Cirrus Logic (CRUS) 1 Feb 222022 Q3 Earnings call transcript

Company Profile

Participants

John Forsyth	CEO
Thurman Case	CFO
Chelsea Heffernan	VP, IR
Tore Svanberg	Stifel
Matt Ramsay	Cowen
Blayne Curtis	Barclays
Ruben Roy	WestPark Capital
David Williams	The Benchmark Company
Christopher Rolland	SIG
Rajvindra Gill	Needham & Company
Ananda Baruah	Loop Capital
Vivek Arya	BofA Securities
Derek Soderberg	Collier Securities

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic Third Quarter Fiscal Year 2022 Financial Results Q&A Session. [Operator Instructions] After a brief statement, we will open up 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 to now would turn over the Mr. I Chief Financial Case, Officer. Thurman Mr. begin. Case, you may

Thurman Case

Thank afternoon. and you, good

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

turn I’ll to over the John. call Now,

John Forsyth

in quarter, Thurman. shipping in fiscal top year. contributions be new calendar the our and of the we of design Thank for devices robust, expected continued are guidance, and first shipping for to XX% activity year. In products the Android reported were execution reflect of and component was December our about that mid-tier strong our of utilizing in of into above our the the record results and first product in of in go in smartphone also and our in the content products product in And audio production smartphones portfolio. half the year we coming continue We the see softness of as fast charging impacts are we the have parts high-performance encouraged feature. promote charging, our market we These momentum fast XXXX increased shipments business. In new mixed-signal from significant of content quarter end seen quarter, contributed two fiscal to and growth the products. and the mark strategy OEMs control smartphones you, taped revenue demand revenue technology end IC. a most overall of of comparative mixed-signal the the areas towards by China diversify that differentiating some Logic total our milestone camera Cirrus while components out during calendar half will the excited to into lines, flagship our with from areas year, controller heavily power by increased $XXX.X another conversion High-performance million progress of from our driven significant and other introduced

Most momentum driven revenue has by year codec positive and been audio with of see shipments. laptop laptops. to past our in continued also We the

this in initial began the boosted objectives. the amplifiers in marking progress team quarter, towards great we also strategic of again, However, one December of our device shipments category, first by our

developments Looking new excited high-performance technologies a and in including content power to mixed-signal the new we this opportunities drive areas, in we expand business. both opportunities investments systems. With of sensing, our These coming and market battery strategic and for our opportunities diversification funding in our in years and and mind, range addressable applications incremental by audio the products business where today, in particular, target forward, in are we’re through markets. today and ship both

in in leadership. of to we XX% the represents expand year as this line product of continue anticipate and our mixed-signal least even high-performance to sales consolidate on build future, revenue we ‘XX, fiscal our our can While year-to-date at that audio half our

encouraged optimistic that very mixed-signal ahead. remain and the for opportunities we gaining and are product are overall high-performance there traction diversification solutions by growth our We meaningful further are with

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

Operator

Thank from you, [Operator Our sir. first comes line from Tore of question Stifel. Svanberg Instructions] the

Tore Svanberg

on you. is first than the question results. better My on the And seasonal. Thank congratulations Yes. is record which guidance,

above references ASPs, but is are seasonal guidance? to better that or ASPs, some the other contributing there the things better made to main You difference, the

John Forsyth

-- and being and the the for as and increases a products demand reporting demand. price adjustments driven Thanks, we’re strength content the by products to quarter, out But the both guidance main customers’ results also Tore. meet The guidance units are our regards working March looking mostly component. the is us our to of drivers of and that with

to March the looks when -- look strong. very typical step quarter December we fact, like March. So, doesn’t in down seasonal at It a seasonal from quarter, it look

to current try the wherever we can customer into to order material in pulling quarter, actually We’re meet demand.

quarter, we quarter when seasonal get so, not driver guidance but -- and is we’d typical talked the results go March But strong what more of for be quarter expectation, the the now, strong And guiding expect March the and units gains, and December and quarter the June between June we’ve March which the we the as June we’re between about. the our the content beyond that, into just expect the pattern we the to principal quarters.

