CRUS - Earnings call transcript Q4 2019

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Operator

Welcome to the Cirrus Logic Fourth Quarter and Full 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 the call for questions from analysts. Instructions for queuing up will be provided at that time.

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

Thurman Case

Thank you, afternoon. and good

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

Jason. the I'll turn to call over Now

Jason Rhode

Thank you, Thurman.

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

results, the FYXX. Relations website. $XXX.X Cirrus of financial our and our in revenue of account for please detailed in FYXX Letter posted on million $X.X QX Shareholder a read revenue billion Logic of delivered For Investor

year boosted were strategic our in we of we a believe FYXX the accelerated. We significantly executed penetration number Although enable customer to in served of at the including sales results the original amplifiers a Android below revenue on fourth grow markets. XX% expectations, initiatives will quarter fiscal Cirrus our Logic expanded of market our that second addition as

momentum to line haptic gained our and we product with driver as audio continue voice we adjacent Additionally, move into beyond markets.

relationships components the strong smartphone we future of believe manufacturers Cirrus shipping many for in and portfolio in extensive of China. component product six the an is we leading a road Logic XX success. top map now the in OEMs With solid are today, four well-positioned including shipping of markets Our with target,

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

Operator

Thank line from you. the Roy MKM Your from first Partners. Ruben comes [Operator of Instructions] question

Your line is open.

Ruben Roy

to new you've obviously what's on hello, the products boosted much. the 'medium very talked Jason customers, the key and I'm next are congrats you new wondering, for significant guys amps Thank I past getting and guess Thurman, with about called and term'. driver in adding another growth Jason, over with you customer. involved

technologies wondering content talked other into beyond? are you you XXXX if new looking boosted expand customers, as those fiscal activity you've other since about You've as some customers and of had beach-head customers. activity talk and and you to design a other could the overall those growth bundle I'm these once could products you established new design about to and out areas amps lead potential at devices, you're seeing into

Jason Rhode

thing great well amplifiers the new job. of business customer great an us more in just goal our making, we lot great their whenever fantastic. customer helping for rather are past, and that to in ship be they're they pretty the The opportunity they lot They looking particular customer opportunities successful a and and and reviewed Android Thank, sound that Ruben. has be for our across performance fit. right. are extremely question. well it's the that with the incredible a of and particular help they're you're a opportunity sets job for That's audio our with involves acoustic the hand-holding, much and good power of help of deliver said engage very the of point ones to detail whatever a point customers' to than exactly and lot direct provide that and the customer of fit doesn't To the which product, a lot board They tuning do. not right functionality. in involved, such devices The such team for stuff a about we do Yes, capabilities I've and achieve architecture. kind do slide you're features to high They neat in very in is a referring is last. a a engineers, the result do in great amplifier expertise rare team and of The you're that very in tune increasingly care, every low and customer has of one the

definitely of at for the very that's business customers helping are of other good appeal if of audio haptics smart it's codecs door our have customers a ubiquitous and -- things product for participating the and Yes, to in that Given great those lines. appeal other itself amps do the a accessories nature and opportunity for related as the in things. a of same way of and such lot there's entry a picture it really closely opportunities with bigger the then

Ruben Roy

being up quick it XXXX, kind you about Has the unit Jason. as assessment? about think follow talked nearer with able XXXX? Great. just in fiscal Thanks anything changed in to bring you've When growth think to and for content you that, past case smartphone about do market. that's that think flat the grow you Or again, term. a of a And into that still fiscal

Jason Rhode

No.

There's think the periods them things I we're changed what case. really our with. about in far we're prior outlook much in as very as and still nothing versus that's the that

of time course start certainly these is to online see curious around feel more last come we'll than unfolds extremely rest like be under good the our to So be how meaningful more that than the form about very world, the to control and and talked feels we front new if perhaps factors quickly how are -- of sentiment in of terms other our -- market that curious and volume. some smartphone to of the that the relative good. positive It and the sentiment anything, we remains like see things

Operator

Dougherty of the Charlie question comes Company. & from from Your line Anderson next

open. line Your is

Charlie Anderson

there time the taking adjacent was for for consecutive Jason, wanted start quarter. the second Letter a and in about I area. my Thanks or an product the Yes. with congrats on to Shareholder an questions reference adjacent

us I at could under actually might sampling umbrella. of thought little give material time still how wonder if that product but you're up is to I think this be, the you audio maybe just you're now. bit a behind what through that

follow-up. I important that may any development? Just then And should additional we if color on consider how

