Cirrus Logic (CRUS, Financial) surged 10% following its impressive Q1 results. The company reported a significant EPS beat for the fifth consecutive quarter, with revenue up 18% year-over-year to $374 million, surpassing analyst expectations due to robust smartphone shipments. Q2 revenue guidance is set at $490-550 million, exceeding forecasts.
- Cirrus Logic's main customer is Apple (AAPL, Financial), contributing 87% of FY24 sales, up from 83% in FY23 and 79% in FY22. Apple's Q3 results showed a solid EPS beat, with iPhone revenue slightly exceeding expectations.
- Q1 is typically the lowest revenue quarter for Cirrus Logic as consumers await the new iPhone, usually launched in September. The strong Q1 results are a positive indicator for the upcoming quarters, especially with the iPhone 16 launch. Q2 revenue guidance was notably high, with inventory expected to rise to support new smartphone releases this fall.
- Cirrus Logic is also enthusiastic about new products in its smartphone audio segment. The company started ramping production of its next-generation custom boosted amplifier and its first 22-nanometer smart codec, ahead of new product launches later this year.
- The new components are expected to deliver performance, efficiency, and cost improvements. Cirrus Logic anticipates these components will be used in multiple generations of customer devices. The previous smart codec and boosted amplifier have shipped over 1 billion and 3.5 billion units, respectively, in the past six years.
- In the long term, Cirrus Logic aims to expand its smartphone content beyond audio. New customer introductions later this year should enhance its smartphone offerings, including a third-generation camera controller. The company also sees opportunities in advanced power and battery technologies, with several R&D programs focused on high-efficiency charging, battery management, and power delivery.
- Another strategic focus is expanding into new markets beyond smartphones. Cirrus Logic is particularly excited about laptops, having design wins with the top six laptop OEMs globally. The company is pursuing future design opportunities and sees strong demand for its audio codec, boosted amplifier, haptics driver, and power converter products.
Overall, Cirrus Logic's strong start to FY25 and the upcoming iPhone 16 launch provide solid momentum. The unexpectedly high smartphone demand in Q1 and the company's expansion into other areas are promising signs for the future.
