Cirrus Logic, Inc. (NASDAQ:CRUS) Q3 2023 Earnings Call Transcript

Venk Nathamuni: And if I could just add to what John said, just as we talked about the amplifiers and other products where we have good visibility, we are in a similar position with the camera controllers just having gone through multiple generations. And there’s also a lot of partnership with the customer to develop those products. So there’s a lot of excitement about and visibility about this going forward.

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

Christopher Rolland: Hey guys. Thanks for the question and congrats on December. So, actually as I look at December, your revenue at your largest customer was fantastic. If you x that out and look at revenues from others it was perhaps a little lower than I had expected and maybe the lowest we’ve seen in a while. I guess, could you kind of address that? Is it just because you were catering to the needs and demands from your largest customer that you couldn’t necessarily fulfill the other customers? Or does that really reflect true demand in the December quarter from other customers? Thanks.

John Forsyth: Yes. Thanks, Chris. I’ll give a comment and invite Venk to add any additional color if you’d like. I think previous comments that I’ve given on how we approach the supply constrained environment, probably set the stage for what you’ve observed there, which is that when we are supply constrained, what we absolutely don’t want to do is leave a customer in the lurch. So it tends to be on the granular €“ the nature of our business is that it tends to be on the granularity of a socket. Either we bid for a socket or we don’t, and if we aren’t confident we can supply it, we’re not going to bid for it. So winding back multiple quarters before fiscal Q3 when we were bidding for these sockets, we were deep in the supply constrained environment, and that really limited what we targeted especially within the Android space.

And so, yes, that’s resulted in our revenue. I mean, I think great revenue story overall, but it’s tilted a little towards our largest customer there for obvious reasons. And we benefit in terms of total content value quite significantly with each of those devices that are sold.

Venk Nathamuni: Yes. And just to add what John said, if you’ll think about the business that we sell outside of the largest customer, it’s a combination of what we sell into some of the other smartphone vendors and Android, but also there’s a general market product portfolio that we sell into the typical analog type of functionality. And as you can imagine, and we alluded to this on the previous call, the general market did see some softness, and that’s part of also why we saw the mix between the top customer and the rest of the business. And we expect that to kind of continue, and that’s part of our guidance for the March quarter.

Christopher Rolland: Okay. That’s very helpful. I guess, just a quick follow-up on that one. Should we expect a catch up to other customers in March? But secondly, regarding supply that you had mentioned can you talk about how comfortable you are now, particularly as we’re seeing some supply slack from others around foundry? Are you much more comfortable there? Are you going to enter into larger WSAs kind of given this dynamic or just kind of play it by year? Just anything around your supply situation and strategy would be great.