Tore Svanberg

Very good. you momentum. to areas management as high-performance you sensing, are three strong to And and invest with mixed-signal are And mentioned the continuing expect follow-up, battery you obviously very a power a in. continue

business Just more new to a in as those of forward? give two part three we us offerings perspective, technologies of what inning kind those or are some as becoming far the going material product

John Forsyth

is I great. think the potential really

We’re early still in innings. the

were in the complete, Lion lot areas power got do. of we we we’ve we can a or have either power the coming designed acquisition are first the On out, second those that And we fast really then shipping before of in was both product. of obviously, products, VX, most believe which our side, shipping more quarter but charging

where In Again, addition, the area we that’s sustained to where through an the contributor year-on-year through high-performance cycle, look both saw year-on-year if through in content the enhancement. an also growth, and attach current camera at mixed-signal. rate anticipate additional increase we important some content, controller which we but feature is attach rate

projects either mixed-signal so, controllers future we’ve are battery-related the for we pieces whether the all of space, it’s maps high-performance have we so camera and underway lot for And our there. slated road got or that moving a look on, technologies, for sensing, in power, when at the

Operator

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

Matt Ramsay

a of to to ASPs are gross ask going guess, and things they’re couple kick interrelated margin. of and off, I questions kind that around I’m

You couple is that, above the great gross a and taken see. which ago margin guys down coming to had are range quarters of in well

And in in how to thematic input of sustainable in be the input Thurman, for and that, ASP but costs John guys, made that to letter. assumption the into for One margins, guess, might comment concentration that little semis I fact, are on couple there Tore levels customer margin largest do And a shareholder difficult fiscal it with looks and that guess, come year? I places those happening. given next touched was So, bit is the think investor think judging to right up for I on these now was companies a like of your an big in related the you this base. pass you that customer, is, from your ability going the costs

discuss could that Thank gross to you. the would helpful. margin, those in dynamics you if So relation be two

John Forsyth

-- I’d a folks couple to not comments thanks are and the nice gross our would new the effects to from But to fiscal guidance. and normalize margin some of we improved There my Matt, gross Thanks, there. margin other also here, words extrapolate our we characterize quarters I look you the outlook transient around for as to and margin back. XX% as relative gross the cautiously year. encourage immediate expect quarter’s

some have cost range products. And some true also perfectly increases lot cost to which be this things And over across new these in kicked place in don’t So, absorbed increases going year. of is have at of that’s adjustments modeling, the we’ve the increases, past on terms calendar what’s of think. we there start up kicking the year I of timing. and in, a price our But a right price

some are expect the period, lower on It XX% again. inventory March a built that we around cost So, to the in slightly was base. a to sales, quarter, but gross we for a inflates little which margin have normalize going that of be then

our rising few communicated So, the over business I on that past think your broader of we’ve question costs been regarding past pricing. feature have Clearly, in a the year. calls

a have on We same At our innovation everywhere we really. partnership. customers value time, that us rely of for lot absorbed our can, the and

a better to base, of we normalizing Clearly, ways quarters across costs, hence, a ago. customers And range closely solving we footing feel we’re do but across find worked on XX%, of about customer comments our my than and a absorbing very of did still around so, with couple products we’ve that.

Matt Ramsay

for John, all details the there. Thanks,

appreciate going be As business, of are non-audio that piece the a growth forward. and of going made the that’s disproportionate I the a parts follow-up, in being investments to

new guys you that non-smartphone opportunities clear very markets. been come have There’s on in have up think been I that.

John, others. You going a your similar arena if spread mentioned in about wondered, might versus Thanks. the other verticals. some forward how smartphone growth few commentary Company you you might the be offer laptops and for I think

John Forsyth

particular, audio Matt, you area, are around the In asking?

Matt Ramsay

going Just in general, smartphone versus growth outside? forward

John Forsyth

Yes.

to match in and we’re which way again, that’s we Well, on the with market. any Okay. a add we’ve in hard clearly, jump done, content space, revenue we other see smartphone intent new doing when

in that more our encouraging do space. extent, So, in is audio signs and one to markets, space, continue But think, being. potential. I The going other revenue of both smartphone mixed-signal in to mixed-signal time dominate for to the high-performance we high-performance the see is

in battery, discharging very innovative. have We and the path path are the both which around the technologies charging

product to looking categories. We’re leverage into those new

and going very some no attacking new immediately, gives to us significant not something side, we deliver try we And really the take go over and basis it’s I the but believe then, going to on think that’s batteries seen laptop we’re to growth for space. have the There’s past a in of markets. that to. excited shortage audio year good about, innovation

to very small. weren’t If full really the for total on ‘XX. And back saw in we you fiscal focused ‘XX, area going It communicated audio the -- $X region probably that we was year, that laptop as very, We be $XX million. That’s look that. fiscal the more of I million. our an around was year the to previous to grow revenue think in

we happens that. That’s depending the power out, haptic around amplifiers around audio continue that has good I that looking really in us. boosted content for charging based and shouldn’t on market, potential and and beyond fiscal market ‘XX. But content, what opportunities much expect then codecs, growth laptop probably for believe to content the in too further PC we think

