Cirrus Logic Inc. Earnings Report Q2 FY 2025

Cirrus Logic Inc. (NASDAQ:CRUS), a leader in high-precision analog and digital signal processing components, reported a significant increase in revenue and earnings per share during its second quarter fiscal year 2025 earnings call on October 24, 2023.

The company's financial performance was bolstered by strong smartphone demand, leading to record revenue of $541.9 million, a 45% sequential rise, and a 13% growth compared to the same period last year.

Cirrus Logic's President and CEO, John Forsyth, discussed the company's strategic focus on expanding its product offerings, including the launch of a next-generation custom boosted amplifier and a 22-nanometer smart codec, expected to drive future revenue.

Key Takeaways

• Cirrus Logic reported a 45% sequential increase in revenue, achieving $541.9 million.
• The company saw a 13% year-over-year growth, primarily driven by robust smartphone demand.
• New product launches, such as a next-generation custom boosted amplifier and a 22-nanometer smart codec, are expected to contribute significantly to future revenue streams.
• Cirrus Logic has entered the laptop market with significant design wins and has begun shipping new power conversion ICs.
• The company forecasts revenue between $480 million and $540 million for Q3 FY 2025.
• Cirrus Logic maintains a non-GAAP tax rate guidance of 22% to 24% for FY '25.

Company Outlook

• Cirrus Logic anticipates significant growth in fiscal year '26.
• The company is focusing on capturing new market opportunities and enhancing existing product sockets.
• Cirrus Logic aims for low tens of millions in revenue from PC-focused products in the upcoming year.
• Participation in the Barclays Global Technology Conference on December 12, 2023, is scheduled.

Bearish Highlights

• The company's cash and investments decreased to $706.6 million due to share repurchases.
• Seasonal declines are expected in December, influenced by the previous fiscal year and production patterns.

Bullish Highlights

• Cirrus Logic achieved record earnings per share of $2.25.
• The company's long-term strategy shows progress, focusing on high-performance mixed-signal solutions.
• Cirrus Logic remains optimistic about its growth trajectory despite flat smartphone unit sales, relying on content growth and new product launches.

Misses

• There was no specific guidance provided for March, with historical seasonality indicating potential fluctuations.
• The outlook for content growth in fiscal year 2025 remains cautious, with low to high single-digit increases expected.

Q&A Highlights

• Analysts sought clarity on the expected seasonal decline in December.
• Questions were raised about the company's strategy in the face of flat smartphone unit sales, with John Forsyth emphasizing the potential for incremental and new socket additions.
• The impact of varying production patterns and customer demands was also discussed.

Cirrus Logic's second quarter fiscal year 2025 earnings call revealed a robust financial performance and a strategic focus on future growth. The entry into the laptop market and new product launches signal a commitment to diversifying its revenue streams and leveraging R&D investments.

Despite potential seasonal fluctuations, Cirrus Logic is positioning itself for significant growth in the coming fiscal year. The upcoming Barclays Global Technology Conference will likely provide further insights into the company's plans and industry outlook.

InvestingPro Insights

Cirrus Logic's strong financial performance is supported by data from InvestingPro, with a market capitalization of $5.91 billion and impressive results evident with a revenue of $1.85 billion in the last twelve months as of Q1 2025. Its profitability is clear with a gross profit margin of 51.23% and an operating income margin of 20.28%.

InvestingPro suggests the stock's recent dip of -8.72% in total return could present an opportunity for investors, especially considering the company's positive outlook and strategic focus on expanding into new markets like laptops. InvestingPro offers 10 additional tips for Cirrus Logic, providing a more comprehensive analysis for potential investors.

Full Transcript

Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic Second Quarter Fiscal Year 2025 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 call over to Ms. Chelsea Heffernan, Vice President of Investor Relations.

Chelsea Heffernan:

Thank you and good afternoon. Joining me on today's call is John Forsyth, Cirrus Logic's President and Chief Executive Officer; and Ulf Habermann, our Interim Chief Financial Officer. Today at approximately 4:00 pm Eastern Time, we announced our financial results for the second quarter fiscal year 2025…

[Transcription continues with detailed financial results, operations, and Q&A]

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