Q1 2024 Cirrus Logic Inc Earnings Call
Ladies and gentlemen, thank you for standing by.
Welcome to the Cirrus logic first quarter fiscal year 2024 financial result queuing.
Q&A session at this time, all participants are in listen only mode.
After a brief statement, we will open up the call for questions from animals instead.
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 call over to MS. Chelsea Heffernan, Vice President of Investor Relations, What's happening you may begin.
Thank you and good afternoon, joining me on today's call is John Forsyth, Cirrus Logics, Chief Executive Officer, and think nothing Mooney Chief Financial Officer.
Hey at approximately four P M. Eastern time, we announced our financial results for the first quarter fiscal year 2020 for 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.
Finally, 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.
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 in the 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 current expectations.
Now I'd like to turn the call over to John .
Thank you Chelsea and thank you everyone for joining today's call.
As you've seen in the press release in the first quarter of fiscal year 2020 for Cirrus logic delivered revenue of $317 million towards the top end of our guidance for the quarter driven by products shipping in smartphones.
In a moment bank will discuss the results in greater detail, but before we get onto that I'd like to provide some color on how we're doing against the strategy that I've outlined on previous calls.
The first pillar of that strategy is to maintain and build our leadership in smartphone audio.
And to that end this quarter, we taped out our next generation custom boosted amplifier. The component that we believe will deliver significantly increase performance and value to our customer and which we anticipate will shift next calendar year.
We also completed product validation of our first 22 nanometer smart codec, a new product, which is also on track for introduction next year.
<unk> represents a significant technology transition for Cirrus logic, and again will deliver meaningful feature and performance benefits to our end customer.
And our general market smartphone business. We also secured several next generation Android sockets and as a consequence, we anticipate seeing many great smartphone products featuring Cirrus logic audio in haptics being launched in the market in the coming year.
Okay.
Moving on to the second pillar of our strategy. We're excited about the opportunities we see to continue to grow our high performance mixed signal content in smartphones.
Cameras are marquee feature of every major smartphone launch we're proud of the progress that we've made in this area. Since we introduced our first camera controller product in calendar 2020.
We're currently ramping production of our latest camera control of product for a smartphone that is expected to be introduced later this year.
And looking forward. We believe there is still significant potential to continue to grow value in this area.
And we are today investing in our roadmap of further products and features in pursuit of that goal.
Beyond the camera. We've also previously indicated that we believe advanced power and battery related technologies represent great opportunities for the company.
And today, we have a number of R&D programs underway related to high efficiency charging battery management and system side power delivery.
We believe that the investments we're making in this space today, we will continue to drive product diversification and revenue growth in the future.
Turning to our third strategic vector, we're increasingly leveraging our strengths in audio and high performance mixed signal to diversify into additional applications and markets most.
Most recently, we are focused on expanding into the laptop market, where we see significant greenfield opportunity for the company in the coming years.
We have well established relationships with the top five laptop Oems, who together account for a significant majority of all laptop unit volumes and we are shipping content with each of them.
While we're still in the early stages of our entry into this market, we already see significant customer demand and engagement around our amplifier and codec products that have been specifically optimized for laptops and we expect end devices, incorporating these new components to come to market in the next 12 months.
During the June quarter, we also secured our first business laptop win with a new amplifier highlighting the growing importance of audio quality in this key segment and we anticipate this device will begin shipping next year.
Additionally, we are delighted that both on new amplifies and Kodak are being selected as part of the Soundwalk compatible reference design from Intel, which will accelerate time to market and enable adoption of our components across more OEM platforms.
Beyond the laptop market. We also continue to invest in further products and customer engagements that we anticipate will expand both our revenue and market diversity in the long term. These.
These include gaming augmented and virtual reality automotive industrial and professional audio applications. The latter illustrated by our recent launch of a range of industry, leading professional audio ADC products.
We're excited about the number of ways in which we believe we can leverage our outstanding engineering talent and best in class intellectual property to grow our business in these areas and beyond.
Finally, I would like to discuss briefly the difficult decision. We took in July resulting in a workforce reduction of approximately 5% of our global employee base.
This action was taken in order to better align our overall cost structure with our revised revenue expectations in light of both the previously discussed change in customer plans regarding H BMS product that we had been expecting to be introduced this fall and the current general market softness.
