CRUS - NASDAQ

Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic Fourth Quarter and Full Fiscal Year 2024 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 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. Ms. Heffernan, you may begin.

Thank you and good afternoon. Joining me on today's call is John Forsyth, Cirrus Logic’s President and Chief Executive Officer and Venk Nathamuni Chief Financial Officer. Today at approximately 4 P.M. Eastern Time, we announced our financial results for the fourth quarter and full fiscal year 2024. A Shareholder Letter discussing our financial results, the earnings 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 the analysts covering our company. Additionally, the results and guidance we 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. 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 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 now turn the call over to John.

Thank you, Chelsea and thank you everyone for joining our today's call. As you've seen in the press release, in the March quarter, Cirrus Logic delivered revenue of $378.1 million, above the top end of our guidance range due to stronger-than-anticipated demand for smartphone products. In FY 2024, Cirrus Logic delivered full fiscal year revenue of $1.79 billion, down 6% year-over-year due to a reduction of general market and custom components, primarily in non-smartphone applications. Despite those challenges, we are proud that our disciplined execution helped to grow both non-GAAP earnings per share year-over-year for the quarter and both grow GAAP and non-GAAP EPS for the full year. Venk will take the reins in a few moments to walk us through the details of the financial results for the quarter and for the year. But before I turn the call over, I want to share an update on the progress we've been making on our strategy in the past four quarters. We've previously communicated that our growth strategy is based around three broad principles; number one, maintaining leadership in our core flagship smartphone audio business; number two, expanding into areas of high-performance mixed signal functionality in smartphones; and number three, leveraging our audio and high-performance mixed signal capabilities to penetrate new markets. This year, we have made exciting progress on all three fronts. In our flagship smartphone audio business, most notably in the past year, we completed our design work on and delivered to our customer two next-generation products; a Boosted Amplifier and a Smart Codec. The Boosted Amplifier introduces an innovative new architecture, significantly improving system performance and efficiency, while saving valuable board space. The smart codec will be Cirrus Logic's first 22-nanometer product and will similarly deliver meaningful advances in audio and mixed signal processing capabilities to our customers. Taken together, these devices represent a considerable engineering investment and the culmination of many years of work and close collaboration with our customer. We anticipate both products will launch in devices in the fall of this year. Looking beyond audio. We also made significant investments in certain HPMS areas where we believe our mixed signal design and signal processing expertise can enhance our customers' products. A core element of our HPMS strategy is camera controller products, where we shipped our third generation controller in the fall of 2023 itself a key enabler of marquee features in customer devices. Moreover, in the last quarter, we continued to develop our road map by taping out new camera controller IP on a new process node, an early investment, which we expect will pave the way for further Beyond camera control as we also continue to investment in feature and performance enhancements in the future. Beyond camera controllers, we also continue to invest in a number of power and battery-related technologies and innovations. And while new product introductions in these domains are a little further out, we are excited about the progress we made in the development of both key intellectual property and silicon in these areas in FY '24. We During the year, we also saw encouraging signs that our IP and audio and HPMS can be valuable and highly relevant as we reach into new markets, most immediately in laptops. In FY '24, we sampled on designs with and shipped a new codec and a new boosted amplifier that were specifically designed for this market. We also won customer designs with a new power converter products designed for the laptop market and sampled a laptop-focused haptic driver product. Three of these devices, the codec, the boosted amplifier and the power converter were also featured as part of Intel's Luna lake reference design. and their capabilities contribute meaningfully towards our customers being able to create better laptops. Compared to competitive alternatives, Cirrus Logic solutions sound better, play louder, conserve battery life and save board space. While there is still a lot of work ahead of us in the laptop space, we exit the year optimistic about the momentum that we are building in this market. Against this backdrop of investment in supporting our customers and in future growth, we remain committed to disciplined execution. Throughout the year, we worked hard on increasing both our own operational efficiency, and the efficiency, competitiveness and diversity within our supply chain. Additionally, during the year, we returned $186 million of cash to shareholders in the form of share repurchases. And these combined actions, along with a decrease in our tax rate during the year contributed to a $0.17 year-over-year increase in non-GAAP earnings per share to $6.59. And with that, let me now turn the call over to Venk to provide an overview of our financial results for the fourth quarter and full fiscal year 2024 as well as the outlook for the first quarter of fiscal 2025.

