Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic's First Quarter Fiscal Year 2018 Financial Results Q&A Session. At this time, all participants are in a listen-only mode. After a brief statement, we will open up the call for questions from analysts. Instructions for queuing up will be provided at that time. 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 first quarter of fiscal year 2018 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 e-mail at investor.relations@cirrus.com. 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 our projections. By providing this information, the company undertakes no 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 issued today, which is available on the Cirrus Logic website, 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. Cirrus Logic delivered Q1 revenue of $320.7 million and GAAP and non-GAAP earnings per share of $0.64 and $0.81, respectively. Overall, demand for our products was in line with our expectation that had a new product launches in the back half of the year. We are pleased with our progress in Q1, as design activity across the portfolio was strong, and we expect the new devices utilizing our products in smartphones, digital headsets and the smart home to continue to be introduced throughout the year. More importantly, we made significant progress in new product development as we taped out numerous components over the last several months that we believe will expand the company's product portfolio and enhance our competitive position in key markets, including our first 28-nanometer voice biometrics chip and our 55-nanometer boosted amplifier with integrated DSP for the China and mid-tier markets. We also taped out first hi-fi codec with integrated USB interface that targets the USB-C headset, which allows the company to address a broader customer base and enables us simplify designing process that helps OEM deliver digital headset and adapters to market faster and more efficiently. Customer interest has been strong, driven by the product's ultra-low power consumption and class leading analog performance and size. We expect design activity to accelerate as we move throughout the fiscal year. Highlighting some of our other product achievements over the past several months, we are pleased to have ramped production of a recently introduced hi-fi DAC and a boosted amplifier with a customer in China for a flagship smartphone introduced this summer. Commercial production of the first adaptive AMC headset using our innovative technology increased in Q1 and the product is available for purchase in Europe, Asia and the United States. We are also shipping in smart home products today including a new Tier 1 digital assistant that uses our high-performance ultra-low power stereo codec to deliver high fidelity audio playback. Further, we were happy to announce our new Amazon Voice Capture Development Kit, which enables a wide range of consumer OEMs to bring Alexa-enabled smart home products to market faster and more efficiently, while providing a superior user experience. We are excited about our opportunities in FY 2018 and we are optimistic about the company's future as a leading provider of innovative audio and voice technology. With many of our target markets in the early stages of development, we have numerous multi-year growth vectors that are expected to fuel opportunities in the coming years. Before we begin the Q&A, I would also like to note that while we understand that there is intense interest related to our largest customer, in accordance with our policy, we did not discuss specifics about our business relationship. Operator, we are now ready to take questions.

Your first question is from Tore Svanberg from Stifel. Tore Svanberg - Stifel, Nicolaus & Co., Inc.: Yes. Thank you. Just a few questions. The first question is basically just on the language in your Shareholder Letter and maybe I'm reading too much into this, but you did talk about product ramps in the back half of the year. I think, last year, you talked about the end of the year. So, am I reading too much into that or is it just how the language is?

Yeah. No, you're probably reading more into it than it was intended. I think we're not intending to give anyone any outlook about exactly when what is going to get launched. But as usual, we're plugged into a launch cycle for a lot of our business that is geared around the fall – fall to late fall timing leading up through Christmas is always pretty hot timing here. So it's intended to be pretty similar. Tore Svanberg - Stifel, Nicolaus & Co., Inc.: Very good. And you also emphasized the short order lead times. Is that something that is a little bit different this time around or is this pretty consistent with how it's been in the past?

Well, it's intended to just highlight that there's a lot that gets read into how we do one quarter or the next quarter, when in reality for the company, it's very common, especially when we're in a scenario like is frequently the case as we transition from September to October, where we're ramping really heavily across the quarterly boundary. And there can be a shipping holiday in China or there can be somebody reshuffling the way they book orders through a CM that moves a meaningful fraction of our quarter from – into the current quarter or out of the current quarter, which obviously has nothing do with the health of our business, but obviously the financial community can get wrapped around the axle about that from time-to-time. So nothing new, we just always like to call that out in the fall because it doesn't make predicting the exact relative transition from Q2 to Q3 especially challenging. Tore Svanberg - Stifel, Nicolaus & Co., Inc.: Very good. And you also mentioned haptic functionality being sort of a new opportunity for you, just the way, I guess, the architecture is from the phones. Could you just elaborate a little bit on that? And is that going to be another nice content boost for future smartphones?

