Cirrus Logic, Inc.: Q2 FY2027 earnings call

What management said about Q2 FY2027, from the documents filed with the SEC on 4 November 2026: press release, letter to shareholders. Guidance figures: 2 raised, 1 lowered, 3 new, 3 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Revenue rose sequentially, flat yearly: Revenue was $559.5 million, up 22 percent from the prior quarter and flat year over year. Source
• Diluted EPS on GAAP and non-GAAP bases: GAAP diluted EPS was $2.23 and non-GAAP EPS was $2.70, compared with $1.47 and $1.84 in the prior quarter. Source
• One customer provided 93 percent: One customer contributed about 93 percent of total revenue. Management said it does not discuss specifics of that business under its policy. Source
• GAAP operating expense rose on acquisition costs: GAAP operating expense was $168.2 million, up $10.8 million sequentially, mainly from $6.9 million of acquisition-related costs and higher product development expense. Source
• Lower wafer costs lifted gross margin: Lower wafer costs, largely a temporary benefit from prior GlobalFoundries wafer agreements, and lower production ramp expenses drove the sequential gross margin increase. Source
• PC unit volumes under pressure: Memory and component shortages and related pricing pressure are driving significant PC unit volume declines this year, according to market research cited by management. Source
• Cash and investments fell to $1.1 billion: Cash and investments were $1.1 billion at quarter end, down $90.9 million from the prior quarter. Source
• Three core strategic priorities: Management named three priorities: leadership in smartphone audio, more HPMS content in smartphones, and expansion into new applications and markets. Source

“Cirrus Logic delivered solid results in the September quarter primarily driven by strong demand and increased content shipping into smartphones,”

John Forsyth, Cirrus Logic president and chief executive officer

Guidance

What changed from last quarter

• Guidance lowered: GAAP gross margin guidance for the third quarter is 51 to 53 percent, down from 52 to 54 percent given in the prior quarter. Source
• Guidance raised: Combined GAAP R&D and SG&A expense guidance rose to $184 to $190 million from $163 to $169 million. Source
• Guidance raised: Non-GAAP operating expense guidance rose to $152 to $158 million from $140 to $146 million. Source
• Guidance kept: Third-quarter revenue range of $510 to $570 million is the same as the prior quarter's guidance. Source
• New: Company completed the acquisition of INVENTVM, a fabless semiconductor company, after the quarter ended. Source
• New: Board authorized an additional repurchase of up to $500 million of common stock in October 2026. Source

Results and growth drivers

• Revenue rose sequentially, flat yearly: Revenue was $559.5 million, up 22 percent from the prior quarter and flat year over year. Source
• Smartphone volumes and content drove growth: Management attributed the sequential increase to higher smartphone units and content, plus custom components in non-smartphone applications, partly offset by PCs and end-of-life general market parts. Source
• Diluted EPS on GAAP and non-GAAP bases: GAAP diluted EPS was $2.23 and non-GAAP EPS was $2.70, compared with $1.47 and $1.84 in the prior quarter. Source

Audio and HPMS product lines

• Audio was majority of revenue: Audio was 56 percent of revenue in the quarter, the larger of the two product lines. Source
• Camera controller attach rate rose: HPMS was 44 percent of revenue. Management cited a higher attach rate of the third-generation camera controller in some newly introduced smartphone models. Source
• Audio components run long lifecycles: Management expects the current codec and amplifier generation to follow prior lifecycles of five and six years, giving long-term visibility. Source

“we believe Cirrus Logic is well-positioned to drive long-term growth and deliver shareholder value.”

John Forsyth, President & Chief Executive Officer

Customer concentration and smartphone content

• One customer provided 93 percent: One customer contributed about 93 percent of total revenue. Management said it does not discuss specifics of that business under its policy. Source
• Several new smartphone components in development: Management listed multiple new smartphone components in development, including a fourth-generation camera controller and a smart power IC for 3D sensing. Source
• Accessories and wearables add content: Management expects continued content gains from accessories, wearables and other non-smartphone devices alongside smartphone growth. Source

Operating expenses and headcount

• GAAP operating expense rose on acquisition costs: GAAP operating expense was $168.2 million, up $10.8 million sequentially, mainly from $6.9 million of acquisition-related costs and higher product development expense. Source
• Non-GAAP expense rose with R&D investment: Non-GAAP operating expense was $141.6 million, up $6.2 million sequentially and $13.9 million year over year. Source
• Year-over-year rise in employee costs: GAAP operating expense rose $18.6 million year over year on employee costs, acquisition costs, and product and R&D spending, partly offset by lower stock-based compensation. Source

