Synaptics Incorporated (SYNA)

Interest coverage

		Jun 30, 2025	Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-76,400	-65,200	-56,300	-52,500	-59,300	-108,500	-56,900	7,100	154,300	316,400	375,700	407,200	347,700	274,200	212,300	193,200	146,700	214,200	201,600	177,600
Interest expense (ttm)	US$ in thousands	12,900	16,900	21,700	23,500	23,000	23,700	24,800	25,400	28,300	30,900	30,600	29,600	27,200	27,200	27,500	27,800	26,600	24,000	20,200	16,500
Interest coverage		-5.92	-3.86	-2.59	-2.23	-2.58	-4.58	-2.29	0.28	5.45	10.24	12.28	13.76	12.78	10.08	7.72	6.95	5.52	8.92	9.98	10.76

June 30, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-76,400K ÷ $12,900K
= -5.92

The interest coverage ratios for Synaptics Incorporated over the specified periods exhibit notable fluctuations, reflecting evolving financial conditions. Starting from a high of 10.76 times on September 30, 2020, the ratio declines progressively through 2021 and into early 2022, reaching a low of 5.52 on June 30, 2021, before rebounding to a peak of 13.76 on September 30, 2022. This indicates periods of improved ability to meet interest obligations relative to earnings before interest and taxes (EBIT).

However, the ratios demonstrate a significant downward trend thereafter, culminating in negative values in late 2023 and beyond. Notably, the interest coverage drops to 0.28 on September 30, 2023, and further declines into negative territory, reaching -2.29 by December 31, 2023, and continuing negative through subsequent periods, with the latest figure of -5.92 expected by June 30, 2025.

The negative interest coverage ratios from late 2023 onward imply that the company's earnings before interest and taxes are insufficient to cover its interest expenses, suggesting serious financial distress or potentially unsustainable debt levels. During the periods with positive ratios, the company maintained an adequate cushion to meet interest obligations, but the recent downturn indicates deteriorating profitability or increasing debt burdens, raising concerns about future financial stability and liquidity positions.