Well, certainly, looking at the opportunity, it's something that's got a lot of interest from customers. It turns out that an LRA type of an actuator – linear actuator rather than the typical vibration motor can really provide a much more realistic kind of tactile sensation as a physical button replacement. When you think about something that where the buttons get pressed as often as a handset, it's nice to have them not actually move because that can be a failure point. And so there's a lot of interest in that. There's not a lot of solutions out there that are really all that satisfying. And interestingly enough, it looks an awful lot like driving an audio speaker. It's an inductive load, it's a power level where our boosted amplifiers really provide an advantage of being able to accelerate and then stop this mass that's in the LRA very rapidly. And then, ultra – obviously, power matters because the thing needs to be on a pretty good fraction of the time, latency in terms of being able to power up the full chip. So it plays to a lot of our strengths. It's very similar from a product line perspective to the audio amps we have today. And it also allows us to play a role in the algorithm and the wave form development. So it plays to a lot of the company's strengths. We'll see how that goes with a lot of interest from a wide array of customers in that technology today.

The next question is from Christopher Rolland from Susquehanna.

Hey, guys. Thanks for the question. So, on digital headsets, I think you guys said a TAM for 1 billion plus units within three years. Any idea in terms of your goals of market share, kind of who your stiffest competitors are there. And then also, you mentioned a robust pipeline of digital headset adapters/adapters to commoneer (9:47), so does that mean that we should think about these wins as in-box considering you put adapters in there, or could they just be standalones?

No, I mean, we certainly have the goal of shipping in-box with a variety of things, but no, there's definitely companies that are interested in having standalone adapters in really in both directions. There's kind of a need to go from traditional headsets to new digital ports and vice versa. Probably people are starting to have the experience of traveling with the digitally-enabled headset and getting on the airplane and realizing you don't have an easy way to plug it into the airplane. So there's interest – like is often the case in audio, there's interest from customers of all sorts in doing a lot of creative things, some of which we don't even think about when we kick-off a chip. As far as the portfolio and the pipeline, we see good adoption of the products that we have out there today and then additionally with the new products where we've integrated the USB interface, we see that as really enabling a wide array of customers, lowering the barrier to adoption, making a little simpler designing process. As far as where we're going to end up market shares, it's early days and hard to call that. Like any audio new market, they will probably be a pretty good piece of the market that is below the level of kind of careabouts that we would target. There's typically a low margin in most of any of our market segments that is just not especially interesting to us. So we're targeting working with premium customers that are trying to deliver a premium audio and voice experience and we expect that to be a pretty good fraction of that overall headset market. So, we think we're increasingly well positioned to serve and it's something we continue to remain very excited about.

Thanks for that. And then also in your remarks, you talked about ramping a hi-fi DAC and a boosted amp with a flagship Chinese customer or a flagship handset from a Chinese customer. Maybe you could elaborate a little bit on that? And is this expected to be a high-volume SKU? How are you kind of viewing it? And is it kind of the first of many to come with this OEM? How do you kind of describe that relationship?

