Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic First Quarter Fiscal Year 2023 Financial Results Q&A session. 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 for queuing up will be provided at that time. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Ms. Chelsea Heffernan, Vice President of Investor Relations. Ms. Heffernan, please begin.

Thank you and good afternoon. Joining me on today’s call is John Forsyth, Cirrus Logic’s Chief Executive Officer; and Venk Nathamuni, Chief Financial Officer. Today, we announced our financial results for the first quarter fiscal year 2023 at approximately 4 p.m. Eastern Time. The Shareholder Letter discussing our financial results, the earnings press release, along with 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 the company. Additionally, the results and guidance we will discuss on the 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 the 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 the Shareholder Letter issued today, which are available on the Cirrus Logic website and the latest 10-K, as well as corporate filings registered with the Securities and Exchange Commission for additional discussion of risk factors that could cause actual results to differ materially from the 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 had seen in the press release, Cirrus Logic delivered outstanding results with record first quarter revenue, even in light of continued supply chain constraints. Before we discuss the details of those results, I’d like to take a moment to recap the three key pillars of the strategy driving the momentum and success that we are now seeing. These are: one, maintaining our leadership position in smartphone audio by continuing to deliver world-class products and outstanding execution to the leading customers in the market; two, broadening sales of audio components into key profitable applications beyond smartphones; and three, leveraging our world-class mixed-signal engineering expertise in order to build a growing footprint of products outside of audio in the area we call our high-performance mixed-signal product lines. We believe this area will yield significant opportunities both within smartphones and beyond. This quarter we continue to execute on all three fronts to an impressive extent. In audio, we have been encouraged by customer engagement across our portfolio of amplifiers and codecs. During the quarter, we began developing a next-generation smart codec for smartphones in the 22-nanometer process node and also began initial production ramps ahead of new smartphone introductions later this year. Additionally, we are proud to have recently received the Galaxy Quality Best Award from Samsung’s MX Division for our quality performance. This further demonstrates the reputation Cirrus Logic has for outstanding execution among our world-class customers. Despite the near-term slowdown in demand in the laptop market, customer engagement there remains strong and we continue to see an increased opportunity for high-quality audio in laptops, as we benefit from several secular trends that we believe can contribute to revenue growth and market diversity longer term. To capitalize on these trends, we are now sampling a new amplifier and recently taped out a new codec, both optimized specifically for the emerging audio architectures in laptops. In fiscal year 2023, we expect to see over 40 new laptop models come to market featuring our components. Turning to our high-performance mixed-signal product lines, development and design activity are stronger than ever across this category. Our customer engagements and the close engineering collaboration with our customer around camera controllers continues to strengthen as we work together to identify new opportunities to enable advanced functionality and to improve the camera experience. In fiscal year 2023, we expect to benefit from both the higher attach rate of our camera controller in the newest devices and also a more favorable mix of smartphones on the market that include our camera components. And in power, building on the success of our first-generation power conversion and control IC, we have today invested in intellectual property and capabilities that will bring further innovations and address new challenges, including those of battery health and longevity in the coming years. In summary, we are delighted with our financial results, our customer engagements, and our progress in executing against our strategy in the quarter. We remain focused on serving our customers, diversifying our product portfolio, and broadening our addressable market into new application areas. With the wide range of technology investments we are making today, we believe we have a solid pipeline of opportunities to expand the HMPS dollar content in fiscal year 2024 and beyond. And with that, let me now turn the call over to Venk to provide an overview of our financial results for our fiscal first quarter 2023, as well as guidance for fiscal Q2 2023.

