Thurman K. Case - Cirrus Logic, Inc. Jason P. Rhode - Cirrus Logic, Inc. Chelsea Heffernan - Cirrus Logic, Inc..

Tore Svanberg - Stifel, Nicolaus & Co., Inc. Christopher Hemmelgarn - Barclays Capital, Inc. Rick Schafer - Oppenheimer & Co., Inc. Rajvindra S. Gill - Needham & Co. LLC Matthew D. Ramsay - Canaccord Genuity, Inc. Christopher Rolland - Susquehanna Financial Group Charlie Lowell Anderson - Dougherty & Co. LLC.

Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic Third Quarter Fiscal Year 2017 Financial Results Q&A Session. I would now like to turn the conference call over to Mr. Thurman Case, Chief Financial Officer. Mr. Case, you may begin..

Thank you, and good afternoon. Joining me on today's call is Jason Rhode, Cirrus Logic's President and Chief Executive Officer, and Chelsea Heffernan, our Director of Investor Relations. Today, we announced our financial results for the third quarter of fiscal year 2017 at approximately 4 p.m. Eastern.

The Shareholder Letter discussing our financial results, the earnings press release, including a 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 to us via e-mail at investor.relations@cirrus.com.

Please note that during this session, we may make other projections and other forward-looking statements that are subject to risks and uncertainties that may cause actual results to materially differ from projections.

By providing this information, the company undertakes no 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 issued today, which is 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'd like to turn the call over to Jason..

Thank you, Thurman. Before we begin taking questions, I'd like to make a few comments. For a detailed account of our financial results, please read the Shareholder Letter posted on our Investor Relations website. We are extremely pleased with our results for the December quarter.

We delivered Q3 revenue of $523 million, above the high end of guidance, as demand for certain portable audio products exceeded our expectation. During the quarter, shipments of our new boosted amplifiers and hi-fi digital headset codec accelerated.

At the same time, we expanded our footprint in the mid-tier as several new smartphones utilizing Cirrus Logic's smart codecs were launched. We are encouraged with our customer engagements and design momentum across our portfolio as innovative audio and voice solutions that enhance the consumer experience are increasingly viewed as essential.

More importantly, our engineers and technical marketing teams are working hard to execute on an extensive roadmap that will augment our product offerings, broaden our addressable market and drive growth opportunities in the coming years.

While Cirrus Logic is excited to be on track to deliver our third consecutive year of more than 25% annual revenue growth, we are also optimistic about our future as we are participating in markets such as digital headsets and mid-tier smartphones where demand for compelling audio and voice technology is just beginning to accelerate.

With an extensive platform of products that span the complete audio signal chain, we believe the company is well positioned to continue to be a leading provider in the markets we serve.

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. Operator, we're now ready to take questions..

We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Tore Svanberg from Stifel. Your line is open..

Yes, thank you, and congratulations on the strong results. Jason, in the Shareholder Letter you talk about growth moderating for fiscal 2018. I was just hoping you could calibrate that comment a little bit.

Obviously, you've had three very, very strong years but just hoping to get a bit more color on that comment, especially in relation to dollar content growth at your largest customer..

Yeah, sure. As you've highlighted, we're delighted to have exceeded 25% revenue growth for three years in a row so it's probably not too surprising that our expectations for FY 2018 are more modest than that. That's driven by a lot of content growth which, of course, is always the goal but it's not a straight line up and to the right.

So we remain very excited about a lot of the growth opportunities we're pursuing and we think we're making good progress there so nothing's changed on that front but the more diversified nature of some of these opportunities means we need to aggregate up a larger number of wins to really move the needle on the top line and obviously that can take time.

Of course, we're unable to give very specific annual guidance since however many units our customers sell is beyond our control or our ability to guess this far out.

All of that said, I'm sure you need something for your models, so I'd say something in the single digit percentage growth range would be sensible assuming that products and markets we serve remain relatively stable which again is not something we're predicting one way or the other but is a reasonable place to base assumptions probably..

That's very helpful. And you also mentioned in the Shareholder Letter some ASP declines at one of your Android customers.

I was just obviously not asking for specifics but what are some of the dynamics that are leading to that?.

Sure. I mean, any good set of engineers has always got multiple ways to implement a particular product and we try to provide a lot of different solutions for our customers to choose from. In this particular case, customer opted for one smart codec in particular that's a lower ASP than the one they've used in the most recent flagship model.

