Cirrus Logic, Inc. (CRUS) Q1 2021 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Cirrus Logic First Quarter Fiscal Year 2021 Financial Results Q&A Session. At this time, all participants are in a listen-only mode. After a brief presentation, we will open up the call for questions from analysts. 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 Mr. Thurman Case, Chief Financial Advisor. Mr. Case, you may begin.

Thank you and good afternoon. Joining me on today's call is Jason Rhode, Cirrus Logic's Chief Executive Officer; John Forsyth, the company's President; and Chelsea Heffernan, our Director of Investor Relations. Today, we announced our financial results for the first quarter fiscal year 2021 at approximately 4:00 p.m. The shareholder letter discussing our financial results, the earnings press release, including the reconciliation of non-GAAP financial information to the most directly comparable GAAP information, along with the webcast of this Q&A session are all available at the company's Investor Relations website at investor.cirrus.com. This call will feature questions from the analysts covering our company, as well as questions submitted via e-mail at [email protected]. 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 and shareholder letter issued today, which are available on the Cirrus Logic website and the latest Form 10-K and 10-Q 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 I'll turn it over to Jason.

Thank you, Thurman. Before we begin taking questions, I'll provide a brief update on COVID-19 and then I will turn the call over to John for comments on the quarter. I am doing this call remotely and not with the rest of the team currently. While I don't expect to have any technical issues, should there be any, you'll be in good hands with John and the rest of the team. For a detailed account of our financial results please read the shareholder letter posted on our Investor Relations website. Despite the challenges associated with the majority of our employees working remotely due to COVID-19, I continue to be impressed with how well our employees have adapted to this new environment. Across the organization, they're doing a great job remaining highly productive and ensuring we continue to operate efficiently. During the quarter, we executed on key product development efforts and our supply chain continued to meet production schedules. We have established enhanced protocols to ensure the safety and well-being of our employees while maintaining business continuity and continuing to provide outstanding support to our customers. I’ll now turn the call over to John for comments on our results.

Thank you, Jason. Cirrus Logic delivered Q1 FY 2021 revenue of $242.6 million as we experienced robust demand for certain products shipping in tablets and smartphones. During the quarter, customer engagements and design activity were encouraging across new and existing product categories. As we have noted previously, our expectation is that in addition to building on our strong position in smartphones, over the next year, we will continue to gain momentum in non-mobile phone applications, particularly in devices requiring compact components to deliver a premium user experience while minimizing power consumption. The company has a number of innovative products expected to tape out this quarter and sample with our customers over the next year. When combined with a robust roadmap, they will continue to strengthen our portfolio of products in audio, voice, and other mixed-signal domains. We remain optimistic about the company's future. Before we begin the Q&A, I would also like to note that while we understand there is intense interest related to our largest customer, in accordance with our policy, we do not discuss specifics about our business relationship.

Our first question comes from Matt Ramsay with Cowen.

Yes, thank you. Good afternoon. I don't know if this is for Jason or John, whichever. I saw in the shareholder letter some comments that you hinted at or put in there about a new power conversion or power management IC that you're working on and are thinking about taping out here in the near term. I wonder if you might step back and talk about that as — and you've hinted plenty of times at new applications outside of the audio domain and I imagine this is one of those examples. Are there any details you could give there, or I know Chelsea and the team have also updated some of the TAM slides in the last couple of quarters if there are any comments about how that TAM for that type of product might be? That would be really helpful. Thank you.

Yes, Matt, thank you. I'll take that. Yes. And yes, we've talked about this opportunity in particular as being towards the back end of next calendar year. So there's a lot of time to go between now and then. And obviously we don't want to get too far over our skis regarding the opportunity. But it's no secret that we've developed considerable IP relating to power and battery through our boosted amplifiers and haptic drivers. We believe there are ways of leveraging some of that IP and some of the innovations that we've developed in that space into nontraditional segments for us relating to power. We don't want to say too much more about that right now, but we certainly believe that this is a very exciting opportunity for us. In keeping with a lot of the opportunities that we discussed, we regard the first market entry of this as being very much a first step of a road where we will seek to continue to grow the value of the product and the segment over time, and the long-term outlook for that is reflected in the further adjacent opportunities that we've highlighted in the SAM and TAM materials in the updated investor deck.

