Good day. And welcome to the Synaptics Second Quarter 2016 Conference Call. Today's conference is being recorded. At this time I would like to turn the conference over to Jennifer Jarman. Please go ahead, Ms. Jarman.

Thank you, Adam. Good afternoon and thank you for joining us today on Synaptics Second Quarter Fiscal 2016 Conference Call. This call is also being broadcast live over the Web and can be accessed from the Investor Relations section of the company's website at Synaptics.com. With me on today's call are Rick Bergman, President and CEO; and Wajid Ali, CFO. In addition to the company's GAAP results, management will also provide supplementary results on a non-GAAP basis, which excludes share-based compensation, change in contingent consideration and certain noncash or nonrecurring items. Please refer to the press release issued after market closed today for a detail reconciliation of GAAP and non-GAAP results. Additionally, we would like to remind you that during the course of this conference call, Synaptics will make forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. Although Synaptics believes our estimates and assumptions to be reasonable, they are subject to a number of risks and uncertainties beyond our control, and may prove to be inaccurate. Synaptics cautions that actual results may differ materially from any future performance suggested in the company's forward-looking statements. We refer you to the company's current and periodic reports filed with the SEC, including the Synaptics Form 10-K for the fiscal year ended June 27, 2015, for important risk factors that could cause actual results to differ materially from those contained in any forward-looking statements. Synaptics expressly disclaims any obligation to update this forward-looking information. And with that said, I will now turn the call over to Rick Bergman. Rick? Richard A. Bergman - President, Chief Executive Officer & Director: Thanks, Jennifer. And I'd like to welcome everyone to today's call. As you've seen from today's press release, we…

Thank you. We'll now pause for just a moment to allow everyone an opportunity to signal for questions. So the first question comes from Rajvindra Gill from Needham & Co. Please go ahead. Rajvindra S. Gill - Needham & Co. LLC: Yes, thank you. I was wondering if you could talk a little bit about the revenue drivers in the March quarter by business line, and what are you seeing by each product line? Wajid Ali - Chief Financial Officer & Senior Vice President: Sure. Hi, Raj. So like we said in our prepared remarks, we expect the mix of mobile products to increase sequentially from 87% to 90% of our total revenues, and for our PC products to effectively decline sequentially quarter-over-quarter, both on a percentage basis as well as on a dollar basis. Now, within the mobile products, we've got a significant drop in our DDIC product line. And we expect to see growth in both our Fingerprint products as well as our core touch business. And our core touch business is primarily going to be driven by both the strength in our small discrete products as well as initial ramps of TDDI products during the month of March. So that's kind of some color on how we see it by product line for the March quarter. Rajvindra S. Gill - Needham & Co. LLC: And as a follow-up, you know the fiscal year 2016 guidance of 9% to 11%, just so let's say I have my math correct. On an apples-to-apples basis, where I include $200 million of extra revenue for Renesas in the September 2014, or fiscal year, Q1 2015 quarter, that basically implies revenue to be down 1% or 2% year-over-year if I, again, add the extra $200 million or so of Renesas in fiscal…

The next question comes from Kevin Cassidy from Stifel. Please go ahead. Kevin Cassidy - Stifel, Nicolaus & Co., Inc.: Hi. Thanks for taking my question. I guess as you're looking at the TDDI, are you also winning just DDIC designs, discrete DDIC, in China? Richard A. Bergman - President, Chief Executive Officer & Director: Yeah, thanks, Kevin. We talked about discrete DDIC being an opportunity for us. And you're correct, yes, we are. Certainly, what TDDI has helped us, we are by far the clear industry leader. And as we have to call it, new customer engagements now, with some of the Asian LCMs. TDDI is actually a big door opener for us. We get in there and work with them on doing end-sell. And suddenly they also want to use our discrete DDIC chips on some high-resolution or mainstream type of products. So, to answer your question, absolutely we're getting design wins with some of the Chinese or Taiwanese LCMs that we previously haven't had. Earlier during the prepared remarks you heard me rattle off a bunch of LCMs. In some cases those are brand new customers for us that we haven't had previously. And now they're using our TDDI products. But back to your original question, that gives us some opportunity for DDICs as well. Kevin Cassidy - Stifel, Nicolaus & Co., Inc.: Okay. Great. And maybe if you could just talk a little bit about that competition in TDDI. You've been working on it for a lot of years and it seems you should have a significant advantage. But could you talk about where the competition is and the differences between your product and theirs? Richard A. Bergman - President, Chief Executive Officer & Director: Sure. So, call it more broadly, for a year we've been…

