Cirrus Logic Reports Record Revenue Amid Market Challenges

Cirrus Logic ((CRUS)) has held its Q2 earnings call. Read on for the main highlights of the call.

Cirrus Logic’s latest earnings call painted a picture of robust financial health and strategic growth, despite facing some market challenges. The sentiment expressed during the call was largely positive, with record revenue and strong financial performance underscoring the company’s resilience and strategic initiatives.

Record-Breaking Revenue

Cirrus Logic reported a record September quarter revenue of $561 million, which was at the higher end of their guidance range. This impressive figure was primarily driven by strong demand for components used in smartphones, highlighting the company’s successful penetration in this competitive market.

Strong Financial Performance

The company achieved a non-GAAP gross margin of 52.5% and a non-GAAP net income of $150 million, translating to earnings per share of $2.83. This solid financial performance reflects Cirrus Logic’s effective cost management and operational efficiency.

Expansion in PC Market

Cirrus Logic made significant strides in the PC market by securing its first mainstream consumer design win. This positions the company for future growth, particularly with a focus on integrating voice interaction features into AI-enabled PCs, a burgeoning segment in the tech industry.

Increased Cash Position

The company ended the quarter with a robust cash and investment position of $896 million, marking an increase of $48.3 million from the previous quarter. This financial cushion provides Cirrus Logic with flexibility for future investments and strategic initiatives.

Positive Tax Impact

The introduction of the One Big Beautiful Bill Act had a favorable impact on the company’s tax situation, resulting in a lower non-GAAP tax rate of 14.6% for the quarter. This legislative change contributed positively to the company’s bottom line.

Higher Inventory Reserves

While the company enjoyed an increase in gross margin, this was partially offset by higher inventory reserves. This indicates a cautious approach to managing supply chain uncertainties and market demand fluctuations.

Slight Decline in Android Market

Cirrus Logic faced some challenges in the Android market, with softness impacting non-flagship customer revenue. This decline highlights the competitive pressures and market dynamics within the Android ecosystem.

Forward-Looking Guidance

Looking ahead, Cirrus Logic provided guidance for Q3 fiscal 2026, projecting revenue between $500 million and $560 million, with a gross margin expected to range from 51% to 53%. The company anticipates non-GAAP operating expenses between $128 million and $134 million, and a fiscal year non-GAAP effective tax rate of 16% to 18%. These projections reflect the company’s cautious optimism and strategic focus on maintaining growth momentum.

In summary, Cirrus Logic’s earnings call highlighted a strong quarter with record revenue and solid financial performance, despite some market challenges. The company’s strategic initiatives, particularly in the smartphone and PC markets, position it well for future growth. With a positive outlook and robust financial health, Cirrus Logic remains a compelling player in the tech industry.