Got it. Thanks, John. I appreciate the sensitivity on the roadmap stuff. I guess my follow-up question is more in the immediate term. There's obviously challenges with Huawei and shipping to them and what's going on with their smartphone business. But at least in the first swag of putting together the model tonight after the results came out, it looks like the Android business in the June quarter was down pretty materially. Are there things to read into that other than Huawei? And maybe you could just talk about the forward outlook for the non-Apple smartphone business and how you think that might trend in the next few quarters? Thank you.

Yes, that's a good question. I think there were layers of complexity and confounding factors there that frankly make it pretty difficult to tell what signal and what's noise for sure. There are challenges around the Huawei business. As you know from previous discussions, we felt really good about the momentum that we've been building with Huawei. We're obviously still able to execute on some of that, where we have a license and where we were shipping stuff already, but it does create a headwind. More broadly, I think what we have seen over the past few months is that large chunks of the Android space have suffered turbulence in the COVID-19 environment. And in part that's a reflection of just the kind of progressive lockdown around different markets. So I think the reliance that some of the Android vendors have on distribution channels that they don't control has made them a little bit more susceptible. So there's been a fair amount of buffeting there. But on the back of that, I think a fair amount of that stuff will hopefully be behind us as we go into the next few quarters. And we continue to feel upbeat and very positive about the story and the momentum that we have for our boosted amplifiers in particular and haptic drivers within the Android community.

And I would just chime in to add to what John said. There's definitely a plus and minus to that because while the Android side of the customer base has clearly had some challenges, I think, a fair amount of that likely resulted in some of the strength that our non-Android handset business enjoyed as well, which overall has been net positive for us because it's obviously a significantly larger amount of content for us there.

Thanks guys, appreciate it.

And our next question comes from Raji Gill with Needham & Company.

Yes, thank you for taking my questions. A question on the traction in haptics. The demand for haptics has been driven by increased demand for waterproof devices, increased screen space, replacing these mechanical buttons. I'm wondering, kind of what you think is kind of the next-generation kind of products related to haptics? And how do we think haptics as a percentage of revenue or in terms of kind of major strategic growth areas?

Well, in terms of the next-generation products, you've hit on a theme that is yet to run its course in Android. I think we've seen – or in smartphones, I should say in general I think we've seen a lot of interest from OEMs in button replacement to the point of reducing the phone to a fully sealed plain of glass. There's still a lot of problems to be solved to get to that and to build a really good user experience around it. As the technologies for haptics and virtual buttons are being incorporated into more handsets, we're also seeing drivers for the user experience, such as gaming and the kind of dynamic controls which can enrich the gaming experience and so on. I think beyond smartphones, we certainly see plenty of opportunity in other segments, where we're traditionally maybe not so well penetrated with our haptics technology. We've seen growth in haptics opportunities and haptics drivers for virtual buttons in the automotive space, the PC space, and possibly in the longer-term in the VR and AR space as well. Those are clearly very speculative when it comes to what the market size can be. So regarding our view on the haptics TAM, again, I'd refer you to the investor presentation where we break that out.

Thank you for that. And just switching gears to the opportunity in the headset space. You've made significant inroads in the wired and wireless digital headset space. It's a pretty good dominant technology there. I'm wondering how you look at that market as you move forward to Calendar 2021? When do we expect layering in ANC technology, as a way to increase dollar content and as a way to kind of bolster the competitive differentiation in the digital headset space?

Yeah. That's a great question. It's a segment we've been really excited by. I think all the key products launched in that space have tended to outstrip our customers' expectations for demand and it's just – even though the numbers initially have been fairly small. The direction of travel is really compelling. So in some of the products that we've been in, we've been deploying smart codecs, where they were maybe not even initially designed for that category of truly wireless headset device. Obviously, we are investing and developing technologies specifically for that category of device. Now back end of last year, obviously, we had an amplifier launch in truly wireless devices. And mentioned in the shareholder letter for this quarter, we have begun sampling our new next-generation codec for truly wireless earbuds, which incorporate hybrid ANC technology. So that puts us on a timeline, where you would expect, if that's in customers' hands now, over the next calendar year, you're going to see products come to market incorporating ANC technology into that category of device.

And just last question, Thurman on the gross margin. It's kind of dipping down about 60 basis points, sequentially up for the guidance. Just wondering what the reasons for that? Thank you.

