<div id="readability-page-1"><p>Cirrus Logic ((CRUS)) has held its Q4 earnings call. Read on for the main highlights of the call.</p><h3>Claim 55% Off TipRanks</h3><ul><li>Unlock  hedge fund-level data  and  powerful investing tools  for smarter, sharper decisions  </li><li> Discover top-performing stock ideas and upgrade to a portfolio of market leaders with  Smart Investor Picks  </li></ul> <p>Cirrus Logic’s latest earnings call struck an upbeat tone, as management highlighted record annual revenue and earnings, strong cash generation and solid demand across smartphones, PCs and new markets. Short‑term issues such as a sharp sequential revenue decline, higher freight costs and rising inventories were acknowledged, but framed as manageable side effects of seasonality and strategic investment.</p> <h2>Record Revenue Marks a New High</h2> <p>Cirrus Logic reported fiscal 2026 revenue of $2.0 billion, a 5% year‑over‑year increase and the highest in the company’s history. Management credited the gain to robust demand for smartphone components and stronger PC sales, underscoring the firm’s leverage to key consumer hardware trends.</p> <h2>Earnings Power Strengthens with Record EPS</h2> <p>Non‑GAAP earnings per share climbed to a record $9.26 in fiscal 2026, up from $7.54 a year earlier, representing growth of about 22.7%. The strong EPS performance reflects not only higher revenue but also disciplined cost control and favorable product mix across the portfolio.</p> <h2>Quarter Tops Guidance Despite Seasonality</h2> <p>Fourth‑quarter revenue came in at $448.5 million, exceeding the midpoint of guidance and rising 6% from the prior year. This performance is notable given the usual seasonal slowdown, suggesting underlying demand remains resilient even as volumes fluctuate.</p> <h2>Margins Remain Healthy and Expand</h2> <p>For the fiscal year, non‑GAAP operating income reached $548.8 million, translating to an operating margin of 27.5%, up from 26.5% in the prior year. Q4 non‑GAAP gross margin stood at 53%, with the full year at 52.8%, underscoring solid profitability despite some quarterly cost pressures.</p> <h2>Cash Engine Fuels Shareholder Returns</h2> <p>The company ended the year with about $1.2 billion in cash and investments, up $319 million from the prior year, supported by $650.6 million in operating cash flow. Free cash flow margin was roughly 32%, and Cirrus returned $280 million to shareholders through repurchases of 2.5 million shares in fiscal 2026.</p> <h2>Core Products Show Strong Momentum</h2> <p>Cirrus reported ongoing strength in its latest custom‑boosted amplifiers and 22nm smart codecs, which are expected to have long life cycles in key devices. Demand and design activity remained robust for camera controllers and other high‑performance mixed‑signal products, reinforcing the company’s position in premium audio and signal‑chain solutions.</p> <h2>PC Business Gains Scale and SDCA Adoption</h2> <p>PC revenue expanded meaningfully, rising from the low tens of millions in fiscal 2025 to the “40s” in fiscal 2026 as adoption broadened. SDCA‑related PC revenue tripled, making up about 60% of PC revenue, and is projected to approach 80% in fiscal 2027 as mainstream devices are expected to account for more than half of PC sales.</p> <h2>Diversification and Manufacturing Initiatives Advance</h2> <p>Management emphasized expansion into professional audio, automotive, industrial and imaging markets, including ramps of ultra high‑performance ADCs and DACs. The company also highlighted its collaboration with GlobalFoundries to develop U.S.‑based process technology, enhancing manufacturing diversification and resilience for certain products.</p> <h2>Sequential Revenue Dip Highlights Seasonality</h2> <p>Despite the strong annual results, Q4 revenue dropped 23% sequentially, driven mainly by lower smartphone unit volumes. Management characterized this as seasonal and reflective of the company’s exposure to handset cycles rather than a structural shift in demand.</p> <h2>Quarterly Margin Pressure from Freight Costs</h2> <p>Gross margin in the quarter faced year‑over‑year pressure, which leadership tied largely to higher freight expenses. Even so, the company maintained that the broader fiscal‑year margin improvement, driven by favorable product mix, demonstrates underlying pricing power and operational discipline.</p> <h2>Inventory Build Raises Near‑Term Risk</h2> <p>Inventory rose to $240.9 million at year‑end from $189.5 million in the prior quarter, pushing days of inventory to 104. While this reflects preparation for future demand and product ramps, it also increases working capital and heightens risk if customer demand patterns were to change.</p> <h2>Pricing and General Market Softness Weigh</h2> <p>Management noted that fiscal 2026 growth was partially offset by pricing reductions and softer sales in the general market segment. These dynamics point to continued competitive and mix‑related pressures, which could temper revenue and margins in less specialized product areas.</p> <h2>Higher Operating Spend and R&amp;D Investment</h2> <p>Non‑GAAP operating expenses climbed by $12.3 million year over year in fiscal 2026, and the company signaled further increases ahead. For the first quarter of fiscal 2027, operating expenses are projected to rise, reflecting stepped‑up R&amp;D that is expected to weigh on near‑term earnings while funding future product initiatives.</p> <h2>Concentration and Long Ramps Remain a Factor</h2> <p>Cirrus reiterated its policy not to comment on its largest customer, underscoring ongoing concentration risk in its revenue base. The company also pointed out that strategic products, such as new smart power ICs for advanced sensing, typically require multi‑year development and ramp cycles, extending timelines before meaningful revenue contributions.</p> <h2>Guidance Signals Continued Growth</h2> <p>For the first quarter of fiscal 2027, Cirrus guided revenue between $430 million and $490 million, with the midpoint implying about 3% sequential and roughly 13% year‑over‑year growth. Non‑GAAP gross margin is expected at 51% to 53%, operating expenses at $132 million to $138 million and the tax rate at 16% to 18%, with management reiterating that R&amp;D‑driven OpEx will rise over the year.</p> <p>Cirrus Logic’s earnings call painted a picture of a company balancing record performance with disciplined investment for the future. While near‑term challenges such as seasonality, cost pressures and higher inventories bear watching, the combination of strong cash generation, expanding end‑market exposure and a growing PC and mixed‑signal franchise suggests the long‑term story remains firmly on track.</p></div>

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<p>Cirrus Logic reported record fiscal 2026 results with revenue of $2.0 billion, a 5% increase year-over-year, and a record EPS of $9.26, up 22.7%. Despite a 23% sequential revenue decline in Q4 due to seasonal factors, the company exceeded guidance with Q4 revenue of $448.5 million. Strong demand for smartphone components and PCs drove growth, while cash flow supported $280 million in shareholder returns. Management acknowledged challenges like rising inventories and freight costs but emphasized ongoing strength in core products and diversification efforts.</p>

Cirrus Logic Delivers Record Results, Eyes Further Growth