Cirrus Logic Reports Fiscal First Quarter Revenue of $374.0 Million

Rhea-AI Summary

Cirrus Logic (NASDAQ: CRUS) reported fiscal Q1 2025 revenue of $374.0 million, exceeding guidance due to stronger-than-expected smartphone shipments. The company began production of custom boosted amplifiers and 22nm smart codecs for upcoming smartphone launches. GAAP EPS was $0.76, while non-GAAP EPS reached $1.12. Gross margin stood at 50.5% (GAAP) and 50.6% (non-GAAP).

For Q2 FY25, Cirrus Logic forecasts revenue between $490 million and $550 million, with GAAP gross margin expected to be 50-52%. The company is focusing on product and end-market diversification, seeing strong design activity in laptops and introducing new data converters for various applications.

Positive

• Revenue of $374.0 million exceeded guidance
• Non-GAAP EPS of $1.12, outperforming GAAP EPS of $0.76
• Production ramp-up of custom boosted amplifier and 22nm smart codec for new smartphone launches
• Strong Q2 FY25 revenue guidance of $490-$550 million
• Expansion into laptops and new data converter products

Negative

• None.

Insights

Financial Analyst

Cirrus Logic's Q1 FY25 results demonstrate strong performance, with revenue of $374.0 million exceeding guidance. The GAAP gross margin of 50.5% and non-GAAP EPS of $1.12 indicate robust profitability. The company's outlook for Q2 FY25 is particularly impressive, projecting revenue between $490 million and $550 million, a significant sequential growth of 31% to 47%. This growth is likely driven by new smartphone launches and diversification into laptops and professional audio markets. The strong guidance and product ramp-up suggest Cirrus Logic is well-positioned for the upcoming high-demand season in consumer electronics.

Tech Industry Expert

Cirrus Logic's strategic focus on product diversification and technological advancement is evident in this report. The ramp-up of their custom boosted amplifier and first 22-nanometer smart codec for upcoming smartphone launches showcases their innovation in audio solutions. Their expansion into laptops and introduction of new data converters for various applications demonstrates a push to reduce dependence on the smartphone market. The 22nm process node for their smart codec is particularly noteworthy, as it likely offers improved power efficiency and performance, important for mobile devices. This technological edge could strengthen Cirrus Logic's market position and potentially lead to increased market share in the competitive audio IC space.

Market Research Analyst

The strong performance and outlook from Cirrus Logic reflect broader trends in the semiconductor industry, particularly in the smartphone and consumer electronics sectors. The company's above-guidance revenue suggests resilient demand for audio solutions in smartphones, despite overall market challenges. The significant sequential growth forecast for Q2 aligns with typical seasonal patterns ahead of major smartphone launches. However, Cirrus Logic's efforts in market diversification, especially in laptops and professional audio, are important given the cyclical nature of the smartphone market. The company's focus on high-performance, custom solutions could provide a competitive edge, but it's essential to monitor their success in penetrating new markets to ensure long-term growth sustainability.

AUSTIN, Texas--(BUSINESS WIRE)-- Cirrus Logic, Inc. (NASDAQ: CRUS) today posted on its website at investor.cirrus.com the quarterly Shareholder Letter that contains the complete financial results for the first quarter of fiscal year 2025, which ended June 29, 2024, as well as the company’s current business outlook.

“Cirrus Logic delivered revenue above the top end of our guidance range in the June quarter driven by stronger-than-expected shipments into smartphones,” said John Forsyth, Cirrus Logic president and chief executive officer. “In addition to these strong results, during the quarter we began ramping production of our custom boosted amplifier and first 22-nanometer smart codec ahead of new smartphone launches that are expected later this year. We also executed against our growth strategy to drive product and end-market diversification as we saw strong design activity in laptops and introduced the latest products in a series of data converters targeting professional audio, consumer, and industrial applications. With a compelling roadmap of products and an outstanding track record of execution, we believe we are well-positioned to grow long-term shareholder value.”