Jason Rhode

served important. before It's well. still all the Yes. excited kind of about important definitely it application The gone alluding we're of we and kind reasons. just very it, different -- obvious has of in to terms it what generally it's have kind big extremely large than We're for

We expect a be FYXX that frame. for in meaningful benefit us time to probably the

Charlie Anderson

a sitting fair then Okay, of you amount are perfect. guys cash. And on down

more probably update you. a That around wonder company, considering and as your could and that you're thoughts would us just appetite financial never be the had of cash well. I philosophy? generating amount Thank M&A great. maybe you You as philosophy if flexibility

Jason Rhode

blessed M&A. philosophically has always. and it's rare, changed implementing find, M&A, backs They're cash. our those up some including discuss those. we very management, we priorities a We're we long amongst [ph]. in value answer lot will of We'd quality generating there. to of Yes. be careful to be find We've Same great far where with will we're things pretty companies it many with ton really been strategy frequent as them hard occasions about the with don't Nothing end do. believe definitely course. board. aligned actively are they're successful on term where our lieu in We make Wilson We've If of examples it addition shareholder we to of where it to culturally In a years. the find a love adding what key the very buy done like great oath, a that at sure past we over addition avoid and more

fair continue that's on there authorization remaining so. a We've basis. that do current opportunistic we'll an amount to we'll out got expect the of expect we amount We on to and continue evaluate

we that dividends of it, for in and program the we to we more opportunistically buy where it at either, window circumstances, buy like think there, and vehicles, but grow, share certainly about to an that we're engage in anyone lots evaluated don't we giant that like in forth. is the but times be If wondering, but back That trading point. think we front. and more appropriate overall continues this rush note But of in not folks out vehicle continue company be so we other results have do Just Again so as we to given we a opportunities can't. open-market we'd to have on a that. backs a flexible

Operator

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

open. is line Your

Thomas O'Malley

lot just sustains? shape the the in This the a for one results. of the is Android year? the to XXXX Can guys. kind think this you customer. from March, dip what back what you a O'Malley, From expect for higher guess had down of level question I heading the Obviously see that one the what can Curtis. on good with color my Tom some seasonality-wise, Or into quarter. first us is, quick you for you Obviously I It's really you level do half of Year Hey, coming see, Congrats with well. a rest have I the that helpful as business. contribution Android in as on higher XX% well. a think maybe customer do robust Blayne I revenue record-quarter to building, a on see of a there? Fiscal up you on from think

Jason Rhode

volatile right probably. was pretty alluded two seasonality a the work letter is and and is with pretty very benefit term a is don't lot cycle of some that you It new certainly year I It be maybe quarter, major March which to of as opportunities heavily to solid as the we're quite market us. now quarter, moment product top with those well. later we're to difficult manufacturers same that to handset a one is Right. ramp the the shipping there is strength. familiar -- a launch if at call time, a expect Android in very in at The overall that or doing customer know the you you additional we are and being would number the strong but layering segment of that have is of in But for sure the some good expect pretty quarter the -- second in that I'm then fair that

through but basis, we of that it Android the nets expect as to it on we'll have of steady just quarter-by-quarter, is the to all out, long grow. term how a continue go to So state net we roll

Thomas O'Malley

pieces, guy gaining Clearly market there moving also OEM. at about as with trend It's little you mentioned well. Okay. the also Korean in Android and just then the the handsets, then Letter, the a the taking wireless, in products just earbud proliferation big the Can Shareholder both your and the And it's traction. just you wireless on the talk guy earbuds? of big

think You contributes do you talk where XXXX? focused generally growth a about think that fiscal different business lot year that areas of is that you you're to in in, something

Jason Rhode

customers of we I great and expect are XXXX, but good be factor that mover see out that thing good only in it opportunity. earbuds We're want in growth delivered experience types it ways key right, huge to the than most, but popular time, experience, have you're exactly needle not help out turns with a they it's audio-voice really XXXX, wouldn't that that form be number you opportunities a I are we're monkey point a in a voice. not all in over features, but that is ones so huge the that other as shipping. some reason. to user It already and to us for factor and and are additional already shipping. that say audio folks those very Us security form for finding over devices to is time delivers make that various as are wireless a great forth great making wouldn't