Well, we see a lot of puts and takes with gross margin. So for any given quarter, we can see certain products that may see some normal ASP erosions. And we have certain levels of absorption based on our levels of expense and our levels of profit. We give our range of 51% to 53%, but we would expect that generally to be closer to 52% on most quarters or in that range although we've been outperforming at this level, but there was not anything very specific. It was a wide range of things that had that effect.

And our next question comes from Tore Svanberg with Stifel.

Yes. Thank you. First question perhaps on seasonality or even linearity. So your largest customer has openly talked about their delays this year. How does that really impact Cirrus from a timing of shipments perspective?

Thanks, Tore. I would say, obviously we don't want to get into details related to our customers' launches. It's factored into our guidance. The September to October quarter transition is obviously always really tricky to call. Our job is just to make sure we put parts on our customers' docks or their contract manufacturers' docks when they need them. So we don't always know. In fact, we never know exactly what the launch date or the availability date will be until the rest of the world does. So that's really something that the customer base takes care for us and we just try to make sure to execute on exactly what they're doing. That said, I think pretty reasonably strong guide relative to expectations. So things I think largely appear to be consistent with what else has been said publicly by folks that are a little closer to their own launches.

Very good. And maybe this is just my perception but reading your shareholder letter, you're really emphasizing more tablets and notebooks than what you have historically. Has the work-from-home environment sort of reawakened those opportunities? And are you starting to see more content opportunities there than perhaps historically?

To a degree, I would say that what we are discussing here was for sure part of our strategy prior to the transition of large parts of humanity to working from home. But amongst our customer base, there's certainly been renewed interest in those segments as well. But for sure, there are spaces where, if you look at our boosted amplifier share and progress in Android, you can see that we're in a great number of the sockets that matter at this point. And hence when we look at how we continue to grow and drive growth, it's partly about enhancing those products and continuing to win the sockets that count in the smartphone space. But it also has very much been about how we leverage those IP investments and broaden our range of targets to other markets. So tablets were for a short part of that. We've mentioned notebooks as well. And then of course, wearables and hearables are the other kind of primary categories, which we believe our IP investments are highly relevant to.

Okay. Thank you.

Thank you, Tore.

And our next question comes from Charlie Anderson with Collier Securities.

Yes, thanks for taking my questions. I want to start just to go back to the new product, the power control. I wonder if you could first speak if it's that merchant's product or more of a custom product. And then secondarily, as we've seen you expand into some new capability here, I wonder if you could maybe just give us some framework for thinking about as you continue to move into that larger portion of the mixed signal market. What are some of the areas where you bring something that's unique that's not served by the larger portions of the pie that you're not serving today? And then I've got a follow-up.

I'll start by addressing the first part, and then John can add anything I might overlook. We have a solid history of leveraging our technology, applying key aspects of what we've developed. The saying goes that you want to approach a new market with established technology or an existing market with innovative technology, while trying to avoid entirely new concepts. Over the past few years, we've successfully adapted existing technologies and related tools to explore new sectors. This is another example of that. It’s a custom solution, and for obvious reasons, we can't share too much detail about it. However, we believe it's an important new capability. We’re uncertain how widely it will be needed or wanted, but we see the current target market as significant and a substantial opportunity. A lot of our team is engaged with this project, and we were fortunate to redirect many of our MEMS resources to pursue this because it's much larger and has a quicker timeline than MEMS would have offered. This represents one of the biggest opportunities we've pursued in standalone products that align with our strengths. Our previous investments in Amps, haptics, and other areas, which possess significant power capabilities, have positioned us well to apply our signal processing expertise in these new power-oriented prospects. That summarizes what we can share at this moment, but it reflects the strategy that John, Carl, the team, Jeff, and Coyle have focused on: we’re exploring adjacent markets in handsets since we aim to tap into larger markets beyond handsets. That's the only category I know of where everyone purchases such high volumes annually. We're looking at other areas where mixed signal and signal processing capabilities can effectively enhance the handset market beyond just audio or voice while maintaining our focus on our traditional strengths. We're excited about this direction and would love to share more details when the time is right.