Reported Financial Results – First Quarter FY25

• Revenue of $374.0 million;
• GAAP and non-GAAP gross margin of 50.5 percent and 50.6 percent;
• GAAP operating expenses of $142.1 million and non-GAAP operating expenses of $118.0 million; and
• GAAP earnings per share of $0.76 and non-GAAP earnings per share of $1.12.

A reconciliation of GAAP to non-GAAP financial information is included in the tables accompanying this press release.

Business Outlook – Second Quarter FY25

• Revenue is expected to range between $490 million and $550 million;
• GAAP gross margin is forecasted to be between 50 percent and 52 percent; and
• Combined GAAP R&D and SG&A expenses are anticipated to range between $149 million and $155 million, including approximately $22 million in stock-based compensation expense and $2 million in amortization of acquired intangibles, resulting in a non-GAAP operating expense range between $125 million and $131 million.

Cirrus Logic will host a live Q&A session at 5 p.m. EDT today to discuss its financial results and business outlook. Participants may listen to the conference call on the investor relations website at investor.cirrus.com. A replay of the webcast can be accessed on the Cirrus Logic website approximately two hours following its completion or by calling (609) 800-9909 or toll-free at (800) 770-2030 (Access Code: 95424).

About Cirrus Logic, Inc.

Cirrus Logic is a leader in low-power, high-precision mixed-signal processing solutions that create innovative user experiences for the world’s top mobile and consumer applications. With headquarters in Austin, Texas, Cirrus Logic is recognized globally for its award-winning corporate culture.

Cirrus Logic, Cirrus and the Cirrus Logic logo are registered trademarks of Cirrus Logic, Inc. All other company or product names noted herein may be trademarks of their respective holders.

Use of non-GAAP Financial Information

To supplement Cirrus Logic's financial statements presented on a GAAP basis, the company has provided non-GAAP financial information, including non-GAAP net income, diluted earnings per share, operating income and profit, operating expenses, gross margin and profit, tax expense, tax expense impact on earnings per share, effective tax rate, free cash flow, and free cash flow margin. A reconciliation of the adjustments to GAAP results is included in the tables below. Non-GAAP financial information is not meant as a substitute for GAAP results but is included because management believes such information is useful to our investors for informational and comparative purposes. In addition, certain non-GAAP financial information is used internally by management to evaluate and manage the company. The non-GAAP financial information used by Cirrus Logic may differ from that used by other companies. These non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP.

Safe Harbor Statement

Except for historical information contained herein, the matters set forth in this news release contain forward-looking statements including our statements about our expectation for new smartphone launches later this year; our belief that we are well-positioned to grow long-term shareholder value; and our estimates for the second quarter fiscal year 2025 revenue, gross margin, combined research and development and selling, general and administrative expense levels, stock-based compensation expense, and amortization of acquired intangibles. In some cases, forward-looking statements are identified by words such as “expect,” “anticipate,” “target,” “project,” “believe,” “goals,” “opportunity,” “estimates,” “intend,” and variations of these types of words and similar expressions. In addition, any statements that refer to our plans, expectations, strategies, or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements are based on our current expectations, estimates, and assumptions and are subject to certain risks and uncertainties that could cause actual results to differ materially, and readers should not place undue reliance on such statements. These risks and uncertainties include, but are not limited to, the following: the level and timing of orders and shipments during the second quarter of fiscal year 2025, customer cancellations of orders, or the failure to place orders consistent with forecasts, along with the risk factors listed in our Form 10-K for the year ended March 30, 2024 and in our other filings with the Securities and Exchange Commission, which are available at www.sec.gov. The foregoing information concerning our business outlook represents our outlook as of the date of this news release, and we expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.

