, 2021 , we entered into an agreement and plan of merger with DSP Group, Inc., or DSPG, to acquire all of the equity of DSPG, a leading global provider of voice and wireless chipset solutions for converged communications, for $ 22.00 per share in an all-cash transaction, referred to as the DSPG acquisition.

The DSPG acquisition closed on December 2, 2021 , or the DSPG Closing Date, whereupon we obtained voice and wireless technology and product solutions for converged communications.

In addition, under the terms of the agreement and plan of merger, we provided replacement equity awards to the transferred employees and allocated $ 1.7 million of the replacement equity awards value to consideration transferred.

The DSPG acquisition has been accounted for using the purchase method of accounting in accordance with the business acquisition guidance.

Under the purchase accounting method, the total estimated purchase consideration of the acquisition was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their relative fair values.

The excess of the purchase consideration over the net tangible and identifiable intangible assets acquired and liabilities has been recorded as goodwill.

Our estimate of the fair values of the acquired intangible assets at June 25, 2022, was based on established and accepted valuation techniques performed with the assistance of our third-party valuation specialists.

The adjusted purchase price paid for DSPG was $ 543.3 million.

The final purchase price allocation is as follows (in millions):

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 25, 2022

Cash and cash equivalents

Short-term investments

Accounts receivable, net

Prepaid expenses and other current assets

Property and equipment

Intangible assets

Right-of-use lease asset

Severance pay fund

Deferred tax asset

Non-current other assets

Total identifiable assets acquired

Accounts payable

Other accrued expenses

Short-term lease liabilities

Long-term lease liabilities

Accrued severance

Deferred tax liability

Other long-term liabilities

Total liabilities

Net identifiable assets acquired

Net assets acquired

There were no measurement period adjustments during fiscal 2023.

The following table summarizes the estimated fair value of the intangible assets as of the DSPG Closing Date (in millions):

Estimated Weighted Average Useful Lives in Years

Estimated Fair

Developed technology

Customer contracts and related relationships

In process research and development

Estimated fair value of acquired intangibles

We estimated the fair value of the identified intangible assets using a discounted cash flow model for each of the underlying identified intangible assets.

These fair value measurements were based on significant inputs not observable in the market and thus represent a Level 3 measurement.

Key assumptions include the level and timing of expected future cash flows, conditions and demands specific to each intangible asset over its remaining useful life, and discount rates we believe to be consistent with the inherent risks associated with each type of asset, which range from 4 % to 18 %.

The fair value of these intangible assets is primarily affected by the projected revenue, gross margins, operating expenses, the technology migration curve, customer ramp up period and the anticipated timing of the projected income associated with each intangible asset coupled with the discount rates used to derive their estimated present values.

We believe the level and timing of expected future cash flows appropriately reflects market participant assumptions.

In-process research and development consists of advanced semiconductor telecommunications products for the Internet of Things, or IoT, market.

We expect to complete the in-process research and development project in calendar year 2024.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The value of goodwill reflects the anticipated synergies of the combined operations and workforce of DSPG as of the DSPG Closing Date.

None of the goodwill is expected to be deductible for income tax purposes.

Prior to the DSPG acquisition, we did not have an existing relationship or transactions with DSPG.

The consolidated financial statements include approximately $ 83.8 million of revenue from the DSPG Closing Date through June 2022.

It is impracticable to determine the effect on net income attributable to DSPG as we completed the integration of DSPG into our ongoing operations during the third quarter of fiscal 2022.

In fiscal year 2022, we incurred $ 4.4 million in acquisition related costs which were recorded in selling, general and administrative expense in the consolidated statements of operations.

In December 2021, we executed the Term Loan Facility agreement in the amount of $ 600.0 million, the proceeds of which were used to finance the DSPG acquisition and we incurred $ 11.2 million of debt financing costs thereon.

As of June 2023 , $ 6.0 million of the Term Loan Facility is included in short-term debt, and $ 585.0 million is included in long-term debt on the accompanying consolidated balance sheets.

See “Note 8 –

for additional information.

Supplemental Pro Forma Information (Unaudited)

The supplemental pro forma financial information presented below is for illustrative purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the acquisition had been completed on the date indicated, does not reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position.

The pro forma adjustments are based upon currently available information and certain assumptions we believe are reasonable under the circumstances.

The following supplemental pro forma information presents the combined results of operations as if DSPG had been acquired as of the beginning of fiscal 2021.

Pro forma adjustments used to arrive at pro forma net income included adjustments for the addition of intangible amortization expense for the value of intangibles under the purchase price allocation, adjustments to record acquired inventories at fair value, transaction and restructuring costs.

The total pro forma adjustments for fiscal 2022 was an increase to net income of $ 5.9 million and a decrease in net income of $ 86.3 million in fiscal 2021 .

The unaudited supplemental pro forma financial information for the periods presented is as follows (in millions):

Net income (loss)

Cash, Cash Equivalents and Short-Term Investments

The following table summarizes our cash, cash equivalents and short-term investments by category at June 2023 and June 2022 (in millions):

The following table summarizes our cash, cash equivalents and short-term investments by category as of June 2024 and June 2023 (in millions):

We use the specific-identification method to determine any realized gains or losses from the sale of our short-term investments classified as available-for-sale.

