CRUS - Earnings call transcript Q2 2019

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic Second Quarter Fiscal Year 2019 Financial Results Q&A Session. At this time, all participants are in a listen-only mode. After a brief statement, we will open up the call for questions from analysts. Instructions for queuing up will be provided at that time.

conference being this purposes. for reminder, a call recorded is replay As would the turn like call I to Mr. conference now over to Chief Financial Case, Thurman Officer. Mr. begin. may you Case,

Thurman K. Case

Thank you, and afternoon. good

expectations. other cause website, current materially otherwise. for factors session, that made this Please projections filings information, Commission Logic XX-K obligation developments and statements result to of the and available Jason are me of actual at Director or cause we make during our latest risk approximately press the year a The the Relations. earnings our Eastern. the refer company submitted covering This reconciliation Cirrus materially and this investor.cirrus.com. webcast or Joining projections. second call announced most comparable Investor no well Officer; company our Shareholder update is new X:XX corporate we that our us projections GAAP any company's results are results non-GAAP to Q&A differ Cirrus the to statements, revise all forward-looking the today's whether Logic's Securities forward-looking the Chelsea By as p.m. on at email actual as of via analysts at financial risks this the undertakes President including Letter Form as that XXXX website may financial from call providing subject note Chief uncertainties press Today, Heffernan, XX-Q, quarter release to the discussion as is Executive well to issued and fiscal with today, results, Rhode, and that will investor.relations@cirrus.com. release, directly discussing Investor financial or for of of information differ Relations to Please could other at available with from feature on to results information, which questions additional questions Exchange may and of the a session, as the along from

Now the call to Jason. over I'll turn

Jason P. Rhode

Thank you, Thurman.

comments. Before questions, we taking begin I'd few to make a like

early moved into be our for Shareholder are guidance for Cirrus For please frequently reported Predicting of late revenue million on on products QX high account the portable the the end orders results, Relations short exceeded ramping QX website. quarter $XXX.X particularly and from revenue boundary customers quarters our heavily QX. our in of as can and Revenue a these as do at of of read Logic typically we detailed can individual FYXX. posted certain financial change notice. Letter Investor orders challenging,

our for the in remain demand smartphone this customer launches reflects the expected quarter year. fiscal relatively and that period expectations overall of primary for products shift end of for timing in of the FYXX, With the variability late remainder December While include company's drivers guidance to handsets utilize this orders, company's respect the note our unchanged. the for six-month we expectations new

expanded we flagship two are new that market, numerous with our share and handset portfolio components. as were and momentum announced We and a Android existing North audio our design customer. American began strong a was with in customers our the our In progress QX, new amplifiers haptic shipping use in across driver pleased devices smartphone

are single after with now amplifier we footprint our quarter, in boosted amplifiers During penetration company and OEMs with our and a in multiple XX-nanometer in a the ramped win boosted of smartphone the increased new leading quarter, largest initial last a shipping amplifiers model and smartphones of models. flagship Further, Android mid-tier one customer. expanded

In Cirrus expect calendar line our this we're investing haptics, next team's XXXX. product launch flagship utilizing in the We since with to execution in R&D additional devices over our began months. Logic technology resources delighted six

haptic driver a Android smartphone. mentioned, shipping I we're As our flagship now in first

robust is also driver our haptic come first-generation our on product in using plan with of component, market see months a first and expect taping the and new specifically we XXXX. are this road we XX to design increased we the we next as to devices low-latency in continue haptics activity out over design map, ultra-low-power, products mixed-signal to While processing. an capitalize spring and products our encouraged With compelling extensive demand of that portfolio calendar for expertise on for

revenue a As confident we we look in to meaningful customer our pipeline to and engagements, ability of return remain FY year-over-year solid XXXX growth. with to products

do I about now Before we would note interest understand is we relationship. with take largest to there discuss our ready in also to accordance like Q&A, that business intense specifics our while customer, to begin related we're questions. not the policy, we our Operator,

Operator

Your first go ahead. of Stifel. Tore line question Please comes Svanberg of from the

Tore Egil Svanberg

thank you. Yes,

First topic is haptics.

like that it what the about sounds to could integrated be that customers bit for in DSP going was Jason, a offering company, and haptic-specific flexibility the on you're XXXX. thinking of I you especially can as just So, elaborate when a and so for little what spring solution you offer on. a means hoping,