Great. Thank you, John, and good afternoon, everyone. I'll start with a summary of our financial results for both our fiscal Q4 as well as full year fiscal 2024 and then provide guidance for our fiscal Q1 2025. Revenue in Q4 was above the high end of our guidance range at $371.8 million as shipments remain robust throughout the March quarter. On a sequential basis, revenue was down 40% due primarily to a reduction in smartphone volumes, which follows a stronger-than-seasonal December quarter, which, as you recall, was a 14-week quarter. On a year-over-year basis, revenue was roughly flat. Fiscal year 2024 revenue of $1.79 billion was down 6% from a year ago. The decline was driven by a reduction in shipments of our general market and custom products, primarily in non-smartphone applications. Turning to gross profit and gross margin. Non-GAAP gross profit in the quarter was $193 million, and non-GAAP gross margin was 51.9%. Gross margin was above the high end of our guidance range, due mostly to supply chain efficiencies and lower freight expense. On a sequential basis, gross margin increased by 50 basis points driven by a favorable year basis, gross margin increased 180 basis points due largely to lower supply chain costs, including freight. This was partially offset by a less favorable product mix. Non-GAAP gross profit for our full fiscal year 2024 was $917.5 million, and non-GAAP gross margin was 51.3%. Gross margin increased year-over-year due to a decline in supply chain costs, including the absence of wafer premiums, lower freight expense as well as a reduction in inventory reserves. And all of this was partially offset by a less favorable product mix. Now I'll turn to operating expenses. Non-GAAP operating expense for the fourth quarter was $116.5 million. On a sequential basis, OpEx declined $9.2 million, primarily due to decreased variable compensation, lower employee-related expenses, mostly due to one fewer week of salaries as well as increased R&D incentives. On a year-over-year basis, operating expense was down $3.3 million, largely due to an increase in R&D incentives and lower product development costs. This was partially offset by an increase in variable compensation. Non-GAAP operating income for the quarter was $76.5 million or 20.6% of revenue. For the full fiscal year, non-GAAP operating expense was $470.4 million, down $16 million from the prior year, primarily due to increased R&D incentives, a reduction in variable compensation as well as lower product development expenses. This was partially offset by an increase in employee-related expenses. Non-GAAP operating income for fiscal year 2024 was $447.1 million, as a result, full fiscal year 2024 operating margin came in at 25%, up slightly from the prior fiscal year despite the revenue headwind we experienced in fiscal 2024. Turning now to taxes. For the March quarter, our non-GAAP tax rate was 17.6%. However, for the full fiscal year, non-GAAP effective tax rate was roughly 21%, which was in line with our previous guidance. And lastly, on the P&L. Non-GAAP net income in the fourth quarter was $69 million, or $1.24 per share as the higher revenue and profitability flowed through to the bottom line. And for the full fiscal year, non-GAAP net income was $369.3 million, or $6.59 per share, up $0.17 from fiscal 2023. The increase in non-GAAP earnings per share was driven by our disciplined execution, share repurchases, as well as a decrease in tax rate that I alluded to earlier. Let me now turn to the balance sheet. Our balance sheet continues to remain strong, and we ended fiscal 2024 with nearly $700 million in cash and cash equivalents. Our ending cash balance was up $182.6 million from the prior year, primarily due to strong cash flow from operations, which was partially offset by stock repurchases. We continue to have no debt outstanding and have $300 million undrawn on our revolver. Inventory balance at the end of the fourth quarter was $227.2 million, down from $256.7 million in Q3 2024. Days of inventory was up 38 days sequentially and we ended the quarter with approximately 116 days of inventory. Looking ahead, in Q1 fiscal 2025, we expect inventory to increase from the prior quarter as we begin to build ahead of seasonal product launches in the second half of the calendar year. In fiscal 2025, inventory is expected to be elevated as we continue to support customer demand and fulfill our wafer purchase commitments in accordance with our long-term capacity agreement with GlobalFoundries. Turning now to cash flow. Cash flow from operations was $170.5 million in the March quarter, and CapEx was roughly $7.7 million, resulting in non-GAAP free cash flow margin for the quarter of roughly 44%. For the 12-month period ending in the March quarter, cash flow from operations was $421.7 million, and CapEx was roughly $38.3 million, resulting in non-GAAP free cash flow margin of roughly 21%, a 500 basis point improvement compared to free cash flow margin of 16% in fiscal 2023. On the share buyback front, in Q4, we utilized $50 million to repurchase approximately 548,000 shares of our common stock at an average price of $91.3. For the full fiscal year, we returned $186 million of cash to shareholders as we repurchased 2.3 million shares at an average price of $80.68. At the end of Q4 fiscal 2024, the company had $315.1 million remaining in its 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 on to the guidance. For Q1 of fiscal 2025, we expect revenue in the range of $290 million to $350 million, reflecting seasonal weakness in the general market product sales and lower smartphone units. We expect gross margin to range from 49% to 51%. I'd like to point out that we expect gross margin during the current quarter to be towards the lower half of the range as we incur costs to ramp production of our new 22-nanometer codec, as well as the new boosted amplifiers. Non-GAAP operating expense is expected to range from $118 million to $124 million, up sequentially due to an increase in product development and employee-related expenses. I'd note that with the start of a new fiscal year, our annual merit increase takes effect during the June quarter. This is partially offset by lower variable compensation expense. We'll continue to control discretionary spending while investing strategically in product development to drive long-term growth. We expect our fiscal 2025 non-GAAP tax rate to be approximately 22% to 24%, which is slightly higher than our tax rate in fiscal 2024. You may recall that we had a large one-time tax benefit last quarter from applying new IRS guidance to our capitalized R&D amounts. We do not expect to have a similar one-time benefit in fiscal 2025. In closing, thanks to the collective efforts of the entire Cirrus Logic team over the past year, we increased operating efficiencies and exercised fiscal discipline, which contributed to year-on-year earnings per share growth. We are pleased with the progress we have made this year, and we'll 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 we understand there is intense interest related to our largest customer, in accordance with Cirrus Logic's company policy, we will not discuss specifics about this business relationship. With that, let me now turn the call over 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.

