Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic First Quarter Fiscal Year 2026 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 over to Ms. Chelsea Heffernan, Vice President of Investor Relations. Ms. Heffernan, you may begin.

Thank you, and good afternoon. Joining me on today's call is John Forsyth, Cirrus Logic's Chief Executive Officer; and Jeff Woolard, our Chief Financial Officer. Today, at approximately 4:00 p.m. Eastern Time, we announced our financial results for the first quarter of fiscal year 2026. 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 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's 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 welcome to everyone joining today's call. As you have seen in the press release, in the June quarter, Cirrus Logic delivered revenue of $407.3 million, above the top end of our guidance range, driven primarily by strong end demand for smartphones incorporating our silicon. In a moment, I'll hand the call over to Jeff to discuss the financial results for the June quarter in detail, along with our outlook for the September quarter. Before we get to that, I'd like to make a few comments about the recent progress we've been making across our business. As many of you are aware, our long-term strategy for growth at Cirrus is based around 3 principles. First, we seek to maintain a strong leadership position in our core flagship smartphone audio business. Second, we aim to expand the value and range of high-performance mixed signal solutions with which we serve our customers in smartphones and similar products. And third, we are increasingly leveraging our world-class expertise and IP in both audio and high-performance mixed signal areas to grow and broaden our business in new markets. I want to now speak to our recent progress in each of these areas. In our flagship smartphone audio business, during the quarter, we were pleased with the positive impact of our latest generation custom boosted amplifier at our first 22-nanometer smart codec. These components enable exceptional audio and voice experiences, along with significant power and efficiency improvements over previous generation products. We are proud to see these new devices contribute to the remarkable performance of our customers' products. Outside of our custom audio solutions, we also continue to serve customers in the Android ecosystem. While the majority of our general market R&D efforts are directed toward developing products to new markets, we continue…

Thank you, John. Good afternoon, everyone. I'll start with a summary of our financial results for our fiscal Q1 and then provide guidance for our Q2 fiscal 2026. In Q1 fiscal 2026, we delivered revenue of $407.3 million, above the top end of our guidance range due to stronger-than-expected smartphone unit volumes. On a sequential basis, revenue was down 4%, primarily due to lower smartphone unit volumes. On a year-over-year basis, sales were up 9%, primarily driven by sales associated with our latest generation products and higher smartphone unit volumes. Turning to gross profit and gross margin. Non-GAAP gross profit in the June quarter was $214.3 million, and non-GAAP gross margin was 52.6%. On a sequential basis, the decrease was mostly driven by a less favorable product mix and a return to a more typical pricing environment. On a year-over-year basis, the increase in gross margin was largely due to a more favorable product mix. Now I'll turn to operating expenses. Non-GAAP operating expense for the first quarter was $119.5 million. On a sequential basis, OpEx was down $0.5 million, primarily due to a reduction in product development costs, largely due to the timing of expenses for new products. The decrease also reflects a reduction in variable compensation and lower facilities-related expenses. This was offset by higher employee-related expenses, mostly due to annual salary increases. On a year-over-year basis, operating expense was up $1.5 million, largely due to higher employee-related costs, mostly associated with annual salary increases. This is offset by lower product development costs. Non-GAAP operating income for the quarter was $94.9 million or 23.3% of revenue. Turning now to taxes. For the June quarter, our non-GAAP tax rate was 22.1%, in line with our previous guidance. And lastly, on the P&L, non-GAAP net income was $80.3 million, resulting…

Thanks, Jeff. 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 Christopher Rolland with Susquehanna.

Congrats on the results. I guess, with the results and guidance here, the results in particular, there's just a very big delta between what you're expecting and what actually happened. And so I just wanted to understand what's driving that delta? Was it just conservatism in the guide? Or is this better units or better content or a better inventory build or tariff-related pull-ins. What was driving this delta?

Thanks, Chris. Yes, obviously, big picture is strong demand for smartphones, primarily, and there are no content surprises to us at this point in the cycle, but it is true that we're shipping more content in smartphones than ever before. So that strong demand had a significant effect on us. Obviously, when we guide, we guide based on our judgment using all the information we have available. Relative to guidance, I would say that in the last quarter, we saw demand remain really robust and sustained during a period of the year where that is not something that we typically see. And so also factored into that, there was the launch of a lower-cost product earlier in the year, which contributed to an extent. So we obviously shipped to customer demand. That means we don't have perfect visibility of how much might be related to, for example, tariff-related pull-ins or pull ahead of demand. We think that contributed somewhat to it, but it's difficult for us to put a number on.

I guess, secondly, I wanted to kind of check in on your diversification efforts outside of your largest customer. On the PC side, I wanted to know how big the Compal thing was in driving new designs and then check in with the auto opportunity as well. And anything else that you can point to there? Is it going better than you would expect, that diversification effort?

Yes. Thanks, Chris. We're certainly very excited about the progress that we're making. Auto, I'll cover off first. That's still very early stage for us. To be clear, we've been shipping in the automotive market for some time, but it's really not something we've been investing in. It's been legacy products and so on. We've started reinvigorating that. It's going to take some time given the design cycles that we're all familiar with in that market. But I think we see plenty of opportunity there. There's fairly obvious ones that you would associate with us around audio and haptics and so on, just improving the in-cabin experience. And that's an area where we do have great engagement with customers. We also mentioned in the commentary for this quarter, the design-in of the timing products that we -- I think we just launched late last year. Again, that's not a needle mover today revenue-wise, but it will -- those products will ship for a long time. Automotive is one of the target markets for them. And I think it's a great indicator of one of the strengths of the company given that we have a vast array of IP and capability at pretty advanced geometries for the kind of mixed signal stuff that we do, most of which has been targeted and develop for our major markets around smartphones. But we're able to take a lot of that IP and a lot of that design capability, and refresh and upgrade existing kind of legacy product segments and see very positive adoption and response from our customers to that. And that's what we've seen with timing, where we went from, I think, publicly launching those products not that long ago to talking this quarter about those being designed in to a Tier…

Your next question comes from David Williams with The Benchmark Company.

