Cirrus Logic, Inc.

What they do

Cirrus Logic designs both custom and general market mixed-signal ICs that convert and process signals across the analog-to-digital divide. Its Audio product line includes amplifiers, codecs, smart codecs, analog-to-digital and digital-to-analog converters, and standalone digital signal processors. Its HPMS product line includes camera controllers, haptics and sensing solutions, and battery and power ICs. It tracks one reportable segment but reports revenue by these two product lines.

Revenue drivers

• Smartphone Audio — Custom and general market audio components shipping into smartphones, the company's established leadership area; in Q1 FY27 audio was 54 percent of total revenue.
• HPMS — Camera controllers, haptics and sensing, and battery and power ICs sold primarily into smartphones and expanding applications; 46 percent of Q1 FY27 revenue.
• PC Market — Amplifiers and codecs sold into PCs across all segments; management calls PCs the largest near-term growth opportunity beyond smartphones.
• General Market — Audio and mixed-signal products sold to a broad customer base in professional audio, automotive, industrial, and imaging end markets.

Recent performance

Q1 FY27 revenue was a record first-quarter $459.7 million, up 2 percent sequentially and 13 percent year over year, on higher smartphone component sales partly offset by previously anticipated pricing reductions. GAAP diluted EPS was $1.47 and non-GAAP diluted EPS was $1.84; GAAP gross margin was 52.6 percent and non-GAAP gross margin 52.7 percent. One customer contributed approximately 90 percent of total revenue in the quarter. For the September quarter, guidance is $510 million to $570 million, up 17 percent sequentially but down 4 percent year over year at the midpoint, with gross margin expected at 52 percent to 54 percent.

Strategy

Management follows a three-pronged strategy: maintain leadership in smartphone audio, increase HPMS content in smartphones, and leverage audio and HPMS expertise to expand into additional applications and markets. In FY26 the company began developing next-generation camera controller components and validated technologies in advanced battery and power, including a first smart power IC for a customer's FaceID implementation. It also grew revenue in PCs and developed new product families for professional audio, automotive, industrial, and imaging. In Q1 FY27 it taped out a high-performance analog front-end for metrology, expected to sample in the September quarter. The company signed a new Capacity Reservation and Wafer Supply Agreement with GlobalFoundries covering calendar 2027 and 2028 and is working toward U.S. manufacturing at GlobalFoundries' Malta, New York facility.

Risks

• Customer Concentration — One customer contributed approximately 90 percent of Q1 FY27 revenue, so changes in that customer's demand or sourcing could materially affect results.
• PC Timing and Supply Constraints — Management lowered FY27 PC revenue expectations due to constrained supply of a key industry platform, memory and component shortages, and OEMs delaying new model introductions.
• Pricing Pressure — Gross margin declined sequentially to 52.6 percent in Q1 FY27, reflecting previously anticipated pricing reductions only partly offset by cost reductions.
• Inventory and Demand Estimation — The company writes down inventory to net realizable value based on forecasted customer unit demand, product release schedules, and product life cycles, and actual demand may differ from those projections.

Outlook

For the September quarter, management guides revenue to $510 million to $570 million, up 17 percent sequentially and down 4 percent year over year at the midpoint, with gross margin of 52 percent to 54 percent. Management expects a temporary Q2 gross margin benefit from wafers purchased under prior GlobalFoundries agreements at favorable pricing. It says the lowered FY27 PC outlook reflects a shift in timing rather than a change to the underlying opportunity. It also points to design win activity including smart codecs for AI-enabled PCs and PCs based on NVIDIA's RTX Spark platform expected to ship later this year with Cirrus Logic amplifiers and codecs.