Q4 2023 Cirrus Logic Inc Earnings Call
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.
Instructions for queuing up will be provided at that time.
As a reminder, this conference call is being recorded for replay purposes, I would now like to turn the conference over to MS. Chelsea Heffernan, Vice President of Investor Relations Ms. Heffernan, you may begin.
Thank you and good afternoon, joining me on today's call is John Forsyth, Cirrus Logics, Chief Executive Officer, and think naphtha Muni Chief Financial Officer.
Today at approximately four P M. Eastern time, we announced our financial results for the fourth quarter and full fiscal year 2023, the shareholder letter discussing our financial results. The earnings press release and the webcast of this Q&A session are all available at the company's Investor Relations website.
This call will feature questions from analysts covering our company. Additionally, the results and guidance.
We will discuss on this call will include non-GAAP financial measures that exclude certain items.
Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures are included in our earnings release and are all available on the company's Investor Relations website.
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.
Riding 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 a shareholder letter issued today, which are available on the Cirrus logic website and the latest Form 10-K as well as other corporate filings registered with the Securities and Exchange Commission for additional discussion of risk factors that could cause actual results to differ materially from <unk>.
Our expectations now I would like to turn the call over to John .
Thank you Chelsea and thank you everyone for joining today's call.
As you have seen in the press release in FY2023 Cirrus logic delivered record full fiscal year revenue of $1 9 billion up 7% year over year, driven by higher sales of components shipping in smartphones.
Thank you is going to discuss those results in greater detail shortly but before we get to that I'd like to take a moment to highlight the progress we've made on our long term growth strategy over the last year.
The three key pillars of that strategy include one maintaining our leadership position in smartphone audio by continuing to deliver world class products and outstanding execution to the strongest customers in the market.
Two increasing high performance mixed signal content in smartphones to build a growing footprint of products outside of audio.
And three leveraging our strength in audio and high performance mixed signal to expand into additional applications and markets overtime with new and existing components.
Looking at the first pillar of that strategy Cirrus logic remains a clear leader in smartphone over to you.
17 of the top 20 smartphone devices and DSO marks audio quality rankings used cirrus logic audio components.
In Q4, several Android customers introduced flagship devices that utilize our boosted amplifiers and we anticipate a number of new smartphones using our audio components to be launched later this calendar year.
During the year. Our team also began design of our next generation custom boosted amplifier and our next generation 22 nanometer smart codec.
Of which are now in advanced stages of development. We anticipate that these next generation audio components will not only extend our leadership position in smartphone audio but also deliver significant revenue for many years following their introduction.
Turning to the second key element of our growth strategy, increasing high performance mixed signal content in smartphones is critical for our success is it substantially expands our addressable market beyond audio.
We believe that this product line represents a significant opportunity to grow and diversify our revenue.
And to that end in the past year, we saw both our R&D investment and the number of opportunities we're pursuing in this area increase.
Over the last year progressed with RH BMS products included growing our penetration in haptics and Android along with the introduction of an updated camera controller in Q2 FY2023.
Indeed, since our first camera product was introduced in FY 'twenty. One we have grown the average content of a camera controllers in each subsequent generation of smartphones.
More recently in Q4, we completed the successful production qualification on our next generation camera controller, which is expected to ship in the second half of this calendar year continuing to build on our track record of innovation in this critical area of the user experience.
The ultimate measure of successful execution of our <unk> strategy as revenue and over the past four years, we have seen revenue derived from <unk> solutions increased from 12% to 38% as a proportion of total company sales and from 145 million to $726 million in dollar terms.
We continue to believe that we're on a path, where our <unk> business can generate at least half of our annual revenue in the future.
That said among the HB mass opportunities, we've discussed a new product that we mentioned in previous shareholder communications as being scheduled for introduction. This fall is no longer expected to come to market as planned.
We have limited visibility of our customers future plans for this product at this time, we are removing the revenue associated with this component from our internal model to reflect this change in our expectations.
And while this is undeniably a setback we are proud of our execution in this program and we continue to believe that our strategy of expansion through H BMS products provides us with many exciting opportunities.
I'd also note that our customer relationship remains very strong and we continue to collaborate on a range of technologies and products across both the audio and <unk> domains.
The third pillar of our strategy is to leverage our existing products intellectual property and capabilities in order to enable new applications and penetrate new markets, thereby unlocking further opportunities for growth.
