Q1 2022 Cirrus Logic Inc Earnings Call

Thank you and good afternoon, joining me on today's call is John for site, Cirrus logic, Chief Executive Officer, and Chelsea Heffernan, our director of Investor Relations.

Today, we announced our financial results for the first quarter of fiscal year 2022 at approximately for PM 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&A session and ours.

All available at the Companys Investor Relations website at Investor Cirrus Dot.

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

Lease and shareholder letter issued today, which are available on the Cirrus logic website.

And the latest form 10-K, as well as other corporate filings made with the Securities and Exchange Commission for additional discussion of risk factors that could cause actual results to differ materially from current expectations.

Now.

Now I'd like to turn the call over to John.

Thank you.

So Luckily for limited Q1, FY 'twenty 2 revenue of 273 global involves up 14% year on year, driven by higher smartphone volume and Android content gains and smartphones and an uptick in sales and laptops.

During the quarter, and we made great progress and both accelerating our sales momentum and executing on several of the strategic initiatives that we believe will position the company and for sustained growth and the longer term.

We increased penetration of our Android customers ramped shipments for the leading laptop OEM supported.

And the adoption of new content and anticipation of product launches and the latter half of the year and advance the development of a number of exciting new devices that are expected to fuel future revenue growth.

And also remained very positive headway and the high performance mixed signal category within this product line and our largest single area of.

Both investments and growth opportunities remains power the Companys first generation power conversion and control IC, which we are currently ramping brings new technology and system level capabilities to smartphones and add significant diversity to our products and intellectual property mix.

To further broaden our product portfolio and in this space we recently.

Slide line semiconductor.

Doing so extends our footprint into the rapidly growing wired and wireless fast charging market and brings considerable long term growth potential.

We also believe the addition of battery centric charger products is highly complementary to our power conversion and control investments.

With line component.

And we're shipping in volume and both flagship and mid tier Android smartphones, the acquisition aligns well with our current target end markets, while bringing meaningful opportunities for FERC for diversification.

With our continued leadership and audio our innovations and high performance mixed signal areas, such as haptics camera controllers and power.

Component and our continued investment and building strong and enduring customer relationships. We believe we are well positioned to achieve sustained growth from the coming years.

In addition to this progress and executing our growth strategy I would also like to highlight that the company recently published exposed to environmental and social and governance report, which can be found.

And ESG website.

And doing so we formalized our ESG strategy setting up for a short and long term commitments in the areas of sustainability diversity equity and governance that matter most to our customers our employees, our stockholders and the communities and which we live and work.

We also put in place structures for accountability.

And our eighth and monitor and report on our progress and lease areas in the coming years and.

And to continue the theme of energy efficiency that unite so many of our products. We also reported on the Companys energy usage and emissions for the first time, establishing a baseline comp and footprint to help identify opportunities for improvement and to set science based emissions.

Blitzer and goals for the future.

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

Operator, we're now ready to take questions.

Alright.

Time.

And.

And as a reminder to ask a question you will need to press star 1 on your telephone.

Joe Your question for <unk>.

Again to ask a question you will need to press star 1.

First question from the line.

And.

Bamberg.

Stifel.

Your line is now open.

And.

Great. Thank you and congrats on the results, especially the strong strong guidance.

John could you just talk a little bit more about your ambitions and power.

I know initially when you sort of get into the space I think you were.

Working on a completely new function and our new application.

And now obviously, you're extending your reach.

Switching to charter.

And the technologies so.

And that helped us understand a little bit.

<unk> long term strategy and power.

As you are going to be.

And perhaps going after other sub sectors of the power management space. Thank you.

Absolutely.

Thanks for the kind words.

Yes, so I previously talked about the 3 main.

And the growth vectors for us 1 of them and is continuing to grow our strength and smartphone audio and 1 of them.

Pushing and broadening.

Broadening our audio reach beyond phones.

And thirdly developing.

More volume and revenue in adjacent mixed signal areas.

The beginning focused on smartphones.

And our initial areas and that there is Mexico.

Jason fees were around haptics, and then Covid controllers for cameras and then.

And lastly, and more recently the power conversion and control.

Product that we've been working on and obviously, what we've been working on up and still now we believe is highly differentiated.

It's we're not interested in getting into the vanilla peanut game, but it's also a custom silicon. So we are very limited and what we can.

