Cirrus Logic Inc

NASDAQ:CRUS

Earnings Call Transcript 2024-Q1

[Operator]

Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic First Quarter Fiscal Year 2024 Financial Results Q&A session. [Operator Instructions] 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.

[Chelsea Heffernan, Director, IR]

Thank you, and good afternoon. Joining me on today's call is John Forsyth, Cirrus Logic's Chief Executive Officer; and Venk Nathamuni, Chief Financial Officer. Today, at approximately 4:00 p.m. Eastern Time, we announced our financial results for the first quarter fiscal year 2024. The shareholder letter discussing our financial results, the earnings press 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 analysts covering our company. Additionally, the results and guidance we will 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 and 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 turn the call over to John.

[John Forsyth, CEO, President & Director]

Thank you, Chelsea, and thank you, everyone, for joining today's call. As you've seen in the press release, in the first quarter of fiscal year 2024, Cirrus Logic delivered revenue of $317 million towards the top end of our guidance for the quarter, driven by products, shipping and smartphones. In a moment, Venk will discuss the results in greater detail. But before we get on to that, I'd like to provide some color on how we're doing against the strategy that I've outlined on previous calls.

The first pillar of that strategy is to maintain and build our leadership in smartphone audio. And to that end, this quarter, we taped out our next-generation custom boosted amplifier, a component that we believe will deliver significantly increased performance and value to our customer and which we anticipate will ship next calendar year.

We also completed product validation of our first 22-nanometer smart codec, a new product, which is also on track for introduction next year. This new codec represents a significant technology transition for Cirrus Logic and again, we'll deliver meaningful feature and performance benefits to our end customer.

In our general market smartphone business, we also secured several next-generation Android sockets. And as a consequence, we anticipate seeing many great smartphone products featuring Cirrus Logic, audio and haptics being launched in the market in the coming year.

Moving on to the second pillar of our strategy, we're excited about the opportunities we see to continue to grow our high-performance mixed signal content in smartphones. The cameras are a marquee feature of every major smartphone launch. We're proud of the progress that we've made in this area since we introduced our first camera controller product in calendar 2020.

We're currently ramping production of our latest camera controller product for a smartphone that is expected to be introduced later this year. And looking forward, we believe there's still significant potential to continue to grow value in this area, and we are today investing in a road map of further products and features in pursuit of that goal.

Beyond the camera, we've also previously indicated that we believe advanced power and battery-related technologies represent great opportunities for the Company. And today, we have a number of R&D programs underway related to high-efficiency charging, battery management and system side power delivery. We believe that the investments we are making in this space today will continue to drive product diversification and revenue growth in the future.

Turning to our third strategic vector, we're increasingly leveraging our strengths in audio and high-performance mixed signal to diversify into additional applications and markets. Most recently, we are focused on expanding into the laptop market, where we see significant greenfield opportunity for the Company in the coming years.

Today, we have well-established relationships with the top five laptop OEMs who together account for a significant majority of all laptop unit volumes, and we are shipping content with each of them.

While we're still in the early stages of our entry into this market, we already see significant customer demand and engagement around our amplifier and codec products that have been specifically optimized for laptops, and we expect end devices incorporating these new components to come to market in the next 12 months.

During the June quarter, we also secured our first business laptop win with our new amplifier, highlighting the growing importance of audio quality in this key segment, and we anticipate this device will begin shipping next year. Additionally, we're delighted that both our new amplifiers and codec have been selected as part of the sound wire compatible reference design from Intel, which will accelerate time to market and enable adoption of our components across more OEM platforms.

Beyond the laptop market, we also continue to invest in further products and customer engagements that we anticipate will expand both our revenue and market diversity in the long term. These include gaming, augmented in virtual reality, automotive, industrial and professional audio applications.

The latter illustrated by our recent launch of a range of industry-leading professional audio ADC products. We're excited about the number of ways in which we believe we can leverage our outstanding engineering talent and best-in-class intellectual property to grow our business in these areas and beyond.

Finally, I would like to discuss briefly the difficult decision we took in July, resulting in a workforce reduction of approximately 5% of our global employee base. This action was taken in order to better align our overall cost structure with our revised revenue expectations.