We've spoken about the PC market as being one of these areas, which despite its present cyclical softness remains a largely greenfield opportunity for us where we believe a number of secular trends connect as favorable tailwind in the coming years.
During the year, we continued to gain momentum with customers in this market increasing the number of models were designed into and sampling our first boosted amplifier and Kodak products that optimize specifically for laptops to our customers.
We expect the first end products with these components to start to come to market in the second half of FY 'twenty.
More recently, we taped out our first laptop focused power solution.
We continue to view the laptop market as a promising opportunity in the coming years as we look to capitalize on the favorable trends and expand our share. We also continue to evaluate further markets, where our world class expertise in mixed signal innovate innovation can benefit both new and existing customers.
Okay.
In summary, we're proud to have delivered record revenue in FY2023 as we continued to execute on our strategic initiatives.
With a pipeline of products coming to market over the next couple of years and our continued design innovate and continued design innovation and both existing and new product areas. We believe cirrus logic is well positioned to continue to diversify our product portfolio and to expand our addressable market.
And with that let me now turn the call over to <unk> to provide an overview of our financial results for our fiscal Q4, FY2023 as well as guidance for Q1 FY 'twenty four.
Thank you John and good afternoon, everyone.
I'll start with a summary of our financial results for both our fiscal Q4.
Full year fiscal 'twenty, three and then provide guidance for our fiscal Q1 'twenty four.
As John mentioned, we delivered record fiscal 'twenty three revenue of $1 9 billion.
Which is up 7% from a year ago.
Strong growth during the fiscal year was driven by higher Asps as well as the continued benefit from prior your content gains in smartphones.
Were partially offset by a softening in general market and smartphone demand.
Fiscal fourth quarter revenue was $372 8 million.
Down 37% quarter over quarter and down 24% from a year ago, but came in slightly above the midpoint of our guidance range.
The year over year and sequential decline in revenue reflects the reduction in smartphone volumes.
The year over year decline was also due in part to the launch of our lower priced smartphone in Q4 fiscal 'twenty, two which did not reoccur in Q4 fiscal 'twenty three.
As well as lower sales of our general market products.
Turning to gross margin non-GAAP gross profit for fiscal 'twenty, three with $958 2 million.
non-GAAP gross margin was 55%.
Gross margin decreased year over year due to an increase in supply chain costs, partially offset by higher asp's.
non-GAAP gross profit in the quarter was $186 7 million.
non-GAAP gross margin was 51%.
On a sequential basis gross margin was roughly flat.
On a year over year basis gross margin decreased as Q4 fiscal 'twenty. Two included the benefit of selling through lower cost inventory build prior to price increases taking effect.
As well as higher Asp's.
non-GAAP operating expenses for the full fiscal year with $486 4 million up.
Up 7% year on year.
Our non-GAAP operating income for fiscal 'twenty, three was $471 8 million.
Or 24, 9% of revenue.
For the quarter non-GAAP operating expenses were $119 8 million.
At the low end of our guidance range.
On a sequential basis the decline in operating expense was primarily due to a reduction in variable compensation and discretionary spending.
Which was offset by higher product development and employee related expenses.
On a year over year basis, Opex declined primarily due to lower variable compensation and an increase in R&D incentives.
This was offset by higher product development costs.
Now, let me turn to a couple of special onetime items this quarter that impacted our GAAP results.
Number one during the quarter.
<unk> evaluated our intangible assets recorded in purchase accounting associated with the acquisition of <unk> semiconductor.
The prolonged weakness in the China smartphone market has had an adverse impact on sales of our general market battery and power products associated with the land acquisition.
As a result, the acquired intangible assets were written down by $85 8 million.
Notwithstanding this intangible impairment we continue to believe that this technology is relevant in other applications and we're focusing our investment in resources in pursuit of these opportunities.
Number two.
We have been focused on improving operational efficiency.
And accordingly have taken a number of steps, including reducing our global real estate footprint.
Product prioritization.
As well as some restructuring actions.
As such during the fourth quarter, the company recorded $10 6 million of lease impairments and restructuring charges.
As previously mentioned both of these charges were excluded from non-GAAP operating expenses.
non-GAAP operating income was $66 9 million in the fourth quarter or 17, 9% of revenue.
