CRUS - Earnings call transcript Q3 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic's Third Quarter Fiscal Year 2021 Financial Results Q&A Session. [Operator Instructions] I would now like to turn the conference call over to Mr. Thurman Case, Chief Financial Officer. Mr. begin. may you Case,

Thurman Case

good and afternoon. you Thank

the results Form expectations. the additional with could cause release the made that XX-Q today, latest materially subject statements of the of press This webcast to our Q&A discussion Company XX-K as differ today's may materially GAAP Joining otherwise. Investor letter the information, including XXXX Logic's note Investor as Logic at non-GAAP feature as information the corporate or John the revise all of discussing to announced Cirrus questions of information, projections approximately during release, Company, By along this X:XX shareholder The make financial on any session differ questions session, is to well to our projections providing from which issued uncertainties Executive filings the me refer Relations. are result or quarter and directly available Please Officer; shareholder from are year we submitted of our whether on results forward-looking the press Chief and letter forward-looking that Director Exchange this Cirrus and the any Forsyth, are projections. that us our expressly most a factors Relations as results, and comparable a may and for with website and call from to available earnings Eastern. this call the email Company's on via reconciliation actual investor@cirrus.com. and Chelsea statements, fiscal new other results we to actual financial cause p.m. Commission as current covering risk financial developments website, the at other or analysts Securities investor.cirrus.com. Today, third Heffernan, will well update at for the obligation that Please disclaims risks to

Now the over John. call to turn I'll

John Forsyth

million, introduced above we demand smartphones. QX Thank Cirrus recently delivered Thurman. as end you, for high Logic shipping strong the revenue $XXX.X certain in products of of guidance FY 'XX experienced

During with design-in lines. pleased product especially and we the customer our across activity quarter, were evaluations

of new and boosted of and respectively wireless We codecs role are be quarter, will utilizing such I'd introduced we variety incredible contribute Schuele, reflecting Board who course, on to amplifiers, and in vectors about really instrumental haptic were, products In the today. acknowledge of the completed and year. Rhode played growth an for Directors and results annual Jason end the that long-term we also express truly Al Company the solutions set our and December headset strategic our quarter, CEO our Chair this review are our the In to of that excited expect in the thanks of for whose Company smart first is success. half period, three what building a we truly of calendar to like an the leadership the believe to

in supplier audio leading the smartphones. as position our strengthening anticipate we First,

this a another calendar product area closed-loop introduction product. two controller in important last in introduce along heavily that to an the aiming will power in smartphones. are currently in technology sales year. to we we product we we that applications certain increasing the In drawing also that Second, calls, we've path of that new are with new domain. are audio quarter, on areas our investing a last And step to relating expertise develop mixed-signal beyond the And focused we the we in engineering earnings components diversification extensive signaled of are on believe beyond audio took third, drive later

execute to I and a rich be will won't be With on details we that into customer. and we about continue very our opportunities that progress both excited portfolio products we strategic a to those optimistic products, we're the today plan. product this development, and coming continues innovative really pipeline about available drive with on believe in go of we that journey this new will components And positive engineering of on the years. revenue ability our While in growth report to diversification our are

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

Operator

of Svanberg question comes the first Stifel. from Tore your And from Instructions] line [Operator

line open. is Your

Tore Svanberg

congratulations results. and you thank on the Yes,

could visibility would of you is your now you sort But any First your say you offer guidance. in Obviously, now. customer the bit question, previous worse? John, have right right as visibility or appropriate same or it calibrate largest you had a years, better didn't little

John Forsyth

difficult with see our always it's orders that is with fact module do strong the demand. just to read cases, we generally to we manufacturers What what's to happening contract think we products, I customer and what some see own really our ship vendors. across in given from happening

the I quality and of definitely So of But strength a bullish own continued of we supply from demand very problem constraint book. a obviously have. market. outlook chain, the in that macro certainly pattern in largest outlook a exceeding positive what same in supply. It's sense, is see our think yeah, of to for the customers - It's order we reflected the capacity time our we very hear in see and lot the