Amortized Cost

Gross unrealized gain (loss)

Gross unrealized loss

Amortized Cost

Gross unrealized gain (loss)

Gross unrealized loss

Cash equivalents:

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Treasury bills

Certificates of deposit

Total cash and cash equivalents

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Total short-term investments

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table classifies our short-term investments by contractual maturities ( in millions ):

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Due within 1 year

Due between 1 year to 5 years

Due between 1 and 5 years

All available-for-sale securities have been classified as current, based on management's intent and ability to use the funds in current operations.

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The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value :

Level 1 –

Valuation is based upon unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2 –

Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 –

Valuation is based upon other unobservable inputs that are significant to the fair value measurements.

The fair value of our Level 1 financial instruments are traded in active markets and are 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.

• Level 1 – Valuation is based upon unadjusted quoted prices for identical assets or liabilities in active markets.

• Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instruments.

• Level 3 – Valuation is based upon other unobservable inputs that are significant to the fair value measurements.

Our Level 1 financial instruments are traded in active markets, and the fair value is based on quoted market prices for identical instruments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

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Treasury bills

Certificates of deposit

Short-term investments:

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Municipal bonds

The above table excludes $ 853.9 million of cash held in our bank accounts.

The above table excludes $ 238.4 million and $ 853.9 million of cash held in our bank accounts at the end of June 2024 and 2023, respectively.

We did not have any financial instruments measured at fair value on a recurring basis within Level 3 fair value during fiscal 2024 and 2023 and there were no transfers in or out of our Level 1 or 2 assets during the same periods.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

We report our financial instruments at fair value with the exception of the Senior Debt and Term Loan (“Note 8.

Debt”).

We report our financial instruments at fair value with the exception of the Senior Debt and Term Loan, see Note 8.

The estimated fair value of the notes was determined based on the trading price of the notes as of the last day of trading for the period.

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Senior Notes due 2029

Term Loan due 2028

Term Loan Facility due 2028

Goodwill and Acquired Intangible Assets

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The following table summarizes the life, the gross carrying value of our acquired intangible assets, and the related accumulated amortization as of the end of fiscal 2024 and 2023 (in millions):

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Weighted Average

Life in Years

Gross Carrying

Audio and video technology

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Not applicable

Acquired intangibles, gross

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

During fiscal 2023 , we retired fully amortized intangible assets of $ 20.4 million of display driver technology.

During fiscal 2022 , we retired fully amortized intangible assets of $ 21.5 million of audio and video developed technology, $ 12.0 million in backlog and $ 3.1 million in licensed technology and other.

Acquired intangibles totals

During fiscal 2024, we retired $ 4.4 million of fully amortized patents that reached the end or their useful life.

During fiscal 2023, we retired $ 20.4 million of fully amortized display driver technology.

Amortization expense is calculated using the straight-line method over the estimated useful lives of the acquired intangibles.

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The following table presents expected annual aggregate amortization expense in future fiscal years (in millions):

To be determined

Future amortization

Impairment of indefinite-lived intangible asset

During fiscal 2024, we recorded an indefinite-lived intangible asset impairment charge of $ 16.0 million on our in-process research and development, or IPR&D, from our December 2021 acquisition of DSPG.

We recorded the impairment charge as an operating expense in our consolidated statement of operations.

We recorded the impairment charge due to a lack of commitment from certain key customers, no anticipated customer migration to the IPR&D technologies acquired from DSPG, and no further development or investment planned for this project.

On March 11, 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, or the Senior Notes Indenture, by and among our company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee.

The Senior Notes were issued pursuant to an indenture, dated as of March 11, 2021, or the Indenture, by and among our company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee.

The Indenture provides that the Senior Notes will bear interest at a rate of 4.0 % per annum, payable in cash semi-annually in arrears on December 15 and June 15 of each year, commencing on June 15, 2021.

The Senior Notes will mature on June 15, 2029 and are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of our current and future domestic restricted subsidiaries that guarantee our obligations under our senior secured credit facilities.

Prior to June 15, 2024, we may redeem the Senior Notes, in whole or in part, at a redemption price of 100 % of the principal amount thereof, plus a make-whole premium set forth in the Indenture, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date .

The Senior Notes will mature on June 15,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2029 and are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of our current and future domestic restricted subsidiaries that guarantee our obligations under our senior secured credit facilities.

On or after June 15, 2024, we may redeem some or all of the Senior Notes at the redemption prices specified below, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date:

2026 and thereafter

In addition, at any time prior to June 15, 2024 , we may redeem up to 40 % of the aggregate principal amount of the Senior Notes at a redemption price equal to 104 % of the principal amount thereof, plus accrued and unpaid interest, if any, up to, but excluding, the applicable redemption date with the net cash proceeds from one or more equity offerings by us.

The Senior Notes are the general unsecured obligations of our company.

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Under certain circumstances, the guarantors may be released from their Senior Note guarantees without consent of the holders of Senior Notes.

Under the terms of the Indenture, the Senior Notes rank equally in right of payment with all of our and the guarantors’

existing and future senior indebtedness, and rank contractually senior in right of payment to our and the guarantors’

future indebtedness and other obligations that are, by their terms, expressly subordinated in right of payment to the Senior Notes.

The Senior Notes are effectively subordinated to our and the guarantors’

existing and future secured indebtedness, including secured indebtedness under our senior secured credit facilities, to the extent of the value of the assets securing such indebtedness.