Summary Financial Data Follows:

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(in thousands, except per share data; unaudited)
	Three Months Ended
	Jun. 29,				Mar. 30,				Jun. 24,
		2024				2024				2023
	Q1'25				Q4'24				Q1'24
Audio	$	218,970			$	226,681			$	195,806
High-Performance Mixed-Signal		155,056				145,146				121,210
Net sales		374,026				371,827				317,016
Cost of sales		185,101				179,202				157,629
Gross profit		188,925				192,625				159,387
Gross margin		50.5	%			51.8	%			50.3	%
Research and development		105,363				103,383				106,215
Selling, general and administrative		36,770				36,866				35,379
Total operating expenses		142,133				140,249				141,594
Income from operations		46,792				52,376				17,793
Interest income		8,202				7,360				4,600
Other income (expense)		1,609				(78	)			377
Income before income taxes		56,603				59,658				22,770
Provision for income taxes		14,508				14,816				7,170
Net income	$	42,095			$	44,842			$	15,600
Basic earnings per share	$	0.79			$	0.83			$	0.28
Diluted earnings per share:	$	0.76			$	0.81			$	0.28
Weighted average number of shares:
Basic		53,433				53,739				54,862
Diluted		55,665				55,559				56,631
Prepared in accordance with Generally Accepted Accounting Principles

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION
(in thousands, except per share data; unaudited)
(not prepared in accordance with GAAP)
Non-GAAP financial information is not meant as a substitute for GAAP results, but is included because management believes such information is useful to our investors for informational and comparative purposes. In addition, certain non-GAAP financial information is used internally by management to evaluate and manage the company. As a note, the non-GAAP financial information used by Cirrus Logic may differ from that used by other companies. These non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP.
	Three Months Ended
	Jun. 29,				Mar. 30,				Jun. 24,
		2024				2024				2023
Net Income Reconciliation	Q1'25				Q4'24				Q1'24
GAAP Net Income	$	42,095			$	44,842			$	15,600
Amortization of acquisition intangibles		1,972				1,973				2,170
Stock-based compensation expense		21,385				22,158				22,715
Lease impairment		1,019				—				—
Acquisition-related costs		—				—				3,166
Adjustment to income taxes		(4,105	)			75				(5,628	)
Non-GAAP Net Income	$	62,366			$	69,048			$	38,023
Earnings Per Share Reconciliation
GAAP Diluted earnings per share	$	0.76			$	0.81			$	0.28
Effect of Amortization of acquisition intangibles		0.03				0.03				0.04
Effect of Stock-based compensation expense		0.38				0.40				0.40
Effect of Lease impairment		0.02				—				—
Effect of Acquisition-related costs		—				—				0.05
Effect of Adjustment to income taxes		(0.07	)			—				(0.10	)
Non-GAAP Diluted earnings per share	$	1.12			$	1.24			$	0.67
Operating Income Reconciliation
GAAP Operating Income	$	46,792			$	52,376			$	17,793
GAAP Operating Profit		12.5	%			14.1	%			5.6	%
Amortization of acquisition intangibles		1,972				1,973				2,170
Stock-based compensation expense - COGS		266				362				285
Stock-based compensation expense - R&D		15,763				15,483				15,952
Stock-based compensation expense - SG&A		5,356				6,313				6,478
Lease impairment		1,019				—				—
Acquisition-related costs		—				—				3,166
Non-GAAP Operating Income	$	71,168			$	76,507			$	45,844
Non-GAAP Operating Profit		19.0	%			20.6	%			14.5	%
Operating Expense Reconciliation
GAAP Operating Expenses	$	142,133			$	140,249			$	141,594
Amortization of acquisition intangibles		(1,972	)			(1,973	)			(2,170	)
Stock-based compensation expense - R&D		(15,763	)			(15,483	)			(15,952	)
Stock-based compensation expense - SG&A		(5,356	)			(6,313	)			(6,478	)
Lease impairment		1,019				—				—
Acquisition-related costs		—				—				(3,166	)
Non-GAAP Operating Expenses	$	118,023			$	116,480			$	113,828
Gross Margin/Profit Reconciliation
GAAP Gross Profit	$	188,925			$	192,625			$	159,387
GAAP Gross Margin		50.5	%			51.8	%			50.3	%
Stock-based compensation expense - COGS		266				362				285
Non-GAAP Gross Profit	$	189,191			$	192,987			$	159,672
Non-GAAP Gross Margin		50.6	%			51.9	%			50.4	%
GAAP Tax Expense	$	14,508			$	14,816			$	7,170
GAAP Effective Tax Rate		25.6	%			24.8	%			31.5	%
Adjustments to income taxes		4,105				(75	)			5,628
Non-GAAP Tax Expense	$	18,613			$	14,741			$	12,798
Non-GAAP Effective Tax Rate		23.0	%			17.6	%			25.2	%
Tax Impact to EPS Reconciliation
GAAP Tax Expense	$	0.26			$	0.27			$	0.13
Adjustments to income taxes		0.07				—				0.10
Non-GAAP Tax Expense	$	0.33			$	0.27			$	0.23

CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands; unaudited)
		Jun. 29,				Mar. 30,				Jun. 24,
			2024				2024				2023
ASSETS
Current assets
Cash and cash equivalents		$	491,351			$	502,764			$	352,346
Marketable securities			25,680				23,778				35,765
Accounts receivable, net			190,079				162,478				186,033
Inventories			232,566				227,248				300,956
Prepaid wafers			84,700				86,679				84,739
Other current assets			77,365				103,245				88,829
Total current Assets			1,101,741				1,106,192				1,048,668
Long-term marketable securities			227,527				173,374				38,029
Right-of-use lease assets			136,295				138,288				125,538
Property and equipment, net			170,953				170,175				167,238
Intangibles, net			27,624				29,578				36,447
Goodwill			435,936				435,936				435,936
Deferred tax asset			54,622				48,649				44,991
Long-term prepaid wafers			50,375				60,750				110,262
Other assets			60,552				68,634				49,483
Total assets		$	2,265,625			$	2,231,576			$	2,056,592
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable		$	77,562			$	55,545			$	75,941
Accrued salaries and benefits			41,101				47,612				36,465
Lease liability			22,058				20,640				19,903
Acquisition-related liabilities			—				—				24,527
Other accrued liabilities			61,021				62,596				46,018
Total current liabilities			201,742				186,393				202,854
Non-current lease liability			132,016				134,576				125,071
Non-current income taxes			52,704				52,013				59,587
Other long-term liabilities			31,533				41,580				12,286
Total long-term liabilities			216,253				228,169				196,944
Stockholders' equity:
Capital stock			1,792,283				1,760,701				1,693,420
Accumulated earnings (deficit)			58,591				58,916				(33,621	)
Accumulated other comprehensive loss			(3,244	)			(2,603	)			(3,005	)
Total stockholders' equity			1,847,630				1,817,014				1,656,794
Total liabilities and stockholders' equity		$	2,265,625			$	2,231,576			$	2,056,592
Prepared in accordance with Generally Accepted Accounting Principles