And we can say about it and but we have talked about it being relatively.

About it being involved and power conversion will control and relatively close to the battery.

In.

The offerings, we have and the power space and.

Broad and ex the <unk>.

And market at growth from the addressable market.

In that area too.

<unk> is a piece of the jigsaw and that picture, where and what it brings to us.

As such.

Some highly differentiated technologies.

And if the current appetite and growing demand for fast charging.

As well as broadening the addressable market and having a lot of potential applicability for other markets beyond smartphones and feature.

Okay. Thank you and as my follow up.

First time line.

Or would you guys be.

Excited about the notebook market.

And then I know you've had wins and the past it sounds like youre, starting to hit and hit a bit of a biggest strength here.

So.

If you think about the content opportunity and notebook I know, it's probably a little bit less perhaps than what it is and the smartphone.

But beyond and.

And haptics are you.

Are you starting to get design wins and other.

Other products and then.

And the market.

Yes. Thank you we are accompanied by that I appreciate that market the laptop market has been.

Itself pretty blend over the past 18 months.

On the back of the pandemic.

I think a lot of the growth we've been seeing.

Is it entirely new to us and us.

And.

Partly.

Moving on.

Part of the reason for our excitement there is but it is spread across a number of.

Products, sorry, and so we've talked about the.

The haptic devices.

Being replacing and mechanical track pads, but.

Actually our laptop products sales cover audio domains as well so at this point we are designing.

For shipping.

Haptic drivers per day, and audio amplifiers into into laptops.

And if you look back.

And so where we were just over a year ago, and we have 1 of the top 5 laptop Oems.

And as our customers to day, where either shipping or designed into for either at the top.

<unk>.

Oems and we've seen a very significant.

Right.

To date, even though we have much more coming down the track. So I think it's particularly exciting to us I've spoken previously about the fact that we do believe for the real convergence and a lot of ways between both the architecture and the needs in the.

The laptop segment.

Volume and and the smartphone segment and that that obviously.

Streaming well with the strength of our product portfolio.

Okay. Thanks, just 1 last quick 1 for Thurman determine any details you could share with us on the.

Supply commitment agreement with Globalfoundries.

And any numbers that.

And you can share with us.

Okay.

We're not.

As you saw and 8-K, we Didnt release day members we have.

And we did talk about.

And the prepaid and the and.

And the reservation fee, which we.

We can talk about in.

In terms of pricing for.

And that we got on and certain areas and so forth.

<unk>.

A bit sensitive in terms of competition and other things for us to talk specifically about a third and what I heard.

And to that sorry.

And Im particularly excited about this.

And that.

And that that agreement is secure for us and in a time of really overwhelming demand and a lot of challenge to meet that demand.

And that secures for us a very significant increase and our wafer supply and allocation in the coming year over what we've seen this year.

And that's.

And that's against the baseline where what we had this year is up.

Meaningfully on last year as well.

So it really is very supportive of continued momentum.

And.

And supportive of the strategic growth initiatives that we've talked about.

Sounds good congrats again, thank you.

Thank you.

And your next question from the line of Ruben Roy of West Park Capital. Your line is open.

Thank you thanks, guys for taking my questions John I wanted to follow up firstly on the laptop discussion and you have inventory.

And just kind of wanted to dig in.

And a little bit more and the shareholder letter you were talking about particularly strong design momentum and you talked about getting into more tier 1 Oems et cetera.

Also have.

Some discussion about operating expenses going up as you're expanding your power related products team you've got the line acquisition it sounds like.

Yes.

Real need time and re.

I would say real time need for a new.

New products and expansion and for laptops is this scenario and then kind of as you look out 12 to 24 months, the laptop market and it's sort of a primary area for the power products or is it going to be a mix between smartphone.

And laptops.

I think thats, a really great question up until now we've really talked about the laptop opportunity is being released.

Related to our audio products and the haptics products, but.

In particular the line acquisition.

And the technologies.

Come along.

<unk> phones at all.

Focused on enabling really fast charging.

Seem to have for sure a lot of losses.

Relevance and appeal and the and the laptop market as well.

The primary target for that.

And in line and products today.

And the.

For the market.

And part of that is just <unk>.

Reflective of the fact that that was a relatively small team and so you can see our desire to invest and the power space to scale up to meet the demand.

<unk> line.