In light of both a previously discussed change in customer plans regarding HPMS product that we have been expecting to be introduced this fall and the current general market softness. We remain committed to disciplined execution of our strategy and believe that following this action, we are well positioned to invest in the many opportunities we see to drive future growth.

And with that, let me now turn the call over to Venk to provide an overview of our financial results for our fiscal Q1 2024 as well as guidance for the second quarter.

[Venk Nathamuni, CFO & Principal Accounting Officer]

Thank you, John. Good afternoon, everyone. I'll start with a summary of the fiscal first quarter results and then provide guidance for fiscal Q2. Fiscal first quarter revenue was $317 million, which was close to the top end of our guidance range as unit volumes were higher than expected. Revenue was down 15% quarter-over-quarter and down 19% from a year ago due to lower volume of components shipping into the smartphone end market and, to a lesser extent, continued weakness in general market sales.

Turning to gross margin. Non-GAAP gross profit in the quarter was $159.7 million, and non-GAAP gross margin was 50.4%, which is slightly above the midpoint of the guidance range we have provided. On a sequential basis, gross margin increased slightly, while on a year-over-year basis, gross margin declined by 110 basis points due to higher inventory reserves and a less favorable product mix. I'd like to provide an update on the high-performance mixed-signal product that John alluded to earlier.

As we mentioned in the shareholder letter, we have removed the revenue associated with this component from our internal model. But during the quarter, we made good progress with both our customer and foundry partner on the disposition of wafers associated with this product, and we do not anticipate the disposition to have a material financial impact. I'd also like to reiterate that our customer relationship remains strong as we continue to collaborate on a range of technologies and programs and pursue opportunities for both the next generation of our existing components as well as new products.

Turning to OpEx. Non-GAAP operating expenses in the quarter were $113.8 million, down $6 million sequentially. I'd note that operating expenses came in below the low end of our guidance range due to product development prioritization as well as controls on discretionary spending. Restructuring costs associated with the cost actions John referred to earlier are not expected to be material and are reflected in the Q2 fiscal '24 GAAP operating expense guidance.

I'd note that we're continuing to invest in products and technologies in order to pursue opportunities to drive our long-term revenue growth. And overall, non-GAAP operating income was $45.8 million in the first quarter or 14.5% of revenue. And lastly, on the P&L, non-GAAP net income in the first quarter was $38 million, or $0.67 per share as the higher-than-expected revenue and the lower operating expense flowed through to the bottom line.

Let me now turn to the balance sheet. Our balance sheet continues to remain strong, and we ended the first quarter of fiscal '24 with approximately $426 million in cash and cash equivalents. Our ending cash balance was down $91.1 million from the prior quarter as we built inventory to support seasonal product launches in the second half of the calendar year and also used cash to repurchase stock during the quarter. Specifically, cash used in operations was $39.8 million during the June quarter, which is about 13% of revenue. We continue to have no debt outstanding, and also, we have $300 million undrawn on our revolver.

Now turning to inventory. As we indicated in prior quarters, we've been building inventory to support seasonal product launches in the second half of the calendar year, and fulfill our wafer purchase commitments for our long-term capacity agreement with GlobalFoundries. As a result, inventory was $301 million, up from $233.5 million sequentially, and days of inventory was approximately 175 days in Q1, up 60 days sequentially. Let me add some additional color on our GlobalFoundries agreement.

While a portion of the capacity associated with this agreement was originally intended to support our new HPMS component, the agreement allows for wafer allocation flexibility within our product portfolio. As a result, these wafers are being reallocated to other products that use the same underlying 55-nanometer high-voltage process technology, including amplifiers, haptic drivers and battery and power ICs.

Looking ahead, in Q2 fiscal '24, we expect inventory dollars to increase from the prior quarter. However, days of inventory are expected to decline due to seasonal product ramps. While we anticipate increased inventory levels of these other products during this fiscal year, we expect Q2 to be the high point of inventory for the remainder of the fiscal year.

Turning now to cash flow. Cash used in operations was $39.8 million in the June quarter, and CapEx was roughly $12.3 million, resulting in free cash flow for the quarter of minus 16%. For the 12-month period ending in the June quarter, free cash flow margin was roughly 10%. On the share buyback front, in Q1, we utilized $38.5 million to repurchase approximately 466,000 shares of our common stock at an average price of $82.59.