As expected due largely to a tax through effective from the start of our fiscal year 2023 that requires companies to capitalize and amortize R&D expenses, rather than deduct them in the current year, our fiscal year 'twenty three non-GAAP effective tax rate was 23, 5% for the full year.
And finally on the P&L non-GAAP net income for fiscal 'twenty, three with $367 4 million.
Or $6 42 per share.
non-GAAP net income in the fourth quarter was $52 6 million or <unk>.
92 cents per share.
Let me now turn to the balance sheet.
Our balance sheet continues to remain strong and we ended the fourth quarter of fiscal year 'twenty, three with approximately $517 3 million in cash and cash equivalents.
Our ending cash balance was up roughly $9 $6 million from the prior quarter, primarily due to strong cash flow from operations.
Actually offset by stock repurchases during the quarter.
We continue to have no debt outstanding.
And also I would note we have 300 million undrawn on our revolver.
Inventory was $233 5 billion.
Up from $152 4 million sequentially and days of inventory was 114 days in Q4.
As we built product to support our customers new product ramps.
I'd note that our inventory position has been substantially below normal levels over the past couple of years due to supply constraints.
As indicated in our prior quarter's earnings call, we have been increasing our inventory position in order to shorten delivery times.
Looking ahead to Q1 fiscal 'twenty four we expect inventory to increase from the prior quarter as we begin to build ahead of seasonal product launches in the second half of the calendar year.
We expect inventory to remain above historic levels over the next couple of quarters as we balance anticipated product demand and wafer purchase commitments that required us to build inventory on a more linear basis.
I would note that our current silicon products tend to ship for multiple generations of our key customers and products.
Turning to cash flow.
Cash flow from operations was $339 6 million for fiscal year, 'twenty, three and Capex was roughly $36 7 million.
Resulting in free cash flow for the year of $302 9 million.
Free cash flow margin for the 12 month period, ending in the March quarter was 16%.
Thanks to the excellent execution as well as collections performance by the team.
Cash flow from operations was $48 $3 million in the March quarter, and Capex was roughly $11 $6 million, resulting in free cash flow for the quarter of $36 6 million.
Free cash flow margin for the March quarter was 10%.
On the share buyback front in fiscal 'twenty, three we utilized $191 4 million.
To repurchase approximately two 4 million shares of our common stock at an average price of $81 16.
In Q4, we utilized $35 million.
We repurchased approximately 338000 shares of our common stock at an average price of $103 70.
After the end of Q4 fiscal 'twenty, three we had $501 1 million remaining in our share repurchase authorization.
Subsequent to Q4 fiscal 'twenty three the company utilized $23 9 million.
We repurchased approximately 274000 shares at an average price of $87 <unk>.
Under our rule <unk>, one share repurchase plan.
We expect to continue to return capital in the form of stock repurchases, which we believe will provide a long term benefit to shareholders going forward.
And now onto the guidance.
For Q1 of fiscal 'twenty four.
We expect revenue in the range of $260 million to $320 million.
Reflecting lower smartphone units and weakness in general market product sales.
We expect gross margin to range from 49% to 51%.
non-GAAP operating expense is expected to be down sequentially in the range of $114 million to $120 million.
Due to higher R&D incentives and lower variable compensation.
Partially offset by higher employee related expenses.
I would note operating expense includes the full impact of our annual Merit increase which took effect at the beginning of the fiscal year.
We will continue to control discretionary spending while investing strategically in product development to drive long term growth.
Our fiscal 'twenty four non-GAAP effective tax rate will continue to be unfavorably impacted by the tax rule that requires us to capitalize and amortize that R&D expense and.
And we expect our foreign tax credits to decrease.
As a result, we expect our fiscal 'twenty four non-GAAP tax rate will be approximately 24% to 26%.
We continue to anticipate that the impact of capitalized R&D will become less unfavorable over time.
As additional years of R&D expenses are amortized for tax purposes.
We also note that builds have recently been introduced in both the house and the Senate with bipartisan support.
That would restore full tax deductibility of R&D investments this past.
In closing we had a strong Q4 fiscal 'twenty three and our full year fiscal 'twenty three.
As we executed well to deliver these results.
Going forward, we remain focused on improving operational efficiencies.
Exercising fiscal discipline.
And increasing shareholder value.
Furthermore, we intend to continue to invest strategically in new product development as we see ongoing opportunities to increase our content and enable the company to grow both revenue and profitability over the long term.
