Cirrus Logic Inc (CRUS) 2017 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic third-quarter FY17 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 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 FY17 at approximately 4 PM 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 email 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 differ materially from projections. By providing this information, the company undertakes no obligation to update or revise any projections or forward-looking statement, 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 expectations. 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 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.

(Operator Instructions)

Tore Svanberg, Stifel.

Yes, thank you, and congratulations on the strong results. Jason, in the shareholder letter you talk about growth moderating for FY18. 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.

Yes. Sure. As you've highlighted, we're delighted to exceed 25% revenue growth for three years in a row so it's probably not too surprising that our expectations for FY18 are more modest than that. That's driven by a lot of content growth, which of course you know 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. 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 the 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 not, obviously, asking for specifics, but what are some of the dynamics that are leading to that?

Sure. 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'd used in the most recent flagship model.

So there'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 that gets soaked up into the 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. There's an ebb and a flow to that in any given year.

Obviously we'd prefer if a 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 on the flagship to significantly grow content over the longer term.

Blayne Curtis, Barclays.

Hey, this is Chris Hemmelgarn on for Blayne, thanks very much for letting us on to ask a question and congrats on strong results. First of all, if you could talk a little bit about -- you mentioned you're getting 55-nanometer amps back from the fab shortly. Could you just talk about what that product and some of the [belt you have braided] in terms of coupling closely with the codec, and just how defensible you see that amp socket as being going forward?

We've actually got our first device back from the 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 a lot of latitude for how we implement the 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 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 AP, 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 a 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 when the customer doesn't have to mess around with getting algorithms to run across a couple of different devices.

So that said, 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. This is a quick follow-up. I'm very excited to see that it looks like you guys -- we'll finally be watching an ANC-enabled product this fiscal quarter. Looking forward to sampling those. But it seems to me like that market's been a little slower; I think we've talked about this before, but a little slower developed than you might have expected. Your largest customer is really pushing a wireless, very light functionality product. Could you talk about how you see that market evolving, how you got more familiar with giving with the customers, how you're adapting to some the challenges, and how you see the opportunity to grow there in coming years?

Sure. 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 USBC 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 could 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 technical support point of view. We've got the engineering team has -- now that we've got somebody very close to production, we learned a lot from that. And the team's all for finding the tools to make it easier to support a wider range of customers. Definitely no lack of demand for that particular product and 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.

Rick Schafer, Oppenheimer.

Thanks and I'll add my congratulations on the results, you guys. Excuse me. So I had a question on headsets. As the move to digital headset 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 that playing out in the android space? Do you expect the majority of the bigger handset OEMs to include that dongle in the box as you move to USBC? And what's the staying power of that dongle? How long do we expect that dongle to be there, to be around?

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, yes, I think we see every possible permutation that see people that'll probably be long holdouts with the headphone jack. I think there'll be people that'll go whole hog and rid of it, include the headset and an adapter, and probably every 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 USBC 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 grow separate but connected to each other, we think there's -- creates a lot of pull-through on the other product types.

Okay. And a quick question on China with the OEMs there. Can you talk about your strategy to break the Qualcomm bundle, for lack of a better phrase? And maybe talk about some of the success, or 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 in 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 a 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 has for the last year been a pretty meaningful application on handsets for whatever reason; in China in particular.

So we see 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 money to differentiate their products in that regard. So 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. FAEa a good team of salespeople, so we're 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.

Rajvindra Gill, Needham & Company.

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 FY18 will be driven by your hi-fi codecs. I wanted to get 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 the android handset customers, how are you proliferating -- or your go to market strategy for -- or transitioning folks over from analog to digital? Maybe you could elaborate on that strategy and talk about that pick up rate. Thank you.

Sure. Well, it's heavily skewed by our participation, obviously, with our customer outside the android space. That obviously makes up a huge bulk of the headset revenue 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 USBC and android, it's an interesting mix across those 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 USBC 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. And 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 FY18, I'm 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?

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 to buy a phone again, I think was the accurate summary of the sentiment. And then the last couple of quarters I've been hearing about the supercycle.

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 that 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 update you as we go.

As far as the only specific puts and takes that I can give, we talked about in the shareholder letter and a previous question about somewhat lower ASP for our leading android customer, and we see good opportunity to grow that again over the longer-term. Kind of like last year when we were 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 every year. So that's how we look at it.

And just a last question then I'll jump back in, but what would be 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 the basic digital headset is definitely a higher ASP device. Longer-term we've got opportunities that we're investing in. 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. We're still investing in the microphones, that'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's a lot of room left to grow in big ticket items and then of course as a mixed signals supplier we're always looking for lots of little things as well, less passive components or more power efficiencies, smaller board space, all manner of different things that go into adding value to our devices.

Matt Ramsay, Canaccord Genuity.

