Cirrus Logic Q4 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 7, 2024

There are 9 speakers on the call.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic 4th Quarter and Full Fiscal Year 20 24 Financial Results Q and A Session. At this time, all participants are in listen only mode. After brief statement, we will open up the call for questions from analysts. Instructions for queuing up will be provided at that time.

Operator

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.

Speaker 1

Thank you, and good afternoon. Joining me on today's call is John Forsyth, Cirrus Logic's Chief Executive Officer and Venkatramouni, Chief Financial Officer. Today, at approximately 4 p. M. Eastern Time, we announced our financial results for the Q4 and full fiscal year 2024.

Speaker 1

The shareholder letter discussing our financial results, the earnings press release and the webcast of this Q and 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.

Speaker 1

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 development or otherwise. Please refer to the press release and the shareholder letter issued today, which are all available on the Cirrus Logic website and the latest Form 10 ks 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.

Speaker 2

Thank you, Chelsea, and welcome to everyone joining today's call. As you've seen in the press release, in the March quarter, Cirrus Logic delivered revenue of $378,100,000 above the top end of our guidance range due to stronger than anticipated demand for smartphone products. In FY 2024, Cirrus Logic delivered full fiscal year revenue of $1,790,000,000 down 6% year over year due to a reduction of general market and custom components primarily in non smartphone applications. Despite those challenges, we are proud that our disciplined execution helped to grow both non GAAP earnings per share year over year for the quarter and both grow GAAP and non GAAP EPS for the full year. Venk will take the reins in a few moments to walk us through the details of the financial results for the quarter and for the year.

Speaker 2

But before I turn the call over, I want to share an update on the progress we've been making on our strategy in the past 4 quarters. We've previously communicated that our growth strategy is based around 3 broad principles. Number 1, maintaining leadership in our core flagship smartphone audio business. Number 2, expanding into areas of high performance mixed signal functionality in smartphones and number 3, leveraging our audio and high performance mixed signal capabilities to penetrate new markets. This year we have made exciting progress on all three fronts.

Speaker 2

In our flagship smartphone audio business, most notably in the past year, we completed our design work on and delivered to our customer 2 next generation products, a boosted amplifier and a smart codec. The boosted amplifier introduces an innovative new architecture significantly improving system performance and efficiency while saving valuable board space. The smart codec will be Cirrus Logic's first 22 nanometer product and will similarly deliver meaningful advances in audio and mixed signal processing capabilities to our customer. Taken together, these devices represent a considerable engineering investment and the culmination of many years of work and close collaboration with our customer. We anticipate both products will launch in devices in the fall of this year.

Speaker 2

Looking beyond audio, we also made significant investments in certain HPMS areas where we believe our mixed signal design and signal processing expertise can enhance our customers' products. A core element of our HPMS strategy is camera controller products where we shipped our 3rd generation controller in the fall of 2023 itself a key enabler of marquee features in customer devices. Moreover, in the last quarter, we continued to develop our roadmap by taping out new camera controller IP on a new process node, an early investment which we expect will pave the way for further featured and performance enhancements in the future. Beyond camera controllers, we also continue to invest in a number of power and battery related technologies and innovations. And while new product introductions in these domains are a little further out, we are excited about the progress we made in the development of both key intellectual property and silicon in these areas in FY 2024.

Speaker 2

During the year, we also saw encouraging signs that our IP and audio and HPMS can be valuable and highly relevant as we reach into new markets, most immediately in laptops. In FY 'twenty four, we sampled, won designs with and shipped a new codec and a new boosted amplifier that were specifically designed for this market. We also won customer designs with a new power converter product designed for the laptop market and sampled a laptop focused haptic driver product. 3 of these devices, the codec, the boosted amplifier and the power converter were also featured as part of Intel's Luna Lake reference design and their capabilities contribute meaningfully towards our customers being able to create better laptops. Compared to competitive alternatives, Cirrus Logic solutions sound better, play louder, conserve battery life and save board space.