And before we begin the Q&A I'd like to note that while we understand there is intense interest related to our largest customer.
In accordance with citizen logic company policy, we will not discuss specifics about our business relationship.
With that let me now turn the call to Chelsea to start the Q&A session.
Thank you bank, we will now start the Q&A portion of the call. Please limit yourself to a single question and one follow up operator, we are now ready to take questions.
Thank you.
Have a question. Please press star one on your telephone keypad, if you wish to remove yourself from the queue simply press star one again.
First question comes from the line of Matt Ramsay with TD Cowen. Please go ahead.
Thank you very much good afternoon, thanks for taking my questions.
Hey, guys.
First question that I wanted to ask is.
Around.
The agreement that you guys have with Globalfoundries that you guys put in place for supply.
The question I've been getting is.
There were some things that you guys disclosed tonight around.
<unk> in China.
And maybe some of the challenges that have been there in the China smartphone market.
And you discussed in the shareholder letter and John in your comments the content increase.
At your largest customer for this year that may not happen now I'm just wondering.
If there are variability in your revenue level.
With with items like that that come and go that's normal business things happen I get it.
My question is really what happens to the commitment that Jeff.
And if you could talk us through are there any.
Ramifications for margins in the medium term or do you feel like you've got enough room, there that that won't really affect the P&L and other products scan.
And make up for that I, just want to add some of the terms there haven't been public so I'm just trying to understand the sensitivities around.
Revenue growth in that agreement. Thank you.
Yes. Thank you. Thank you Matt for that question.
I'll just say upfront there are pieces of this which are which are.
Work in progress right now.
But.
What I would say regarding our relationship and agreement with Globalfoundries.
Is that we have.
Pretty broad number of products using the same underlying process technology at global including Haptics and power.
All of which are very long lived products and we have products shipping from that process to multiple customers.
And many of those products, we anticipate shipping for.
For a fair amount of time, so that gives us some level of flexibility with how we prioritize wafers meet our ongoing purchase commitments and manage to.
For a fair amount of time, so that gives us some level of flexibility with how we prioritize wafers meet our ongoing purchase commitments and manage to.
The change of plan.
Near term, obviously, we're working we're going to be working very closely with our customer and foundry is to balance those commitments with with the <unk>.
Slightly changed pattern of demand.
But that's that's broadly the picture.
Got it John .
For that I understand theirs.
A fluid situation and sensitivities there.
I guess as my follow up question and I realize this is sensitive but one of the things that.
The company I think has done well is talk about the.
The investments that Youre, making in new program, specifically ones that are.
Custom for any particular customer that you wouldn't make those investments until there was.
Three high predictability and line of sight to those product being adopted and I don't I would anticipate none of that has changed there. This is a one time type of situation I just wonder on the backend of that.
What kind of what are the ramifications CRM compensations, maybe from the customer to a change in plans. This late in our program are there anything.
Especially considering this is likely a relatively custom product are there any.
Things on the other side that helped compensate the company for the investments that you guys have made and if you could just talk about the philosophy there broadly that would be helpful. Thank you.
Yes sure. Thank you.
I'm going to just step around the specifics of kind of life topics with the customer.
For obvious reasons, but I wanted to pick up your point there on the.
The confidence we we have generally had communicated regarding investing in opportunities, especially around.
Custom silicon with with our largest customer in fact, we.
When we step back from it there is really an amazing track record of innovation and execution there over the past decade, and a half going from Kodak.
Codecs boosted amplifiers to haptics to camera controllers.
And then more recently power conversion and control.
That's been within the context of a really really strong relationship and this within that this situation is really an anomaly it really hasn't happened before.
And I think the way we regarded certainly the way I look at it is its a temporary setback, but it doesn't change our plan or strategy or confidence in in that relationship.
And our desire to.
To grab the opportunities that we see therefore potential further growth.
Your next question comes from the line of tore Svanberg with Stifel. Please go ahead.
Okay.
Yes, I had a question about <unk> and especially in relation to the.
The write down of <unk> and I think as you in your prepared remarks, I think you said you.
I'd like to use some of that technology in other applications.
Im just trying to understand if there's still a lot of opportunities for power in smartphone or is there a shift in.
And the focus more on the notebook side for that type of IP.