Operator

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

Blayne Curtis

but the talked make Tore’s right. were think, John, supply think were I I you wanted you March, But sure you ramp. you too. the answer, wondered catching it in guess, go smartphone I pricing in it you offsetting back want that? strength I ongoing I just so your in was and, -- in like, chain on said right But seems March just up, -- thought then talking heard how about And I wanted just you -- just letter be to be is would clarify I demand flagship I more then sure given I factors what could sequential. to then to thought could more June, the just that be June. the you wanted The sure make of maybe June more said you to about to I to will terms heard -- March, first make sequential if question. reiterate helpful, said like I

John Forsyth

what call quarter, there the Blayne. we demand a When knew to of think given a keep questions struggling we just March about lot to as and up was of the looked going into previous there Thanks, relating open had to lot everybody seasonality what products were -- Yes. like this to demand. fact the that I quarter, we’re with happen was went

because think stronger normal. pulling that from our shows into December guidance the like March March we likely looking today these our from March in our are playing think this pulling see typically to That our March the I reflects to meet we’re material still clearly, highest March much answer. we is quarter like to much is the quarter look the we I wherever order expect. that are outlook And June with demand. So, for than the have normally transition guidance and so beyond quarter quarter are, fact we that customer quarter perspective, looks The catch-up that possible, demand. we numbers And content more in, where than

Blayne Curtis

And mentioned in maybe some a weakness that. I you curious, Android market. follow-up the handset then, was just to

and late non-iOS for that on just June? lot the for was I you. about some curious outlook March you’re better. any And that perspective March for outlook kind markets obviously, you but is tape-outs, was whether December. a talking for what the June, you of Just have curious, content seeing kind of and Thank some of in

John Forsyth

demand a launched. haven’t products for Yes. read that been I don’t on have yet new

particular are to that going in flagship year. quarter the in However, smartphones about products, first launched this be Android we’re of excited

those around positive. signs the certainly, are So

So, we’re about there. upbeat opportunity and optimistic the

in worth coverage and pointing Android, -- often revenues are our quite think -- for as it’s strength given translated out of is we the picture, if I works obviously out any where if that which weakness our we into smartphone the overall it well. seeing market, iOS, well in

Operator

next Our Capital. the from question from WestPark of line comes Ruben Roy

Ruben Roy

kind some to product some high-performance think products, you’re working product of of you batteries, power, platforms that that the that going want just investments in the we we talking been type or it’s about one and should family around fast areas side about it’s of and talking I put sort you down you on, camera of power about start these the solutions areas investments how sort catalog guys John, solutions Are mixed-signal have guys the looking are about. mentioned, controller to of think still merchant whether you’ve of If and the cetera, other customers? charging new of road a there? sensing of whether broaden kind custom or specific et for or

John Forsyth

Yes. Thanks, Ruben.

right. absolutely You’re

strategy three kind Our of is parts.

into and mixed-signal the smartphone areas beyond maintain expand broadening of secondly, where in audio; all, thirdly, then; smartphone our in profitable in First leadership audio we can sales high-performance the adjacent segments in product space.

controllers So, as power, talked camera haptics, sensing, battery, part that. we about of

broader our goal. custom market a and silicon of view it’s That’s is of silicon. going Our be to that that mixture certainly

of time, areas. we’re I the markets where content excited take out to potential shipping yes, us build both grow new for in And as well incremental over you’ll us we’re in those today. see into that places as about think

Ruben Roy

Okay.

So, follow-up can your that, bring kind significant to the just about a cetera. to et we as investments, discussion, of Thurman engineering thinking and comments maybe on just

you’re your that on we put But, guidance. this be us model. that they walk growth Lion You could think move sort R&D these like acquisition fiscal might you to the as impact into Semiconductor the helpful. looks of through Obviously, nicely it did making would based as how about pretty grow maybe year, R&D forward, we investments if

Thurman Case

guidance, and taxes Of size that’s pretty higher. that quarter. just mean, starting the guidance March good in happened there the that funding I of guidance, medical that the with payroll a and really is was Well, up only things

that. So that was an on uptick

move development at look of and some and product go that you that it And can a piece tape-outs up said investments, with we’ve also expenses quarter-over-quarter. If -- down of and product good that can always we was -- other development. was around

not So, specifically a at rate. expense least that is run with associated

investments saw resources. the to maybe different of really one will forward, what be we’re the what at, results in will and in also that, invest. probably a we’ll earlier take investing to At you will at March moving not least into new but on we than resources, at in really higher can that when QX So you a not and that but quarter, year, look R&D, gauge. again, kind would it you look -- that be lower than or you if continue you only a There at touch QX, reallocating these that the give point, guiding need look results come