Speaker 2

While there is still a lot of work ahead of us in the laptop space, we exit the year optimistic about the momentum that we are building in this market. Against this backdrop of investment in supporting customers and in future growth, we remained committed to disciplined execution. Throughout the year, we worked hard on increasing both our own operational efficiency and the efficiency, competitiveness and diversity within our supply chain. Additionally, during the year, we returned $186,000,000 of cash to shareholders in the form of share repurchases. And these combined actions along with a decrease in our tax rate during the year contributed to a $0.17 year over year increase in non GAAP earnings per share to $6.59 And with that, let me now turn the call over to Venk to provide an overview of our financial results for the Q4 and full fiscal year 2024, as well as the outlook for the Q1 of fiscal 2025.

Speaker 3

Great. Thank you, John, and good afternoon, everyone. I'll start with a summary of our financial results for both our fiscal Q4 as well as full year fiscal 'twenty four and then provide guidance for our fiscal Q1 2025. Revenue in Q4 was above the high end of our guidance range at $371,800,000 as shipments remained robust throughout the March quarter. On a sequential basis, revenue was down 40% due primarily to a reduction in smartphone volumes, which follows a stronger than seasonal December quarter, which as you recall was a 14 week quarter.

Speaker 3

On a year over year basis, revenue was roughly flat. Fiscal year 'twenty four revenue of $1,790,000,000 was down 6% from a year ago. The decline was driven by a reduction in shipments of our general market and custom products, primarily in non smartphone applications. Turning to gross profit and gross margin. Non GAAP gross profit in the quarter was $193,000,000 and non GAAP gross margin was 51.9%.

Speaker 3

Gross margin was above the high end of our guidance range due mostly to supply chain efficiencies and lower freight expense. On a sequential basis, gross margin increased by 50 basis points driven by a favorable product mix, while on a year over year basis, gross margin increased 180 basis points to largely to lower supply chain costs, including freight. This was partially offset by a less favorable product mix. Non GAAP gross profit for our full fiscal year 2024 was $917,500,000 and non GAAP gross margin was 51.3%. Gross margin increased year over year due to a decline in supply chain costs, including the absence of wafer premiums, lower freight expense as well as a reduction in inventory reserves.

Speaker 3

And all of this was partially offset by a less favorable product mix. Now I'll turn to operating expenses. Non GAAP operating expense for the Q4 was $116,500,000 On a sequential basis, OpEx declined $9,200,000 primarily due to decreased variable compensation, lower employee related expenses mostly due to 1 fewer week of salaries as well as increased R and D incentives. On a year over year basis, operating expense was down $3,300,000 largely due to an increase in R and D incentives and lower product development costs. This was partially offset by an increase in variable compensation.

Speaker 3

Non GAAP operating income for the quarter was $76,500,000 or 20.6 percent of revenue. For the full fiscal year, non GAAP operating expense was $470,400,000 down $16,000,000 from the prior year, primarily due to increased R and D incentives, a reduction in variable compensation as well as lower product development expenses. This was partially offset by an increase in employee related expenses. Non GAAP operating income for fiscal year 2024 was $447,100,000 As a result, full fiscal year 2024 operating margin came in at 25%, up slightly from the prior fiscal year despite the revenue headwind we experienced in fiscal 2024. Turning now to taxes.

Speaker 3

For the March quarter, our non GAAP tax rate was 17.6%. However, for the full fiscal year, non GAAP effective tax rate was roughly 21%, which was in line with our previous guidance. And lastly on the P and L, non GAAP net income in the 4th quarter was $69,000,000 or $1.24 per share as the higher revenue and profitability flowed through to the bottom line. And for the full fiscal year, non GAAP net income was $369,300,000 or $6.59 per share, up $0.17 from fiscal 2023. The increase in non GAAP earnings per share was driven by a disciplined execution, share repurchases as well as a decrease in tax rate that I alluded to earlier.

Speaker 3

Let me now turn to the balance sheet. Our balance sheet continues to remain strong and we ended fiscal 2024 with nearly $700,000,000 in cash and cash equivalents. Our ending cash balance was up $182,600,000 from the prior year, primarily due to strong cash flow from operations, which was partially offset by stock repurchases. We continue to have no debt outstanding and have $300,000,000 undrawn on our revolver. Inventory balance at the end of the 4th quarter was $227,200,000 down from $256,700,000 in Q3 2024.

