CIRRUS LOGIC, INC. Q2 FY2025 earnings call

• Long-term strategy includes maintaining leadership in core flagship smartphone audio, expanding in high-performance mixed signal in smartphones, and leveraging audio and mixed signal capabilities to enter new markets.
• In flagship smartphone audio, began shipping next-generation custom boosted amplifier and first 22 nanometer smart codec in recent smartphones, providing power efficiency and audio quality improvements.
• Camera controller product line has seen increased content in smartphones, with potential to add further value.
• Progress in laptop business with securing high-volume mainstream design win for PC codec and shipping power products for laptops, with more customer product introductions anticipated.

In the second quarter of Fiscal Year 2025, Cirrus Logic delivered record revenue of $541.9 million, which was near the high-end of the guidance range. Non-GAAP gross profit was $282.9 million with a non-GAAP gross margin of 52.2%. Non-GAAP operating expense was $126.8 million, and non-GAAP operating income was $156.2 million, or 28.8% of revenue. Non-GAAP net income was $125.3 million, resulting in an EPS of $2.25 for the quarter. The balance sheet was strong with $706.6 million in cash and investments at the end of the quarter.

• Q3 FY2025 revenue expected in the range of $480 million to $540 million.
• GAAP gross margin expected to range from 51% to 53%.
• Non-GAAP operating expense expected to range from $124 million to $130 million.
• FY2025 non-GAAP tax rate expected to be approximately 22% to 24%, unchanged from previous guidance.

• Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from projections.
• Wafer obligations and inventory build-up considerations as part of fulfilling commitments with GlobalFoundries.

Q: Christopher Rolland asked about the extra week in September and the effect on December, and about wafer obligations and inventory.

A: John Forsyth discussed factors affecting December comps including the extra week in September, 14-week quarter in FY '24, and earlier android production; Ulf Habermann talked about fulfilling wafer obligations and building inventory into early FY '26.

Q: Tore Svanberg asked about unusual linearity due to customer operating system and product cycle updates.

A: John Forsyth said the major factor shaping the September-December transition was the later ending of the September quarter, and it's hard to judge unusual linearity.

Q: Thomas O'Malley asked about seasonality and PC side tracking.

A: John Forsyth said they guide based on what they see, and the PC side is tracking to low tens of millions with momentum for fiscal '26.

Q: Ananda Baruah asked about context for smartphone growth.

A: John Forsyth said the company aims to be positioned for growth even if smartphone units are flat, with opportunities for incremental additions and new sockets.