The Senior Notes and guarantees are structurally subordinated to all

SYNAPTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

existing and future indebtedness and liabilities (including trade payables) of our subsidiaries that do not guarantee the Senior Notes.

Under the terms of the Indenture, the Senior Notes rank equally in right of payment with all of our and the guarantors’ existing and future senior indebtedness, and rank contractually senior in right of payment to our and the guarantors’ future indebtedness and other obligations that are, by their terms, expressly subordinated in right of payment to the Senior Notes.

The Senior Notes are effectively subordinated to our and the guarantors’ existing and future secured indebtedness, including secured indebtedness under our senior secured credit facilities, to the extent of the value of the assets securing such indebtedness.

The Senior Notes and guarantees are structurally subordinated to all existing and future indebtedness and liabilities (including trade payables) of our subsidiaries that do not guarantee the Senior Notes.

The Indenture contains covenants that, subject to exceptions and qualifications, among other things, limit our ability and the ability of our Restricted Subsidiaries (as defined in the Indenture) to (i) incur additional indebtedness and guarantee indebtedness;

(ii) pay dividends or make other distributions or repurchase or redeem our company’s or any parent’s capital stock;

(iii) prepay, redeem or repurchase certain indebtedness;

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(viii) enter into transactions with affiliates;

(ix) enter into agreements restricting its subsidiaries’

ability to pay dividends;

(ix) enter into agreements restricting its subsidiaries’ ability to pay dividends;

and (x) consolidate, merge or sell all, or substantially all, of its assets.

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An event of default under the Indenture will allow either the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Senior Notes to accelerate, or in certain cases, will automatically cause the acceleration of, the maturity of the principal, and accrued and unpaid interest, if any, on all outstanding Notes.

Debt issuance costs relating to the Senior Notes of $ 5.7 million, netted against the debt amount on the consolidated balance sheet, are amortized as interest expense using the effective interest method over 99 months .

The total interest expense and amortization of the debt issuance costs recorded on the Senior Notes during the fiscal year ended June 2023 and 2022 was $ 16.6 million in each year.

The total interest expense and amortization of the debt issuance costs recorded on the Senior Notes during the fiscal year ended June 2024 and 2023 was $ 16.7 million and $ 16.6 million, respectively.

Revolving Credit Facility

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As of June 2024 , there was no balance outstanding under the revolving credit facility.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Borrowings under the revolving credit facility are required to be repaid in full by March 11, 2026 .

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Our obligations under the Credit Agreement are guaranteed by the material domestic subsidiaries of our company, subject to certain exceptions, who collectively with our company are referred to as the Credit Parties.

The obligations of the Credit Parties under the Amended Credit Agreement and the other loan documents delivered in connection therewith are secured by a first priority security interest in substantially all of the existing and future personal property of the Credit Parties, including, without limitation, 65 % of the voting capital stock and 100 % of the non-voting capital stock of certain of the Credit Parties’

direct foreign subsidiaries, subject to certain exceptions.

The Credit Agreement bears interest, at our election, of a Base Rate plus an Applicable Margin or Adjusted Term SOFR, as defined in the Second Amendment, plus an Applicable Margin.

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Interest and fees are payable on a quarterly basis.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Under the Credit Agreement, there are various restrictive covenants, including two financial covenants which limit the consolidated total leverage ratio, or leverage ratio, the consolidated interest coverage ratio, or interest coverage ratio, which after the Third Amendment, only applies if our cash and cash equivalents balance is less than $ 450 million as of the last day of any fiscal quarter.

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The Term Loan Facility is subject to a 1.00% prepayment premium in the event all or any portion of the Term Loan Facility is prepaid within the first 6 months in connection with a repricing transaction only.

The Term Loan Facility is subject to customary mandatory prepayments, including, commencing June 30, 2023, an excess cash flow sweep, subject to customary step-downs and thresholds.

Debt issuance costs relating to the Term Loan Facility of $ 11.2 million, netted against the debt amount on the consolidated balance sheet, are amortized as interest expense over 96 months.

The Term Loan Facility is subject to customary mandatory prepayments, including an excess cash flow sweep, subject to customary step-downs and thresholds.

Debt issuance costs relating to the Term Loan Facility of $ 11.2 million, netted against the debt amount on the consolidated balance sheet, are amortized as interest expense through the maturity date.

The total interest expense and amortization of the debt issuance costs recorded on the Term Loan Facility during fiscal 2024 and 2023 was $ 47.8 million and $ 37.9 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table presents the future principal payments related to our Senior Notes and Term Loan Facility in future fiscal years (in millions):

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Long-term debt

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Convertible Debt

On June 1, 2021, pursuant to the Indenture, dated as of June 26, 2017 between us and Wells Fargo Bank, National Association, as trustee, or the Convertible Notes Indenture, we provided an irrevocable notice of redemption, for all $ 525,000,000 aggregate principal amount of our outstanding 0.50% convertible senior notes due in 2022, or the Convertible Notes.

On June 1, 2021, pursuant to the Indenture, dated as of June 26, 2017 between us and Wells Fargo Bank, National Asso ciation, as trustee, or the Convertible Notes Indenture, we provided an irrevocable notice of redemption, for all $ 525,000,000 aggregate principal amount of our outstanding 0.50% convertible senior notes due in 2022, or the Convertible Notes.

