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Cirrus Logic (CRUS +10%) is cruising higher following its Q1 (Jun) results last night. CRUS reported a huge EPS beat, its fifth consecutive beat of at least $0.26. Revenue rose a heathy 18% yr/yr to $374 mln, well ahead of analyst expectations due to stronger than expected shipments into smartphones. The Q2 (Sep) revenue guidance was also impressive at $490-550 mln, which was much better than expected.

• CRUS's largest customer by far is Apple (AAPL), which represented 87% of FY24 sales (up from 83% in FY23 and 79% in FY22), so there is a high correlation between the two companies. Last week, Apple reported Q3 (Jun) results that were roughly as expected with a nice EPS beat. iPhone performed well with revenue being a bit better than street estimates.
• As we noted in our preview, JunQ is typically the lowest revenue quarter of the year for CRUS because consumers are waiting for the new iPhone, which usually gets unveiled in September. So, to see this huge was upside a pleasant surprise and bodes well for the next couple of quarters when iPhone 16 debuts. Speaking of SepQ, the revenue guidance was well above range. CRUS said it expects inventory to increase from JunQ in support of new smartphone launches expected this fall.
• Besides earnings, CRUS was pretty excited about some new products in its flagship smartphone audio business. CRUS achieved what it described as a very significant milestone in JunQ. It began ramping production of its next-generation custom boosted amplifier and its first 22-nanometer smart codec ahead of new product launches expected later this year.
• Specifically, CRUS is excited about the performance, efficiency, and system cost improvements that these new components will deliver. Importantly, CRUS expects that both the boosted amplifier and the new smart codec will ship for multiple generations of customer devices following their introduction. As a reference point, over the past six years, the preceding smart codec and boosted amplifier have shipped over 1 bln units and 3.5 bln units, respectively.
• Longer term, its goal is to continue to broaden its content in smartphones beyond audio. With new customer introductions that CRUS expects to see later this year, it should benefit from more favorable content in smartphones, including its third generation camera controller. Also, it believes advanced power and battery-related technologies represent great opportunities. It also has a number of R&D programs related to high-efficiency charging, battery management, and system-side power delivery.
• CRUS says another key part of its strategy is to expand into new applications and markets outside of smartphones. In particular, CRUS is excited about laptops. Today, it has design wins with each of the top six laptop OEMs worldwide and is actively pursuing many future design opportunities. CRUS sees significant customer demand and engagement around its audio codec, boosted amplifier, haptics driver, and power converter products.

Overall, this was an impressive way to start FY25 for Cirrus Logic and provides good momentum heading into the expected iPhone 16 launch next month. Given Apple's in-line results last week, we were expecting a pretty quiet seasonal quarter with most of the focus on the SepQ guidance. However, smartphone demand was stronger than expected and JunQ became the story. Also, we got more color on CRUS's expansion into other areas, which sounds pretty compelling.