I'd say it's a great relationship. I mean, it's tough to characterize anything as huge outside of kind the number one and number two guy in the handset space, but there are a lot of units sold there. It takes us aggregating up a relatively large number of wins across a bunch of customers, but we've got more of those opportunities. And that's a really nice dynamic to have incorporated in our business along with the traditional business where it's been a couple of home runs. So it's nice to have that basic component. The D/A converter itself was driven by a really remarkable transition over the past couple of years, where in the Android space, companies are really keen on trying to differentiate in any way they can. The core chipset is sometimes pretty well locked down. The Android folks don't want you monkeying around too much with the software aspect of it. So DAB (13:11) went around the edges in increasing audio performance has been something over the past couple of years in China that's really taken off. We've shipped other products into that application previously, but they weren't optimized for handsets. So in this case, what we're delivering is really kind of studio grade audio performance at handset level powers. It's a bunch of really remarkable innovation that went into the product and fits a nice price point that enables our customers to achieve specs – I mean, obviously, great sound quality as well, but also achieve specs whether they're published by GSMArena or CNET or any of these type outfits. They've got published specs that are measurable that they can try to differentiate their products on. So, yeah, we expect to win a number of sockets in China, both with the customer we're shipping to today and a handful of others. This is a good opportunity – that amplifier win is a good entree in that customer with the amps as well. So, yeah, we would expect that relationship to continue to go well and we expect to continue to add customers in that market.

Your next question is from Matt Ramsay from Canaccord.

Thank you very much. Good afternoon. Jason, I wanted to maybe expand on Chris's question there around amplifiers a bit. Going down to 55-nanometer, it seems to me that might enhance the competitive position that you guys have into what largely is a Qualcomm baseband market in China and in the Android Community. How has that gone as that product has come out? And do you see that pipeline opening up for the same type of amplifier content that you might have at some of your larger customers?

Yeah. I mean, I think what it enables us to do is bring the amplifier as more of a whole product to that market. And what I mean by that is, our traditional chips were architected and optimized around serving customers that have a lot of design capability and have a lot of ability to impact things on the APs. And as such in many cases, the speaker protection algorithm that we provide runs on somebody else's processor and then the amplifier is its own standalone device. And we've shipped that in Chinese handsets – China handset customers, such as the announcement that we were talking about here. But in a lot of cases in China, there's a lot of value placed on having devices be much more of a black box. If you're selling the amplifier, they really want you to turn up with an amplifier that you send sound in and it kind of behaves the way you expect and you don't need to run a lot of software to run across multiple vendors, work with silicon. So it's enabling a similar price point to what we've been able to do today, but significantly more DSP functionality. And I think that's going to make it very difficult to compete with for some of our competitors who are typically and significantly older (16:19). So it's another case where a mixed signal type of device, you have to be careful about applying the same sort of rules of economics as it relates to migrating down the various geometries. Because, for example, the power transistors in an amplifier like that clearly are not 55-nanometers transistors. They just happen to be on the same die with the same 55-nanometer type transistors we use in our smart codec. So we can implement very high performance DSP capability alongside some very large power transistors, which is a great tool to have in the tool belt. We think it's going to do very well for us going forward and it will enable us to implement a lot of digital features built-in to the amplifiers themselves in a way that is a lot more black box kind of turnkey for the customer. So it should be a win all the way around.

Got it, got it. That's really helpful. And then maybe a bigger picture question in the headset market. You can see with the introduction of some of these Bluetooth or variants of Bluetooth-enabled wireless earbuds that there is a market developing there. In another question you talked about the 1 billion plus units in digital headsets potentially over time and some share there. How do you, I'd say, bifurcate the market between wireless and wired? And what implications might that have on your ability to grab revenue there in a market where you can and can't pull power from the phone or the wired?

Sure. Well, I mean, we see digitally-enabled headsets taking over the markets over the next handful of years, whether that's wired with one of these modern digital interfaces or with over a Bluetooth or BTLE interface for different reasons. It is really nice to have a headphone that you have with you that you know is going to work whether you – and that there's no battery to remember to charge and we think will remain a valuable and a viable piece of the market for years. That said, wireless is certainly interesting. There's been finally some good products turning up on the market. We think there's good opportunity for us in those over time as well. We're certainly working on devices that are applicable more and more to that space. Things today – if you were going to make a stereo Bluetooth headset today, it tends to be a pretty premium products that you want to – if you're going to look at devices like ours, you're going to want to incorporate something like noise cancellation. Our noise canceling device that we have today, it doesn't – it's interface agnostic. It doesn't care whether it's USB-C or some of the other interfaces are Bluetooth. But as that market matures, we'd expect to come up with some more products that are a little more specific to the type of headset involved in and certainly the growth feature rich Bluetooth headset is a potentially very good thing for us as well.

