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

Matthew D. Ramsay - Cowen and Company, LLC Charlie Lowell Anderson - Dougherty & Co. LLC Tore Egil Svanberg - Stifel, Nicolaus & Co., Inc. Blayne Curtis - Barclays Capital, Inc. Adam Gonzalez - Bank of America Merrill Lynch Christopher Rolland - Susquehanna Financial Group LLLP

Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic first fiscal year 2019 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 over to Mr. Thurman Case, Chief Financial Officer. Mr. Case, you may begin. Thurman K. Case - Cirrus Logic, Inc.: 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 first quarter fiscal year 2019 at approximately 4:00 PM Eastern. The Shareholder Letter discussing our financial results, the earnings press release, including the reconciliation of non-GAAP financial information to the most directly comparable GAAP information, along with the webcast of this Q&A session are all available at the company's Investor Relations website at investor.cirrus.com. This call will feature questions from the analysts covering our company as well as questions submitted to us via e-mail at investor.relations@cirrus.com. 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 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 Cirrus Logic website, and the latest Form 10-K and 10-Q, as well as other corporate filings made with the Security 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. Jason P. Rhode - Cirrus Logic, Inc.: 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. Cirrus Logic's Q1 FY 2019 revenue was $254.5 million, above the high end of guidance. GAAP loss per share was $0.07, and non-GAAP earnings per share was $0.28. During the quarter, the company continued to gain momentum in Android devices as several OEMs launched new smartphones and wireless headset products that utilize our technology. Designing activity across our portfolio was robust in Q1. And we continue to execute on the strategic initiatives that we believe will position the company for future growth. We expect more end products to come to market over the next 12 months, expanding our business with existing mobile customers as well as adding new, leading OEMs. We are encouraged to see the accelerating demand for user-experience-driven features across our target markets, including flagship and mid-tier smartphones, advanced mobile accessories and connected devices in the home. As these devices have become an integral part of our daily lives, consumers expect continuous improvement with regard to performance, security, and battery life. This is pushing OEMs to continue to add new features, more intelligence, and make devices aware of the users' environment and intent, all of which play extremely well into Cirrus Logic's core competencies of complex analog, mixed signal, and low power signal processing. With a diversified product portfolio that addresses a wide range of performance and cost requirements, the company expects to capitalize on increasing demand for innovative audio and voice solutions as well as adjacent opportunities, including haptics, all of which we believe will contribute to the company's continued success, including our ability to return to growth in FY 2020. 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.