Okay, great. Thank you for all the color. And then Thurman I have a follow-up question for you. I think inventory was a pretty decent spike year-over-year and sequentially and then you measured in days as well. So I wonder if you can provide any color there. Was there anything that was sort of COVID-related or product transition-related? Just trying to understand why we saw that the inventory …

A normal question for me. Yes, over the last couple of years, we observed a decrease in inventory compared to Q4 and Q1 of the previous year when it was higher. This is largely influenced by our collaboration with customers, as it is driven by their needs and demands. In this particular quarter, we coordinated with them and our supply chain partners to align with the demand schedules. This resulted in a significant spike, but from our perspective, we believe that ending the quarter with $200 million is appropriate.

And our next question will come from Adam Gonzalez with Bank of America Securities.

Thank you for taking my question. There have been rumors that some of the content provided to your largest customer might be discontinued or modified. If this were to happen, do you believe you would still be able to increase your content year-over-year with this customer, considering the new opportunities you mentioned earlier? Thank you.

Yes sure. I mean we're not going to comment on market rumors and we're definitely not going to comment on our customers' launch plans. We know what the scenario was there. It's baked into our guidance. We gave you guidance for the quarter and that's really what we're going to get into saying about that.

Got it. Okay. No problem. And then just the second question I have is just a question on the investor deck, I think you cited that you're a supplier to the top seven smartphone OEMs, but in prior presentations I think you said top eight. Is there anything to be coming from that or is it just a function of shifting at the top smartphone OEMs? Thank you.

Yes. Adam, I honestly wouldn't read too much into that. The nature of the smartphone market and the Android share of the smartphone market at this point is that once you get past the top five, the total volumes are pretty small. In the context of the economic environment, we've seen over the past couple of quarters that has led to more designs or models being pulled or canceled in those smaller players or kind of roadmaps moving around and so on. So, down at the bottom end of that list, in fact, I think at the bottom of the list for us, one dropped off. I think there's not really anything significant there from a revenue perspective for us.

That's great. Thank you.

And our next question comes from Ruben Roy with Benchmark.

Hi thanks for taking my question. Jason or John, just following up on some of the discussion around the new products and Jason, you mentioned that at least this new product you mentioned in the shareholder letter is custom in nature. I'm wondering if that means that as we think about these new product sets that you're working on, I would assume that means that you're working with your customers, on the actual functionality? And if that's right, is that something investors should think about as we think about competitive differentiation is the first question. Thanks.

I may not have fully understood, but I believe it would be challenging to create a custom device for a customer without extensive discussions. The reason we mention the custom aspect is to emphasize our strong track record in developing and delivering custom solutions for clients. This process requires significant investment from both the customer and us. Whenever we undertake a custom project, our customers are generally good at ensuring efficiency, as they want to protect their own time and resources. We point out that the device is custom to convey that it is not a standard product. While there are inherent risks involved that need to be considered, the potential and intent are genuine, and we have already discussed timing and other factors. This is something we are genuinely excited about.

Yes. And that's helpful, Jason. I guess that's where I was going. It sounds like there is a socket available for the product. So, I think that's something that is important. Just as a follow-on to that, as we think about the product roadmap and audio versus non-audio, you guys have, even in the shareholder you talked about enhanced functionality to the boosted amps and things like that. How should investors think about investments and focus of investments, as we think about audio versus non-audio, as we look ahead over the next couple of years?

Well, for sure, our R&D has increasingly been distributed more evenly between audio and non-audio, as we've gone from shipping almost exclusively audio products to having a really substantial investment and business around the haptics drivers and so on. And then, beyond that, of course, we have been development of what we referred to as our closed-loop controller technology. Again, in the non-audio domain and then further beyond that, this opportunity that we're discussing here landing in the back end of calendar 2021, again, being in a non-audio domain. So, at this point, although we don't break out exactly what the percentages are, it's fair to say that a substantial amount of our R&D is focused on how we can leverage key areas of IP and key insights that we've had from existing customer engagements and product categories and use them to build sharing in adjacent spaces. We continue to be committed to growing and building our leadership in the audio space, but it's become very obvious, first through haptics, and then through the closed-loop controller and beyond, that a lot of the problems that we're solving in those spaces are ones which are highly relevant to our customers in other parts of the system. So we're seeking to leverage that as best we can.

Great. Thanks for that detail, John.

And our next question comes from Christopher Rolland with Susquehanna International Group.