Thank you. The floor is now open for questions. [Operator Instructions] And your first question comes from the line of Matt Ramsay with TD Cowen.

Thank you very much, everybody. Good afternoon. I wanted to start on the gross margin stuff. You mentioned in your script maybe being a little bit below the middle of the range for June, and that's all fine. I wanted to ask, as you roll through the next 12, 15 months, you're going to be introducing the new codec on 2022, the new boosted amplifiers, you would think that the laptop business becomes a little bit more material to the company. If you could just kind of walk us through how you're thinking about things on the gross margin front, given all of those variables, I don't really care that much about one quarter, but just over this product cycle, if there's anything new that we should consider and just kind of the puts and takes on margins? Thanks.

Yes. Thanks for the question, Matt, and good afternoon. Yes. So in terms of just the overall gross margin, as you correctly pointed out, with the current quarter, we do expect to see it slightly below the midpoint, primarily because of the ramp costs that I alluded to in the prepared script. But as you've seen over the last several quarters, we have made significant strides in terms of improving our supply chain efficiencies and lowering freight costs and so forth. Our long-term gross margin model continues to be 49% to 51%. That's the range that we're still comfortable with. Now obviously, we'll continue to improve the efficiencies as we go forward. But I think we'll just provide guidance later on as we get more visibility into the gross margin performance. And then as it relates to your question about the mix as things progress, as you pointed out, we are making some good strides in the PC space today. It's still -- I think we talked about this on the previous earnings call. We expect in fiscal 2025 PC contribution to be somewhere in the low tens of millions of dollars. So as it becomes a bigger portion of our revenue in the future years, it will have some impact on gross margin. But right now, think of it as being in line with our corporate average and we'll provide updates as we get further along.

Got it. Thank you for that. I guess just as my follow-up, it's a new market for you guys in notebook and you've sized it in the near-term. John, maybe you could give us a little bit on how the early strides have gone in notebook? I mean, can this be a much bigger market over time? I mean, what's -- relative to where you thought you'd be as you sort of start down this path, I mean, what's been the early experience and sort of the breadth of interest across the different platforms at the PC OEMs. Is this niche for now and growing over time? Or are you sort of pleased with the early progress and maybe it's potentially a bit larger than you thought?