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(in thousands; unaudited)
		Three Months Ended
		Jun. 29,				Jun. 24,
			2024				2023
		Q1'25				Q1'24
Cash flows from operating activities:
Net income		$	42,095			$	15,600
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			12,359				11,941
Stock-based compensation expense			21,385				22,715
Deferred income taxes			(5,897	)			(9,411	)
Loss on retirement or write-off of long-lived assets			—				6
Other non-cash charges			1,104				1,334
Net change in operating assets and liabilities:
Accounts receivable, net			(27,601	)			(35,560	)
Inventories			(5,318	)			(67,506	)
Prepaid wafers			12,354				—
Other assets			(5,459	)			8,101
Accounts payable and other accrued liabilities			12,037				(10,278	)
Income taxes payable			30,102				20,079
Acquisition-related liabilities			—				3,166
Net cash provided by (used in) operating activities			87,161				(39,813	)
Cash flows from investing activities:
Maturities and sales of available-for-sale marketable securities			12,646				11,048
Purchases of available-for-sale marketable securities			(69,060	)			(13,372	)
Purchases of property, equipment and software			(9,990	)			(12,310	)
Investments in technology			(155	)			—
Net cash used in investing activities			(66,559	)			(14,634	)
Cash flows from financing activities:
Net proceeds from the issuance of common stock			10,196				560
Repurchase of stock to satisfy employee tax withholding obligations			(1,219	)			(1,047	)
Repurchase and retirement of common stock			(40,992	)			(38,504	)
Net cash used in financing activities			(32,015	)			(38,991	)
Net decrease in cash and cash equivalents			(11,413	)			(93,438	)
Cash and cash equivalents at beginning of period			502,764				445,784
Cash and cash equivalents at end of period		$	491,351			$	352,346
Prepared in accordance with Generally Accepted Accounting Principles

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION
(in thousands; unaudited)
Free cash flow, a non-GAAP financial measure, is GAAP cash flow from operations (or cash provided by operating activities) less capital expenditures. Capital expenditures include purchases of property, equipment and software as well as investments in technology, as presented within our GAAP Consolidated Condensed Statement of Cash Flows. Free cash flow margin represents free cash flow divided by revenue.
		Twelve Months Ended				Three Months Ended
		Jun. 29,				Jun. 29,				Mar. 30,				Dec. 30,				Sep. 23,
			2024				2024				2024				2023				2023
		Q1'25				Q1'25				Q4'24				Q3'24				Q2'24
Net cash provided by (used in) operating activities (GAAP)		$	548,648			$	87,161			$	170,526			$	313,692			$	(22,731	)
Capital expenditures			(36,180	)			(10,145	)			(7,695	)			(9,813	)			(8,527	)
Free Cash Flow (Non-GAAP)		$	512,468			$	77,016			$	162,831			$	303,879			$	(31,258	)
Cash Flow from Operations as a Percentage of Revenue (GAAP)			30	%			23	%			46	%			51	%			(5	)%
Capital Expenditures as a Percentage of Revenue (GAAP)			2	%			3	%			2	%			2	%			2	%
Free Cash Flow Margin (Non-GAAP)			28	%			21	%			44	%			49	%			(6	)%

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION
(in millions; unaudited)
(not prepared in accordance with GAAP)
		Q2 FY25
		Guidance
Operating Expense Reconciliation
GAAP Operating Expenses		$	149 - 155
Stock-based compensation expense			(22	)
Amortization of acquisition intangibles			(2	)
Non-GAAP Operating Expenses		$	125 - 131

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240806516771/en/

Investor Contact:

Chelsea Heffernan

Vice President, Investor Relations

Cirrus Logic, Inc.

(512) 851-4125

Investor@cirrus.com

 

Source: Cirrus Logic, Inc.

FAQ

What was Cirrus Logic's revenue for Q1 FY25?

Cirrus Logic reported revenue of $374.0 million for the first quarter of fiscal year 2025, which ended June 29, 2024.

What is Cirrus Logic's revenue forecast for Q2 FY25?

Cirrus Logic expects revenue for the second quarter of fiscal year 2025 to range between $490 million and $550 million.

What new products did CRUS begin ramping up production for?

Cirrus Logic began ramping production of its custom boosted amplifier and first 22-nanometer smart codec ahead of new smartphone launches expected later this year.

What was Cirrus Logic's (CRUS) EPS for Q1 FY25?

Cirrus Logic reported GAAP earnings per share of $0.76 and non-GAAP earnings per share of $1.12 for Q1 FY25.

What is CRUS's expected gross margin for Q2 FY25?

Cirrus Logic forecasts GAAP gross margin to be between 50 percent and 52 percent for the second quarter of fiscal year 2025.