Cirrus Logic, Inc.

Logix Chief Executive Officer and Ulf Habermann, our Interim Chief Financial Officer. Today, at approximately 4 p.m. Eastern time, we announced our financial results for the first quarter fiscal year 2025. The shareholder letter discussing our financial results, the earnings press release, and the webcast of this Q&A session are all available at the company's investor relations website. This call will feature questions from analysts covering our company. Additionally, the results and guidance we will discuss on this call will include non-GAAP financial measures that exclude certain items. Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures are included in our earnings release and are all available on the company's investor relations website. Please note that during this session, we may make projections and other forward-looking statements that are subject to risks and uncertainties. that may cause actual results to differ materially from projections. By providing this information, the company expressly disclaims any obligation to update or revise any projections or forward-looking statements, whether as a result of new developments or otherwise. Please refer to the press release and the shareholder letter issued today, which are available on the CirrusLogic website. In the latest Form 10-K, as well as other corporate filings registered with the Securities and Exchange Commission for additional discussion of risk factors that could cause actual results to differ materially from current expectations. Now I'd like to turn the call over to John.

Thank you, Chelsea, and welcome to everyone joining today's call. As you've seen in the press release, in the June quarter, Cirrus Logic delivered revenue of $374 million. above the top end of our guidance range due to stronger than expected shipments into smartphones. In a moment, I'm going to hand over the call to Ulf to discuss our financial results for the June quarter in greater detail, as well as our outlook for the September quarter. But before we get to that, I'd like to make a few remarks regarding our recent progress. Our long-term strategy is based around three broad principles. Number one, maintaining leadership in our core flagship smartphone audio business. Number two, continuing our expansion in areas of high-performance mixed signal functionality in smartphones. And number three, leveraging those audio and high-performance mixed signal capabilities to penetrate and grow in new markets. In our flagship smartphone audio business, this past quarter marked a very significant milestone as we began ramping production of our next-generation custom-boosted amplifier and our first 22-nanometer smart codec ahead of new product launches expected later this year. At Cirrus, we do not innovate in a vacuum, but believe in focusing closely on our customers' needs and aspirations. And both of these products represent significant multi-year development efforts undertaken in close collaboration with our customer. We are excited about the performance, efficiency, and system cost improvements that the new components will deliver. We anticipate that both the boosted amplifier and the new smart codec will ship for multiple generations of customer devices following their introduction. As a reference point, over the past six years, the preceding smart codec and boosted amplifier have shipped over 1 billion units and 3.5 billion units, respectively. It takes an extraordinary level of dedication to excellence in both engineering and execution to deliver that kind of accomplishment. And we believe that same dedication can help our new next generation components have similar success. Looking beyond audio, our goal is to continue to broaden our high performance mixed signal content in smartphones, where we see a meaningful opportunity to not only expand our addressable market, but also to grow and diversify our revenue. With new customer introductions that we expect to see later this year, we believe we will benefit from a more favorable for more favorable content and smartphones on the market that include our third-generation camera controller. We also believe there is significant potential to continue to grow value in this area in the future, and we are today investing in a roadmap of further products and features in pursuit of that goal. Beyond camera controllers, we have also previously indicated that we believe advanced power and battery-related technologies represent great opportunities for the company. And today we have a number of R&D programs underway related to high efficiency charging, battery management, and system side power delivery. We believe that the investments we are making in this space today can continue to drive our product diversification in the future. The third element of our strategy is our focus on expanding into new applications and markets outside of smartphones. In this area, we continue to be excited about the opportunities we see in the laptop business. Today, we have design wins with each of the top six laptop OEMs worldwide and are actively pursuing many future design opportunities across multiple generations of customer products. We see significant customer demand and engagement around our audio codec, boosted amplifier, haptic driver, and power converter products, supporting our belief that this is a market where Cirrus Logic can enhance the end user experience improve the performance of our customers' products, and increase both content, pair device, and market share over time. Additionally, following the launch of our latest generation of analog to digital converters last year, during Q1, we also added a series of new digital to analog converters and an ultra high performance audio codec to this product family. These components offer sustained differentiation with improved performance, lower power consumption, and new feature enhancements. and we have received outstanding customer feedback across professional and prosumer audio segments. We believe they can be valuable contributors to our profitability in the years to come. And with that, let me now turn the call over to Ulf to provide an overview of our financial results as well as the outlook.