Gross margin and cost drivers

• Lower wafer costs lifted gross margin: Lower wafer costs, largely a temporary benefit from prior GlobalFoundries wafer agreements, and lower production ramp expenses drove the sequential gross margin increase. Source
• Year-over-year gains from mix and reserves: Year over year, gross margin rose on favorable product mix, lower inventory reserves and the temporary GlobalFoundries wafer benefit. Source
• Freight and supply chain costs rose: Higher freight expense and supply chain costs partly offset the margin gains. Source

PC market and demand

• PC unit volumes under pressure: Memory and component shortages and related pricing pressure are driving significant PC unit volume declines this year, according to market research cited by management. Source
• New PC models delayed: Shortages delayed some new PC models, most expected to carry more content and higher volumes. Source
• PC design wins remain in place: Management said PC design wins remain in place, customer engagement on new programs continues, and the company expects to be positioned for growth as demand recovers. Source

Cash, balance sheet and buybacks

• Cash and investments fell to $1.1 billion: Cash and investments were $1.1 billion at quarter end, down $90.9 million from the prior quarter. Source
• Operating cash flow of $50.9 million: Operating cash flow for the quarter was $50.9 million. Source
• Quarterly buybacks returned $125.5 million: The company repurchased 991,983 shares at an average price of $126.51, returning $125.5 million to shareholders. Source
• Remaining authorization at quarter end: At quarter end, $114.1 million remained in the existing share repurchase authorization. Source
• Post-quarter buybacks under 10b5-1 plan: After quarter end, $18.6 million was used to repurchase 170,757 shares at $108.67 under a Rule 10b5-1 plan. Source
• Long-term cash uses under review: Management will evaluate uses of cash including organic investment, M&A and share repurchases, and expects strong long-term cash flow generation. Source

Strategy and new applications

• Three core strategic priorities: Management named three priorities: leadership in smartphone audio, more HPMS content in smartphones, and expansion into new applications and markets. Source
• Premium PC launched on NVIDIA platform: A tier 1 OEM launched a premium six-speaker PC using NVIDIA's RTX Spark platform with Cirrus Logic amplifiers and a codec. Source
• AI PC codec handles voice wake-up: The latest smart codec handles wake-word detection and noise reduction independently of the CPU or NPU, enabling always-on conversational interaction. Source
• Growing focus on AI gadgets: Management sees a growing area in AI gadgets and smart glasses as AI assistants move beyond the smartphone, and is engaged with several market leaders. Source
• General market components with long lifecycles: General market components span professional audio, automotive, industrial and imaging, typically with long lifecycles and gross margins above the corporate average. Source
• Smart metering sampling and imaging orders: Analog front-end parts for smart metering began sampling, and first production orders were secured for industrial imaging components. Source

Acquisition, engineering and headcount

• Acquisition adds engineering capacity: Management said the combined team expands engineering capacity and strengthens the portfolio in consumer wearable and AI gadget markets. Source
• Headcount rose by 98: Total headcount exiting the quarter was 1,815, up 98 from the prior quarter, as R&D investment continues to increase. Source

Coming up, as management said on 4 November 2026

• Industrial imaging mass production: Management expects to begin mass production of industrial imaging components in the December quarter. Source
• Fourth-generation camera controller production: Management expects the fourth-generation camera controller to begin production in calendar 2028 and further increase content per device. Source
• Attach-rate gains over 18 months: Management expects growth in attach rates across existing ICs over the next approximately 18 months through successive smartphone launch windows. Source
• AI gadget end devices reach market: Management expects end devices using its products in AI gadgets and smart glasses to come to market in the next few quarters. Source

Figures management reported

Risks management discussed

• Demand: PC unit volumes are declining on memory and component shortages and pricing pressure, which management expects to further erode shipments in 2027. Source
• Demand: Revenue depends heavily on one customer, which contributed about 93 percent of total revenue this quarter. Source
• Demand: Revenue from general market components is falling as some parts reach end of life. Source
• Operational: Freight expense and supply chain costs increased and offset part of the gross margin gains. Source

Earlier plans management reported on

• Delayed: Component shortages delayed the introduction of certain PC models, which management expected to carry more content and volume. Source
• Not stated: Year-over-year revenue reflected pricing reductions that management had previously anticipated. Source

Other quarters

• Q1 FY2027 earnings call
• Q4 FY2026 earnings call
• Q3 FY2026 earnings call
• Q2 FY2026 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.