Cirrus Logic (CRUS) Q1 EPS Jumps 35%

Core Insights - Cirrus Logic reported strong fiscal Q1 results, with non-GAAP earnings per share of $1.51 and GAAP revenue of $407.3 million, both exceeding Wall Street expectations [1][5][9] Financial Performance - Non-GAAP EPS of $1.51 surpassed the estimate of $1.01, reflecting a year-over-year increase of 34.8% from $1.12 in Q1 FY25 [2] - GAAP revenue reached $407.3 million, an 8.9% increase from $374.0 million in Q1 FY25 [2] - Gross margin improved to 52.6%, up 2.0 percentage points from 50.6% in the previous year [2][8] - Free cash flow surged to $113.4 million, a significant increase of 1,961.8% from $5.5 million in Q1 FY25 [2] Business Segments - Revenue from audio products was $240.0 million, up from $219.0 million in Q1 FY25, while high-performance mixed-signal chip sales reached $167.2 million [6] - The company is diversifying its revenue streams, with expectations for laptop market revenue to double in FY26 compared to FY25 [7] - New product offerings include high-performance digital-to-analog converters and advanced audio codecs aimed at professional audio and automotive systems [7] Customer Concentration and Strategy - Cirrus Logic's revenue is heavily reliant on Apple, which accounted for approximately 89% of annual net sales in FY25 [4] - The company focuses on sustained R&D investment to maintain its competitive edge in audio innovation and expand into new markets [4] Future Outlook - Management forecasts Q2 FY26 revenue between $510 million and $570 million, indicating strong sequential growth [9] - Gross margin is expected to remain stable at 51% to 53% for Q2 FY26, with projected non-GAAP operating expenses of $131 million to $137 million [9] - The company aims to reduce its reliance on Apple, with general market revenue potentially reaching 10% of total sales in the future [10]