Cirrus Logic Inc
NASDAQ:CRUS
Earnings Call Analysis
Q2-2024 Analysis
Cirrus Logic Inc
Cirrus Logic has reported a robust second quarter for the fiscal year 2024 with revenues touching $481.1 million, which is at the upper end of their guidance range. This positive outcome is attributed to their leadership in smartphone audio and strategic developments, such as the first silicon of their next-generation custom boosted amplifier and a 22-nanometer smart codec. These advancements are slated for rollout next year and aim to enhance audio sensing and other key applications.
From a financial standpoint, Cirrus Logic showcased a non-GAAP gross margin increase both sequentially and year-over-year, reaching 51.3% for the quarter. This improvement largely comes from reduced supply chain costs and a mindful inventory management strategy, despite facing challenges such as the disposition of wafers for a new high-performance mixed-signal product. Operating expenses have been kept under control at $114.4 million, while generating a non-GAAP operating income of $132.5 million, or 27.5% of revenue. It’s also noteworthy that the company concluded the quarter with a solid cash position of approximately $352.5 million.
Cirrus Logic has been carefully managing inventory levels which stood at $328.9 million by the end of the second quarter, with the company aiming to optimize further. They anticipate that Q2 FY24 will mark the apex of inventory for the fiscal year. Cash flows from operations were negative this quarter, primarily driven by seasonal product ramps. Despite this, Cirrus Logic remains committed to returning capital through share repurchases, having utilized $40.6 million this quarter to buy back shares, with an additional $422 million remaining under the buyback authorization.
Strategically, Cirrus Logic reaffirmed its commitment to expanding beyond the smartphone sector, including strengthening its foothold in the laptop segment where it now supplies to the top 5 OEMs. There’s an increased focus on capturing design wins for next-generation laptop models, tapping into trends like higher quality audio, which is historically underemphasized by laptop manufacturers. The company has started shipping content for new high-end laptop models, which demonstrates the potential for expanded market share and increased per-device content in the future.
Looking ahead, Cirrus Logic expects third-quarter revenues to range between $510 million to $570 million, and gross margin to hover between 49% to 51%. Non-GAAP operating expenses are projected to increase owing to a longer fiscal quarter with 14 weeks, contributing to higher salary costs and variable compensation. Meanwhile, the company's long-term growth strategy includes continued investments in product development, and they've forecasted a non-GAAP effective tax rate of 24% to 26% for the fiscal year 2024, consistent with previous guidance.
Cirrus Logic continues to nurture its standing with major Android OEMs, citing better performance with Samsung this year and projecting future support. However, their focus is gradually shifting towards the laptop market, which they believe holds a more considerable potential for growth. While current Android relations remain valuable, the laptop sector is seen as a 'greenfield' area, offering ample space for expansion and content growth. Additionally, the company looks forward to new product introductions and ramp-ups in the next fiscal year, aiming to diversify its revenue streams into segments like professional audio, automotive, industrial, and imaging end markets.
Wrapping up the call, executive responses seemed optimistic, yet conservative in projecting the company’s position beyond the upcoming quarter. They acknowledged the importance of one quarter at a time planning, hinting at ongoing evaluations of inventory and customer demand levels. Specific projections or detailed assessments, particularly concerning March quarter seasonality, were left undiscussed, suggesting that the company prefers to observe unfolding market dynamics and make decisions based on real-time data.
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Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic Second 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. Mr. Heffernan, you may begin.
Thank you, and good afternoon. Joining me on today's call is John Forsyth, Cirrus Logic's President and 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 second quarter of fiscal year '24. The shareholder letter discussing our financial results, the company's earnings press release, the webcast of this Q&A session are all available at the company's Investor Relations website.
This call will feature questions from the 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.
Thank you, Chelsea, and thank you, everyone, for joining our call today. As you've seen in the press release that Chelsea referred to, in the second quarter of fiscal '24, Cirrus Logic delivered revenue of $481.1 million, near the top end of our guidance for the quarter.
In a moment, I'll hand the call over to Venk to discuss those results in greater detail. But before we get on to that, I'd like to provide some color on the progress that we made during the last quarter regarding the strategy that I have outlined on prior calls.
