Cirrus Logic Reports Record Q2 Revenue Amidst PC Market Growth and Android Segment Nuances
## Cirrus Logic Posts Record Quarterly Revenue, Navigates Market with Strong PC Growth and Android Softness
**Cirrus Logic Inc.** (**CRUS**) reported robust financial results for the second quarter of fiscal year 2026, with record revenue driven by strong sequential growth. Despite these positive indicators, the company's stock experienced a modest decline in aftermarket trading, signaling a nuanced investor response to both its successes in the personal computer (**PC**) market and ongoing challenges in the Android segment.
## The Quarter in Detail: Exceeding Expectations
For the second quarter of fiscal 2026, Cirrus Logic reported **revenue of $561 million**, marking a significant **38% sequential increase** and a **4% year-over-year advance**. This figure surpassed analyst forecasts by 3.8% and landed at the higher end of the company's guidance range. Earnings per share (**EPS**) for the quarter reached **$2.83**, considerably outperforming the projected **$2.07**. The company also reported a non-GAAP gross margin of **52.5%** and non-GAAP net income of **$150 million**. At the close of the quarter, Cirrus Logic maintained a solid financial position with **$896 million in cash and investments**.
Product developments included the launch of a new **custom-boosted amplifier**, contributing to the company's diversified offerings. Looking ahead, Cirrus Logic has provided guidance for the third quarter of fiscal 2026, projecting revenue to be between **$500 million and $560 million**, with a gross margin anticipated to range from **51% to 53%**.
## Nuanced Market Reaction Amidst Strong Performance
Despite reporting record revenue and exceeding earnings estimates, Cirrus Logic's stock experienced a **1.22% decline** in regular trading, followed by an additional **2.34% decrease** in aftermarket activity. This tempered market reaction, particularly given the strong headline numbers, suggests investors are weighing various factors. While the company's performance in the PC market has been a significant tailwind, concerns regarding softness in the Android segment, as highlighted in the core event analysis, appear to be influencing sentiment. The Q3 guidance, while substantial, may not have been aggressive enough to fully offset these segment-specific apprehensions.
## Broader Context and Strategic Positioning
Cirrus Logic's expanding presence in the PC market positions it favorably within an industry poised for significant growth. According to the International Data Corporation (**IDC**), the **PC market is forecasted to grow 4.3% year-over-year in 2025**, marking its first growth since 2021. Key drivers for this resurgence include the impending sunset of Windows 10 in October 2025, rapid advancements in **artificial intelligence (AI)**, and the necessity to replace aging hardware. **AI PCs are expected to constitute 43% of all PC shipments by 2025**, a substantial increase from 17% in 2024. This trend underscores a promising long-term opportunity for Cirrus Logic's solutions within this evolving ecosystem.
Conversely, the company continues to navigate challenges in its Android segment, which remains a focal point for future performance. In a move to enhance shareholder value, Cirrus Logic utilized **$40 million** during the quarter to repurchase approximately **362,000 shares** of its common stock at an average price of **$110.55**. The company retains **$414.1 million** remaining on its share repurchase authorization, indicating an ongoing commitment to capital return.
## Outlook: Sustaining Momentum and Addressing Headwinds
As Cirrus Logic moves into the third fiscal quarter, its guidance of **$500 million to $560 million** in revenue reflects a continued expectation of solid performance. The company's strategic focus on the burgeoning PC market, particularly with the rise of AI-driven computing, is anticipated to be a key growth driver. However, the performance of the Android segment will remain a critical area for investors to monitor. The ongoing share repurchase program could provide a degree of support for the stock amidst market fluctuations, as the company seeks to balance growth opportunities with efficient capital management in the coming quarters.