Your next question comes from Charlie Anderson from Dougherty & Company. Charlie Lowell Anderson - Dougherty & Co. LLC: Yeah. Thanks for taking my questions. I just want to ask about voice biometrics chip. Congrats on getting that taped out. I saw that you're talking about sampling in the fall and I think was another reference in the Shareholder Letter to meaningful revenue contributions several years away. So wonder if you can just kind of talk about expectations for that product as customers start to sample it and sort of the timing? Thanks.

Well, yeah, sure. Yeah, we're extremely excited to get that device out. That was a huge and is a huge development across multiple sites and a lot of disciplines that have come together through the company from a variety of sources. So a tremendous job by the team and the group that put that together. It's a new market. It's a technology that on the market in an embedded form factor doesn't exist today. So there's always caution around how quickly that kind of takes off, but I can say that the demand, the interest level in it is extremely high. We have a robust demo of it available in a format where the algorithm is either running in FPGAs or in the cloud somewhere and we mock-up the performance of the device and it is extremely compelling as things stand today. So, we've already demonstrated the capability to do the kinds of things we want to do such as the false accept and false reject trade-offs that are involved in any sort of biometric. The remaining challenge is just to continue to improve how robust it is in a noisy environment and we've made good progress on that. We did a small acquisition that we talked about on the last earnings call that was geared towards improving our performance there. And that's continued to work out well. So, we'll get the device on the market this fall and get it out to some key select customers that we can work with, learn from and hopefully make progress together. But just generally speaking, if you launch the first device of its type in our market, then turning that into revenue a couple of years down the road is actually a pretty remarkable progress. So that's kind of the benchmark we're aiming for. It could be sooner than that, it could be later than that, but as long as we're hitting the milestones that we can control and then get in front of the right customers and getting the feedback, incorporating that and rolling out the rest of the product line, then we feel like we're covering the things that we can control and good things will turn out of that. Charlie Lowell Anderson - Dougherty & Co. LLC: Great. And then, as a follow-up, it was nice to see the Alexa reference design. I wonder your expectations around that. And then also, I think most of the products that are in the market today are wired. As we think about that end market evolving over time in a more call it wireless battery-powered devices, how do you see that evolving just based on some of the conversation with customer right now? Do they want to have more of the battery-powered products? Just kind of what you're seeing right now.

Sure. I mean, I think the short summary is that voice-as-and-interface, and in particular, now that it's been demonstrated how impactful it can be when it's done well, I think voice-as-an-interface is expected broadly to be just a really huge driving force in the industry. We've got a lot of roles that we can play in that, improving the performance of cloud algorithms by doing things cleverly embedded in the device to improve the performance and noise, whether it's incorporating embedded biometric security. There's a variety of things for us to do there that we think can expand our opportunities in those devices and it's clearly something that in the long-term will be pretty ubiquitous. That said, the volumes today, while impressive, are at the kind of content levels that we expect and then weighing that against the handset volumes, the volumes today are not huge. We're just positioning ourselves to be a partner of choice with the customers that we expect are going to really move the needle there over the long-term. So, it's really more important than we get kind of any content in these various systems and then learn and grow with the customers that we really think are going to move the needle. And as far as – and then to just be specific about your question on the battery-powered, certainly, there's things that we can do in a wall-powered socket that we think are producing advantages for our customers. But where Cirrus Logic really kind of earns our keep is in doing that kind of algorithm, that kind of audio and voice performance, but doing it in an ultra-low power, low-latency kind of an application. So as those systems migrate over and are applicable in a wider array of form factors, then we think the opportunity for us grows over time.