And we're seeing and that we see for those fast charging solutions initially that revenue.

Associated with power is going to be driven mostly by smartphones, but I do believe there are going to be significant opportunities in the laptop space for the power and charging solutions as well.

Very compelling idea to me I would.

I would love I mean, who wouldn't love a laptop and charged really quickly I think that's.

And that's a very easy thing for consumers.

Right.

So that will in time for us in a position of.

And having a very compelling growth spread of content across audio haptics and power and charging.

Targeting for laptop market takeaway to hopefully help continue our growth.

Okay. Thanks for that and as a quick follow up just on.

And I don't know too much about that.

For the company, but it seems like most of their revenues that you guys are expecting kind of over the next year coming from the Android smartphone market is that correct number 1 and number 2 can you give us an idea of what the partial quarter of revenue contribution will be for the September quarter.

First of all yes, you're right.

And the revenue.

And all driven by by Android devices there.

And it's going to be the case to begin with the line and take holidays.

We havent broken that out by quarter, but what we have said is that $60 million would be the rough.

Contrary.

On line item over the remainder of the fiscal year between deal closure and the end of the fiscal year deal closed on July 20th.

So you've got a couple of months of the present quarter and then.

The back half of for the fiscal year to cover that $60 million.

Contribution to volume seasonality.

Typically lyons logic quarters are going to be the December and the March quarter, just given the nature of the customers that day, they selling to so you should be able to triangulate from that for something that fits.

And that's in the right ballpark.

Right got it thanks John.

Thank.

From the day.

Thank you next question from the line of Blayne Curtis.

Barclays.

Your line is open.

Hi, guys. Thanks for taking my question. This is Tom O'malley on for Blayne Curtis.

And.

And the and the release that you guys put out and you kind of talked about gross margin trajectory for fiscal.

For your 23% below your long term rate.

Is that related to the new agreement with global or can you talk about whats driving that gross margin profile down in fiscal 2003rd year.

Well I mean, we did mentioned and water that we've seen we are seeing supply constraints and we are seeing.

Increased prices and we talked about that for a while as we move into as.

As we get into fiscal year 'twenty, 2 for US, which is the beginning of the year.

The cost associated.

<unk> are going to and we expect to increase and it's not just with 1 particular.

Particular.

Supply partner I mean, this is across the board and Theres a lot of complexities and that and really this was just a directional kind of.

The comment that we wanted to make that our longer term models as it has been and 50% and we've talked about that for a long time and this can.

Take us under that but.

All of that said, we will be working and doing things to maximize our margin choices.

Have so that's pretty much where we are there.

Thanks, and then John not to beat a dead horse, but it's helpful on the $60 million that we saw before but maybe.

Maybe that's just urban as well can you help us understand the cost.

Obviously, a pretty significant step up into the September quarter.

Specced with the addition of the new business you see some ramp up there as well and December and March can you help us kind of frame what the cost increases may look like from an opex perspective for the rest of the year due to line.

Yes.

And then some and add little more color and a second but.

And just just to paint the picture there.

The the line team is that 35 folks, but we're also.

And.

And having experiencing a pretty pretty significant.

Revenue acceleration on that side and so.

And given the opportunities in front of them.

And we would like to we decided that we would like to expand our R&D and the power space.

And we're able to have.

Really strong hiring period and as.

Additional to the line acquisition so over the past few weeks, we managed to bring in something close.

260 engineers focused on the power and charging space for us to help with that initiative, which is which we're really excited about it but that's the bulk of what youre seeing there and the and the cost step up and the guidance, we've given all that for them and add a little more color and a note on that I mean 3.

And a half and going into that was nonrecurring.

Additional costs, so that's not a.

A way to look at the run rate you.

You could take the guidance that we've shown and pull that out.

And we would expect as we see a full quarter of these expenses, we should see a step up next quarter and overall opex and through.

Through the.

Slight increases but.

That's really the primary.

What's driving it is the increase from head count and the costs associated with that.

Thanks for the color guys and we continue.

We continue to invest beyond dose. So the year is not over and we will continue to continue to invest.

And.

Product development.

Thank you and our next question from the line of Ananda Baruah.

New capital your line is open.

Hey, good afternoon, guys. Thanks for taking the question.

I apologize I jumped on a few minutes.

I'll start out and get another call. So this is actually been asked already but.