Your first question comes from Matt Ramsay with Cowen. Your line is open. Matthew D. Ramsay - Cowen and Company, LLC: Good afternoon. Thank you. Jason, maybe you could talk a little bit about – I mean there's obviously a lot of moving parts in the supply chain, et cetera, and you go through this sort of transitional period with your largest customer around this time of year. But maybe you could talk a little bit about what drove the upside to the guidance in this quarter, if there were – obviously the percentage of revenue to Apple you guys disclosed, but maybe you could just kind of walk us through what went a little bit differently in the quarter than you guys had expected three months ago with some of the moving parts. And then I have a follow-up. Thank you. Jason P. Rhode - Cirrus Logic, Inc.: Well, I mean, at the end of the day, what drives in demand is kind of out of our control. I think at the beginning of any given quarter, what we're in is long since determined, and so it's just a question of how many our customers end up shipping or building ahead. And we get good forecasts. But honestly, forecasting demand for the kind of products we're in is tricky and challenging, and we do our – our customers do their best and give us their best information, and then we do the best we can do to interpret it. And frankly, we put a pretty conservative slant on that in most cases. So it's a challenge in a lot of quarters. You might think, well, okay, backlog, you could just ratio that to the end result. The reality is it's very often the case that we come in to the quarter with – in absolute dollars potentially even more than what we end up shipping or even at or near the end of the upper end of our guidance range, and we just have to kind of back into what we think it will really be based on historical trends. So there's a lot of moving parts to it. We try to be really conservative. If you look at the past – I don't know, we charted up – pretty recently charted up the last 40 quarters' worth of history, and it supports – we try to be very conservative. We probably beat – well, we beat far more often than we miss. Most of the time we're in somewhere within the range, ideally within the mid to upper end of the range. But we don't have perfect visibility in any given quarter about what people are going to end up taking. It's also the case that a good 10% or so, just due to natural dynamics of the way the business flows, more than 10% of the quarter is usually in the last week of the quarter. And so any movement in orders or timing from a customer can have a pretty significant swing as it relates to your models, in particular. It doesn't have anything to do with the health of the company or our business, but it can move expectations from a financial perspective pretty significantly. So the net is, I guess, not – I hesitate to say this (07:25) but I think at the end of the day, people sold a little more stuff than what we had sort of expected going in. Matthew D. Ramsay - Cowen and Company, LLC: (07:32) Jason P. Rhode - Cirrus Logic, Inc.: And that's a helpful indication because I think we've – that indicates that we obviously had some challenges in terms of demand from some of our customers kind of around the end of the last calendar year and in the first part of this year. And so that things picking back up seems to indicate that we've seen the trough of that (07:53). Matthew D. Ramsay - Cowen and Company, LLC: Got it. Got it. That's helpful. Just as a sort of unrelated follow-up, I mean, I noted in the Shareholder Letter sort of momentum in the fact that you guys are now shipping the 55 nanometer amp parts into Android world. I guess an update on the progress there, and what – how broad the traction can be and how quickly the ramp of that product can be. And I guess related to that, the Qualcomm-NXP merger obviously didn't happen now. And it's been sort of going on for a long period of time. And the question – some of the questions that we got, I don't know, 12, 18 months ago about a large codec customer – or competitor merging with a large amp competitor and how that would affect your business. Obviously, that's not going to happen now. So just any comments there and context to the amplifier business that seems to be taking off. Thank you. Jason P. Rhode - Cirrus Logic, Inc.: Sure. Yeah. I mean, so the 55-nanometer amp product, that team, we're pretty well accustomed to our engineering teams just knocking the cover off the ball. And they've done that to a pretty extraordinary level with this product, both it's kind of two variants of the same product for audio and haptic. The premise of that device, it's the first device where we've really directly targeted it at the Android ecosystem, and targeted it to be easy to design in, in that particular category of customers. So, it's much more easy to deploy broadly than the previous architecture we've had on our amplifiers because of the integrated DSP. And as I say, both the product development team as well as the marketing and business folks just did a great job of anticipating what the market was going to need. And then also the flying circus (09:44) that you referenced certainly has had customers in an uncertain position relative to some of our (09:52) to open the doors right when we have the exact right part to slide in with. So we think we can support that part very broadly. We've already – there's already teardowns out there showing – shipping in very important mid-tier devices that we care about. We're having great conversations with the who's who list in China as well, so very excited about the opportunities for that part. As it relates to the competitive landscape and the M&A on-again off-again world, we need a good strategy that's going to be successful regardless. It always helps when our competitors hobble themselves by entertaining – by tying themselves together in the three-legged race, but we think we've got a good strategy that'll survive the competition no matter how they've managed to tie themselves (10:41).

Your next question comes from Charlie Anderson with Dougherty & Company. Your line is open. Charlie Lowell Anderson - Dougherty & Co. LLC: Yeah. Thanks for taking my question and congrats on the strong results. Jason, I know that last quarter you guys had talked about a 10% decline for the year. I wonder if there's just any update to that number. And I know you're also talking about growth in fiscal 2020. I wonder if you want to add any more additional commentary beyond just growth, if there's any quantitative commentary there.. And then I've got a follow-up. Jason P. Rhode - Cirrus Logic, Inc.: Sure. I mean, not much of an update on either one. Our general practice is to guide the quarter. And we really like to stay away from providing formal guidance for the year, but as it related to coming into this fiscal year looking at where everybody's models were and what our expectations were, it was very possible that people would be off in both magnitude and polarity of things. So we don't want – when we have a pretty good sense that they're going to be that far off, we want to provide better direction than that. So hopefully, people understand that in circumstances like that where we do give something directional like, say, minus 10%, the fact that we're not giving a range implies there should be some pretty large error bars around the expectations that we have for that timeframe. So, we don't really have an update given that. We don't think there's any disconnect that is of that order. This is all dominated, of course, by the relative degrees of success our customers see (12:11). The largest ones that have an impact on us are still to come in the second half of our fiscal year, and even at the very end of the fiscal year, which can and frequently does change our outlook up or down. So, given that this uncertainty is in front of us, we just encourage investors to be conservative in their assumptions whenever they're making financial models around our outlook. And so as far as FY 2020, on the other hand, that's a little – it's also difficult to pin down in terms of a number. Again, it hinges on customer success and all the various trade wars and other geopolitical entertainment that we can't control. But it is a year where we do expect content gains with existing customers and additional success with new customers. So on a like-for-like basis, we remain optimistic about our growth outlook in that timeframe. So hopefully, that helps put a (13:11).

