CRUS - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic Second Quarter Fiscal Year 2021 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 Case

Thank you and afternoon. good

email GAAP the and and actual statements our this to Company's Executive to turn as cause Cirrus Jason letter shareholder me time Chelsea with website expectations. any and financial Investor of to Director XX-Q, a Today, to factors Company, other I'll Cirrus Joining as results and call Commission session, Please And from that other Relations. our with session, materially Forsyth, projections. the is you. Investor personal actual of issued Please for us announced Jason. are questions working today's information, release XX-K guess, Logic’s, Company's otherwise. call press great it's Q&A that really and note website statement, Logic the result the at to the any the Jason, press risks the on heck this forward-looking Heffernan, non-GAAP information, available new On website predictions discussing or questions a last our along that Chief it’s differ we This investor.cirrus.com. of well now -- Officer; as from to results call of all we time, this as letter Eastern. The second Relations shareholder whether ride, of comparable will and materially the directly uncertainties quarter President; which on or covering fiscal important submitted over for on a reconciliation make disclaims results, for analysts most I the year refer a latest been available developments to release, John subject feature well enjoyed the are I at made and Rhode, today, form investor.relations@cirrus.com. forward-looking earnings may XXXX financial update By may a approximately information filings could are discussions via X our to that additional pm during including financial Exchange expressly current corporate of predictions providing Company revise the differ obligation or a as been note, from Securities risk results cause with and a the

Jason Rhode

you, a Thank And pleasure. Thurman. been it's I agree,

we view. having Before I with start, difficulties note technical I'll significant are that leader

us favor If your to Chelsea, try you're thoughts. to figuring an do in analyst anyway, we'll texting having very Anyway, some cover Thurman. of able be a a out. could quick maybe question. this covering least you We're you, at time us and all But thank of hard

eight an Company's the integrity in and XXXX, my comments of I of be an Board a the the the some tenure. years. I'd relationship David an be built with expertise that his valuable strong incredible begin strategic bright understanding and Cirrus after announcement for developed transformation will A over team. passion, corporate person XXXX, world, we've in a that into forward, extremely lead his design company Cirrus the new make been on I down going few outlook engineering a experience and our stewardship the with to as member promoting with this beneficial make of the built and Schuele.I'd since years. And I'm over in of confident excited deep Chairman Believe look it's will him as to well team David him January delivered discussing take January innovation, management has vision result fosters work Board skills and thrilled as We've that personally. environment. valuable the our completing of I to Al during we in his thank Chairman right best meaningful succeeding Board of fun as role leadership Directors our outstanding Xst, the proud I'm product roles. ever and technical I'm to financial Tupman will brings to worked opportunity as our on The Company a announced leadership. journey working the We're and stepping Al's growth I'm for over to that extremely also It's customers will expanded execution, to John's incredible incredibly call our culture comradery, future. like for forward the for. of the expertise to and continue relationships last John. Al Before become I now Chair CEO joined Logic thankful school I've me on only and like results, the today's been Xst. turn his and to while Chairman. Logic

John Forsyth

you, Thank Jason.

I'd count has Before take on leadership, relationship have developed I for his outstanding Jason's the over Logic and Cirrus new fortunate enjoyed and has Cirrus thank I CEO continuing of Jason friend would business I everything to our last next personally and become comment Jason excited Company. like in our say role look leader to an years, forward to to moment the honored and growth Under call exceptional done Logic. roles. he how to culture. also am as myself has in the I like to CEO to results, corporate a of I six the been able

continue driving support our our assuming In to leadership my reach talented team a areas. new audio have to innovative to the in most customers, and delivering of tremendously customers who create of products We strategic world's culture mixed-signal record advanced position outstanding across execution track in and this focus will that service role, proven products. initiatives a will the strengthen the Company, on technology our be expand a

my the our creating shareholders, work profitability for value and With place customers drive more creating in engineering employees looking to our working the excellence, focus I'm vision choice well leadership our is as closely Logic the processing. with Company the on Cirrus to years. and of in employees, our believe signal a customers fulfill the forward and being growth coming to we for first I our to great with continue Board and team, positioned