The next question comes from Charlie Anderson from Dougherty & Company. Please go ahead. Charlie Lowell Anderson - Dougherty & Co. LLC: Yeah. Thanks for taking my questions. Wajid, could you give the percentages of the 10% customers? Wajid Ali - Chief Financial Officer & Senior Vice President: Yes, I can. Charlie, I just don't have it in front of me right now. Richard A. Bergman - President, Chief Executive Officer & Director: Charlie, do you have another question. He's, he's... Maybe I can answer it while he's hunting and searching. Charlie Lowell Anderson - Dougherty & Co. LLC: That works. So, Rick, you know, it's interesting that you mentioned at the Analyst Day and at CES that you had a much improved Fingerprint sensor, and you mentioned some design wins. I wonder to what degree – maybe if I X out Samsung, you know that's your largest customer. And when I think about the China market where we've seen a lot of designs in the industry, to what degree is that in your guidance? Is that more of a back half of calendar 2016 that you would see that ramp? And then I also wonder to what degree ClearForce is in the guidance at all for the fiscal year – if that's also more of a back half of calendar 2016 event for you guys. Richard A. Bergman - President, Chief Executive Officer & Director: Okay. Yeah thanks, Charlie. So let's start off with the Fingerprint. So I often get this comment, "Well, if we X off Samsung..." So as you heard, there's a lot of good news with Samsung, and they're by far the number one Android smartphone manufacturer. We all heard their results earlier today. And we continue to expand our success there. So we have a…

The next question comes from Rob Stone from Cowen & Company. Please go ahead. Robert Stone - Cowen & Co. LLC: Hi, guys. Thanks for taking my question. Wajid, I just wanted to follow up on your OpEx commentary. When you say flat, are you speaking in percentage terms or in absolute dollars? Because revenue is going to be... Wajid Ali - Chief Financial Officer & Senior Vice President: Absolute dollars. Absolute dollars. Robert Stone - Cowen & Co. LLC: Okay... Wajid Ali - Chief Financial Officer & Senior Vice President: Yeah. So we're expecting March operating expenses in absolute dollars to be sequentially flat, plus or minus the 100 basis points in fiscal Q3, and then flat in dollars for the June quarter to the March quarter, plus or minus 100 basis points. So that's the range that we're looking at. Robert Stone - Cowen & Co. LLC: Okay. A question for Rick, on the Fingerprint sensors, when might you see the gen two under-glass solution, which I guess is sampling now? When do you think that could be shipping for revenue? Richard A. Bergman - President, Chief Executive Officer & Director: That particular product will be a second half of the calendar year. You've got to understand when you move under glass, we're changing a bit of the paradigm in the industry. So that means we have to work with the module manufacturers to either do recessed glass or build the glass buttons. And then of course work with the OEMs and how that impacts their industrial design. So that takes a little longer. You saw samples of the part in November. But realistically, we'd see mass production in the second half of the year. The phones that I talked about launching in the spring would be using…

The next question comes from Ambrish Srivastava from BMO. Please go ahead. Mr. Srivastava, your line is now open.

Hi. Sorry about that. Can you hear me now? Hello?

Pardon the interruption. It looks like Mr. Bergman and Mr. Ali's line has just dropped. Ms. Jarman, are you there?

I'm here. Hopefully they're trying to dial back in as we speak. So, stand tight, everybody.

Yes. Let's give them a minute to dial back in.

Sure.

Yes, Adam, they are working on dialing back in. So, everyone please hold. Are you back?

I think they're back. Richard A. Bergman - President, Chief Executive Officer & Director: Yeah, Jennifer.

