Financial Data and Key Metrics Changes - Cirrus Logic reported record revenue of $561 million for the September quarter, which was at the top end of guidance, driven by demand for smartphone components [4][15] - Revenue increased by 38% sequentially due to higher smartphone unit volumes and was up 4% year-over-year [15] - Non-GAAP gross profit was $294.7 million with a gross margin of 52.5%, reflecting a favorable product mix [15][17] - Non-GAAP operating income was $167 million, representing 29.8% of revenue [16] - Non-GAAP net income for the quarter was $150 million, resulting in earnings per share of $2.83 [17] - The company ended the quarter with $896 million in cash and investments, up $48.3 million from the prior quarter [17] Business Line Data and Key Metrics Changes - Strong demand was noted for the latest generation custom-boosted amplifier and 22-nanometer smart codec in the smartphone audio business [5][6] - Engagement in the PC market is increasing, with strong design activity and expectations for new consumer and commercial laptops featuring Cirrus Logic components [9][10] - The company is diversifying revenue streams with high-performance mixed-signal solutions, particularly in camera controllers and battery performance technologies [8][9][12] Market Data and Key Metrics Changes - The company is experiencing growth in the PC market, with significant design wins in both commercial and consumer segments [10][35] - Interest in general market products across professional audio, automotive, industrial, and imaging end markets is strong, with long product life cycles and higher gross margins [12][13] Company Strategy and Development Direction - Cirrus Logic's long-term growth strategy focuses on maintaining leadership in smartphone audio, expanding mixed-signal solutions, and leveraging expertise in new markets [4][5] - The company aims to penetrate the PC market further, particularly with voice-related features that enhance AI capabilities [10][41] - Continued investment in battery management technologies is seen as a crucial area for future growth [26] Management's Comments on Operating Environment and Future Outlook - Management noted a shift in seasonality due to increased camera content, which is expected to impact revenue patterns moving forward [23] - The company remains optimistic about growth opportunities in the PC market and is focused on executing its long-term strategy [12][45] Other Important Information - The company has no debt outstanding and reported a decrease in inventory to $236.4 million, with approximately 81 days of inventory [17][18] - Cirrus Logic plans to participate in the Barclays Global Technology Conference on December 11 [46] Q&A Session Summary Question: Thoughts on seasonality going forward - Management indicated that the seasonality shape has changed, primarily due to camera content becoming a larger revenue portion, with expectations for traditional patterns to resume [23][24] Question: Updates on power/battery opportunities in smartphones - Management expressed excitement about battery management technologies and the potential for compelling IP in this area, although no specific design wins were disclosed [26][27] Question: OpEx expectations for the third quarter - Management confirmed that lower OpEx in Q2 was due to timing issues, with some expenses pushed into Q3, maintaining a disciplined approach to spending [31][32] Question: Revenue trends outside the largest customer - Management acknowledged softness in the Android space but highlighted growth in the PC market as a significant opportunity moving forward [34][35] Question: Changes to smartphone unit outlook - Management maintained that there were no material changes to the smartphone unit outlook, with seasonality expected to follow historical patterns [39] Question: New products for AI PCs and revenue expectations - Management noted significant interest in voice-related features for AI PCs, with expectations for these products to contribute to revenue in the future [40][42]

Financial Data and Key Metrics Changes - Cirrus Logic reported record revenue of $561 million for the September quarter, which was at the top end of guidance, driven by demand for smartphone components [4][15] - Revenue increased by 38% sequentially due to higher smartphone unit volumes and was up 4% year-over-year [15] - Non-GAAP gross profit was $294.7 million with a gross margin of 52.5%, reflecting a favorable product mix [15][17] - Non-GAAP operating income was $167 million, representing 29.8% of revenue [16] - Non-GAAP net income for the quarter was $150 million, resulting in earnings per share of $2.83 [17] - The company ended the quarter with $896 million in cash and investments, up $48.3 million from the prior quarter [17] Business Line Data and Key Metrics Changes - Strong demand was noted for the latest generation custom-boosted amplifier and 22-nanometer smart codec in the smartphone audio business [5][6] - Engagement in the PC market is increasing, with strong design activity and expectations for new consumer and commercial laptops featuring Cirrus Logic components [9][10] - The company is diversifying revenue streams with high-performance mixed-signal solutions, particularly in camera controllers and battery performance technologies [8][9][12] Market Data and Key Metrics Changes - The company is experiencing growth in the PC market, with significant design wins in both commercial and consumer segments [10][35] - There is a noted softness in the Android space, impacting revenue from non-flagship customers [34] - The general market products are gaining traction across professional audio, automotive, industrial, and imaging end markets [12] Company Strategy and Development Direction - Cirrus Logic's long-term growth strategy focuses on maintaining leadership in smartphone audio, expanding mixed-signal solutions, and leveraging expertise in new markets [4][5] - The company aims to penetrate the PC market further, particularly with voice-related features for AI-enabled devices [10][42] - Continued investment in battery management technologies is seen as a crucial area for future growth [26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the traction in the PC market and the potential for growth in new applications [12][35] - The company anticipates a slight decrease in inventory in the upcoming quarter and maintains a disciplined approach to operating expenses [18][19] - Management noted that seasonality in the business is shifting, primarily due to increased camera content in revenue [23] Other Important Information - The company has no debt outstanding and reported a decrease in inventory levels, ending the quarter with approximately 81 days of inventory [17][18] - Cirrus Logic will participate in the Barclays Global Technology Conference on December 11 [46] Q&A Session Summary Question: Thoughts on seasonality going forward - Management indicated that the seasonality shape of the business has changed, with camera content becoming a larger portion of total revenue, pushing some revenue earlier in the fiscal year [22][23] Question: Updates on power/battery opportunities in smartphones - Management confirmed ongoing investment in battery management technologies and expressed excitement about the potential IP in this area [25][26] Question: Clarification on OPEX and its impact on future quarters - Management noted that lower OPEX in Q2 was due to timing issues and that some expenses would carry over into Q3 [31][32] Question: Revenue trends outside of the largest customer - Management acknowledged softness in the Android space but highlighted growth potential in the PC market as a key area of focus [34][35] Question: Changes to smartphone unit outlook - Management maintained that there were no material changes to the smartphone unit outlook despite strong quarterly results [38][39] Question: Development of new products for AI PCs - Management noted significant interest in voice-related features for AI and indicated that this would expand the serviceable addressable market (SAM) for the company [40][42]