Thank you, John. Fiscal first quarter revenue was $393.6 million and a record for the June quarter. Revenue was up 42% from a year ago and about at the high end of our guidance range. Our strong results were driven by high-performance mixed-signal content gains and to a lesser extent higher ASPs. Non-GAAP gross profit in the quarter was $202.9 million and non-GAAP gross margin was 51.5% and exceeded expectations due to favorable product mix. On a sequential basis, gross margin was down as cost increases that took effect in January were fully reflected in product shipments during the June quarter. This was partially offset by a favorable product mix. The year-over-year change in gross margin reflects the favorable impact of higher ASPs on our general market products. Going forward, we expect gross margin to be more in line with our long-term model and I will cover this topic more in the guidance section. Non-GAAP operating expenses in the quarter were $119.5 million, down $3.6 million sequentially. Operating expenses came in slightly below the midpoint of our guidance range despite higher revenue and the sequential decline was primarily driven by a reduction in variable compensation and employee-related costs. This was partially offset by higher product development expenses. Non-GAAP operating income was $83.4 million in the first quarter or 21% of revenue. Non-GAAP net income in the first quarter was $64.5 million or $1.12 per share. Let me now turn to the balance sheet. Our balance sheet remains strong and we ended the first quarter of fiscal year 2023 with approximately $454 million in cash and cash equivalents. This was up roughly $9.5 million from the prior quarter, due to strong cash flow generation, partially offset by stock repurchases during the quarter. I’d note, we have no debt outstanding. Inventory was $174 million, up $36 million sequentially and days of inventory was 83 days in Q1, up 28 days sequentially. I’d note, this is in line with normal seasonal trends as we began building ahead of product launches later this year. Turning to cash flow, cash flow from operations was $74.4 million in the quarter and free cash flow for the quarter was $67.1 million. In Q1, we utilized $56.4 million to repurchase roughly 725,000 shares of our common stock at an average price of $77.78. As of the end of Q1 fiscal year 2023, we had $136.1 million remaining in our 2021 share repurchase authorization. Furthermore, the Board of Directors last month authorized the company to repurchase up to an additional $500 million of the company’s common stock. 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 the fiscal second quarter of 2023, we expect revenue in the range of $450 million to $490 million. On a year-over-year basis, our expected revenue growth is largely driven by higher ASPs and to a lesser extent increased high-performance mixed-signal content in smartphones. As I alluded to earlier, we expect gross margins to be around our long-term model of 50% due primarily to product mix. As a result, in the September quarter, we expect gross margin to range from 49% to 51%. Non-GAAP operating expense is expected to be up sequentially in the range of $123 million to $129 million. The sequential increase is expected to be driven primarily by higher product development costs. We expect SG&A to remain flat sequentially. On the tax front, as we mentioned in our Q4 fiscal 2022 earnings release, due largely to a tax slew effective this year that requires companies to capitalize and amortize R&D expenses rather than deduct them in the current year. We expect our fiscal 2023 non-GAAP effective tax rate to be approximately 23% to 25%. We continue to anticipate that under this rule, our effective tax rate will decrease and may return to a normalized range in about five years as additional years of R&D expenses are amortized for tax purposes absent any changes to the legislation. However, there appears to be legislative support for delaying or eliminating this rule, which we are watching closely. I’d note that without the impact of this rule, our non-GAAP effective tax rate would be in our more typical mid-teens range. In closing, we had a strong Q1 fiscal year 2023. Going forward, we will focus on the best opportunities to enable the company to continue 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 Cirrus Logic company policy, we will not discuss specifics about this business relationship. With that, let me turn the call to Chelsea to start the Q&A session.

Thanks, Venk. We will now start the Q&A portion of the earnings call. Please limit yourself to a single question and one follow-up. Operator, we are now ready to take questions.

Your first question comes from the line of Matt Ramsay with Cowen. Your line is open.

Thank you very much, John, Venk. Good afternoon and congratulations on the results. I just wanted to ask one question. John, in the scripts you were, I think, much more specific about the number of engagements and the number of potential wins and the trends in the business that you might have in audio going into the notebook market and I think we are all aware of some of the challenges in notebook units globally, but this is all greenfield for you guys. So I wonder if you might characterize how large that opportunity could be for Cirrus in the long-term sort of relative to the smartphone business? And I will just go ahead and ask my follow-up while I am on, it’s a bit unrelated but I noticed the Android piece of your audio business down pretty sharply, which I guess is no surprise given what’s going on in the China smartphone market in the mid-tier. I just wonder if you guys feel going into the latter half of the calendar year that that business has been de-risked?. Thanks, guys.