As of the end of Q1 fiscal '24, we had $462.6 million remaining in our 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 Q2 of fiscal '24, we expect revenue in the range of $430 million to $490 million.

We expect gross margin to range from 49% to 51%. Non-GAAP operating expense is expected to be up sequentially in the range of $114 million to $120 million as higher variable compensation and product development costs is partially offset by lower employee expense. We will continue to control discretionary spending but invest strategically in product development to drive long-term growth.

On the tax front, as we previously discussed, our fiscal 2024 non-GAAP effective tax rate will continue to be unfavorably impacted by capitalized R&D expense, and as expected, our foreign tax credits will be lower this year. Our fiscal 2024 non-GAAP tax rate is expected to be approximately 24% to 26%, consistent with our prior quarter's guidance.

We continue to anticipate that the impact of capitalist R&D will become less unfavorable over time as additional years of R&D expenses are amortized for tax purposes. We're closely monitoring legislation recently introduced that would restore immediate tax deduction for R&D investments if passed.

In closing, we had a solid Q1 fiscal '24 as we executed well to deliver these results. Going forward, we will 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 fiscal year 2024 is a 53-week fiscal year and will include 14 weeks in the fiscal third quarter. And finally, while 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 our business relationship.

With that, let me now turn the call to Chelsea to start the Q&A session.

[Chelsea Heffernan, Director, IR]

Thanks, Venk. We will now start the Q&A portion of the earnings call. [Operator Instructions] Operator, we're ready to take questions.

[Operator]

[Operator Instructions] Your first question comes from the line of Matt Ramsay with TD Cowen. Your line is now open.

[Matt Ramsay, TD Cowen]

John, I guess for both of you guys, I wanted to ask a couple of questions around the resolution of the HPMS product that didn't ramp with a large customer. So you guys talked about a couple of different things, one of which is sort of the resolution on the wafers that were built. If you could give a little bit more color on that, if you're able to at all? And I guess are those wafers still included in your inventory balance that you talked about?

And then the second question on that topic is, John, this is kind of a longer-term one. And conversations over the years with yourself and with your predecessor Jason, it's always been really, really hard to find mixed-signal analog audio engineers. And I know it was a rough go, not of your own fault at all, that thing happened with that product. But I just kind of wondered the decision to take the workforce reduction rather than just given the scarcity value of that engineering talent, maybe reallocating that with those folks. And so maybe you could talk a little bit about that?

[John Forsyth, CEO, President & Director]

Yes. Thank you, Matt. I'll speak to that and then hand over to Venk, and he can talk about how we've been working through the dispositioning of the work in progress around the product. Yes, first of all, obviously, there was not a decision that we took lightly at all. But the reality is there's a significant change to immediate near-term revenue expectations there, and we wanted to work very hard to bring the cost structure more into line with that reality, whilst still ensuring that we were in a position to invest in all the things that we believe will drive us forward as a company in the mid- to long term.

And I'd emphasize the latter point because we do have very many areas of opportunity across those three pillars of the strategy. And our plan is to continue to invest in that growth. So although this action was kind of distributed across the business, we will, in fact, exit this quarter with more people working in design than we had a year ago. So this is -- we had to take some steps to navigate the short-term challenges, while at the same time, ensuring that we're positioned for execution on the opportunities that we believe are going to help us grow and diversify in the medium and long term.

[Venk Nathamuni, CFO & Principal Accounting Officer]

Yes. And thanks, Matt, for the question. This is Venk. So, I wanted to address your question about the inventory related to the part that's no longer expected to ship. So the first point I want to make is that we do not expect a material financial impact, as I mentioned in the prepared remarks. The inventories in different levels, basically, at the high level, I want to mention that we've made really good progress with both our customer as well as our foundry partner on the disposition. And clearly, this is factored into our current guidance.

Now one thing to keep in mind is that as we talked about the GlobalFoundries contract, we do have some flexibility in terms of how we allocate the capacity that we have across the different products. And suffice it to say that we have factored that into our guidance, and there's no material financial impact of the inventory for the component that's no longer going to ship.

[Operator]

Your next question comes from the line of Tore Svanberg with Stifel. You may now go ahead.