So, it's always a little bit of part of the nature of the beast.

When you're a mixed signal peripheral provider, there's always some fraction of what you've done in any one year, they get soaked up into the big digital chip, big square digital chip in the center of the board and we're always trying to put more features and functions on the table to offset that and there's an ebb and a flow to that in any given year.

Obviously, we'd prefer if the customer used a bigger device but as we also said in the Shareholder Letter, we see opportunities over the coming year to expand into additional products with that same customer. The relationship is great and we see good opportunities even in the flagship to significantly grow content over the longer term..

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

Hey. This is Chris Hemmelgarn on for Blayne. Thanks very much for letting us on to ask a question and congrats on the strong results. I guess, first of all, if you can talk a little bit about you mentioned that you're getting 55-nanometer amps back from the fab shortly.

Could you just talk about what that product and some of the development you have to bring in terms of coupling closely with the codec and just how defensible you see that amp socket as being going forward?.

Well, we've actually got our first device back from a fab in 55-nanometer in the amp product line a little while ago. We're off developing additional products. The idea there would just be to accelerate significantly below what our competitors are doing and be able to add more digital content.

In the cases where our smart codec is paired with our amplifier device, we have kind of a lot of latitude for how implement algorithms such as speaker protection or brownout and battery protection.

We can implement those in the smart codec, but there's a lot of opportunities particularly in China, the mid-tier, where demand for louder sound or stereo sound or multiple speakers to implement a mono solution are desired even when they're not going to go to the expense or trouble to have a smart codec in there, and in that case we don't want to be in a position where we need to run those algorithms on the API (8:53), or at least we don't want to be in a position where we have to.

So being able to embed that kind of algorithm in a very low-cost fashion is something that's really facilitated by the 55-nanometer devices. So we think we'll really be able to drive much more complete product.

In China, in particular, the market is such that it really rewards turning up with the whole product where it's a little bit more of a black box and the customer doesn't have to mess around with getting algorithms to run across a couple of different devices. So that's the kind of thing we're targeting. The technology really looks good.

The first product that we got back a little while ago was – the team did just a truly exceptional job well beyond what one would expect for a new device of that sort in a new process. So that's just a huge accomplishment by the team and we're off to the races of stamping that out into as broad a product line as possible, as rapidly as possible..

That's really helpful. Thanks. Just a quick follow-up. Really excited to see that it looks like you guys will finally be launching an ANC-enabled product this fiscal quarter. Looking forward to sampling those but it seems to me like that market has been a little slower.

I think we talked about this probably a (10:12) little slower to develop than you might've expected. Your largest customer is really pushing a wireless, very light functionality product.

Can you talk about how you see that market evolving? As you've gotten more familiar with dealing customers, how you're adapting to some of the challenges? And how you see the opportunity to grow there in coming years?.

Sure. Well, it's obviously still pretty early days in what we think will be a really tremendous opportunity. You're right, in particular in the Android space, a year ago I probably would've guessed that people would migrate towards USB-C connected devices more rapidly than they have for whatever reason.

So whether it's cost consciousness or any number of other things, but our job is just try to work with customers that can really move the needle for us, support them well, and have a wide range of offerings available so they can implement whatever it is they're doing in a cost-effective manner and we still see a very, very good opportunity to continue to do that.

ANC in particular has been more of a challenge from a just technical support point of view. We've got the engineering team – now that we've got somebody very close to production, I think we learned a lot from that and the team is off refining the tools to make it easier to support a wider range of customers.

Definitely no lack of demand for that particular product in that functionality and we expect additional models to be on the market over the course of the year. So, still see good things from that product line. And it's a good opportunity to learn and refine the product line and refine our go-to-market strategy going forward..

Your next question comes from Rick Schafer from Oppenheimer. Your line is open..

Thanks, and I'll add my congratulations on the results to you guys..

Thanks. So I had a question on headsets. As the move to digital headsets has been a tailwind for you guys and it looks like it's going to continue to be and the in-the-box dongle is a part of that.

How do you see sort of that playing out in the Android's base? Do you expect the majority of the bigger handset OEMs to include that dongle in the box as you move to USB-C? And sort of what's the staying power of that dongle? How long do we expect that dongle to be there, to be around?.

Well, I want to be careful not to comment in a way that's construed as reading on our largest customer. As it relates to Android, I think we see every possible permutation. I see people that'll probably be long holdouts with the headphone jack.

