CIRRUS LOGIC, INC. Q1 FY2026 earnings call

• In the flagship smartphone audio business, the latest generation custom boosted amplifier and 22-nanometer smart codec had a positive impact, enabling better audio/voice experiences and power efficiency improvements.
• Outside of custom audio solutions, continued success in Android ecosystem with new flagship smartphones featuring components to launch in H2 calendar year.
• Progress in high-performance mixed signal solutions with camera controller product line success and investments in battery, power, sensing domains.
• Leveraging expertise into new markets like laptops with next-generation PC amplifier and codec designed into new laptops, collaboration with Compal to address audio challenges in laptops, and ramping production of ADCs, stacks, and audio codecs for general market including professional audio, automotive, industrial, and imaging end markets.

In the first quarter of fiscal year 2026, Cirrus Logic delivered revenue of $407.3 million, which was above the top end of the guidance range. Non-GAAP gross profit in the June quarter was $214.3 million with a non-GAAP gross margin of 52.6%. Non-GAAP operating expense for the first quarter was $119.5 million, and non-GAAP operating income was $94.9 million or 23.3% of revenue. The balance sheet was strong with $847.8 million in cash and investments at the end of the June quarter, inventory was $279 million down from the prior quarter.

• Q2 fiscal 2026 revenue expected in range of $510 million to $570 million.
• GAAP gross margin expected to range from 51% to 53%.
• Non-GAAP operating expense expected to range from $131 million to $137 million.
• Impact of the One Big Beautiful Bill Act on taxes not reflected in Q2 guidance as the company is evaluating the legislation's impact.

• Projections and forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from projections. Refer to the press release, shareholder letter, latest Form 10-K, and other SEC filings for risk factors that could cause actual results to differ from current expectations.

Q: Congrats on the results. What's driving the delta between expected and actual results?

A: Thanks, Chris. Big picture is strong demand for smartphones. We guide based on available information. Strong demand remained robust during a typical slower period, and launch of a lower-cost product earlier in the year contributed. Difficult to put a number on tariff-related pull-ins or pull ahead of demand but think it contributed somewhat.

Q: Check in on diversification efforts outside largest customer. How is the PC side and auto opportunity?

A: Auto is early stage but seeing engagement; we've started reinvigorating it. On PC side, continue to track progress path with design activity around new codec and amplifier products, and collaboration with Compal addressing audio challenges in laptops. Also, progress towards mainstream volumes in PC space with expected revenue from mainstream devices increasing in fiscal 2026 compared to prior years.

Q: Seasonality and inventory expectations. How to think about seasonality and inventory in Q2?

A: More weighted towards first half due to camera content shipping earlier, pull-ins, and supply chain factors. Inventories expected to decrease in Q2 due to GlobalFoundries commitments trailing off as we manage customer demand and GF contract.

Q: AI opportunities. Any new areas or products related to AI?

A: On product side, all areas. We want to be part of enablers for largest customer's AI features. Believe voice-centric devices and enabling voice technology are key, as AI unlocks conversational interface. Also, power efficiency is an area where we can make impact as AI features consume power, and we have power-efficient technologies.