Speaker 3

Days of inventory was up 38 days sequentially and we ended the quarter with approximately 116 days of inventory. Looking ahead in Q1 fiscal 2025, we expect inventory to increase from the prior quarter as we begin to build ahead of seasonal product launches in the second half of the calendar year. In fiscal twenty twenty five, inventory is expected to be elevated as we continue to support customer demand and fulfill our wafer purchase commitments in accordance with our long term capacity agreement with GlobalFoundries. Turning now to cash flow. Cash flow from operations was $170,500,000 in the March quarter and CapEx was roughly $7,700,000 resulting in non GAAP free cash flow margin for the quarter of roughly 44%.

Speaker 3

For the 12 month period ending in the March quarter, cash flow from operations was $421,700,000 and CapEx was roughly $38,300,000 resulting in non GAAP free cash flow margin of roughly 21%, a 500 basis point improvement compared to free cash flow margin of 16% in fiscal 2023. On the share buyback front, in Q4, we utilized $50,000,000 to repurchase approximately 548,000 shares of our common stock at an average price of $91.23 For the full fiscal year, we returned $186,000,000 of cash to shareholders as we repurchased 2,300,000 shares at an average price of $80.68 At the end of Q4 fiscal 2024, the company had $315,100,000 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. And now on to the guidance. For Q1 of fiscal 2025, we expect revenue in the range of $290,000,000 to $350,000,000 reflecting seasonal weakness in the general market product sales and lower smartphone units.

Speaker 3

We expect gross margin to range from 49% to 51%. I'd like to point out that we expect gross margin during the current quarter to be towards the lower half of the range as we incur costs to ramp production of our new 22 nanometer codec as well as the new boosted amplifiers. Non GAAP operating expense is expected to range from $118,000,000 to $124,000,000 up sequentially due to an increase in product development and employee related expenses. I'd note that with the start of a new fiscal year, our annual merit increase takes effect during the June quarter. This is partially offset by lower variable compensation expense.

Speaker 3

We'll continue to control discretionary spending while investing strategically in product development to drive long term growth. We expect our fiscal 2025 non GAAP tax rate to be approximately 22% to 24%, which is slightly higher than our tax rate in fiscal 2024. You may recall that we had a large onetime tax benefit last quarter from applying new IRS guidance to our capitalized R and D amounts. We do not expect to have a similar onetime benefit in fiscal 2025. In closing, thanks to the collective efforts of the entire SIRIS Logic team Over the past year, we increased operating efficiencies and exercised fiscal discipline, which contributed to year on year earnings per share growth.

Speaker 3

We're pleased with the progress we've made this year and we'll continue to focus on the best opportunities to enable the company to grow both revenue and profitability over the long term. And before we begin the Q and A, I'd like to note that while we understand there is intense interest related to our largest customer In accordance with Citrus Logic Company policy, we'll not discuss specifics about our business relationship. With that, let me now turn the call to Chelsea to start the Q and A session.

Speaker 1

Thanks, Venk. We will now start the Q and A portion of the earnings call. Please limit yourself to a single question and one follow-up. Operator, we are now ready to take questions.

Operator

Thank you. The floor is now open for questions. And your first question comes from the line of Matt Ramsay with TD Cowen.

Speaker 4

Thank you very much everybody. Good afternoon. I think I wanted to start on the gross margin stuff. You mentioned in your script maybe being a little bit below the middle of the range for June and that's all fine. I wanted to ask as you roll through the next 12, 15 months, you're going to be introducing the new codec on 2022, the new boosted amplifiers.

Speaker 4

You would think that the laptop business becomes a little bit more material to the company. If you could just kind of walk us through how you're thinking about things on the gross margin front given all of those variables. I don't really care that much about 1 quarter, but just over this product cycle, if there's anything new that we should consider and just kind of the puts and takes in margins? Thanks.

