Cirrus Logic NASDAQ: CRUS reported record fiscal first-quarter revenue of $460 million for the June quarter, up 2% sequentially and 13% from a year earlier, driven by higher component sales into smartphones. The company posted GAAP earnings per share of $1.47 and non-GAAP earnings per share of $1.84, also a record for a June quarter.
Chief Financial Officer Jeff Woolard said revenue landed at the midpoint of the company’s guidance range. He said sales growth from smartphone components was partly offset year over year by previously anticipated pricing reductions.
Non-GAAP gross profit totaled $242.1 million, producing a non-GAAP gross margin of 52.7%. Woolard said gross margin declined sequentially because of anticipated pricing reductions, partly offset by cost reductions. Compared with the prior year, gross margin increased slightly due primarily to favorable product mix, although higher freight and supply-chain costs partially offset that benefit.
Non-GAAP operating expenses were $135.4 million, up $9.3 million sequentially and $15.9 million year over year. Woolard attributed the increases mainly to employee-related costs and continued research-and-development investment, along with higher variable compensation, product-development and professional expenses. Non-GAAP operating income was $106.7 million, or 23.2% of revenue.
September-Quarter Outlook
For fiscal second-quarter 2027, Cirrus Logic forecast revenue of $510 million to $570 million. The company expects GAAP gross margin of 52% to 54% and non-GAAP operating expenses of $140 million to $146 million. Its full-year non-GAAP effective tax rate is projected at 16% to 18%.
Woolard said the September-quarter gross margin should receive a temporary benefit from wafers bought under prior GlobalFoundries agreements at favorable prices. He said that inventory tranche is expected to largely sell through during the quarter, after which margins should normalize.
Management said the company’s quarterly seasonality is tighter than in prior years. Woolard noted that the June-quarter results were significantly higher than historical averages for the period and that the company expects less variation among quarters than it has historically experienced.
Smartphone Audio and Mixed-Signal Pipeline
Management said demand remained strong for its custom-boosted amplifiers and smart codecs used in smartphones. The products have benefited from a strong product cycle at Cirrus Logic’s largest customer, and the company expects them to continue shipping across multiple future product generations.
The company also highlighted its high-performance mixed-signal, or HPMS, opportunities in camera, battery and power applications. Management said it is developing the next generation of camera controllers with its largest customer and remains on schedule with a smart power IC for 3D sensing discussed on the prior earnings call.
During the question-and-answer session, management said the HPMS opportunity pipeline was “as good as we can remember.” It cited a camera roadmap, power products that have been delivered to customers, and active programs spanning phone and non-phone applications. One power product is now shipping in tablets, while another is intended for an accessory product that has not yet reached the market, according to management.
Woolard said Cirrus Logic continues to maintain its long-term gross-margin outlook despite industry discussion around higher supply-chain input costs. He said many costs now appearing in financial results were agreed upon previously, while the company will continue pursuing cost reductions and targeted price increases when warranted.
PC Expectations Reduced, but AI Voice Interest Builds
Cirrus Logic said the PC market remains its largest near-term growth opportunity outside smartphones, though it reduced its expectations for the business for the current fiscal year. Management cited constrained supply of a key industry platform, memory and component shortages, associated pricing pressure, and delays in new PC model introductions by original equipment manufacturers.
Management characterized the issues as timing-related rather than fundamental changes to the company’s competitive standing or customer engagement. Delayed new models matter because they generally carry higher content per system and, in some cases, higher expected volumes, the company said.
The company reported strong customer interest in a low-power smart codec designed for AI-enabled PCs. The device can perform wake-word detection, noise reduction and audio buffering independently, which management said can reduce power use and latency relative to relying on a PC’s CPU or NPU for always-on voice functions. Cirrus Logic advanced discussions with multiple customers on designs expected to arrive next calendar year.
Several customers are also expected to ship PCs later this year based on NVIDIA’s RTX Spark platform containing Cirrus Logic amplifiers and codecs, management said.
New Industrial Products and Capital Allocation
In general markets, Cirrus Logic said it taped out a new family of high-performance analog front-end components for smart meters and expects to begin sampling them in the September quarter. The products are intended to provide higher-accuracy voltage and current measurements, power-quality analysis and fault detection for residential, commercial and industrial uses.
Management said it is targeting a calendar 2028 market launch for the smart-meter products and is exploring related applications including energy storage, data-center DC metrology, EV charging and grid monitoring. The company did not provide a market-size estimate.
Cirrus Logic ended the quarter with $1.2 billion in cash and investments and no debt. It generated $64.1 million in operating cash flow, spent $15.5 million on capital expenditures, and repurchased $34.5 million of stock during the quarter. After the quarter ended, it repurchased an additional $50.5 million of shares under a Rule 10b5-1 plan.
Woolard said the company’s capital priorities remain funding organic growth opportunities first, pursuing acquisitions second and share repurchases third. He said Cirrus Logic was not considering a dividend in the near term. The company also signed a capacity reservation and wafer supply agreement with GlobalFoundries covering dedicated capacity and pricing for calendar years 2027 and 2028.
About Cirrus Logic (NASDAQ:CRUS)
Cirrus Logic, Inc, headquartered in Austin, Texas, is a fabless semiconductor company specializing in high-precision analog and mixed-signal processing solutions. The firm develops low-power, high-performance audio, voice, and power management integrated circuits, serving prominent consumer electronics OEMs. Its semiconductor devices are designed to enhance audio quality, battery life, and system integration in mobile phones, tablets, wireless headsets and other portable devices.
The company's product portfolio includes digital-to-analog converters (DACs), analog-to-digital converters (ADCs), audio codecs, power management ICs, voice processors and integrated amplifiers.
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