$XXX.X to Turning headsets above truly Cirrus the sales shipping and our and Logic of lesser results. drove revenue components tablets QX now to delivered wellness FYXX significantly orders smartphones as extent, for expectations. stronger-than-anticipated a million,

quarter, our development During new excellent excited made launched products. wearables high-volume grew, number we and of our engagements The customer were several particularly ship, see we featured activities. the in and and smartphones, in progress content to in which products both, recently tablets

this to challenges to of September made the those value. progress tape-outs the to broadens Additionally, diversification despite on we months. multiple long-term products both that leverage majority and In continuing increased quarter, our programs them, and all the significant market, several the to situation as work create outstanding near-term and our for addressable customers remotely to expect continued relationships, in customer and greater both presents are product sampling we employees we With shareholder design opportunities excited key completed begin coming individuals innovation team. for development the us of and that a collectively that

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

Operator

[Operator comes Instructions] And question first your Svanberg. Tore from

Tore Svanberg

to we're on Great going next as John, you miss and your and cynicism. congratulations well quarter and move. your to Jason, And humor to great congratulations

headsets. wireless side. on sorry, more question until understanding First premium up the exposure headset amplifier the is to codec wearables for your wireless My has been for now, truly is, -- on

to this is content completely So, is for you? new it that safe say

John Forsyth

our did actually designed our there. They a Actually, much truly wireless were variety for originally applications. smart target We shipping first wireless which headsets. the should were get picked designed parts I this Tore. previously. of to you headsets. first truly -- is codec happened said for This Thank that. Yes. specific headsets Those smart in codec wireless truly have have up wishes you, to for best thank very is

So, first that in are see now, what wireless codec. smart to to sampled months launch expecting our truly coming products customers we've focused and we're what specifically incorporate our the

our extremely but customer. talking about new building much in note, for when bringing improvements, at that's product to the stuff of are with custom content ANC much particular, products from made power that we we've consumption. not detail it's very make customers, our point course, low talking definition, that One largest headway for significant in to on So, our from It does by perspective, hybrid catalog. products existing almost this we're about category

Jason Rhode

seeing to it of than not follow-up, anywhere. really look actually like rather to forward I you I I'd think just cynicism. Tore, again And going as am And sarcasm soon. to

it. seeing to and So, forward absolute I we class you've an act, appreciate you, been look and

Tore Svanberg

that. you follow-up All looks my for capabilities. some right. it And now next-generation there enhanced the just the out you're like -- Thank second-generation taping you're haptics, question as with on

for elaborate wearables. a what from even that or if on wondering just whether you perspective, means could smartphones So, content it's for

John Forsyth

that's an update analog driving although about the more year there, it the end as find front talked the dedicated We conversion smartphones where content and actuator. see so is have that earlier well Haptics new we across bit about portable as Yes. it's incorporating really little separate in a haptics, were well space. in drivers may parts. a data believe non-portable talked end, something does there, used which traditionally, of from we the areas. the other pot we The Whereas we're in haptics those is haptic where targeting addition part something an to primarily, interest haptic the front that you the

the reduces required. board count, space part it the So, reduces

for very wise being haptics close us, to And it's driver amplifier. so, traditional -- at content about an the sits

$X.XX amplifier architectures So, $X.XX, the it's of the that very This not different up range. -- would look for worth ASP solutions. out different is kind pointing in will ask. be part It's

high-performance happy very the are as There'll portfolio. really integrated with a end be without It well. we solution. for the It a people product role fills integrated still the front drivers nice So, that. gives haptics out

Operator

And from Cowen. with question comes Ramsay your Matt next

Matt Ramsay

awesome over Yes. the people role; you very much. engineering say congratulations and new build Cirrus and afternoon you the been just would on Thank it's obviously, see at to the John, that time. culture I Good Jason, everybody.