Is there an opportunity or can you frame the opportunity potential opportunity for closed loop controller.

Technology.

And the Android space going for it or at some point and the future.

Our initial.

For opportunity around that and this has been.

And in the custom silicon space.

As you know and we continue to see plenty of opportunity to enhance that and grow the feature set and growth value in that part of our business over time.

And.

At this point, that's the major focus for us and maybe and time. There are there are opportunities outside of that and the general market, but right. Now we're just concentrating on the biggest opportunities in that space and from the base and that very much and the custom silicon debate.

That's really helpful. But is that also.

And also apply that nothing would necessarily preclude you in the future from going from from entering the Android space.

I wouldn't say nothing because.

We always have to make some pretty difficult choices.

Which opportunities we select relative to the pool of.

R&D resources, we have for example.

Very excited about the path that we're on with that product in particular.

It's obviously something the team is incredibly proud to have been a part of enabling such a compelling and camera experience.

And 2.

To see that over time.

And you could grow and value.

And and hopefully be.

And as a prominent in our customers' marketing and promotion as it has been to date.

Certainly help us help.

And help continue to drive our revenue and success.

That's really helpful context, and I appreciate.

Appreciate that and I guess, just a quick follow up is with regards to the guidance and again I apologize. If this was addressed before I jumped on but could you talk about.

And what the drivers of the incremental drivers of the guidance are.

And so really nice guide up sales of love to get the.

And can ship the order of magnitude.

<unk> continues to that thanks.

Yes, and in particular the guidance is reflective of.

And I was getting into the.

Typically the.

Strongest quarters of the year.

Ramping a lot of new content this year with our power conversion and control.

I see and then obviously.

Going through the second cycle of our closed loop controller for the cameras, which as that moves into its second cycle is obviously going to be prevalent across more models represent small volume and all of that adds up to a pretty large number.

You can share, but it's just in that space alone. In addition to that as we've signaled we have a very positive path.

Revenue momentum and Android and and the laptop space as well and what it is.

Meaningfully up on last year, but admittedly.

Last year, we felt the strongest year for Android.

Just across the board for the entire Android market was.

All other the shelf last year, so even if you compare it back to Ed.

FY 'twenty.

Our previous.

This quarter, we've just reported on and it's still up by about 30% relative to what we delivered and Android So Android.

Android and critical metrics as well and that's also still reflected and the guidance for the coming quarter.

And that's really helpful. I really appreciate it thanks a lot.

Next question from the line of Matt Ramsay.

Cohen.

Okay.

Sir your line is open.

Yes. Thank you good afternoon, everyone.

Okay.

John and I apologize there is a bunch of calls going on Tonight. So.

Already asked and I apologize I was.

Please proceed you guys did the alliance acquisition.

I wonder if yourself with them and might talk a little bit about.

The valuation that you were.

And still has acquired the company for I guess the thesis around.

And expanding IP and.

And products that you can potentially leverage with your customers.

I was surprised anyone can buy anything for 3 times revenue and semi for these days so.

It would be interesting to hear your perspectives on how that process went.

We're able to and then the really attractive valuation and you were able to provide the company for thanks.

Thank you Matt Yes, we also feel that the evaluation is really solid relative to what the opportunity.

We see there is in both the near term and the long term I mentioned.

And.

Great trends from a revenue growth perspective.

It's a really solid team that has built some very very good customer relationships. So we're excited about that.

Yet the process of getting there I guess and getting to the valuation that everybody was happy with.

As is always a complex and so I think there was all sides and recognize that was a particularly good fit here a lot of complementarity between what we were doing.

And what the line seamless.

It was.

Developing and bringing to market some and I don't know if you've got any other particular color to add to that.

And it's difficult to get into real specifics.

We are.

And we landed on that figure with with.

And with the investors, but but I think I think all parties.

And really really positive, but the opportunity and we've.

Had a very solid relationship with the line team for a couple of years that.

And there were certainly extremely excited.

Sorry.

Joining join us and become other serious.

Thanks, John and I appreciate it.

And I guess for my follow up question.

And I know some folks had already asked on the call about gross margin in fiscal 'twenty 3 that you guys outlined and the shareholder letter I Wonder.

Okay.

No. There is some products on the comm and you guys have and announce the timing for for some of those yet but there is some work being done on 22 nanometer and theirs.