We remain committed to disciplined execution of our strategy and believe that following this action, we are well positioned to invest in the many opportunities we see to drive future growth.
And with that let me now turn the call over to bank to provide an overview of our financial results for our fiscal Q1 2024 as well as guidance for the second quarter.
Thank you John and good afternoon, everyone I'll start with a summary of the fiscal first quarter results and then provide guidance for fiscal Q2.
Fiscal first quarter revenue was $317 million.
Which was close to the top end of our guidance range as unit volumes were higher than expected.
Revenue was down 15% quarter over quarter and down 19% from a year ago due to lower volume of components shipping into the smartphone end market.
And to a lesser extent continued weakness in general market sales.
Turning to gross margin non-GAAP gross profit in the quarter was $159 7 million.
And non-GAAP gross margin was 54%, which.
Which is slightly above the midpoint of the guidance range we've provided.
On a sequential basis gross margin increased slightly.
While on a year over year basis gross margin declined by 110 basis points.
Due to higher inventory reserves, and a less favorable product mix.
I'd like to provide an update on the high performance mixed signal product that John alluded to earlier.
As we mentioned in the shareholder letter we have removed the revenue associated with this component from our internal model.
But during the quarter, we made good progress with both our customer and foundry partner on the disposition of wafers associated with this product.
And we do not anticipate this position to have a material financial impact.
I'd also like to reiterate that our customer relationship remains strong as we continue to collaborate on a range of technologies and programs and pursue opportunities for both the next generation of the existing components as well as new products.
Turning to Opex non-GAAP operating expenses in the quarter with $113 8 million.
Down $6 million sequentially.
I'd note that operating expenses came in below the low end of our guidance range.
Due to product development prioritization as well as controls on discretionary spending.
Restructuring costs associated with the cost actions John referred to earlier are not expected to be material and are reflected in the Q2 fiscal 'twenty for GAAP operating expense guidance.
I'd note that we're continuing to invest in products and technologies in order to pursue opportunities to drive long term revenue growth.
And overall non-GAAP operating income was $45 8 million in the first quarter were 14, 5% of revenue.
And lastly on the P&L non-GAAP net income in the first quarter was $38 million.
<unk> 67 per share as.
As the higher than expected revenue and lower operating expense flowed through to the bottom line.
Let me now turn to the balance sheet.
Our balance sheet continues to remain strong and we ended the first quarter of fiscal 'twenty, four with approximately $426 million in cash and cash equivalents.
Our ending cash balance was down $91 1 million from the prior quarter.
As we built inventory to support seasonal product launches in the second half of the calendar year and also used cash to repurchase stock during the quarter.
Specifically cash used in operations was $39 8 million during the June quarter, which is about 13% of revenue.
We continue to have no debt outstanding.
And also we have 300 million undrawn on our revolver.
Now turning to inventory as we indicated in prior quarters, we've been building inventory to support seasonal product launches in the second half of the calendar year.
And fulfill our wafer purchase commitments.
Long term capacity agreement with Globalfoundries.
As a result inventory was $301 million up from $233 5 million sequentially and.
And this is inventory was approximately 175 days in Q1 up 60 days sequentially.
Let me add some additional color on our global foundries agreement.
While a portion of the capacity associated with this agreement was originally intended to support our new <unk> component the.
The agreement allows for wafer allocation flexibility within our product portfolio.
As a result, these wafers are being reallocated to other products that use the same underlying 55 nanometer high voltage process technology, including amplifiers, haptic drivers and battery and power Ics.
Looking ahead in Q2 fiscal 'twenty four we expect inventory dollars to increase from the prior quarter. However days of inventory are expected to decline due to seasonal product ramps.
While we anticipate increased inventory levels of these other products. During this fiscal year, we expect Q2 to be the high point of inventory for the remainder of the fiscal year.
Turning now to cash flow cash used in operations was $39 8 million in the June quarter, and Capex was roughly $12 3 million.
Resulting in free cash flow for the quarter of minus 16%.
For the 12 months period, ending in the June quarter free cash flow margin was roughly 10%.
On the share buyback front in Q1, we utilized $38 5 million.
To repurchase approximately 466000 shares of our common stock at an average price of $82 59.
