Cirrus Logic(CRUS) - 2026 Q2 - Quarterly Results

Financial Performance - In Q2 FY26, Cirrus Logic reported record revenue of $561.0 million, a 38% increase quarter-over-quarter and a 4% increase year-over-year[4] - Q2 FY26 net sales reached $560.96 million, a 4% increase from $541.86 million in Q2 FY25[35] - Net income for Q2 FY26 was $131.60 million, representing a 29% increase from $102.14 million in Q2 FY25[35] - Basic earnings per share for Q2 FY26 were $2.57, up from $1.92 in Q2 FY25, reflecting a 34% increase[35] - GAAP Net Income for Q2 FY26 was $131,596, an increase of 29% compared to $102,140 in Q2 FY25[38] - Non-GAAP Net Income for Q2 FY26 reached $149,980, up from $125,289 in Q2 FY25, reflecting a growth of 19.8%[38] - GAAP Diluted Earnings Per Share (EPS) for Q2 FY26 was $2.48, compared to $1.83 in Q2 FY25, representing a 35.7% increase[38] - Non-GAAP Diluted EPS for Q2 FY26 was $2.83, an increase of 25.8% from $2.25 in Q2 FY25[38] Margins and Expenses - GAAP gross margin for the September quarter was 52.5%, consistent with the previous quarter and up from 52.2% in Q2 FY25[7] - Operating profit was 25.8% on a GAAP basis and 29.8% on a non-GAAP basis, with GAAP operating expenses totaling $149.6 million[8] - Gross profit for Q2 FY26 was $294.37 million, with a gross margin of 52.5%, compared to 52.2% in Q2 FY25[35] - Research and development expenses for Q2 FY26 totaled $110.02 million, slightly down from $112.93 million in Q2 FY25[35] - GAAP Operating Expenses guidance for Q3 FY26 is projected to be between $151 million and $157 million[49] - Non-GAAP Operating Expenses for Q3 FY26 are expected to be between $128 million and $134 million after adjustments[49] - Stock-based compensation expense for Q3 FY26 is estimated at $21 million, and amortization of acquisition intangibles at $2 million[49] Cash Flow and Investments - Cirrus Logic's cash and investment balance at the end of Q2 FY26 was $896.0 million, up from $847.8 million in the prior quarter[16] - Free cash flow for Q2 FY26 was $92,214, significantly higher than $8,231 in Q2 FY25, indicating a substantial improvement in cash generation[44] - Net cash provided by operating activities for the twelve months ended September 27, 2025, was $557.319 million, with Q2'26 contributing $92.214 million[47] - Free Cash Flow (Non-GAAP) for the twelve months ended September 27, 2025, was $534.171 million, with Q2'26 contributing $87.704 million[47] - Cash Flow from Operations as a percentage of revenue (GAAP) was 29% for the twelve months ended September 27, 2025, and 16% for Q2'26[47] - Free Cash Flow Margin (Non-GAAP) was 27% for the twelve months ended September 27, 2025, and 16% for Q2'26[47] - The company aims to maintain a Free Cash Flow margin above 25% in the upcoming quarters, reflecting its commitment to operational efficiency[47] Future Outlook and Strategy - The company expects revenue for the December quarter to range from $500 million to $560 million, reflecting a 6% sequential decline and approximately 5% year-over-year decline at the midpoint[4] - Cirrus Logic secured its first mainstream consumer laptop design, expected to ship in the next calendar year, as part of its strategy to grow market share in the PC market[22] - The company is developing new products for power and battery technologies, viewing this as a long-term growth driver within its HPMS product line[20] - The company expects new end products utilizing its components to launch within the next 12 months, indicating ongoing innovation[34] - The first product designed for AI-enabled PCs is expected to sample with customers during the December quarter[34] - The company plans to leverage its mixed-signal design and advanced low-power signal processing expertise to drive growth opportunities in new applications and markets[23] - The company aims to leverage its mixed-signal design expertise to expand its addressable market and product portfolio[34] - Cirrus Logic anticipates combined GAAP R&D and SG&A expenses for Q3 FY26 to range from $151 million to $157 million[11] Inventory and Tax - The company anticipates a slight sequential decrease in inventory levels[34] - The effective tax rate for the full fiscal year 2026 is projected to be non-GAAP[34]