Hi, guys. This is for both Jason and Thurman. This is the time of year when we start trying to predict socket bingo for flagship phones and flagship phone launches. But we forget about the long-term revenue story at Cirrus. I was looking at one of your slides. Your 10-year CAGR is 19% top line. And over that time, I think, you guys have actually increased customer concentration at your top customer. So, I guess, my question is, and this is for Jason and Thurman if you have any more specificity on top of it. But what do you think for the next 10 years a CAGR could be, a top line CAGR, given your relationship what you know about your roadmap, with your primary customer? How should we kind of frame this long-term opportunity? Thanks.

I can't predict the next 10 years, and I'm not sure anyone in the semiconductor industry can either. However, I believe we have strong opportunities ahead of us. We have accomplished a lot of what we aimed to do in the past. Predicting which customers will succeed or fail isn't always straightforward, but we're fortunate to be working with many of the top players in the industry, and I'm confident that some of them will continue to perform exceptionally well. We are enthusiastic about the prospects in the coming years. There is significant potential for our technology and intellectual property as we expand beyond audio and voice. While we remain excited about those areas, there are other sectors that may offer even bigger opportunities. I can't directly compare it to the 19% CAGR we've seen over the last few years, but we do see promising chances ahead. Engaging with great customers typically leads to further success. It's common to target multiple major projects and find that a few exceed expectations while others don't perform as well. This is the nature of our highly competitive and differentiated field. We need to ensure we're aiming for significant opportunities and while we may not win every project, our history suggests we will secure more than we lose, allowing us to grow the business and attract talented individuals. The final results, in terms of CAGR, often depend as much on external factors like the economy and customer outcomes as they do on our efforts. That's about as much clarity as I can provide without venturing into speculation.

Okay. Sounds good. Yes. I mean Thurman just to that last question. I don't know if you had anything in your planning assumptions for growth from that larger customer and in the intermediate term but that would be great. And then there's a second question, if you could talk about the just some clarification on the power conversion side and control IC. We have in the traditional charging market for example, power conversion is a big market there, traditional AC to DC conversion, DC to AC or even DC to DC. Is that the kind of opportunity that we're talking about here? The communications chip that controls power conversion typically with charging? Is that the ballpark of what we're talking about?

To address your questions, we're not going to speculate on the growth potential from our largest customer. Regarding power conversion, there is a new application emerging. It's not a charger, and it doesn't currently exist. A customer believes this new application could create value and aligns well with our existing capabilities and technology. However, discussing this further would be challenging, as it's a concept that is quite new. We prefer to keep that information more guarded to maintain a good relationship with the customer.

Thanks.

And our next question comes from Blayne Curtis from Barclays.

Hi guys, thanks for taking my question. I just want to go back to the inventory and then I had a couple of questions around that. So it's I think record level and particularly for June. So is there any one I guess was that some of the customer asked you to do? And I guess as we look out the rest of the year, I'm just kind of curious you do have a new product not even sure if it goes on the board or in the module. So is there anything that we should contemplate in terms of seasonality? Obviously, people are expecting a later launch and you're building inventory in June; if you can walk us through that. And sometimes you do comment on December I'll throw that out there as well.

We need to prepare for when things actually launch or become available, which should have aligned with our inventory build-up that would have been completed by the end of June. While we don't have all the details yet, we need to be ready, regardless of whether it's early or late. We have a strong financial position and a history of managing our expenses well over time, so we're generally comfortable, especially with a new product ramp-up. Many of our products require careful planning, as simply aiming to meet peak demand isn't feasible due to capacity limitations. We engage in detailed discussions with our customers about these challenges. There are several variables affecting our inventory, and some things are progressing slower than anticipated. It's difficult to predict sales for entirely new products. When our customers achieve success, we often can't speed up production as quickly as desired. However, we are in a solid position to respond effectively. In summary, I don't see any significant issues with our inventory at this time.

Thank you. I wanted to ask about the Android situation. I believe it’s at an all-time low. There have been discussions regarding Huawei, but I think your second-largest customer historically is likely also at low levels. I'm trying to understand this better. While there has been talk about the adoption of products like your boosted amps, I’m looking at this from a minimal perspective and trying to reconcile the two.

I would just say on the Android side to your point our number two customer, I think is pretty well done. That was not the most spectacular launch in history. I think we're very well positioned for them should they return to pre-eminence in their particular segment of the market, but that was definitely not a stellar spring for them.