Thank you, Matt. We're certainly pleased with the early progress. It's going to take time to grow it to be a real needle mover for us, but we see a great opportunity there. And when we look a few years out, we see over $1 billion of SAM there for us to attack as I've mentioned previously. If you look back over the past year, in particular, I think we've hit a number of really positive milestones, both with sampling our new Codec and Boosted Amplifier design for the laptop market and then seeing those launch in customer products and then now since the last quarter's report, seeing them actually shipping into end users' hands. So, that's great. And alongside that, of course, we had the integration of that Codec, that Boosted Amplifier along with the power converter product in the Intel Lunar Lake reference design. And that we do believe can be a great engine for further design wins and growth in the coming years. So, Lunar Lake will be something that makes more of a difference to us in calendar 2025. So, that's in the hands of a lot of OEMs right now. We're certainly working with, as we said, with the top five OEMs and they are all in various stages of evaluating Lunar Lake and building Lunar Lake designs. And we'll see those come to market during calendar 2025, which means that the bulk of the impact of that on our P&L will be from FY 2026 and going forward. And our view on what we expect in FY 2025 is unchanged. As Ben said, we think of that as low tens of millions, but with a great opportunity to grow it as we look further at.

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

Customer of this question. Can you hear me?

Chris, we couldn't hear you. Can you start over?

Yes. Can you hear me now?

Yes.

We can, Chris.

You can. Okay. I was saying despite my interest in your largest customer, this question will be about all of the revenue not related to that customer. So, I think last year, it was about $232 million total. And I'm wondering, as we enter this next fiscal year, how should we think about growth there? Is like the 30% area with these laptop and other handset games, is that like a reasonable expectation? How should we think about that? Thanks.

Yes, Chris, thanks for the question. So, I'll split the non-top customer revenue into a couple of smaller buckets just for some additional clarity. So, if you look at the composition of that business, it can vary anywhere from 12% to 15% at the high point, is probably about 20% of our revenues. And I'll break it into 3 components. So one part of it is what we call the general market catalog business that is not very dissimilar to what you'll see in a general purpose, high-performance analog portfolio. And that business is sold predominantly to distribution. We've seen just as our peers have, that business has been fairly weak for the last several quarters. And we are seeing some signs of stabilization there. In the last couple of quarters, we've seen distribution inventory be fairly stable and such. And I think that will recover as the economy improves and as general market conditions improve. So that's very tied to the overall macro. The second piece of that business is the Android business, and I would say, non-big customer, smartphone business. And I would say we're doing fairly well in the Android space today. We've had some good wins there and we're participating in whatever is happening there in that market. And then the third piece of it is the PC space, and with PCs, as John just alluded to, we've made some really good progress in terms of design wins. There's a lot of momentum across multiple OEMs, and we're seeing more adoption, especially with Intel Lunar reference design wins and so forth. But it will take a few quarters, maybe even a few years for that to be a needle mover. And I think in the fiscal '25 time frame, we have framed it as low tens of millions of lows in revenue within an expense substantially higher than that in fiscal 2016 and beyond. But that's the way I would frame the portion of our business that's not related to our top customer.

Okay. Low tens of millions, I guess, would be just 10% and then layer these other opportunities on top. And if it's tens of millions, 20 million, I mean that would be 20% -- 10% plus growth. But I guess moving on, you talked about you guys taped out your next-gen CLC, just curious as to any new functionalities or ASP? And if not, maybe talk about your new power and battery products, even though the time table is further out.

Thank you, Chris. Yes, I mentioned that we, in the past quarter did see silicon for our first -- for a camera control IP on a new process, we're excited about that. That's kind of running ahead of our road map a little to get our arms around new process and new IP and new customer features. So what we see in that part of our product portfolio is a continued desire over time for increased processing capability. That translates into higher performance, stabilization focus and other features that are very meaningful to the end-user camera experience. So we have, I think, a pretty rich road map there, and we'll continue to invest in it and continue to see, I think, over time, that kind of steady rate of growth that we've seen since the introduction of the first camera controller 4 years ago. In the battery and power space, we've made a lot of progress over the past year on IP, both in design and seeing much of that in silicon. We're actively engaged with customers in how that gets to market. Clearly, there are areas in the general market business where you can see some of our power IP being productized. For example, I mentioned the power converter product. It's a part of the Lunar Lake reference design. But we really want to get that into the hands of as many of our customers and across as much of our business as possible. And we're excited about that. As I've said previously, we're very interested in stuff around the battery in particular, kind of building on what we've done to date around sensing and managing battery health. And so we don't have more to report right now on what the product road map and timing looks like for that, but we're excited that we're making good progress in this space.

