Cirrus Logic (CRUS) Conference Summary Company Overview - **Company**: Cirrus Logic (CRUS) - **Date of Conference**: August 12, 2025 - **Speakers**: Jeff Willard (CFO), Kala Birligi (VP of Mixed Signal) Key Industry Insights Smartphone Demand Dynamics - There has been a pull forward in demand for smartphones, impacting the company's fiscal year outlook [4][5] - The increasing share of camera content in total revenue is leading to earlier shipments, affecting seasonality [6][7][8] Growth in Camera Controllers - Cirrus Logic expects continued growth in camera controllers driven by higher attach rates and increased average selling prices (ASPs) [10][11] - The latest generation of camera controllers features a 6x increase in processing capability, enhancing customer value [11][12] Expansion Beyond Smartphones - The company is expanding its High-Performance Mixed Signal (HPMS) content into haptics and power conversion, particularly for AI applications [14][15][16] - The focus is on optimizing power delivery and battery management to support new AI use cases [19][20] PC Market Opportunities - Cirrus Logic has seen significant growth in the PC market, with expectations to double revenue in the coming year [21][22] - The company is leveraging similarities between mobile and PC platforms, particularly in audio and voice solutions [22][23] Competitive Landscape - Cirrus Logic is displacing entrenched incumbents in the PC market by offering superior audio experiences and total cost of ownership advantages [27][30] - The company emphasizes the importance of audio quality in laptops, which has been historically overlooked [22][23] Market Addressability - The addressable market for Cirrus Logic in the PC notebook segment is estimated at approximately $1 billion, focusing on mainstream applications rather than low-end markets [36][37] Automotive Market Entry - Cirrus Logic has a long history in the automotive sector and is re-engaging with new products aimed at enhancing in-cabin experiences [52][53] - The transition to zonal architectures in vehicles presents new opportunities for audio, voice, and haptic technologies [52][54] Financial Performance Gross Margins - The company has been operating above its long-term gross margin target of 49% to 51%, driven by product mix and supply chain cost reductions [40][41] Operating Margins - Cirrus Logic has maintained mid-20s operating margins while balancing investments in R&D for growth [44][45] Strategic Initiatives M&A Opportunities - The company is exploring M&A opportunities to diversify its portfolio and enhance value through synergies [46][47] Customer Concentration - Cirrus Logic aims to diversify away from mobile concentration while continuing to grow in that segment [48][49] Android Market Focus - The company has reduced investments in the Android market, focusing instead on more promising growth areas [50][51] Conclusion Cirrus Logic is strategically positioned to capitalize on growth opportunities in the smartphone, PC, and automotive markets while maintaining strong financial performance and exploring diversification through M&A. The focus on enhancing audio and power management technologies aligns with emerging trends in AI and consumer electronics.

Group 1 - The average length of car ownership has increased to almost 13 years, making the search for a new vehicle a significant life experience [1] - Mercury Insurance provides guidance for consumers to choose a vehicle that fits their needs and budget [1][3] - The total cost of ownership should be considered, including insurance, repair costs, and fuel consumption, rather than just the purchase price [3] Group 2 - Consumers should define their needs and set a realistic budget, considering ongoing costs like insurance and maintenance [7] - Researching different models and trims is essential, including comparing features such as fuel economy and safety ratings [7] - Inspecting the vehicle for damage and conducting a test drive are critical steps in the buying process, especially for used cars [5][7] Group 3 - The 20/4/10 rule is recommended: a 20% down payment, a four-year repayment term, and spending less than 10% of total monthly income on transportation costs [11] - Doing thorough research can help reduce the likelihood of regretting a vehicle purchase [8]

Financial Data and Key Metrics Changes - For the full year of 2024, revenue increased to $56 million from $44.5 million in 2023, while cost of goods sold rose to $52 million from $45.8 million [40] - GAAP gross margin for 2024 was a profit of $4 million (7.1%) compared to a loss of $1.3 million (-2.9%) in 2023, and non-GAAP gross margin was a profit of $10 million (18%) compared to a loss of $2.3 million (-5.2%) in 2023 [40] - In Q4, revenue was $11.5 million, down from $15.8 million in Q3, with cost of goods sold increasing to $15.2 million from $12.9 million in Q3 [41][42] - Q4 GAAP gross margin was a loss of $3.7 million (-32.4%) compared to a profit of $2.9 million (18.1%) in Q3, significantly impacted by inventory reserves and write-offs [42] Business Line Data and Key Metrics Changes - In Q4, the company delivered 51 units, reflecting a 27.3% decline in top-line revenue compared to Q3 due to seasonal challenges in the parcel delivery segment [11][16] - The step-van business is expected to shift positively towards strip chassis deliveries, which could reduce inventory turnover by two to three months [17] - The powertrain business made significant progress, with the first powertrain product delivered for a Bluebird electric school bus, and commercial production deliveries expected to begin in early 2025 [18] Market Data and Key Metrics Changes - The company has secured major commercial orders, including nearly 200 strip chassis for UPS and 20 hub units for Caltrans, indicating strong demand across various sectors [14] - The hub product has seen increased demand, with customers including Waymo and Duke Energy, and production rates reached approximately two hub units per week [20][32] Company Strategy and Development Direction - The company aims to continue top-line growth, margin expansion, and improved product diversity, positioning itself as the most efficient public commercial EV company [9] - Strategic partnerships with Bluebird and Winnebago are expected to drive growth in the Powered by XS segment [19] - The company is focused on reducing operational expenses and improving liquidity, with a goal of achieving positive free cash flow [27][28] Management's Comments on Operating Environment and Future Outlook - Management remains resilient despite economic changes and potential cost impacts from new tariffs, having prepared for these shifts over the past year [10] - The outlook for 2025 anticipates revenue between $50.2 million and $65.8 million, with unit deliveries expected to range from 320 to 420 units [48] - Management believes that the evolving regulatory landscape presents opportunities to differentiate the company in the market [50] Other Important Information - The company closed a significant transaction that added over $40 million in liquidity to its balance sheet [15] - Inventory decreased to $36.6 million from $37.8 million at the end of 2023, attributed to strategic purchasing and inventory management [47] Q&A Session Summary Question: Can you help us understand what's going right in delivering strong margin results despite lower volume? - Management attributed the strong margins to a shifting product mix, particularly with specialty products like the XS Hub, which have higher margins [56][57] Question: Do you expect to operate near production capacity for the hub business this year? - Management indicated plans to increase capabilities of the hub to offer broader market applications, but will not expand production capacity until market validation is achieved [60][63] Question: Can you provide insight into the powertrain business and FMVSS certification? - The powertrain business requires deep partnerships for engineering validation and testing, with production units expected to be shipped to end-user customers this year [66][68] Question: How much room is there to continue improving working capital? - Management emphasized a focus on sustainable business practices, improving working capital usage, and proactive measures to ensure timely delivery and cash collection [71][74] Question: Will gross margins remain positive throughout 2025? - Management anticipates continued positive gross margins for 2025, with expectations for year-over-year growth on an adjusted basis [79][80] Question: Did you have any environmental credit revenue in Q4? - Management confirmed that there was no credit revenue in Q4, unlike in the previous quarter [89] Question: Can you provide details on the unit mix for Q4 and guidance for 2025? - Management noted an increased mix of hubs in Q4, which are higher ASP products, and expects this trend to positively impact margins in 2025 [91][92]