Cirrus Logic Reports Fiscal Second Quarter Revenue of $541.9 Million

Rhea-AI Summary

Cirrus Logic (CRUS) reported record Q2 FY25 financial results with revenue of $541.9 million, reaching the top end of guidance due to strong smartphone product demand. The company achieved a 52.2% GAAP gross margin and $1.83 GAAP EPS ($2.25 non-GAAP). During the quarter, Cirrus began shipping its next-generation custom boosted amplifier and first 22nm smart codec in new smartphones, while expanding in the laptop market with a high-volume mainstream design win. For Q3 FY25, revenue guidance is set between $480-540 million with GAAP gross margin projected at 51-53%.

Positive

• Record quarterly revenue of $541.9 million
• Strong GAAP gross margin of 52.2%
• Successful launch of next-gen amplifier and 22nm smart codec
• Secured first high-volume mainstream design win in laptop market
• Expanded into power products with multiple tier-one customer shipments

Negative

• Q3 guidance indicates potential sequential revenue decline
• Expected slight gross margin compression in Q3 guidance

Insights

Financial Analyst

Cirrus Logic delivered an impressive Q2 FY25 performance with $541.9 million in revenue, reaching the higher end of guidance and setting a new record. The 52.2% gross margin demonstrates strong operational efficiency, while non-GAAP EPS of $2.25 reflects robust profitability. The company's strategic expansion into laptops with new design wins and power products diversifies revenue streams beyond their smartphone core business.

Q3 guidance of $480-540 million suggests potential sequential decline but maintains healthy margins of 51-53%. The successful launch of next-gen custom boosted amplifiers and 22nm smart codecs in new smartphones indicates strong execution in their core market. The expansion into PC codecs and power products for tier-one customers represents meaningful progress in market diversification efforts.

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 second quarter of fiscal year 2025, which ended September 28, 2024, as well as the company’s current business outlook.

“Cirrus Logic reported record revenue and earnings per share for the September quarter. Revenue was near the top end of our guidance range due to strong demand for products shipping into smartphones,” said John Forsyth, Cirrus Logic president and chief executive officer. “In addition to our outstanding financial results, during the quarter, we started shipping our next-generation custom boosted amplifier and first 22-nanometer smart codec in recently launched smartphones. We also made excellent progress in the laptop market as we secured our first high-volume mainstream design win with our latest PC codec and began shipping our first power product in multiple tier-one customers’ devices. With an extensive product portfolio and a compelling roadmap of future products, we believe Cirrus Logic is well-positioned to capitalize on the many opportunities ahead of us to further broaden our technology and market reach.”

Reported Financial Results – Second Quarter FY25

• Revenue of $541.9 million;
• GAAP and non-GAAP gross margin of 52.2 percent;
• GAAP operating expenses of $150.7 million and non-GAAP operating expenses of $126.8 million; and
• GAAP earnings per share of $1.83 and non-GAAP earnings per share of $2.25.

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

Business Outlook – Third Quarter FY25

• Revenue is expected to range between $480 million and $540 million;
• GAAP gross margin is forecasted to be between 51 percent and 53 percent; and
• Combined GAAP R&D and SG&A expenses are anticipated to range between $148 million and $154 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 $124 million and $130 million.