Thank you, Matt. I appreciate your kind words. Let me start with the laptop market. We are optimistic about the level of design activity there, which we find very exciting. Although there are some challenges currently impacting the market, this does not affect our view on the fundamental drivers of our strategy. These drivers are centered around evolving audio architecture, as well as potential opportunities in haptics and power. We're thrilled about the laptop market, especially since it represents a significant opportunity for us, and we've historically performed well with strong relationships with a select few major customers. Currently, we are shipping with four out of the top five laptop OEMs, which puts us in a good position. I won’t make predictions on what we can achieve, but we see our serviceable addressable market potentially reaching $1 billion or more in audio, haptics, and power. This is an appealing market for us, and we are actively building momentum there. Now, regarding Android, I want to refer back to previous remarks where I mentioned that our business this year has been limited by supply constraints. This situation forces us to be very selective about which designs we pursue in the smartphone sector, and it has affected our Android business. It's not about lacking customers in a given month; rather, it's about not committing to certain designs without confidence in our supply. We expect our Android business to continue facing supply constraints for the remainder of fiscal 2023. However, we are well positioned in the flagship segment of that market, and as we can increase our supply, we will aim to do that and build on our existing momentum.

Your next question is from the line of Tore Svanberg with Stifel. Your line is open.

Yes. Thank you and congrats on the results. The first question is on the new smart codec. I know typically this chip changes sort of every two years, three years or so. I was just wondering about the dynamics there as far as pricing; I assume that you had some new features and things like that. So is that an opportunity to perhaps get some better prices on that as sort of the latest and greatest smart codec?

Thank you, Tore. First, regarding the timing, the lifespan of both codecs and boosted amplifiers has been extending over the years, mainly due to the maturity of the products. The update cycle has slowed down compared to when these products were refreshed every couple of years. However, this is indeed a significant update to an important product for us. I won't comment on pricing at this stage, but as you know, making a substantial investment to transition a lot of mixed-signal circuitry to a new process node is generally driven by our recognition of an opportunity to incorporate much more digital processing. This shift, in this case from 55-nanometer to 20-nanometer, enables us to add more features and capabilities. Therefore, we generally anticipate some increase in average selling price that aligns with this development.

Great. Thank you for that. And then my follow-up, you mentioned in the Shareholder Letter that given the tightness of especially 55-nanometer, you do intend to move down to lower geometries. I was hoping you can expand a little bit on that because obviously, there is more capacity there but it’s also more leading edge, which could be more expensive, right? So I just want to make sure that I understand this correctly: you want to go there because it’s more capacity, but you are not going to go really real advanced or perhaps the nodes are significantly more expensive than at the 55-nanometer node?

I believe you’re spot on. Tore, the approach varies based on the product line, whether that action is appropriate or not. To provide some background on the subject, last year we made a significant strategic decision by establishing a long-term agreement with Global Foundries to support our growth in alignment with our customers' plans. Since then, I have consistently emphasized that if more supply becomes available, we will definitely utilize it. This need arises from the strong demand we observe in the short term, as well as a pipeline of additional opportunities to enhance our dollar content in the future. To seize these opportunities, we require both additional capacity and new technologies. Sometimes this might involve utilizing technologies available at 55-nanometer or 22-nanometer, or possibly exploring other alternatives. However, you are correct that the economics vary, and the suitability of a particular process node depends on the specific product involved. That said, advancing high-voltage, high-precision mixed signal technologies to increasingly sophisticated geometries has been a crucial aspect of our competitive advantage. Therefore, expect us to continue in that direction; our investment in the 22-nanometer codec is a prime example.

