Cirrus Logic (CRUS) Q2 Earnings & Revenues Beat, Rise Y/Y – November 2, 2022

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Cirrus Logic Inc (RAW Free Report) delivered strong results in the second quarter of fiscal 2023, with both upper and lower results beating the Zacks consensus estimate and increasing year over year.

The company reported adjusted earnings of $1.99 per share, beating Zacks’ consensus estimate by 37.2%. Net income increased 9.3% over the prior year quarter earnings of $1.82 per share.

Total revenue of $540.6 million beat Zacks’ consensus estimate by 14.9% and was up 16% year-over-year. Performance was driven by its strong mixed-signal content gains in smartphones as well as higher unit volume.

Segment details

This Texas-based company revamped its reportable segments and created a separate category in the fourth quarter of fiscal 2021, High Performance Mixed Signal and Audio. Cirrus Logic is expanding into other applications such as laptops, games, tablets and AR/VR.

by Cirrus Logic High performance mixed signal includes some of its non-audio products. It contributed 38% of total fiscal second quarter revenue. Revenue for the same division jumped 22.8% year over year to $202.7 million.

The audio segment sales increased 12.3% to $337.8 million and contributed 62% of total revenue.

Margins

Non-GAAP gross margin was 50.2%, which contracted 110 basis points (bps) year-over-year.

Cirrus Logic’s non-GAAP operating expenses increased 8.2% year over year to $123.9 million.

Non-GAAP operating income of $147.7 million increased 18.5% year over year. Additionally, non-GAAP operating profit margin increased 50 basis points to 27.3% from the prior year quarter.

Balance sheet and cash flow

The company ended the fiscal second quarter with cash and marketable securities of $427.9 million, up from $379.3 million as of June 25.

As of September 24, accounts receivable were $304.6 million, compared to $206.3 million recorded as of June 25.

During the second fiscal quarter, the company reported $36 million in net cash from operations, compared to $29 million in the prior year quarter.

The company repurchased 582,876 shares worth $50 million during the quarter under review. As of Sept. 24, the company had $586.1 million of shares remaining under its existing stock repurchase authorization. The company also announced an additional stock buyback worth $500 million during the fiscal first quarter.

Outlook

For the third quarter of fiscal 2023, the company expects revenue between $520 million and $580 million. R&D and general and administrative expenses combined are expected to be between $153 million and $159 million. Gross margin should be 49-51%.

Zacks ranking and key picks

Cirrus Logic currently wears a Zacks rank #4 (sale).

Some higher ranked stocks from the broader tech space are Pstorage (PSTG free report), Black Baud (BLKB free report) and Cadence Design Systems (CDN free report). All stocks carry a Zacks rank of #2 (buy). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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