Cirrus Logic will host a live Q&A session at 5 p.m. EST 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 statement about our belief that we are well-positioned to capitalize on the many opportunities ahead of us; and our estimates for the third 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 third 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												Six Months Ended
	Sep. 28,				Jun. 29,				Sep. 23,				Sep. 28,				Sep. 23,
		2024				2024				2023				2024				2023
	Q2'25				Q1'25				Q2'24				Q2'25				Q2'24
Audio	$	316,588			$	218,970			$	282,855			$	535,558			$	478,661
High-Performance Mixed-Signal		225,269				155,056				198,208				380,325				319,418
Net sales		541,857				374,026				481,063				915,883				798,079
Cost of sales		259,267				185,101				234,467				444,368				392,096
Gross profit		282,590				188,925				246,596				471,515				405,983
Gross margin		52.2	%			50.5	%			51.3	%			51.5	%			50.9	%
Research and development		112,925				105,363				104,205				218,288				210,420
Selling, general and administrative		37,813				36,770				34,323				74,583				69,702
Restructuring costs		—				—				2,319				—				2,319
Total operating expenses		150,738				142,133				140,847				292,871				282,441
Income from operations		131,852				46,792				105,749				178,644				123,542
Interest income		8,134				8,202				3,729				16,336				8,329
Other income (expense)		19				1,609				(70	)			1,628				307
Income before income taxes		140,005				56,603				109,408				196,608				132,178
Provision for income taxes		37,865				14,508				34,001				52,373				41,171
Net income	$	102,140			$	42,095			$	75,407			$	144,235			$	91,007
Basic earnings per share	$	1.92			$	0.79			$	1.38			$	2.70			$	1.66
Diluted earnings per share:	$	1.83			$	0.76			$	1.34			$	2.59			$	1.61
Weighted average number of shares:
Basic		53,275				53,433				54,503				53,354				54,683
Diluted		55,800				55,665				56,278				55,753				56,453
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												Six Months Ended
	Sep. 28,				Jun. 29,				Sep. 23,				Sep. 28,				Sep. 23,
		2024				2024				2023				2024				2023
Net Income Reconciliation	Q2'25				Q1'25				Q2'24				Q2'25				Q2'24
GAAP Net Income	$	102,140			$	42,095			$	75,407			$	144,235			$	91,007
Amortization of acquisition intangibles		1,864				1,972				2,170				3,836				4,340
Stock-based compensation expense		22,447				21,385				21,331				43,832				44,046
Lease impairment		—				1,019				—				1,019				—
Restructuring costs		—				—				2,319				—				2,319
Acquisition-related costs		—				—				939				—				4,105
Adjustment to income taxes		(1,162	)			(4,105	)			(604	)			(5,267	)			(6,232	)
Non-GAAP Net Income	$	125,289			$	62,366			$	101,562			$	187,655			$	139,585
Earnings Per Share Reconciliation
GAAP Diluted earnings per share	$	1.83			$	0.76			$	1.34			$	2.59			$	1.61
Effect of Amortization of acquisition intangibles		0.04				0.03				0.04				0.07				0.08
Effect of Stock-based compensation expense		0.40				0.38				0.38				0.79				0.78
Effect of Lease impairment		—				0.02				—				0.02				—
Effect of Restructuring costs		—				—				0.04				—				0.04
Effect of Acquisition-related costs		—				—				0.01				—				0.07
Effect of Adjustment to income taxes		(0.02	)			(0.07	)			(0.01	)			(0.10	)			(0.11	)
Non-GAAP Diluted earnings per share	$	2.25			$	1.12			$	1.80			$	3.37			$	2.47
Operating Income Reconciliation
GAAP Operating Income	$	131,852			$	46,792			$	105,749			$	178,644			$	123,542
GAAP Operating Profit		24.3	%			12.5	%			22.0	%			19.5	%			15.5	%
Amortization of acquisition intangibles		1,864				1,972				2,170				3,836				4,340
Stock-based compensation expense - COGS		355				266				361				621				646
Stock-based compensation expense - R&D		15,844				15,763				15,472				31,607				31,424
Stock-based compensation expense - SG&A		6,248				5,356				5,498				11,604				11,976
Lease impairment		—				1,019				—				1,019				—
Restructuring costs		—				—				2,319				—				2,319
Acquisition-related costs		—				—				939				—				4,105
Non-GAAP Operating Income	$	156,163			$	71,168			$	132,508			$	227,331			$	178,352
Non-GAAP Operating Profit		28.8	%			19.0	%			27.5	%			24.8	%			22.3	%
Operating Expense Reconciliation
GAAP Operating Expenses	$	150,738			$	142,133			$	140,847			$	292,871			$	282,441
Amortization of acquisition intangibles		(1,864	)			(1,972	)			(2,170	)			(3,836	)			(4,340	)
Stock-based compensation expense - R&D		(15,844	)			(15,763	)			(15,472	)			(31,607	)			(31,424	)
Stock-based compensation expense - SG&A		(6,248	)			(5,356	)			(5,498	)			(11,604	)			(11,976	)
Lease impairment		—				1,019				—				1,019				—
Restructuring costs		—				—				(2,319	)			—				(2,319	)
Acquisition-related costs		—				—				(939	)			—				(4,105	)
Non-GAAP Operating Expenses	$	126,782			$	118,023			$	114,449			$	244,805			$	228,277
Gross Margin/Profit Reconciliation
GAAP Gross Profit	$	282,590			$	188,925			$	246,596			$	471,515			$	405,983
GAAP Gross Margin		52.2	%			50.5	%			51.3	%			51.5	%			50.9	%
Stock-based compensation expense - COGS		355				266				361				621				646
Non-GAAP Gross Profit	$	282,945			$	189,191			$	246,957			$	472,136			$	406,629
Non-GAAP Gross Margin		52.2	%			50.6	%			51.3	%			51.5	%			51.0	%
	Three Months Ended												Six Months Ended
	Sep. 28,				Jun. 29,				Sep. 23,				Sep. 28,				Sep. 23,
		2024				2024				2023				2024				2023
Effective Tax Rate Reconciliation	Q2'25				Q1'25				Q2'24				Q2'25				Q2'24
GAAP Tax Expense	$	37,865			$	14,508			$	34,001			$	52,373			$	41,171
GAAP Effective Tax Rate		27.0	%			25.6	%			31.1	%			26.6	%			31.1	%
Adjustments to income taxes		1,162				4,105				604				5,267				6,232
Non-GAAP Tax Expense	$	39,027			$	18,613			$	34,605			$	57,640			$	47,403
Non-GAAP Effective Tax Rate		23.8	%			23.0	%			25.4	%			23.5	%			25.4	%
Tax Impact to EPS Reconciliation
GAAP Tax Expense	$	0.68			$	0.26			$	0.60			$	0.94			$	0.73
Adjustments to income taxes		0.02				0.07				0.01				0.10				0.11
Non-GAAP Tax Expense	$	0.70			$	0.33			$	0.61			$	1.04			$	0.84

CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands; unaudited)
		Sep. 28,				Mar. 30,				Sep. 23,
		2024				2024				2023
ASSETS
Current assets
Cash and cash equivalents		$	445,759			$	502,764			$	277,805
Marketable securities			32,499				23,778				34,636
Accounts receivable, net			324,098				162,478				271,894
Inventories			271,765				227,248				328,930
Prepaid wafers			71,740				86,679				79,468
Other current assets			79,044				103,245				104,138
Total current Assets			1,224,905				1,106,192				1,096,871
Long-term marketable securities			228,302				173,374				40,042
Right-of-use lease assets			133,316				138,288				144,104
Property and equipment, net			168,265				170,175				171,047
Intangibles, net			25,700				29,578				33,801
Goodwill			435,936				435,936				435,936
Deferred tax asset			48,619				48,649				44,126
Long-term prepaid wafers			37,804				60,750				94,474
Other assets			53,292				68,634				44,052
Total assets		$	2,356,139			$	2,231,576			$	2,104,453
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable		$	91,899			$	55,545			$	87,340
Accrued salaries and benefits			51,861				47,612				46,504
Lease liability			22,800				20,640				19,859
Other accrued liabilities			62,716				62,596				47,487
Total current liabilities			229,276				186,393				201,190
Non-current lease liability			129,806				134,576				136,042
Non-current income taxes			42,683				52,013				51,589
Other long-term liabilities			26,247				41,580				7,277
Total long-term liabilities			198,736				228,169				194,908
Stockholders' equity:
Capital stock			1,819,589				1,760,701				1,712,710
Accumulated earnings (deficit)			107,233				58,916				(1,213	)
Accumulated other comprehensive income (loss)			1,305				(2,603	)			(3,142	)
Total stockholders' equity			1,928,127				1,817,014				1,708,355
Total liabilities and stockholders' equity		$	2,356,139			$	2,231,576			$	2,104,453
Prepared in accordance with Generally Accepted Accounting Principles

