EPS of $1.83 decreased by 25.3% from previous year
Gross margin of 52.2%
Net income of 102.14M
""To maintain leadership in our core flagship smartphone audio business is our primary goal while diversifying into new markets like laptops," said CEO John Forsyth." - John Forsyth
Cirrus Logic Inc (CRUS) Q2 2025 Financial Results: Record Revenue and Strategic Growth in Semiconductor Market
Executive Summary
Cirrus Logic Inc (CRUS) has announced impressive financial results for Q2 2025, achieving a record revenue of $541.9 million, reflecting a 45% increase sequentially and a 13% increase year-over-year (YoY). This noteworthy performance is attributed to robust demand for the company’s audio components within the smartphone sector, highlighting an ongoing recovery and expansion in product adoption. Amidst rising competition, management's strategic focus on innovation and market diversification—particularly in smartphone audio and next-generation mixed signal products—positions Cirrus Logic favorably for sustained growth.
Additionally, the company emphasized its commitment to establishing long-term revenue streams through its latest product launches, including a 22-nanometer smart codec and enhanced boosted amplifiers. Moving forward, management anticipates continued demand driven by upcoming smartphone models while also navigating supply chain dynamics and inventory management in the context of fluctuating market conditions. Investors should closely monitor industry trends and Cirrus Logic’s operational developments as it seeks to capitalize on significant growth opportunities in new markets and product segments.
Key Performance Indicators
Revenue
541.86M
QoQ: 44.87% | YoY:-12.46%
Gross Profit
282.59M
52.15% margin
QoQ: 49.58% | YoY:-10.99%
Operating Income
131.85M
QoQ: 181.78% | YoY:-21.30%
Net Income
102.14M
QoQ: 142.64% | YoY:-26.37%
EPS
1.92
QoQ: 143.04% | YoY:-25.29%
Revenue Trend
Margin Analysis
Key Insights
**Revenue:** $541.9 million, up 45% QoQ and 13% YoY.
**Gross Profit:** $282.6 million, with a gross margin of 52.2%.
**Operating Income:** $156.2 million, representing 28.8% of revenue.
**Net Income:** $125.3 million, leading to an EPS of $2.25, up from previous quarters.
**Cash Position:** $706.6 million in cash and investments, no debt outstanding.
Financial Highlights
Financial Performance Overview:
- Revenue: $541.9 million, up 45% QoQ and 13% YoY.
- Gross Profit: $282.6 million, with a gross margin of 52.2%.
- Operating Income: $156.2 million, representing 28.8% of revenue.
- Net Income: $125.3 million, leading to an EPS of $2.25, up from previous quarters.
- Cash Position: $706.6 million in cash and investments, no debt outstanding.
- Free Cash Flow Margin: Roughly 1%, indicating cashflow optimization.
Key Trends:
- Revenue growth primarily driven by new product launches and increasing adoption in smartphones. Management noted that the September quarter had one additional week of production, contributing to higher revenue recognition.
- Cost control measures have been effective, reflected in improvements in operating income despite rising operating expenses.
- Continued focus on inventory management with increased levels attributed to fulfilling long-term commitments in supply chains, particularly with GlobalFoundries.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
541.86M
-12.46%
44.87%
Gross Profit
282.59M
-10.99%
49.58%
Operating Income
131.85M
-21.30%
181.78%
Net Income
102.14M
-26.37%
142.64%
EPS
1.92
-25.29%
143.04%
Key Financial Ratios
currentRatio
5.34
grossProfitMargin
52.2%
operatingProfitMargin
24.3%
netProfitMargin
18.9%
returnOnAssets
4.34%
returnOnEquity
5.3%
debtEquityRatio
0.08
operatingCashFlowPerShare
$0.16
freeCashFlowPerShare
$0.1
priceToBookRatio
3.36
priceEarningsRatio
15.86
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Strategic Growth Insights from Management:
- "We delivered record revenue and earnings per share for the September quarter... due to strong demand for products shipping into smartphones," stated CEO John Forsyth. This places emphasis on the growth trajectory stemming from the flagship smartphone audio business.
- Regarding new market penetration, Forsyth noted, "We secured our first high-volume mainstream design win with our latest PC codec...this represents a considerable opportunity in the laptop market."
- CFO Ulf Habermann indicated, "We expect higher unit volumes due to new smartphone launches which have positively impacted Q3 guidance." This suggests sustained momentum into the following quarters.
"To maintain leadership in our core flagship smartphone audio business is our primary goal while diversifying into new markets like laptops," said CEO John Forsyth.
— John Forsyth
"We are excited about the opportunities ahead, given the potential increase in content in smartphones with our high-performance mixed signal solutions," noted John Forsyth.
— John Forsyth
Forward Guidance
Management provided guidance expecting revenue for Q3 FY 2025 to range between $480 million to $540 million, addressing seasonal fluctuations and the impact of fiscal calendar adjustments from prior years. As indicated by CFO Ulf Habermann, *"The December quarter reflects one less week due to timing in our fiscal calendar, impacting year-over-year comparisons significantly."* Investors should consider the broader context of seasonal demand shifts when evaluating quarterly performance.
Management also anticipates another favorable gross margin range of 51% to 53% for Q3, asserting commitments to cost management while fostering product development investment.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
CRUS Focus
52.15%
24.30%
5.30%
15.86%
SWKS
41.10%
10.20%
1.16%
36.98%
QRVO
42.60%
0.93%
-0.51%
-140.96%
ADI
45.90%
18.10%
0.86%
81.92%
LSCC
60.80%
20.30%
3.24%
88.11%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Cirrus Logic Inc's commitment to development within the smartphone audio and mixed-signal areas positions it favorably for future growth amidst strong revenue growth trends. The company's strategic focus on diversifying applications and products, especially in the laptop segment, opens further avenues for expansion. Conversely, potential risks related to market volatility, competition, and supply chain dependencies must be monitored closely. Overall, the outlook remains positive, supported by strong financial fundamentals and proactive management strategies. Investors interested in technology and semiconductor sectors should consider CRUS as a compelling opportunity for long-term growth and continuity.
Key Investment Factors
Growth Potential
Cirrus Logic's ongoing expansion into the laptop and mixed-signal semiconductor markets represents substantial growth avenues. Management's introductions of innovative audio codecs and amplifiers into smartphone and laptop segments are set to drive revenue streams, showcasing a diversified product portfolio.
Profitability Risk
The company faces operational risks from supply chain dependencies, particularly with wafer purchase commitments and inventory levels that may fluctuate based on market demand patterns. Competitively, there’s increased pressure from rivals in both semiconductor and consumer electronics space.
Financial Position
With $706.6 million in cash and no outstanding debt, Cirrus Logic maintains a robust balance sheet, positioned to invest in future growth opportunities while managing operational expenses effectively.
SWOT Analysis
Strengths
Strong revenue growth indicating robust market demand for product offerings.
No outstanding debt, providing financial flexibility for investments and strategic initiatives.
Significant advancements in product technology and innovation, leading to competitive differentiation.
Weaknesses
Dependence on smartphone market, which may experience cyclical fluctuations.