The Convertible Notes were redeemable at a cash redemption price of 100.0 % of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the redemption date of August 4, 2021.

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We elected to settle any conversions by Combination Settlement (as defined in the Convertible Notes Indenture) with a Specified Dollar Amount (as defined in the Convertible Notes Indenture) per $1,000 principal amount of Convertible Notes equal to $1,000, plus a number of shares of our common stock, to be determined pursuant to the Convertible Notes Indenture, together with additional cash, if applicable, in lieu of delivering any fractional shares of common stock.

As a result of this election, on August 4, 2021, we settled or redeemed the remaining outstanding Convertible Notes for $ 505.6 million in cash representing the principal amount outstanding and delivered approximately 3.5 million shares in common stock from our treasury stock for additional amounts, resulting in a loss of approximately $ 8.1 million which is included in Interest and other expense, net on our condensed consolidated statements of operations included elsewhere in this report.

As a result of this election, on August 4, 2021, we settled or redeemed the remaining outstanding Convertible Notes for $ 505.6 million in cash representing the principal amount outstanding and delivered approximately 3.5 million shares in common stock from our treasury stock for additional amounts, resulting in a loss of approximately $ 8.1 million which is included in Interest and other expense, net on our consolidated statements of operations included elsewhere in this report.

Our leases primarily include our headquarters office and worldwide office and research and development facilities which are all classified as operating leases.

Certain leases include renewal options that are under our discretion.

The leases expire at various dates through fiscal year 2034 , some of which include options to extend the lease for up to seven years .

During fiscal 2023 and 2022, we recorded approximately $ 12.0 million and $ 12.7 million of operating leases expense, respectively.

The leases expire at various dates through fiscal 2034 , some of which include options to extend the lease for up to seven years .

During fiscal 2024

SYNAPTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

and 2023, we recorded approximately $ 11.8 million and $ 12.0 million of operating leases expense, respectively.

Our short-term leases are immaterial and we do not have finance leases.

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As of the end of fiscal 2024, the weighted average remaining lease term was 6.49 years, and the weighted average discount rate was 5.34 % .

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Future minimum lease payments for the operating lease liabilities are as follows (in millions):

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Indemnifications and Contingencies

Legal proceedings

We are subject to a variety of claims and suits that arise from time-to-time in the ordinary course of our business.

While management currently believes that resolving claims against us, individually or in the aggregate, will not have a material adverse impact on our financial position, results of operations or statements of cash flows, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.

We accrue for loss contingencies when it is both probable that we will incur the loss and when we can reasonably estimate the amount of the loss or range of loss.

During the fourth quarter of fiscal 2023 , we accrued $ 4.0 million in relation to a contractual dispute with a vendor.

Contingencies

We have in the past and may in the future receive 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.

Indemnifications

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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 do not have a maximum stated liability.

However, historical costs related to these indemnification provisions have not been significant.

We have not recorded any liability in our consolidated financial statements for such indemnification obligations.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Stockholders’

provisions have not been significant.

We have not recorded any liability in our consolidated financial statements for such indemnification obligations.

Contingencies

We have in the past, and may in the future, receive 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.

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.

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.

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.

Stockholders’ Equity

Preferred Stock

7 unchanged sentences

Shares of common stock reserved for future issuance as of the end of fiscal 2024 were as follows:

Stock options outstanding

Restricted stock units outstanding

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As of the end of fiscal 2024, we had $ 893.9 million of common stock remaining to be repurchased under our common stock repurchase program.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Share-Based Compensation

5 unchanged sentences

Upon approval of the 2019 Incentive Plan, new awards are no longer issued under the 2010 Incentive Plan.

Awards outstanding at October 29, 2019 under our prior share-based compensation plans were not impacted by the approval of the 2019 Incentive Plan and continue to remain outstanding and vest by their terms under the applicable share-based compensation plan.

Awards outstanding as of October 29, 2019 under our prior share-based compensation plans were not impacted by the approval of the 2019 Incentive Plan and continue to remain outstanding and vest by their terms under the applicable share-based compensation plan.

Shares underlying certain share-based awards forfeited under the 2010 Incentive Plan subsequent to the approval of the 2019 Incentive Plan automatically transfer to and become available for award issuance from the 2019 Incentive Plan.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The 2019 Incentive Plan authorizes our Board of Directors to provide equity-based compensation in the form of stock options, stock appreciation rights, restricted stock units, cash incentive awards, performance shares, performance stock units, and other stock-based awards.

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650,000 shares of our common stock have been reserved for issuance under the 2019 Inducement Equity Plan, subject to adjustment for stock dividends, stock splits, or other changes in our common stock or capital structure.

The 2019 Inducement Equity Plan is intended to comply with Rule 5635(c)(4) of the Nasdaq Stock Market Listing Rules, which provide an exception to the Nasdaq Stock Market Listing Rules’

on the shareholder approval requirement for the issuance of securities with regards to grants to employees of the company or its subsidiaries as an inducement material to such individuals entering into employment with the company or its subsidiaries.

The 2019 Inducement Equity Plan is intended to comply with Rule 5635(c)(4) of the Nasdaq Stock Market Listing Rules, which provide an exception to the Nasdaq Stock Market Listing Rules’ on the shareholder approval requirement for the issuance of securities with regards to grants to employees of the company or its subsidiaries as an inducement material to such individuals entering into employment with the company or its subsidiaries.