[Tore Svanberg, Stifel]

If I could just follow up on that last topic, Venk. So your inventory days were 175. I mean I know there's a lot of things that go into the inventory, but what would that number perhaps have been without the issues with the HPMS product just roughly?

[Venk Nathamuni, CFO & Principal Accounting Officer]

Yes. Thanks for the question, Tore. So a couple of things on the overall inventory that we talked about is a lot of it is driven by the fact that we are building ahead of the traditional launch of our key customers' products that happens in the second half of the year. That's the vast majority of it. And obviously, we also have a commitment to our foundry supplier in terms of fulfilling wafer starts and such.

So without going into the specifics of what the split is, I can tell you that it's a relatively small number. And clearly, we're in discussions with both our customers as well as with our foundry supplier. And as I said before, we do expect our inventory days to come down next quarter and we have taken into account whatever is the inventory associated with that particular product.

[Tore Svanberg, Stifel]

That's very helpful. And for John. John, I know you don't -- I mean, you can't preannounce your customers' products, obviously, but can you just give us some puts and takes right now on content growth for the second half and next year? I mean, second half, it sounds like it's mainly new camera controller products. But how should we think about possible or opportunities for 2024?

[John Forsyth, CEO, President & Director]

Yes, sure, Tore. So going into the cycle this fall, yes, the content growth that I've alluded to previously is in the camera controller area. So we have a new product ramping then. As we turn to next calendar year, in 2024, we've got two significant products coming to market in our new audio components, the boosted amplifier and the codec, both of which we believe deliver meaningfully more value to the customer.

So we're on track with those, and very excited about those and their potential impact. As we look beyond that, we believe there are multiple opportunities to continue to grow in the camera space, but also expand in other HPMS areas, in particular, I've alluded to power and areas around the battery where we believe there's still further opportunity for us to grow.

[Operator]

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

[Christopher Rolland, Susquehanna]

I guess my first question is, you guys did mention some upside in revenue due to better units. And also, you guys had a nice guide as well. As we look out beyond September, and I know you guys don't guide, but is there anything we should think about in terms of shipment pull-in versus a typical cycle that you guys have out there? And these high DOIs and build-aheads, for example, does that also -- even when you make an adjustment for the HPMS part and wafer supply commitments. Do these high DOIs also tell us about something beyond September as well?

[John Forsyth, CEO, President & Director]

Chris, I'll make a comment here and then hand over to Venk to provide additional color if he wants. I -- obviously, we don't guide beyond the quarter, the additional bit of color that I would add is that when we look at the backlog today and the movement there, it's pretty robust and stable. We haven't seen a lot of really any signs of the kind of stuff that you're alluding to. So it's pretty steady as this goes.

[Venk Nathamuni, CFO & Principal Accounting Officer]

Yes. And I'll reiterate what John said, as we look at the bookings parts throughout the quarter, nothing unusual. And obviously, we have the business with our top customer, but also the rest of the business, we've seen -- there are no changes in terms of order cancellations or pushouts and pull-ins and so forth. Obviously, we're only guiding one quarter at a time. But so far, what we've seen has -- doesn't give us any reason to believe that there's anything unusual, number one.

And then the second question, Chris asked about in terms of the inventory. Again, I want to reiterate the point that for the prior couple of years, we were pretty much in a hand to march existence as it relates to inventory. And obviously, days were incredibly low. So, we have been talking for the last couple of quarters about building that inventory so that we can service our customers more promptly. And that's what we are down the path of executing. And also reiterate the point that while the inventory days are up this quarter, we do expect it to decline in the next quarter.

[Christopher Rolland, Susquehanna]

And then secondly, on your wafer commitments. How are you guys feeling about the $560 million in '24 and the $380 million in '25 yet to come? And you'll have less flexibility probably because of those high DOIs, does that come into play here or not?

[Venk Nathamuni, CFO & Principal Accounting Officer]

Yes. Good question. So clearly, from the long-term commitment standpoint, we feel good about where we are with the supplier. We are working very collaboratively with them in terms of trying to figure out how do we make use of those parts and repurpose them for the ones that we see demand going forward.

And longer term, we still see a lot of opportunity in terms of being able to work with this supplier and then obviously continue to look for other sources of supply over time because we do see the runway ahead over the last -- over the next several years in terms of the increased content and the new capabilities that we're working on.