As of the end of Q1 fiscal 'twenty four we had $462 6 million.
Remaining in our share repurchase authorization.
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 Q2 of fiscal 'twenty, four we expect revenue in the range of $430 million to $498 million.
We expect gross margin to range from 49% to 51%.
non-GAAP operating expense is expected to be up sequentially in the range of $114 million to $120 million.
As higher variable compensation and product development costs, partially offset by lower by lower employee expense.
We will continue to control discretionary spending, but invest strategically in product development to drive long term growth.
On the tax front as we previously discussed our fiscal 2024 non-GAAP effective tax rate will continue to be unfavorably impacted by capitalized R&D expense and as expected our foreign tax credits will be lower this year.
Our fiscal 2024, non-GAAP tax rate is expected to be approximately 24% to 26% consistent with our prior quarters guidance.
We continue to anticipate that the impact of capitalist R&D will become less unfavorable over time as additional years of R&D expenses are amortized for tax purposes.
We're closely monitoring legislation recently introduced that would restore immediate tax deductions for R&D investments this past.
In closing we had a solid Q1 fiscal 'twenty four as we executed well to deliver these results.
Going forward, we will continue to focus on the best opportunities to 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 fiscal year 2024 is a 53 week fiscal year.
And will include 14 weeks in the fiscal third quarter.
And finally, while we understand there is intense interest related to our largest customer in accordance with <unk> 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. Thanks.
Thanks, Frank we will now start the Q&A portion of the earnings call.
Please limit yourself to a single question and one follow up.
We're ready to take questions.
Okay.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad, we will pause for just a moment to compile the Q&A roster.
Your first question comes from the line of Matt Ramsay with TD Cowen. Your line is now open.
Thank you very much guys good afternoon.
Jonathan I guess for both you guys I wanted to ask a couple of questions around.
The resolution of.
Doug.
Okay, Ms product that didn't ramp with a large customer. So you guys talked about a couple of different things one of which is sort of the resolution on the.
The wafers that were built.
If you could give a little bit more color on that if you if youre able to at all and I guess thank you.
Are those wafers.
Still included in your inventory balance that you talked about.
And then the second question on that topic as John This is kind of a longer term one in conversations over the years with yourself and with your predecessor, Jason It's always been really really hard to find mixed signal analog audio engineers and I know it was.
A rough go not of your own fault at all bad things happen with that product, but I, just kind of wonder the decision to take the workforce reduction rather than.
Just given the scarcity value of that engineering talent.
Maybe reallocating that folks those folks and so maybe you could talk a little bit about that thank you.
Yes. Thank you, Matt I'll speak to that and then hand over to bank and he can he can talk about how we've been working through.
The disposition of the work in progress around.
Around the products.
Yes first of all obviously there was.
Not a decision that we took lightly at all.
But.
The reality is there's a significant change to immediate knee.
Near term revenue expectations there.
We wanted to work very hard to bring the cost structure more into line with that reality.
While still ensuring that we were in a position to.
To invest in all of the things that we believe will drive us forward as a company in the mid to long term.
To emphasize the latter point, because we do have very many areas of opportunity across those three pillars of the strategy and our plan is to continue to invest in that growth. So.
Although this action was distributed across the business.
We will in fact exit this quarter with more people working and designs and we had a year ago.
So we had to take some.
Steps to navigate the short term challenges.
While at the same time, ensuring that we're positioned.
For execution on the opportunities that we believe we are going to help us grow and diversify in the.
The medium and long term.
Yes, and thanks, Matt for the question. This is thanks. So I wanted to address your question about the inventory related to the part that is no longer expected to ship.
The first point I want to make is that we do not expect a material financial impact as I mentioned in the prepared remarks.
The inventories in different levels basically.
The high level I want to mention that we've made really good progress with both the customer as well as a foundry partner on the disposition and clearly this is factored into our current guidance. The one thing to keep in mind is that as we talked about the globalfoundries contract. We do have some flexibility in terms of how we allocate.
The capacity that we have across the different products and suffice it to say that we have factored that into our guidance and there is no material financial impact of the inventory for the component is no longer going to share.
Okay.
Your next question question.
Your next question comes from the line of.
Tori seven got it.
Stifel You May now go ahead.