Thank you Terry at leaning much more towards the latter I think the smartphone opportunities around power I think the larger opportunities for us there and the custom silicon space, we have obviously some line.
Technology shipping today into Android smartphones.
I think we've we've seen both with the softness of the market there and the rise and possible preference for domestic Chinese suppliers in that space.
Thats, a fairly tough place to be by comparison, we've seen some pretty exciting opportunities around charging and power conversion and the laptop space for the future and some some possible other markets in due course as well so definitely.
Tilting much more towards those other markets.
And Tony I'll, just add to what John said in terms of the Vms technologies that we have for our.
Our key customers that has been primarily homegrown technology and the IP that we had from Lion has been primarily focused on the on the China smartphone market, which as you all know there's been a pretty tough spot over the last several quarters. So the underlying technology and architecture is still pretty relevant.
Focusing the lion IP more towards C. The laptop opportunity, but the.
The entirety of the H BMS products that we've built for our top customer and others has been based on homegrown Ips homegrown technology.
Very good and as my follow up I, just wanted to sort of understand the.
Content opportunities you still have.
For the second half in spite of this setback that you mentioned.
You did mention.
I'm just wondering if thats, primarily the content increases that we should be expecting.
For the second half of this year.
In the smartphone space, Yes, yes, sorry, that's.
That is.
Pursuing content opportunities in both.
The Android space and other markets as well.
Your next question comes from the line of Blayne Curtis with Barclays. Please go ahead.
Hey, good afternoon, and thanks to my questions I just wanted to ask one of general seasonality for June I think this is one of the steeper declines you've seen in particularly after how much March was down because can you just speak to that is that is there any aspect of that is customer inventory that needs to be worked down or kind of I know, it's tough to talk about your largest customer but.
Why the sharp seasonal decline in June .
Yeah Blayne. This is bank, let me respond to that so if you look at the.
The guidance that we provided for the June quarter, I think the two major elements that contribute to that one is no there isn't.
And the smartphone volumes, but I would say there is also a significant contributor contribution from the general market. So as you know we have a fairly decent exposure to the general market and that is highly correlated to macro and thats, where we see some weakness in addition to the to the overall weakness in smartphones, but.
Both of those are factored into our guidance and.
And Thats whats driving the number.
Sure.
Oh, sorry.
Apple just had better iPhone numbers so.
Obviously, it's the biggest parts of the general weakness Couldnt explain it. So is there a little more you can add to that bank.
Yes, I think there's always some timing mismatches between what our customers are reporting and obviously, how we bill to the customer forecast and such so.
It's at a high level.
Good.
We are not attributed to the smartphone volumes being down relative to <unk>.
The prior years and then there's a contribution from dental market. That's also not insignificant.
Your next question comes from the line of Christopher Rolland with Susquehanna. Please go ahead.
Hey, guys. Thanks for the questions.
So Qualcomm last night was out and they said.
Essentially that more of their flagship purchases by Oems.
Were pulled into March and that it would lead to more of a gap for June and the September .
And I wanted to know if that was consistent with something that.
Pattern at least that you guys are seeing and how we should think about kind of sequentially for you guys moving forward.
Yes, Chris the zinc.
Thanks for the question. So yes, we did see the Qualcomm report from yesterday and.
In General again every company has a different dynamic based on the specific parts of the ship and the lead times and such so I wouldn't make a general comment, especially about our top customer based on on our competitors' announcements, but suffice it to say that as we see it we are.
Clearly modeling a reduction in smartphone volumes overall, and then responses latest question Theres also the general market sales thats, having an impact though colder.
Couldnt call specifically the dynamics for one of our competitors and how that relates to their outlook for the year.
And for the quarter.
Sure I guess, a follow up and then another quick question.
Yes.
My follow up is could you see some of this weakness in June .
Also leak into September .
And then for my for my question.
Around your non lead customer revenue your general market revenue as you were discussing I think it was an all time low or at least in certain years. Its all time low.
Can you walk us through the puts and takes.
Do we get a nice bounce off the bottom do you expect this to be the bottom or is there is June kind of be a significant step down or a little step down or even a step up.
In general market rent.
Revenue for you guys. Thanks.
Yes.
So two parts.
<unk>.
From the standpoint of the guidance beyond the June quarter, obviously, we're not providing that right now.
But I would add that in general the.
We look at the past year's patterns, there as well.