[Operator]

[Operator Instructions] The next question comes from the line of Ananda Baruah from Loop Capital. You may now go ahead.

[Ananda Baruah, Loop Capital]

Yes, two quick ones, if I could. Guys just sort of with regards to the go-forward opportunity, that you talked about, both with regards to advanced power and battery capabilities. Is philosophically as smartphone -- if smartphones were to begin to adopt kind of more robust AI features and functionality? And even if ARR, DRR, more robust ARR, DRR features and smartphones were to work their way in, in the coming years. Would that create a need for a noticeable step-up in advanced power and value capability that you guys provide? And then I have just a quick follow-up.

[John Forsyth, CEO, President & Director]

Yes. Thanks. That's an interesting question. I guess I'll probably be bearing into a kind of speculative domain here. But yes, two things would be potentially favorable to us. One is that where we really specialize is in the interface between the physical world and the digital domain. So anything where a lot of data needs to cross that boundary at very low power and be subject to some kind of processing then we're really ideal for solving problems in that space.

That's why we've done so well traditionally in the boundary between -- the boundary around audio and more recently in the camera and optical space. And I think in general, AI, augmented reality and so on, certainly drive use cases, which look like that. So I think that presents opportunity for us to grab.

And then since you asked about the power space, I think one thing that's very obvious with anything related to AI is that it is very, very power hungry, it causes major spikes in power demand within any system.

And that's exactly the kind of thing where even already our power conversion and control, I see is it really delivers a lot of benefits to the system, to the end user and to our customer in terms of battery protection, in terms of managing the system -- the power across the system and so on. So yes, I think that would probably accentuate some of the kinds of problems that we're really experts at solving.

[Ananda Baruah, Loop Capital]

Yes. That's awesome. I appreciate that context. And the quick follow-up is the context that you were giving just around sort of I know you're not talking specifically about given December quarter guidance. You're just talking about the backlog looking stable and steady as she goes. Is that also to say sort of if we just look at what your classic seasonality might be, that's not an awful place to start for our modeling purposes?

[John Forsyth, CEO, President & Director]

I think so. I'll caveat it because when we get into this part of the year, of course, around any quarter boundary, there's a lot of material on either side of that. So it doesn't take much movement to move the needle of fair amount. But if you look at the shape of the quarter we're guiding now relative to the last quarter, that is and then compare it against the last six or seven years in terms of seasonality, it's straight down the middle of the fairway. So again, it kind of looks pretty normal to us.

[Operator]

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

[Blayne Curtis, Barclays]

I just want to ask you, it might be a tough one to answer, so answer as you can. But to the product that got shells, I'm just kind of curious if you can speak to I guess, the why part. And I guess I asked because I'm wondering if you can speak to kind of what's the status of it? I mean is the customer but they're never going to use it, kind of who owns the chip? Is there any IP that you need? I mean, you spend a lot of time on this development, I'm assuming in cost. So, I think you spoke to maybe getting some reconciliation on the wafers and the cost of like product that was made. I'm kind of curious either recouping your efforts or monetizing it later, anything you can speak to as to the future of that product?

[John Forsyth, CEO, President & Director]

Yes, I'm not going to go through the details as we understand them of what lay behind the decision. I did point out in the previous call, we were certainly happy that we hit our milestones, but obviously, there were other factors involved. Regarding expectations going forward for it, per the comment in the prepared remarks, we've taken it out of the model, which means that we don't have any expectations around it. That's not to say it mightn't come back.

There is some very cool technology in there, so we would obviously love that. And it's also not to imply that we're saying something about the actual plan that the customer has because we're not, and we don't have insight into that. But we -- it's just to say that we really don't have line of sight of the plan for it right now. So, it remains on the shelf. But yes, there's a lot of great IP there that we would really like to find a way to get it to see the light of day.

[Blayne Curtis, Barclays]

Great. And then just, Venk, on the workforce reduction, I was just kind of curious the timing of that? Obviously, OpEx is up in September, and then you have the 14 quarter in December. I'm just kind of wondering how to think about OpEx for December? And when you get the full impact of the reduction, does that offset some of the kind of the mechanics of the extra week?