I think there will be people that'll go whole hog and get rid of it, and include a headset and an adapter and probably ever combination in between. A lot of the Android manufacturers don't have as much leverage with the carriers as other handset manufacturers do.

And apparently, sometimes in some countries at least, carriers prefer to have those devices be external and sold as an accessory, for example.

So it kind of is a wide range of opportunities, but the net of it is, I think it's been established that there is a value in having a digitally connected headset that can do all manner of things, such as ANC or other functions, without needing a battery.

And as that market grows, as the handset markets that are supporting devices connected over USB-C grows, there's a need for either headsets or adapters or both that allow existing headsets to connect up to those handsets, so whether it's sold in-box or not, as those markets – as those markets grow sort of separate but connected to each other we think that it creates a lot of pull through on the other product types..

Okay. And then a quick question on China with the OEMs there. Can you talk about your strategy to sort of break the Qualcomm bundle up, for a lack of a better phrase? And then maybe talk about some of the success of what your penetration rates look like or something like that so far, or maybe for this year in China..

Sure. It's something that I think we made a bunch of great progress and last year we've seen more models and more interest from customers there.

It's definitely the case where we want to be lined up and positioned well with the product line to be able to support a wide array of what people might want to do and I think it's early innings there as far as penetration into that market.

We're making more progress over time, both as a result of more interest in this type of features and functions, voice-based, whether it's with speakerphone and amplifiers or whether it's things like karaoke, which is for the last year been a pretty meaningful application on handsets for whatever reason in China in particular. So we've seen more pull.

It's something where there isn't really any sort of technical barrier to breaking the bundle with any of the core chipset manufacturers. It's just really a matter of whether a customer is willing to spend a little bit of money to differentiate their products in that regard. And like I say, I think the tide is continuing to grow on that front.

We've got a good team there, a strong team of FAEs, a good team of sales people. So we are well positioned to support the customers there once they've got the desire and interest to incorporate this kind of product and functionality in their handsets..

Okay. Thanks..

Yeah..

Your next question comes from Rajvindra Gill from Needham & Company. Your line is open..

Yeah, thanks for taking my questions and congrats on the good results. I have a question on the ANC. You're basically saying the majority of the digital headset revenue in fiscal year 2018 will be driven by your hi-fi codecs.

I wanted to get a sense in terms of what the penetration rates you're seeing across the market, whether it's at the third-party accessories or directly with Android handset customers.

How are you kind of proliferating or your go-to-market strategy for – or transitioning folks over from analog to digital? Maybe you could kind of elaborate on that strategy and talk about that that pickup rate? Thank you..

Sure. Well, it's heavily skewed by our participation obviously with our customer outside of the Android space. That obviously makes up a huge bulk of the headset revenue kind of out of the gate and it puts us in a good position where people in the Android space have a logical choice to look to us as they attempt to emulate that strategy.

I think that, as it relates to USB-C and Android, it's kind of an interesting mix across different customers we look to and it really varies customer by customer. There's folks that are looking at purely doing either a basic digital headset or basic digital adapter.

There's folks that are looking at doing the noise-canceling devices with the USB-C and no battery, and there's at least one customer that's looking at doing the entire gamut of all of those things. So it's something we definitely expect to grow our market share over the course of the year.

It's a big, big market for us, but the comment in the Letter about being driven by basic digital headsets is really reflective of the progress we've already made and just that that's a pretty big number to compare against. Obviously, we're continuing to expect good things in the existing sockets we're serving as well..

And your comment about single-digit growth-rate range in fiscal year 2018 kind of moderating, can you talk a little bit about what are the puts and takes when you're thinking about that forecast and what could be the potential upside to that number?.

Well, obviously, we're very dependent on how well our customers products do when they put them on the market, which isn't something that we're able to guess or forecast. And as much prognostication as goes into that around the world, no one else is either.

This time last year no one was ever going buy a phone again, I think was the accurate summary of the sentiment, and then all the last couple of quarters I've been hearing about the super cycle. So we're not wise enough to guess those things.

Obviously, if our customers sell more units then we'll do better than that, but we're not able to give annual guidance with any degree of precision that's helpful so we're just trying to give you that color of a place to model it where you're probably in reasonably good shape and then we'll kind of update you as we go.

As far as only specific puts and takes that I can give, you know we talked about in the Shareholder Letter and a previous question about a somewhat lower ASP for our leading Android customer and we see good opportunity to grow that again over the longer term.