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, and 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 topline 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, and just to be specific on your first point, yes, we definitely make that comment in cognizance 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, mostly in the R&D side. We've done a good job of keeping the lid on SG&A headcount growth. So we'll probably be a little bit more moderate on R&D side, and I think that puts us in 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 from me, I noticed as we've 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 talk to that a little bit, that would be really helpful. Thanks guys.

Sure. 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 CM's with much lower -- 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 the box with a handset, there's very little to no electronics in it whatsoever; speakers, the microphone, etcetera.

So when you look at an ANC headset, where it's a closed-loop feedback system, calibration, making sure to think in the case of an adaptive solution 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 algorithms, such that either our customers can do it on their own or it's a much lower touch model from our FAEs. So I think the team allow, on the one hand in hindsight you'd always love to have been a little more accurate on how to cost something a year or two ahead of time.

Once you're in the market that's when you really, really learn. And I think we've done a good job of that of 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 of performance, really across every form factor. A much higher level of performance and other features and functions such as noise canceling and whatnot.

All right. Thank you.

You bet.

(Operator Instructions)

Chris Rolland, Susquehanna.

Hey, guys, thanks for the question. So we recently looked at a tear-down 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 in wireless earbuds for Cirrus on perhaps the codec side moving forward? And do you guys 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 ear bud for each ear, yes, you would need obviously silicon each of those ears. But as it relates to a codec, you would need about half as many channels in each ear. So yes, I wouldn't regard it as necessarily double from a codec perspective.

That's if 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's something that's that is difficult to do from a radio perspective using traditional Bluetooth.

So that is a market that we still expect as a broad accessory market. We'll probably accelerate once BTLE audio is fully ratified and 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 can use it in a Bluetooth headset or a wired or one with a battery or one with USBC. So hopefully that's a little color to it.

Yes. 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 want going to want to migrate to higher end amplifiers or speaker protection? Would that 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?

Yes. Absolutely. Those two things are very correlated because in a lot of a lot of cases, if you think about 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 maybe marketed a stereo. But a lot of it is about just being louder and in particular in speakerphone mode, making it louder so you can, say, lay the handset on the passenger seat of your car and just use it as a speakerphone 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 drive, to draw rather from the battery, brings with it a requirement to do much more elaborate speaker protection than 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.

Charlie Anderson, Dougherty & Company.

Yes, thanks for take my questions. I think Jason you just mentioned microphones as a longer-term opportunity and I know over the last couple of quarters we've talked about where you guys stand, and you guys are just trying to refine the process. So I wonder if you could 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. Robust is definitely the word of the day. The team has made a tremendous a lot of progress I think since we acquired the microphone business as part of the Wolfson acquisition. It's definitely an oversized investment for Wolfson. It's not anywhere is near as big a percentage of what we're looking -- as what we're investing in for the long term, so it's much more manageable investments 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, is that 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, deliver it, develop it, deliver it to a customer on time, qualify it quickly, and ramp it to production without causing them any surprises is a bar that seems, when you say it that way, 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 of our goal. We want to bring the same level of predictability to that that we've done 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's 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 mentioned smart home in the last few shareholder letters as a market you're interested in. If you could update us on what you're looking at, what you're targeting in that market? Obviously there's a lot of buzz around some of those categories, coming out of CES we saw Alexa everywhere. Maybe some of the specific capabilities that you guys bring to bear you think are going to help you differentiate in the market? Thanks.

Yes. There are things in that smart home market that are very much in our wheelhouse. 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. 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 homes that goes between the microphone and the cloud.

So for example, far field beamforming, or the voice biometrics, there's obviously there was that whole story around CES about the little kid ordering cookies and 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 an appropriate user and that you've got the right level of permissions to whatever it is that you're doing with the device. If you're asking it to tell you the time, maybe you want anybody 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 play into that very well. And then the various sounds enhancements and codecs and microphones and all manner of other things. So that's 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.

Thank you.

Tore Svanberg, Stifel.

Yes. 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 FY19 event?

Yes, that's probably cutting it pretty close. But within the fiscal year is possible. We've seen a lot of good interest in, 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 year -- or, sorry, FY18. But I wouldn't expect that to be the huge driver of our amplifier business. That's probably something that could ring in 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-nanometer amps on the general market that we expect good progress from in the shorter term than that.

Okay. And the last question on voice biometrics. You're going to be sampling in the first half. I assume you're going to be sampling mobile customers, right? And not 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 solution, as we think we can -- a hardware-implemented solution, is that we can deliver much more of a whole product that way, and in a way that is a little bit more turnkey to put together.

Sounds good. Thank you.

Thanks, Tore.

(Operator Instructions)

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 trailed significant expansion of revenue, operating profit, and earnings-per-share. We are 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.