Speaker 3

Yes. Thanks for the question, Matt, and good afternoon. Yes, so in terms of just the overall gross margin, as you correctly pointed out with the current quarter, we do expect to see it slightly below the midpoint, primarily because of the ramp costs that I alluded to in the prepared script. But as you've seen over the last several quarters, we have made significant strides in terms of improving our supply chain efficiencies and lowering freight costs and so forth. Our long term gross margin model continues to be 49% to 51%.

Speaker 3

That's the range that we're still comfortable with. Now obviously, we'll continue to improve the efficiencies as we go forward, but I think we'll just provide guidance later on as we get more visibility into the gross margin performance. And then as it relates to your question about the mix as things progress, as you pointed out, we are making some good strides in the PC space today. It's still I think we talked about this on the previous earnings call, we expect in fiscal 2025 PC contribution to be somewhere in the low tens of 1,000,000 of dollars. So as it becomes a bigger portion of our revenue in the future years, it will have some impact on gross margin.

Speaker 3

But right now, think of it as being in line with our corporate average and we'll provide updates as we get further along.

Speaker 4

Got it. Thank you for that. I guess just as my follow-up, it's a new market for you guys in notebook and you've sized it in the near term. John, maybe you could give us a little bit on how the early strides have gone in notebook. I mean, can this be a much bigger market over time?

Speaker 4

I mean, what's relative to where you thought you'd be as you sort of start down this path? I mean, what's been the early experience and sort of the breadth of interest across the different platforms at the PC OEMs? Is this niche for now and growing over time? Or are you sort of pleased with the early progress and maybe it's potentially a bit larger than you thought?

Speaker 2

Thank you, Pat. We're certainly pleased with the early progress. It's going to take time to grow it to be a real needle mover for us, but we see a great opportunity there. And when we look a few years out, we see over $1,000,000,000 of SAM there for us to attack as I've mentioned previously. If you look back over the past year in particular, I think we've hit a number of really positive milestones both with sampling our new codec and boosted amplifier designed for the laptop market and then seeing those launch in customer products.

Speaker 2

And then now since the last quarter's report, seeing them actually shipping into end users' hands. So that's great. And alongside that, of course, we had the integration of that codec, that boosted amplifier along with the power converter product in the Intel Luna Lake reference design. And that we do believe can be a great engine for further design wins and growth in the coming years. So Luna Lake will be something that makes more of a difference to us in calendar 2025.

Speaker 2

So that's in the hands of a lot of OEMs right now. We're certainly working with, as we said, with the top 5 OEMs. And they are all in various stages of evaluating Luna Lake and building Luna Lake designs. And we'll see those come to market during calendar 2025, which means that the bulk of the impact of that on our P and L will be from FY 'twenty six and going forward. And our view on what we expect in FY 'twenty five is unchanged, as Venk said.

Speaker 2

We think of that as low tens of 1,000,000, but with a great opportunity to grow it as we look further at.

Operator

Your next question comes from the line of Christopher Rolland with Susquehanna.

Speaker 5

Customer of this question. Can you hear me?

Speaker 1

Chris, we couldn't hear you. Can you start over?

Speaker 5

Yes. Can you hear me now?

Speaker 6

Yes.

Speaker 2

We can, Chris.

Speaker 5

You can. Okay. I was saying despite my interest in your largest customer, this question will be about all of the revenue not related to that customer. So I think last year, it was about $232,000,000 total. And I'm wondering as we enter this next fiscal year, how should we think about growth there?

Speaker 5

Is like the 30% area with these laptop and other handset gains, that like a reasonable expectation? How should we think about that? Thanks.

Speaker 3

Yes, Chris, thanks for the question. So I'll split the non top customer revenue into a couple of smaller buckets just for some additional clarity.

Speaker 5

So if

Speaker 3

you look at the composition of that business, it can vary anywhere from 12% to 15% to at the high point, it's probably about 20% of our revenues. And I'll break it into 3 components. So one part of it is what we call the general market catalog business that is not very dissimilar to what you'll see in a general purpose high performance analog portfolio. And that business is sold predominantly through distribution. We've seen just as our peers have, that business has been fairly weak for the last several quarters.