Yes. Thank you if I could just follow up on that last topic, Greg. So your inventory days were 175 I mean.
I know theres, a lot of things that go into inventory, but.
What would that number perhaps a bean.
The issues with the <unk> product just just roughly.
Yes. Thanks for the question Terry So couple of things on the overall inventory that we talked about.
A lot of it is driven by the fact that we are.
Our building ahead of the traditional launch of our key customers products that happens in the second half of the year.
That's the vast majority of it and obviously, we also have a commitment to our foundry supplier in terms of.
Fulfilling wafer starts and such so without going into the specifics of what the split is I can tell you that it's relatively small.
Number and clearly we're in discussions with both our customer as well as with our <unk>.
Foundry supplier and as I said before we do expect our inventory days to come down next quarter.
And we have taken into account what is the inventory associated with that particular product.
That's very helpful and for John .
John I know you don't I mean, you can't pre announce your customers' products, obviously, but can you just give us some puts and takes right now on content growth.
For the second half and next year, I mean second half it sounds like it's mainly new camera controller products, but how should we think about possible opportunities.
For 2024.
Yes, sure Terry so.
Going into the cycle this fall yesterday.
Content growth that I have.
I alluded to previously is in the camera controller.
Area. So we have a new product ramping then as we turn to next calendar year in 2024, we've got two significant products coming to market in our new audio components boosted amplifier and the codec.
Both of which we believe deliver meaningfully more value to the customer. So we're on track with those.
We're very excited about those and that potential impact as we look beyond that we believe there are multiple opportunities to continue to grow in the camera space, but also expanding in other <unk> areas.
In particular I have alluded to power in areas around the battery, where we believe this.
Still further opportunity for us to grow.
Your next question comes from the line of Christopher Rolland from Susquehanna. Your line is now open.
Hi, guys. Thanks for the question.
I guess my first question is.
You guys did mention some upside in revenue due to better units.
<unk>.
And also you guys had a nice guide as well as we look out beyond September and I know you guys don't guide, but is there anything we should think about in terms of shipment pull in versus a typical cycle that you guys have out there.
And these high <unk> and build the heads for example does that also even when you make an adjustment for the <unk> part and wafer supply commitments to.
These high Dois also tell us about something beyond September as well thanks.
Chris ill make a comment here and then hand over to bank to provide additional color if he wants.
I, obviously, we don't guide beyond the quarter.
The additional bit of color that I would add is that when we look at the backlog today and the movement there.
It's it's pretty pretty robust and stable.
We haven't seen a lot of.
Really any signs of the kind of the kind of stuff that youre alluding to so.
It's pretty steady as she goes.
Yes.
And I'll reiterate what John said as we look at the bookings pattern throughout the quarter.
Nothing unusual and.
Obviously, we have the business with a top customer, but also the rest of the business. We've seen no changes in terms of order cancellations or push outs and pull ins and so forth.
Obviously, we're only guiding one quarter at a time, but so far what we have seen has done.
Give us any reason to believe that there's anything unusual.
Number one and then the second question because you asked about in terms of the inventory again I want to reiterate the point that for the prior couple of years, we were pretty much on a hand to mouth existence as it relates to inventory and obviously these were incredibly low. So we have been talking for the last couple of quarters about building that inventory. So that we can service our.
<unk>.
<unk>.
More promptly and Thats, what we have.
Down the path of executing and also reiterate the point that while inventory days.
Are up this quarter, we do expect it to decline in the next quarter.
Thank you bank.
And then secondly on your wafer commitments how are you guys feeling about the $560 million and 24 in the $380 million and 25 yet to come.
And.
You'll have less flexibility probably because of those high <unk> does that come into play here.
Not.
Yeah. Good question so.
Mainly from the long term commitment standpoint, we feel good about where we are with the.
With the supplier we are working very collaboratively with them in terms of trying to figure out how do we make use of those parts and repurpose them for the ones that we see demand going forward.
And.
Longer term, we still see a lot of opportunity in terms of being able to work with the supplier and then obviously continue to look for other sources of supply over time, because we do see the runway ahead over the last over the last over the next several years in terms of increased content in the new capabilities that we're working on.
Okay.
At this time I would like to remind everyone in order to ask the questions Press Star then the number one on your telephone keypad.
Yeah.
Okay.