Lots of great color there on the last question. I guess, if we kind of think about the volumes and the content and just kind of the puts and takes around the first half being more weighted versus the second half, is there a way to kind of, I guess, qualify the magnitude of that? And maybe what -- how to think about the difference between the content and the volume differential?

Let me give a bit of color. Obviously, we just guide 1 quarter at a time, but I do want to give color to this. Clearly, we're coming off a record June and then a very strong September guide, which overall reflects strong demand for our smartphone products generally -- which is generally a very, very positive picture for us, but there are a few factors which we think are giving a somewhat different shape to the seasonality this year that you should keep in mind when thinking about your models for the rest of the year. So I'll just touch on each of the factors that we think are playing a part there. One of them I mentioned already, we think the pull-ins contributed to some extent from our position in the value chain. It's pretty much impossible to say precisely how much because we ship to customer demand. But we believe we've likely seen a pull forward of some level of demand and common sense says that has to come from somewhere. Secondly, although we don't have the perfect visibility of this, we do think it's possible that with a more complex and diverse global manufacturing supply chain on the part of certain of our customers, that we may have seen and maybe seeing a need for parts to be available and on hand a little earlier than normal, which again, would just pull forward some of the revenue ramp. And then finally, and this is certainly, I think, perhaps a secular trend for us. As you know, the quantity of our camera content has been growing over time. And that content is part of the longer supply chain process than our other products because it's typically incorporated into modules and the manufacturing time lines associated with that longer. Which means that we ship the camera parts earlier than we ship the other parts that don't go into modules, and that pulls a larger part of our revenue forward. So if you look actually last year, we also saw a comparatively stronger September quarter, and that, again, in part, reflected this trend. So I think we just guide to what we can see. But as we commented and Jeff commented in his prepared remarks, we do see these factors all playing a part in tilting the demand pattern more towards the first half of the calendar year rather than the back half as it perhaps used to be for us. That said, as Jeff mentioned, there's nothing about that shift in patent has changed our overall view and expectations for the full year.

Great. Lots of great color there. I appreciate it. And then just kind of thinking about the AI opportunities, and you've talked to this before, but just kind of curious if there's new areas or new products potentially that you could work into the AI trend or especially at your largest customer, but even beyond that, maybe in the laptop space or even on the Android side, anything, I think, to that future opportunity would be helpful.

Yes. I think on the product side, all of the above. I think we definitely want to be a part of the set of enablers that our largest customer uses critical for AI features. We, for sure, see that as being potentially something that brings a kind of paradigm shift in how people use laptops. I think it can be very significant there. And I think other device categories are going to emerge around these technologies, which we haven't seen yet. And we really want to be addressing all of those. So first and foremost, I think we're big fans of voice- centric devices and enabling voice technology. We think AI is fundamentally really unlocks the conversational interface, and that can be -- whether that's through your phone, through your laptop or through some of the yet to be invented or announced device, we believe that we can play a very important part in that. That's absolutely our wheelhouse voice capture, voice processing and so on. And then the other area where we think we can make a big impact is power. Everybody is fully aware of the amount of power that's running AI features at the edge, inference and so on consumes. And we both provide technologies which are incredibly power-efficient on the voice and audio side and power specific products which help customers get more out of batteries.

Your next question comes from Tore Svanberg with Stifel.

So I just had a follow-up question on where you talked about seasonality there, John. And maybe I missed this from Jeff's comments, but I mean typically, first half, first calendar is 40% and then second half 60%. So are we kind of looking more sort of at a 45-50 profile? Is that how we should think about it -- sorry 45-55 profile versus 40-60?

Well, I think -- as you want to think about it is just to reiterate what John said, what has been typical as we have more camera content, and that becomes a bigger piece of the total revenue pie. It is shipped earlier. So if you think about that trend of -- it is a change what you had seen in years past, the camera content, bigger piece of the pie gets shipped earlier. And then certainly, there was some amount of pull-in, which is hard for us to determine. So I think as you think about that moving forward, it's not -- it's really a mix of the camera content in the total pie and how that has just shifted forward from where we have to place in our customer supply chain.

Got it. And related to that, you mentioned you expect inventories to be down sequentially in the September quarter. So does that also have something to do with that? Or is it just purely the GlobalFoundries commitments that are sort of trailing off?

Yes. It's mostly the GlobalFoundries commitments trailing off as we continue to work through that and manage both our customer demand and our GF contract. So we'll continue to see that going down. As we said in the last call, we had a peak there. And that's really all that is. And we'll get closer to our inventory sweet spot as we work through that.

That was the last question. So now I'll turn the call back to John for final comments.

Thank you, Chelsea. In summary, Cirrus Logic delivered outstanding results for the June quarter driven by strong demand for components shipping into smartphones. We also continue to make great progress in each major area of our long-term strategy, and the team at Cirrus remains very excited about the opportunities in front of us. I'd like to thank you for your continued interest in our progress, and I'd like to thank all of our employees around the world for their incredible dedication to innovation and to supporting our customers' success. Before we close, I'd also like to note that we will be participating in the KeyBanc Technology Leadership Forum in Deer Valley on August 12. Please check our investor website for the details. I'd like to thank everybody for participating today. Goodbye.

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