And also an increased shift and mix toward.

And maybe non smartphone opportunities.

And mixed and mixed signal.

And if you could just.

Walk us through maybe a little more detail and what's driving some of those margins or it is all on the input cost side is there no mix element to it.

It's really on the cost side Matt.

And some of the movement, we've seen over the past few quarters has been as we noted at the time more related.

Product mix and.

Anything new we have coming to market and broadly supportive of the corporate model and.

And if.

And youre going to have.

Margin challenges obviously.

Try and you would prefer to have is is where you.

And we're working on costs relative because people.

And then wanted by yourself and we have a lot of demand for our for our products.

But a fairly complex supply environment, where we anticipate some continued headwinds and.

Taking us taking is potentially below the $50.

So we wanted to get out and some of that and.

And.

To just leverage metrics that for you.

And the.

And the demand side is.

Very very robust and the new products that we're bringing to market.

And you see supportive of the overall business model for Coca model that we set out.

Thanks, very much for the detail John.

And.

Thank you.

Next question from the line of.

Luke and John.

And I'd.

Your line is open.

This is Chris Rolland actually from <unk>.

From Sig.

For him and you talked about some supply.

I appreciate it.

Are these.

Issues with potentially your own supply chain or are you looking kind of downstream or upstream.

We had some comments last night about the handset supply chain.

And perhaps some constraints there.

And stream could elaborate at all that would be great.

And maybe I can jump in on that when we talk about the constrained supply environment.

I would take that pretty simply we.

We could just sell more stuff and we.

We are currently selling if we could.

And you'll get more free foundries get more for assets.

But principally comes back and wait for supply Chris.

Chris that's really.

The limiting factor on our sales and the way to think about that and relations with our customers.

And and.

And the general and shape of our business is that when it comes to our logic customers and the major strategic relationships we have.

We have.

We put a lot of effort and we have very experienced team working on the long range planning associated with that securing capacity.

Looking deeply with our customers about foundry partners to make sure that we have everything and the need for our.

Biggest products not biggest customers the demand.

And such.

Working to supply as much of it.

Is it 10, but but invariably that stripping away for supplies is more on the kind of short term.

Relatively short planning horizon.

Parts of the business with.

A bunch of our other customers.

Understood and.

With John while I have you looking forward call. It 1 to 3 years something like that.

And are the products for the product categories.

The year, most excited about to drive incremental for incremental growth for for Cirrus here and.

And if there are new products.

And you haven't.

Disclosed yet.

Could that be a driver as well.

We're very excited about a whole host and things on our roadmap, which for obvious reasons.

And it really limit the.

The amount of detail.

Share on.

But.

Give you the broad strokes.

Really believe there is opportunity to.

Continue.

With the success, we've been having in the audio space and smartphones and expand that to other areas I mentioned earlier and the coal just just how receptive.

And found customers and the laptop market in particular for some of our audio and.

<unk> solutions.

We will continue to drive the audio.

Business for Us we've seen good progress over the last year, especially in tablets as well and then and Wearables.

We have audio and other technologies.

And in most of the AR and VR products for the rest of it so if that market ever really catches fire I think will be very well positioned.

And alongside that we're very very excited about what we can do and the in the high performance mixed signal and space.

Had.

Notable success would be.

Politically controller.

But now were bringing to market and the back half of this year and.

And our power control conversion and control I see something that has meaningfully higher value on a pay for unit basis, and the closely controller and Thats something that we can build on so and the conversations we have with customers around that.

Total LNG there is a lot to do that so we have a very big to do list we have more.

Test IP and development and test vehicles and and.

And a very rich roadmap for products that I think bringing the Lyon team into the Cirrus picture has only added to that they have a really compelling set of fast charging solution.

Technically I think being able to.

Explore how is that.

And that complements our product portfolio today and also the possibilities integrating that.

With other products that we have as we go forward is really really exciting and that's going to continue to grow our content.

Is.

And the Oems.

And the in the Android space and with other parts of the general market and that.

And that's going to be really positive from a revenue perspective.

Thanks, Sean.

Yes.

Our next question from the line of Rick Sheffer.

Open timer and your line is open.

Hey, this is Andy.

Solutions for Rick.

My question.

To start I, just wanted to touch on the.

Annual growth guidance. It sounds like you guys are still expecting acceleration.

