Cirrus Logic (CRUS, Financial) experienced a significant drop of 8% following its Q2 results. The company reported a substantial EPS beat, marking its sixth consecutive beat of at least $0.20. Revenue increased by 12.6% year-over-year and 45% sequentially to $541.9 million, aligning with the higher end of its previous guidance of $490-550 million, driven by strong demand for smartphone products.

• CRUS provided downside revenue guidance for Q3, projecting $480-540 million. Although CRUS is known for conservative guidance, this was more severe than usual, surprising investors, especially after last quarter's optimistic guidance.
• Apple (AAPL, Financial) is CRUS's largest customer, accounting for 87% of FY24 sales. Apple's recent Q4 results were slightly better than expected, but its Q1 revenue guidance was lighter than anticipated.
• CRUS explained that its SepQ benefitted from an extra week of production during the peak ramp period, impacting DecQ guidance. Additionally, last year's DecQ saw higher Android production, affecting this year's year-over-year growth rate.
• In its smartphone audio business, CRUS launched its next-generation custom boosted amplifier and its first 22-nanometer smart codec, offering significant improvements in power, efficiency, and audio processing capabilities.
• CRUS is expanding into new markets beyond smartphones, particularly in the laptop sector. It secured its first high-volume mainstream design win with a PC codec in SepQ and shipped its first power product for laptops to multiple Tier 1 customers.

While CRUS showed strong performance in SepQ, the DecQ revenue guidance has caused investor unease. Despite CRUS's tendency for conservative guidance, this forecast appears unusually cautious. Concerns arose after Qorvo's (QRVO, Financial) weak results, mainly due to its Android exposure, making CRUS's guidance unexpected.