Speaker 3

And we are seeing some signs of stabilization there. For the last couple of quarters, we've seen distribution inventory be fairly stable and such. And I think that will recover as the economy improves and as general market conditions improve. So that's very tied to the overall macro. The second piece of that business is the Android business and I would say non big customer smartphone business.

Speaker 2

And I

Speaker 3

would say we're doing fairly well in the Android space today. We've had some good wins there and we're participating in whatever is happening there in that market. And then the 3rd piece of it is the PC space. And with PCs, as John just alluded to, we've made some really good progress in terms of design wins. There's a lot of momentum across multiple OEMs and we're seeing more adoption, especially with Intel Lunar Lake Reference Design wins and so forth.

Speaker 3

But it will take a few quarters, maybe even a few years for that to be a needle mover. And I think in the fiscal 2025 time frame, we have framed it as low tens of $1,000,000 in revenue. We think it can expand substantially higher than that in fiscal 2020 and beyond. But that's the way I would frame the portion of our business that's not related to our top customer.

Speaker 5

Okay. Low tens of millions, I guess, would be just 10% and then layer these other opportunities on top. And if it's tens of 1,000,000, dollars 20,000,000 I mean that would be 20% 10% plus growth. But I guess moving on, you talked about you guys taped out your next gen CLC. Just curious as to any new functionalities or ASP?

Speaker 5

And if not, maybe talk about your new power and battery products even though the timetable is further out?

Speaker 2

Thank you, Chris. Yes, I mentioned that we in the past quarter did see silicon for our first for a camera controller IP on a new process. We're excited about that. That's kind of running ahead of our roadmap a little to get our arms around a new process and new IP and new customer features. So what we see in that part of our product portfolio is a continued desire over time for increased processing capability.

Speaker 2

That translates into higher performance, stabilization, focus and other features that are very meaningful to the end user camera experience. So we have, I think, a pretty rich roadmap there and we'll continue to invest in it and continue to see I think over time that kind of steady rate of growth that we've seen since the introduction of the first camera controller 4 years ago. In the battery and power space, we've made a lot of progress over the past year on IP, both in design and seeing much of that in silicon. We're actively engaged with customers in how that gets to market. Clearly, there are areas in the general market business where you can see some of our Power IP being productized.

Speaker 2

For example, I mentioned the power converter product that's a part of the Lunar Lake reference design. But we really want to get that into the hands of as many of our customers and across as much of our business as possible. And we're excited about that. As I've said previously, we're very interested in stuff around the battery, in particular kind of building on what we've done to date around sensing and managing battery health. And so we don't have more to report right now on what the product road map and timing looks like for that, but we're excited that we're making good progress in this space.

Operator

Your next question comes from the line of Tore Svanberg with Stifel.

Speaker 7

Yes, thank you and congratulations on the strong cash flows. I had a question for you first, John. So I'm not asking a question about your largest customer, anything like that. But with LLMs starting to trickle down to edge devices like pieces and smartphones. I assume that the best interface is voice for AI at the edge.

Speaker 7

But I'm just wondering just from an architectural perspective, if that is something that will I mean, are you starting to see some new designs with your IP to those types of use cases? I mean, I know there's a lot of different angles here. It could be battery, it could be power, it could be voice, audio. But yes, any color you could share with us as far as new design that's starting to evolve on LLMs trickling down to edge devices?

Speaker 2

Yes, absolutely, Tarek. I think we see a multitude of positives and opportunities around the Gen AI space and voice is certainly one of them. That's one where across our customer base, we have multiple customers who are interested in how the voice interface evolves and assists the user interaction with generative AI. So that's clearly one thing that we're very interested in and looking at. But I think the opportunity set is really broader than that for us in the AI space.