An individual was eligible to receive an award under the 2019 Inducement Equity Plan only if he or she was not previously an employee or director of our company (or is returning to work after a bona-fide period of non-employment), and an award under the 2019 Inducement Equity Plan is a material inducement for him or her to accept employment with our company.

As a result of approval by our stockholders of our amended and restated 2019 Incentive Plan on October 27, 2020, no new awards will be granted under the 2019 Inducement Equity Plan.

Share-based compensation awards available for grant or issuance for each plan as of the beginning of the fiscal year, including changes in the balance of awards available for grant for fiscal 2023, were as follows:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Share-based compensation awards available for grant or issuance have been adjusted for outstanding awards for which the performance period is complete.

Awards available for grant or issuance for each plan, as of the beginning of the fiscal year, including changes in the balance of awards available for grant for fiscal 2024, were as follows:

Replacement Award

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Additional shares authorized

Transferred between plans

Restricted stock units granted

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Income tax benefit on share-based compensation

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

We recognize a tax benefit upon expensing certain share-based awards associated with our share-based compensation plans, including RSUs, market stock units, or MSUs, PSUs, and phantom stock units.

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Our share-based compensation plans with outstanding stock option awards include our 2010 Incentive Plan.

Under our 2010 Incentive Plan, we were able to grant incentive stock options or nonqualified stock options to purchase shares of our common stock at not less than 100 % of the fair market value, or FMV, on the date of grant.

Under our 2010 Incentive Plan, we were able to grant incentive stock options or nonqualified stock options to purchase shares of our

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

common stock at not less than 100 % of the fair market value, or FMV, on the date of grant.

We ceased granting stock options in fiscal 2018.

Options granted under our 2010 Incentive Plan generally vest three to four years from the vesting commencement date and expire seven years after the date of grant if not exercised.

Options granted under our 2010 Incentive Plan generally vested three to four years from the vesting commencement date and expired seven years after the date of grant if not exercised.

Certain stock option activity for fiscal 2024 and balances as of the end of fiscal 2024 were as follows:

(In millions)

Balance at June 2022

Balance at June 2023

Exercisable at June 2023

The aggregate intrinsic value was determined using the closing price of our common stock on the last trading day of fiscal 2023, or June 23, 2023, of $ 81.16 .

Balance as of June 2023

Balance as of June 2024

Cash received and the aggregate intrinsic value of stock options exercised for fiscal 2024, 2023, and 2022 were as follows (in millions):

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Until delivery of shares, the grantee has no rights as a stockholder with respect to any shares underlying the RSU award.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

RSU activity, including RSUs granted, delivered, and forfeited in fiscal 2024, and the balance and aggregate intrinsic value of RSUs as of the end of fiscal 2024 were as follows:

Balance at June 2022

Balance at June 2023

Balance as of June 2023

Balance as of June 2024

At the end of fiscal 2024, the aggregate intrinsic value of RSUs expected to vest was $ 141.6 million and the number of RSU awards expected to vest is 1.6 million shares.

Our closing stock price of $ 88.20 on the last day of trading in fiscal 2024 was used to calculate the intrinsic value for the RSUs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The unrecognized share-based compensation cost for RSUs granted under our 2019 Incentive Plan, our 2019 Inducement Equity Plan and our 2010 Incentive Plan was approximately $ 128.8 million as of the end of fiscal 2024, which will be recognized over a weighted average period of approximately 2.03 years.

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and the fourth tranche (in the case of four-year vesting) vests based on a four-year performance period.

For MSU awards granted in fiscal 2023, performance is measured based on our achievement of a specified level of total stockholder return, or TSR, relative to the TSRs of each company in the Russell 2000 Index.

For MSU awards granted in fiscal 2023 and 2024, performance is measured based on our achievement of a specified level of total stockholder return, or TSR, relative to the TSRs of each company in the Russell 2000 Index.

The potential payout ranges from 0 % to 300 % of the target grant quantity based on our TSR performance relative to the TSRs of each company in the Russell 2000 Index.

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The first tranche and the second tranche can payout up to 300 %, and the payout for the third tranche will be calculated based on the total target quantity for the entire grant multiplied by the payout factor, based on performance for the three-year performance period, less shares issued for the first tranche and the second tranche, but not less than the third tranche target quantity multiplied by the final payout factor.

For MSU awards granted in fiscal 2022 and 2021, performance is measured based on our achievement of a specified level of total stockholder return, or TSR, relative to the TSRs of each company in the Russell 2000 Index.

For MSU awards granted in fiscal 2022, performance is measured based on our achievement of a specified level of total stockholder return, or TSR, relative to the TSRs of each company in the Russell 2000 Index.

The potential payout ranges from 0 % to 200 % of the target grant quantity based on our TSR performance relative to the TSRs of each company in the Russell 2000 Index.

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The first tranche and the second tranche can payout up to 200 %, and the payout for the third tranche will be calculated based on the total target quantity for the entire grant multiplied by the payout factor, based on performance for the three-year performance period, less shares issued for the first tranche and the second tranche, but not less than the third tranche target quantity multiplied by the final payout factor.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

For outstanding MSU awards granted in fiscal 2020, performance is measured based on our achievement of a specified level of TSR relative to the TSR of the S&P Semiconductor Select Industry Index, or the Index.