Our first strategic priority is leadership in smartphone audio. And this quarter, we received the first silicon of our next-generation custom boosted amplifier and sampled it to our customer. Like our customer, we're excited about the performance, the efficiency and the system cost improvements that it will deliver. Alongside that product, we remain on track with our first 22-nanometer smart codec which represents a significant step forward for audio sensing and other key signal processing applications.
Both of these products, the amplifier and the codec are on schedule to be introduced next year. In the general market side of our smartphone audio business, this quarter, we had multiple customers introduced new flagship devices featuring our audio components and we anticipate more devices using our products to be introduced in the first half of the coming calendar year.
Turning now to the second pillar of our strategy. Our goal is to continue to broaden our high-performance mixed-signal content in smartphones. Progress in Q2 on this front included ramping shipments of our latest camera controller ahead of a customer's product launch.
Once again, in that product launch, we saw the cameras stand out as a key differentiating feature and we are proud that our products help enable our customer to deliver outstanding innovations in this area. We continue to maintain an exceptionally close engineering relationship with our customer in the camera space, and anticipate partnering on further exciting products in the future.
Beyond the camera, we have also been investing in new intellectual property that aims to enhance overall battery monitoring, health and performance expanding the portfolio of technologies that began with the power conversion and control device that we introduced in fiscal '22.
We continue to be excited about the long-term potential these areas represent for further growth and diversification of our revenue. The third element of our strategy is our focus on expanding into new applications and markets beyond smartphones. I've talked principally about the laptop space here, given that it is the market where we see our efforts coming to fruition soonest.
While we are still in the early innings of our strategic plan for this market, today, we are shipping content in each of the top 5 laptop OEMs, and we are actively engaged with those same OEMs on design win opportunities for next-generation laptop models. There are several favorable trends driving the adoption of our products in this space.
First, the post-pandemic desire for high-quality audio, which has historically not been a focus area for most laptop OEMs. Second, the desire for thinner and lighter devices. That desire creates a need for a better audio amplification for haptic rather than mechanical track beds, and for fanless designs where the thermal constraints bring demand for ever greater efficiency and power conversion.
Finally, there is the architectural evolution towards SoundWire that we've spoken about previously, which creates an opportunity for OEMs to rethink their audio architectures and their partners. Today, we have excellent product sampling to customers. We have participation in the SoundWire-compatible reference design from Intel and we are seeing great customer interest.
While it will take some time for that momentum to flow through to meaningful revenue, we continue to be excited about these opportunities. As an example of what can be possible at the higher end of this market. During the quarter, we began initial shipments for a high-end laptop model that features 7 pieces of Cirrus Logic silicon, including several amplifiers, multiple haptic drivers and a codec, resulting in multiple dollars of content.
We continue to believe this is a market where Cirrus Logic has an opportunity to increase both content per device and market share over time. Beyond the laptop market, we are also investing in new products for our general market business, which services a large number of customers across the professional audio, automotive, industrial and imaging end markets.
These components offer sustained differentiation with improved performance, lower power consumption and new feature enhancements, and we believe they can be important contributors to our profitability in the years to come.
In summary, we believe the company is well positioned for the future with new products in the pipeline for the coming year, momentum building in our market diversification efforts and significant opportunities to expand our high-performance mixed signal content.
And with that, let me now turn the call over to Venk to provide an overview of our financial results for our fiscal Q2 '24 as well as guidance for the third quarter.
Thank you, John. Good afternoon, everyone. I'll start with our fiscal second quarter results. Fiscal second quarter revenue was $481.1 million, which is near the top end of our guidance range due to higher-than-expected demand for products shipping into smartphones.
Revenue was up 52% quarter-over-quarter, driven primarily by higher volumes associated with new smartphone launches. On a year-over-year basis, revenue decreased 11%, which reflects a reduction in components shipping into smartphones as well as continued weakness in sales of general market products.
Turning to gross margin. Non-GAAP gross profit in the quarter was $247 million and non-GAAP gross margin was 51.3%, which is above the high end of the guidance range we had provided. On a sequential basis, gross margin increased 90 basis points, reflecting lower supply chain costs, largely due to a reduction in freight costs.
