Q2 2020 Earnings Call
Well as Jason, Rhode Cirrus, Logics, President and Chief Executive Officer, and Chelsea Heffernan, our director of Investor Relations.
Today, we announced our financial results for the second quarter fiscal year, 2020, and approximately 445 P.M. eastern.
The shareholder letter discussing our financial results the earnings press release, including a reconciliation of non-GAAP financial information to the most directly comparable GAAP information.
Along with the webcast of this Q in a session are all available at the company's Investor Relations website.
At an investor dots here as dotcom.
This call will feature questions from the analysts covering our company as well as questions submitted to us via email at Investor Dot relations at Cerus Dot com.
Please note that during this session, we may make projections and other forward looking statements that are subject to risks and uncertainties that may cause actual results to differ materially from projections.
By providing this information the company undertakes no obligation to update or revise any projections or forward looking statements, whether as a result of new developments or otherwise.
Please refer to the press release issued today, which is available on the Cirrus logic website.
Latest Form 10-K , and 10-Q as well as other corporate filings made with the Securities Exchange Commission for additional discussions of risk factors that could cause actual results to differ materially from current expectations.
Now I'll turn the call over to Jason.
Thank you Darren.
Before we begin taking questions I'd like to make a few comments.
For a detailed account of our financial results. Please read the shareholder letter posted on our Investor Relations website.
Cirrus logic delivered Q2, 520 revenue of 388.9 million as stronger than anticipated demand for certain components drove results significantly above the high end of guidance.
GAAP and non-GAAP earnings per share were $1.27 and $1.55 respectively.
During the quarter the company ramped production of boosted amplifiers haptic drivers and a new smart codec and a variety of recently introduced smartphones and we are now shipping product into eight of the top 10 Oems.
While our largest opportunities continue to be associated with mobile phones. We are pleased to be gaining momentum and other applications, such as laptops tablets and digital headsets.
With an extensive portfolio of products available today and an innovative roadmap. This fans audio voice on adjacent markets. We are excited about our future.
Before we begin the Q and I would also like to note that while we understand there's intense interest related to our largest customer in accordance with our policy. We did not discuss specifics about our business relationship operator, we're now ready to take questions.
At this time, if you would like to ask your question. Please press Star then the number one on your telephone keypad again start of the number one we will pause for just a moment to compound the Q any rough day.
Your first question comes from the line of tore Svanberg with Stifel.
Yes, Thank you and congratulations on the strong results.
Jason maybe first question is I.
I know this is always very difficult, but you know that sort of seasonality you know looks a little bit different.
Now versus other years is this the new norm or do you have any other comment on on how things are playing out seasonally hence I cannot.
Oh, it's yeah. Thanks for that it's hard to call it seasonality in the and I don't know that there is such that it goes on new norm.
This in this era out and you know certainly it feels like there's strong demand we've had years, where we've been surprised and and you know certainly.
We are unable to to ever rule that out, but it would be nice if we could refer everybody to the.
The risk factors for a discussion of such things in our filings. It's the kind of thing we want to give guidance, that's meaningful and relevant but there are definitely things to happen outside our control from time to time.
That said, we feel good we you know backlog is strong the outlook looks good going forward, we've largely lapped the.
The headwinds that we've had over the past couple of couple of years, which is kind of mask some of the under underlying really good things that are going on in the company. So.
I think we've got a a strong lineup of of good news that should be coming over the next year, so and as expected the to get us back on more of our normal growth.
Growth outlook. So you know again, it's hard to characterize anything as normal at this point, but.
But we certainly feel good about the outlook going forward.
Very good and your shareholder letter you make reference to close the controllers I was hoping you did elaborate a little bit more on that I mean, my understanding that is it's it's on some sort of the sensor control, but maybe you can elaborate what it means for you guys and should we assume products.
Just sell primarily again in smartphones their first are the any other applications that you want to highlight.
Well the particular device that we're talking about there is a his hand is I had in a handset and we'd expect that to to ship sometime in the next 12 months.
I wish we could get into little more detail, but what it what it's for a you know that the phrase closed loop controllers, not not really meant to be a proper down it's just kind of a description of.
Of of a thing it.
You know it kind of as a further offshoot of some of the capabilities that we've developed.