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(in thousands; unaudited)
		Three Months Ended
		Sep. 28,				Sep. 23,
			2024				2023
		Q2'25				Q2'24
Cash flows from operating activities:
Net income		$	102,140			$	75,407
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			12,618				11,610
Stock-based compensation expense			22,447				21,331
Deferred income taxes			4,984				810
Loss on retirement or write-off of long-lived assets			12				58
Other non-cash charges			87				274
Restructuring costs			—				2,319
Net change in operating assets and liabilities:
Accounts receivable, net			(134,019	)			(86,046	)
Inventories			(39,199	)			(27,974	)
Prepaid wafers			25,531				21,058
Other assets			(341	)			(14,392	)
Accounts payable and other accrued liabilities			27,268				10,200
Income taxes payable			(13,297	)			(12,859	)
Acquisition-related liabilities			—				(24,527	)
Net cash provided by (used in) operating activities			8,231				(22,731	)
Cash flows from investing activities:
Maturities and sales of available-for-sale marketable securities			835				7,194
Purchases of available-for-sale marketable securities			(3,577	)			(7,819	)
Purchases of property, equipment and software			(2,670	)			(8,470	)
Investments in technology			(70	)			(57	)
Net cash used in investing activities			(5,482	)			(9,152	)
Cash flows from financing activities:
Net proceeds from the issuance of common stock			4,859				—
Repurchase of stock to satisfy employee tax withholding obligations			(3,207	)			(2,082	)
Repurchase and retirement of common stock			(49,993	)			(40,576	)
Net cash used in financing activities			(48,341	)			(42,658	)
Net decrease in cash and cash equivalents			(45,592	)			(74,541	)
Cash and cash equivalents at beginning of period			491,351				352,346
Cash and cash equivalents at end of period		$	445,759			$	277,805
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
		Sep. 28,				Sep. 28,				Jun. 29,				Mar. 30,				Dec. 30,
			2024				2024				2024				2024				2023
		Q2'25				Q2'25				Q1'25				Q4'24				Q3'24
Net cash provided by operating activities (GAAP)		$	579,610			$	8,231			$	87,161			$	170,526			$	313,692
Capital expenditures			(30,393	)			(2,740	)			(10,145	)			(7,695	)			(9,813	)
Free Cash Flow (Non-GAAP)		$	549,217			$	5,491			$	77,016			$	162,831			$	303,879
Cash Flow from Operations as a Percentage of Revenue (GAAP)			30	%			2	%			23	%			46	%			51	%
Capital Expenditures as a Percentage of Revenue (GAAP)			2	%			1	%			3	%			2	%			2	%
Free Cash Flow Margin (Non-GAAP)			29	%			1	%			21	%			44	%			49	%

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION
(in millions; unaudited)
(not prepared in accordance with GAAP)
		Q3 FY25
		Guidance
Operating Expense Reconciliation
GAAP Operating Expenses		$148 - 154
Stock-based compensation expense		(22)
Amortization of acquisition intangibles		(2)
Non-GAAP Operating Expenses		$124 - 130

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241104344379/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 (CRUS) revenue in Q2 FY25?

Cirrus Logic reported revenue of $541.9 million in Q2 FY25, reaching record levels.

What is Cirrus Logic's (CRUS) revenue guidance for Q3 FY25?

Cirrus Logic expects Q3 FY25 revenue to range between $480 million and $540 million.

What new products did Cirrus Logic (CRUS) launch in Q2 FY25?

Cirrus Logic began shipping its next-generation custom boosted amplifier and first 22-nanometer smart codec in smartphones.

What was Cirrus Logic's (CRUS) earnings per share in Q2 FY25?

Cirrus Logic reported GAAP earnings per share of $1.83 and non-GAAP earnings per share of $2.25.