Cirrus Logic, Inc.

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 the 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 reported outstanding results for the December quarter, delivering revenue of $580.6 million above the top end of our guidance range. This was driven by stronger than anticipated demand for components shipping into smartphones and a favorable mix of end devices. We're also proud to have delivered record gap and non-gap earnings per share in the third quarter. In a few moments, I'll hand the call over to Jeff to discuss the financial results for the December quarter in detail, along with our outlook for the March quarter. Before we get to that, I'd like to provide an update on the recent progress we've been making across the key pillars of our strategy. As I've 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, we saw very strong demand for our latest generation custom boosted amplifier and 22 nanometer smart codec. These products are based on innovative new architectures that are designed to enable system level improvements with each new smartphone generation, extending our product life cycles while also providing longer term visibility and sustained revenue contribution. In our high-performance mixed signal business, customer engagement around our camera controller roadmap remained strong during the December quarter. We are actively developing next-generation camera products that will deliver enhanced features, improved performance, and greater system efficiency, and we are excited about the opportunities in this space for the future. We also continue to invest R&D dollars in IP and capabilities around advanced battery and power applications, where we believe there is both opportunity to enhance existing content and grow content further. Across a range of areas, we see considerable opportunity to expand our value in smartphones with HPMS solutions and believe this will be an important driver for shareholder value creation in the coming years. Our third strategic priority is to leverage our audio and high-performance mixed signal expertise into new applications and markets outside of smartphones. We've made great progress here, particularly in PCs, where we continued to build momentum. Our progress in the December quarter included ramping the first shipments of our latest generation amplifier and codec in mainstream PC platforms, ahead of new customer product launches. an important milestone as we focus on expanding our footprint in higher-volume mainstream PCs and capturing a larger share of our serviceable, addressable market. During the quarter, we also sampled a new component designed to enable and enhance the use of voice as an interface for future AI-enabled PCs, and we were pleased to see strong interest in this product from several leading OEMs and PC platform vendors. Finally, we were excited to see multiple new customer products introduced at the Consumer Electronics Show in January that use a variety of our amplifiers, codecs, and haptic drivers. These product launches included our first win with a new customer in their high-end laptop platform that features up to six Cirrus Logic amplifiers and our latest generation codec, setting a new standard for the audio experiences end users can expect from PCs. While we are very pleased with our achievements in PCs, the company also continued to gain momentum in other applications within our general market business. A growing number of our new general market components span the professional audio, automotive, industrial, and imaging end markets. Leveraging our world-class IP, these products typically enjoy long product life cycles and gross margins that are well above our corporate average, and hence act as a strong complement to the rest of our business. In the December quarter, we began sampling a new prosumer audio product family that will expand our addressable market by delivering solutions that span additional tiers and categories of products. This builds upon our portfolio of class-leading components that already service many of these markets today, particularly in professional audio and prosumer applications. Further, we also announced a new series of automotive haptic components that are designed to consistently deliver a range of tactile responses in real time for applications across a wide range of in-cabin interfaces. Although we are in the early stages of participation in the automotive haptic market, we believe this represents an important growth opportunity for Cirrus Logic. In summary, we are proud of our progress this past quarter as we continue to execute on our strategy to diversify our product portfolio and drive growth in new applications and markets. And that concludes the latest 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. Thank you, John.

Good afternoon, everyone. I'll now walk through our Q3 financial results and provide guidance for Q4. In Q3 fiscal 2026, we delivered revenue of $580.6 million, which was above the top end of our guidance range, driven by demand for components, shipping into smartphones, and a favorable mix of end devices. On a sequential basis, revenue was up 4% due to higher smartphone unit volumes, partially offset by a decline in general market sales. On a year-over-year basis, sales were also up 4%, primarily driven by higher smartphone unit volumes. This was partially offset by previously anticipated pricing reductions and lower general market sales. Turning to gross profit and gross margin. Non-GAAP gross profit in the December quarter was $308.2 million, and non-GAAP gross margin was 53.1%. On a sequential basis, the 60 basis point increase in gross margin reflects the benefit of a reduction in inventory reserves and to a lesser extent, supply chain efficiencies. On a year-over-year basis, a 50 basis point decrease in gross margin was largely due to the impact of previously anticipated pricing reductions, which were mostly offset by cost reductions. Now I'll turn to operating expenses. Our non-GAAP operating expense for the third quarter was $133 million. On a sequential basis, OpEx was up $5.3 million, primarily due to higher employee-related expenses. This was partially offset by lower product development costs, largely associated with the timing of tapeouts. On a year-over-year basis, operating expense was up $3.8 million, primarily due to higher employee-related expenses and, to a lesser extent, professional expenses. This was partially offset by a decrease in product development costs associated with lower wafer and tapeout expenses. Non-GAAP operating income for the quarter was $175.1 million, or 30.2% of revenue. Turning now to taxes. For the December quarter, our non-GAAP tax rate was 15.1%, which incorporates the impact of the One Big Beautiful Bill Act. And lastly on the P&L, non-GAAP net income was $156.7 million, resulting in record earnings per share for the December quarter of $2.97. Let me now turn to the balance sheet. Our balance sheet continues to be strong and we ended the December quarter with $1.08 billion in cash and investments. Our ending cash and investments balance was up $185.9 million from the prior quarter as cash generated from operations was partially offset by share repurchases. We continue to have no debt outstanding. Inventory at the end of the third quarter was $189.5 million. down from $236.4 million in the prior quarter. Days of inventory were down sequentially, and we ended the quarter with approximately 63 days of inventory. Turning to cash flow, cash flow from operations was $290.8 million in the December quarter, and CapEx was $5.2 million, resulting in a non-gap-free cash flow margin of 49%. For the trailing 12-month period, cash flow from operations was $629.6 million and CapEx was $21.6 million. This resulted in non-GAAP free cash flow margin of 31%. On the share buybacks in Q3, we utilized $70 million to repurchase approximately 591,000 shares of our common stock at an average price of $118.33. At the end of Q3 fiscal 2026, the company had $344.1 million remaining on its share repurchase authorization. Now on to guidance. For Q4 fiscal 2026, we expect revenue in the range of $410 to $470 million. GAAP gross margin is expected to range from 51% to 53%. Non-GAAP operating expense is expected to range from $124 to $130 million. The fiscal year 2026 non-GAAP effective tax rate is expected to range from 16% to 18%. In closing, we delivered strong results for the December quarter. We remain focused on executing our strategy to drive long-term growth across our business and deliver shareholder value. Before we begin the Q&A, I would like to note that while we understand there is intense interest related to our largest customer, in accordance with Cirrus Logic company policy, we will not discuss specifics about our business relationship. With that, let me turn the call over to Chelsea to start the Q&A session.