On a year-over-year basis, gross margin increased by 110 basis points due to lower supply chain costs and inventory reserves, partially offset by a less favorable product mix. During the quarter, we completed the disposition of wafers associated with a new high-performance mixed-signal product that was previously expected to ship this year. We work in close collaboration with our key customer and supply chain partner in resolving this issue and as anticipated, the disposition did not have a material financial impact.
Turning to operating expenses. Non-GAAP OpEx in the quarter was $114.4 million, roughly flat sequentially and close to the low end of the guidance range mostly due to product development timing as well as lower discretionary spending. We will continue to control discretionary expenses, especially given the current environment.
Non-GAAP operating income was $132.5 million in the second quarter or 27.5% of revenue. And lastly, on the P&L, non-GAAP net income in the second quarter was $101.6 million or $1.80 per share as the higher-than-expected revenue and gross margin as well as the lower-than-expected 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 second quarter of fiscal '24 with approximately $352.5 million in cash and cash equivalents. Our ending cash balance was down $73.6 million from the prior quarter as we built inventory to support seasonal product launches and used cash to repurchase stock during the quarter.
We continue to have no debt outstanding. And additionally, as noted in prior quarters, we have $300 million undrawn on our revolver credit facility. I'd like to reiterate that our balance sheet remains strong with a solid cash position and no debt. Turning now to inventory. As we indicated in prior quarters, we've been building inventory to support seasonal product launches as well as fulfill our wafer purchase commitments for our long-term capacity agreement with GlobalFoundries.
As a result, inventory was $328.9 million, up from $301 million in Q1 '24. However, days of inventory declined 47 days sequentially and we ended the quarter with approximately 128 days of inventory, down from 175 days in the prior quarter. Looking ahead, in Q3 fiscal '24, we expect both inventory dollars and days of inventory to decline from the September quarter as we draw down the inventory to support the ongoing seasonal product ramps.
While we expect inventory levels to remain elevated through this fiscal year as we balance anticipated product demand and wafer purchase commitments, we expect Q2 fiscal '24 to have been the high point of inventory for the current fiscal year. We'll continue to actively manage our inventory position to meet customer demand while fulfilling our purchase obligations.
Turning now to cash flow. Cash used in operations was $22.7 million in the September quarter, and CapEx was roughly $8.5 million, resulting in free cash flow for the quarter of minus 6%. For the 12-month period ending in the September quarter, free cash flow margin was roughly 7%.
On the share buyback front, in Q2, we utilized $40.6 million to repurchase approximately 510,000 shares of our common stock at an average price of $79.45. As of the end of Q2 fiscal '24, we had $422 million remaining in our share repurchase authorization. Subsequent to Q2 fiscal '24, we utilized $24.4 million to repurchase roughly 350,000 shares at an average price of $69.40 under a rule 10b5-1 share repurchase plan.
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 Q3 of fiscal '24, we expect revenue in the range of $510 million to $570 million, and we expect gross margin to range from 49% to 51%.
Non-GAAP operating expense is expected to be up sequentially in the range of $120 million to $126 million, primarily due to an additional week of salaries as well as higher variable compensation. As a reminder, fiscal year 2024 is a 53-week fiscal year, and our fiscal third quarter will span 14 weeks instead of the typical 13 weeks.
Overall, from an operating expense perspective, we'll continue to control discretionary spending but invest strategically in product development to drive our 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 capitalized R&D will become less unfavorable over time as additional years of R&D expenses are amortized for tax purposes.
In closing, we had a strong Q2 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 finally, while we understand there is intense interest related to our largest customer, in accordance with Cirrus Logic company policy, we'll not discuss specifics about our business relationship.
With that, let me now turn the call to Chelsea to start the Q&A session.
Thanks, Venk. We will now start the Q&A portion of the earnings call. [Operator Instructions] Operator, we are now ready to take questions. .
[Operator Instructions] Your first question comes from the line of Ramsay Matthew.
John, there's -- for the first time in a long more time from an architecture and share perspective, there's a lot going on in the notebook market with the emergence of what Apple has done with the M2 and now M3 and obviously what Microsoft is going to do with CoPilot and sort of shaking up the ecosystem a bit.