Times like last year when we're able to grow content sort of massively are not opportunities that you get every year and that made it a little bit easier for us to give some color where we'd be able to exceed a particular target because, frankly, this time last year we could add it all up and even short of an apocalypse, everything could go wrong, and we'd still be able to be in excess of that number, which again, you don't get that kind of opportunity ever year.

So that's kind of how we look at it..

And just last question, and I'll jump back in. But what would be, I guess, the possible opportunities to increase dollar content? Would it be the transition from digital to ANC? We, obviously, had the first transition from analog to digital. But the transition from digital to ANC would be potential for dollar content increases..

Again, not commenting on any particular customer, but noise-canceling versus a basic digital headset is definitely a higher ASP device. Longer term, we've got opportunities that we're investing in and we've talked about the voice biometrics which we haven't – we should take that first device out this spring.

Very excited about the interest level from customers. That's obviously a function that isn't in the devices today at all and is a pretty meaningful opportunity for us that we're still investing in the microphones.

It's not a near-term opportunity to really move the revenue needle, but it is something that is obviously a very big market, we think very synergistic with our smart codec business. So there is a lot of room left to grow in big ticket items.

And then, of course, as a mixed signal supplier, we're always looking for lots of little things as well, less passive components or more power efficiency, smaller board space. All manner of different things that go into adding value to our devices..

Your next question comes from Matt Ramsay of Canaccord Genuity. Your line is open..

Thank you. Good afternoon. Thurman, I wanted to ask a couple of questions. I noticed in the Shareholder Letter that you guys were able to take the operating margin target in the long term up to the mid-20s. I assume that even with a more moderate growth rate in the upcoming fiscal year that that model would apply.

And I just wonder, how much of the OpEx growth that you guys have had in the last couple of years can you then moderate if the top-line growth is a bit slower? So the puts and takes there would be really helpful. Thank you..

Well, we're certainly going to, when you look at a change in the revenue growth or moderate, as we've talked about, we'll manage our expenses accordingly.

We would think that the SG&A expenses are going to remain relatively flat going forward and we will grow our R&D to meet our project needs accordingly but we'll manage it along with continuing to try to maximize our margins to ensure that we keep our operating profit at that level..

Yes. Just to be specific on your first point, yes, we definitely make that comment in cognizance of sort of what we expect for the year. Our team has done an amazing job of hiring a really remarkable array of people around the company and mostly in the R&D side. We've done a good job of keeping a lid on SG&A head count growth.

And so we'll probably be a little bit more moderate on the R&D side and I think that puts us in a good position to do well relative to that mid-20s operating margin target..

Great. Thanks, guys. That was helpful. And just as a follow-up for me, I noticed as we started to, outside of your largest customer, the industry is starting to shift, as you said, and we can debate the pace but towards digital and then ANC headsets.

It occurred to me that many of the suppliers there are going to have significantly less experience at doing headsets and R&D dollars against them. So maybe some of the steps you guys are taking to make adoption of your products within that more fragmented headset market easier over time.

If you could talk to that a little bit that would be really helpful. Thanks, guys..

Sure. Yes. It's really something. If you think about the number, the percentage of the headphone market out there that has been ANC in the past it's really pretty small and if you've used any of them there's some wonderful ones on the market but they're built by manufacturers that really, really know what they're doing.

And so if you look towards a much wider range adoption of ANC, those are the types of things that are built by CMs or ODMs with much lower level of experience with electronics and acoustics and everything else, a typical basic headset of the sort you'd find in a box with a headset.

There's very little to no electronics in it whatsoever, speakers and the microphone, et cetera. So when you look at an ANC headset where it's a closed loop feedback system, calibration, in the case of adaptive solutions such as ours, making sure it converges and all of that.

Something that we're now investing significantly more in the tools, software tools and tuning algorithm, such that it either our customers can do it on their own or it's much lower touch model from our FAEs.

So I think the team while on the one hand on hindsight you'd always love to have been a little more accurate on how to call something a year or two ahead of time, once you are in the market that's when you really, really learn and I think we've done a good job at that over the past six months or so and invested a lot more in developing those capabilities so we can support more customers or enable them to support themselves because there's definitely a demand for a much higher level performance really across every form factor and much higher level of performance and other features and functions such as noise canceling and whatnot..

All right. Thank you..