next So, role. the congratulations on

the like phone looks the it the first For And for that be devices or the just -- in bit number question, lot how modeled. now units could understand content would maybe quarter could But, a of being of if functionality. exact a units be functionality the than from follow-up. phone, have give just ASPs that And closed-loop it, externally launched, I you higher the controller, me, are about more of for little maybe either device outlook really I the per part had that more, December the is sensitivity amount us might potentially talk that used, my a about you anything ASP John a decent in per the Thanks. then, helpful. us or

John Forsyth

expect the we're are that. details amplified going as I many you, roughly know to We're an is When that those SKUs phone customers' the also, how a be about content additional obviously that's doing a value. space. general like of given -- We don't different designs.So Yes. being products, but of and -- our that's Thanks the [ph] for about that that product guidance attach across that that run ask which across don't to people in think but of custom get say would rate nice products, reiterate firstly, SKU. be custom given to lot buy Yes, Think want averaged different about per our it those we the talking about there excited average about -- we a That a with amplifier we've different SKUs. a into customers there'll But about we that opportunity -- across terms in Matt. see as we bunch as to and that sold. may words, in should product. just previously, to what on we're again, rate don't talked are phones you extremely

competitive win and a road product to of key think, of a that is exciting. first in and extremely new absolutely of for there on map differentiator us having phone, phenomenal in kind particular journey starting is that I in is new kind be part just the which

to it's enabling I'm sure as continue functions. said, imaging we've that grow as related can well. add So, value we to time various over and

Jason Rhode

do. it's and do additional Yes. words. point work note, a chip patent. the the in But Thanks, to things also, I'd folks that And again, things will note It's in I things sheets, what fine patent the to kind possible chip Matt, mean by patents I that product. for chips aren't out, data always detective filings aren't various is are and to that for to a do complete it's

Matt Ramsay

that. I No, appreciate it. Got the sensitivity around

of in folks shareholder noted with those folks Vivo -- they beneficiaries wonder, you I of For some content now shifts wins Oppo, and of Thanks. share the largest in China. doing new Huawei been might to in a I if of and follow-up, might the think and and right business is if potentially arena, the so is lots challenges your own Xiaomi. of that have noting other work facing some your mean chips advantage where potentially for in go us about letter, that facing? terms what challenges unit might John, customer, the the procuring the talk are with I smartphone obviously, industry Huawei their

John Forsyth

as are of Android focused going Yes. turn and many the kind I amplifiers. that phone. how the is are all matter space around know up guess, winning people on chiefly believe don't which sockets But as boosted we ever always, in that the to we buy we

It been we great. building with the but small momentum of our amount a know, had relatively you represented revenue, good was still As trajectory some Huawei.

Xiaomi, I making certain It since have where a think, components we an who to year a also license. the from to continue reawakening uptick mentioned Huawei. we've offsets market. the obviously headway that the of smartphone we that including letter, with some the we But, of but of somewhat Android to other kind kind are in in customers, certainly lot Huawei earlier headwind with demand sold in supply we COVID, degree seen,

Operator

with Colliers Your Anderson next Securities. question comes Charlie from

Charlie Anderson

my Thank the Great. And on for on appointment. congrats Jason a questions. congrats taking really and John tremendous you run,

haptics. to first about For question, my ask I wanted

the products. here are guys with You out of fully flushed portfolio number really a

penetration could end markets guess, the a got of how could how onto view wide maybe And I've I'm end follow-up. in devices, if you with of then, and of us give of curious So, these terms I back view just eye bird's types step a spans it you products? haptics cover

John Forsyth

experiences you impressive Sure. as along history largest haptics customer, and Yes. you we've, as say, our began pretty targeting haptics a out chain general of so market, business with a haptics with Well, it's suite whole part simulate of about touch of less a that to talked key user. enabling focused portfolio built but this, we the know, devices, and the on the tool is and a although end algorithms various