And continue to slightly scale that SG&A, very numbers possible. should looking about keep And revenue, like to scale can or revenue so, just that historically, then, we’ll close really leverage you pretty that whatever to as that. you flat talked much at, we’ve you’re and as growing

John Forsyth

Yes. to And I color. by R&D was add in opportunities driven in us. a which to add mixed-signal circle we back year, Ruben, headcount We saw of maybe front managed significantly in additional the past little high-performance and could if our really that the

some But If then that add generally of about to see And of concrete in to So, overall that. opportunities, we’ll our we’re staff want and we pretty continue stuff. thoughtful ahead get kind to mixed-signal we addition, talent. well. new as there, of abundance space products growth of capability in resources the given those we’ve the and -- have also redirect strength as areas the IP our we to our audio and to

Operator

comes Company. line The from Benchmark Williams David question next of the Our from

David Williams

Congrats for question. quarter. me a on letting And ask thanks the

it where large and on to basis. but that your up about if kind year-over-year see, growth of customer the revenue wanted think modestly, fairly been, has sequentially Just maybe was non-major up you

on for just that maybe products expectation some think customer. normalized newer you rates how Just outside expect of kind given you kind on that What and that of about revenues core model newer of growth line? the think coming see a would -- your should we you do kind have to of of platforms

John Forsyth

for growth clarify question David? you Sorry. you about our customer? there, rate business Can largest asking your just of Are outside

David Williams

Yes, that’s correct.

Just think over that how can you trend time? do

John Forsyth

additional guidance right obviously June give to And I’ve Well, not color tried for March I’m the Okay. giving some regarding quarter. guiding beyond that. But, we’re now.

the we’ve excited have However, high-performance the and I of that we’re us space the front spoken letter and there. indicated what about mixed-signal to what is in opportunities in really

is incremental content markets. on a some So, our in targeted we but further growth that where reasonable products new in there’s into a places today, to much there of of very and diversify in ship take our plans lot of opportunities number

delighted business that’s or with I coming we’re grow there in years. whether to opportunities So, to both meaningfully, largest the our think are customer our beyond, do

We’re optimistic and predict not get lot what going that’s like, of look ahead be a about reasons but ourselves going exactly of to that. to there’s to

David Williams

for then, And Great. maybe me. last

Just anything left significant particular, on whether quarter, the there’s any place, you’re can for constraints? maybe table constraints, supply in you constraints that the on quantify -- seeing supply was the what maybe

John Forsyth

guidance Well, our takes our supply of to account the availability always course, into of -- us.

more So, where our planning. Most areas that quarter, undoubtedly do of March as we last for could the long-range shipped the able for obtain We would of regarding obviously in true our been business the was we’ve guidance true have more be that quarter. guided the if for December we to wafers quarter. it’s

where our lot a with capacity tends So, when into and of we’re long-range customers, business so we something effort largest to planning our be and put about agreements on. thinking that

or fairly that past industry seen as that quarter. degree sure if Most resilient. that in had over So, demand opportunistic able was of wafers. we’ve to business. more of -- of the not the resilient the we’re There obtain semi has been Most been revenue we of has that and alone on gone demand so. have the still case. would fairly side that The I’m we’d unmet been Most year has through more some of it’s

that. up, some wafer frees of hopefully advantage supply take we’re able as So, to of

Operator

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

Christopher Rolland

new two in guess, I about parts. you out guys talked letter, taping fast-charging the shareholder

Chinese of maybe I different? ones these talk they are you today. can new then, have are outside Thanks. talk on or think And tech, new there? how for parts of. there going what’s Lion or about customers this is about Lion or maybe these fast chargers And of product broadening set just features, just for iterations Do process your

John Forsyth

higher Yes. These on products rates. focus Thank you. charging

charging to So, driving overall in battery competitive force the power the is fast efficiency put market rate and the the into of and product. the amount of able the the charging you’re that

have increasing we’re which believe the leading. we steadily been we architecture. to And an class charging battery. So into it’s able extremely We efficient deliver rates power have the at

fairly next can was established in was the step were to watts beyond XX well China. watts charging. which over higher watts point a these in time. There charging at Today, XXX, We in transitioning that fast that. So, XX see XXX considered fast mainstream smartphones is and

product our you devices products without devices Lion specific a extend on smartphones. rollout then, in And those announced excited what team. of That’s So, the with part our haven’t about featured getting minutia those big yet, been into charging beyond we’re to for about higher. products rates of opportunity the driving asked are the that focused

example, there’s the But absolutely, it meaningful in get other opportunities devices charging there’s technology So years customer lot believe to space, that. engagement then the for smartphone-focused products. to a extend a and to the good for that, beyond in us for foothold laptop and of battery-centric for we coming around today, business this markets