Your next question comes from Tore Svanberg with Stifel. Your line is open. Tore Egil Svanberg - Stifel, Nicolaus & Co., Inc.: Yes. Thank you. So Jason, in this sort of world with less buttons, you seem to be emphasizing haptics much more than ever before. Can you maybe talk a little bit about what type of opportunity do you have there? I mean, are we talking about one or two or over time will there be opportunities for multiple haptics? Jason P. Rhode - Cirrus Logic, Inc.: Sure. Yeah. I mean, it's an exciting application for us both financially as well as just philosophically. It's a great job by the team of taking some technology that we're already really good at with respect to the audio amplifiers and finding new applications and new ways to reuse that existing technology right in the same box we're already shipping in, which is a great way to grow your business. So it's a nice job by the team of executing some textbook marketing. As it relates to us being more bullish, we've not been in that space for very long, and this really marks the first time we've had the right device to take to the Android community and enable them to achieve kind of a really crisp, low latency, synthetic button press, because to your point, people are absolutely very focused on removing buttons for reasons of reliability and space on a screen and any number of varieties of goodness that comes with removing physical buttons. We certainly see a market where – I mean everybody that makes a handset seems to want to move in that direction. There is – it does add cost versus having a traditional buzzy vibration motor. And a lot of them, it's not that often that I play with Android handsets, and when I have recently, I was pretty surprised by the level of gimmicky look and feel that the lack of mechanical buttons in those cases had. And that's due to they're using 10-year-old technology with buzzy vibration motors. So we think it's a massively more compelling experience to have a proper haptic engine in there. It does add a little bit of expense, but for the folks that are really trying to make a premium product, having one and then to your other point, in the long run, having more than one in there makes sense if you're really trying to create a compelling, tactile experience. Tore Egil Svanberg - Stifel, Nicolaus & Co., Inc.: Very good. And as my follow-up, I also noticed you chose the word advanced mobile accessories. Just want to try and understand more what you mean by that. I mean, obviously, you have headsets and wireless headsets, but when you call them advanced, it just seems like there's something more to it. So if you could elaborate a little bit on that, that'd be great. Thanks. Jason P. Rhode - Cirrus Logic, Inc.: Sure. I mean, we're always – we come out with neat products that are intended to be used in the applications that they're designed for, and we never cease to be amazed with the way that people use our stuff in ways that we didn't necessarily intend. And I think there's nowhere where that's more relevant than headsets where it's really been a constrained market. It's either been a completely passive analog headset or it's been a pretty high end ANC-specific device with a battery pack, and that really kind of constraints the cost as well as the end applications and ultimately the volume that people are going to ship. And when you remove that constraint by going to a full digital wired headset via USB-C or that other one, then you've got access to power in the headset without including a battery. And that'll, for a relatively low amount of cost, allow people to try other things out, gesture recognition or various different fitness options. And then as a lot of that is true in the wireless space, as the level of power comes down that we can offer – that we can enable with our DSP capability along with our amplifiers and other products that are relevant. For those applications, we just think it takes the headset innovation also in noise cancellation, but in addition to it. So, I think that's kind (17:46).