[Operating Instructions] The next question is from Rajvindra Gill from Needham & Company. Rajvindra S. Gill - Needham & Co. LLC: Yes Thank you and congrats on solid results. Question, Thurman, on the OpEx. So the OpEx kind of spike as you taped out several products, voice biometrics, audio amplifier, et cetera. Are we kind of done with the R&D spike? How should we think about R&D going forward?

Well, you always going to see R&D spikes when we have a additional tape outs in a particular quarter. So you'll see that go up and down. It's not linear for the year, but we do expect to continue to invest in R&D and we'll grow that area of our business ongoing, but SG&A will continue to remain flat. And that's really the profile that we look at it. Rajvindra S. Gill - Needham & Co. LLC: Okay. And so, Jason, the whole voice – voice becoming a major interface for consumer devices is becoming I think pretty much dominant, so I wanted to get a sense of how you're looking at the market from a competitive landscape? You obviously saw a major competitor – not a competitor, but a company in the space by (26:00) connection. And so they're looking at it from their perspective. You have other smaller competitors who are doing always-on voice processing, targeting smart speakers, digital personal assistant. So it's a pretty big unit TAM that's available. So wanted to get a sense of how you're looking at it competitively and how you can leverage your expertise in audio into this market.

Yes, sure. I mean, we do think it's a big and growing opportunity that's always going to bring competition with it any market that's worth serving is pretty likely to have a meaningful amount of competition. That said, we really try to focus on running our game and staying aware of what competitors are doing, but not getting overly hung up on it. We've got a good game plan. We think we're – well, we know we're spending more R&D dollars on audio and voice than anyone we're aware of. The real competitors that we come up against just tend to be just a different kind of breed. Obviously, we come up against Qualcomm pretty frequently and they're a good option for people that want to wrap plastic around a reference design and move on. We're typically targeting folks that are going to differentiate around what we're doing. And there are competitors out there that are trying to serve those same spaces. We think were head and shoulders above a lot of them. So there's always competition. We never want to get complacent or take it for granted, but we think we're really well-positioned versus the other folks in our space, whether it's in voice-as-an-interface or any of the other audio and voice areas we participate in. Rajvindra S. Gill - Needham & Co. LLC: And just last question. You saw Lenovo break the Qualcomm bundle. Are you now seeing that with other Chinese OEMs in the future?

We've certainly seen – yeah, we've seen good opportunity to do that in China and elsewhere, both with Qualcomm and MediaTek. So, yeah, I think the barrier to being able to do that has decreased over time. I think our capabilities for supporting it have increased. I think to the market is matured, to where the customers in those geographies, we've got a lot more capability of doing their own work and not completely be in under their AP vendor's thumb. So it's an interesting mix of what value the customer's trying to bring to the market and what capabilities they have and then what our role to play in that is, but we certainly see an increasing opportunity to participate regardless of where the AP is coming from.

Our next question is from Blayne Curtis from Barclays.

Hi. This is Chris Hemmelgarn on for Blayne. Thanks for letting us on and congrats on the solid quarter and guide. I guess, first a few questions for you. On the ANC front, you mentioned that there are a number of attractive premium products coming out. You guys see some nice opportunities there. Do you think you're at a place where you can hit the size and the power envelope required to fit ANC into a product like Apple's AirPods today? And if not, when do you think you can get there?

Well, I'm not going to comment on the specific product. But we -

Just a product in that form factor, a fixed 5 hour-ish battery life, et cetera, that type of premium product?

Sure. We think we can fit in, in Bluetooth headsets of all sorts, whether it's ANC or some of the other stuff that we've got as well. I think there's a lot of capabilities that can be brought to bear the TAM. There's applications where people don't want to incorporate ANC because they're worried about getting you run over while you're crossing the crosswalk. But whether it's fitness or all manner of other things, there's good opportunities for us to participate in Bluetooth headsets, whether it's over-the-ear or in-ear or the wire yoke thing that goes around your neck with the battery in it. We've got good applicability in that space.

So you're basically already at a point where you can hit what's needed to deliver good battery life in a very premium small form factor products.

Yeah, I don't think there's a form factor concern for us. (30:28)

Okay.