And you guys have been sort of hinting at opportunities in that space. So what I'm interested in is to sort of compare and contrast that to what you've seen the Windows market in laptops versus the Android market and smartphones for your company. You obviously have your largest customer and a really, really strong relationship there, but do you have like legit opportunities in audio and other areas and sort of the Windows part of the notebook market? And is it dependent on ARM folks gaining share? Or do you feel like your opportunities with Intel platforms are equally strong?
Thank you, Matt. I agree with your observations. I think there are a number of dynamics that make this market, the laptop market really interesting again and specifically interesting for us in a way that it hasn't been in quite a long time. And there are multiple drivers for us that I think will help us gain customer adoption.
To answer your question specifically, we have great relationships with customers across the Windows side of the laptop market. And our relationship with Intel and our presence in the Intel reference design that I referred to earlier, is really helping to drive customer engagement around the new products that we have. So we feel we're in a very good position with regards to our engagement with the key market leaders in Windows laptops.
Today, we're shipping to, as I mentioned, the top 5 OEMs overall in the laptop market. And we're engaged with each 1 of those OEMs around future designs. So we're very excited about that. And those conversations tend to be right now more focused on audio, but also including haptics and, to some extent, power products, which are coming a little behind the audio and haptic products for us. But lots of great opportunity there.
And it's in no way limited to ARM. In fact, I think ARM is potentially a tailwind for us given the experience we have integrating into ARM-based systems in the smartphone space and the degree to which notebooks start architecturally, looking more and more like smartphones, especially with the advent of ARM-based SoCs, but that's not a necessity. I would just say it creates additional opportunity over time.
John. As my follow-up question, I wanted to ask, I think it was good to hear your comments on sort of the resolution of the content and the product that didn't ship this year as you guys thought.
I wanted to ask a bit about the technology and the IP that you developed for some of these haptic opportunities and its applicability into the Android market. I mean when you guys made the big push and [indiscernible] Wolfson acquisition and tried to push into audio in Android with fits and starts and you had to kind of "break the bundle with Qualcomm and MediaTek in those markets and sometimes it was successful, sometimes not.
But if you look at the haptics arena, you have technology, you have -- and I wonder if the environment for the Android smartphone market around haptics, if there's an opportunity there -- and are the SoC providers, do they have strong solutions? Or is this a new TAM that you could go into in Android?
Thank you, Matt. In haptics, we are shipping haptics today into flagship Android phones. The story of haptic adoption in Android has been somewhat different from the iOS world and that not every OEM values it to the same extent.
And to begin with, the platform support was somewhat limited. We've seen in key flagship designs and appreciation for high-quality haptics and that's tended to win our sockets. But I think there's probably a bit of a long-term headwind to the SAM for us there, given that it comes at a higher cost and OEMs are perhaps comfortable putting high-quality haptics into flagship devices, but less so as they go down the tiers.
I would say that the opportunity for us to continue serving flagship phones there with haptics continues, and we'll certainly aim to do that.
Question comes from the line of Christopher Rolland.
I guess, first of all, can you talk about your inventory balance once levels are done with this customer ramp. Is that where you're going to want them to be? And does the wafer supply commitments come into play? Or is that behind us at this point as well?
Yes, Chris, thanks for the question. Yes, as I had indicated in my prepared remarks, the inventory that we have been building the last couple of quarters was just to come to balance with the both the supply that we had to fulfill in terms of our commitments to our partner.
But in addition, also the ramp of the new products that we alluded to. Now -- as you may recall, prior to these last 2, 3 quarters, we were in a pretty constrained position from the standpoint of inventory and living a pretty much hand-to-mouth existence. So we wanted to build inventory in anticipation of these product lamps.
And as I mentioned on the call earlier, we are expecting that the current fiscal quarter, which is Q3, we'll see a meaningful reduction in inventory from what it was last quarter, and we expect Q2 to be at the high point. Now obviously, looking ahead, we still have some supply requirements that we have to meet in terms of the purchase commitments to our partner, but we also see reasonable demand with the next set of products and such.