Operator

of Your next the question Stifel. Tore Svanberg line from comes from

open. is line Your

Tore Svanberg

Yes, you. thank

the it you does in a Cirrus bit mentioned was surface it market I You playback on a or competitive mean in whether whether audio Logic's could elaborate hoping exactly for amplifier positioning your [ph] Shareholder What that. overall? Letterm is little more content

Jason Rhode

huge and it is sound Historically, area technical a lot a piezos. a definitely solutions been things dead, wouldn't to need go forth. an with there's forward as of a glass for like We anyway an driven contains being has trying while rid provide other extremely a drive experience. of in that to help to to lot don't from need processing for largely differentiator try to of that coming of of to be capability. and perspective to used -- good us, well that of the able make led salute. it the which us holes reasons amplifier problematic completely team that for up The that are customer's a for traditional have, is more capabilities lot manufacturers LRA-type the build sleepy. surface lot actually voltages, our past that around new the higher not so great expertise We while. but very Piezo I one see if type audio that that of actuator a where are it a of an in need -- is can see market as get of a speaker maybe of are and a it it. as over advantage, have but signal signal as another they why people by a These good, versus the customers both as from way come amplifier would be things content us to whole that's for reasons, there's with view processing out kinds It's see to a example go

Tore Svanberg

material as from my while and as elaborate bit the the MEMS bit does actually be That's little little a And having transition helpful. perspective your concrete that? time becoming a Taiwan, a more MEMS to mean this think supply you on I What a timing far this could as of basically about in first you more chain more microphone revenue? seen is follow-up, microphone I've part

Jason Rhode

FYXX forward. by of progress a team. the steps couple really another of it's was year Well, good

kind the term that -- the the shipping the to of today event. support are microphones, from to and microphones a change long of we're shipping tremendous intend of main long, the customers amount are game, but end go not that. we've do market microphone We in got We

a how the are of haven't all bunch that of silicon we've drop partners high we've us day on test located, even up as volume very want, and both that need very high kind do We things Silicon side. commit things customers So lot to side. ship the but great scalable, and tricky. things has with done suppliers them large are lot there the can the coming worked do best got think very progress. in really just in high to These do the kind And as be are past process, There's very that of good reliability relative uniformity a have needed one yet, volume a in we're going past turn spear. the to these made give from achieve to they A business. We've team we kind the achieve and our that do they go the a to microphones. on some and in the where on logically another things in the and we margined to progress long progress there's we plan. every to year support from of then the more IP great vendors relative sense team need how in focused like the fronts ship to with much remains we've wafers design can we've made happy we wrong to bunch on run. test of able are targeting been developed with the it in where a are from, the same the not the with and additionally, but on are we we I just that extremely but production is we of focused from the in nearly the microphones, very on and experiences been those of the We're that progress, Those good works customers of be to area

Operator

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

open. is line Your

Adam Gonzalez

wondering mid Hi, second, to my I'm execution. on solid one up for at if earlier. see you announced. that congrats close least a you yes. from ramping following Thanks near Android already to comments and just The the taking on in the just term? perhaps customer question and the results I'm XX%

Jason Rhode

bunch and though it's and volatile we've to engagements Sure, that the coming the There's the certainly I team and think exactly. before say, The products the to Like both we there. over in and potential I place goal there. got that do don't is period. next call a the they're want definitely

potential that everything under well certainly execute long control However on the there our on will that's takes, team another well front. is and that

Adam Gonzalez

digital Got with just Shareholder it. on the this for some wondering factor next wireless there. year, There Letter, then the potentially adapted early headsets. in point just are cited I'm too be form this getting product. you was traction comments if this the a popular your that's but asked And in ANC but at wondering specific earlier, I'm your could about implemented year? question also earbud a what question, continuously Maybe perhaps perhaps