Small and very low-power is kind of what we like to do.

That is your specialty. Kind of the opposite of that, I mean, on the biometric side, you guys – you've mentioned it earlier on the call, you've always talked about how wired speakers in smart home products or other products aren't necessarily going to be your – not forte, but optimal products for you. Given all the IP and the development you've done in voice biometrics, do you think that opens up some of these wired products to you guys in the coming years?

Yeah. I mean, I think it's a lot of the same kind of connected home type of system products that we're participating in a number of today. The initial target for voice biometrics is handsets and handset-related things, but certainly as the wired home device market grows for voice-as-an-interface. I mean, it's yet another – voice biometrics is yet another one of these technologies that you have to be a little bit careful of even bringing up in a meeting with customers at this phase of the game because it just kind of derails the meeting as it's all they want to talk about. The incredible thing about voice as a biometric is that it's the only one of the biometrics that you don't have to touch or orient or aim at your face. And there's a lot of good reasons why the heart of it needs to be embedded in the device rather than operated in the cloud, not that there's not good reasons to run biometrics in the cloud as well. They're just different. And the really cool thing about voice biometric is that in any of these assistant kind of home products, you don't even necessarily need the user to change behavior to get value out of it. There's a lot of the applications and use cases that people use voice as an interface for today that just simply get better or that the device manufacturer can make a more rich experience to have it be even less friction oriented than some things today. So use cases where you don't necessarily know can it read by my email or not, I don't know. Hey, you read my email. Oh! You have to unlock me do that. Well, that's annoying. That's yet another friction point that decreases adoption. And so just having a biometric capability in any of these voice-as-an-interface type devices, whether they are wired or not, becomes a big, big deal, and the way to get the latency and the real – it should be the same – similar latency to what you have with your fingerprint today, which there's no numbers that's slow enough from how quick do they respond to what you said. So that being a latency and power a lot of times are two linchpins for the things that we want to invest in and in varying degrees that's present in a lot of the applications for voice biometric.

That's really helpful. Thanks. If you don't mind, I'll squeeze in one last question, probably more for Thurman than for you, Jason. But I noticed you paid off all your debt and you still generate very healthy cash flow. Could you elaborate a bit on just how you prioritize using that? And I noticed you moved a big chunk of cash into long-term securities. I mean, do you envision stepping up buyback significantly?

Well, we'll continue to our ongoing investment in R&D for sure and we've been looking at and adding small technology acquisitions over time. We'd expect to continue to do that in order to really enhance our development process and accelerate our product roadmap. After those, then we'll look at our share buybacks, but we'll continue to look at those on an opportunistic basis.

Hey, I'd just add to that that we would love to find another big one that was as transformative as (34:14) has turned out to be that's hard to find. It's hard to get enough all of the stars to align just perfectly to make that sort of thing possible. So it's probably more likely that we find small tuck-ins of the sort that we've done a number over the past year or so. But certainly got our eyes open and we like to have a buyback authorized and then just execute on that opportunistically from time to time and we think that strategy works out well for us.

Okay. Thanks. Thanks very much, guys, and congrats again.

Thanks. Appreciate it, Chris.

There are no additional questions at this time. I will now turn the call over to Chelsea Heffernan.

Thank you, operator. There are no additional questions. So I will turn the call back to Jason.

Thank you, Chelsea. In summary, Cirrus Logic delivered solid results for the June quarter. While we are pleased with our progress in Q1, we are even more excited with our product development accomplishments, as we believe these components will help the company capitalize on a positive market trends that are expected to fuel demand for our compelling technology for many years to come. Cirrus Logic's extensive expertise in delivering sophisticated products, expand the audio and digital divide, coupled with our diverse product portfolio and innovative roadmap positions us uniquely as a leader in a rapidly growing audio and voice markets. I would also like to note that we will be presenting at the KeyBanc Conference in Vail on August 7, the Oppenheimer Conference in Boston on August 8, and the Canaccord Conference in Boston on August 9. Live webcast of these events will be available at investor.cirrus.com. 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.