Thank you, John, and good afternoon, everyone. I will start with a summary of our financial results for our fiscal first quarter 2025 and then provide guidance for Q2 FY25. Revenue in Q1 F525 was above the high end of our guidance range at $374 million, which is stronger than anticipated shipments into smartphones. On a sequential basis, revenue was relatively flat. On a year-over-year basis, sales were up 18% due to an increase in smartphone unit volumes and HPMS content gains. This was partially offset by lower general market sales. Turning to gross profit and gross margins. Non-GAAP gross profit in the quarter was $189.2 million, and non-GAAP gross margin was 50.6%. On a sequential basis, gross margin decreased by 130 basis points, mostly driven by higher supply chain costs related to new product rents. Gross margin increased slightly on a year-over-year basis. Now I'll turn to operating expenses. Non-GAAP operating expense for the first quarter was $118 million. On a sequential basis, OPEX was up $1.5 million, primarily due to an increase in employee-related expenses. This was offset by lower product development costs. On a year-over-year basis, operating expense was up $4.2 million, largely due to higher variable compensation. Non-GAAP operating income for the quarter was $71.2 million for 19% of revenue. Turning now to taxes, for the June quarter, Our non-GAAP tax rate was 23% in line with our previous guidance. And lastly, on the P&L, non-GAAP net income in the first quarter was $62.4 million for $1.12 per share, as the higher revenue and profitability flowed through to the bottom line. We now turn to the balance sheet. Our balance sheet continues to remain strong, and we ended the June quarter with $744.6 million in cash and investments. Our ending cash balance was up $44.6 million from the prior quarter, primarily due to strong cash flow from operations, which was partially offset by stock repurchases. We continue to have no debt outstanding and have $300 million undrawn on our revolve. Inventory balance at the end of the first quarter was $232.6 million, up from $227.2 million in Q4 and 5-24. Days of inventory were down slightly sequentially, and we ended the quarter with approximately 115 days of inventory. Looking ahead, in Q2 FY25, we expect inventory to increase from the prior quarter in support of new smartphone launches expected later this fall. Turning to cash flow, cash flow from operations was $87.2 million in the June quarter, and CapEx was roughly $10.1 million. resulting in non-GAAP-free cash flow margin for the quarter of roughly 21%. For the 12-month period, cash flow from operations was $548.6 million, and CapEx was roughly $36.2 million. This resulted in non-GAAP-free cash flow margin of roughly 28%, which is up from 10% for the same 12-month period a year ago. On the share buyback front, in Q1, we utilized $41 million to repurchase approximately 361,000 shares of our common stock at an average price of $113.48. At the end of Q1, FY25, the company had $274.1 million remaining in its share repurchase authorization. We expect to continue to return capital in the form of stock repurchases, which we believe will provide a long-term benefit to shareholders going forward. Now, onto the guidance. For Q2 of FY25, we expect revenue in the range of $490 million to $550 million. I would like to take a moment to note that when comparing our September quarter outlook to the equivalent quarter last year, our September quarter this fiscal year begins and ends one week later. Thus, it encompasses one week more of the higher volume production associated typical seasonal product ramps. Gap gross margin is expected to range from 50 to 52%. Non-gap operating expense is expected to range from $125 million to $131 million, up sequentially due to higher variable compensation expense and increased product development cost. We will continue to control discretionary spending while investing strategically in product development to drive long-term growth. We expect our FY25 non-GAAP tax rate to be approximately 22% to 24% unchanged from our previous guidance. This range is slightly higher than our FY24 tax rate, which was impacted by a favorable catch-up benefit related to updated IRS guidance on the R&D capitalization rules. In closing, we delivered outstanding results for the June quarter. We are pleased with the progress we have made this year and remain focused on executing on our strategy that we believe will enable the company to grow both revenue and profitability over the long term. Before we begin the Q&A, I would like to note that while we understand there's intense interest related to our largest customer, in accordance with CirrusLogic company policy, we will not discuss specifics about our business relationship. With that, let me now turn the call over to Chelsea for the Q&A session.