Jason P. Rhode

– kind make that to as and you of it's the of our to product self-contained lot more do a be a building devices yeah, are the try devices possible. just the broad about having engage it's of ecosystem, would I in Yeah, multiple a where Sure, to turnkey have things And Android and prefer more the on the great really development and to of possible. device across you as they first success of particular, had. more with in we've not it sweep system could of relative whenever new come would we more time theme the market, say you a Any learn question. kind out same. It's

little really type of more just device. it's more a of kind integrated So purpose-built, little

Tore Egil Svanberg

And question my other on voice right, great, thanks. All biometrics. was

us a be could Letter that? for earlier progressing But timing of going You fiscal mentioned more your on be when XXXX or it could Is update it driver Shareholder in this on than that is there. could be revenue you you? everything to

Jason P. Rhode

layers reasonable some contribution could – mean, but probably it to I things is growth for strategy. the the when to further-out potential a one our of for is meaningful. that's It we on see be that, placeholder before our the

obviously, from signal the to think it device, capabilities, into seeing integrated haptics, we high that in mixed ecosystem. is apply maybe like to other penetration a bit significantly by as amplifiers a in mixed-signal and for feel embed market. we're is take and and of lot being really with power our the good voice-related. can higher that is aren't driven Increasingly, particular, progress we and a more unique an little areas I child and audio- Android our where something maybe haptics term But more processing capability the broadening of technology in audio voltage out for pull poster short

various look devices. point and good. as continue a with a but of targeting of So really Obviously for in interesting excited appeal we we're broaden lot We've into has but customers of the markets these than growth handsets to number for for interest there's other technology vectors customers ways some about first, out, out it to as well. other demos out voice further done the it's for from remain been us. other biometrics, you Feedback

Operator

Thank you.

ahead. the Your Please Ramsay of Cowen. line next comes Matt from go question of

Matthew D. Ramsay

Maybe per to very things little fiscal case little expand market over about much. could the which be couple There's to affect you you talk some you. lot XXXX. a bit could wireless commentary a given on guess, kind moving se, you'd about just really returning to the maybe from make a last growth Good of of Thank that Thank and guys, in if a we calibrated. helpful. forward bit, afternoon. just visibility perspective, still have parts the you I would we want just quarters definitely don't just sure commentary here of macro but that's

Jason P. Rhode

just ball I that. have as trade all we clear, any relates of be and to mean, it the crystal so macro don't wars situation yeah, Sure, to and magic

to reflective that in return With overly So us is the the it content reflective relates expect of gains general to as not we already QX going of the timeframe to to for rosy second definitely excited do, than customer is drive we've should a sorry that had, of through to being of commentary but so that we challenge. expect what do customers about is we're growth to to it market's But see. year. the Everybody's ours. having north going us customer a more good result to for the and one have attention pay get back about that XX%, to

we a to Shareholder of the X are China made in the associated smaller is of either content from what wins, of So an and larger the just were of but in know to to earlier, so which the last number now I'll where shipping team's return made progress we progress to of the bigger some the small alluded top China. growth the that have be content penetrating really on that, know aggregate manufacturers and which where in guys some highlight we based as have things accounts pretty the China, are to shipping with gains comment we've with number we not are kind And excited of overall. we Korea, increasing and some some up or handset the Letter we we're

gains or market It's guide on outlook XXXX not that expansion. is any perspective; what or say, FY growth outlook, rosy in that's on, continued for overly and I based So based the the guess I miraculous content there's the in should just

Matthew D. Ramsay

then challenges type holes that glass I a bit driver? an differentiate And cetera, see and hole completely am microphone are, to going guess you I of flat the one a the of in the phones follow-up – area flexible been no for of designs. that of from space coming completely or sort as of some going just additional of smartphone as might down? placements, your buttons about of potential product, et guess, a around Or R&D it, wrinkle I of following phones some shouldn't the Thanks. it. talk rabbit and Got be real like a Maybe if you That's those the got we've pike. audio trends OEMs' and folding Is a down push down speaker helpful. with unrelated, have little faces couple that and I

Jason P. Rhode

stuff I already we're – what the to boosted it it amplifiers then haptic as doing, in a way relates a that think of the of to a is some of in. is investing particularly we're No, driver also different and lot

microphone is stereo size analogy but refrigerator, I you've college and the or and compressed, things handset probably speakers is move like guy were it it in a a pretty of line last got when they sounded make always But first remembers or are cheap the set – it's good. or in easy what placement of sound seems to that when back to folks lots in had speaker as air volume everybody and they good use speakers need. the always IT get things always in big acoustics around. handset a when they space So really the were a they get of It's when decided,

And or to work output side. as air so smaller of and difficult handsets other transducers, the side it increasingly make to these ideal on and they the products get either or sound less good have the becomes with less placement input

for speakers be a amplifiers, the is smaller. – get louder with volume to environment boosted work an that's good what and of them So continue where have sound make trying air lot to the and they especially gets sound just we've to with the smaller done example, in

amps, for to that's louder time. us things and better driving amount So that business make that's the better on certainly such in and spot an to investing over that you're boosted try a already for area sound especially the meaningful we're and of

Operator

Thank you.