Christopher Rolland

part second not did guidance question my to but actually second -- question. understand here. of the But the I was Actually, John. And that just you, Thank beyond smartphones, wanted Okay. a beyond China. I was have

on And like were effects XX% June last and So some March saying would is for average. you seasonal have that. went years just -- I back the the XX negative

combination the you. kind quarter something to from guys something June I closer or the about like into I of the June make the down, that that understood want to So, of we’re had? Is is equating talking -- or talking that to seasonality think, have we seasonality that XX% just you March and I I because XX% about sure March marched already that are

Thurman Case

Yes.

we’re June. we really together. transition the So, that talking talk from December, March when that, about we’re would be to how not because June quarter information adding Again, that see the results trying in on March you could indication about and -- really, just based we how had giving that strong pieces And are. we be those strong give just where to the the we’re we’re an quarter of we

Operator

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

Rajvindra Gill

Yes. Yes, Thanks congrats seasonality question. just momentum. the and on a follow-up again on the

As typically March down the question XX% guiding that asked to December previous in was down you’re And from March -- the is March. quarter, the XX%.

that’s maybe roughly points So, XX above seasonal.

implies overwhelming gains perhaps pull-in into for content of the units that’s the in upside quarter the it opposed would or March quarter So, to a March kind the be if basically as pretty reason right. massive

quarter? to normal to a some the of I we get of wanted sort get September, in And commentary June, how do also giving thinking sense about So, we’re there. you In patterns December just appreciate moving pieces. I the

Thurman Case

is I think revenue at one for you look thing record us. it’s all-time when the December,

And yes, so, the we’ve look down When XX%. realize guided a from what base. you for it’s high at very March it’s I coming quarter,

could we’ve March to we’re looking that In that, kind it addition it regardless through I’m looks where is an number, we of look the but given And quarter. was. we average, extremely full between like know that December, and demand on giving commentary strong December think be in it at the which strong continued you similar. that When we picture demand more what exact that to at, are you of March, have saying

basically the So commentary. I mean that’s

Rajvindra Gill

it. Got

Okay. kind starting with moving market. the the audio away of focus in scenario content from from I one customer and then top your of that kind about beyond beyond there’s just big of smartphones that it know lot is Android And seems moving Cirrus seems top the outside of replicating increase -- It folks expand your audio and customer, providing in dollar to dollar to just priority the me the John. then Android first to picture, a content in smartphones, but to smartphones branching of diversifying wants like market. kind some number

you little dig So, continue see that you’re estimated the add phone low-hanging the kind where I at? fruit there bit kind of in per some goal mind of of dollar a content wanted out maybe beyond looking that core have terms of aspirational we is technology kind dollar of you into of adjacencies audio, that content. And to in to key an

John Forsyth

see certainly drive space. by particular, in high-performance the to mixed-signal phone We an per opportunity content meaningfully, driven up

strategic So has that been as immediate an sights adjacency. our from in a perspective

well established in key today. smartphone the customers space selling we’re So, into

relationships great there. have We

we’ve content more formidable execution, with that have first We a demonstrated mixed-signal, reputation for And and conversion and power long that the demonstrated recently the in control controller audio. content. high-performance in we’ve now with camera and

and products take we phone in the process, So we IP space that out want to in the believe can other continue expanding that strategy to develop markets. us build more high-performance into content mixed-signal and

Operator

question Ananda Our next of Loop Baruah the line from from comes Capital.

Ananda Baruah

at the from Congrats shareholder execution I results. could. letter, mixed-signal some the revenues of useful In context letter. XX% about revenues on follow-up. of good Two anything strong the for And then, if any there’s quick Both reaching time frame, the at think with sort if to ones, wondering was have mentioned to you I all comment. that I us of point. a quick regards Yes.

John Forsyth

given time. that so We’re that have see over to it, and an put you we but you it time on we broken the you’re there exact frame out the -- not progress rate growth able have going to have

obviously significant that’s recent meaningful being And around it’s -- run up very year-to-date. the the years. very step third a a a up of to on So, from rate, step in that’s our previous revenue

the I And our hopefully momentum. that foreseeable future, becomes to half that continue of going we’re So, would anticipate within revenue. that

Ananda Baruah

question. the So, as helpful. well. the actually that’s It’s of then, more a other was clarification super shareholder And from letter

share there’s the mixed-signal. context any if was could of share you And gain wondering provide around in just talked You I gains.