Your next question comes from the line of Christopher Rolland with Susquehanna. Your line is open.

Hi, guys. Thank you for the question. I guess my question is around power and some of your mixed-signal capabilities there. First, I guess, traction or an update for Lion and how that’s going? And then, secondly can you talk about your power conversion roadmap and any capabilities we might see there increase in that roadmap over time? Thanks.

Thanks, Chris. We remain enthusiastic about the contributions from the Lion team and the Lion intellectual property in terms of product and market diversification. At the time of the acquisition, the Lion team was primarily focused on the Chinese smartphone market, which has faced some challenges. However, our vision for the technologies extends well beyond that market. Since the acquisition, the team has made significant progress and achieved notable successes with smartphones in regions outside of China, which we are pleased about. Currently, a substantial part of the team is dedicated to developing products for other markets, including the laptop segment, which I mentioned earlier has considerable growth opportunities for us. We believe that market diversity will play a significant role in the future of that team.

Okay.

Regarding our progress.

Go ahead. Sorry, John.

Regarding the broader power market, I won’t go into specifics. The power conversion work we've done so far has been focused on custom silicon aimed at battery health and longevity. We see significant opportunities for further innovation in battery technology, so we are investing in that area. It has been a major focus of our R&D efforts over the past year and will continue to be in the coming years. I’ll leave it at that due to the custom nature of those products.

Great. Thanks, John. And I think you did mention Android, that’s really my follow-up here. I guess, first of all, how would you describe the state-of-the-state in the Android market now and then beyond maybe inventories or sell-through or whatever the downside there is? I would love to know what you are seeing in terms of design and your best opportunities as you see them looking forward in Android for Cirrus?

Yeah. I think the China-based Android smartphone slowdown is, it’s been well covered and I think we first started talking about that in December when we were covering the December quarter last year given that we saw it beginning then. Outside of there in Android, we continue to be very well engaged obviously with Samsung and other top-tier Android vendors. And I think top tier is probably how I’d characterize it, given current supply constrained environment; I think there’s no doubt that we are the first choice for flagship Audio in Android smartphones. We make the best mobile amplifiers on the planet and we have very, very good relationships with the customers there. To the extent that we can expand supply, we would expect to be able to sell more over time.

Your next question is from David Williams with The Benchmark Company. Your line is open.

Good afternoon and thank you for the question. To start, you mentioned the supply constraints, and I would like to know if you could provide more details on that. How do you perceive the overall situation improving or remaining stable? Additionally, regarding the recent softness in consumer electronics, do you think there will be an improvement in available capacity?

Well, we have seen in certain areas limited incremental capacity upsides, but I think it’s important to keep in mind that the majority of our revenue is based around a couple of processes and process nodes at major foundry partners, which is still experiencing very, very high demand. So we haven’t seen significant movement there as yet.

Okay. And then maybe just around the OpEx, if you think about it for the year, just some of the investment initiatives you have. How should we think about OpEx trending for the year and maybe longer term?

Thank you for the question. This is Venk. As we evaluate our operating expenses, we have noticed an increase in our R&D spending over the last few quarters due to a strong pipeline of opportunities for revenue growth in the long term. Therefore, we will be very intentional about our R&D investments. Regarding SG&A expenses, we anticipate them to remain flat. While we are not providing full year guidance at this time, it is reasonable to expect that we will be careful with our investments moving forward. We will continue to prioritize long-term R&D investments, but we will also manage hiring in non-critical areas where appropriate.

Your next question is from the line of Blayne Curtis with Barclays. Your line is open.

Hey, guys. Thanks for taking my question. This is Tom O'Malley on for Blayne Curtis. I just wanted to ask on the seasonality into September, obviously, earlier in the year you had a kind of cautious outlook into June and end up being a bit better. But as you look into September compared to the past couple of years, it looks slightly less seasonal and your commentary has really been around increased content with a better ASP. So could you talk to whether that’s conservatism or if you are seeing some slowdown just because from the broad perspective, particularly your large customer things seem pretty good, so just on the September guidance and why that’s a little less seasonal than in prior years?

