What Cirrus Logic (CRUS) Said on Its Q2 Earnings Call

Key Points

• Revenue rose 22% sequentially to $559.5 million, driven by higher smartphone volumes and content per device, while weaker PC and general-market sales offset some gains. Cirrus forecast December-quarter revenue of $510 million to $570 million, noting that some sales shifted into September due to timing.
• Cirrus said September-quarter gross margin was a high point and expects a 51%–53% range for the foreseeable future, citing cost pressures and tight backend capacity. It plans targeted price increases and expects fiscal 2027 operating expenses to rise as it invests in R&D.
• Smartphone design opportunities and new products—including camera, power, and AI-related chips—could expand Cirrus’s content over time, while component shortages and delayed launches are weighing on near-term PC demand. The company also completed its INVENTVM acquisition and authorized up to $500 million in additional share repurchases.

Cirrus Logic NASDAQ: CRUS reported fiscal second-quarter revenue of $559.5 million, up 22% from the prior quarter, as higher smartphone volumes and increased content per device helped offset weaker PC and general-market sales.

The chipmaker forecast revenue of $510 million to $570 million for the December quarter. Chief Financial Officer Jeff Woolard said some revenue that might have been expected in December was pulled into the September quarter, and that the change reflected timing rather than a shift in demand.

“The full year is roughly in line with our expectations when we started the year,” Woolard said. He added that the first half was more heavily weighted toward premium smartphones, where Cirrus has more content per device, and that camera components generally ship earlier than other parts.

Quarterly results and outlook

Revenue for the September quarter was flat from a year earlier and above the midpoint of the company’s guidance. Higher smartphone volumes and content were offset year over year by lower general-market sales and previously anticipated price reductions, Woolard said.

Cirrus reported earnings of $2.23 per share under generally accepted accounting principles and $2.70 per share on a non-GAAP basis. Non-GAAP gross margin was 53.8%, helped in part by a temporary benefit from wafers purchased under prior agreements with GlobalFoundries. Non-GAAP operating income was $159.2 million, or 28.5% of revenue.

For the December quarter, the company forecast GAAP gross margin of 51% to 53% and non-GAAP operating expenses of $152 million to $158 million. Woolard said Cirrus expects full-year fiscal 2027 operating expenses to rise as it invests in research and development.

Asked about supply-chain cost pressures, Woolard described the September quarter as a high point for gross margin. He said the company has wafer agreements that provide some price and capacity certainty, but backend capacity remains tight. Cirrus plans targeted price increases across its portfolio and is comfortable with a 51% to 53% gross-margin range for the foreseeable future, he said.

Smartphone content and new products

Chief Executive Officer John Forsyth said Cirrus expects adoption of several existing chips to increase across successive smartphone launch windows over roughly the next 18 months. The company also sees opportunities for additional components beyond that period.

Among those products is a fourth-generation camera controller that has completed tape-out and is expected to enter production in calendar 2028. Forsyth said Cirrus also is designing a smart power chip for 3D sensing and developing a custom power and battery product. The company has received another business award in the battery and power area that he said would add content in a high-volume socket.

In response to an analyst’s question about the Duo iPhone, Forsyth cited publicly available device teardowns and said the phone contains two Cirrus audio amplifiers, a haptics driver, a codec and two camera controllers.

PC headwinds and market expansion

Forsyth said shortages of memory and other components, along with higher prices, are weighing on PC demand. Some manufacturers have delayed new model launches, including systems expected to carry more Cirrus content and ship in higher volumes. He said the design wins remain in place, though the delays are affecting the near-term outlook.

The company has taped out a second-generation smart codec for AI-enabled PCs and expects to sample it to customers in the coming calendar year. Forsyth also said devices using Cirrus products in AI gadgets and smart glasses are expected to reach the market in the next few quarters.

In industrial markets, Cirrus began sampling analog front-end components for smart meters and received its first production orders for industrial imaging components. Mass production of the imaging products is expected to begin in the December quarter, Forsyth said.

Acquisitions and capital returns

Cirrus completed its acquisition of INVENTVM, a fabless semiconductor company based in Pavia, Italy, after the quarter ended. Forsyth said the deal adds engineering capacity and expertise in power management and audio, particularly for wearables and AI gadgets. He said the company’s smartphone battery chip is based on internally developed intellectual property, rather than IP acquired through INVENTVM.

Woolard said Cirrus had made acquisition proposals for Synaptics but is not currently pursuing a transaction after the price moved beyond what Cirrus considered appropriate. He said the company remains interested in acquisitions that broaden its platform and markets, while maintaining price discipline.

Cirrus ended the quarter with $1.1 billion in cash and investments and no debt outstanding. It spent $125.5 million repurchasing shares during the quarter, and its board recently authorized up to an additional $500 million in buybacks.

About Cirrus Logic (NASDAQ:CRUS)

Cirrus Logic, Inc is a fabless semiconductor company that designs high-performance, low-power analog and mixed-signal integrated circuits. Its products are used to process, manage and enhance audio and other signals in electronic devices, including smartphones, tablets, laptops, headphones, smart speakers and automotive systems.

The company's product portfolio includes audio codecs, digital-to-analog and analog-to-digital converters, amplifiers, haptic controllers, sensing solutions and power-management components.

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