Cirrus Logic Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tore Svanberg - Stifel - Analyst : Yes, thank you and congratulations on the results, especially the cash flows. I had a question regarding your timing business. John, it's obviously new, and I was just wondering, are you leveraging sort of the old MEMS IP you have here? Or should I think about the technology here as being something that you have more recently developed? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 04, 2025 / 10:00PM, CRUS.OQ - Q3 2025 Cirrus Logic Inc Earnings Call

Question: Tore Svanberg - Stifel - Analyst : Very good. And as my follow up, so I do know you're in a fiscal year, but this is the beginning of a new calendar year. Obviously, you have constant growth sort of happening pretty consistently every year because of the cash getting (inaudible) and so on and so forth, but as we think specifically about calendar '26, is this going to be more sort of a unit growth year or is there some more material content growth that you could potentially speak to?

Question: Thomas O'Malley - Barclays - Analyst : Hey, John, team, thanks for taking the question. Appreciate it. My question was about the linearity of the quarter. So you guys did a really good job last time around kind of talking about the differences between this December and December of 2023, and if I look at the difference between what would have been another week in sales, it looks like you guys actually did even a bit better than that in terms of where you had originally set up guidance. So can you talk about what happened? You called out units specifically in the shareholder letter, but that's something that you saw kind of consistently as the quarter went along or did something change at some point in the quarter that got you to the better results here from a unit perspective? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 04, 2025 / 10:00PM, CRUS.OQ - Q3 2025 Cirrus Logic Inc Earnings Call

Question: Thomas O'Malley - Barclays - Analyst : And then, if I look at your June quarter as well as in the March quarter, I know that you guys can't tell what devices you're being shipped into but you can see mixed, particularly given that you've updated the codec in this last generation. So has there been any mix shift to any more of the legacy product that you're shipping at the end of the December quarter or into the March quarter to this point? I just want to understand if there's any mixed dynamic that's changing here into the March quarter at all. Thank you.

Question: David Williams - Benchmark Company - Analyst : Hey, good afternoon. Thanks for taking my questions and congrats on a really solid quarter. I guess my first question is just on the gross margin side. Clearly, a few different drivers there and you pointed at some of those in the script, but if I'm not mistaken, it's like a record high, at least as far as my model goes back. So just kind of curious what the drivers are there and how much of that is really driven by the new products maybe into your largest customer versus some of the products that are going into some of these other markets you've had success in or with?

Question: David Williams - Benchmark Company - Analyst : Thanks and appreciate the color there. And as a follow-up, just kind of curious if you could size the market for the laptop side? Sounds like you've got some new products that are kind of moving down the tiers, more maybe for the broader market. Can you talk maybe about that, your expectations there and maybe what the laptop market could potentially be if we look at a couple of years in terms of revenue?Thank you.

Question: Christopher Rolland - Susquehanna Financial Group, LLLP - Analyst : Thank you, operator. So you guys used to talk about HPMS being potentially a parity with audio as a percentage of revenue at some point in the future and then obviously, this is a strong cycle for audio for you guys. I think audio is 62% of total. I guess my question is, do you still expect HPMS to match audio at some point in the future and what might be a rough timeframe for this? Is it a year or two years or much more than that? And what has to happen for parity there between those segments? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 04, 2025 / 10:00PM, CRUS.OQ - Q3 2025 Cirrus Logic Inc Earnings Call

Question: Christopher Rolland - Susquehanna Financial Group, LLLP - Analyst : Thank you, John. And also in the letter, it's a good segue into power. So you spoke about a number of R&D programs for battery and power management. I guess first of all, I was wondering if you could talk about the investment when you think that investment in R&D might peak. And then, are these products ready for revenue today? Or when might we see these products ramping for revenue?

Question: Gary Mobley - Loop Capital - Analyst : Hi, everybody, thanks for taking my question. I know you're not going to give too many details or any with respect to your largest customer, but clearly, there's a lot of early speculation that maybe that largest customer might move to a multi-lens horizontal configuration for camera, especially REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 04, 2025 / 10:00PM, CRUS.OQ - Q3 2025 Cirrus Logic Inc Earnings Call the premium tier, maybe some thinner designs in the lower tier and maybe even some foldable designs and without maybe talking about your customers specifically there. Maybe you can just talk in general about how those types of configurations and designs might affect your content in camera haptics, power-related content and whatnot?

Question: Gary Mobley - Loop Capital - Analyst : Okay, appreciate that. For my follow-up, I want to ask about the Android win that you highlighted in you're prepared remarks. I think you mentioned three audio products in use there, and I presume this is for some of your general purpose products because I don't think you really go into the (inaudible) market with applications specific products or custom products. So my question is, with this general purpose approach into the Android market, are there ample opportunities and could it ever be a sizeable portion of revenue for you?

Question: Tore Svanberg - Stifel - Analyst : Yeah, thanks, Chelsea. Just one follow-up, your SG&A has been consistently around 6% revenue, 6%, 7% revenue here for many, many years. I'm just wondering as you continue to venture into new markets, do you have to invest in sort of a new sales organization? Or should we think of your entrance into the [automotive] market, for instance, kind of more similar to laptop where it's more based on a reference design where you don't need that big of a sales force?

Question: Tore Svanberg - Stifel - Analyst : Great, thank you.