Tore Svanberg

a historically the into going but Company on? kind you I think bit has that little a to is a perhaps question, Should a is it diversified to mean, laptops opportunistic. like I be of Second really mentioned and non-smartphone in your to concerted wearables, remarks, we aggressive and view be bit know applications. prepared this more targeting does as bit Company more always so probably those sound opportunities this effort going more the

John Forsyth

big year, indicated, battery And hold That volume we over product other up as other those well, or launches it's as required, past important tablet a - for meaningful or where the something there. believe I something Tore. is product very felt battery-dependent device, opportunities some categories. years. really haptics of expertise passed be you categories milestones really we we've We couple we lot fit of customers, that signal perspective, to there, products, either across mixed power we've a last and In and into that turning wearable laptops it constrained, think about good opportunity when across of talking really my going is that we From could is certainly on think getting the constraint keep the then been there good audio gradually us. some some area on momentum mentioned a want key are

able ball been scale the few and regarding capability So, years, to for our grow past our eye it's not smartphones. for off sure, taking over we're as engineering that the one we've second

kind continue you that's lead in as will can I I make to these number see continue to us, see You other mission to there. But think, said, categories. of one, progress yes, the field

Operator

And your Ruben next of question comes Company. from the Benchmark Roy line from

line is open. Your

Ruben Roy

the John, constraints, supply commentary if follow-up around chain I etc. could on

sort are your participants able you their is, your facing everything or are of you would The supply you're quarter? on of later outlook, the some chain as to on demand to that near-term could a either cap to first look supply which maybe customers March facing other dictates some year you are or as the used putting constraints say question this

John Forsyth

- that ability service and some very market kind and because 'XX now. Well, planning ability be back the got there work comes chain's customers exceeds horizon, calendar do of our as their That selling demand a customers we kind we completely had to could lot long sure boom could upside. feel is you the the then it new our look the products, customers of very the just step a for has a when simply broader in had When supply on of end during at the - sell demand right outlook bleak largest across our in obviously, category be that to products or shape we the the sales and so of at it into, back year, win in largest and there a good look that there. back of

we're it account in into that, work see constraints continue reflects to much Ruben. we on chain is to So, guidance, we our of can of grab. what taken to that capture guidance our But how supply able of all

Ruben Roy

Thank of done. the you, that sort and higher growth John. And then, level around vectors cetera, question strategic et the you've planning,

you're excited Some talking slated and about, I that XX that smartphone you've traditional product also about about is months? largest roadmap other next XX investor about are think you both custom products say appear but looks to the the pretty new markets terms would these more think about customer. your like general some the What offerings, be for excited in end markets base as of your you these of of for products to been excited

John Forsyth

ahead Yes. but term, of certainly on for now, we us. that's our excited additional loaded, getting if we're devices there order - successfully about on honestly with categories focused our versus very meaningful comes happens us. future opportunity be is them, customers ahead a at upbeat by these the the help generation that. sufficiently and kind first of with one ramp and of us with locked opportunity Ruben, be Longer our When else. we to look We current executing customer and opportunities very significant products. evaluating above it is customer the we're new size that that what plan upside, to all consideration and Right see in us We're those the based second to largest another, may against

Operator

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

open. line Your is

Matt Ramsay

of a important and things. of paring if and wonder, - other to important for opportunities is John, design-in that's haptics and a a thank long and laptops if I a as in space? is market well asked, shareholder Company for disruption would mentioned in whatnot. other about, smartphones I the your just amount three the might if very But you it market tons given - much. investing domain did the is than that different the and things the little new also ago, lot the that there cycles it be in you talk that think been to Good I script there talk domains, few audio in would with and as Yes, it about might automotive Thank bit you about that's view consider you two, was that we you. and happening letter is years just you wonder have guys your afternoon. have wanted

John Forsyth

interesting it's Thanks, Matt. Yes, an area.

we automotive some evaluate continue in to have the We space business and that.