John Forsyth

of share our conversion in the That smartphone the vendors to other camera that, we the some camera in from increased camera control content in And then, the content control our Specifically gains -- shipping IC. content and introduced power mixed-signal, cycle. current increased ASP overall our in control in addition process. controller blended displaced we and

ASP first it increased $X.XX the to a camera blended And broadly around should So and model case, control indicated around content, change the power of and control in then conversion the $X. we’ve you content per or device. $X.XX

Operator

Our comes from the BofA next of Vivek line Securities. question Arya from

Vivek Arya

had I two.

very you or would sales still that so the down your flat year-on-year if because The mix. have be though only June outlook use quarter that first I one, contribution modestly basically in Lion sequential, the XX%ish I’m confused about even or up, suggests

do how reconcile am your things guidance year-on-year seemingly, that so conservative. But to content I we right I realize be the essentially still sales John, unit in flattish ways out, June with tend the growth to you’re And guiding understanding June? optimism trends around change. some is So, know way I could you that and

Thurman Case

on look midpoint give Yes, you guidance. this seeing specific a not that’s shift. guidance set see you it’s is pattern, do the do a we’re seasonality do, much and a reflecting although the quarter, our what base. of we from higher in a that if calculation. is pretty normal a at of not right. generally I complete again, And is mean, trying time, a to in point you we’re based very March decrease we visibility, at the And This

not trying expect. give revenue on guidance March to and is June on where We’re very close expectations quarter we a in of what you directional the

of quite down a a down. step expect or bit We a step significant

telling into or what’s that And and not it. driving I not not getting driving you so, we’re mean, details

no expect it. about our give revenue what in the next overall to color year. on has in that our be will some changed internal way, of trying the By we’re terms for where of that whatever We’re first way talking quarter we thoughts year

Vivek Arya

gross just for And my Understood. to wanted revisit follow-up, margins. I

margins views the think level. from just we next Thank even margins case? about come could gross quarters? I the for there how to dip Is gross I happen past, think that that or several some that the below no margins you. longer be wanted could thinking So the XX%. a on suggestion should period? And Does Does I in mentioned at you so the was happen later to back that a XX% it June? get

John Forsyth

gets different to transient going the Yes. on with referred Vivek, costs I that effects -- gross and we as margin in. the fact there’s earlier some phased pricing

for gross guidance quarter the margin is in pretty high. our So, current the

XX% expect XX%. that to or back normalize around We to

in. and I prices these that this will as happen costs think as get -- new pretty baked new quickly

So, our that think relative guidance this cautiously is could I to relative dip to we point, at that. XX%, below previous outlook overall improved

I think be. to place is XX% good a So, modeling

Operator

a follow-up line Stifel. have from We Svanberg Tore from coming of question the

Tore Svanberg

Yes.

quick two you. Thank Just follow-ups.

sustainable growth so in mentioned all, on of drive how December. mixed-signal I the the emphasis that First and forth. on review And so more and high-performance understand you strategic and should

margins strategy So, more know operating getting really this fiscal past, that leverage here margin, I going perhaps about is that, about driving of do the year, we should plus but sort in what talked means ‘XX potentially operating you what which to about as targeted as think haven’t high XX%? in than financially. you’ve XX% operating the you’re

John Forsyth

our high-performance current current really, the solid growth That’s in really fiscal in great year. our obviously driving foundation growth of that a longer-term that’s business have of We lot and believe core audio goal, we mixed-signal, and opportunities a yes. Tore,

ahead And our you believe fiscal if at somewhere that that and that of growth would of so take for here, elsewhere, us -- in midpoint the full the capacity you’ve that agreements opportunities the about capacity on we we’re we’ve got have guidance we’ve wafer coming I growth in So, to our upbeat issued and driving years, year. around XX% that that. indicated us continue seen

and we is grow over leverage as the increased goal operating to and and R&D that on And margin our revenues, SG&A will time. so, able our we drive work expectation be from

Tore Svanberg

last that was mentioned shareholder question in had the letter. I the you gaming And

this but you made too, applications in gaming in exact content getting past, have some may you what are the reference at think point? I

John Forsyth

have audio there we’re We we not to but a might -- mind in have without of public it’s in and The long term. but in huge that imminent. the make product those sure to that of gaming is the gaming volume present particular attached it design gaming haptic content amount And continue it’s we’re spaces, to we the both yet, AR/VR excited that devices. wins seeing about for opportunities obviously yet, those as and be in

Operator

comes Our Collier Soderberg Securities. line of the from Derek from next question

Derek Soderberg

some any reducing you laptops year at customers your nicely. seen rates last here other been in It a like has audio audio some all? three want growing handsets. a sort start ago? relative audio particularly whole I It and handset flattish and are content revenue in year. Are attach audio areas to with Have of as compared to for quarters like audio to change looks seems content in handsets, of the first maybe