Speaker 2

That's a very important part of a part of the signal path that goes through our silicon. So we care a lot about voice, but there are other ways in which it can drive significant value for Cirrus. I think not only of course if it drives the an upgrade cycle in smartphones, watches, AR, VR and laptops. I think we're extremely well positioned to participate and benefit from that. I think secondly, it's really clear that generative AI on the edge is first of all, it's going to be a thing as you allude to, because for privacy and latency reasons, I think that really has to be the case.

Speaker 2

That means there's going to be a lot of data and processing going on, on the client device. And that means that we are going to see more memory needed and more and bigger processes and probably more and bigger batteries as well. And so that does a couple of things. One is it puts tremendous constraints on board space and that our advanced geometry, mixed signal engineering really kind of plays squarely into that. We habitually are delivering very, very compact solutions in the mixed signal space and integrating other components from around the board.

Speaker 2

So I think the premium on board space is probably going to increase in these client devices. And along with that, the premium on power efficiency as well. And again, that's kind of squarely in the bull's eye of a lot of our R and D investments and efforts. So I think of all of those things together as being potential levers for us in the opportunity set around AI.

Speaker 7

Yes. No, that's great. And as my follow-up, so obviously you got the smart codec and the amplifiers ramping. I assume that obviously means some higher content, but at least of course initially, but has I think you said in your shareholder letter, those will remain Workhorse products for a while. How should we think about sort of ASP declines every year once those products have been introduced to the market?

Speaker 7

Should we think about sort of like lowtomidsingledigit declines?

Speaker 2

I think it's difficult to say precisely, Tore, though I do think we're entering a more normal, more typical kind of pricing environment than we've seen over the past few years. So I think a reasonable assumption and certainly we expect this of our suppliers. So I have no reason to think that our customers don't expect it of us is that we see reasons for efficiency to increase, for prices to come down somewhat in the coming years. But at the same time, our goal will always be to offset that through our own operational efficiency, but also through feature enhancements and integration of other functions into the devices we're delivering to our end customers. But I think we're probably moving back into an environment where there is something approaching a more typical pricing curve.

Speaker 8

I just wanted to ask something in relation to just the broader smartphone ecosystem. A couple other players your largest customers realm talked about a weaker June due to some inventory work down. I just want to understand your timing with customers. Do you generally recognize some benefit in the June quarter from new platforms on a year over year basis? Are you seeing any of the inventory headwinds that we've heard about in the market from others?

Speaker 3

Yes, Tom, thanks for the question. So when we look at our bookings patterns from our top customer, If you ignored what happened during the pandemic, I would say in the last, call it, a year and a half or so, we've returned to some semblance of normalcy, right? So there's a typical seasonal pattern that we're beginning to see, especially in the last 4 or 5 quarters. And based on those patterns, I would say that tends to be very little in terms of new product introduction that's related to the June quarter. Now as you talk about what some of our peers have mentioned on their earnings calls, especially in the smartphone space, I recognize that some of them had inventory issues and some of them didn't.

Speaker 3

And for us, it's really hard to compare our bookings patterns with what we see with our peers because the dynamics are very different. As you know very well, we've had a 15 year history of working incredibly closely with this customer and we tend to have much longer visibility at least in terms of new products and so forth. And I think to compare our patterns with what we are hearing from others, I don't think this is something that we have the ability to prognosticate.

Speaker 8

Super helpful. And then if I just look at the full year, I know just being sensitive on customers, etcetera, but you have a really nice content roadmap here this year with new codec and new amps. And I look at kind of the full year, and I'm not seeing kind of the expected growth that I would normally see in a content rich environment year over year. To what extent are you guys baking in headwinds in regarding total units? Can you talk about what conservatism you're kind of introducing to the model there over the next couple of quarters?

Speaker 8

And maybe just your expectations for smartphones in general for this calendar year, just because it seems like when I'm looking at your numbers here, I would expect a little bit more in terms of revenue growth on the audio side given the content increases you're describing? Thank you.

Speaker 2

Thanks, Tom. Obviously, we're just guiding the quarter right now. So I can't speak to what numbers you may have for the full year. To your point, we don't get too far out over our skis on assumptions on units, of course, and we think that's prudent. And we do also, as you say, we feel good about the content that we have coming this fall.