In selectively Android end, terms not the of It's still the -- the kind flagship the of penetration, yet. it's the space devices saturating is as in still found end market. in of high high

We've think That that other I down had launches, our laptops and do, in some expectation working details is the meaningful care on, it I kinds in which categories in haptics we we they where relation think, to smartphones, every have it's device. wearables. kinds haptic use mid-tier. in that trickle but of a experience, of customers it time, really focus drivers we've automotive mentioned that devices. some notable see We said, the kindof technology on see generally devices. to and going the it interest other wearable be over see we obviously, And from the about in haptics does of I exploration months. you would recent for user and reasonable not of haptic customers would the into in general, deploying of OEMs say, and to be the on one

us reach which certainly provide on should there's leverage IP breath to think that haptics, we good the of a downstream. So,

Charlie Anderson

sort the and kind There's the did you've similar first you you'd Thanks. power that out the taped way on the mention of and follow-up, similar letter shareholder IC. a my a Matt for about if conversion given I willing then, device. wonder, just on closed-loop one, of us control that number sort now of And controller lot broadly us asked ASP, to to generation you've view Great. question how thinking be per entertain about closed-loop. of just to maybe sort

John Forsyth

Yes.

to has It's gain said reiterate content -- bigger going comes we're -- a think away I that this, than previously we did We think the the to potential closed-loop way I'd from about still there. have it meaningfully long for be we and talking ASP but actually market. to shy now controller that between us. where

the a done to now There's I've As of the be load work said previously, be plan targeting end new gig. that. 'XX calendar for of between then. and to relatively And in I we're back whole

we're that much So, mean extremely too I'm what excited device about But going saying for can it jinx it. us. by not of to category about

Operator

your comes Rolland from Susquehanna. And Christopher with next question

Christopher Rolland

Hey, Jason, definitely John, you. long on a Scotsman. I quarter. guys. for with miss Congrats way congrats on my the And road will the Congrats. well. as A fantastic time wee

congratulations indeed. So,

First looking in question launch quarters have ahead late I'm is, two guide just typical I your March peers the be of know for that suggested but would many you year. guys of that, seasonality, advance, don't and this given not

was to I out could how thinking you're if typical in loud wondering maybe talk as you about terms So, of seasonality. March guys

John Forsyth

in well nice for it, Yes, countrymen thanks Yes. Scotland. sure. back I there. And as the words appreciate my

our easy with a kind So, we're the doing COVID-XX disruption that across are whole of in a what's people, products to sell-through. the well what quarter. bunch There things just global and what of terms for given as and happening our of are could guidance read we uncertainty customers' as we economic to timing as it's not associated shipments, from to shipping of situation bear you volatility provide one come and know, and impact around

some I'd express caution So, around that.

bullish. a of those factors And on back the be all certain into if new you like that, take is feeling look I'd So, they're to pretty with clear start. consideration, after we're obviously encourage people of products But, it conservative that. incredible that

Jason Rhode

follow that sentiment. point. it's again, I’d conservative anything than bullish say, We just our that peers than what on at do and complicated. tend very But Yes. our up too this know We on don't be different more peers. I'm I to

always work progress of in So, it's this year. time the

of as dialing in kind that an it's on But, and be side if so park fiscal of our to for -- You certainly, the woke world like because never would up yet. out was, things, But great we of home feels were our and know we run but up, the John it said, far. it if QX, the we where always kind that model. consensus want where they're feel morning in stayed of is your really conservative

So, do what like you them? for

Christopher Rolland

into Understood. can talk 'XX. into controller And in kind market-leading and of space? guys unique closed-loop expect do the guys Do for the Android then, perhaps traction and perhaps Cirrus' it cross Are in there? 'XX, over you PMIC about Android the Thanks. will there? think you Android you you opportunity into And more

