Financial Data and Key Metrics Changes - Cirrus Logic reported record full fiscal year revenue of $1.9 billion, up 7% year-over-year, driven by higher sales of components in smartphones [5][14] - Fiscal Q4 revenue was $372.8 million, down 37% quarter-over-quarter and down 24% year-over-year, reflecting a reduction in smartphone volumes [15][16] - Non-GAAP gross profit for fiscal '23 was $958.2 million with a gross margin of 50.5%, while Q4 gross profit was $186.7 million with a gross margin of 50.1% [16][19] - Non-GAAP net income for fiscal '23 was $367.4 million, or $6.42 per share, with Q4 net income at $52.6 million or $0.92 per share [19][20] Business Line Data and Key Metrics Changes - Revenue from high-performance mixed-signal (HPMS) solutions increased from 12% to 38% of total company sales over the past four years, growing from $145 million to $726 million [9] - The company completed production qualification on its next-generation camera controller, expected to ship in the second half of the calendar year [9][11] Market Data and Key Metrics Changes - The company noted a softening in general market and smartphone demand, impacting revenue [14][15] - The China smartphone market has faced prolonged weakness, affecting sales of general market products associated with the Lion Semiconductor acquisition [18][35] Company Strategy and Development Direction - The company focuses on three strategic pillars: maintaining leadership in smartphone audio, increasing high-performance mixed-signal content in smartphones, and leveraging existing products to enter new markets [6][11] - The company aims to capitalize on opportunities in the PC market, despite current cyclical softness, with expectations for product launches in FY '24 [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a reduction in smartphone volumes and general market weakness, impacting Q1 FY '24 revenue guidance of $260 million to $320 million [24][25] - The company remains optimistic about long-term growth opportunities and plans to continue investing in product development [26][57] Other Important Information - The company ended Q4 FY '23 with approximately $517.3 million in cash and cash equivalents, with no debt outstanding [20] - Inventory increased to $233.5 million, reflecting preparations for customer product ramps [20][21] Q&A Session Summary Question: Variability in revenue levels and commitments with GlobalFoundries - Management indicated flexibility in prioritizing wafers and managing commitments despite changes in demand patterns [29] Question: Compensation for investments made in custom products - Management emphasized a strong track record of innovation and execution, viewing the current situation as a temporary setback [31] Question: Opportunities for power in smartphones versus laptops - Management noted a shift towards laptop opportunities for power conversion, given the challenges in the smartphone market [34][35] Question: Seasonal decline in revenue and customer inventory - Management attributed the decline to reduced smartphone volumes and general market weakness, with timing mismatches noted [40][42] Question: General market revenue outlook - Management observed stabilization in general market sales but refrained from calling a bottom, expecting improvements over the year [47]
Cirrus Logic(CRUS) - 2023 Q4 - Earnings Call Transcript