John Forsyth

change rates, meaningful don’t in attach we’ve think Derek. seen I

around tends likely pass amount obviously opportunities that A market revenue. audio wafer limitations. We supply to had have just target, are certain been some our that have not shorter horizons. somewhat general of especially we’ve business, would represented have incremental audio And to able to fair which given there opportunities planning on means

been customers we’ve most sockets product where within the very feel to most most value, bring supply environment. have the the the about and we constraints So, careful differentiated of benefit we the the choosing

in revenue mix, in part continued as added see comments audio As into laptop And that long-term area boosted earlier for design-ins -- well. but the you addition as past in of well. continue the we’ve quarter, that’s where meaningful audio December some amplifier year we’ve laptops our we Android, amplifiers or of to opportunity revenues noted, solidly that in first heard to you to my an us boosted to from audio diversify the as the with also perform

Derek Soderberg

in mentioned just it. you AR, follow-up, designs And as opportunities my some Got there.

there’s year guess, audio And more eventually devices to these around devices think signal. mixed devices of and so. some to handsets? handsets, next sort do Cirrus those less or or think content wearables if for opportunity market been those those would that that on for about the Just of frame AR coming additional content potential Wondering you to have both you replace I guys. likely trying some how than talk be I feel Thanks. over you

John Forsyth

Yes.

over be exciting but something with our and excited and customers we want that midterm. potential, It’s around very we’ve I visions term to the expectations long near in the think about we’re very the VR. where moderate a AR part got for of

So, really have we’ve been of customers off-the-shelf a up number that’s headsets. AR VR picked of in to products. most date, cases, where been In kind and

I fairly some developed But volumes it’s recently more those small AR part and are term, dedicated VR content. that a have to think of. going a begin around long be We with. We the great for to be anticipate area to

Operator

a from Rolland line have follow-up Christopher of We of SIG. coming question the

Christopher Rolland

guys. Hi,

is Sorry the -- should saying sure make September more be that you guidance. than meaningfully guys I you would seasonal Are to are you But or come maybe year-over-year maybe maybe to that want meaningfully elaborate back bit assume And any that year-over-year? put another on reason stronger September. way, expecting little just or Thanks. would number a I for to down I June typical guide Thurman, for again. there -- understand. think to different September the or

Thurman Case

you Oh, year? mean our fiscal of September next No.

think I feel still we saying opportunities as revenue we’re to into is we good grow what our the about that go year.

just We’re on June making really the quarter. a statement

But grow optimistic out really I we so, mean, on think to again, further keep revenue. are I any that. ability not And in to than we’re -- getting we’re context, our that

we couple… results indicate something unseasonable to trying and we’re really see over I’m our just -- affect is ahead that a that go trying can So, to

Christopher Rolland

in this your Is guys this getting have, I a traction? change Sure. around that the content around maybe quick the chain? another It gaming you is most Is just to it’s are guys like while you. audio this and haptics? seasonality just AR/VR And The amps? pipeline Where you follow-up around looks have point. then the

John Forsyth

already to been that’s space the on not Chris, I’m we’ve in there, understand in not domain. comment But anything the if audio launched, that. released going where typically products been have you

more forward, than that. I we think going can diverse be

Operator

Ramsay follow-up from another Cowen. coming of have Matt We the line of

Matt Ramsay

of trying from right that socket with fiscal for versus you message guys changes to planning just you no guys that that quarter? that this are timing new are that next just still the there’s now, typical just made you haven’t getting or the guys circle investors comments, I’m bit reclarify, you June a changed. square the the and clarify outlook to that content the little Thurman, guidance pulling things the issue that revenue for a is Could The on Thanks. trying changes year to

Thurman Case

some thing you this significant Well, to product again, But the look that about of And go was get understand content have driving although another we’re of coming that when in statement, year. in on this And I okay, revenue. will that we we that, revenue saw year, a with think into more benefits all terms from even next ability revenue step-up this and effect that content optimistic -- our talking we had year, other step-up year, has we content a is we that. of the are to increases year. cycle, which grow the not into about content gains the we next

John Forsyth

Yes.

to -- here based full do, March year. bit on I than Matt. normally XX% growth I the stronger think will, mean, for like one which a more of have we’re fiscal at us quarter looks guidance maybe somewhere a it to said, I’ll take the around as we color we general there, is midpoint level, to of trying I kind really, add significantly say all I think

the obviously. of March content revenue, quarter and drivers for is strength of One that that increased the --

is the working key quarter fact the for the drivers still some meet hard strength the to extremely the customers for of in are demand successful March One that products.