In our audio amplifiers haptic controller is a good example of where we've taken out audio amplifier tuck in technology and re purpose that for a new new application. This is kind of something that's philosophically similar it's probably a little further afield.
Even than the haptics stuff, it's not something were.
Traditionally associated with and just due to a customer sensitivities. Unfortunately is something we can really get him to all lot of detail about what it's about but it is meaningfully new content for us in.
You know in in the handset that actually matters.
Great. Just if you can sneak in one last one you talked about reallocating some resources away from the from the mens business unit, maybe you could just update us there or you're just not seeing or the progress that you want to see there or is there is just so many opportunities elsewhere that you want those.
As engineers to work in those those first.
Well. It is it is a hard a hartfield my hats off to the folks to do Mems.
Well to the extent that there are any its a there there are shockingly hard product line. Our team has made great.
Great strides and really moved the needle on our production readiness, but at the same time you know it's happened a a handful of times in the company's past, where Weve you know, we'd like to give the product lines enough room to operate on their own.
But from time to time, we're just looking at such an overwhelming.
Array of opportunities in front of US we have to kind of step back and look at it at the company level and you know the reality is weak if we executed perfectly on Mems going forward it still would be unlikely to be as good or as big of a.
Return on investment as some of these other opportunities that we're looking at that are a little more core to what were known to be good at that are a little sooner in time little lower risk.
As well so all that kind of factored into it you know certainly we would have loved to have it gotten that to production long long ago.
But you know the fact remains you know we just have to balance our investment across our best opportunities and at this point Yeah. Mems is largely got eclipsed by some of the other stuff.
Your next question comes from the line of Blayne Curtis with Barclays.
Hey, guys. Thanks for taking my question I'll Echo the congrats as well maybe just follow up on Tories question you do good job in your slide deck kind of given us this key of ranges of ASP per product.
Is there anyway, you can dial assuming this close loop controller opportunity, even you say kind of leveraging some of the stuff you worked on with haptics that has a much Laurie feeding kodak's is there anyway, you can kind of Dallas and I know you don't want to reveal everything but just the way to think about that opportunity on a and C perspective.
I mean, it's it's probably a little.
Smaller than a codec, but I would I would say probably more valuable than an audio and.
So really soon.
It's kind of in that range again, it's not something we want to get into a ton of detail given that we haven't really been given out what it is intended to do.
That's helpful. And then maybe just one for Thurman I mean at you get the question a lot gross margins were up significantly in September you mentioned cost reductions the driver for that.
Just obviously volume months have a big part of that as well given the huge be just trying to understand you in the guidance for December and kind of going forward here.
Whether some of those cost reductions that you saw the benefit from should continue.
Well, we're always going to be trying to maximize our our gross profit.
Margins and so we'll continue to do that but when we talk about when you see a lower guide from US it's really about.
Theres a lot of different movements and I think you noted one a higher volumes will allow you to absorb more costs and so you get a better margin out of that also mix of different components at any given time during ramps and so forth you have variations in in the margins on that and that can actually move the needle for us so.
So as we guided to Ah you know 51 to 53 that.
We've noted that we've stated being at the high end and we'll continue to try to do that but when you look at us longer term well, we still think that.
You know the 52% range is reasonable and the shorter term in any longer term, a 50% is 50% issues, where we should be.
Your next question comes from the line of Matt Ramsay with Cowen.
Thank you very much good afternoon everybody.
Jason I wanted to you had talked in an earlier question about.
Maybe some opportunities that would be viewed by the team is maybe lower risk and.
Higher opportunity and some stuff in men's and then obviously you've been you call out in the shareholder letter sort of a diversifying of haptics wins that you guys have if you could give us a little update there on on it this vibration stuff for the normal application is this buttons what is that and then I guess longer term. Some some update 'em on where you are.
And with.
The voice biometrics I've heard that I know, it's a pretty big investment for the company. Thanks.
Sure I'm, well I mean, I would I would say the kinds of things that we're we're measuring as we run through our kind of annual strategic.
Investment you know kind of portfolio balancing process.
Certainly haptics is a continuing investment for the company in broadening that out including you know more of the whole system into the into the product to try to increase ASP season, and simplify our customers.
Lives and make it easier to design handsets and so forth with this kind of technology. So certainly haptic is.
It is in the mix of things that we're investing in going forwards that some of it theres some kind of completely new greenfield type of stuff that even beyond the the a that that close would controller, we talked about a question or so ago. So it's really kind of across across the board of what we're doing in its.
It is I think is reflective of the time that were in that so many of the things that we've thought about or heard about our whole lives starting with the jetsons and so forth are all.
Turning into reality voice activation this and that way so systems that are truly useful and there that drags without a lot of.
You know whether its awareness are intrigued about voice and audio or really tricky edge processing a kinds of capabilities.
It's really a wide array of these things that appear to become coming out of some appeared to be really well position to two to capitalize on that as far as voice biometric specifically you know, it's still kind of early innings in that in the development of that market.
The reception that we've gotten from customers as we've promoted the capabilities. We've developed has been really good let's say our opportunities to deploy.
Either the full voice biometric suite or or.
Some of the sub components of that across a wide array of end devices has continued to grow continues to be very exciting a lot of interest.
And that certainly factors into our resource planning as well vis-a-vis. The the comments, we had about about having a really rebalance where we're deploying some folks.
A lot of the things that were going forward with voice biometric in particular.
You know there they're bigger developments frankly, a lot more complex.
Require resources across a wide array of capabilities and though you know that's good because ideally the opportunities that we're chasing our we certainly expect them to scale commensurately with that so anyway. The net of none of it is kind of a wide array of investments across a couple of things and and though and we.
Continued to be real excited about about voice as an interface in particular.
Gotcha. Thanks, Thanks for all the color there I guess is my follow up it wouldn't be in earnings call in Sami's, if we didnt have to talk about China.
I guess.
Maybe you could give us a little bit update on on where are you guys are I know there was a.
Some design wins and some growth look forward at Wawa way and the handset space and and maybe you could give us an update as to how that's going given all the challenges they've had politically versus the strength in their business and then just how many other Oems that are shipping outside of China, how things have been progressing with those all the way around would be helpful. Thank you.
Let's see so as it relates to China hallway, and why specifically I'd say, we've continued to see good progress in China continued to add design wins at new accounts to point out in the in the latter that we're shipping to eight of the top 10 handset manufacturers.
In some form or another and continue to expect to be able to add to that list.
You know with far away I think it's it's kind of very similar to the rest of the news that you read from every semiconductor manufacturer like.
Like I pointed out last last quarter, we're not in Fiveg stuff for networking in particular, where the to the extent that were exposed to them at all its handsets.
No the silicon, we sell feel like a lot of our much like a lot of our peers.
Clearly fall into the de minimus rule.
Category.
We look forward to all of that being resolved because.
As things stand were unable to provide a lot of support.
Or any support really.
No we're able to sell silicon that was already designed in but were unable to pursue.
Kind of the next level of engagement that we would like to do.
So we look forward to that been resolved, but you know there's certainly been a rebound in that and certainly we've seen continuing progress in the other Android accounts that that.
Make up the rest of that.
The top 10 list.
Your next question comes from the line of Rubin, probably with benchmark.
Hey, Thanks, Hey, Jason I had a follow up on the men's discussion last quarter, you guys talked about continuing to work with the lead customer and are getting a supply chain going in Taiwan is just to be clear. It is the mems effort completely done at this point or.
Are there still customers that that you will move forward with maybe at a at a slower pace or a slower rate et cetera, and then you know just a quick follow up on that point is were there any.
Pressing area is that your other customers or whatever we're we're asking for that you thought hey, now's a good time to go and.
Yeah, you get after that type of product given that the customers want something you know near term just trying to trying to gauge what you guys for thinking about what demands.
Yeah, well in this case the redeployment it was.
Oh really more customer then customers the the memo stuff.
I would say that.
Let's see well I would refer you to the the shareholder letters got a little bit of a description of the that Additionally, this kinda spruced up a risk factor on that front, a that talks about a little bit as well you know we're kind of evaluating our options is pretty major change to redeploy folks onto some of these other error.
Areas, you know that leaves the team a little bit out of balance, but nonetheless, we have developed a lot of capabilities that we think are extremely useful.
We're evaluating our go forward plans with that we don't have a whole lot more to say about it at this point other than that we expect to be allude to give up a pretty meaningful update on the next call.
But the none of it is.
From a investor perspective, it feels like Weve pretty significantly expanded the the total Sam that we're pursuing now with some of these new opportunities and likely decreased to an extent the expense in the pursuit of them. So that hopefully should be a good thing in particular lowering their risk.
Oh on some of the developments that were proceeding with going forward as well. So you know a when you're in engineering and you do a bunch of good work you'd like to see it satellite a day, we've certainly done a bunch of good work on a number of areas within Mems, we think that that could be useful. So we're considering a variety of options to perhaps some of that stuff might still be able to see the light a day.
But from a permanent from an analyst perspective, I guess I would say you know just zeroed out in your model from a revenue perspective, and then well and you know at least that way you've you've got the downside covered and we'll we'll update you on where things stand on the next call.
That's very helpful. Thanks, Jason a quick follow up in <unk> based advanced you continue to ramp them and you know keep adding customers. It's a it seems like it's going very well I'm. Just wondering are there still dollar content opportunities would you say in flagship phones were at this point are you guys looking at you know sort of mid tier content.
Accretion of boosted answers as a bigger driver as she as you think about calendar 20 as a growth driver.
Sure Yeah, I think it's both I mean, we're still you know to the extent we're shipping in you know these top Android guys that are out there most of those have a wider at wider variety of models that make up both their flagship lineup as well as their mid tier. So you know there's plenty of those accounts, where we're not fully penetrated in the high end, there's some of those that have yet.
Got to make this switch to stereo we think longer term, there's more features and functions. We can add two flagship amplifiers.
And then to your point.
Theres a lot of ground again.
In the mid tier as well as those transition from having no boosted amplifiers to one or in some cases, something clever, perhaps that receiver assisted stereo that some customers are deployed or or full on stereo even in the mid tier. It is it is kind of.
Long term thing that no matter what type of phone, you're making them you would like it to be a better foam and that includes being a loud speaker phone or loud enough speaker phone that you can use it in a car and so forth. So we see some demand for stereo even in a in a mid tier.
Device it both in and we see that both in China and Korea as well.
Your next question comes from the line of Grouchy Gill with Needham and company.
Thank you and congrats as well just a follow up on the on the closed loop controller and biometric authentication.
If you could maybe elaborate on what are some of the benefits or or the applications or performance enhancements of of this technology.
A voice biometric specifically.
No the closed loop controller that you know sorry.
I'm going to wire across their.
The so yeah, it's kind of hard I mean, you know the kinds of things that you can think about cirrus logic really adding value to in the silicon space remain the same its ultra low power very low latency implementation of mixed signals signal processing.
So this is kind of more of that it's not in one of our traditional wheel houses, but division of the company for the last 12 years has remained.
To be the first choice and signal processing components in that and that's that this is another manifestation of that.
But it's a departure in the sense not audio voice, but it's very much through to the the core what we think we really well.
[noise], yes, I'm just trying to understand what it is audio processing. Your voice processing video processing is it I'm just trying to get a center with the application would be.
Yeah, I wish I guess I wish I could tell you.
And I really do my life would be a lot easier if I could.
[laughter].
And in terms of the.
Your your competitive positioning in wireless earbuds in wireless wireline here, but particularly around and see can you talk about kind of where you are in terms of you and see technology and where the market is in terms of adopting kind of moving forward from digital.
Wireless here, but it's more a and see more advanced.
Cancellation capability.
Yeah sure. So I think we who we elaborated on that pretty specifically in the queue in a on the last call and really nothing has changed from there as you know it is a pretty different market for wired versus wireless primarily due to the battery size and by by wireless I mean, the the untethered ear buds I don't mean the.
We are the okay since around your neck.
Untethered ear buds is clearly a really popular.
Style, but they inherently they're gonna have just a tiny tiny battery and so what I kind of highlighted last quarter. On this call is just that really the number one two and three priority. There is battery life and that has certainly been a focus of our AMC efforts, but not the not the hyatt not maybe the highest priority one we really focused on trying to deliver until.
Experience in particular for unsealed designs.
Sealed gives you some advantages in terms of how you can go about that perhaps in a lower power sense.
So as we kind of alluded to there is a very very recently released set of wired set of untethered earbuds that we now do you have content then it's not a and e. content, but it is new content, we've never had that content before.
So, we'll we'll try to use that as a base to build on hopefully that's that's good news because again its content. We didn't that previously we do have now.
And on the AMC side, we do continue to make progress.
We're now shipping in additional wired wired and see headphones.
From different manufacturers, so continue to see some progress there and longer term will visit we'll revisit.
The a and C roadmap.
For a variety of headset form factors.
But additionally, you know that we think there's a the the untethered here, but form factor should have a lot of legs to it and there's a lot opportunities for us to add.
Pretty wide array of signal processing capabilities to those devices over time, whether it's a and C or otherwise we we feel good about that as a platform that we can continue to build on overtime.
Your next question comes from the line of Adam Gonzales with Bank of America Merrill Lynch.
Hi, Thanks for taking my question just wanted to follow up on the voice biometrics.
Just wondering what the remaining obstacles are to get that to market it silicon or software or is it just to customers figuring out how they want to leverage the technology.
And if you can give us a rough sense of what the content would be when that product does come to market and a handset.
Sure I mean, I would say, it's the latter of the three I mean, it's really you know the device. The initial device. We've developed a is it functions. It does what it so set on the Tenda delivers a pretty remarkable and robust combination of false except in false reject and so forth.
So it is nothing from a silicon or software side that would preclude that go into production.
You know frankly, when you do something as new as what we've done there. It is in with something we still expect to go to production, but it is it is rare that that first product is the total home run.
So customers once we've been able to engage and gotten the fido.
Fido certification, which were still the only voice solution out there that's done.
Then you can really a meaningful engagements with the customer and they can really think.
Long and hard about how they want to deploy things and what they want to give it access to and what the user experience would be and.
So we would expect to continue to evolve that product line overtime, and and and frankly, it's a little bit of I'm in lending for us in the sense that there's quite a lot of subparts of voice biometric that are appearing to be pretty valuable for example, anybody we show the overall solution to part of the first thing anyone thinks of is hey, what if I.
Our record your voice with another handset and play back can you detect that whatever it turns out yeah, we can.
Let's call the anti spoofing.
And.
It turns out to.
Customers a lot of them, where they might have aspirations of doing the voice biometric stuff on their own. The anti spoofing thing is something that are very clearly needs to be down all the way upfront.
Largely done via an analog like input just due to the bandwidth required to make some of the measurements and so forth that tip off that it's a recording versus a lot person.
And so that in of itself can be a product that's kind of under the sub umbrella of voice biometrics. So we continue to be really excited about the overall portfolio of things a fall into that category, whether its voice biometrics itself. We think continues to be one of the biggest opportunities we have over the longer term.
But we're increasingly excited about.
Kind of the broader portfolio of.
Voice processing at the edge Ultra ultra low power.
In a wide array of form factors not just handsets.
Got it and for the hand fits the content opportunity would be in the ballpark of a smart codec and then for my follow up just wondering unhappy drivers are game console that potential opportunity for you guys. There.
So let's see so the ASP I think for voice bio could be all over the map you know certainly with the device that we have today, we could support something that's a couple bucks, but we'll just see how that plays out as we get closer to production type.
Discussions with a variety of customers there.
You know haptic that's a good question haptics were really engaged in a a bunch of interesting discussions.
You know good it is a it is a viable technology for gaming controller is probably the more interesting discussions we've had over the last couple of quarters or or other applications automotive and so forth as.
As.
The ripple through of kind of that market leaders in electric cars and stuff is kind of re imagined what the cabinet modern car should look like.
If you have driven one of these things as got tons of glass and and all sorts of features and functions the access without physical buttons, the physical contact with that stuff is kind of missing and there is a haptic market as it exists today and automotive we think we can bring some interesting stuff to bear that's real similar to what we've done in handsets.
You know to enable that.
Really cool user experience for these modern car interfaces as well.
So thats an interesting discussion, but we think theres a pretty wide array of devices out there where haptics can add meaningfully to the user experience so something we're pursuing.
Wherever we find it.
Your next question comes from the line of Charlie Anderson with Adrienne Company.
Yeah. Thanks for taking my questions in my and my congrats as well.
It sounds like you're now shipping amps into the headset market I Wonder Jason if you could just kind of expand upon that opportunity and through the applicability of your technology to that market and.
You know.
How fast that opportunity is not going to follow up.
Sure. So you know we actually we started shipping actually a kind of a bigger devices codec with an integrated down into some untethered ear buds that that launched earlier this year that have been just a huge it and and so that's something we hope to continue to build on as well more recent.
Really.
Very very recently.
As you pointed out we're now shipping amplifiers, which was nice to see those get.
Kind of a little bit of a public mentioned.
The fidelity and the power savings amplifiers themselves. It you know again like I said on the previous on a previous comment when you've got a battery that's that small every year here really counting electrons and every microgram matters, so being able to deliver a loud and an immersive sound with the absolute minimum.
When you're playing minimum standby current so forth is.
It's really a nice piece work engineering team were pulled off in concert with customer.
We've got a pretty wide array of devices that are applicable across headsets have all sorts.
Untethered ear buds over the air Bluetooth Wired us be wired other digital interface.
So you know that that broader market took off much less quickly them weve imagined it would over the number of years ago, but there there are certainly our pockets of high volume opportunities emerging that.
We're kind of pivot and make sure. We're we're well positioned to support and sand good signs that that's the case.
Great enough for my follow up I Wonder if you guys could disclose maybe the last 12 months a revenue from Mems. So we just sort of assessed what what's coming out of the model and then secondly, I wonder if you could maybe speak to the unique IP. There is this it sounds like you're evaluating options. So.
Just something that could potentially be sold how scores of resources it relative to what's out there. Thanks.
Yeah, you I mean, you can as you hopefully we're doing already you can approximate the revenue to be very very close to zero. It certainly was de minimis over the past 12 12 months or so.
The the IP, we have developed and the capabilities, we have developed or ranged from production test capability that is truly remarkable and ability to test.
Caustic performance live into production environment at a very high volume very low cost.
You know a wide array of patents.
And and frankly, we've moved the state of where our production readiness is significantly far forward. So you know again as we say in the latter we're evaluating all the options that could be a it could be a big deal like able to you know at good derive some transaction for the overall umbrella.
It could be a is as unexciting is selling off bits and pieces of it here in there.
But certainly we're trying to maximize.
The the benefit to the company and also with an eye towards.
Some of the people involved that have done a really fine fine piece of work along the way.
But at the same time.
It's it's the case that we're you know any any positions that were unable to fill those people are just positions were out trying to hire for at this point because we've definitely got that familiar feeling that we've had in previous years, where there's no way, we could staff up faster over.
Anything close to what we'd like to do out of what's in front of was.
Your next question comes from the line of Christopher Rolland with Susquehanna Internet.
[laughter] plus.
So congrats to Ah to the team on the upside there, particularly in.
In a tough environment. So I guess I have two questions one for Jason and one for Thurman So Jason.
As we talk about Oh in the latter you talked about amps and you also talked about Nexgen haptics, if I'm reading that correctly is this a follow on park to your first 55 nanometer part and if so.
How is that HAMP different and then also is it a specific haptics part I knew haptics follow on as well and how is that definitely from yep. Thanks.
I think what we're talking about if I remember that section correctly.
Isn't new haptics amplifier, we have we did PG a new we've got a number of new apps.
Audio amps are the ones, who mentioned shipping in untethered ear buds for example.
We've developed a couple of <unk> developed and taped out a new amplifier for the broader market for audio.
And then additionally, taped out and have gotten back a an amplifier haptic amplifier that basically a expands kind of on a theme that we I think talked about on last call where were you know if you think about a haptics system, there's a sensor.
You measure something whether it's for us or you know gesture or some other thing you do some processing on that and then you feedback feed that back into an El Rey to actuated system and give the users some some feedback.
And what we have done previously the bulk of the.
Business in our haptic is kind of the signal processing through the the haptics driver through the l. or a driver, but there's other pieces of that system for us to sweep up to make the system design simpler to make the overall bill of materials, lower but hopefully capture larger piece of it for ourselves and so thats the device that we take.
The out within the quarter is kind of geared towards towards again sweeping up more in that system. Its it is a little exploratory in us. It's one of those things everybody. It makes handsets got a little different idea of.
What kind of sensor they want to use and you know how much of it they want integrated into the sensor over here in the allergies over there that can have an impact on.
System architecture, so, but it is it's an attempt to have a broader and broader portfolio devices that are applicable no matter. How somebody is trying to go about implement that kind of function.
Great. Thanks, Jason and then Thurman I in the latter he said that you expected to ramp inventory into the December quarter, I guess to continue to fill ongoing demand is what you guys said, but you know with my history with you guys in kind of looking backwards through a lot.
Through the years here you guys almost always ramped down inventory in December and I guess intuitively that that make sense. You know the first half of the calendar year, you know what your big customer is typically softer for them, but but this seems different this year as you're ramping inventories in into December .
Am I looking too much into this.
You know why is it different than than traditional years and just this tell us something about some sort of change in seasonality.
Or some sort of expectation for for Q1. Thanks.
Well part of this is remember you got different launches at different times and you have different a ramp schedules than maybe we have had historically if you look three or four years ago with do you know.
With customers coming on and ramps happening earlier in the season, plus a our largest customers no longer ramping just wants or with one project or things like that so.
The inventory then is is really adjusted for whatever we're seeing in terms of of demand for the for those but it's not a real seasonal change. It's just meeting the needs that we see from a from a forecast standpoint.
Yes, I'd add to that to you got to incorporate the fact that we clearly kind of just be beat the high end by a lot. So that puts us at a position of inventory that you know naturally is lower than we would want to be normally so that kind of can have a.
Distorting effect on the trend.
That you're seeing there.
I bet, but also I wouldn't I would not read too much into it one way or the other.
As a reminder, if he would like to ask a question. Please press Star then the number one on your telephone keypad again that discard any number wine. Your next question comes from the line up for Rick Schafer with Oppenheimer.
Hey, guys. This is way mark on the call for Rick Congrats on the quarter and thanks for taking my question for.
So you guys have done a great job diversifying away from your largest customer and expanding across Android platforms, but can you tell us a can you provide some more color in terms of customer traction in Android devices this quarter.
Well I mean that we thanks for that we started shipping to new customers in the Android space. We've continued to see some strength from the recent developments, we've had with audio amplifiers for Android, but also haptics.
Both of which are relatively new in the company's history.
So it's really you know engagements largely across those product lines.
You know, we're certainly opportunistic.
With the other other devices, but that's that's been a.
Those those devices were specifically designed to be in easily integrated into the Android platform and we've seen a lot of benefit from that as we've engaged with folks, particularly in China.
We did recently launch.
A relatively recently launched flagship in Korea adopted our haptics for the first time, so that's exciting.
And that adds to the momentum that we've had there what's the move to the stereo audio half, which was a brand new.
Brand new win for US in Korea earlier, this year, and we followed that I'm kind of the second half of that customers flagship offering I'll point out to that where are our historical smart codec offering with a their korea customer largely went with their own a pea.
Both the stereo amps as well as the haptic amplifier span both their own apps processor as well as.
The folks from San Diego, So you know that that kind of gives us some higher volume on that side.
In addition to hopefully continuing to make progress on the mid tier.
Okay, great. Thanks for that I'm asked for my follow up with if we leased up in new wireless in New York Airfones I'm. Just wondering if you could you guys have any and see content here and if so how do you see the lifecycle of this product.
Oh, I think we've answered that one pretty thoroughly no. It do we have new content in those earbuds and we're super excited about that it's not ANSI content and.
It's just a different design choice from the customer and we're excited to have content in there for the first time. So that's a big positive for us and certainly well along with the devices. We have a content on from some of our Android customers. You know hopefully that's a platform we continue to below.
And again, if you would I could ask your question. Please press Star then the number one on your telephone keypad.
And there no further questions at this time I would like now to turn the call ever to Miss Chelsea Heffernan.
Thank you operator are there are no additional questions. So I'll turn the call back to Jason.
Alright. Thank you Chelsea in summary, we are pleased with our results in the September quarter, as we experienced stronger than anticipated demand for certain components, which drove.
Revenue in.
Yeah meaningfully above our expectations with a strong commitment to delivering long term growth. The company is investing in key technologies executing on our product roadmap and broadening penetration of our target markets, which we believe will contribute to the company success in the coming here.
I would also like to know the we'll be presenting at the NASDAQ Investor Conference in London on December 3rd.
I live webcast at the conference will be available at Investor not serious dotcom. If you have any questions that were not addressed today you can submit them to us via the ask the CEO section of our Investor website I'd like to thank everyone for participating today Goodbye.
This concludes today's conference call you may now disconnect. Thank you for your participation.
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