Your next question comes from Blayne Curtis with Barclays. Your line is open. Blayne Curtis - Barclays Capital, Inc.: Hey, guys. Thanks for taking my question. Just a couple here. Just going back to the fiscal year guidance, if you look at the first half, it's down about 22%. Android revenue I think is the lowest ever. And to get to minus 10%, you then have to have the second half flat to up. So, I'm just trying to understand what I'm missing in that math. And I think in the Shareholder Letter, you also mentioned I think you called it older headset revenue as a headwind as well, which if that's the largest customer would be 75% of revenue with a headwind. Can you just help me with this math and why minus 10% is the right number? Jason P. Rhode - Cirrus Logic, Inc.: Well, okay. So, previous commentary inclusive, we're not offering you 10% as the year. You can model that however you like. We're giving you the current quarter. 10% is a directional thing. We think it was reasonable when we gave that. It's certainly still in the realm of possibility. We do – we've said we expect content gains with existing customers particularly towards the tail end of the fiscal year, so that's part of where that guidance comes from. But there are some decent error bars around what we're saying. As it relates to the headset comment, I think that is largely speaking to something that's already been pretty widely rumored. I think you're familiar with that one, that we just wanted to acknowledge is incorporated in that – in the current quarter outlook that we just provided. Blayne Curtis - Barclays Capital, Inc.: Thanks. And then just – actually, something else that's been rumored is your capabilities putting ANC in wireless headsets. Just wondering if there's anything you can comment on. Obviously, a lot of speculation here. I know you had some wireless already, but I guess in terms of getting bigger material of volumes, just curious if you had any updates there. Thanks. Jason P. Rhode - Cirrus Logic, Inc.: Sure. Yeah. I mean, the devices we're shipping today, an increasing number of – increasing amount of the things that we're in are Bluetooth headsets, and we see good opportunity to continue to grow there. I think I know the blog or whatever it was that was circulating a week or so ago that I always wonder what the origin of those things are. So to put a fine point on our excitement around fiscal 2020 is driven by content gains with existing customers. We see great opportunity to ship in the form factors that we've not been in before. That is part of why we're excited about FY 2020. The details of that particular headset rumor seems to be made up out of I have no idea what or where they came from. There was not a lot in that report that seemed right. But hopefully, that doesn't take away from the fact that there are things that we expect to make meaningful gains on in the FY 2020 timeframe where we are shipping the new form factors. But the details of that one, both magnitude and type, were pretty far off the mark.

Your next question comes from Adam Gonzalez with Bank of America Merrill Lynch. Your line is open. Adam Gonzalez - Bank of America Merrill Lynch: Hi. Thanks for taking my question. So it sounds like you're being a little conservative on OpEx in the near term. Just wanted to know what's a good way to think about that longer term, and if the near term reduction perhaps signals reduced confidence in a meaningful pick up in top line growth in fiscal 2020. Thanks. Jason P. Rhode - Cirrus Logic, Inc.: No. I mean, I think what we were trying to tell you it's always difficult when we write these letters to be Reg G compliant, but if you read that paragraph very carefully, which was how it was written, we're telegraphing that GAAP OpEx will be down. That's driven largely by amortization of acquired intangibles. The remainder of the actual spending on people and R&D and that sort of thing is flattish. Obviously, it's kind of lumpy as you move through quarters, but it's intended to be flattish (22:04). We are still hiring. We're just being very careful about that. Our variable compensation plan is well-designed so that when we're having years like where we're not – like this one where we're not growing, it doesn't pay out very well. And that has a natural ability to kind of scale our OpEx and is helpful in that regard. So, whenever things are tight, you'd look a lot more carefully at all expenses, but first and foremost, we manage the company for the very long term and we're heavily investing in the areas where we think we'll drive our growth going forward. So, yeah, I would not interpret it that way. Adam Gonzalez - Bank of America Merrill Lynch: Got it. And thanks for the clarification. And then just a follow-up on voice biometrics initiative, just any update there, time to the first design win and perhaps when we can start to see some material revenues? Thanks. Jason P. Rhode - Cirrus Logic, Inc.: Yeah. I mean that's still one of the ones that's further out on our growth strategy. But it is incredibly compelling. We continue to make progress on it. We've definitely demonstrated that we can achieve fingerprint grade security via a voiceprint, if you will. Working through the challenges of that with customers. There's lots of things that are complex just about the evaluation and then about the process of which customer would like it to do what. So it's still moving. It's still out there a little ways further. No real projections at this time. I wouldn't build up any real elaborate financial models around it in the next 12 months or so, but it's something that we're – it's one of the things that we're most excited about in the company, and we think it's just absolutely pivotal to being able to turn all of these voice interfaces that are becoming so prevalent into a real tool instead of a toy. Until you're comfortable that at a financial institution or a company like ourselves that you can give your voice assistant access to read your email, then in my opinion it's kind of a novelty. And as soon as you're able to do that, it becomes a real powerful tool. So that's what we're trying to enable. There's lots of interest in it from our customers both from a handset perspective and increasingly outside of handsets in the connected-home-type applications as well. It dovetails real nicely. There's a section in the strategy portion of the Shareholder Letter that talks about what we call the Intelligent Edge, which is something that we think is actually driven and enabled and increased by the prevalence of cloud computing, and the amount of microphones that are out there beaming data off to the cloud. That creates an incredible set of opportunities for us to do local processing in the device, whether it's something as complicated as voice biometric or just very low power always on, to something in the middle like far-field beamforming or some combination of all those things. The need for that type of application and that type of technology is increasingly driven by a lot of these cloud applications for voice-type services. So, anyway, still very excited about really all of our opportunities in voice, key among them, voice biometric.

