Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cirrus Logic Inc (CRUS, Financial) delivered revenue of $555.7 million, exceeding the top end of their guidance range.
- The company reported a non-GAAP gross margin of 53.6%, driven by a favorable product mix and lower supply chain costs.
- Cirrus Logic Inc (CRUS) achieved significant progress in their flagship smartphone audio business with new products like the custom-boosted amplifier and 22-nanometer smart codec.
- The company is expanding its high-performance mixed signal content in smartphones, with successful camera controller products contributing to revenue growth.
- Cirrus Logic Inc (CRUS) is making strides in new markets, such as laptops and automotive, with promising early customer interest and strategic opportunities.
Negative Points
- Year-over-year sales were down approximately 10%, primarily due to lower smartphone unit volumes and timing of fiscal quarters.
- The December quarter included one less week of revenue compared to the equivalent quarter the prior year, impacting overall sales figures.
- Non-GAAP operating expenses increased both sequentially and year-over-year, driven by higher employee-related expenses.
- The company anticipates an increase in inventory dollars in the upcoming quarters, which could impact cash flow and financial flexibility.
- Guidance for Q4 FY25 indicates a potential decline in revenue, with expectations ranging from $350 million to $410 million, lower than the current quarter.
Q & A Highlights
Q: Are you leveraging old MEMS IP in your new timing business, or is this a new technology?
A: John Forsyth, CEO: This is a new IP we've developed, not leveraging MEMS IP. We exited MEMS completely. The technology targets markets like pro audio and automotive, with long-term potential but no immediate material impact.
Q: For calendar '26, will growth be driven by unit growth or content growth?
A: John Forsyth, CEO: This isn't a major content year for smartphones, but we aim to grow even in a flat units environment. We expect favorable tailwinds from our camera content and growing momentum in the laptop space.
Q: Can you explain the linearity of the quarter and what drove better-than-expected results?
A: John Forsyth, CEO: We saw more sustained demand than typical for a December quarter, with steady and slightly increased demand from our customer, contributing to strong results.
Q: What are the drivers behind the record high gross margin, and how much is due to new products?
A: John Forsyth, CEO: Gross margin is influenced by supply chain costs and product mix. Recent improvements are due to efficiency gains and cost reductions in new product ramps, alongside favorable product mix.
Q: How do you view the potential market size for your laptop products?
A: John Forsyth, CEO: We target addressing up to half of the 200-220 million unit laptop market, focusing on products above the $800 price point. We expect revenue to double in fiscal '26, with further growth opportunities beyond.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