And the last year or last quarter, you talked about acceleration for the year kind of on an organic basis and now.

And now you layer, and then volume which my.

My math is about little over 4 points of growth.

That kind of puts you guys and then.

Term double digit growth for the year and it sounds like a lot of other things are going well.

And the Android and laptop perspective, but could you guys just give any other color on how youre thinking about growth for the full year and.

And I'm.

For wafer and wafer supply is moving out as well, but from what other puts and takes are there that.

Our factoring into that growth.

Well I think for a summary was pretty pretty spot on there actually.

The initial products, we made which we reiterated.

And this quarter of commentary was.

We are anticipating accelerated growth.

For the full fiscal year, So we had 7% growth in and fiscal 'twenty..1 we anticipate to be ahead of that for the full.

Fiscal year 'twenty, 2 and we made that comment before we layer into that so we're still feeling.

Very upbeat about that.

Even with some relatively conservative assumptions about the market. Obviously, there is a lot of variables.

But we don't control.

But from the point of view of your comments on the supply chain.

Any supply chain overhangs on that when we're guiding we are really.

Taking everything into account for the guidance for the quarter and reflects what we have confidence that we can supply and where we have.

Yep.

Most of the material for the quarter is obviously going to be and flight by the time that we got it.

But then as we look further out we feel on very sound footing with our foundry partners.

And.

And the rest of our supply chain.

When it comes to making those comments about growth.

And a great position and then obviously entering into.

A strategic supply agreement for.

And with foundry partners.

Wafer supply and that represents a pretty significant chunk of our business.

Business gives us added confidence and the ability to grow next year given that that's a that's a significant step up and I'll wait for allocation as we go into calendar 'twenty 2.

Okay great.

Really helpful and then.

And as we think about the ramp.

And the new power control I.

With your biggest customer and its fall.

I think you mentioned and the path that.

Not going to be included and full.

Full portfolio of the ramp.

There any way to think about which models are going to include it.

Higher and to go broader than that is there any other.

Any other color you can add on.

That product.

Yes, I think the way to think about it is okay. Okay number 1 if we did no when we wouldnt telling you because we don't we don't disclose details of it.

And I don't know us.

Yes.

And things elsewhere, and which I.

I think I can I can hit on now.

Number 1 that we think this is naturally.

<unk> products, which will have a 1 to 1 relationship with.

With the devices that it's in.

And there is a reason for for 1 day and every problem.

And it's about $1 for each and were making a lot of them, which would be broadly consistent with the wall to wall and attach rate from from get go.

Okay, great. Thanks for taking my questions.

Thank you.

Okay great.

Minder to ask a question you will need to press star 1.

On your telephone and Dan a question. Please press star 1 on your telephone next.

Our next question from the line of rich window heel of net Hum and your line is open.

Thank you and congratulations on the acquisition of line and I think thats it.

And really good acquisition and just staying on.

No.

Business.

Wondering if you could give us a sense in terms of its historical growth rate and you had mentioned rely and that is going to generate about $60 million.

You mentioned that.

And there's a lot of business there and the ramp is accelerating any sense in terms of what it was historically.

And.

How do we think about that ramp going into the next calendar year, what is going to be the main driver is it mainly going to be increasing the attach rates.

These.

Power Ics and.

And the Android market or is it going be expansion outside.

And Android.

And so first of all I'm not sure the historic growth rate.

Is especially meaningful given they're pretty small company.

And there has.

Been very recent rapid growth and the fast charging market. So obviously the gradient and of that.

And most incredible but if you.

Too bad and growth drew a straight line on it.

Colorado.

And so really just.

Over the past year, and a half <unk> seen a couple of years and <unk> and incredible acceleration of demand and that's really driven by the fact that especially at the higher end.

And devices, there's a lot of competitive differentiation around the speed of.

Phone charging and the user experience, but there was a low.

And the coming year, I would say that that that is going to be driving most of the <unk>.

Revenue and and.

And design wins for the products.

And with the line team developed.

There is still plenty of headroom and in the Android market for continuing that momentum.

Alongside which we of course want to be developing products will take ex solutions for other markets, where we think the technologies.

And what I mean by that is that.

And.

The speed of charging and the amount of power.

Into the battery is still increasing meaningfully and still.

Is is going to go through a period, where it's stepping up higher and higher and that drives the demand for higher value content and so if you look across.