areas I towards severe. power As say, steer are where constraints would we a major more much the really focus,

those are person, say, I the needs that every areas taking can of at. the constrained There the are, all around, the automotive us we kind really off, in something haptics device opportunities engineering right space So, It's to on deliver mentioned. ones I thin, focus power front from be us of being our certain think are look of leverage you given most as where counts that major devices not that a in that to of more carried them, we one now for where worn continue space advantage. microamp the which

Matt Ramsay

growth I've year-over-year here. or I out XX% minutes, few Thurman or question the the guess chime basis in XX times I a hour, feel on the second that the in came a to I whatever December. guess so numbers and free guess or are, since But question don't John, it's know, I in my last is, to obviously, got

Your just has past, the a year a it device calendar from flagship little than this later largest launched customer in their perspective. bit

or supply talked I on And the just I year-over-year, quarter XX% it you better that March is are basis. part - guess second else know going the as of you you're some Or So, Thanks. where constraints look you've sort relative there? are I the do than there what to Or it to is, anything supply mostly you're on the of to up, to going certainly is see you a guidance, guess, declining calculating guiding wonder, just secured about? like? you you might informed that? are try supply formula and

Thurman Case

externally. and look, takes see our Yes, everything account internally guidance into that we

So this we our if that areas then launches product have our that faster customers, obviously going of than and be very incredibly across more capacity demand we secure board from largest includes for the business committed currently could also strong would strong quarter.

basing have strength we given that a the are guidance, how broadly when take what conservative data that's reiterating, I So, constraints that real. a the we is - generally on, outlook kind more capacity we But while it give and then but there for be demand line a - on the is we of in outlook guidance service. demand guess, grab of optimistic this through what Yeah, the well we're just we pipeline. solid very may we are can of think sure upside, I our can

Operator

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

Your line is open.

Blayne Curtis

on then Korean some just outside, Android your well. it I you're some Last And of you the enthusiastic want as had ask quarter, the China. customer earlier potentially from like about launches sounds side.

buds? haptics You any in guide don't by So, when the kind But segment. you I of quarter, flat. mentioned [sound] as to at expect ramp of and some you of what to kind curious I'm know bit December you on expected. letter then look little And March, it December from as look played I like color look shareholder Thanks. out Android? you just be

John Forsyth

Yes.

for really to see we as we're you by we - showing year. we which over it Android both Android, don't we're which we're I about of design-in that this in I think break did devices talk and think you'll more about accelerated positive going What us but in the But momentum, about, overall see more momentum, sockets has think past we talk said very design in see been us growth out this in result also quarter. did Android, good. And year what mean, Blayne, segment. a as really I overall

Blayne Curtis

end for the moving would or whether sort That at I'm But just Android you curious are I'm basis the Thanks. of one if XX%. but It Thurman the kind of be know of the then guide of guys. I margin, And has anything? maybe just products? of there, XXX come gross beginning the down always pieces fiscal question to to on from here, conservative kind seeing you points. any color the curious, year kind just a of or new it's helpful. as you're

Thurman Case

out Yes. details have guiding product margin effect - we're change. break have and mix, cycles mean, on again quarter. any it We supply I don't given we margins efficiencies the an all launches, where on that product chain on But will time. think is We're we reasonable that slightly trend a would 'XX, it this our up we look guiding would to fiscal margins year. that we range for that visibility we as across into move But FY when at we note expect that and

Operator

Your next Securities. line from Derek the Colliers of question Soderberg from comes

line is open. Your

Derek Soderberg

Yes, thanks.