We can take the next question.
The next question comes from.
From the line of Ananda Baruah from loop capital you May now go ahead.
Hey, good afternoon, guys and thanks for taking the question.
Two quick ones if I could.
Yes sure.
With regards to the go forward opportunity that you talked about some of the garden.
So advanced power and battery capability.
Philosophically as smartphone if smartphones, where it could begin to adopt.
Yes kind of a more robust AI features and functionality and even if Dr. More robust their BRT Jason smartphone.
Can work their way in the coming years.
That with.
That create a need for a loan for both desktop and advanced power and data capability.
You guys provide.
My follow up.
Yes.
Okay, yes. Thanks.
Interesting question I guess.
I'll, probably be veering into kind of speculative domain here, but.
Yeah, two things would be potentially favorable to us one is that where we really specialize in it is in the interface between the physical world.
And the digital domain, so anything where a lot of data needs to cross that boundary.
Low power and be subject to some kind of processing.
Then we're really.
Ideal for solving problems in that space that's why.
We've done so well traditionally in the.
The boundary between.
Foundry around audio.
And more recently in the camera and optical space.
And I think I think in general AI augmented reality and so on suddenly.
Drive use cases, which which look like that so I think that presents opportunity for us too.
To grab and then.
Since you asked about the power space I think one thing that's very obvious with anything related to AI is that it is very very power hungry causes major spikes in power demand.
Within within any system.
And that is that's exactly the kind of thing where.
Even already are our power conversion and control IC.
Is it really delivers a lot of benefit to the system to.
To the end user and end to our customer in terms of battery protection in terms of managing the system the power across the system and so on so yes, I think that.
That would probably accentuate some of the kinds of problems that were really experts at solving.
Okay. That's awesome I appreciate that context, and the quick follow up.
The contracts that you are getting.
Just around sort.
Bob.
I know you're not talking specifically about giving December quarter guidance, you're just talking about the backlog looking stable.
Gary.
Is that also can say sort of if you just look at what your classic seasonality might be awful place.
For modeling purposes.
I think so I'll caveat it because when we get into this part of the year of course around any quota boundary. There's a lot of material on either side of that so it doesn't take much movement to two.
<unk> moved the needle a fair amount, but if.
If you look at.
Uh huh.
The shape of.
The quarter, we're guiding now relative to the last quarter.
That is.
And then compare it against the last six or seven years in terms of seasonality, it's straight down the middle of the fairway. So again, it kind of it kind of looks pretty normal to us.
Your next question comes from the line of Blayne Curtis with Barclays. Your line is now open.
Hey, Thanks for taking my questions I had two I used last year and it might be a tough one to answer so answer as you can but sort of product that got shallow and just kind of curious if you could speak to I guess, the Wi Fi and I guess I ask because.
I'm wondering if you can speak to kind of what's the status of it I mean as the customer.
But they are never going to use the kind of who owns the chip is there any IP that you spent a lot of time on this development im assuming in cost.
So I think you spoke to maybe getting some reconciliation on the dot.
The wafers and the cost of like product that was maybe I'm kind of curious.
Either recouping your efforts or monetizing it later.
Can speak to as to the future of that product.
Yes, I am not going to go through.
The details as we understand them.
Behind the decision.
I did.
Pointed out in the previous call we were.
Certainly.
Happy that we hit our milestones, but obviously there.
There are other factors involved.
Regarding expectations going forward for it.
Per the comment in the prepared remarks, we've taken it out of the model, which means that we don't have any expectations around it that's not to say it might come back.
There is some very cool technology, unless we would obviously love that.
And it's also not to imply that we're saying something about the actual plan that the customer has because we're not in we don't have insight into that.
It's just to say that we really don't have line of sight of the plan.
For it right now so it remains on the shelf, but yes, there's a lot of great IP there.
We would really like to find a way.
To get to see the light of day.
Great and then just back on the on the workforce reduction is just kind of curious the timing of that obviously opex is up in September and then you have the 14 week quarter in December So I'm, just kind of wondering how to think about opex for December .
And when you get the full impact of the reduction does that offset some of the kind of the mechanics of the extra week.
Yes, thanks for the question, yes, so clearly.
Guidance perspective, giving guidance only for the September quarter, but I understand your point, so essentially in terms of the timing.