You bet..

Your next question comes from Chris Rolland from Susquehanna. Your line is open..

Hey, guys. Thanks for the question. So we recently looked at a teardown of some wireless earbuds and while Cirrus wasn't in the pair, it did appear as though there were two codecs, one in each bud.

And I was wondering if you guys could talk about content and wireless earbuds for Cirrus on perhaps the codec side, moving forward? And do you guys kind of view this opportunity as twice as much as that of a wired digital headset? Or is it something less than that?.

Sure. So I think in the case of what seems to be somewhat standardly now referred to as an untethered headset, where you've got a separate earbud for each ear, yeah, you would need obviously silicon in each of those ears. But as it relates to a codec, you would need about half as many channels in each ear.

So, yeah, I wouldn't regard it as necessarily double from a codec perspective. That particular function is something that is – obviously our largest customer has done a very nice job of doing the wireless piece on their own.

It's something that the rest of the market I think will have a challenge with until Bluetooth low energy is ratified, which deals with how do you get the signal to each ear separately but in a synchronized fashion. That is something that is difficult to do from a radio perspective using traditional Bluetooth.

So that is a market that we still kind of expect as a broad accessory market we will probably accelerate once BTLE audio is fully ratified in a standard that's out there for people to adopt. But nonetheless, from an audio perspective, our devices, you can use in any of these form factors. We're agnostic to the interface as things stand today.

For our noise-canceling device, for example, you could use it in a Bluetooth headset, or a wired, or one with a battery, or one with a USB-C. So hopefully that puts a little color to it..

Yeah, thank you. Thank you for that.

Also, do you think that if Android OEMs start adding dual speakers to handsets, do you think they're also going to want to migrate to kind of higher-end amplifiers or speaker protection? Would that kind of give Cirrus a multiplier effect there? Not only would they get another shot on goal for another speaker but also it moves into that part of the market where you guys have more share and are more present..

Yeah, absolutely. Those two things are very correlated because in a lot of cases, if you think about it, two speakers that are three inches apart – you're not getting a huge amount of stereo separation anyway.

And a lot of what's driving that feature as far as we can tell is actually may be marketed as stereo, but a lot of it is just about being louder. And in particular, in speaker phone mode, making it louder so you could, say, lay the handset on the passenger seat of your car and just use it as a speaker phone and be able to hear it.

So doing that generally correlates with the desire to have a louder sound and a better sound in the process. And, in particular, with the amount of power that these amplifiers are able to draw rather from the battery brings with it a requirement to do much more elaborate speaker protection.

And in the case of a system with two amplifiers in it, requires the coordination of that speaker protection so that you don't brown out and damage the battery, for example. So yes, you're absolutely right. Those things are very well correlated, and that's a trend that we see increasing the amount of interest in our amplifiers around the market..

Great. Thanks so much..

Your next question comes from Charlie Anderson of Dougherty & Company. Your line is open..

Yeah, thanks for taking my questions. I think, Jason, you just mentioned sort of microphones as a longer-term opportunity. I know, over the last couple of quarters, we've talked about kind of where you guys stand and just trying to refine the process.

So I wonder if you would maybe just update us on where you're at and maybe what's held you back to date to having a little bit more of a robust supply potentially and capacity for the market? Thanks..

Sure. Well, robust is definitely the word of the day. The team has made a tremendous amount of progress I think since we've acquired the microphone business as part of the Wolfson acquisition. It's definitely an oversized investment for Wolfson.

It's not anywhere near as big a percentage of what we're looking, as what we're investing in for the long term.

So it's a much more manageable investment for Cirrus and we've been able to add to that in terms of tools and capability and in particular, in the team, bringing in additional folks from around the industry that have cut their teeth at many, many different MEMS suppliers of all sorts to complement the existing team that we already have.

If I look at the list of challenges this time last year, it was an awful lot longer than it is now. We're down to a small number of challenges to work through.

And really, we're selling them in the tens of millions of units, which is plenty of volume where we're able to really learn how to be a good microphone supplier to deliver the same sort of consistency and reliability and so forth that our customers have come to expect from Cirrus as a supplier of ICs.

And when I talk to our customers about why they seem so interested in us being a microphone vendor, it really all boils down to that as they know that if we commit to doing it, that we'll do it well and we'll do it reliably and all that.