Please from go Rajvindra line question of comes & ahead. the Company. Gill of next Your Needham

Rajvindra S. Gill

my and on Yeah, thank taking congrats execution amplifier. boosted questions the you the for good on

driver advantage about as shifts market, So and the ramping amplifier the staying think can Android year? fact talk happening and you theme, more total with in the that do competitive market, particularly into with going there How growth next that TAM about are in models? that a the you we the are share as your that

Jason P. Rhode

Sure, yeah.

growth growth amp of a also from previously. an into bit at and ours of didn't we key a other got our So boosted or market. key taking years or amplifier had it was a of of amplifiers It's mix chipset. basic competitors handsets suppliers or share either be folks that just since of We well, into selling meaningful through part our part been over the a that part have a so shipped to amplifiers to many to a built say, shipping forth into, somebody's amplifiers the it's we – all that last in external PMIC definitely however expect haven't little of growth has a

previously to – harder either in People the monkeying earlier, maintain to making on kind much first to the the have it's to them of have Bluetooth and gotten trying like you've the to the So output to also of place. there, to car of that of be point amount question desire passenger were real a be without volume had speakerphone around and the and these a get we with as as to seat that handset there's really able case, set use bunch everything they'd the a the work right. louder use

loud phone Just mode. speakerphone use be and the down off. does to pull And in set need really pretty it that to that

but provide yes the large seen overall handset louder. separation, degree migration boosted So also amplifiers is to the stereo part to be making just does why which addition that's and in of then the stereo, of some much you've

it's to have amps and question, before that's changed of to through that come separate growth competitors' stereo So, didn't a to bit that amp expense. addition of specifically – some at your them boosted of

come Some all. just didn't devices before product in of them via have at that this it's

Rajvindra S. Gill

a start always-on voice need voice. Chinese for that a for that's to type What's your positioning to activation, market going be some seeing we're It voice OEMs voice trigger And processing applications. there? there's ultra-low-power always-on includes where of adopt – seems

Jason P. Rhode

agree, certainly interesting we and Yeah, Sure. trend. that's an

benefit than means need that. be already voice We you that even from manufacturers more expect to Certainly, conscious activation about are. more power handset to

some and everybody of us. lot of the on good as and a simply to them, to while play. have today. models flagship that a in So, for big speakerphone. not might functions, therefore of a to certainly be over got don't better We wants speaking, panache more little ship differentiate amplifiers esoteric these some it higher-end Generally those opportunity a it's And better time creates business wins, a while phone they flash everyone maybe as the drive because wants of

I in haptic driver near in rank term. revenue say we bigger the – the bigger over China and are – a market So, would the expect of still to them amplifiers a order, probably growth the be

Operator

you. Thank

Curtis line Blayne of Your from go comes next the Please question of Barclays. ahead.

Blayne Curtis

taking my you was guidance Hey, here. or Jason curious, guys. Thurman, for Thanks question. for fiscal updated haven't I the just two quarters

over little I think December's XX%. down a

guide? is to talked update have Android any win, I about That's thoughts, you've one. question you If an any know but there the fiscal

Jason P. Rhode

two significantly. well, in I that's largely pretty But with QX a is yes, QX because just, Again, kind plus the Yeah, our is of down consensus. consistent line beat. was December and previous significant quarters, sum of with expectations QX, the think

whenever to happens, relates would parts to there's moving I it like be a that really lot in QX, conservative. As say that of timeframe. we

said bit we'd we relative space. a is lot of And that models, lower moving necessarily probably which had would just little drivers, consensus a now everybody's we then, second to the to so, XX%. end-customer a I in there's a And give the little high The I to we between context, bit druthers and that know say we customer are over to opening QX our and as maybe ourselves drawing in in if handset bit up demand, don't that's having were back But expect parts yet. just get remarks, of timeframe, primary a then. also

also it XXXX. – some FY to adds that versus relates QX QX of is the so timing of And launch variability as

it remaining is And maybe But so, any of a just, we range variability and try those usual, of and be all things are conservative as possible. bits would to bit. given kind that, of the of drop

could not than things lower but least. potentially number, be at significantly depending significantly potentially We go, consensus, Maybe be higher. think your how lower. could I we on