[Venk Nathamuni, CFO & Principal Accounting Officer]

Yes, Blayne, thanks for the question. Yes. So clearly, from a guidance perspective, we're giving guidance on you for the September quarter, but I understand your point. So essentially, in terms of the timing, the effect of the actions that we took will obviously only be valid for about 6.5 to 7 months of the full fiscal year. And so that's the way to think about it.

And we announced in the 8-K that it was roughly 4% to 5% reduction. So, if you just do the math, it will work out to somewhere around the 4% to 5% spread out over the next several months, right? So I think that's the way to think about it. In terms of the December quarter, clearly, you're not going to see any benefit on the revenue side. But on the OpEx side, in the extra week will definitely have an impact on OpEx, and that's the way you should model it as well.

[Operator]

Your next question comes from the line of Matt Ramsay with TD Cowen. Your line is now open.

[Matt Ramsay, TD Cowen]

Thanks for let me jump back in. John, I wanted to -- you've been having increased commentary about the laptop market and your large customer is a big player there. But you talked tonight about getting in some reference design programs with Intel. Maybe you could expand on that a little bit. The status of that relationship, how immediate that might translate into revenue and just your understanding of the size of the unit opportunity that might be covered under those reference design programs at that customer?

[John Forsyth, CEO, President & Director]

Yes. Thank you, Matt. I guess I'll talk about the PC opportunity in -- on a couple of axis. So one is just the timing of our expectations of how our market penetration and revenue potential looks. And then I'll talk about the stack of content that we believe is going to be relevant and formal part of our SAM there. So we're in the early innings. We've just sampled the codec and amplifier to customers. We've just announced the inclusion of those on the reference design.

Typically, those reference designs will be made available to OEMs between 18 and 24 months before you see end products in the market. So, where we've still got some way to go for that to grow significantly, but we also have a number of designs, pretty significant number of designs underway today, which predate that reference design.

So I think the way to think about it is that we will see some products coming out late FY '24 that include those new devices from us, but the total revenue in FY '24 is going to be fairly limited than growing somewhat in '25 and then continuing to grow and become more and more meaningful through FY '26 and beyond.

And the SAM that we see is going to be made up of audio and HPMS products. So if you look at designs, which are underway today, we have at least one design underway where we can see multiple amplifiers a code and haptics driver, which starts to become a pretty meaningful stack of content, obviously.

And then over time, we expect power products from us to be layered on top of that. And we can see -- we can also see potential in some products for multiple dollars worth of power content. So if you look out to 2027, we think there's about $1.2 billion of SAM when you take both the audio products and the HPMS power-related products into account.

[Chelsea Heffernan, Director, IR]

This will be our last question.

[Operator]

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

[Tore Svanberg, Stifel]

I just had a follow-up to that last topic because I mean this is obviously part of your third strategy. Will you start to break out how much notebook is as a percentage of revenue? And if so, I mean, would it like 10% number, something like that be used? Because obviously, we want to track your progress there and just wondering numerically if you would share some of that with us.

[Venk Nathamuni, CFO & Principal Accounting Officer]

Yes, Tore, great question. So as John just mentioned, we're pretty excited about the opportunity that we see in front of us, especially in the PC market across multiple dimensions and codecs and amplifiers and such. Clearly, from a short-term perspective, everybody knows that the PC market is going through some tough times. So over time, we do expect these design wins to translate into meaningful revenue and at the appropriate time, we will consider that. And yes, watch the space.

[Chelsea Heffernan, Director, IR]

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

[John Forsyth, CEO, President & Director]

Thanks, Chelsea. So in summary, Cirrus Logic delivered revenue towards the top end of our guidance for the first quarter and made great progress across our core areas of strategic focus.

The first of which is maintaining our leadership in smartphone audio; secondly, continuing to expand our high-performance mixed signal content in smartphones; and thirdly, leveraging our outstanding audio and high-performance mixed signal expertise to diversify into new markets.

We're excited about the opportunities in front of us, and we thank you for your continued interest in Cirrus Logic. I'd also like to thank all of our employees for their incredible dedication and commitment.

Before we close, I'd also like to note that we will be participating in the KeyBanc conference in Vail on August 7. Please check our investor website for the details. Thank you all for joining the call today.

[Operator]

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.