Cirrus Logic(US:CRUS)2020-11-03 01:48Financial Data and Key Metrics Changes - Cirrus Logic reported Q2 FY21 revenue of $347.3 million, significantly above expectations due to stronger-than-anticipated orders for components shipping to smartphones, tablets, and truly wireless headsets [12][56] - The company experienced broad-based demand for components across its portfolio, particularly in the smartphone segment, resulting in revenue exceeding initial forecasts [56] Business Line Data and Key Metrics Changes - The number of smartphones, wearables, and tablets utilizing Cirrus Logic's products increased, with new content featured in several recently launched high-volume products [12] - The company introduced its first specific smart codec designed for truly wireless headsets, marking a new content addition in this product category [16] Market Data and Key Metrics Changes - Cirrus Logic noted an uptick in demand from other smartphone customers, including Xiaomi, which somewhat offsets the headwind from Huawei's challenges [27] - The company is focused on winning sockets in the Android space, particularly around boosted amplifiers, despite the competitive landscape [26] Company Strategy and Development Direction - The new CEO, John Forsyth, emphasized a focus on driving strategic initiatives that support customers, strengthen leadership in audio, and expand into new technology areas [11] - The company aims to leverage outstanding customer relationships, increased product diversification, and continued design innovation to create greater shareholder value [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, highlighting a solid pipeline of products and a commitment to investing in innovative technology [56] - There is caution regarding the impact of COVID-19 and global economic volatility on future performance, with a bullish sentiment on new product launches [37][38] Other Important Information - Jason Rhode will step down as CEO on January 1st, with John Forsyth taking over the role, and David Tupman becoming Chairman of the Board [9][10] - The company will participate in the Barclays Global Technology Media and Telecommunications Conference on December 10th [56] Q&A Session Summary Question: Inquiry about codec for wireless headsets - John Forsyth confirmed that the company is launching its first specific smart codec designed for truly wireless headsets, which incorporates significant improvements [16] Question: Follow-up on next-generation haptics - John Forsyth explained that the new haptic part targets smartphones and may also find use in other areas, with an expected content addition of around $0.70 to $0.75 per unit [19][20] Question: Outlook for closed-loop controller in Android - John Forsyth indicated that while they do not provide detailed guidance, they expect the closed-loop controller to have a significant impact on content value per phone [22][23] Question: Impact of Huawei's challenges on market share - John Forsyth noted that while Huawei represented a small revenue portion, the company is making headway with other smartphone customers, including Xiaomi, to offset challenges [27] Question: Discussion on haptics penetration in end devices - John Forsyth mentioned that haptics is still selectively found in high-end devices, with expectations for broader adoption in the future [31] Question: Insights on gross margin expectations - Jason Rhode stated that gross margin is expected to remain sustainable at around 50%, with potential for a tick-up in margins in FY22 [45] Question: True wireless momentum and future growth catalysts - John Forsyth highlighted that the true wireless market has exceeded expectations, with new product launches introducing smart processing features [47][48] Question: Seasonality in margins for March - John Forsyth expressed caution regarding typical seasonality patterns, indicating that various factors could influence performance [50]