Cirrus Logic Pivots: Smart Meters and Secured Wafers as PC Growth Slips

Record June quarter but a tempered PC outlook and a new mixed-signal push signal a strategic rebalancing.

CRUS · Earnings Call · 2026-08-05

A Record Quarter, but a Shift in the Story

Cirrus Logic reported a record June quarter with revenue of $460 million, up 13% year-over-year, and non-GAAP EPS of $1.84. The headline, however, is less about the beat and more about what the company is choosing to emphasize: a new push into smart-metering mixed-signal products and a GlobalFoundries capacity deal, set against a reduced outlook for the PC market. The company is signaling that its future growth will be increasingly powered by smart meter and adjacent energy-monitoring applications, leveraging its high precision sensing and power IP.

We believe the underlying technology developed for these products can also extend beyond smart meters into a number of adjacent applications, including energy storage, data center DC metrology, EV charging, and grid monitoring.
John Forsyth · 2026-08-05

Smart Meters: A New Growth Vector

The new analog front-end family targets smart meters, a market with rising demand for more accurate energy monitoring due to grid strain and regulatory changes. In Q&A, John Forsyth explained that the company is "still in the early innings" but sees the products as a proof point for leveraging its mixed-signal expertise into new markets. The company expects to sample the products broadly this quarter and go to market in calendar 2028. This is a clear strategic expansion beyond smartphones, where the company's large customer concentration has been a persistent risk.

PC: A Timing Setback, Not a Structural One

Management walked back its prior optimism on PC growth for fiscal 2027. The constrained supply of a key industry platform, memory shortages, and OEM delays in new model launches all contributed. This is a stark contrast to the prior quarter's confidence. In the May call, John Forsyth said: “we believe we can deliver strong growth in fiscal '27.” — John Forsyth, Chief Executive Officer · 2026-05-06 Now, he attributes the shortfall to “timing rather than anything fundamental.” — John Forsyth · 2026-08-05 The company's input costs and supply chain pressures are also a recurring theme.

GlobalFoundries: Securing Capacity

To support the expanding product roadmap, Cirrus signed a new capacity reservation and wafer supply agreement with GlobalFoundries covering calendar years 2027–2028. This builds on a long-standing partnership and is a direct response to the broader semiconductor supply constraints. The collaboration also includes progress toward manufacturing on U.S. soil in Malta, New York, which is a geostrategic win. The company is also investing in testers for OSATs, a new capital expenditure that Jeff Woolard noted provides better returns.

Financial Health and Investment

The balance sheet remains strong with $1.2 billion in cash and no debt. The company is increasing R&D spending, which John Forsyth linked directly to the pipeline of opportunities. Research and development expense is up 4% year-over-year, and management expects further increases as they ramp the new product families. This is a deliberate trade-off: near-term margin pressure for long-term diversification. The near-term gross margin guidance includes a temporary benefit from favorable wafer pricing, which will normalize in Q2. We see this as a sign of disciplined cost management in the face of a challenging pricing environment.

Implications

Cirrus is at an inflection point. The record quarter underscores the strength of its core smartphone business, but the company is actively trying to reduce its reliance on that cyclical engine. The smart-meter initiative and the GlobalFoundries agreement are concrete steps toward that goal. The PC setback, while disappointing, is framed as a timing issue, but it highlights the fragility of that growth story under current supply-chain headwinds. The market seems to have taken notice: the stock is down roughly 28% over the past 90 days, but that is largely a drawdown from a peak, not a reaction to this specific call. The diversification narrative is real but will take time to materialize. This is a company that is positioning itself for the next decade, not just the next quarter.