I the start commentary So wanted Saw just adding end John. new with to products positive some in shareholder letter around content.

fiscal And if few content With parts as relates there? XXXX year? have for the last year, maybe of increases was and of fiscal shapes then view the the provide how it for moving I that last can a in months you up bird's-eye growth then some year, I wondering follow-up. And to a

John Forsyth

obviously, we've But body is directionally, so that, got don't would we development in tone know, terms here current And you is you the units what stuff going that. quarter. on introduction a and demand read we very content feel in be feeling can of given the and content strength were as if - Well, the still that very I the new guide side. language flat, But on we for new in have beyond think of factor upbeat we much upbeat.

something we that previously control have main to and That's are planning about. to So, we back of excited calendar about, a headline, both that the referred we extremely power as conversion talked this ramp what the we in that is in end think particular, are as I we year. device

represents smartphone content and on in system, introduction part our users to incremental new landing to and then customers benefit able in and opportunity In value add that based the that. new its us terms of being for a and over that the of time

back of new that's - in the Relatively just calendar new area speaking, really half FY in half to the of indicated for than significant content that the which exciting So value. device ramped us new closed-loop a we've 'XX. value terms of that meaningfully be we've higher in being system, relative the will of with back controller,

ongoing for a headsets, of have truly headset which shipping. ANC, delivering and are we about number of smart We're using devices new introduction is latter - we wireless that, which new product the designed talking the introductions. Beyond developments and currently codec,

categories reception been the you to whole where the has products think of just to then, far, range so out making And really I'd we're sort response letter, those, We're those probably of good whole excited of I about refer the there. the progress. reading And positive. there really opportunities the

space growth Android tablets where smartphone the beyond the wearables, have significant that said, and looking in categories for we that I other As beyond is us devices. But great great. momentum opportunity represent

Derek Soderberg

guess controllers in that. a Should of then is the we adjacencies, products recent with see and year longer this camera cadence term? to how these of shorter cadence power And an view as the or you're about non-audio just I chip I the released sort Thanks. want more IC product cadence atypical after term? thinking control in normal this

John Forsyth

a fair When into ship a is to through every longer that's years, back are the at think it's couple products all don't Yes, variable. look periods it. actually crisp there there question. we answer on when kinds our cadence of you that you are periods given across device introduction of customers, largest when go a There a than new that. pretty it's I

continuing to about to exact more customer. to and - providing just right for guess leveraging that we processing wouldn't add those have signal we sure smarts integrated integrating the of and is categories, that those headroom our plenty comes value - more and timing. the actually What innovation is bringing it I kind functionality, devices in that now I there to wouldn't when hesitate on So are to of

innovation to continue take execute our make good been doing can of customers, have then update products and as to there So, those if in be a time. to I'd expect to we frequency we

Operator

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

is line Your open.

Rajvindra Gill

Yes, A sorry, the thank question new you, and congrats momentum. non-top customer. business all - the on the on non-Apple

at you the that basically last revenue on it if to So December - was based growth year math, customer, of year-over-year. the non-top the the look this December from that year, flat of year-over-year seems,

mid-range strength - wireless which other kind of amplifier products. your is truly and kind in and So of audio

throughout we as the Just that wondering think into about subsequent part you going how ramp - years? that are year business of kind and of the

John Forsyth

business, be past quarter out caution I Yes, on much I'd just you a of direct may lot the a the front, strong a our for 'XX lack regional, on. so given calendar by that was channel that that during badly variety - too partly at of the hit drawing having of pretty when look maybe such reasons, Android against and Android market think the a lot COVID partly of

that So, of there that - of part a on market. fairly was overhang the kind was

I seen momentum we letter think though what the we described and is is what on a design in have the side. this of lot

demand so business our that our amplifiers generation - for part products of our really of leading-edge including within general is and And state-of-the-art kind latest and boost the significant.

And that so the will stuff a Obviously, see through momentum design we on quarter that we year. front. saw bearing this of calendar in lot that last

Rajvindra Gill

a for And follow-up. just

could mix For going on you're of help qualitatively, the that and kind versus the if of forward? the are your your top mix maybe of getting thoughts customer, non-phone, revenue quantifying outside of the that you but without just just it, phone phone me the wondering what understand

John Forsyth

positive story said good been is us honestly, I 'XX. Yes, current that content some we sides the with new that product phone and break side, calendar by amount in We But passed us, the in over had, categories in into is expecting were At the some had all on you're milestones really the both dwarfed very the still, generation that. in obviously, terms as of like, to - we the non-phone the the the out. say of momentum on earlier story But particular. me past lots that very on positive launched of don't I'm year. least great progress. really Obviously, during getting to quarter for has side that, of there past we call, sure

