Financial Data and Key Metrics Changes - Cirrus Logic reported revenue of 481.1millionforQ2fiscal2024,whichisnearthetopendofguidanceandrepresentsa52247 million with a gross margin of 51.3%, above the high end of guidance, and increased by 90 basis points sequentially due to lower supply chain costs [13][14] - Non-GAAP operating income was 132.5million,representing27.5101.6 million or 1.80pershare[15]BusinessLineDataandKeyMetricsChanges−ThesmartphoneaudiobusinesssawmultiplecustomersintroducingnewflagshipdevicesfeaturingCirrusLogic′saudiocomponents,withexpectationsformoredevicesinthefirsthalfofthecomingcalendaryear[6][7]−Shipmentsofthelatestcameracontrollerrampedupaheadofacustomer′sproductlaunch,highlightingtheimportanceofcamerafeaturesindifferentiatingproducts[7]−Thecompanyisalsoinvestinginnewintellectualpropertyforbatterymonitoringandperformance,expandingitstechnologyportfolio[8]MarketDataandKeyMetricsChanges−CirrusLogicisactivelyengagedwiththetop5laptopOEMs,shippingcontenttoeachandfocusingondesignwinopportunitiesfornext−generationlaptopmodels[9][10]−Thecompanynotedfavorabletrendsinthelaptopmarket,includingapost−pandemicdemandforhigh−qualityaudioandthedesireforthinner,lighterdevices[9]−TheAndroidsmartphonemarketpresentschallenges,withvaryinglevelsofhapticadoptionamongOEMs,butflagshipdevicescontinuetoshowappreciationforhigh−qualityhaptics[28][35]CompanyStrategyandDevelopmentDirection−Thecompanyaimstoleadinsmartphoneaudioandisontracktointroduceanext−generationcustomboostedamplifieranda22−nanometersmartcodecnextyear[6][8]−Thereisafocusonexpandinghigh−performancemixed−signalcontentinsmartphonesanddiversifyingintonewapplicationsandmarketsbeyondsmartphones,particularlyinlaptops[9][11]−Thecompanyisoptimisticaboutfuturegrowthopportunitiesinthelaptopmarket,whichmayexceedthoseintheAndroidsmartphonemarketovertime[35]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthecompany′spositioningforfuturegrowth,withnewproductsinthepipelineandmomentuminmarketdiversificationefforts[12][20]−ThecompanyanticipatesadeclineininventorylevelsinQ3fiscal2024asitdrawsdowninventorytosupportseasonalproductramps[16]−ManagementacknowledgedthechallengesintheAndroidmarketbutemphasizedstrongrelationshipswithkeyOEMsandthepotentialforgrowthinthelaptopsegment[35]OtherImportantInformation−ThecompanyendedQ2fiscal2024withapproximately352.5 million in cash and cash equivalents, down from the previous quarter due to inventory build-up and stock repurchases [15] - For Q3 fiscal 2024, revenue is expected to range from 510millionto570 million, with gross margin projected between 49% and 51% [18] Q&A Session Summary Question: Opportunities in the Windows laptop market compared to Android smartphones - Management highlighted strong relationships with customers across the Windows laptop market and noted engagement with Intel, indicating a favorable position for future designs [25][26] Question: Inventory balance and wafer supply commitments - Management confirmed that inventory levels are expected to decline in Q3 and that the current quarter is anticipated to be the high point for inventory this fiscal year [30][32] Question: Android market opportunities in haptics - Management stated that while flagship Android phones are adopting haptics, the overall market may face headwinds due to cost considerations [28][35] Question: Timing for 22-nanometer products and laptop content ramp - Management clarified that the 22-nanometer smart codec is currently sampling and expected to be introduced in the latter half of next calendar year, with a gradual revenue contribution anticipated in fiscal 2025 [39][41] Question: Diversification efforts in power and battery technology - Management confirmed customer interest in power-related technologies and indicated that significant opportunities exist, although they may take time to materialize [46] Question: Seasonality and revenue expectations for March - Management noted that typical seasonal declines are expected, but specific impacts will depend on the performance of top customers' products [48]
Cirrus Logic(CRUS)2023-11-03 00:23