The potential payout ranges from 0 % to 200 % of the target grant quantity and is adjusted on a two-to-one ratio based on our TSR performance relative to the Index.

The payout for the first tranche, the second tranche and the third tranche will not exceed 100 % and the payout for the fourth tranche will be calculated based on the total target quantity for the entire grant multiplied by the payout factor, based on performance for the four-year performance period, less shares issued for the first tranche, the second tranche and the third tranche.

Delivery of shares earned, if any, will take place on the dates provided in the applicable MSU grant agreement, assuming the grantee is still an employee, consultant, or director of our company at the end of the applicable performance period.

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Balance at June 2024

As a result of Synaptics achieving the 80 th percentile relative to the remaining constituents in the Russell 2000 Index, we delivered 200 % of the targeted shares underlying tranche one of the fiscal 2022 MSU grants.

SYNAPTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As a result of Synaptics achieving the 21 st percentile relative to the remaining constituents in the Russell 2000 Index, we delivered 0 % of the targeted shares underlying tranche one the fiscal 2023 MSU grants.

As a result of the Synaptics TSR outperforming the Index TSR by 84.53 percentage points for the tranche three performance period, we delivered 200 % of the targeted shares underlying the fiscal 2020 MSU grants, less shares issued for the first tranche and second tranche.

As a result of Synaptics achieving the 50 th percentile relative to the remaining constituents in the Russell 2000 Index, we delivered 99 % of the targeted shares underlying tranche three of the fiscal 2021 MSU grants.

At the end of fiscal 2024, the aggregate intrinsic value of MSUs expected to vest was $ 17.5 million and the number of MSU awards expected to vest is 0.2 million shares.

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Performance Stock Units

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Our 2019 Incentive Plan and our 2010 Incentive Plan provide for the grant of PSU awards to our employees, consultants, and directors.

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Until delivery of shares, the grantee has no rights as a stockholder with respect to any shares underlying the PSU award.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

PSU activity, including PSUs granted, delivered, and forfeited in fiscal 2024, and the balance and aggregate intrinsic value of PSUs as of the end of fiscal 2024 were as follows:

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Phantom Stock Units

The 2019 Incentive Plan authorized the grant of phantom stock units to non-employee directors, officers and employees.

The 2019 Incentive Plan authorized the grant of phantom stock units to non-employee directors, officers and emp loyees.

We initially granted phantom stock units in October 2019.

Phantom stock units were cash-settled and entitled the recipient to receive a cash payment equal to the value of a single share for each unit based on the average closing share price of our stock over the thirty calendar days prior to the vesting date.

Grants of phantom stock units vested over three years , with an annual

SYNAPTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

vesting date of October 31 each year subsequent to the grant date.

The final vesting occurred on October 31, 2022, and no phantom stock units remain outstanding under this plan.

Phantom stock activity was as follows:

Balance as of June 2022

Balance as of June 2023

Grants of phantom stock units vested over three years , with an annual vesting date of October 31 each year subsequent to the grant date.

The final vesting occurred in the second quarter of fiscal 2023, and no phantom stock units remain outstanding under this plan.

Employee Stock Purchase Plan

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Unrecognized share-based compensation costs for awards granted under our 2019 ESPP at the end of fiscal 2024 were approximately $ 5.7 million that will be amortized over the next 8 months .

SYNAPTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Employee Benefit Plans

1 unchanged sentence

Under the plan, eligible employees may contribute a portion of their net compensation up to the annual limit of $ 23,000 or $ 30,500 for employees who are 50 years or older.

In fiscal 2023 , we provided matching funds of 25 % of our employees’

contributions, excluding catch-up contributions.

In fiscal 2024 , we provided matching funds of 25 % of our employees’ contributions, excluding catch-up contributions.

The employer matching funds vest immediately.

We made matching contributions of $ 1.9 million, $ 1.7 million and $ 1.8 million in fiscal 2023, 2022, and 2021 , respectively.

Income/(loss) before provision for income taxes for fiscal 2023, 2022, and 2021 consisted of the following (in millions):

We made matching contributions of $ 1.9 million in fiscal 2024 and 2023 and $ 1.7 million in fiscal 2022 .

(Loss)/Income before provision for income taxes for fiscal 2024, 2023, and 2022 consisted of the following (in millions):

United States

Income before provision for income taxes

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The provision for income taxes for fiscal 2023, 2022, and 2021 consisted of the following (in millions):

Current tax expense/(benefit)

Deferred tax expense/(benefit)

Provision for income taxes

(Loss)/Income before provision for income taxes

For fiscal 2023, $ 48.7 million of foreign income before provision for income taxes has been reclassified in the preceding table from the United States to foreign to correct for an immaterial error in the prior year presentation .

This reclassification had no impact to our consolidated financial statements or our previously reported net income per share for any prior quarterly or annual period, or the current annual period.

The (benefit)/provision for income taxes for fiscal 2024, 2023, and 2022 consisted of the following (in millions):

Current tax (benefit)/expense

Deferred tax (benefit)/expense

(Benefit)/provision for income taxes

The provision for income taxes differs from the federal statutory rate for fiscal 2024, 2023, and 2022 as follows (in millions):

Provision at U.S.

