Cirrus Logic, Inc. · NASDAQ:CRUS
Cirrus Logic — Investor Presentation (November 2018)
29 slides from Cirrus Logic's investor presentation, Nov 1, 2018
Slide 1: Investor Presentation
Investor Presentation As of November 1, 2018 Advanced Signal Processing Products
Slide 2: Safe Harbor Statement
Safe Harbor Statement Except for historical information contained herein, the matters set forth in this presentation contain forward-looking statements, including industry market projections; our revenue growth opportunities; our ability to grow revenue by expanding content and share in smartphones
Slide 3: Cirrus Logic at a Glance
Cirrus Logic at a Glance PROFILE PRODUCTS CORE STRENGTHS Analog and digital signal Founded in 1984 Smart codecs & voice processors processing for audio and voice Listed on NASDAQ: CRUS Audio amplifiers Engineering execution World-class customer support & FY18 revenue: $1.5B Haptic drivers applicatio
Slide 4: Compelling Business Strategy
Compelling Business Strategy Leverage best in class IP High Operating Expand with more Margins Target fast growing content, more markets products Strong Cash Flow Design best-in-class custom, semi-custom Engage tier-one & general market market leaders products Leading Supplier of Complete Audio & Vo
Slide 5: Focus on Market Leading Customers
Focus on Market Leading Customers SMART HOME MOBILE SMART ACCESSORIES & CONSUMER Supplier to 6 of the top 10 Supplier to 6 of the top 10 Supplier to top 2 smart smartphone OEMs, headset OEMs home OEMs including top 3 Company Continues to Expect Expanding Shipments With Both New & Existing Customer B
Slide 6: Unique Corporate Culture
Unique Corporate Culture “Best Places to Work” 2011-2017 6
Slide 7: Technology & Market Overview
Technology & Market Overview 7
Slide 8: Expanding SAM ~ $5B Opportunity in 2021
Expanding SAM ~ $5B Opportunity in 2021 Smart Home & Mid-Tier Smart Accessories Biometric Haptic Consumer Flagship Audio* Audio* Audio* Voice Drivers Audio* $1.6B $900M $900M $750M $450M $400M Opportunity 2021 Opportunity 2017 Flagship Audio* Mid-Tier Smart Haptic Smart $1.7B Audio* Accessories Driv
Slide 9: Cirrus Logic Growth Vectors
Cirrus Logic Growth Vectors Expanding content and share in smartphones • Increased adoption of digital headsets and adapters • Boosted amplifiers penetrating mid-tier smartphones • Increased concentration of stereo smartphones with dual loudspeakers • Increased adoption of seamless, always-on voice
Slide 10: Intelligent Edge Signal Processing
Intelligent Edge Signal Processing MEMS AUDIO VOICE AUDIO HAPTIC AUDIO DSP MICS CODECS BIOMETRICS AMPLIFIERS DRIVERS Intelligent Edge Intelligent Edge User Experience Voice Processing Processing Adaptive Noise Voice Activation Canceling High Quality Audio Voice Capture Playback Secure User Haptic Fe
Slide 11: Expanding Product Portfolio
Expanding Product Portfolio MEMS Microphones MEMS Microphones ASP ~$0.25 - $0.45 ASP ~$0.25 - $0.45 Haptic Drivers Haptic Drivers ASP ~$0.50 - $0.75 ASP ~$0.50 - $0.75 Boosted Amplifiers Audio Amplifiers ASP ~$0.45 - $0.75 ASP ~$0.40 - $0.80 Mid-Tier Hi-Fi Digital Headset MEMS Microphones Smart Code
Slide 12: Product Overview
Product Overview 12
Slide 13: Audio Amplifiers
Audio Amplifiers Speaker Protection Delivering a louder and higher quality audio High Quality Audio experience Battery Smartphones transitioning from mono to Management stereo speakers Ultra-low power required for extended playback Software Ultra-Low Advanced power management applied to Power DSP pr
Slide 14: Haptic Drivers
Haptic Drivers Home Button Virtual Side Keys Mechanical buttons being replaced by sensor based solutions Custom Tactile Ultra-low latency boosted driver Feedback required to deliver sharp and consistent haptic feedback to user Enabling new user experiences with Ultra-Low custom tactile feedback Powe
Slide 15: Smart Codecs & Voice Processors