Okay. Wajid Ali - Chief Financial Officer & Senior Vice President: Jennifer, it's Rick and Wajid. We're back.

Okay.

So...

Hey, guys. This is Ambrish. Wajid Ali - Chief Financial Officer & Senior Vice President: Hi, Ambrish.

Hey. I didn't even start asking my questions and you guys dropped off. It's not going to be that hard. Wajid Ali - Chief Financial Officer & Senior Vice President: Yeah. We're sorry about that. Please go ahead.

Okay. My first question was, and I apologize if it has been covered. Could you please comment on the health of the end market? You know we've all seen, watched both Apple and Samsung's numbers and the guide. So outside of those two, and we also see Xiaomi has missed their numbers for the full year. So can you help us understand what's going on besides those two guys? And then my quick follow-up is, Wajid, if I look at the – in the context of your backlog coverage and your assumptions for the end market, what gives you the confidence and should give investors the confidence that the full-year number now will not see any of the guide down? I mean I know it can always happen. But just help us understand your confidence around that. Thank you. Wajid Ali - Chief Financial Officer & Senior Vice President: Yeah. Sure. I'll let Rick pick up the question on markets and then I'll follow up with the backlog coverage question. Richard A. Bergman - President, Chief Executive Officer & Director: Okay. Thank you, Ambrish. So yes, there's certainly been no shortage of news around our primary market, the mobile space, over the past couple of weeks. And I think what has happened to a number of us is the forecast changed fairly substantially towards the end of the last calendar year. And we've addressed our plans. And what we have seen is weakness. I would say specifically in the higher end of the smartphone marketplace. Of course there's always seasonality that occurs this time of year. But I think it caught a number of us off guard about the severity of that. And that's now built into what we have for our Q3 and then additional weakness in Q4 as…

Okay, thank you... Richard A. Bergman - President, Chief Executive Officer & Director: Sorry, just to add a little bit more on. I know you recently started tracking us, maybe a year ago. But a couple years ago, I remember back in the day, we had lost an important touch socket roughly this time of year. And the company kept just rolling along. Our financial performance was good, and we stayed very profitable and so forth, and continued to grow after a brief pause. I can't help but see this situation as quite analogous. Yes there's been this blip in the market that we got to fight through but if you kind of do the numbers, you'll see our fiscal Q4 is just fine and Synaptics is making good operating profits and we feel we're positioned well. And it sets us up for a very good fiscal 2017 as well, based on, back to the pillars of strength that I talked around Fingerprint and TDDI.

Thank you. Very helpful, gentleman.

Okay. The next question comes from Paul Coster from JPMorgan. Please go ahead.

Yeah, thanks. Second question. As we see this next-generation TDDI chipset being adopted Rick, what kind of brands and what kind of handsets are we going to see it deployed on? Is it going to be flagships or is it through the range? Richard A. Bergman - President, Chief Executive Officer & Director: That's the real exciting news there. We're getting some top-tier brands for OEMs. Of course, at this juncture we can't mention those names based on our policies and their policies. However, you'll actually see both flagships as well as mainstream phones. As I mentioned, we have that breadth of resolutions and we have multiple LCMs, multiple OEMs per part. So if we have an HD device you can imagine that's more mainstream. And if we have a QHD device, you can imagine that's more of the flagship type of category. So to answer your question, all of the above.

Okay. And then on the China side with Fingerprint, you sound confident that you're going to come back at that market pretty well. Is it through the OEMs? Or is it through the panel manufacturers? What's the go-to-market strategy? And what's the level of confidence? Richard A. Bergman - President, Chief Executive Officer & Director: Sure. For China it's – you kind of have to have a triangle in place. There's of course ourselves and then there's the OEMs that drive a lot of the specs and the quality requirements, so on. And then typically you have an IHV, an independent hardware vendor that actually takes our sensor and makes it into a button or a module. So where we had a gap previously was in some ways that third category, the IHV. We had of course great OEM relationships because we've been shipping them touch products for quite some time, and now TDDI devices and Force and all that good stuff. But we didn't have all of our products in modules ready to roll at the IHVs. As we talked about during the Analyst Day, we kind of fixed that situation in the second half of calendar 2015. And now we're securing those design wins and they're going through the final qual process right now. And we hope to tell you about them in the spring timeframe.