But the ability to take a new microphone spec, develop it, deliver it to a customer on time and qualify it quickly and ramp it to production without causing them any surprises is a bar that seems, when you say it that way, it doesn't seem like it should be so hard but it is really remarkably difficult.

And if you follow microphone vendors regularly, you'll see they turn up in the newspaper pretty frequently, and that is definitely the opposite our goal. We want to bring the same level of predictability to that that we've done in the IC world.

So we're really just more ticking through issues like that, solving things like drift and drop test, reliability, things that are – it's really remarkable what our customers put these devices through in the final product to ensure that they're going to work for the long-term and that's a pretty challenging set of technical requirements.

And as I say, the team has made great strides in getting to the finish line and we're looking forward to good results from them over the next couple of years..

Great. And as a follow-up. I think you guys had mentioned smart home in the last few Shareholder Letters as a market you're interested in. Just if you could maybe update us on what you're looking at sort of what you're targeting in that market. Obviously, there is a lot of buzz around some of those categories coming out of CES.

We saw kind of Alexa everywhere. Maybe some of the specific key abilities that you guys bring to bear you think are going to help you differentiate in that market? Thanks..

Yeah. Well, there are things in that smart home market that are very much in our wheelhouse. And kind of like headsets, it's a good example of technology that we've developed for handsets that we're now migrating out into other form factors.

So we're ironically, given our name is Cirrus, we're not the cloud guys, but we see a lot of opportunity to develop technology and deploy technology in smart home that goes between the microphone and the cloud. So, for example, far field beamforming, or the voice biometrics.

Obviously, there was that whole story around CES about the little kid ordering cookies in a dollhouse and all that.

Any device that's transactional with your voice should, in our opinion, have a very high reliability trigger between the user and the cloud that validates that you're the appropriate user and that you've got the right level of permissions to do whatever it is that you're doing with the device.

If you're asking it to tell you the time, maybe you want anybody to do that, but if you're ordering a dollhouse, maybe not so much I guess. So voice biometrics I think plays into that very well. A lot of the noise suppression and far field type beamforming I think play into that very well.

And then the various sound enhancements and codecs and microphones and all manner of other things. So that's kind of the opportunity as we see it, whether it's in home and we think a lot of those same technologies are applicable in automotive over the long term as well..

Great. Thanks so much..

You bet. Thank you..

Your next question comes from Tore Svanberg from Stifel. Your line is open..

Yeah. I just had a follow-up on the 55-nanometer amplifier business.

Would those 55-nanometer products be in production this year or is that going to be more of a fiscal 2019 event?.

Yeah. That's probably cutting it pretty close. Within the fiscal year, it is possible. We've seen a lot of good interest. And like I say, the first device that came back was cleaner than anyone would have ever imagined a new device with as much new technology in a new process of its type. So that was really good performance by the team.

And it is possible we could see some revenue this fiscal 2018. But I wouldn't expect that to be the huge driver of our amplifier business. That's probably something that could ring in at a little bigger impact over the following year..

Very good. And last question..

Sorry, Tore. I just wanted to clarify too. We have other 180-nanometers amps on the general market that we expect good progress from in the shorter term than that. So....

Okay. And then last question on voice biometrics. You're going to be sampling here in the first half.

I assume you're going to be sampling mobile customers, right, and not like home automation or anything like that?.

We will hopefully be sampling both. We most specifically are targeting handset customers for voice biometrics. But the device is architected such that it should be something we can deploy pretty broadly.

That's part of the value of architecting it around a hardware-implemented solution is that we can deliver much more of a whole product that way in a way that is a little bit more turnkey to put together..

Sounds good. Thank you..

Thanks, Tore..

There are no further questions at this time. I turn the call back over to Chelsea..

Thank you, operator. There are no additional questions. And I will now turn the call back to Jason..

Thank you, Chelsea. In summary, Cirrus Logic reported excellent results for the December quarter as demand for portable audio components drove significant expansion of revenue, operating profit and earnings per share.

We're pleased with our accomplishments this past quarter, and as we look ahead we are extremely excited to be a leading provider of technology for the rapidly-evolving audio and voice market.

With a passion for delivering innovative solutions that enable compelling and unique user experience at ultra-low power levels, the company has built an extensive portfolio of boosted amplifiers, smart codecs and MEMS microphones, coupled with a robust product roadmap that we believe will fuel our future success.

If you have any questions that were not addressed today, 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..

This concludes today's conference call. You may now disconnect..