For the second half build of corporate.
Our customers' products.
And.
As we see things today, we don't we don't see anything differently, So thats one and.
And then as it relates to the general market, we have seen some stabilization in the general market. Obviously as you pointed out that the market has been weak not just for us, but suddenly the companies in the semi space over the last couple of weeks that have reported have all cited.
Inventory build and so forth.
For us we do see some stabilization in the general market sales and but we're not ready to call a bottom we do expect things will improve over the rest of the year, but it's hard to call the timing of when that inflection point happens.
Your next question comes from the line of Ananda Baruah with loop capital. Please go ahead.
Hi, Good afternoon, guys. Appreciate you taking the question well I guess, yes, two if I could.
Hi.
Going back to the prepared remarks, you were talking about control of content.
Yes sort of in the past increasing.
Sort of on an annual basis can.
It is what allows the control of content to increase our what has been allowing it to increase on an annual basis is it is it purely the innovation that you guys are doing.
Is it innovation Youre doing gets connected to other innovation that's happening.
On the product.
Any context, there would be helpful along with kind of a quick follow up thanks.
Absolutely I think the way to think about that is.
As of the being three primary drivers there of the growth in value number one is the camera controllers.
Increase we've seen an increase in attach rate over time, just due to multiple cameras and so on secondly as.
Those Richard camera systems with more cameras more stabilization and so on.
Work their way down through the tiers. We then seen multiple generations of devices shipping at the same time.
With with more of our camera controller content and then thirdly to your point, we are driving innovation ourselves with the camera controllers. So they have been.
Increase the overall capabilities in relation to stabilization and autofocus.
At enable.
New features within the camera system. So theres really three drivers there all of them play a part in seeing that that step up in value that I mentioned in the opening remarks.
That's super helpful context, I appreciate that.
Just a quick follow up.
I understand youre not going to give guidance passage in quarter, but what is the on the gross margin what are the forces that we should keep an eye out for that.
Sort of influence the gross margin one way or another.
And that's it for me.
Yes, Thanks Amanda.
At a high level as you've seen us over the last several quarters, we've been kind of in the 49% to $50, 49% to 51% range.
More towards the high end.
And as we see things right now, there's nothing that will cause us to change that range. So again, not providing guidance beyond the June quarter, but our plan is to be in the 49, our models to be in the 49% to 51% range. So that we can optimize between revenue growth and profitability.
Your next question is a follow up from Blayne Curtis with Barclays. Please go ahead.
Hey, Thanks for letting me ask the second one I just wanted to ask a follow up on Matt's question.
The new product given cycle times, you probably started it so I'm just kind of curious how to think about is there going to be.
Product thats going to live on the balance sheet and I know, it's fluid and so you can figure out if there is a future product it goes into but I mean, how do you think about that dynamic because I would assume.
You started wafers before you figured out it wasn't going to be in the phone.
Yeah Blayne this is bank you're.
Absolutely right. So we had started building wafers based on lead times and production ramp schedules.
But we are in discussions with our customer or a disposition of this.
And we'll provide an update when we can but at a high level.
Level, though I think one thing that's really important to point out is look at inventory overall, our inventory position has been substantially below normal levels right. So as we indicated in prior calls we've been increasing it.
We do expect that to trend higher because we do have to build projects ahead of our customers' product ramps.
Existing and current silicon products do tend to ship for multiple generations of our key customers and products on that something.
<unk>.
Kind of different from a traditional model so.
And overall as it relates to this product that's no longer going to be shipped we are in discussions with our customer in terms of how to this position.
And with that we will end the Q&A session I will now turn the call back to John for his final remarks. Thank you Chelsea in summary, we're pleased with our progress in FY2023 as we executed across our three areas of strategic focus.
Maintaining our leadership position in smartphone audio.
Increasing high performance mixed signal content in smartphones.
And thirdly, leveraging our strengths in audio and high performance mixed signal to expand into additional applications in markets with new and existing components.
We remain very excited about the opportunities that we see in front of us and we thank you all for your continued interest in Cirrus logic.
Before we close I'd also like to note that we will be participating in the Cowen Conference in New York on May 31, and the Stifel Conference in Boston on June six please check our investor website for the details.
I'd like to thank everyone for participating today goodbye.
This concludes today's conference call you may now disconnect your lines.
Okay.