(Benefit)/provision at U.S.

federal statutory tax rate

State income taxes

Non-deductible share-based compensation

(Windfall)/shortfall related to share-based compensation

Shortfall/(windfall) related to share-based compensation

Non-deductible officer compensation

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Deferred taxes on unremitted foreign earnings

provision to return adjustment (1)

Deferred tax benefit from domestication (2)

Other differences

Provision for income taxes

(Benefit)/provision for income taxes

provision to return adjustment in fiscal 2024 was primarily driven by approximately $ 11.3 million tax benefit from foreign tax credit relief under U.S.

Treasury Notice 2023-55 issued in July 2023, together with a tax benefit of

SYNAPTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Non-current deferred tax assets and non-current deferred tax liabilities are included in “Non-current other assets”

and “Other long-term liabilities,”

respectively, on our consolidated balance sheets.

approximately $ 6.3 million recognized as part of a multiyear research and development tax credit study completed in fiscal 2024.

(2) On June 29, 2024, we completed an intra-group transfer that involved the domestication of certain foreign subsidiaries and the migration of certain foreign intellectual property to the United States.

See further discussion below.

Significant components of our deferred tax assets (liabilities) as of the end of fiscal 2024 and 2023 consisted of the following (in millions):

2 unchanged sentences

Inventory write downs

Property and equipment and intangible assets

Intangibles and capitalized research and development costs

Share-based compensation

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Net deferred tax assets

The fiscal 2022 capital loss carryforward deferred tax asset and its corresponding valuation allowance includes a reclassification adjustment of $ 16.0 million to conform to the current period presentation.

This reclassification had no impact on previously reported deferred tax assets.

Realization of deferred tax assets depends on our generating sufficient U.S.

2 unchanged sentences

and foreign taxable income.

As of the end of fiscal 2023, a valuation allowance of $ 78.4 million was maintained to reduce deferred tax assets primarily related to state tax credits and capital losses carryforwards that are not more likely than not to be realized through future taxable income.

As of June 29, 2024, we simplified our corporate entity structure via an intra-group transfer that included the domestication of certain foreign subsidiaries and the onshoring of certain intellectual property.

As a result of the domestication, a deferred tax benefit of $ 263.0 million was recognized primarily driven by recording certain deferred tax assets, net of deferred tax liabilities based on the U.S.

tax rate in the fourth quarter of fiscal 2024.

The associated deferred tax assets resulting from the domestication are expected to be realizable based on the assessment of currently available evidence.

As of the end of fiscal 2024, a valuation allowance of $ 92.4 million was maintained to reduce certain state and foreign related deferred tax assets to levels we believe are more likely than not to be realized through future taxable income.

The net change in the valuation allowance during fiscal 2024 was an increase of $ 14.0 million, primarily due to an increase of unrealized deferred tax assets associated with state tax credits.

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The federal and California net operating loss will begin to expire in fiscal 2037 and 2027 , respectively if not utilized.

Most of our foreign net operating losses have no expiration date.

Under current tax law, net operating loss and tax credit carryforwards available to offset future income or income taxes may be limited by statute or upon the occurrence of certain events, including significant changes in ownership.

We had $ 16.4 million and $ 53.4 million of federal and state research tax credit carryforwards, respectively, as of the end of fiscal 2023.

The federal research tax credit carryforward will begin to expire in 2029 and the state research tax credit can be carried forward indefinitely.

Most of our foreign net operating loss carryforwards have no expiration date.

Under current tax law, net operating loss and tax credit carryforwards available to offset future income or income taxes

SYNAPTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

if not utilized.

We had $ 30.2 million and $ 69.0 million of federal and state research tax credit carryforwards, respectively, as of the end of fisc al 2024.

The federal research tax credit carryforward will begin to expire in fiscal 2029 and the state research tax credit can be carried forward indefinitely.

The total liability for gross unrecognized tax benefits related to uncertain tax positions, included in other liabilities in our consolidated balance sheets, increased by $ 2.8 million from $ 43.7 million in fiscal 2023 to $ 46.5 million in fiscal 2024.

2 unchanged sentences

Beginning balance

Increase in unrecognized tax benefits related to current year tax

Increase in unrecognized tax benefits related to prior year tax

Increase in unrecognized tax benefits related to current year tax positions

(Decrease)/increase in unrecognized tax benefits related to prior year tax positions

Decrease due to effective settlement with tax authorities

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Ending Balance

Accrued interest and penalties inc reased by $ 0.5 million in fiscal 2023 as compared to fiscal 2022 and increased by $ 0.8 million in fiscal 2022 as compared to fiscal 2021 .

Accrued interest and penalties increased by $ 0.6 million in fiscal 2024 as compared to fiscal 2023 and increased by $ 0.5 million in fiscal 2023 as compared to fiscal 2022 .

Accrued interest and penalties were $ 3.6 million and $ 3.0 million as of the end of fiscal 2024 and 2023, respectively.

Our policy is to classify interest and penalties, if any, as components of income tax expense.

Our policy is to classify interest and penalties as components of income tax expense.

It is reasonably possible that the amount of liability for unrecognized tax benefits may change within the next 12 months;

an estimate of the range of possible changes could result in a decrease of $ 2.9 million to an increase of $ 5.1 million.

Any prospective adjustments to our unrecognized tax benefits will be recorded as an increase or decrease to inc ome tax expense and cause a corresponding change to our effective tax rate.

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.

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the development, marketing, and sale of semiconductor products used in electronic devices and products.