And the products.

<unk> line and selling into and.

And the kind of.

Tiers of value associated with entry level, and mid tier and flagship level fast charging it can be anything from 50 standard bias up to $2.50, each day and device.

At the at the top end.

Differentiated very fast charging.

So the targets and the performance bar at that top and it will continue to move.

The primary goal will be to continue to serve that and to capture as much of that value for possible and alongside that as we've said that we believe for really great opportunities.

In.

And other battery devices, such as laptops and beyond as well.

And then Thurman.

And last quarter there was.

Discussion around the lead times being different for the camera controller.

Versus the other.

And just like the smart codec and the lead time for the camera controllers were shorter and that caused a difference in terms of timing of revenue.

Which led to.

Some differences relative to past seasonality I'm wondering how we're thinking about the lead times for for camera.

And smart codec in the September guide.

Well I think what we talked about last quarter is a different supply chain.

Route so we normally sell and through the contract manufacturer directly with the camera controllers, we sell into a module maker, who then sells.

That module and so.

And for US It was an adjustment period of understanding what those what that process look like we would recognize revenue as we sold that into the.

And our module maker and.

And but that timing didn't know.

Matchup nor did b.

Vs or the orders that we're seeing and and the backlog that we were seeing and Thats. All that we said we are getting more and we've got and more comfortable with it we understand this much better as we're working through the process and so I wouldn't read anything into that we think that.

That's not really going to.

<unk>.

A lot of what you see from our results this year.

Okay, great appreciate it thank you.

Sure.

Thank you next question is from the line and Tony standard of Stifel.

Sir your line is open.

Yes. Thank you.

The chain and I just had a follow up on volume and just kind of trying to understand the market opportunity.

So.

Mentioned fast charging.

My understanding a little bit of distances and wireless charging.

And and.

And I assume that their products are mainly and the device itself and modern.

GAAP.

Obviously right now there is a big move towards again, so if you could just elaborate on the market between that'd be great.

Right, Yes, and <unk>.

Got it absolutely right, sorry, Gan and is appropriate for the wall side, it's not appropriate for the phone side on the other device side charging.

And yet.

Apologies for for.

And for a whole host of reasons.

But the switch GAAP architecture that.

That rely on half.

On their Cmos devices is kind of leading edge of what you're seeing and cash charging for it for.

Smartphone day and.

And that can be used in conjunction with either wired and wireless charging.

Why are charging and it's clearly more efficient.

The the efficiency metric on the whole is 1 of the key things about these products because if you if you look at what what's the limiting what the rate.

Limiting.

Factor for the speed at which you charge and mobile device and wanted to have 1.

And the most critical things as heat dissipation for thermal bucket that you have to work with.

If you have a very efficient power conversion there and you are generating less heat and then you can put more power for the battery for given.

Total budget, there's 1 other things where line has.

Demonstrating leadership is and the efficiency of its charging technologies and that also matters a lot and in wireless and the wireless space as well, which is kind of inherently less efficient.

But again, it's something where we're at.

The.

The speed.

Efficiency tradeoff for us.

This technology is very attractive.

Got it thank you John.

Thank you.

And again.

And to ask a question you will need to press star 1 and your telephone.

And again to ask a question.

And then you will need to press, Taiwan, all your telephone.

There are no further question.

Now I'd like to turn the call over.

Chelsea and Hernan.

Thank you.

There are no additional questions.

And I'll back to John.

Thank you Chelsea.

So in summary, and the June quarter, we significantly increased sales and smartphones laptops and other products, while also making great progress on several of our longer term strategic initiatives.

Those included the ramping of our power conversion controller IC and the recent addition.

Acquisition of line.

We expect these initiatives to price to drive growth of our high performance mixed simple business diversified range of products that we offer and meaningfully expand our addressable market.

With a strong pipeline of audio and high performance mixed signal products ramping in the coming months, we continue to anticipate accelerated.

Growth in fiscal year 'twenty 2.

I would also like to note that we will be participating in conferences hosted by Keybanc and Oppenheimer and this quarter. Please check our investor website for details.

If you have any questions and will not addressed today and you can submit them to other side of the ask the CEO section of our Investor website and.

And I'd like to thank everyone for participating in the course day Goodbye.

Thank you and that concludes today's conference. Thank you everyone for participating you may now disconnect.

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