Financial Data and Key Metrics Changes - Cirrus Logic reported record revenue of $561 million for the September quarter, which was at the top end of guidance, driven by demand for smartphone components [4][15] - Revenue increased by 38% sequentially due to higher smartphone unit volumes and was up 4% year-over-year [15] - Non-GAAP gross profit was $294.7 million with a gross margin of 52.5%, reflecting a favorable product mix [15][17] - Non-GAAP operating income was $167 million, representing 29.8% of revenue [16] - Non-GAAP net income for the quarter was $150 million, resulting in earnings per share of $2.83 [17] - The company ended the quarter with $896 million in cash and investments, up $48.3 million from the prior quarter [17] Business Line Data and Key Metrics Changes - The flagship smartphone audio business saw strong demand for the latest generation custom-boosted amplifier and smart codec, contributing significantly to revenue [5][6] - Engagement in the PC market is increasing, with strong design activity and expectations for new consumer and commercial laptops featuring Cirrus Logic components [10][12] - The company is diversifying revenue streams with high-performance mixed-signal solutions, particularly in camera controllers and battery performance technologies [9][10] Market Data and Key Metrics Changes - The company noted strong interest in general market products across professional audio, automotive, industrial, and imaging end markets, which typically have long life cycles and higher gross margins [12] - The Android ecosystem remains a valuable contributor, although there was some softness in the Android space impacting revenue [36] Company Strategy and Development Direction - Cirrus Logic's long-term growth strategy focuses on maintaining leadership in smartphone audio, expanding mixed-signal solutions, and leveraging expertise in new markets [4][5] - The company aims to penetrate the PC market further, particularly in mainstream consumer laptops, to capture a larger share of the addressable market [10][36] - There is a strong emphasis on developing voice-related features for AI-enabled PCs, which is expected to enhance product offerings and market reach [42][43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the traction in the PC market and the potential for growth in battery management technologies for smartphones [10][27] - The company does not foresee significant changes in seasonality for the remainder of the fiscal year, maintaining historical patterns [24][39] - Management highlighted the importance of disciplined operating expenses and the potential for future increases if high-confidence opportunities arise [33] Other Important Information - The company has no outstanding debt and reported a decrease in inventory to $236.4 million, with approximately 81 days of inventory at the end of the quarter [17][18] - Cirrus Logic plans to participate in the Barclays Global Technology Conference on December 11 [46] Q&A Session Summary Question: Thoughts on seasonality going forward - Management noted a change in the seasonality shape due to increased camera content, which has shifted revenue patterns earlier in the fiscal year [24] Question: Updates on power/battery opportunities in smartphones - Management confirmed ongoing investment in battery management technologies and expressed excitement about the potential impact on power efficiency and battery health [27] Question: Clarification on OPEX and its impact on future quarters - Management indicated that lower OPEX in Q2 was primarily due to timing issues and that some expenses would carry into Q3 [31][33] Question: Revenue trends outside of the largest customer - Management acknowledged softness in the Android space but highlighted strong growth potential in the PC market, particularly with recent design wins in mainstream laptops [36] Question: Changes to smartphone unit outlook - Management maintained that there were no material changes to the smartphone unit outlook, consistent with previous assessments [39] Question: New products for AI PCs and revenue expectations - Management noted significant interest in voice-related features for AI PCs and indicated that initial sampling of new products is underway, with revenue expected to materialize over time [43][44]

Core Viewpoint - Cirrus Logic's stock price has increased by 23% recently due to favorable tariff developments for its largest customer, Apple, which accounts for 89% of its revenue [1][2][3] Group 1: Company Performance - Cirrus Logic's revenue for fiscal 2025 grew by 6% year over year, while adjusted earnings increased by 14% to $7.54 per share [6] - Despite a slight decline in Apple's iPhone shipments in 2024, Cirrus Logic managed to gain more business from Apple, including supplying power management modules [7][8] - In Q1 of the current year, Apple's smartphone shipments rose by 10% year over year, significantly outpacing the overall smartphone market growth of 1.5% [9] Group 2: Future Growth Potential - The sales of AI-capable smartphones and PCs are projected to grow at a compound annual growth rate of nearly 35% through 2029, indicating a positive outlook for Cirrus Logic [9][11] - Cirrus Logic's sales in Q4 of fiscal 2025 increased by 14% year over year, with earnings growing at a stronger pace of 34% [10] Group 3: Valuation and Investment Opportunity - Cirrus Logic is currently trading at less than 18 times trailing earnings, making it an attractive investment given its recent earnings growth [12] - If Cirrus achieves expected earnings next fiscal year and trades at 29 times earnings, its stock price could potentially reach $221, more than double its current price [14]