So -- it will be something that we will carefully monitor. As you've seen, we have come down the inventory path pretty substantially in the last few quarters, and we expect that to be substantially better going forward. But we'll just guide for it 1 quarter at a time.
As it relates to this current quarter, we do expect inventory to be down from the prior quarter. And just to give you some perspective, last fiscal year, we were at about 4.0x in inventory, and that's our ultimate goal in terms of where we want to be from an inventory turns perspective.
Excellent. And maybe following up just talking about the Android opportunity over the next year. Where you think you could capture some kind of needle-moving revenue? It sounded like in the latter, audio, you have some -- I would assume that the ramps coming in the first half, but maybe you can talk to that.
Do you think anyone would ever copy your lead customer's telephoto camera architecture for opportunities there. how are haptics ramping? I think you said you had some battery products efficiency products that you're trying to ramp as well? Where are all the opportunities, particularly needle-moving opportunities for Android?
So specifically around Android. I'd say the market for us really splits into 2 buckets. There's the China-based OEMs and then there's Korean and North American-based OEMs. And -- if you look at the China-based OEMs, we still have a good business there. We very much value our business with Xiaomi, Vivo and Meizu.
But we think that, that environment long term has some headwinds for us. It's become a more difficult environment to do business. So it's not a major area of investment. If we then look at the other bucket, the other side of the Harrison Android, we've got great relationships with those OEMs. We continue to invest in those and to support future designs.
I think our business with Samsung was up -- was bigger this year or has been bigger so far than last year. We feel very good about that, and we're excited about supporting them further in the future. But the Android opportunity as a whole is something that I think for us is not as large when we look further out, as the potential of the laptop opportunity.
So we can see, as we look a few years out, we can see a scenario where the laptop opportunity in our laptop business exceeds that of our Android business. And that's 1 where we have, I think, much more greenfield space for expanding content and gaining market share right now. So that's the greater area of our focus when it comes to customer engagement and new product development.
Your next question comes from the line of Tore Svanberg.
Yes. And congrats on the results, especially getting through this way for purchase commitment in light of the spread product that was great execution on your side.
I had a question about the 22-nanometer products John, mentioned the word introducing them next year. So does that mean that they will be sampling in calendar '24, and then we'll see potential revenues the year after?
They are sampling today. Thank you for opening the door to that clarification. Sorry, they're sampling today. The 22-nanometer smart codec in particular, is the product that we're talking about. That's in our customers' hands. It's performing beautifully. It's a marvelous product, and we're very happy with it, which means that we are working towards a market introduction in the back half of next calendar year.
Very good. And as far as the timing and opportunity in laptop, I understand you're in the top 5 today. But as far as this sort of bigger content ramp. Is that something that could happen already next year? Or is that more a calendar '25 or '26 story?
Yes, that's a great question. Obviously, I've referred to the fact that we have a significant number of designs in development now. And we need that, but it's also important to have the right being the right products, have the right designs in development and enough of them to start moving the needle on revenue given where our overall revenue is today.
So I guess I'll try to frame that for you in broad terms so you can get a sense of what we anticipate could happen here. This year, as I mentioned, we've got a number of designs coming to market within the remainder of fiscal '24, including the poster child device that I referred to in my prepared remarks, which we're very proud about.
But by definition, anything shipping in the second half of the fiscal year, and that really means in practice in the laptop space, most likely in the early part of next calendar year isn't going to contribute much during the current fiscal year. So think of the contribution of laptops in our fiscal '24 as being pretty minimal.
However, those -- there are designs coming to market now, which will start to contribute to revenue as we move into fiscal '25. So we anticipate seeing a moderate step-up in fiscal '25 as more of those current design wins start going into production, putting us likely in the range of the low tens of millions of revenue in fiscal '25.
A lot of what's happening today around the reference platforms that I mentioned in the prepared remarks, will lead to customer product that's launching early calendar '25. So we would anticipate that, that would likely lead to steeper growth and more meaningful revenue than in fiscal '26 and beyond.
And as I mentioned, previously, I know that we don't break it out as such, but to give you a sense of how we think about the opportunity. If Android stayed flat, then somewhere beyond that, we are -- we see the potential for our laptop revenues to overtake the Android business.
