Cirrus Logic, Inc.

As a reminder, this conference call is being recorded for replay purposes. I would now like to turn the conference call over to Ms. Chelsea Heffernan, Vice President of Investor Relations. Ms. Heffernan, you may begin.

Thank you, and good afternoon. Joining me on today's call is John Forsyth, CirrusLogic's Chief Executive Officer, and Jeff Wollard, our Chief Financial Officer. Today, at approximately 4 p.m. Eastern Time, we announced our financial results for the second quarter fiscal 26. 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 the 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 shareholder letter issued today, which are available on the CirrusLogic website and 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, Cirrus Logic delivered record September quarter revenue of $561 million towards the top end of our guidance range driven by demand for components shipping into smartphones. In a few moments, I'll hand the call over to Jeff to discuss the financial results for the September quarter in detail, along with our outlook for the December quarter. Before we get to that, I'd like to make a few comments about the recent progress we have been making across key areas of our business. As we have outlined previously, our long-term strategy for growth at Cirrus is based around three principles. First, we seek to maintain a strong leadership position in our core flagship smartphone audio business. Second, We aim to expand the value and range of high-performance mixed signal solutions with which we serve our customers in smartphones and similar products. And third, we aim to leverage our world-class expertise and IP in both audio and high-performance mixed signal to grow and broaden our business in new markets. I want to say a few words now about the progress we've made in the past quarter in each of these areas. In our flagship smartphone audio business, during the quarter, we experienced strong demand for our latest generation custom boosted amplifier and first 22 nanometer smart codec. These products, introduced in the fall last year, represent years of engineering effort and a deep and collaborative relationship with our customers. We're proud of the crucial role they play in enhancing the power efficiency and exceptional audio quality of our customers' latest products. I think it is also worth highlighting a characteristic of this area of our business that isn't always apparent to those outside of the company. While we ship custom products into many consumer end devices, much of our custom silicon business offers returns over a significantly longer period than is typical of consumer products. For example, these latest generation audio components that I've referred to superseded a codec and amplifiers that had been shipping in high volume flagship phones for five and six years respectively. We consider this longevity a significant strength of our business, as it provides solid long-term visibility and sustained revenue contribution, along with the ability to leverage our R&D resources in new areas that can drive further innovation and growth. Outside of our custom audio solutions, we also continue to serve a number of customers in the Android ecosystem. This past quarter, a leading Android OEM introduced its latest flagship smartphone featuring two Cirrus Logic boosted amplifiers and a haptic driver. While the majority of our general market R&D investments are focused on developing products for new markets beyond smartphones, we continue to engage with customers on next generation flagship smartphone products and expect additional designs from various customers to come to market in the future. Looking beyond audio, we continue to diversify our revenue and expand our smartphone content with high performance mixed signal solutions. Customer engagement around our camera controllers remains strong. And we were excited to see this technology stand out as a key differentiator in the latest generation of devices. Today, we are engaged on a number of projects that we believe will bring even more feature and performance enhancements to this area in the future. Moreover, we also have several R&D programs that are focused on battery performance and health. And we continue to believe these areas represent an excellent opportunity for our mixed signal expertise to bring innovation and value to our customers. Our third strategic priority is to leverage our audio and high-performance mixed signal expertise into new applications and markets outside of smartphones. We're making excellent progress here, especially in the PC market, where we are focused on continuing to grow our share across customers and product tiers. During the quarter, we saw strong design activity across our PC portfolio and expect a range of consumer and commercial laptops featuring our components to come to market over the next year. as the adoption of Soundwire device class audio accelerates. After establishing early success in high-end laptops, we are now expanding into mainstream programs to reach higher volume opportunities and capture a larger share of the addressable market. Building on our recent wins in mainstream commercial laptops, this quarter we were particularly excited to secure our first mainstream consumer design, which is expected to shift next year. This success demonstrates the excellent progress we are making in our long-term strategy to grow beyond smartphones, and positions us well for the continued momentum in the broader PC space. Additionally, we are excited about the long-term opportunity that voice represents as a natural way to interact with AI-enabled PCs, and we increasingly see PC OEMs turning to voice as a means to enhance their products. In this area, we are able to leverage our audio and voice expertise which has been developed and refined in the smartphone market over many years to develop PC-specific products that deliver enhanced voice capabilities and performance, enabling features such as VoiceWake for AI applications even while the device is in an ultra-low power standby state. Our first product featuring this technology is expected to sample to customers in the December quarter. Finally, in the PC space, We have in the last quarter deepened and expanded our engagement across multiple PC platform vendors in order to accelerate our customers' time to market. We believe that our ability to provide consistent audio architectures and advanced features across multiple PC platforms is a great benefit to OEMs. Overall, we are very encouraged by the traction we are seeing in PCs and believe there is a meaningful opportunity ahead for us to grow in this market. Beyond PCs, we are also seeing strong interest in our general market products, which serve a wide range of customers across professional audio, automotive, industrial, and imaging end markets. These products typically have long life cycles and gross margins well above our corporate average, and moreover, can frequently leverage the world-class low power IP that we have developed in other areas of our business. Our progress in this space was exemplified during the quarter in several areas. First, we gained design momentum with prosumer and automotive customers on all 14 variants of our latest generation ADCs, DACs, and ultra high performance audio codec, and expect new end products utilizing these components to come to market over the next 12 months. Second, we had increased engagement with automotive and professional audio customers on our latest timing product family, which began shipping last quarter. And third, We are now sampling a family of high-performance analog front-end components targeting imaging applications, and the initial response has been positive. We're proud of our execution to date in these areas and will continue to expand our product portfolios in order to drive profitable growth opportunities in these segments. And that concludes the latest progress update on our long-term growth strategy. So let me now turn the call over to Jeff to provide an overview of our financial results as well as the outlook.