Thank you.

And our next question comes from Rick Schafer with Oppenheimer.

Hi. This is Andrew Humel on for Rick. Thanks for taking my question. Just wanted to get an update if I could on the progress of the voice biometric business. I'm wondering to see if there's any new thoughts from a revenue timing perspective or just on the broader market opportunity over time for that product? Thank you.

Yes sure. So we've talked previously about the fact that when we've used the label voice biometrics it encompasses a whole suite of technologies relating to voice authentication, anti-spoofing and so on. We're in dialogue with customers about adoption of certain of those technologies. We're feeling pretty good about that and optimistic about the long-term outcome. That said, the entire market around client-side voice authentication has been something that's been very slow to develop. We do believe that the FIDO standardization around voice authentication was a meaningful step forward that took place last year. We have the only technology currently that's certified for that, but it's still being markedly slower in adoption than we would have hoped. So we're not talking about a timeframe for specific revenue relating to that. Right now, the likelihood is that we will in due course be able to talk about certain of those technologies being incorporated within products which drive important business for us.

Great. Thanks.

And our next question comes from Tore Svanberg with Stifel.

Yes. Thank you. Just a follow-up, you did disclose that you are going to be ramping production of closed-loop controllers in the September quarter. But you've also said in the past that this is kind of the beginning of perhaps some more opportunities down the road. Any updates you could share with us there?

There aren't many updates, Tore, but I want to emphasize that sentiment. In general, when we work with our key customers, we focus on integrating our technology and enhancing its value to address more of their challenges in that specific area. Regarding the closed-loop controller product, we are engaged in a significant and constructive discussion about the future potential of that technology. We believe we are just at the start of a valuable long-term opportunity where we can add more features and content in that area, potentially creating variants to cover a range of price points and tiers as expected. Therefore, we remain optimistic about that market potential for us.

Very good. And on the power conversion, yes, go ahead, Jason.

I would just throw in there 100% on what John said. I just would throw in there that that's the exact same sentiment for this new power type of application that we were talking about earlier.

Yes, I wanted to follow up on the power conversion opportunity. Do you have that fully staffed now, or is it more of a long-term opportunity that you plan to continue hiring for?

A bit of both in the sense that we have really sizable team pulling absolutely extraordinary efforts actually in the current circumstances to hit the target with our customer there. But by our reckoning and from our dialogue with our customers, there are many ways in which that feature set and that product can be enhanced and built on over time. So yes, we'll grow R&D, continue to grow R&D around that area. Hopefully, that leads to more SKUs, more opportunities and more broader applicability over time.

Great. Congrats on those two new opportunities. Thank you.

Thank you, Tore.

And there are no further questions at this time. I would like to turn the conference back over to Mrs. Chelsea Heffernan.

Thank you, operator. We received one question today regarding the opportunity for closed-loop controllers. Can you provide some color, John?

Certainly. I believe the last question from Tore touched on a key point. We see this product area as one where we will follow our usual strategy of offering various features and product variants at different price levels to enhance customer value over time. I also encourage everyone to check our investor presentation on our website, specifically slide nine, which discusses the potential of closed-loop controllers. It mentions a $1 billion opportunity in total for haptics and closed-loop controllers combined. We could analyze them separately, but for simplicity, we estimate it to be roughly evenly split between the two. While $1 billion is not a perfectly accurate figure, it does represent the general scope of opportunity we perceive in these areas moving forward.

Great. Thanks. No more questions. So I'll turn it back over to you, John.

All right. Thank you, Chelsea. Well, in summary, we are pleased with our progress in Q1 FY '21. As teams across the company continue to actively engage with our key customers and to execute on product development, while maintaining an extraordinarily high level of performance throughout the organization. With robust design activity and a pipeline of differentiated products coming to market over the next year, we believe we are well positioned to maintain our strong customer relationships and expand our share in the markets that we target. I'd also like to note that we will be participating in conferences hosted by KeyBanc and by Oppenheimer this quarter. Please check our investor website for the details. If you have any questions that were not addressed, you can submit them to us via the Ask-the-CEO section of our investor website. I'd like to thank everyone for participating today. Goodbye.

And that does conclude today's conference call. Thank you for your participation. You may now disconnect.