We generate our revenue from three broad product categories:

the IoT product applications market, the personal computing, or PC, product applications market, and the mobile, product applications market.

The chief executive officer was identified as the chief operating decision maker, or CODM, and is ultimately responsible for and actively involved in the allocation of resources and the assessment of our performance.

The fact that we operate in only one reportable segment is based on the following:

Our organizational structure is based along functional lines.

Each of the functional department heads reports directly to the CODM.

The assessments of our performance company-wide, including assessment of our incentive compensation plan, are based largely on our operational performance and consolidated financial performance.

The decisions on allocation of resources and other operational decisions are made by the CODM based on his direct involvement with our operations and product development.

Net revenue within geographic areas based on our customers’

locations for fiscal 2023, 2022, and 2021, consisted of the following (in millions):

United States

In previous reporting periods, we categorized revenues from three product categories:

the IoT product market, the personal computing, or PC, product market, and the Mobile product market.

Effective in the first quarter of fiscal 2024, we categorize our revenues in the following product categories:

Core IoT, Enterprise and Automotive, and Mobile product applications.

A summary of our products and how they are categorized under our new product categories is as follows:

Wireless and Processor Solutions

• Enterprise and Automotive:

PC Touch Pad, PC Fingerprint, Video Interface Solutions, Enterprise Audio Solutions, Fax and Printer Solutions, Automotive Solutions

Touch and Display Solutions for Mobile phone applications

Revenues for the fiscal 2023 and 2022 from our previous product categories have been reclassified in order to conform to the current period presentation as follows (in millions):

Enterprise and Automotive

IoT product applications

PC product applications

Mobile product applications

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Net revenue from external customers for each group of similar products for fiscal 2023, 2022, and 2021 consisted of the following (in millions):

Enterprise and Automotive

IoT product applications

1 unchanged sentence

Mobile product applications

Long-lived assets within geographic areas as of the end of fiscal 2023 and 2022 consisted of the following (in millions):

Net revenue from our customers for each product category was as follows (in millions):

Enterprise and Automotive product applications

Core IoT product applications

Mobile product applications

Net revenue within geographic areas based on our customers’ locations for fiscal 2024, 2023, and 2022, consisted of the following (in millions):

United States

The fiscal 2022 long-lived assets reported in the above table includes a reclassification of approximately $ 428.0 million to conform to the current period presentation.

The reclassification relates to goodwill and intangible assets previously reported within the Asia Pacific region that are now presented within the EMEA region.

This reclassification had no impact on previously reported geographic long-lived assets.

Our goodwill of $ 816.4 million has been allocated to two reporting units which include IoT and Mobile/PC.

Major customers’

revenue as a percentage of total net revenue for fiscal 2023, 2022, and 2021 were as follows:

Long-lived assets within geographic areas as of the end of fiscal 2024 and 2023 consisted of the following (in millions):

North America

During fiscal 2024, as a result of the intra-group transfer that domesticated certain subsidiaries, in the above table, we reclassified $ 350.7 million of goodwill and intangible assets from EMEA to the United States.

Major customers’ revenue as a percentage of total net revenue for fiscal 2024, 2023, and 2022 were as follows:

* Less than 10 %

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Restructuring Activities

3 unchanged sentences

Balance, end of period

During fiscal 2024 , we recorded restructuring and related charges of $ 10.5 million in our consolidated statements of operations.

The charges were for activities intended to further improve efficiencies in our operational activities, decrease costs and increase profitability.

The restructuring plan was initiated during the first and fourth quarters of fiscal 2024 to streamline the company and optimize resources.

Restructuring charges are mainly comprised of severance and other one-time termination benefits.

We expect these restructuring actions to be substantially completed by the end of fiscal 2025.

During fiscal 2023 , no restructuring charges were recorded.

2 unchanged sentences

These activities from the restructuring actions taken during fiscal 2022 are complete as of the end of fiscal 2022.

During fiscal 2021, we recorded restructuring and related charges of $ 7.4 million in our consolidated statements of operations.

The charges were for activities to gain synergies from our DisplayLink acquisition.

The activities from the restructuring actions taken during fiscal 2021 were complete as of the end of fiscal 2021.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Subsequent Events

In July 2023, we entered into an agreement with Avago Technologies International Sales PTE.

Limited, or Broadcom, to acquire certain developed technology intangible assets from Broadcom for an aggregate consideration of $ 130.0 million.

We are still in the process of evaluating the proper accounting treatment under Topic 805 on Business Combinations.

On July 21, 2023, the IRS issued Notice 2023-55 which generally allows taxpayers to defer application of elements of the 2022 foreign tax credit final regulations, and related guidance, until 2024.

In our case, foreign taxes which were creditable under the prior regulations will continue to be creditable for our fiscal 2023.

As this Notice was issued subsequent to our fiscal 2023 and represents a retroactive change in tax law, we anticipate recording a discrete tax benefit in the first quarter of fiscal 2024 in the amount of approximately $ 12 million.

Subsequent to our fiscal 2024, we initiated a restructuring action to reduce our cost structure, improve operational efficiencies, and optimize resources, including freeing up resources for deployment into strategic product development opportunities.

This restructuring action will mainly be comprised of severance and other one-time termination benefits.

We expect to record restructuring charges from this restructuring action of approximately $ 14.0 million to $ 16.0 million in fiscal 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures