Q4 2020 Earnings Call

[music].

Ladies and gentlemen, thank you for standing by welcome to the Cirrus logic fourth quarter in full fiscal year 2020 financial results Q any session.

At this time all participants are in a listen only mode.

After a brief statement, we will open up the call for questions from analysts instructions for queuing up will be provided at that time.

As a reminder, this conference call is being recorded for replay purposes.

I'd now like to turn the conference call over to Mr. Thurman case, Chief Financial Officer, Mr., Keith you may begin.

Thank you and good afternoon.

Joining me on today's call is Jason, Rhode Cirrus Logics, Chief Executive Officer, John Fore sight, the company's president and Chelsea Heffernan, our director of Investor Relations.

Today, we announced our financial results for the fourth quarter and full fiscal year 2020 at approximately four 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 website webcast of this QNX said session are all available.

At the company's Investor Relations website at Investor dots here of stock comp.

This call will feature questions from the analysts covering our company as well as questions submitted to us via email at Investor Relations at Sirius Dotcom.

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 expressly disclaims any 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 and shareholder letter issued today, which are available on the Cirrus logic website in the latest form 10-K, and 10-Q as well as other corporate filings made with the Securities and Exchange Commission for additional discussion of risks factors that could cause actual results to differ materially from current expect.

Patients.

During the call over to Jason.

Thank you determine.

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.

First I'd like to provide a brief update oncogenic team.

Cirrus logics priorities have been to ensure the safety and well being of our employees their families and our communities worldwide, while maintaining business continuity and continuing to provide outstanding support to our customers.

We would like to thank the entire Cirrus logic team for their efforts and cooperation over the past few months that have enabled us to rapidly shift the majority of our workforce to working remotely across the organization everyone has done an excellent job adapting to a new work environment, while remaining highly productive.

Turning to our results. The company reported 25 20 revenue of 1.28 billion up 8% year over year growth was driven by content gains primarily in smartphones and to a lesser extent higher unit volumes.

We are proud of our accomplishments this past year as we increased the number of components shipping into smartphones gained share in tablets, wearables and truly wireless headsets and introduce numerous new components to address opportunities and voice audio and other adjacent markets.

With approximately 600 million in cash and no debt, we're confident in the company strategy and strong customer relationships and believe we're in a strong position to weather the storm and emerge stronger off over the long room.

Before we begin the Q and I would like to also note that while we understand there's intense interest related to our largest customer in accordance with our policy, we do not discuss specifics about our business relationship.

Operator, we're now ready to take questions.

Certainly.

Wanted to ask a question you will need to press star one on your telephone to withdraw your question press the pound or hash key again that is star one on your telephone to ask the question. Please standby, while we've compiled the Q and a roster.

Yes.

Your first question comes from the line of Matt Ramsay with Cowen Your line is open.

Hi, Thank you good afternoon guys.

Everyone down in Austin is hanging in there.

All that's going on.

I just wanted to ask my first question, Jason I noticed.

In the shareholder letter you talk about some some new audio stuff specifically around premium tablets and that includes a boost I see in addition to so many other architecture that typically there maybe you could talk a little bit about that sort of development of that road map, if thats something that might be more broad.

The applicable into the premium tier the smartphone market and just any kind of revenue opportunities that that kind of architecture might bring thanks.

Oh, Thanks have a good thing Thats a good point to have picked up on yeah. That's the new architecture, that's really I think probably more tablet specific.

What's referred to as a fairly recently launched professional grade tablet the larger of which features I think pretty close to a record number of our devices in it.

Really remarkable and emphasis sounds amazing.

That's that's a an architecture this.

A little bit driven by benefit of being able to spread the speakers and also the amplifiers out in a in a high speaker count application.

And also with that many speakers and that many amplifiers going on as quite a large peak currently be driven which is a little more relevant on the tablet side than the handset side, we're already providing something it were already providing stuff that's a pretty high performance amplifier why is into the handsets. So.

You know if theres always as time goes on.

The best ideas from one product line kind of migrate over to open another back and forth and so forth like that but I would expect our handset amplifier architecture to be changed too much but.

That is a design win that we've been working on for a long time.

Those devices were developed over a period of a couple of years as usual and thats need to see that get out there and get the kind of reviews is that it's gotten in terms of sound quality and so forth.

Got it and that makes sense, just as a follow up and I guess as it may be a broader two part question you guys said had been talking about.

Some closed loop controller content and some other additional content that might be ramping through the year I assume maybe some.

Obviously, there's unit uncertainty now given covidien, maybe a few schedule fluctuations, but maybe you could just confirm for us but nothing in the road map is is really changed your expectation on content and then the second part is.

No secret that Fiveg is ramping and there's a particular competitor of yours that likes to bundle.

Audio content in with its with it they peas in modems any thoughts around the fiveg opportunity.

Outside of your largest customer ads as maybe modem share shifts around if there's any thing to call out there those two things would be helpful. Thank you.

Sure Yeah, I mean generally speaking things in the near term horizon feel like they are on track to us the.

Fiveg.

We think is we're agnostic to it in a sense it doesn't directly impact us, but hopefully it drives demand for a refresh cycle on handsets.

Within Android.

Historically, the bundling thing is really more applicable to the smart codec and at this point, our smart codec exposure in Android is really pretty low.

The bulk of our revenue there as from Android or as from amplifiers, rather and haptic and going forward. Some other things that we hope to add to that the ability to bundle those out is really pretty low and in particular that competitor doesn't.

Have especially competitive amplifiers either so.

We don't we don't see that as being a a huge impact.

Your next question comes from the line touring Sandberg from Stifel. Your line is open.

Yes.

Hi, Jim as you mentioned.

Sure well back go onto it's really tough.

Estimate and we just in years there how this just Jill.

Joining me on true.

Mhm kind of more pages things.

Lee.

Sorry, just and EBIT.

Oh, sorry. This is the operator are you looking your line is cutting out how we're not able to hear your question.

Hello can you hear me now.

Yes up there we go well.

Yes, yes, yes, sorry about that.

So so yes, Jason I had a question about the investments you're making in the downturn.

Do you have any specifics there or is it kind of just staying the course and not really adjusting much that you've already doing.

I'd say it will.

The ability to invest more to to capitalize on the circumstances would probably come later for the time being were just staying the course, we've already seen some of our competitors do stupid stuff, probably because they have to because they weren't being managed in a fiscally.

Conservative way, but people announcing 10% pay cuts across the border suspension of bonuses or whatever.

We see that as it really good way to record company.

To the extent it wasn't already correct.

In any event.

So we're going to carry on doing what we're doing just like we did in 2008, we've got a great plan. We've got some of the best customers in the industry that.

Typically employees similar strategy.

And so we'll just carry on making sure we're able to deliver that includes hiring people, which we expect to have that be somewhat challenging over the next handful of months.

But we've already brought some good folks on board this current year.

Longer term, you know who knows in there in the unlikely outset, maybe we'll we'll turn some real estate seller.

Accumulators, and often into sellers and I'll be able to consolidate all of our folks back into a building or you know who or whatever it might be but it's the kind of things that we took advantage of in 2008 that still pay dividends for the company.

Did that bit are often opportunities that you don't get when when everything is gone extremely well for the overall industry. So no no specific plans on anything other than staying the course.

And then hiring one were when were able.

That's helpful and Thats My follow up fiscal 2000 was certainly a year about share gains in accessories tablets Wearables headsets.

Where it was where are we in that.

With physical 21 still be a big opportunity for those types of share against just kind of trying to understand on a relative basis.

Looking at meaning we're in.

As you continue to gain share, especially in more accessory type applications.

Sure well I mean, if it's a pretty good bunch opportunities within the high volume handsets as well, but yeah. I mean hearables. We you know you saw the progress we made over the course of of last year with a couple of big flagship folks were broadening out those product lines were working on find another customers that are.

You know that are that the source that we can we can really support new our thing wearables.

Other categories of Wearables is still in front of most still on track, we're still really super excited about it laptops are a little further out we talked about about tablets.

In relation to.

In response to a question earlier.

So that's all still good still the biggest stuff is handset related and we do continue to expect good content.

That is new from us coming in the fall timeframe I will say a pointed out on last call. There. The rosy step aside there's often puts and takes on the content story.

And we expect that to be the case this fall.

But overall, we expect to exit this fiscal year and a stronger strategic position.

Meaning this this stuff that we provider is even stickier than than what we do today and our product lines that we can build around in that meaningful content to overtime, they become product lines rather than spot products. So regardless of how that nets out in this in this crazy environment.

That's kind of how we see that stuff going on where where we are on that trajectory.

I suppose in the it given the debt was a whole bunch of those forward looking statements that third Thermon mentioned, a second ago or a minute ago.

I'll also point out that we've added a section in our shareholder letter at the end following the safe Harbor. So just in case, you tune out when you get to safe harbors.

You Shouldnt and we've added a statement in there since our 10-K won't be published for a couple more weeks, but we're going to highlight some of the particular risks we see in play given the pandemic unrelated issues. Obviously, we'll have a full set of risk factors new ones updated in our upcoming 10-K filing we spent a lot of time, preventing all these things trying to prevent these sort of.

Things from happening, but but they do happen every investors should review them and be aware that real risks in our industry.

Your next question comes from the line Blayne Curtis with Barclays. Your line is open.

Hey, Thanks to my question that maybe to start Jayson I was little confused you said that there's always puts and takes out and then if you're trying to think that's something I think most people were expecting you to add content is there something that I guess, we should focus on.

In the negative column and that I'm, just kind of curious to hear perspective, what all this disruption you said you're updating the.

The risk factors, but yes, there has been.

Some concern of delays in getting handset flexion handsets out and just kind of curious as you look at this level for this year is there anything to think about in terms of the shape of this year versus the historical.

Hey patterns, if there is a delay.

Yes sure.

Well I mean on the puts and takes there's there's lots and lots of people to read read or listen to our earnings calls. It's usually the case that there's puts and takes and so when were when I gone along paragraph like that of like Here's this and this and this and this that we're all adding.

There are categories of people out there that then we have a big red flag of there's one other one that you didnt talk about that wasn't going up under the right. So that's where that come from as usual when products haven't launched yet we can't get into a lot of details, but as I said overall I'm.

Happy with where our position will be when we are coming out the ended the fiscal year and I should point out I didnt in that paragraph of Rosie stuff I didn't talk about the content gains we expect to see.

From other new technologies within handsets in in calendar 2001, Paul the calendar 21, this is likely larger than than what we see right now that did long ways away from now so more things can change over that time horizon, but that's the plan as we see it today.

As far as the shape of this fall we are crystal ball is not that good in that I'm that as I'm sure featured in some of those risk factors.

The September to October October quarter transition is always difficult to call.

Because we're usually ramp and really heavily across that quarter boundary.

We I mean, we would expect to this one to be more so I would expect the timing to be more and influx are difficult for us to invisible envisioned.

By the time, even get to the Joel Joel I call. It I think that when it will be a more difficult one for us to provide.

Comprehensive guidance, we certainly hope hopefully be able to do so.

We have a pretty comprehensive process for determining our guidance, we'll look at all the public available information speculation and otherwise as well as all the stuff that's confidential and specific to us backlog short term a long term forecast build plans.

Bunch other stuff our goal is always to provide guidance that's useful and conservative we think thats. The case. This time, we have we have as you saw broadened the range out a little bit under the circumstances, reflecting the uncertainty we see.

But frankly, we feel and as always our recommendation as you model the midpoint and now then of course be aware.

If we ever do end up outside of our guidance range, which is really rare on the downside at least is really where it's a lot of times. The case that we don't provide an update till we get to the next earnings call.

They have my as far as the shape or when when the things that are of extreme interest might launch relative to normal I don't know yet.

Expect they will and will be excited about it and our content story is what it is and so.

What.

How that gets interpreted what was that to see we're ramping to support it already we would expect to grow inventory in support of that ramp.

So I don't see that that timing as particularly germane to the health of our business. Obviously, if its earlier that's nice but.

It'll that's not under control.

Thank you.

Your next question comes from the line Adam Gonzalez with Bank of America Security. Your line is open.

Hi, guys. Thanks for taking my question on the first one I know you'd said before and seems like some of the content gains you talked about for the second half are on track, but I was just wondering if you'd comment perhaps on.

If you interactions with customers have changed at all about future design wins, perhaps in 2021 and beyond given the broader economic uncertainty.

You just see any change in customers willingness to adopt new features beyond this year or deskins proceeding as planned.

Thanks.

Adam This is John I would say no our customer interactions have been very consistent with the way they would normally be at this point in the annual cycle for for planting and so on.

What is clear is that.

They have a Matt.

Well of additional challenges in meeting that Roadmaps and and their programs and so we're doing everything we can.

To continue to support that is being an incredible effort across the cirrus logic team.

Both the engineers and then all the teams around them, who support them in their roles to keep our customers on track or is close to that as as we possibly can.

With that product programs, but in terms all the appetite of those customers for.

Talking about new stuff planning, new stuff I wouldn't say, we've seen any significant change there I think thats highly reflective.

The fact that.

Our partnerships.

On me and our customers tend to be.

With those who are the biggest in the industry who tend to.

Manage for the long term, so we see them as hungry as ever for new stuff and as determined as ever to to deliver great products. This year index.

Thanks, that's helpful and my follow up I, just wanted to talk about the supply chain and seems like you guys have been relatively less impacted relative to some of your peers leased in the most recently reported quarter, what what exactly has enabled you guys to weather the storm better.

Outperformed there what is what about your supply chain. Thank you.

I'd say, there's a couple unique things about cerus.

So many of our products are relatively new are so much of our revenue is derived from products that are relatively new.

That.

That makes a big difference if you're a company that's got an inch deep mile wide.

Product catalog that is has been developed over a span a 20 years.

You are trying to source 40 pin plastic pita chips lead frames right now did block that's going to be really hard or you're on tester platforms that are only available in one.

Assembly test house and that what happens to be shut down you're going to have a problem.

Were modern processes for well over 90% of our revenue modern packaging almost everything we ship is wafer level chip scale.

And even in we have great large foundry partners referred to in the shareholder letter. They just did a stellar job last quarter, both global foundries and TSMC.

And on the Assembly test side work of our flagship folks in the industry and we've usually got.

A way to manufacture each particular device at multiple different assembly and test houses not so much on the fab side, but on the assembly and test side, So that gives us a lot of flexibility where.

Folks where the business is composed a little differently I, probably have got a lot less room to maneuver.

Your next question comes from the line Christopher Rolland, Let's ask that's behind your line is open.

Hey, guys forgive me if this was already outside joined a little late but.

Now that we're getting closer to the launch of the close loop controller in the fall.

I was wondering if you guys could talk.

Now the potential Pam there for that market over time.

And then also if you could give us any update on gross margins are A.S.P. or or even opex spend related.

That'd be great as well.

Yeah. This is John I.

I mean, I think previously we've talked about the ASV opportunity there is being.

Eight easiest to think of that is being amplify like and.

In terms of magnitude.

The the time there I mean, it's a degree of uncertainty about that we make products, but we don't often have great line of sight into exactly how they get configured across you know across different tiers and and so on with with our key customers.

So we'll we'll.

We'll have to wait and see on that.

But yes, the ASV wise I think we see we see that as being a.

He asked as sort of is being around to amplify level.

And just clear and comment on yeah.

Your comment on trends I would just add ASP has trended down as our volumes have grown certainly amplifiers haptics and some of those newer stuff we're talking about.

For the current year is little is lower and would would again caused volumes to go up quite a lot and and Sps to come down somewhat margin wise should be pretty consistent with where we've been running trend on the trends.

Great just related to the Tam if if maybe you guys could comment on whether you think that's going to be adopted by Android and and other handset Oems what are the.

Possibilities there.

And then maybe talk about competition would you expect competition to rise to the occasion pretty quickly here.

If there were other opportunities.

I mean, it's a it's a pretty flagship product.

It's it's often the case, the Android community or other customers would benefit from adopting stuff other of our customers are doing but they usually aren't willing to spend the money to achieve quite the same level a result so.

Never say never say never could happen over time, but thats not a primary driver of where around with that.

Yeah, I think thats.

Kind of the color.

Again, if you would like to ask a question press star one on your telephone.

Next question comes from the line of Charlie Anderson Dougherty and company. Your line is open.

Yeah. Thanks for taking my questions I will turn out to repeat one since I joined bleed as well.

There's a sort of in theory out there that you have a pandemic makes us all one subsurface his last will we'd like to use our voice.

Input.

So on occasions I'm curious.

The theory that seems logical but have you actually seen it and the pipeline or any conversations with customers that are grateful for your products and then I got a follow up.

Hey, Charlie well add to talk about puts and takes we've obviously got a two product lines. There, one which is haptics, which pretty much relies on people touching surfaces, and one which is a voice authentication and voice interface, enabling technologies, which which.

I asked people to interact with machines, where that without doing that.

We havent seen any kind of significant.

Impact on customer thinking as a consequence of that I mean, it may be just early in the game to.

Two to.

In Canada that kind of thing as yet, but as we mentioned in the latter we are certainly encouraged about the conversations and progress we've been making without customers around the secure voice authentication technology. So.

Yes, we're certainly hopeful that that can be part of.

Part of that the a user interface and user experience solutions that that help people more.

With that touchscreen interfaces in the future.

Okay, Great and then for my follow up you you, obviously have a great balance sheet right now I wonder.

Incrementally or M&A opportunities any more interesting I know the markets sort of jump back maybe valuations aren't aren't as attractive as maybe they could have been but just sort of curious on your your view there.

The other uses of cash thanks.

Well I mean, M&A remains our highest and best use of cash if we think it's a properties it's going to work out and we're I mean, frankly, a little bit probably less sensitive to valuation than we are two whether it's a really good strategic fit the quality property.

We haven't seen a lot that's meaningful I mean, we were always talking to folks who are starting to pay a little more attention to kind of the incubators type phase of things just to stay current about what's happening and where things are going.

But as far as you know needle moving M&A, we haven't we haven't seen anything.

In a while this of.

Notable.

Notable interest but were.

We are certainly keeping our ears to the ground and and.

Maybe if things get it that could be one of those things that we referred to inventories in response to Tories question about.

You know what can you spend money on.

You know if this thing as protracted and then starts to cause larger companies difficulties like the last big recession did you know weve, maybe maybe get the opportunity to see.

We'll see some carve outs and things like that there's not you know as far as standalone companies that are out there on their own that we could acquired that move the needle there is just.

Given the consolidation over the recent years, there's not been there's not that many of those that exist. So.

So it's probably some a little mark unconventional unconventional if it's going to move the needle in the short term.

Probably more focused on little tuck ins here in there, but we're pretty mindful not spreading ourselves any center geographically as well so.

No nothing really has changed there yet but that the of course is a key focus of a bunch of our folks.

Your next question comes from the line of Orange, Houston with Needham and company. Your line is open.

Hey, that's already taking the question for Rajiv Gill.

First wanted to start off basketball your voice biometric solutions and yeah can you talk about some of the traction you've been seeing in this market and I'm kind of paint a picture of the Tam that you expect in the next year as Fred Thank you.

Hi, all right well we've.

Spoken a little bit and ER.

Past calls and Latin is about the fact that there's a range of technologies, there, which gets grouped under voice biometrics.

Some of those technologies go towards just enabling the always on voice interface.

Some of them to do with a secure authentication of the use.

And some of the others such as anti spoofing our are enabling.

Detection of when there is some kind of malicious replay attack or reap a replay of a recording of if somebody's voice and so on.

So it's really a whole suite of technologies, where we are actively engaged with customers.

Looking at how are those fit into their product and ER and into their system architecture.

So I think we're you know where were optimistic and hopeful that we can get that get some of those technologies designed into customer products. We've been very encouraged by the engagement we've been having.

Over the past year there.

As regards Tam, but will you know this this market has moved slower I think than we expected as we mentioned last year I think fido the standards organization kind of putting a rubber stamp on all stuff and just generally tilting the industry more towards standards based biometrics I think that that is wong.

A significant potential enabler for the industry.

Our belief is that timewise market opportunity wise this remains a really exciting area.

Just to be able to do anything you want a with you a device via the voice interface.

Without having to use some other means of authentication is really a.

There's a case for that technology being being integrated into into everywhere that we currently used the voice interface.

Well, thank you and just a quick follow up so you previously talked about the transition from 55 nanometer to 22 nanometer.

Can you highlight the advantages of this transition and perhaps if he had been information on the timeline for such products than any color on this would be very appreciate it.

Sure Yeah. It timeline wise think of this is being some distance out when we undertake a migration of technology Dan.

In particular are a mixed signal IP down through.

The deep sub micro nodes, where.

That is a very large after that you would only on to take that if you saw really significant meaningful benefit to your customers for some product categories in particular product categories, which combined.

The.

The mixed signal IP or key parts of the mixed signal IP, we have with significant quantities of digital processing as well. So the as you go down from 55 to 22 nanometer the that cost and area, while the cost associated with your your a analog IP, which is typically going to rise.

The logic for doing are undertaking that transition is really so that you can build more processing and more smarts around.

The the analog to digital boundary.

And the reason for it for doing that processing very very close to the HD boundary is where you are doing stuff which requires this.

Extremely low latency response rate that we've we've highlighted as being a characteristic of a lot about products.

Such as haptics, such as noise cancellation.

Such as number of other things we're doing in the in the close loop control a domain.

Those categories of functionality, where you need to do or a significant degree of digital processing.

In very rapid response to to the HD.

Conversion.

There was it those are the kind of use cases that were focused on which are really driving us to migrate our IP down that we've indicated that that's you know that the product category, which sees the greatest benefit from that is around the smart codec space right now.

But obviously undertaking that transition gives us a really great platform of all our IP at a new process node.

Were in the past when you look at what we achieved on the back of the migration to 55 nanometer and then and then our amplify technology moving to 55 BCD process.

That's those transitions of being a very significant benefit to us for many years in terms of what we're able to do relative to our competitors.

So think about is a multiyear thing think about is a major a engineering a undertaking.

The one that lays the foundation for.

Subsequent generations of products and we believe meaningful advantage over over what the competition can do.

Your next question comes from the line touring Sandberg.

Your line is open.

Yes, Thanks, I just had a follow up for Thurman.

So Monday, the tax rates coming in a little bit higher than what I put the fiscal 21 and you also made reference to the.

Cares to act, let's just just wondering what's what's going on there.

Well you know the the effective tax rate.

Move around.

Any given year and we're seeing that.

But if you look at the tax rate for the year.

It was well aligned with what we were talking about the cares Act, we didn't get a whole lot of advantage out of the carriers Act, we weren't able to take it we either weren't eligible or we were it wasn't no value to us I'm on a lot of the things that were in that one of the anomalies with that though was the.

The accelerated depreciation on the lease hold improvements when you did that you've got some extra tax credits on the U.S. side, but that actually flows through our overall tax structure and we ended up.

Actually having a lower effective tax rates with offset any of those benefits. So.

We you know again, when we look at the year, there's a lot of things that affected and and there's really nothing into nothing's really changing the one thing that we didnt get that we expected moving into the coming fiscal year was.

The UK tax rate was expected to drop.

To 17%, but it actually stayed at a higher level, but that really.

Drop our rate.

Or or affect our rate because a we were already at that rate. So that's that's something that we thought we could take advantage of but we won't be able to now into the coming year, but that that effective tax rate can move around.

Very good just one quick one on the inventory looks like the inventory days of could've been lower now than when you typically exit the fiscal year and these compared to last two years I assume that was probably related to this supply chain disruption, but do you expect it.

Well, we would expect that.

We will increase inventory in that.

Again, how much inventory build depends on.

What our customers demands are and multiple ramps that happened over a multi period of time and so forth, but we do expect it to grow this period and it will began to.

With.

We can't guess as Jason.

Just talked about where the numbers are going to fall out or what things are going to look like all the way through next March quarter, So with where the inventory is yeah.

I mean, it's hard to answer when you viewed as days when you view it as absolute dollars of inventory, it's a little more.

Predictable, we would expect to grow then in advance for now.

Your next question.

Comes from the line outgrown GTL.

Yes, Thanks, and I appreciate it I take the question I am joined you little bit late show apologize. If this was asked already but regarding kind of the traction that you're seeing in the closed loop controller.

You had mentioned in your prepared remarks that you're seeing traction. There can you talk about some of the benefits of the advantages of the close of controller and I think in the past you talked about.

Hey, ASP range as well so I'm wondering if you could kind of the can explore in detail in terms of both those concepts. Thank you.

Oh, Yeah, we did actually already but I'll just the highlights for yet.

You know ASP, you think of it similar to an amplifier, it's a little more complex because it does depend a little bit on mix you know, it's up there's potentially multiple ways to to put these things in a in a system.

So that can that can vary but as far as the use and functionality. They have it will just have to wait for that to to get out there. There's certainly some rumors already that of the built and and.

Party universe that have kind of show a little bit of light as to what is being used for but suffice to say.

The intent is to deliver a pretty remarks, mark will user experience.

Uh huh.

Awesome Weve provided in the past.

And on the the untethered the digital headset.

The growth there the kind of the sharp uptick that you're seeing in revenue.

Trinity for for that market.

Do you see the net than.

An uptick in these type of headsets, given the koby situation given that people are working from home I'm a need more headphone capability.

I would say across the board, whether its tethered or untethered were we see more demand for headset type products than we would have expected definitely people are looking at whether people are looking for a premium experience because they can afford it in our own them all day everyday or are there on them all day everyday and so they need any new one of the whatever the cheapest thing is.

They can connect to their device were in kind of both ends of that spectrum and those product categories of.

Definitely done well for us.

Your next question comes from the line of Matt Ramsay with Cowen Your line is open.

Thanks for let me jump back and I'm, just a quick one thurman on on Opex on looks like you're down 6 million or something like that in the guidance from a couple of quarters ago and.

There was the men's exit and I would imagine some belt tightening given the virus situation.

But you guys have mentioned still.

He so if you could just give us a little help that as we go forward about.

Non-GAAP opex levels that really helpful. Thank you.

Well, we would look at a SGN as being something that won't grow and when can we there are ways.

To find some.

On R&D given the base that we're looking at and as a there's been no.

Hi, Jason and letter that we all can.

We can see slight.

Increases along those lines, but Ah again, we got to be able to hire people and there's a lot of different things Uh huh.

Right.

Got it thank you perfect.

And again, if you would like to ask.

Good question Press Star one on your.

There are no further questions at this time I will turn the call back over to Jim.

Thank you operator, there are no additional questions. So I will turn the call back over to Jason.

Thank you Chelsea.

In summary, as the global community continues to can front the cover 90.

In pandemic, an unknown economic consequences Cirrus logic is fortunate to have a strong balance sheet and solid relationships with the leaders in the markets we serve.

Our outstanding teams and engineering supply chain and operations are actively engaged with our customers and vendors to ensure we any production requirements and execute on new product developments and key strategic initiatives as we move indefinitely 21, we're optimistic about our ability to gain content with new and existing customers across a range of end devices with an extensive intellectual property.

Portfolio and a robust product roadmap the company will continue to invest in key technologies that we believe will drive meaningful opportunities in the future.

I would also like to note. The we expect to participate in virtual conferences hosted by Cowen Bank of America and Stifel. This quarter. Please check our investor site for all the details.

If you have any questions.

To us via the ask the CEO section of our.

Our investor website I'd like to thank everyone for participating today good bye.

Ladies and gentlemen, this concludes today's conference call.

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