John Forsyth

let Well, is of space. with getting me that, we're into start bit last which PMIC the not the

have in to our talked relation on We conversion. working power custom we're about product

on it's say, to a be exists that I of stuff is on space, it closed-loop not incredibly call, last of -- means arms full to of across what lot would also that going like it doing. that outlined controller there is on part exciting. that we isn't we're kind detail that the that whole we're But, really give and been? our have I it's also of something what think, the makes well working we today, what it

for can able invest talk what about we're access. the think we being to we that is about that into see example, ourselves SAM, to way when currently So, modeling

of opportunities front as an detailed now. I of arms the is have work And really we of as focus percentage products rate we'll serving market incredibly to the a a for doing we would really So, just have, at high go remains tilt got full said, That given do in for That's hit shipping us today. where and how -- in well. our plan the fact those our that Android yet. entirely are of that reflection we those for haven't

Operator

Your with from comes Blayne next Curtis question Barclays.

Blayne Curtis

gotten, when Jason, these I'll we question. think, Thanks Good a the question, the on as Maybe John beating states. travel I kind amount Maybe my miss afternoon. on of of well. Congrats of taking decent it pops on I've low one just how and done just you some up. but Android up actually it's can you for first side, see

that. comment know up. I lost it's So, Samsung, Android any into just well, you looks it like but And content some color directionally? some just at on as December then, for

John Forsyth

think any feel, we on, this win out And centered were Android there I more than if year don't up design have for looks I back Android think of which amplifiers. the been like not feeling certainly in the was said, One that it we was had the principally, point in was space, Android one us at which Huawei case boosted mean on step your from having the which I Blayne, continued we're there to to the COVID December. to was and did second of have sockets. in beating headwinds. Huawei's it, you go as and area. it, years, our ever all share that their There's now going take of and obviously, about commentary the around situation, underlying being and if that some one the going I people on back of counted to to are planning break kind on on least we've market or building wanting of product of kind thing -- But, aggressive least headwinds. it a largest lead of produce perspective as our devices at that stuff delay one create bunch business, one of eyeing customer was portion a from our launch, to I

of that there. to investing in focus being audio the they're from on one Another, we're benefiting obviously things

Blayne Curtis

I to And just to gross want margin. go then,

mix December, midpoint? at beating the anything the high way. -- kind keep probably that it of range of of want the you end curious to there history into kind if of and the You a But, influencing just with you of was have kind

Jason Rhode

past mean the structurally in changed the business nothing I over No, year. has

is that to lot that margin of product I a going it, affect move stuff product around. all mean gross cycles, can of supply chain there's efficiency, mix, So stuff.

QX, So, And for sustainable it's that again. a based on XX%, to on even longer visibility we'll of we at changed try it. how on into We tick up in see and we range that really -- FYXX, a though we we margins nothing basis, continue and QX current view maximizeit. term as we think look can has to guided believe

Operator

And question Gill comes with Needham your next from & Company. Raji

Raji Gill

for Yes. Jason. John, my taking well. Thank And as questions. congrats, you And good you, look to

a attach seeing. leg product Just growth on do momentum to the the wireless is kind market? be drive question the of true of think What you've next you in What's that that the been going market? kind catalyst rates of next in that to

John Forsyth

Thank you, us. incredibly it's I past appreciate say, year That's sure, exciting would or exceeded And our category it. expectations I been certainly over for the Raji. for an two.

that category. processing the we not pretty lot smart about kind and cancellation, seems have market augmentation, personal earlier, have roadmap of introducing to As in of that general as is for that specifically device out And designed we sure a for first the the that a just truly extends smart way the the I that more But sound mentioned environmental features noise me wireless launching listening. but amplification we obviously the like just clear that well. that talked that we're of for precedence kind really of on headsets. for beyond features product hearing It

be there's of should feature be acoustic you and So, aware environment then identifying some of the noise, attenuating can it so but if on.

that. the packing stuff lot category products as digital to high lot more aggressive of iterating of that processing very have on of a innovations. is in it All to us for schedule whole that they like a a to means want clock rate talk on product the just really sure close feels But we a with now. boundaries. Obviously, new Customers about, ideas, to stuff of like those -- analog

part that. we'll I we to that some hopefully, can of of the I think And serve growth in talked So, meaningful way processing about. that continue see