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

Yes. Thank you. And congratulations on the strong cash flows. I had a question for you first, John. So I'm not asking a question about your largest customer, anything like that. But with LLM starting to trickle down to edge devices like pieces and smart phones, I assume that the best interface is voice for AI at the edge. But I'm just wondering, just from an architectural perspective, if that is something that will -- I mean are you starting to see some new designs with your IP to those types of use cases. I mean, I know there's a lot of different angles here. I could be battery could be power. It could be voice audio. But yes, any color you could share with us as far as new design strength evolve on LMs trickling down to edge colitis?

Yes. Absolutely, Tore. I think we see a multitude of positives and opportunities around the Gen AI space. And voice is certainly one of them. That's one where across our customer base, we have multiple customers who are interested in how the voice interface evolves and assists the user interaction with generative AI. So that's clearly one thing that we're very interested in and looking at. But I think the opportunity set is really broader than that for us in the AI space. That's a very important part of a part of the signal path that goes through our silicon, so we care a lot about voice. But there are other ways in which it can drive significant value for us. I think not only, of course, if it drives the -- an upgrade cycle, in smartphones, watches, AR, VR and laptops. I think we're extremely well positioned to participate and benefit from that. I think secondly, it's really clear that generative AI on the edge is -- first of all, it's going to be a thing, as you alluded to, because for privacy and latency reasons, I think that really has to be the case. That means there's going to be a lot of data and processing going on, on the client device. And that means that we are going to see more memory needed and more and bigger processes and probably more in bigger batteries as well. And so that does a couple of things. One is it puts tremendous constraints on board space -- and that -- our advanced geometry mixed-signal space engineering really kind of plays squarely into that. We habitually are delivering very, very complex solutions in the mixed-signal space and integrating other components from around the board. So I think the premium on board space is probably going to increase in these client devices and along with that, the premium on power efficiency as well. And again, that's kind of squarely in the bull's eye of a lot of our R&D investments and efforts. So I think of all of those things together as being potential levers for us in the opportunity set around AI.

Yes. No, that's great. And as my follow-up, so obviously, you've got the smart codec and the amplifiers ramping, I assume that obviously means some higher content. But at least, of course, initially, but as -- I think you said in the shareholder letter, those to remain workhorse products for a while. How should we think about sort of ASP declines every year once those products have been introduced to the market? Should we think about sort of like low to mid-single-digit decline?

I think it's difficult to say precisely, Tore, though I do think we're entering a more normal, more typical kind of pricing environment than we've seen over the past few years. So I think a reasonable assumption. And certainly, we expect this of our suppliers. So I have no reason to think that our customers don't expect it of us is that we see reasons for efficiency to increase for prices to come down somewhat in the coming years. But at the same time, our goal will always be to offset that through our own operational efficiency, but also through feature enhancements and integration of other functions into the devices we're delivering to our end customers. But I think we're probably moving back into an environment where there is something approaching a more typical pricing curve.

[Operator Instructions] And your next question comes from the line of Thomas O'Malley with Barclays.

Hey, guys. Thanks for taking my question. I just wanted to ask something in relation to just the broader smartphone ecosystem. A couple other players in your largest customers around talked about a weaker June due to some inventory work down. I just want to understand your timing with customers. Do you generally recognize some benefit in the June quarter from new platforms on a year-over-year basis? And are you seeing any of the inventory headwinds that we've heard about in the market from others?