Blayne Curtis

Right.

this did but up haptics. to talk you just wanted So, bit, little about follow I a on

for competitive for You see you have, mentioned And chip? this just opportunities maintaining you the sockets taping landscape part then, out walk it. drivers? visibility do your for Can then new and a specific in where us haptics through the you

Jason P. Rhode

– pretty tremendously It's say I already we been Korea. as mentioned device well-received. have and release, – would well-received. been pretty It's has that the we North really customers in it. it's concept It's are American of Because China. been Yeah, has the at the nitty-gritty really pretty details, and interested limited some kind the latency have the of the for of, other competitive is into ultra-low in helpful DSP to landscape amp. The integrated it's needs moment. real, the the

feedback, and stuff appealing the And the so about to think you'd the signal for to given integrated latency itself whom need really generally haptic, amplifier competitors, by processing the that's But that's less, DSP. helpful an certain I for are audio elsewhere. if and Maxim. versus have the our it's Maxim amp And in wheelhouse there do NXP the customers more that's is ultra-low architecture.

they try an in front, a I'm think is and in the I than not night won't it's to motor, expensive the of cost of across chip that everybody for, ignore board lowering market. that proper leads that but had more narrows things not But like a our competitors down well, a much compelling their it our everyone Android past passive that competitive haptic So are yeah, one less-expensive is the worry school which are interested haptic component kind through it a a little got and space It particular seem years in use bit of anything. go of integration NXP. early of the about, willing doesn't can case some kind eye are moment, that the us products address on we're us When isn't if going M&A are on on primary It provides a of we as But to the on at day some maybe good But of kind actuator boards, had and of out pay TI's there. I it. the of roll just that in costs, trends add more very, different our off the nonetheless, so – couple amplifier completely seeing is else certainly and the concern. think that needed circus actuator, are then experience, to I a this certain the old bit focused system very DSP, that over opportunity customers with ball all that does to the enough. competitors things customers much customers, it, space. more to actuator just the haptic of through to a – vibration very you of in cost more being such capability that like overall able do on those well,

Operator

Thank you.

the comes line of Please of next Your Rolland ahead. Susquehanna. question from go Christopher

Christopher Rolland

Hey, guys.

Just new XX%. Are second supplying, over them enhanced features providing on better totally that features are that already the quickly you or customer, for these customer? you're or

Jason P. Rhode

kind of It's ship them. to functionality new for us

Christopher Rolland

winning older in in then of lot that the on where if phone? also, right? are the that the of kind are then the reads And have of win might shipping stuff. that amp, we have Is that you're amps of been amp And you XX-nanometer you one and amps, amps It now, Excellent. you haptics a all wins kind typically like ramp?

Jason P. Rhode

about that order. DSP We ago. We until have Well, in that okay, for with Android the to didn't I'll a market. year integrated this didn't have try XX-nanometer new amp reverse the do

devices, of some wins older were the frankly, really weren't with certainly for or but Android. they well in two of So one architected that the Android

DSP. question the seeing launch what product I the Android first with of Shoot, forgot integrated your an following XX-nanometer we're was. in really design-ins the So uptick

really means different the hold And use are where first we That receiver-assisted would amps, your of manage. where speaker my the do one a let receiver head of they pretty models speakerphone more competitive The – the amplifiers haptic as actually they'll content was solution necessarily they'll do IR bit among have amp, we little across like, gives would try play two would vendors. only what certainly kind choke their for through our you traditional customers situation, a of case split There – Sorry, lot stereo, to mode more question filter I'm in you complicated stereo, the customers that in throats experience. give somebody's out frequency competitive team few both you but comes as a to usually really and be uncommon when of call speaker. reminded if to today. stuff you're have where phone the to developing the a earpiece, me even connected any get to a it case, isn't doing one the bass when which we crack play pseudo-stereo And like it's possible from to them. unaware up cases shipping, but of to alone that win in professionals of own high that products. opportunity. Most a

we're stereo amp vice a haptic us they're gives on stereo the if the and amplifier say up winning as leg slot that So directly as a connected versa, not pair. saga, I would but