Raji Gill

Thank margins be speaking. for we down in ahead seasonality given John. would follow-up. is around of obviously, of Any questions there are know talking is Is future going typically any for and whether you to just delay But If in about March, historically that that? And any Any look that, top helpful. color significantly, guys in positioning quarters. going the my into the you customer, hesitant time about be pretty be terms of there at patterns, thoughts or your color to this product around? different inventory change in kind I

John Forsyth

January Well, a give certainly we'll report. we on color lot that of in when

As guide ahead. you don't know, we

terms confidently about So, I going in a what I in mean in it bunch But of be crazy we the did. global useful speak of whole as would early appreciate bunch what's earlier, are if volatility, to you, of perhaps products said economic that be means happen it even we there honesty, had. mean, to various and the still a relatively that to if that being all in -- I factors I of sincerely whole did which space, their cycle, kind things

incredibly it seems really compelling start. reaction launched that said, devices And looks generally. to use. certainly as new great a So, to off They're products the like to recently be I those

the that to update very around well. So, as feel bullish products. potential certainly be we're hopefully, solid how makes that you that's And But, us the new quarter. we'll feeling on about about January going

Operator

from Tore question with next comes Instructions] Svanberg [Operator Stifel. Your

Tore Svanberg

Yes.

a follow-up, hybrid ignorance side. as Just what is exactly But, my active technical and noise cancellation? the on excuse

John Forsyth

you, Thank sure. Tore. Yes,

the of called microphone find are the ear anti plenty what then which of performance world going where to devices and the makes noise calculating listening cancellation, a ANC, a forward is implementations to are where will the cons other. So, you both, generate The got approaches. doing. best or the but canal have what's the which a being both noise that feed noise of noise have can that. feedback There outside what's There outside, unsurprisingly and cancellation, -- the those the a on something generating. of are microphone you're out in you processing back canal pros overall, and There of you to paths. facing ear the called anti-noise is the that and is of each approach, there in on that you takes one either more there do use It hybrid is hybrid lot you effect

Tore Svanberg

smart in home you a of the or what some bit the smart talked OEMS. as two you being on have Is then, If you have supplier what sure or about about home, two smart there it's content could Not presentation, it to means. your codec little top exposure there? more you. investor share the the well? that your exactly highest But, primarily do amp a side, the talk on And

John Forsyth

Yes.

I side, on small. smart still think pretty the volumes So, the are home

is the a that a powered, sweet put huge spot. if can to because edge. don't not which just mains that's quite home cloud create smart mixture have of are processing a have a point emphasis in we power and incorporate that's a those it's attractive our battery-centric of strategic into capability, been devices. feature then of which plugged various because our use on home there And lot signal devices. expertise the We in leverage nice device, more codecs voice the of smart value codecs. is smart We you But, wake market for feature, OEMs, Historically, from view an devices more processing, low a low shipping from elsewhere can it when power content that's we for doing make our think those something about leading focus, at of wall

a a major focus. business like, we it's So, it's strategic certainly not but

Operator

[Operator are ahead. please And questions. go Instructions] Chelsea, no further there

Chelsea Heffernan

questions. Thank you, additional There operator. are no

to now turn back I'll over So, the John. call

John Forsyth

Okay. you. Thank

broad-based So, initial December on Technology proven we growth results and revenue other components details. portfolio, resulted years, Telecommunications those check in is we that for would be particularly the track with smartphones, believe commitment innovative in a in With shipping Please technology audio, I record are significantly the execution, for above Media and to and also over investing XXth. of will as in solid Cirrus participating a note of a coming quarter which demand across Investor to in and like experienced product the our our adjacent the deep pipeline Barclays in well-positioned Conference pleased Logic market several September for to voice next we summary, Global website domains. we our expectations. our products

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

Cirrus Logic (CRUS) 2 Nov 202021 Q2 Earnings call transcript