Can Cirrus Logic's Strong Q1 Offset Cautious Q2 Revenue Guidance?

Cirrus Logic, Inc. CRUS delivered record fiscal first-quarter results, but its next-quarter outlook makes the post-earnings picture less straightforward. Smartphone demand and high-performance mixed-signal momentum remain supportive.

The counterweight is a fiscal second-quarter revenue midpoint that implies a year-over-year decline, alongside higher operating expenses and delayed PC growth. Investors must weigh those pressures against an expanding product pipeline.

Cirrus Logic's Q1 Beat Sets a High Bar

Fiscal first-quarter adjusted earnings reached $1.84 per share, up 21.9% year over year and above the Zacks Consensus Estimate of $1.45. Revenues increased 12.9% to about $460 million, supported by higher smartphone component sales.

Demand remained strong for custom boosted amplifiers and smart codecs. Cirrus expects those products to ship across multiple future smartphone generations, supporting its core audio business while research and development resources move toward newer applications.

CRUS HPMS Growth Broadens the Smartphone Story

High-Performance Mixed-Signal revenues climbed to $210.7 million from $167.2 million a year earlier and represented 46% of quarterly sales. Development remains active across a next-generation camera controller, a smart power integrated circuit for 3D sensing and additional battery and power products.

Texas Instruments Incorporated TXN reported second-quarter 2026 revenue growth of 23%, led by industrial, data center and automotive demand. Analog Devices, Inc. ADI posted 37% fiscal second-quarter revenue growth across all end markets. Those results provide broader mixed-signal demand context as Cirrus works to expand beyond its mobile concentration.

Cirrus Logic's Q2 Outlook Turns Mixed

For the fiscal second quarter, Cirrus expects revenues of $510-$570 million. The $540 million midpoint implies 17% sequential growth but a 4% year-over-year decline, creating a tougher comparison after the June-quarter performance.

The outlook will test whether higher smartphone content and newer products can produce sustained growth beyond seasonal improvement. Weaker fiscal 2027 PC expectations also reduce one near-term diversification driver.

CRUS Spending and Wafer Benefits Shape Margins

GAAP gross margin is projected at 52%-54%. The range includes a temporary benefit from favorably priced wafers purchased under prior agreements with GlobalFoundries, with that tranche expected to largely sell through during the quarter.

Non-GAAP operating expenses are expected at $140-$146 million, up from $135.4 million in the first quarter. Full-year operating expenses are also expected to rise as Cirrus increases research and development investment.

Cirrus Logic's PC Delays Shift Growth to 2027

Management lowered fiscal 2027 PC revenue expectations because of constrained supply of a key industry platform, memory and component shortages and delayed model introductions. The company characterized those issues as timing-related rather than a change in the underlying opportunity.

Customer interest in Cirrus' low-power smart codec for AI-enabled PCs remained strong, with multiple designs targeted for calendar 2027. Several customers also announced PCs based on NVIDIA's RTX Spark platform that are expected to ship later in 2026 with Cirrus amplifiers and codecs.

CRUS Signals Temper the Post-Earnings Read

The earnings beat and HPMS expansion support the longer-term product story, but the fiscal second-quarter year-over-year decline, higher spending and delayed PC growth keep the near-term setup cautious. New content will need to translate into steadier growth.

CRUS currently carries a Zacks Rank #5 (Strong Sell). It has a Growth Score of B, Momentum Score of B and VGM Score of B, while its Value Score is C. The B scores indicate favorable characteristics in several styles, but Style Scores complement the Zacks Rank. With the Rank at #5, the near-term signal remains unfavorable despite the strong first-quarter results. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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