Jason Rhode

we're have audio battery headset a a valuable in echo devices out form term. life The the them wireless in are a a wild. followed and applicable on really tremendous not It's base the be that it in noise think and not when both at on really a sure power so not types the by that from to is in to time these from isn't with forth. appear put relative reasonable front customer function, to power you relative power. out quality be the great That canceling high an battery and device, factor. directions, batteries. focused got there's to more then and power tiny life, now. short are form heavily of batteries. don't It's things a that that's wind trivial you-got-to-have-it that reasonably, By providing that to that voice cancellations, handset relatively something task our a deliver people's howl I the moment huge pull make a little in It's there trying bring priorities of They are type factor we've features in-air clear experience, most doesn't the It's power long already functionality to what tiny, right

stuff. circle wireless road, back a down of certainly the possibility that Somewhere the could kind there's truly on we

Operator

next Rolland from of [Operator question Instructions] line the from Your Christopher comes Susquehanna.

is line open. Your

Christopher Rolland

second getting on Congrats customer. guys. XX% Hey, your

Just a biometrics. voice question on

talk could nanometers mics the plan you do about on just If of making shipping for when you're of clarification, on and one some progress there XX volume? point you

Jason Rhode

first that. specified so we won't forget I take But haven't We'll last it. point the

progress as a We are when we're actually last long-term year. We'll made the on it closer we've I But very good say, you needle-mover lot shipping that to front a mics perspective. let from be know in today. a seeing

little there evaluating in moved As then customers into onboard progress voice far in also and proportionally access well. pleased what to as made are that, biometrics, We and figuring as folks. thing in as sticking results the out the extraordinarily standards of terms and get tied now more and the needs that you're front past. as information more device firmly the with that process and we've or actually it FITO is security referred progress an to the ways of being we've an do. on a going the that run over It's with and closely in to viable where more We've in-depth we complex also the most not the of while so designing in achieving to integrated extremely forth of whatever past secure good what done to [ph] complex than that your We're in very realm see in-device be product the good on progress the long leave it of all the will that processing is handset edge, into. those

great look that valuable on So the make forward capitalize to of be all demonstrated The other we've customer is can over our progress time to in the as fronts. ready progress of it other go. experience. type We seeing applications. of part made device We've same variants really that to as a device well customers in those

Christopher Rolland

and market? haptics then points about in versus speakers there the of perhaps percent terms one today activity, you talk even design what overall And end Great. your on funnel or haptics. design addressing Can overall guys and amp are

Jason Rhode

and first production stereo. also from and that and the revenue is of universal of the a is That ecosystem Android the the more product a in volume, audio. for vast frankly lot demand it Well, majority was in cases

often with behind end marketing, work weighted of win pleased But that. design world-class hardware, is that the the progress the next haptics. that piece the and proportional, Certainly both was sales, seeing and both about stereo wins, the very not. towards across really design given the Can't audio lines. very revenue generally nicely is design nicely the the say a the name and on the end product board but effort. software, more you Again, good Extremely very enough audio are those did, we're fact it, while. design haptic team So is over up haptic far coming

Christopher Rolland

line question comes from next the of [ph] Needham. Arya Your from

line Your is open

Unidentified Analyst

Thank the for trends months? Thank Gill. Any talk question, for my China's Can you you. would taking past you little in a asking about be seeing the Any guys. few I'm smartphone color appreciated. bit from market you're Raji in signs of stabilization? greatly

Jason Rhode

Sure.

supply I a customers would forth. think is of in for enjoy the participating volatile some amount with this for where A either visibility. It's bunch talked expect not to I through of cases quite at a or in were as couple while. cases the lot where being otherwise much customers to lot same so quarter about so last new no for got, a not that. the that matter what in to for content volume we're I've our in from you in is difficult a continue judgment most it, a for more we're about it's those they us. In I speculate don't way now it is and at we on. perspective, But chasing before forecasting, think Again, much shipping. all to of the March so going not be of business lot a time, strength of because got provides China us, models to generally tend a we or tremendous with relatively much lot stabilizing the of that new we've exceptionally be which quarter in making And how do our so did frankly, what's insight don't on the know us great on we're fact relative not good the because stuff stabilizing Customers of see in us, They're just on. things call. there or a they've with known of

anyone matter read next we've ship. about the that how the phone you to As how no in talked about about speculation past, news, in is going much the much ships

on somebody and until actually up puts know never thing. it the you the buy seeing You line market the customers and

obviously that's true well. as think China I in

upside have again, but a of clearly doesn't little the successes in customers the certainly had relative seem of they So we've some quite we're stabilization. over while. I dealing because with it us, or compare how surprised It know bad that of in a don't terms seen past to some there lot statement to