The effect of the <unk>.
Actions that we took will obviously only be valid for about six.
Six five to seven months of the full fiscal year.
So that's the way to think about it and we announced in the 8-K that it was roughly 4% to 5% a reduction. So if you just do the math.
Sure.
Work out to somewhere.
Somewhere around.
Yes.
The 4% to 5% spread out over the next several months right. So I think that's the way to think about it.
In terms of the December quarter, clearly youre not going to see any benefit on the revenue side, but on the opex side and the extra week will will definitely have an impact on opex and.
That's the way you should model it as well.
Your next question comes from the line of Matt Ramsey with Cowen. Your line is now open.
Hey, guys. Thanks for let me jump back in John I wanted to.
<unk> been having in Greece commentary about the laptop market.
Your large customer is a big player there, but you talk tonight about getting in some reference design programs at Intel.
Maybe you could expand on that a little bit the status of that relationship how immediate.
That might translate into revenue and just your understanding of.
The size of the unit opportunity that might be covered under those reference designs programs at that customer.
Yes. Thank you, Matt I guess I'll talk about the PC opportunity.
On a couple of access so one is just the timing of our expectations of how our market penetration and revenue potential looks and then.
I'll talk about the <unk>.
The stack of content that we believe.
Is it going to be relevant.
Part of our our Sam there.
So we're in the we're in the early innings.
We've just sample the codec and amplifier to customers.
We've just announced the.
Inclusion of those on the on the reference design typically.
Those reference designs will be made available to Oems between 18 to 24 months before you see end products in the market.
So.
Where.
We still got some way to go for that to grow significantly, but we also have a number of designs pretty significant number of designs underway today, which predate that reference design. So I think the way to think about it.
Is that we will see some products coming out late FY 'twenty for that include those new devices from us.
But the total revenue in FY 'twenty four is going to be fairly limited then.
Growing somewhat in 'twenty, five and then continuing to grow.
And become more and more meaningful through 26 in FY 'twenty six and beyond.
The Sam that we see is going to be made up of audio and H BMS products.
So if you look at designs, which are underway today.
We have at least one design underway, where we can see multiple amplifiers codec and haptics driver.
Which starts to become a pretty meaningful stack of content obviously.
And then over time, we expect power.
Products from.
For us to be layered on top of that and we can see we can also see potential in in some products for multiple dollars worth of power content.
So if you look out to two.
2027, we think theres about $1 $2 billion of Sam when you take both the audio products and the <unk> power related products into account.
Thank you for all that detail John I appreciate it.
Yes.
This will be our last question.
Yeah.
Your next question comes from the line of Sam Bergman.
Stifel. Your line is now open.
Yes, Thanks, I just had a follow up to that last topic.
I mean this is obviously part of your third strategy.
Will you start to break out.
How much notebook is as a percentage of revenue.
And if so I mean.
Like 10% number or something like that.
We used because obviously, we want to track your progress there.
Just wondering numerically.
Sure some of that with us.
Yeah, Great question so.
John just.
Mentioned, we're pretty excited about the opportunity that we see in front of us, especially in the PC market across multiple dimensions.
<unk> and amplifiers and such.
Clearly from a short term perspective, everybody knows that the PC market is going through some tough times, but over time, we do expect these assignments to transfer to translate into meaningful revenue and at the appropriate time, we will we will consider that and yeah.
What's the space.
It sounds good thank you.
Thanks for the question.
With that we will end the Q&A session and I will now turn the call back to John for final remarks.
Thanks Chelsea.
So in summary, Cirrus logic delivered revenue towards the top end of our guidance for the first quarter and made great progress across our core areas of strategic focus.
The first of which is maintaining our leadership in smartphone audio <unk>.
Secondly, continuing to expand our high performance mixed signal content in smartphones and thirdly, leveraging our outstanding audio and high performance mixed signal expertise to diversify into new markets.
We're excited about the opportunities in front of us and we thank you for your continued interest in Cirrus logic I'd also like to thank all of our employees for their incredible dedication and commitment.
Before we close I'd also like to note that we will be participating in the Keybanc conference in Vail on August seven please check our investor website for the details.
Thank you all for joining the call today.
Okay.
Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Yes.
Yes.
Yeah.
Okay.
Yeah.