Yes. Tom, thanks for the question. So when we look at our bookings patterns from our top customer. If you ignore what happened during the pandemic, I would say in the last year and year and a half or so, we've returned to some semblance of normalcy, right? So there's a typical seasonal pattern that we're beginning to see, especially in the last 4 or 5 quarters, And based on those patterns, I would say that tends to be very little in terms of new product introduction that's related to the June quarter. Now as you talk about what some of our peers have mentioned on their earnings calls, especially in the smartphone space, I recognize that some of them had inventory issues and some of them didn't. And for us, it's really hard to compare our bookings patterns with what we see with our peers because the dynamics are very different. As you know very well, we've had a 15-year history of working incredibly closely with this customer and we tend to have much longer visibility at least in terms of new products and so forth. And I think to compare our patterns with what we are hearing from others, I don't think this is something that we have the ability to prognosticate.

Super helpful. And then if I just look at the full year, I know just being sensitive on customers, et cetera, but you have a really nice content road map here this year with new codec and new amps. And I look at kind of the full year, and I'm not seeing kind of the expected growth that I would normally see in a content-rich environment year-over-year. To what extent are you guys baking in headwinds in regarding total units? Can you talk about what conservatism you're kind of introducing to the model there over the next couple of quarters? And maybe just your expectations for, smartphones in general for this calendar year? Just because it seems like when I'm looking at your numbers here, I would expect a little bit more in terms of revenue growth on the audio side given the content increases you're describing? Thank you.

Thanks, Tom. Obviously, we're just guiding the quarter right now, so I can't speak to what numbers you may have for the full year. To your point, we don't get too far out over our skis on assumptions on units, of course. We think that's prudent. And we do also, as you said, we feel good about the content that we have coming this fall. But beyond that, we're not giving guidance right now.

Yeah. And if I could, Tom, just to add to what John said, we -- when we provide guidance, we take all the factors into account in terms of what the ordering patterns are, what the historical seasonality is, and things of that sort. And we try to provide guidance with what we think is the most likely outcome. But looking beyond the current quarter is not something that, we were particularly equipped with.

And we have time for one last question.

Your last question comes from the line of Ananda Baruah with Loop Capital.

Hey. Thanks, guys. I really appreciate you taking the question. And congrats on the great execution this quarter. I guess the question, maybe, John, along those lines is given the new technology that you have ramping boosted amp and the smart codec, all things being equal, could you see better than typical seasonality through the back half of the calendar year?

I don't think I'm in a position to guide that right now, Ananda. I think a lot of that does depend on the scheduling of orders around the ramp. As you would imagine, it's a really significant ramp of material with the boosted amplifiers being three per device, and then the codec with a one attach rate as well. That's a lot of material. And, so that will be showing up in our results as we go forwards. But exactly how that pans out relative to typical seasonality, I don't think we're in a position to comment in detail.

That sounds well. And then just a quick follow-up is given sort of just tipping back to your comment here about Gen-AI opportunities, given the multiple touch points you could have into the various potential areas of needs. Does that place the company in a stronger position to expand its customer base participation? And that's it for me. Thanks.

I certainly hope so. I think with our existing customer base, a number of those customers are many of the brands who I think will be bringing generative AI-centric devices to consumers. So we're very well-positioned from that point of view. But I think we can target achieving deeper penetration of some of those customers as we go forward. I mentioned that there are multiple product categories where I think we can be relevant and where GenAI can be relevant across smartphones, watches, AR, VR, laptops and so on. In some of those markets, we're still in the early innings, laptops being a prime example. And I think we have both product solutions today, which are highly relevant just in terms of delivering significantly increased power efficiency, plus the engineering and IP expertise that will lend itself extremely well to participation in GenAI cycle of products. So yes, is the answer. I'm hopeful that we can certainly be active participants in that cycle.

And with that, we will end the Q&A session, and I will turn the call back to John for his final remarks

Thank you, Chelsea. In summary, we're pleased to report these results for the quarter and to report the significant progress we made in fiscal 2024 across our main areas of strategic focus. I'd like to thank our customers for the trust they continue to place in us as a partner and supplier and all of the Cirrus Logic employees worldwide whose commitment to excellence in everything they do is what drives our collective success. We remain very excited about the opportunities that we see in front of us, and we thank you all for your continued interest in Cirrus Logic. Before we close, I would also like to note that we will be participating in the Cowen Conference in New York on May, 29. And the Stifel conference in Boston on June 4th. Please check our investor website for the details. I'd like to thank everyone for participating in the call today. Goodbye.