EPS of $0.76 decreased by 42.8% from previous year
Gross margin of 50.5%
Net income of 42.10M
"‘Our long-term strategy is based around three broad principles: maintaining leadership in our core flagship smartphone audio business; continuing our expansion in high-performance mixed-signal functionality; and leveraging capabilities to grow in new markets.’" - John Forsyth
For the first quarter of fiscal 2025, Cirrus Logic Inc reported impressive financial results, delivering revenues of $374 million, surpassing the upper guidance and reflecting an 18% year-over-year increase. This performance was underpinned by heightened shipments into the smartphone sector. With a solid gross profit margin of 50.5% and net income of $42.1 million, the company showcases a healthy profit trajectory, although management highlighted rising supply chain costs impacting gross margins sequentially. The strategic focus on extending audio technology and high-performance mixed-signal solutions positions Cirrus Logic favorably for sustained growth as it seeks to penetrate new markets beyond smartphones, particularly in laptops and automotive applications. The balance sheet remains robust, marked by $744.6 million in cash and investments, with no debt, further enhancing investor confidence.
Key Performance Indicators
Revenue
374.03M
QoQ: 0.59% | YoY:-22.25%
Gross Profit
188.93M
50.51% margin
QoQ: -1.92% | YoY:-23.39%
Operating Income
46.79M
QoQ: -10.66% | YoY:-55.75%
Net Income
42.10M
QoQ: -6.13% | YoY:-44.18%
EPS
0.79
QoQ: -4.82% | YoY:-42.75%
Revenue Trend
Margin Analysis
Key Insights
**Revenue**: $374 million (18% YoY growth)
**Gross Profit**: $188.9 million (Gross Margin: 50.5%)
**Net Income**: $42.1 million (EPS: $0.79)
**Operating Income**: $46.8 million (Operating Margin: 12.5%)
**Research and Development Expenses**: $105.4 million
Financial Highlights
### Key Financial Metrics
- Revenue: $374 million (18% YoY growth)
- Gross Profit: $188.9 million (Gross Margin: 50.5%)
- Net Income: $42.1 million (EPS: $0.79)
- Operating Income: $46.8 million (Operating Margin: 12.5%)
- Research and Development Expenses: $105.4 million
Comparatively, Cirrus Logic's revenue growth exceeds industry averages and indicates strong positioning within the semiconductor sector, particularly in its smartphone audio solutions. Despite an increase in R&D expenses, the company's focus on innovation and market expansion reflects a commitment to long-term growth.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
374.03M
-22.25%
0.59%
Gross Profit
188.93M
-23.39%
-1.92%
Operating Income
46.79M
-55.75%
-10.66%
Net Income
42.10M
-44.18%
-6.13%
EPS
0.79
-42.75%
-4.82%
Key Financial Ratios
currentRatio
5.46
grossProfitMargin
50.5%
operatingProfitMargin
12.5%
netProfitMargin
11.3%
returnOnAssets
1.86%
returnOnEquity
2.28%
debtEquityRatio
0.08
operatingCashFlowPerShare
$1.63
freeCashFlowPerShare
$1.44
priceToBookRatio
3.69
priceEarningsRatio
40.51
Net Income vs. Revenue
Expense Breakdown
Management Commentary
### Highlights from Earnings Call
- John Forsyth, CEO: ‘In the June quarter, Cirrus Logic delivered revenue ... due to stronger-than-expected shipments into smartphones.’ This statement underlined the unexpected resilience in demand driven by their flagship audio products.
- Ulf Habermann, CFO: ‘Our balance sheet continues to remain strong ... with $744.6 million in cash and investments.’ This reinforces the company’s financial stability.
- Future Outlook: 'Looking ahead, we expect revenue in the range of $490 million to $550 million for Q2 FY '25,' indicating management's confidence in upcoming product launches and customer engagements.
‘Our long-term strategy is based around three broad principles: maintaining leadership in our core flagship smartphone audio business; continuing our expansion in high-performance mixed-signal functionality; and leveraging capabilities to grow in new markets.’
— John Forsyth
‘Our ending cash balance was up $44.6 million from the prior quarter, primarily due to strong cash flow from operations.’
— Ulf Habermann
Forward Guidance
Cirrus Logic anticipates revenue growth to continue in Q2 FY 2025, guided between $490 million and $550 million, reflecting increased production in response to seasonal smartphone demand. Management has projected non-GAAP gross margins to range from 50%-52%. Investors should monitor upcoming product launches, particularly in laptops and automotive applications, as these new markets could contribute significantly to revenue diversification and growth.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
CRUS Focus
50.51%
12.50%
2.28%
40.51%
SWKS
41.40%
16.90%
2.53%
22.31%
QRVO
37.50%
0.52%
0.01%
6,689.61%
ADI
58.70%
23.30%
1.30%
51.45%
LSCC
61.80%
13.00%
2.17%
181.72%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Cirrus Logic offers a compelling investment proposition grounded in strong growth metrics, a solid balance sheet, and a clear strategic vision for expanding its market presence. The anticipated revenue growth driven by innovation in audio technology and entry into adjacent markets further supports a bullish outlook. The existing reliance on key customers and rising costs pose risks that investors should monitor closely; however, the overall trajectory remains positive for Cirrus Logic as it commits to enhancing its product offerings and market strategies.
Key Investment Factors
Growth Potential
Cirrus Logic is well-positioned for growth, with significant expansion opportunities in audio innovation and high-performance mixed-signal solutions, particularly in smartphones and emerging areas such as laptops and automotive.
Profitability Risk
Challenges include reliance on key OEM customers, potential disruptions in the supply chain, and increased competition in the semiconductor market which could pressure margins.
Financial Position
With a robust cash position of $744.6 million and no outstanding debt, Cirrus Logic's financial stability supports ongoing investments in R&D and strategic initiatives.
SWOT Analysis
Strengths
Strong revenue growth of 18% YoY driven by robust smartphone demand
Leadership position in audio chipset technology for smartphones
Strong balance sheet with significant cash reserves and no debt
Weaknesses
High dependency on a few key customers may expose the company to revenue volatility
Rising supply chain costs could impact profitability
Opportunities
Expansion into the laptop and automotive markets offers additional revenue streams
Investment in R&D for innovative products can enhance market share in the semiconductor industry
Continued demand growth for audio components in consumer electronics
Threats
Intense competition within the semiconductor space may affect pricing power
Market fluctuations and economic conditions can impact customer demand
Potential supply chain disruptions might affect production capabilities