Certainly. Our March and June quarter results were strong, and while there are shifts in the macro environment, we don't observe any significant change in our bookings or booking patterns compared to previous years. However, we anticipate that order patterns will be more linear throughout the rest of the year due to the positive performance in the March and June quarters. Overall, our order patterns are as we expected. Notably, one of our major customers is preparing for a product launch, which is influencing our shipment levels. We advise against overanalyzing this situation at this juncture, and we believe that the linearity in our orders for the remainder of the year will be more pronounced than in previous years.

Helpful. And then just on the Android market, obviously, the weakness that you have seen in the near term was pretty severe. Is there any hope that there is a bounce off the bottom into the September quarter, just any color on if you see a slightly improving market there or if you expect things to further deteriorate? Thank you.

I don’t think we have any additional insights on the Android market specifically for the coming quarter, Tom. I wish I did. There’s a lot of macro uncertainty in that area, but we are shipping a significant amount of silicon into products within the smartphone market, where demand has remained quite resilient. As you know, the Android market appears to have much more uncertainty surrounding it.

And then, if I can add to it. John pointed out, clearly, we are shipping to the slice of the market that seems to have a little more robustness around it and we are all reading the same signs in terms of what’s happening in China as it relates to Android and also the rest of the world. And as the macro situation develops, we will keep an eye. But most of our focus has been primarily driven by the shipments that we have made into the high end of the market, and as John pointed out earlier, those are still supply constrained.

Our final question comes from the line of Ananda Baruah with Loop Capital. Your line is open.

Hey, guys. Good afternoon. Thanks for taking my question. Two, if I could. Just maybe stating the obvious, but on the audio constraints assuming then there is no real inventory built up sort of throughout your ecosystem or at least not significant and so sort of seasonality over the next couple of quarters will probably ebb and flow more towards true demand is, is that a sort of a fair assumption? Then I have a quick follow-up as well.

Yeah. Thank you, Ananda. Obviously, our view of that is imperfect, but we ship based on the demand signals that we see from our customers. But given the quantity of our silicon that goes into smartphones where our customers have publicly commented on the robustness of demand. And the fact that really on the supply side, we have spent the whole year with the team just working as hard as it can, just to keep up with demand for those products. I think the likelihood that there is a significant buffer of silicon out there is comparatively low.

That’s super helpful. Thanks. And just a quick follow-up on the laptop, you mentioned in the Shareholder Letter, you kind of work from home remote work being a catalyst and so is that to say that there is a sort of skew in the 40 laptop towards commercial exposure as opposed to consumer exposure?

That is certainly a meaningful part of it. Yes. That’s one of the secular drivers that I don’t think is going to change, suddenly from conversations I have had with very senior people running laptop businesses within some of those four out of the top five OEMs that I talked about, they will admit that audio did not used to be a feature that was very high on the spec list and it absolutely needs to be first class now, the AV experience and that’s really driven by the pervasive nature of hybrid working. So that’s going to be true and consumer, of course, but we do see that as being highly relevant in the Enterprise segment as well.

With that we will end the Q&A session. I will now turn the call back to John for his final remark.

Thank you, Chelsea. In summary, in the June quarter, Cirrus Logic delivered record first quarter revenue driven by strong execution across our three strategic drivers, continuing our leadership in smartphone audio, broadening sales of audio components in key profitable applications beyond smartphones and applying our mixed-signal expertise to expand into new adjacent high-performance mixed-signal markets. We are more excited than ever about the opportunities that we see ahead and we thank you for your continued interest in Cirrus Logic. Before we close, I’d also like to note that we will be participating in the KeyBanc Conference on August 8th in Vail. 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. Thank you. Good-bye.

Ladies and gentlemen, this concludes today’s conference call. You may now disconnect.