Operator

Your the next question comes Vivek of Arya from Bank the line America. from of

Your line open. is

Vivek Arya

the what we or is metric taking right for should Android you I'm question. milestone Thanks or track hold on to the my for side. Cirrus curious,

they units, growing up So if, let's percent a goes you show that X to outlined terms But model? your interesting this number in is market? in up of visibility how of content I do start say, actually Android market of in the with opportunities. year think terms when

John Forsyth

flagship Well, on upper half Android so tend vendors in shipping range in there obviously, half Historically, the We the of tier then been the some time. mid-tier some phone well today strong maximize market, that we're and seeking have the be upper been smartphones. we've the over very to a populated we're, less - focused to of smartphones. the and of in vendors, whole of flagship other

one certainly into from grow indicator the and SKUs value Android populate leading get are we iterate, in as tiers other So we other smartphones - sockets, amplifiers I'd is community. and flagship power point Then and appropriate. the to once the obviously, design-in look OEM those across to sockets the

Vivek Arya

and the the in then potentially described do think end expanding models coming also I'm that about at year camera up what the only think that a has chance I or models? which content you content, all to opportunity, as you the meaningful that curious of think control multiple to power And second half right way the perhaps have is a in step-up show you high

John Forsyth

SKUs. I as we about particular and across Look, is relevant being term, what that Yes. highly that the we've across said long think in regard tiers

to run talked first controller I device seen. the blended devices given as on this previously of your So And attach we as of in about that a - ASP that amplifier when I we'd that yes, just How to content, think taking nature half expect towards latter the rates. one. an looks that of ASP based rate back on Again, year, an that the likely over that based is certain ramp being to we remains think out shipped the an of closed-loop well. general - blended then trend on the attach there in, trend a on guideline up ASP time, see that's to that roughly equivalent be

Operator

of from from Your comes line the Rolland next Christopher question SIG.

is open. Your line

Christopher Rolland

drill first a guess, I'll kind big bit. I little a down then ask and of picture

talked your strategic reviewed had letter talk annual you you the kind John, you takeaway in from as Perhaps, about review. that couple about in So, your CEO But your there. tenure if review could that also ship far? of topics and were biggest that the maybe kind of short thus

John Forsyth

disappoint. to hate I

I review. think times looking I've how the it those to tell all you're stuff to of you're a going painful. strategic is you takeaways. you do and their that ideas it, that and this comparatively come you to of about There every as it's and across to do you there for pitch But told ask - opportunities, are are where you the can. we wondering yeah, and teams - list occasions There identified staff and many times I'm company say head, between as you're their - scratching growth. them does but And going one I'm where everything going looking they've look, your obviously, business select

past what that's gone the months. we've few over So, through

we then We trajectory and which build really that talked the and revenue continue space, I both build the in feel clear audio I've that, there that really about. continue and vectors believe to significant we that beyond think, smartphone is beyond opportunity out three our there are that. on of meaningful are leadership

Christopher Rolland

so from various at signal you question, really haptics. five for you guys could around market. perhaps this pretty the And, my missed the growth that products there that's Company controller the above break I that a for expect new you cool, think market do opportunity well. sets would was you And XX% trend of as was the my down question something gave. and thanks. solidly overall beyond in years next in guess holds now that audio there's you But you and Awesome, If great here? else camera this say presentation, I as guys couple was was that Would and the that HP second number be that look years this Where anything be mixed that have? rate the is there,

John Forsyth

in on outlined to that. that we exactly I I'm it that continues was communicating. drawn that believe in tells not I on going - highlighting get our the growth opportunity audio categories. smartphones, device our there business signal into into IP is are for think that really us applying continue there is products then, categories, still it, that around And and for core is where story mixed product to because Obviously, other expertise. other trend slide. a we've growth that to have areas that view meaningful the We we those taking that Thanks expand there advanced

we growing other significantly in see of - we where from that non-audio the domains see time. with the that over revenue can presentation, you illustrate that So shareholder set

be, upside But per phone of that. what's growing market content And underlying sure with who content. any we that the is believe the and knows We exactly our way growth on is revenues expect growing to obviously, for market. then to going I happen best mean, - the growing

Operator

from Your Schafer of next question the Oppenheimer. comes from Rick line

Your line is open.