The next question comes from Christopher Rolland with Susquehanna International. Your line is open. Christopher Rolland - Susquehanna Financial Group LLLP: Hey, guys. Thanks for the question. Back to amps again and your optimism around haptics. Do you expect haptics or stereo speakers to be a bigger driver for you guys for 55-nanometer amps? And I think you said that haptic drivers could be a $450 million TAM? Is that right? And how do the speakers compare? Thanks. Jason P. Rhode - Cirrus Logic, Inc.: Let's see. So, I don't know how to handicap the race between haptic versus stereo for the 55-nanometer amp. They're both big opportunities for us. We see an increasing percentage of the opportunities that we're targeting that are stereo audio in nature. That actually plays to the strengths of our solution because if you're going to put two of them down, then obviously power as well as area and costs also matter even more. And then also because of the way we've created the part, the signal processing that's incorporated inside actually helps the two amplifiers play nice together in terms of brown-out the battery and not blowing up the speaker and so forth. So, increasing percentage of our opportunities for stereo going forward. And as far as haptics is concerned, I don't know what you get when you multiply the whole market by, say, $0.50. But as it relates to the part of the market that's ever going to be willing to spend the money to add that, that's kind of the number you end up with. It's a large market. It's all incremental opportunity for us in the Android space. And so whether it's $450 million or somewhere thereabouts, it's clearly large relative to the (27:11). Christopher Rolland - Susquehanna Financial Group LLLP: Great. Okay. And then revenue from your non-biggest customer is down 21% if I'm doing the math right year-over-year. So, as we look year-over-year, what's going well for you kind of in that camp? And then what accounts for the drop as well? Thanks. Jason P. Rhode - Cirrus Logic, Inc.: Well, yeah, the non-largest customer, I think a large part of that is, frankly, our second largest customer. That's an account that is obviously got some challenges going on. Outside of that, we're actually doing quite well in the Android space. And with a full roadmap of smart codecs with the increasingly relevant amplifier product line, that's where we're spending our time. We're turning up in more teardowns. We're now shipping in all three of the top three handset manufacturers, which is new news, I think. So, we're extremely excited about that. I think every marketing textbook would agree that's probably a real good sign for where we're headed. So it is challenging given the way we break out our numbers to really kind of understand the story behind that, but I think it'll become more clear where we're having success in Android over the next 9 to 12 months as some of the other stuff we're working on comes to the fold. Christopher Rolland - Susquehanna Financial Group LLLP: Great. Thanks, Jason. Jason P. Rhode - Cirrus Logic, Inc.: Yeah. You bet.

There are no further questions from the phone at this time. I turn the call back to Chelsea Heffernan. Chelsea Heffernan - Cirrus Logic, Inc.: Thank you, operator. There are no additional questions, so I'll turn the call over to Jason. Jason P. Rhode - Cirrus Logic, Inc.: Okay. Thank you, Chelsea. In summary, we are pleased with our momentum this past quarter, and we remain focused on the execution of our product roadmap, expanding our customer base, and capitalizing on increasing demand for compelling audio and voice components. In addition, the company is dedicated to developing a broader portfolio of products that address new requirements, which we believe will add incremental content opportunity over the coming years, and contribute to our continued success. I would also note that we will be presenting at the Oppenheimer Conference in Boston on August 7 and the KeyBanc Conference in Vail on August 13. Live webcasts of these events will be available at investor.cirrus.com. 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. You may now disconnect.