of there piece more see of we on every to in consequence pressure deck. would than So March is normally quarter as a material that, the get

is Some our in demand. try meet reflected more of customers that outer can material expedite to activities which to rate from and to to our the accelerate in try bring quarters at

the June quarter would we're be there'll March would on a the back between normally be quarter and because see of more strong we seeing step that expectation of here. a the quarter March than that Our comparatively down

Operator

We have another Blayne of line coming Barclays. of follow-up Curtis from the

Blayne Curtis

going ask you a I quarters, stocks think -- to going maybe know we've I guide X on I discussion. to out it was pivot again. a X questions guess you was ask ton. this But don't I to guys that, Well, or now had X and down early, typically but answered it's I and even the just way

I the 'XX? the on and I you comps They’re on honest, fiscal you're is. themselves give be your here with is mean that you just about way, here customer maybe a to perspective there another John, June not getting think fully story because phone you a catch it's context told understanding really still up. higher maybe confident is of a where point you. where can have discussion just to that they're content there's very So lot working But still low-end to -- I'm what launching help should that any

better. And just know So, seasonality might that answer or are to estimating you you there’s seeing but to want could I’m probably June, trying what for reasons part. I some be be guess, don’t why just what I understand, you’re

you just pivot tell ‘XX? maybe I could us is anything there the can And fiscal question? So, about

John Forsyth

being don’t I significant provide I we largely by in but be gains really growth in the there, Obviously, growth. guidance think color our new helpful. year-on-year significant content fiscal strategic propelled is out mean, some current areas. the year, revenue Hence, might

camera that be we and the I’ve to that in able expect to driven, that. and over growth, engaged of controllers. coming then immediate the signals will the the grow few that product indicated contribution think associated of cycle fiscal to next As kicking cycle of with new ‘XX, seen in obviously, fiscal year-over-year new progress are incremental development and in you’ve continued we our story the second products we And be content going beyond believe further space continue with look in ‘XX, we more power into our I the cycles. units drive growth believe is to tailwinds currently on meaningful

to ‘XX the our customers we demands for serve the are, to that securing can period. and to continue them us that on strong we’ll from So, help think I opportunities where fiscal and meet to all looks we work

Operator

Arya of have We follow-up Vivek Securities. a line question [Operator from BofA the Instructions] from coming

Vivek Arya

‘XX? Semi is fiscal in think Just fiscal and should Lion curious, in how contributing how about contribution we much that ‘XX,

Thurman Case

that, as the fiscal the the We end Vivek. deal we rate little we’ve year. to forward, fiscal run to deal of go a of we engagement current We’re during between out guidance the contribute close looks year relative customer in great The indicated and and of not that million but expect the Lion region previously soft opportunity. a breaking $XX got

around that, the beyond, the in have design then, we’ll of products. into Lion how So, go of goes And lot and a momentum charging lot of fiscal beyond the products a as we and ‘XX see we year. end that

So, we’re about upbeat that.

Vivek Arya

And some that last as puts think OpEx just Thurman, way intensity. For under year, know, OpEx of you one, the about terms forward? XX% percentage takes and around. intensity Is OpEx of the given or in above OpEx that just had a to was I last there it or sales? the or in kind right Is so. a going example, calendar of be can level, below you

Thurman Case

invest that I from need we will be about, of what we’ve we talked in invest grows. And OpEx of in Well, in, think a percent to continue as revenue, will we a will as R&D. believe we time -- become revenue over period -- longer to a

resources We already and manage or as also expenses internally to our we projects key have accordingly. can allocating that. done be We’ll reallocating

into a looking will also. if particular number, falls in longer be a that line. that be And SG&A be we leveraged lower now, may that certainly to right expect yes, able that you percentage we term, to But So, come order we’d that to have revenue the ask in somewhere lower area. believe it down equity start be the in of

Operator

over back Ms. now will turn further questions Heffernan additional time. Chelsea to are There I no at this the remarks. for call

Chelsea Heffernan

are no operator. additional you, comments. There Thank

to the turn I’ll call John. you, back So,

John Forsyth

Chelsea. Thanks,

December design high-performance significant and business. Cirrus expanding progress in our momentum in summary, So, record saw mixed-signal Logic made revenue, in across portfolio a delivered quarter, the our strong

engineering growth portfolio enabled excited conversion, road charging. the our product management product and develop key consistent of Our drive us new by and coming ahead technologies a in extensive and further power property into in execution to are adjacent to categories, record compelling deliver of us intellectual a particularly With track years. map, opportunities we the and fast capabilities and and battery have diversification expand world-class

the to conference note participating investor be our like I’d Please Xth. we’ll see the we that Stanley on Before close, March also details. Morgan in website for

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

Operator

participation. Thank concludes call. for you again This today’s your conference

now disconnect. may You

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