[Operator Instructions] Next question comes from the line of Blayne Curtis.
I wanted to ask you, you've been mentioning several quarters in a row diversification efforts in HPMS. I don't read too much in the language, but I guess the language is a little different. You said there's some customer interest in power and battery.
Can you just talk about the diversification efforts and maybe any kind of rough timing as to when we should think about maybe that impacting the model?
Yes, we certainly have customer interest, Blayne, and principally, that's around the power space. So really stuff that sits around the battery is an area that we believe we have significantly differentiated technology. We have that IP in silicon for the most part at this point. So we've been able to demonstrate IP to customers there, and we're excited about that translating that into specific program design awards and design wins and so on.
I'm going to limit what I say on this call, but that would be a little further out. That's obviously beyond the audio products that we've got coming next year. It's likely still some time before we see that come to fruition, but we believe there are meaningful opportunities. So we're certainly investing in securing those.
And then maybe a question for Venk. I wanted to ask on seasonality for March. Obviously, the 14 weeks impacts OpEx, I don't know with such high customer concentration, whether that matters for revenue. But any thoughts on March seasonality.
Yes. I mean it's too early to talk about March. But you're right. I mean in terms of just the current December quarter, we do have that extra week of both revenue and expenses, and that's kind of factored into the guidance.
Now what happens in March, obviously, is a big function of what happens to our -- the top customers' main product. So I think we'll just reserve judgment on it. But a typical sequence between the December quarter and March quarter is that there's a seasonal decline. We'll quantify it at the right time. But I don't see anything that's different this time around in terms of the seasonality, just the magnitude of it is what we'll have to determine going forward.
And this will be our last question.
Our last question comes from the line of Ananda Baruah.
I appreciate the questions. I guess going back to the PCs, John, would you -- if the sort of it's thought that there perhaps could be a little bit of a PC adoption dynamic in 2024. If that were to happen broadly would you anticipate seeing an impact to your PC business that we may notice as well? And then I have a quick follow-up also.
Sorry, are you referring to headwinds in the PC market?
Tailwinds in the PC market. A bit of a PC cycle. Yes.
I guess, yes, although we're still building design momentum. So we would certainly expect to benefit from that. And we think that when you do an AB comparison between laptops that have serious logic audio and haptics in them versus competitive products that do not.
The difference is really striking. It's really a night and day difference. We're very, very proud of what we're doing there, and we think it's really meaningful for the PC experience. So I would certainly hope to benefit from that next year, even if we're still building our design momentum in our pipeline today.
And then on the PC opportunities that you spoke about a few moments ago. Yes -- like HP is talking about in the next handful of years, 40% eventually of their of their PCs and laptops shipping what they're calling AI-enabled processing. Dell is probably in the similar ballpark. So folks like that.
Do you -- with that -- is that captured that kind of AI -- AI capability in PCs and laptops. Is that already captured in your thought process? Or would that provide kind of incremental content opportunity with that kind of AI enablement.
I'm not sure how that intersects quite with our current laptop-focused product portfolio. It may be that it does. We know, of course, the typical AI use cases burn a lot of power. So anything we can do to increase power efficiency across the system is obviously going to be a benefit.
But what I would say more broadly is I think anything that makes laptops more interesting and more of a vector for innovation and more of a focal point for improving the user experience is likely to benefit us in general.
And with that, we will end the Q&A session. I will now turn the call back over to John for his final remarks.
Thank you, Chelsea. So in summary, Cirrus Logic delivered revenue toward the top end of our guidance for the second quarter and made solid progress across each of the 3 key areas of our strategy.
We're excited about the opportunities in front of us, and we thank you for your continued interest in Cirrus Logic. In addition, I'd also like to thank the entire Cirrus Logic team. whose commitment to disciplined execution and to bringing innovation to bear on the challenges that our customers are addressing is ultimately what enables us to deliver strong results.
Before we close, I'd also like to note that we will be participating in the Barclays Conference on December 6 in San Francisco. Please check our investor website for the details. Thank you all for joining our call today.
This concludes today's conference call. You may now disconnect.