Thank you.

The next question comes from Rajvindra Gill from Needham & Company. Please go ahead. Rajvindra S. Gill - Needham & Co. LLC: Yeah. Thanks for the follow-up. Just the – I'm just trying to get a sense of the mobile products business because I think in the past you have given at least some color commentary on the Fingerprint, on the Renesas business, if I'm going back through the old transcripts, of how they've kind of trended. So, any color there would be helpful in terms of what Fingerprint is doing in the March quarter, what TDDI is doing. That would be helpful. Thanks. Wajid Ali - Chief Financial Officer & Senior Vice President: So, Raj, it becomes a little bit more difficult on the RSP business because as I talked about earlier there's a lot of product integration that's happening. And so because of that product integration you know we've talked about the success we're expecting in TDDI, both for the March quarter and for the June quarter. So we're seeing positive trends there. Rick and I both talked about our DDIC business declining in the back half of the year. So that's the additional color. So really what's left over is our Fingerprint business. And our Fingerprint business, at least in the March quarter we're expecting to see material improvements sequentially. And we're also expecting to see improvements in our fiscal Q4. So that's really about the level of color I can provide at this time. But when you take a look at our gross margin profile, our gross margin profile, the March quarter versus the December quarter, the reason for the uptick is because of that positive product mix related to both Fingerprint and to TDDI, unfortunately offset by the weakness that we're seeing in DDIC that Rick talked about earlier. So... Rajvindra S. Gill - Needham & Co. LLC: I appreciate that. On the DDIC is the weakness across the board both on Android and non-Android? Wajid Ali - Chief Financial Officer & Senior Vice President: So I can't talk about particular customers but if I take a look at the first half of the year versus the back half of the year, our DDIC revenues are declining quite a bit. We're hoping that that picks up again in the latter part of the calendar year but at least for our fiscal year, we're seeing that decline in DDIC second half versus first half. Richard A. Bergman - President, Chief Executive Officer & Director: But just to be really clear on the hints that we're giving here. This isn't due to the weakness of our product line or losing share or anything of that nature to somebody else. It's our customers forecasts that are driving this significantly lower outlook for the second half of the year than previously. Rajvindra S. Gill - Needham & Co. LLC: All right. Got you. Thank you.

We have a follow-up question from Paul Coster from JPMorgan. Please go ahead.

Yeah. Rick, I'm so sorry to have to ask this but can you comment on the M&A stories that have been floating around? Richard A. Bergman - President, Chief Executive Officer & Director: Well and Paul you can probably anticipate what my answer's going to be on the question in that particular area, so we're not going to comment on rumors or market speculation.

Well, let me rephrase it then. I mean in principle anything that creates shareholder value is that something the board would consider? Richard A. Bergman - President, Chief Executive Officer & Director: Well Paul we had a form of that question back in October as well. And as a public company, the answer is at the end of the day it is our job to maximize shareholder value so we'll listen to any great ideas that can do that and evaluate them appropriately. But as a company as you can tell, we're excited about growing Synaptics so that continues to be job number one for myself and my team.

Okay, thank you.

The next question comes from Vijay Rakesh from Mizuho. Please go ahead.

Hi guys. I saw you mentioned some nice design wins on the TDDI side and Fingerprint coming through from China as you go through the year. As you exit, looking out at 2016, any thoughts on what the mix of force sensing and Fingerprint and TDDI would be? Richard A. Bergman - President, Chief Executive Officer & Director: When you say mix, you mean revenue mix or...

Yeah... Richard A. Bergman - President, Chief Executive Officer & Director: Can you narrow it down a bit?

As a mix of revenues, yeah. Richard A. Bergman - President, Chief Executive Officer & Director: Between force sensing, TDDI and Fingerprint?