Speaker 2

But beyond that, we're not giving guidance right now.

Speaker 3

Yes. And if I could, Tom, just to add to what Don said. We when we provide guidance, we take all the factors into account in terms of what the ordering patterns are, what the historical seasonality is and things of that sort. And we try to provide guidance with what we think was the most likely outcome. But looking beyond the current quarter, it's not something that we were particularly equipped with.

Speaker 1

And we have time for one last question.

Operator

Your last question comes from the line of Ananda Baruah with Loop Capital.

Speaker 6

Hey, thanks guys. Really appreciate you taking the question. And congrats on the great execution this quarter. I guess the question maybe John along this line is given the new technology that you have ramping, boosted AMP in the smart codec, all things being equal, could you see better than typical seasonality through the back half of the calendar year?

Speaker 2

I don't think I'm in a position to guide that right now, Ananda. I think a lot of that does depend on the scheduling of orders around the ramp. As you would imagine, it's a really significant ramp of material with the boosted amplifiers being 3 per device and then the codec with a one attach rate as well. That's a lot of material and so that will be showing up in our results as we go forward. But exactly how that pans out relative to typical seasonality, I don't think we're in a position to comment in detail.

Speaker 6

That's helpful. And then just a quick follow-up is, given sort of just tipping back to your commentary about Gen AI opportunities, Given the multiple touch points you could have into the various potential areas of need, does that place the company in a stronger position to expand its customer base participation? And that's it for me. Thanks.

Speaker 2

I certainly hope so. I think with our existing customer base, a number of those customers are many of the brands who I think will be bringing generative AI centric devices to consumers. So we're very well positioned from that point of view. But I think we can target achieving deeper penetration of some of those customers as we go forward. I mentioned that there are multiple product categories where I think we can be relevant and where Gen AI can be relevant across smartphones, watches, AR, VR, laptops and so on.

Speaker 2

In some of those markets, we're still in the early innings, laptops being a prime example. And I think we have both product solutions today, which are highly relevant just in terms of delivering significantly increased power efficiency, plus the engineering and IP expertise that will lend itself extremely well to participation in a GenAI cycle of products. So yes, is the answer. I'm hopeful that we can certainly be active participants in that cycle.

Speaker 1

And with that, we will end the Q and A session. And I will turn the call back to John for his final remarks.

Speaker 2

Thank you, Chelsea. In summary, we're pleased to report these results for the quarter and to report the significant progress we made in fiscal 2024 across our main areas of strategic focus. I'd like to thank our customers for the trust they continue to place in us as a partner and supplier and all of the Cirrus Logic employees worldwide whose commitment to excellence in everything they do is what drives our collective success. We remain very excited about the opportunities that we see in front of us and we thank you all for your continued interest in Cirrus Logic. Before we close, I would also like to note that we will be participating in the Cowen Conference in New York on May 29th and the Stifel Conference in Boston on June 4th.

Speaker 2

Please check our investor website for the details. I'd like to thank everyone for participating in the call today. Goodbye.

Operator

That concludes today's conference call. You may now disconnect.

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Key Takeaways

  • Cirrus Logic delivered Q4 revenue of $378.1 million, beating guidance on strong smartphone demand, while full-year revenue fell 6% to $1.79 billion but both GAAP and non-GAAP EPS rose year over year.
  • Engineering milestones include completion of two next-generation smartphone audio products—a boosted amplifier and 22 nm smart codec—slated to launch in devices this fall.
  • The company expanded its high-performance mixed-signal (HPMS) portfolio with shipments of its 3rd-gen camera controller, a tape-out on a new process node, and progress on power and battery IP.
  • Cirrus Logic entered the laptop market by sampling, winning designs for, and shipping a new codec, boosted amplifier, and power converter, all featured in Intel’s Luna Lake reference design.
  • Through disciplined execution—supply-chain efficiencies, lower freight and tax rates—the company returned $186 million in share buybacks and boosted FY24 non-GAAP EPS by $0.17 to $6.59.
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Earnings Conference Call
Cirrus Logic Q4 2024
00:00 / 00:00