Smart Codecs & Voice Processors Voice Activation Voice Capture Cirrus Logic’s extensive portfolio of audio and voice technology delivers complete product Far-Field solutions for a variety of applications Barge-In Voice 3rd Party Customer Ecosystem Software Software Ultra-Low Power DSP High Performan
Slide 16: Headset Codecs
Headset Codecs Demand for digital headsets and Sensing adapters fueled by transition Voice Capture Applications from analog to USB-C digital connectivity Noise Reduction, Hearing Echo Cancelation Enhancement Digital connectivity enables new and enhanced user experiences in audio, voice and sensing a
Slide 17: Voice Biometrics
Voice Biometrics When you don’t know it’s the user… When you do know it’s the user…. Unlock Order Locate Summon Check Set Play weather timers music Read Monitor Hail Book … Get Check jokes scores Manage Navigate Pay Etc. Limited functionality The user can do everything 17 17
Slide 18: Security is Key
Security is Key Always-on voice activation with robust user authentication Enables execution of any virtual assistant command without requiring fingerprint/PIN High-security biometric voice passphrase authentication User passphrase for authenticating FIDO transactions Allows financial transactions,
Slide 19: Positioned for Long-Term Growth
Positioned for Long-Term Growth • Multiple vectors for content and application expansion driving significant growth in SAM • Leveraging mixed-signal expertise to penetrate adjacent technology opportunities • Continuing investment in innovative R&D projects expected to extend market leadership in aud
Slide 20: Financials
Financials 20
Slide 21: R&D Investment Driving Innovation
R&D Investment Driving Innovation R&D Spend FY13-FY18 (M) Significant increase in product $366 development capacity over the past 5 26% CAGR $304 years - more than 1,100 engineers $269 focused on: $198 • Executing product roadmap • Identifying and targeting new market $114 $126 opportunities • Broad
Slide 22: Long-Term Track Record of Growth
Long-Term Track Record of Growth $1,539 $1,532 $1,169 10-year CAGR of 24% $917 Growth fueled by strong demand for audio and $810 voice products primarily addressing mobile $714 applications $427 $370 $221 $182 $175 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Revenue (M) 22
Slide 23: Financial Highlights
Financial Highlights • BALANCE SHEET $396M total cash, up from $386M in the June quarter • Q2 ending inventory $142M, down from the prior quarter • In Q2, we utilized $55M to repurchase ~1.3M shares at an average price of $43.19 • In FY18, we used $175.8M to repurchase ~3.4M shares at an average pri
Slide 24: Strong Cash Generation
Strong Cash Generation Cash generation Generated $1.2B of operating cash flow Trailing Twelve Month Operating Cash Flow and Capex (M) over last 5 full fiscal years $414 Ended Q2 FY19 with $396M cash and $338 $327 investments globally $319 $317 Use of cash Increased investment in R&D $58 $59 $61 M&A
Slide 25: Operating Profit Profile
Operating Profit Profile *GAAP to non-GAAP reconciliations available on slide 28 and at www.cirrus.com 25
Slide 26: Financial Results and Outlook
Financial Results and Outlook GROSS OPERATING REVENUE MARGIN EXPENSE RESULTS Q2 FY19 $129.5M $366.3M 50.5% (includes $13M in stock comp, $12.9M in amortization) GROSS OPERATING REVENUE MARGIN EXPENSE GUIDANCE Q3 FY19* $122M - 128M $360M - 400M 49% - 51% (includes $12M in stock comp, $8M in amortizat
Slide 27: Quarterly Revenue and EPS
Quarterly Revenue and EPS $600 GAAP EPS $523 $1.87 Non-GAAP EPS** $1.83 $500 $483 $1.59 $429 $426 $1.36 $400 $380* $1.30 $1.33 $366 $328 $1.10 $1.08 $321 $303 $0.93 $300 $0.85 $0.81 $254 $0.64 $0.52 $0.52 $0.51 $200 $0.28 $0.19 $100 $(0.07) $0 Q2/FY17 Q3/FY17 Q4/FY17 Q1/FY18 Q2/FY18 Q3/FY18 Q4/FY18
Slide 28: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (unaudited, in thousands, except per share data, not prepared in accordance with GAAP) We use these Non-GAAP financial numbers to assist us in the management of the Company because we believe that this information provides a more consistent and complete understanding
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