On August 5, Cirrus Logic (NASDAQ:CRUS) reported record first-quarter revenue of $459.7 million, up 13% year over year, alongside non-GAAP earnings per share of $1.84, a June quarter record for the company. Smartphone component demand carried the print, and executives struck a confident tone about content growth across cameras, batteries and power circuits. But that optimism sat next to a quieter admission: the company’s PC segment outlook for fiscal 2027 just got smaller, and the reasons behind that cut matter for anyone weighing this stock’s next chapter.
Beyond The Smartphone Speaker
High-performance mixed-signal revenue climbed 26% year over year to $210.7 million, as Cirrus Logic expanded its footprint across camera, battery, and power applications inside smartphones. CEO John Forsyth pointed to a multi-generation collaboration with the company’s largest customer on camera controllers, plus continued work on a Smart Power IC for 3D sensing that stayed on schedule through the quarter. Audio, the company’s flagship business, still grew 3.7% to $249.0 million on demand for custom boosted amplifiers and smart codecs, and Forsyth said those parts should keep shipping across multiple future product generations.
The company is also pushing past smartphones. During the quarter, Cirrus Logic taped out a new family of analog front-end components aimed at smart meters, with sampling expected in the September quarter and potential spillover into EV charging, data center metrology and grid monitoring. On the PC side, a new low-power smart codec built for always-on wake word detection drew strong customer interest, and products using Nvidia’s RTX Spark platform are expected to ship later in 2026 carrying Cirrus Logic amplifiers and codecs. A fresh wafer supply agreement with GlobalFoundries locks in capacity and pricing through calendar 2028 and advances a shift toward domestic manufacturing in Malta, New York. Underneath it all sits $1.2 billion in cash and investments, no debt, and $598.6 million in trailing 12-month operating cash flow, funding $34.5 million in share buybacks during the quarter and another $50.5 million afterward.
Where The Cracks Are Showing
The company trimmed its fiscal 2027 PC segment outlook, and Forsyth laid out three specific culprits: constrained supply of a key industry platform, memory and component shortages pressuring pricing across the PC market, and OEMs responding by delaying new model launches and stretching the life of older platforms. Those delayed models typically carry higher content and higher volume for Cirrus Logic, so Forsyth said the slippage “pushes out some of the growth we would otherwise have seen in our PC business this year.”
Costs are creeping up elsewhere too. CFO Jeffrey Woolard noted that year-over-year gross margin gains were partially offset by higher freight and supply chain costs, and operating expenses rose $135.4 million, up $15.9 million from a year ago on higher R&D headcount, with management expecting full-year opex to climb further. Q2 gross margin guidance of 52% to 54% includes a temporary lift from favorably priced GlobalFoundries wafers that should mostly sell through during the quarter, after which margin is expected to normalize. Inventory days rose to 110 from 104 the prior quarter, and non-GAAP free cash flow margin fell to 11% in the June quarter from 28% over the trailing twelve months, partly because the company is now buying its own testers rather than relying on assembly partners. Android revenue kept shrinking as a share of the total as management leaned toward PC and industrial opportunities instead.
Reading The Market’s Mood
Hedge fund ownership of Cirrus Logic rose from 29 funds to 36 quarter over quarter, which points to institutions building rather than trimming their positions. Short interest sits at 8.62% of float, high enough to signal a real bear camp rather than routine hedging. Yet the stock trades at a forward P/E of just 12.48 as of September 3, a modest multiple for a company touting record earnings and multiple new growth avenues. That combination suggests that the market hasn’t fully settled on which story about Cirrus Logic to believe yet.
The Bigger Picture
Cirrus Logic’s quarter captures a company in transition, still leaning on smartphone audio and content growth while planting seeds in smart meters, AI PCs and industrial sensing. The GlobalFoundries agreement and strong cash position give it room to keep investing even as PC timing slips. For the diversification story to keep winning skeptics over, the smart meter and camera pipelines need to convert into revenue on schedule. For the caution to prove out, the PC delays and margin normalization after the wafer benefit fades would need to weigh more heavily than the new markets can offset.
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