Yeah. Richard A. Bergman - President, Chief Executive Officer & Director: Yeah, it's kind of hard to – We don't, at this point, split out those product lines. It would be really hard to call it, split out force sensing. As I indicated, that's a capability that we're actually building into our TDDI devices as well as our discrete Touch. So that will get mixed quite a bit. In terms of overall, where's TDDI going to be, we gave the market size for calendar 2016 as part of our Analyst Day deck. I believe it was 60 million or 70 million units. And we think we'll get the lion's share of that business in calendar 2016. So that gives you a generalized ball park. On Fingerprint, Wajid talked about the great growth that we're having this quarter and how that strength continues into fiscal Q4. And we would expect that to continue to roll forward as we get these new products and additional OEMs. In terms of percentage, unfortunately, we can't really throw something out there.

Got it. And when you look at the China market, obviously, you are throwing a lot of effort into it now. Would you expect Fingerprint and TDDI to pick up in China, or TDDI is smaller for later and maybe more Fingerprint in the second half? Richard A. Bergman - President, Chief Executive Officer & Director: So China is a very important part of any of our plans for all of our product lines. As I mentioned, we have some unnamed OEM design wins, and clearly some of those are the Chinese OEMs. And likewise, as I said, you'll expect to see some product announcements on Fingerprint in the springtime, certainly from China or Asia area.

Thanks.

The next question comes from Osten Bernardez from Cross Research. Please go ahead.

Hey, good afternoon. Thanks for taking my questions. I just wanted to follow up with respect to DDIC, given what you're seeing in the market today, both from a broader macro perspective and from some of the higher end customers. What's your thoughts today on the longer term growth trajectory for DDIC versus what you were thinking not too long ago when you first acquired Renesas, at the, what I believe, is a mid-single growth rate long-term, 5 percentage or 6 percentage points. And now we're in a world where, obviously, smartphones are growing at a much slower pace. How should we be thinking about that? Richard A. Bergman - President, Chief Executive Officer & Director: We haven't, called it, reset our expectations on DDIC. I presume you're talking about discrete DDIC and at this juncture I'd say the only call it rethinking that we've done we have some customers that are focused in that area. That will continue on and they're separate forecasts around their business but in general, if anything right now we're more optimistic about what TDDI is doing. And at some level it's certainly going to start cannibalizing the DDIC business and for us for the most part that's pretty good news because where we'd see that cannibalization frankly we don't have a huge amount of share to start with. So that's for the most part upside for us and so again, we're more encouraged about the adoption rate of TDDI than we were just three or six months ago when we first started sampling the parts based on all the LCM design wins and momentum that you heard me mention earlier in the prepared remarks.

And following on an earlier comment with respect to shareholder returns, was there – it looks like you did not repurchase any shares. I'm not sure. There wasn't any commentary. If not, why not? And then attached to that is what portion of your cash is in the U.S.? Wajid Ali - Chief Financial Officer & Senior Vice President: Yeah. So, Osten, probably close to $150 million of cash is in the U.S. right now. We didn't buy back any shares. You're quite correct this quarter. The board had authorized an additional $273 million of share buybacks at the end of the prior quarter, at the end of Q1, to bring our cumulative authorization to $1 billion $50 million (55:44). And at our analyst day we talked about a number of pillars to our capital deployment strategy and share buybacks is one of those pillars. As a reminder we had purchased close to 5% of our outstanding shares back in August and so we've got to balance all the opportunities and the pillars in front of us while we're looking at our cash deployment strategy. So that's the reason we didn't buy back any shares in fiscal Q2.

There are no further questions. I would now like to turn the call back over to management for closing remarks. Richard A. Bergman - President, Chief Executive Officer & Director: Thank you, everyone. It was a long call today even though we had a lot of news, a lot of changes in the marketplace. So thanks for everybody hanging in there and for those that I'll see in Barcelona I look forward to being able to talk or update you on the business and our products at that time. Otherwise we'll talk next quarter. Thank you very much.

Ladies and gentlemen, this concludes the conference call for today. We thank you for your participation. You may now disconnect your lines and have a great day.