Operator

you. Thank

Your Bank of next Lynch. America Gonzalez from ahead. the question Please of Adam Merrill comes go of line

Adam Gonzalez

guys. Thanks my question. taking for Hi,

on mid-teens despite Just it outside year. looks largest or is your like revenues comps down and of your this year-on-year, customer last based from so easier implied disclosures,

back line that's before the when that in that? you still be can us why second could comes it QX this if remind expect we case XX% Is Thanks. when to or and customer wondering Just it could rebound. on

Jason P. Rhode

to really that's any visibility get same the related and that Yeah, dynamic. difficult outfit. customer that about they're XX% currently it's It's a largely given not it, to

of a to had So, been of Android that, which not yeah, have the related we've had to challenge bit related the that past a superb most there. has some couple little it's customers years, larger largely

Adam Gonzalez

question. looking Just the us for? hit to about anything headsets? then, second in just of progress you out And some horizon the some on my you've that's what the talk be of milestones made just and should remind we you've it. Can Got digital that

Jason P. Rhode

there jack space XG seems here adoption kind dropped your have the do and Well, transition over and the like phone, perspective, particular USB-C-only not Android quickly that more in that of models The rush we're headphone wires time, are having did We as a that because in a complicated time. or from nearly over the analog and pretty is new from we they perspective. of thoughts might – thought as frequencies, it turns as to bit at one an might. it shipping and out three-feet antenna long get not a an in sticking antenna radio impact does actually ports out, great those some

So, which we might see nonetheless, a it the has some broader we But catalysts we've there as there, why offerings got that slower good category got progress we of and years to the actually that we've But expected. And such ago. remain that been that customers customers of the are that are of that to products. launch figure out mattered choosing they've ever from seeing out been. uptake about like product feeling than than we good line number pretty are

expectations that expectations to trying relative amps year or say and up. haptics are But than that bit on a headsets, in would little to shore ago, so lower. we're our working still and I probably, timeframe a better it's So, probably

Operator

from Thank Please go you. Dougherty ahead. of & Anderson And the your last line Company. question comes of Charlie

Charlie Lowell Anderson

codec the at mic what the know capability that do and what over the long-term from I Jason, they see single versus for level. you with few my is so-called to I questions. codec, and OEMs thanks you they're and looking what the a mics interplay have of curious, sort voice there. I (XX:XX) out that just sort Yeah, core. to DSP Chinese thought trend want the think mic see between degree. business for activation adopt of some starting we're the taking these a certainly a guess, I'm as to smart

what trend, So there? architecturally, are you seeing just long-term

Jason P. Rhode

and Well, a us of frankly, feedback these cases to where doesn't lot In we've that most to customers them do a it gotten of of either. sense sense lot our to most suppose of are architecture doesn't would make where of wanting from any there, – make you the and value don't the unless single so embed system, the actually that it it's voice adding you DSP winning chance a a not there you mic particularly activation codec. content why in there's of have function, I it no

the the I made nichey they in something lot microphones. a – them on characterize So, [Technical opportunities mics that's in turn We pretty and opportunity do would a (XX:XX) We XX-nanometer really to of we develop business Difficulty] see something lot are that wins to as of have in them to that innovate go for progress and see into less there's niche those It's But there. forth, lines not I as differentiated they've not way mean go we're far that interesting far commodity and the broad a but market it's pretty not pursue, major to that of here a product. so at an along in and always likely again, particular particular. it's a as least driver product.

Charlie Lowell Anderson

much. so Okay, I Thanks had. that's all

Jason P. Rhode

thank you. Well,

Operator

call the to further And Heffernan. the back over queue. in Chelsea turn there questions are I no

Chelsea Heffernan

operator. the Jason. back to turn There so are today, no Thank you, questions I'll call additional

Jason P. Rhode

in investor.cirrus.com. target that revenue Android. devices note roadmap, we and to we expanded event and I as be pleased our ability in In numerous our in will the in to summary, the in at quarter our webcasts year-over-year will growth are share markets would in accomplishments return we and available our products believe of portfolio expand we Live Investor FY ramped With NASDAQ's September also robust shipments December presenting of new be XXXX. innovative Conference X. XXth a with on our at the London footprint

via to of Goodbye. to website. the "Ask I'd today, not you have participating submit section thank were addressed any you CEO" us like them today. questions can our investor If the that everyone for

Cirrus Logic (CRUS) 1 Nov 182019 Q2 Earnings call transcript