CRUS Q1 Earnings & Sales Top, Rise Y/Y on Diversified Market Tailwinds

Cirrus Logic Inc. (CRUS) reported first-quarter fiscal 2026 adjusted earnings per share (EPS) of $1.51, which surpassed the Zacks Consensus Estimate by 41%. The company reported adjusted EPS of $1.12 in the prior-year quarter.

Cirrus Logic generated revenues of $407.3 million, growing 9% year over year, reflecting strong customer demand, particularly for its flagship custom boosted audio amplifier and its newly introduced 22-nanometer smart codec, both of which gained steady traction across premium smartphone models. However, sequentially, revenues declined 4%, mainly due to a decrease in smartphone shipment volumes. The top line exceeded both management’s guidance ($330-$390 million) and the consensus mark of $364 million.

Its long-term growth strategy is built on three pillars-maintaining leadership in smartphone audio, expanding high-performance mixed-signal solutions for mobile devices and leveraging core expertise to enter new markets.

During the first fiscal quarter, CRUS not only maintained momentum with core smartphone customers but also expanded into emerging markets. The company continues to establish a presence in premium laptops, especially with its high-performance audio solutions, opening a new revenue stream. Market components are being adopted across automotive, professional audio systems, industrial applications and imaging equipment.

Cirrus Logic, Inc. Price, Consensus and EPS Surprise

Cirrus Logic, Inc. price-consensus-eps-surprise-chart | Cirrus Logic, Inc. Quote

The company’s largest customer accounted for 86% of total revenues in the fiscal first quarter.

The stock has declined 9% in the past year against the Zacks Electronics-Semiconductors industry’s growth of 54.8%.

Segment Details

This Texas-based company rearranged its reportable segments and created separate categories — High-Performance Mixed-Signal and Audio — in 2021. Cirrus Logic is expanding into other applications such as laptops, gaming, tablets and AR/VR.

Cirrus Logic’s High-Performance Mixed-Signal segment includes a few of its non-audio products. It contributed 41% to total revenues in the fiscal first quarter. Revenues from the same division grew 7.9% year over year to $167.2 million. We estimated the metric to be $150.4 million.

The Audio segment’s sales increased 9.6% to $240 million and contributed 59% to total revenues. Our estimate was $210.8 million for the segment.

Margins

Non-GAAP gross margin came in at 52.6% compared with 50.6% in the prior-year quarter, largely driven by a more favorable product mix. Sequentially, it declined from 53.5%, primarily due to a weaker product mix and normalization of pricing.

Cirrus Logic’s non-GAAP operating expenses rose 1.2% year over year to $119.5 million, mainly due to higher employee-related costs, partly offset by lower product development spending. OpEx fell by $0.5 million sequentially, mainly due to lower product development costs, reduced variable compensation and lower facility expenses. This was partially offset by higher employee costs from annual salary hikes.

Non-GAAP operating income of $94.8 million soared 33.3% year over year.

Non-GAAP operating profit margin rose to 23.3% from 19%.

Balance Sheet and Cash Flow

The company exited the fiscal first quarter with cash and marketable securities of $614.8 million compared with $595.8 million as of March 29, 2025.

As of June 28, 2025, accounts receivable were $214 million compared with $190.1 million in the previous-year quarter.

In the fiscal first quarter, CRUS generated $116 million as net cash from operations compared with $87.2 million in the prior-year quarter. Free cash flow was $113.4 million in the quarter under review.

The company repurchased almost 1 million shares worth $100 million in the reported quarter. As of June 28, 2025, it had $454.1 million worth of shares under its existing share repurchase authorization.

Fiscal Q2 2026 Business Outlook: Growth to Accelerate

Cirrus Logic anticipates a strong sequential uptick in the fiscal second quarter as customer demand accelerates, especially within smartphones.

Management projects revenues between $510 million and $570 million.

Combined GAAP R&D and SG&A are anticipated to be between $153 million and $159 million, respectively. Non-GAAP operating expenses are estimated to be in the band of $131-$137 million.

The GAAP gross margin is expected to be in the range of 51-53%.

CRUS’ Zacks Rank

Cirrus Logic currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

Recent Performance of Other Companies

International Business Machines Corporation (IBM) reported strong second-quarter 2025 results, with adjusted earnings and revenues beating the respective Zacks Consensus Estimate. Quarterly total revenues increased to $16.98 billion from $15.77 billion, driven by strong demand for hybrid cloud and AI, which fueled growth in the Software segment. On a constant currency basis, revenues were up 5% year over year. IBM exceeded the consensus estimate of $16.58 billion for revenues.

Cadence Design Systems (CDNS) reported second-quarter 2025 non-GAAP earnings per share (EPS) of $1.65, which beat the Zacks Consensus Estimate by 5.1%. The bottom line increased 28.9% year over year, exceeding management’s guided range of $1.55-$1.61. Revenues of $1.275 billion beat the Zacks Consensus Estimate by 1.3% and increased 20.3% year over year. The figure beat CDNS’ guided range of $1.25-$1.27 billion. The top line was driven by broad-based demand for its solutions, especially the AI-driven portfolio, amid robust design activity.

SAP SE (SAP) reported second-quarter 2025 non-IFRS earnings of €1.50 ($1.70) per share, climbing 37% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.63 per share. Driven by robust cloud growth, disciplined cost control and expanding AI capabilities, SAP reported total revenues of €9.03 billion ($10.24 billion) on a non-IFRS basis, representing a 9% year-over-year increase (up 12% at constant currency). The Zacks Consensus estimate was pegged at $10.37 billion.

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