Unidentified Analyst

you. for the to would say thank -- XX% current margin one gross I forward; to moving margin you [ph] guess CI target should assume some what gross long-term? gross that's Okay, more question your your XX%, outlook, regarding target progressing are of of margin risks And and we're hitting targets just your we less than many of

Jason Rhode

refer move the very meticulous think for we about decent we think all will in can sure you in not the don't that model hard to risk our just you move try which us number. they definitely are give different We range certainly the can long off in materially We're where business that's off biting works us think a the we happen, a different model things of near is you that somewhere certainly but factors bunch very I'll today. range, where to until find term. we things of in filings to make Well, we can.

we're hard dramatic to happen. make expect happen. that sort what you see that's factors risk stuff So sure trying the it's usual strike-type again, anything I to But in doesn't of wouldn't that this unless

Operator

next Your comes of line the from question Stifel. Tore Svanberg from

line Your open. is

Tore Svanberg

Yes, thank you.

ups. follow two Just

you us year, where the but you you spot early think sorry could sometimes for the here, on a it's be Jason, know all think on you this give will of go year? I of putting -- for revenues lead year. do First and the -- beginning growth pretty directionally but a

Jason Rhode

growth a year. be can it think I

just know I on answer, last how in QX to for going don't As how was EMEA. QX I saying predict the and to phones ship are many

ship to what in guys wise roller in something. some for your closely year excited new next year, want happen. in next for to in pretty There's a FYXX. we're decided able past are market we year, the what excited, the increases guess of going that off that. obviously. extremely to add are customers we're leave hard both had perspective at about FYXX as happens, We're that point to going This that applications to We'll as just not grow.' category, say about we just the to been well the So online. new will how we've haven't that, handset isn't This years where year. to we substantially might in got nets are form content or content. 'Hey, confidently story you matter out enough more overall content and for areas for We're coaster. historically so market. we're not might more point, that value There haven't guess we've been that from in that It's Phone factors tied I obviously new significant, that We're our coming no where against there just historically obviously we content

it seems we'll same the looking this it As stuff positive nets that sentiment seem us, all a out that I more it's sentiment or all we're time. reading, does like than at said a earlier, But quarter I like over we're little external now just the how will say to ago. see was

Tore Svanberg

you release [ph]. technology. on I important elaborate excuse the my mentioned biometrics? the understand Could very PNQ for just don't you why And helpful. but that voice ignorance, That's is Android

Jason Rhode

is that that but I'm realization the in folks in can't needs expert architected I FITO there to needs stuff the be type support for of say along a OS. really somewhere super that who and it broad Android way be had have Sure. definitely either, the really, critical, to a it way in security the

I has think in that of have it's the exactly net of of there more and the forth. I building to that. just don't all reflective hooks awareness but so of the been that's details PNQ, the added and kind reflective it's in of then what

Tore Svanberg

Thank enough. you. Fair

Jason Rhode

Take right. All care.

Operator

the back There turn over time. are Miss Heffernan, call at this I further to questions no you. Chelse

Chelsea Heffernan

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

Jason Rhode

June long term will for the I are road increasing also that a to executed years. that delivering challenging executed on we we that capitalize multiple analog note in significantly would was activities new coming as us development key and will dedicated Media be in will growth on Live and processing the Cross Telecom Boston voice relationships in over with XX next The months our We adjacent on year available drive extensive demand increased Conference FYXX to numerous well, differentiated summary, In product right. Android strengthen expected on Stifel Conference will to Insight financially. Cal to webcast signal market an initiatives spanning Sector on success. All to that investor.cirrus.com. map digital presenting at these at that Technology other be will XX believe XX. come we are customer to share our and complex, market and New the in the we May enable the such audio and product and contribute events believe products XX York company Haptics, of

you our questions for of CEO ends you the to that thank not the to website. addressed have us Ask Investor submit If section can abruptly]. them via everyone [Call I'd today, were participating. any like

Cirrus Logic (CRUS) 1 May 192019 Q4 Earnings call transcript