Andy Hummel

is Andy for This on question. Thanks taking Hummel for Rick. my

customer? Just quickly of technology But as for customer. on in conversations have roll potential kind that demand OEMs, on that largest are sounded of the the product. any product of had out [indiscernible] to that's I'm providers largest other interested back over of CLC sense out early from It of letter a your your guys you other whole time. that else or product in or - shareholder to you anybody a rolling kind like that the beyond just even And course in the trying get to capable

John Forsyth

and our for our focus a biggest focused on us for in that. We're We engineering now. invest And obviously pretty opportunities. somebody lot years business executing with we're - we'll the towards But to in really other that. and with expertise ramping confident being not custom customers that We to of those. product working not of that I'm very That's then look our on - right a and are for focused on IP customers. leverage

Andy Hummel

or $XXX is look quickly I that extension run of see guys buyback to of my the your of on question. the And at of on normal kind of time Is near-term you just for rate accelerating million. course an just taking any plan over buyback Thanks authorization, sort then kind you buybacks the it and guys that any time? the of planned indication

John Forsyth

of use cash preferred our Well, M&A. remains

return So, on look authorization high amount What to and to dictate. just a absent sheet, that good have reflects that position an the is we leverage cash on we that buyback acquisition through share opportunity, of cash if want represents then historically opportunistic we'll in balance to continue circumstances basis. the and to be really

Operator

[Operator a line have Instructions] Svanberg Tore of from question from Stifel. the follow-up We

Your open. line is

Tore Svanberg

quick Two you. thank Yes, follow-ups.

this that build Thurman, want quarter? the not revenue lower mean, all, your be to through I ability of mean, a I days. that's if are get the First ability to you about all-time down, some inventory sense quarter? But your just end, an feel inventory we days is get at here March obviously, low. it up going XX really at How to for back should to is number look but for history.

Thurman Case

the From into that the we do as So, end quarter how visibility, expecting it a first by 'XX. fiscal that increase right? expect our lot of we're this to quarter. How There's we to environment, inventory head be Yes. much will grow year in much? of

Tore Svanberg

especially, around products, have mid-tier And that I new smartphone your of part ranges good. the the you penetrating for applications guys market. ASP they assume tend you the because move keep to that's and of then sort and Very

all, related then all, customer, largest that it's your business? not of And are that you second right? XX% of the just these can ASPs tied to is to editing to tied your case? clarify So of First

John Forsyth

customer reflect Yes, there don't that's about may to When broadly new the typically, a new - that new that, from reflect category if we correct, or or products quarter-to-quarter, move penetrating update in products. there may ASPs And those the yeah, product introduction that Tore. in we talk tier. the reflect be be they of that's because - don't we're it presentation

Operator

questions the back Chelsea [Operator over to no Instructions] are time. call there Heffernan. And at this I further turn

Chelsea Heffernan

questions. additional Thank you, no are Operator. There

So back I'll call John. turn the to

John Forsyth

in shipping as Well, we smartphones drove higher-than-anticipated guidance. demand revenue results you. delighted for Thank are quarter certain components our for with December in summary, the above

has believe relationships the with capitalize by team able of position leaders and and during markets the growing the the past We to to our unusual us. accomplish be opportunities circumstances year. our well roadmap of on and that with the And amazed we dedication I will innovative ahead our the strength serve combined continue of to Company the challenging talent what in this been that

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

Operator

concludes this gentlemen, and call. Ladies today's participating. conference you for Thank

now disconnect. may You

Cirrus Logic (CRUS) 2 Feb 212021 Q3 Earnings call transcript