Group 1 - Cirrus Logic, Inc. announced its financial results for the third quarter of fiscal year 2025 on February 4, 2025 [4] - The conference call included participation from key executives, including the CEO and Interim CFO [3] - The company provided non-GAAP financial measures in its results, with reconciliations available on the Investor Relations website [5] Group 2 - The Q&A session following the financial results announcement was open to analysts covering the company [4] - The call was recorded for replay purposes, indicating the importance of the information shared [4]

Company Performance - Cirrus Logic reported quarterly earnings of $2.51 per share, exceeding the Zacks Consensus Estimate of $2.03 per share, but down from $2.89 per share a year ago, representing an earnings surprise of 23.65% [1] - The company achieved revenues of $555.74 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 8.97%, although this is a decline from year-ago revenues of $618.98 million [2] - Over the last four quarters, Cirrus Logic has consistently surpassed consensus EPS and revenue estimates [2] Market Outlook - Cirrus Logic shares have underperformed the market, losing about 0.3% since the beginning of the year compared to the S&P 500's gain of 1.9% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at $1 on $357.05 million in revenues for the coming quarter and $6.41 on $1.78 billion in revenues for the current fiscal year [7] Industry Context - The Electronics - Semiconductors industry, to which Cirrus Logic belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable environment for performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Cirrus Logic's stock performance [5][6]

Cirrus Logic surpassed earnings expectations for Q3 FY25, driven by robust revenue and cost discipline.Cirrus Logic (CRUS 2.10%), a leading provider of low-power, high-precision mixed-signal processing solutions, recently announced its earnings for the third quarter of fiscal year 2025 on February 4, 2025. The company reported revenue of $555.7 million, which was higher than both the $510 million analyst consensus and the $540 million high end of its management expectations. Meanwhile, its Non-GAAP earnings ...

Investor Relations Update As of February 4, 2025 Safe Harbor Statement Except for historical information contained herein, the matters set forth in this presentation contain forward-looking statements, including industry market projections; our revenue growth opportunities; our ability to fuel product and application diversification; our ability to maintain our leadership position in smartphone audio; our ability to increase HPMS content in smartphones; our ability to leverage our strength in audio and HPMS ...

Financial Performance - Net sales for the third quarter of fiscal year 2025 decreased by $63.2 million, or 10%, to $555.7 million from $619.0 million in the third quarter of fiscal year 2024[88]. - Net sales for the first nine months of fiscal year 2025 increased by $54.6 million, or 4%, to $1.5 billion from $1.4 billion for the first nine months of fiscal year 2024[89]. - Net income for the third quarter of fiscal year 2025 was 21% of net sales, compared to 23% for the third quarter of fiscal year 2024[87]. - Income before income taxes for Q3 FY2025 was $153.7 million, down from $172.1 million in Q3 FY2024, with an effective tax rate of 24.5% compared to 19.4%[105]. - For the first nine months of FY2025, income before income taxes was $350.3 million, up from $304.3 million in FY2024, with an effective tax rate of 25.7% versus 24.5%[105]. Expenses - Gross margin for the third quarter of fiscal year 2025 was 53.6%, up from 51.3% in the third quarter of fiscal year 2024[93]. - Research and development expense for the third quarter of fiscal year 2025 was $113.0 million, an increase of $0.3 million from $112.7 million in the third quarter of fiscal year 2024[95]. - Selling, general and administrative expense for the third quarter of fiscal year 2025 was $39.0 million, an increase of $1.4 million from $37.6 million in the third quarter of fiscal year 2024[97]. - Research and development expense for the first nine months of fiscal year 2025 was $331.3 million, an increase of $8.2 million from $323.1 million for the first nine months of fiscal year 2024[96]. Cash Flow and Investments - Cash generated from operations for the first nine months of FY2025 was $314.0 million, an increase from $251.1 million in the same period of FY2024[107]. - Net cash used in investing activities was $111.2 million in the first nine months of FY2025, compared to $60.8 million in FY2024, primarily for marketable securities and capital expenditures[108]. - Net cash used in financing activities was $179.1 million in the first nine months of FY2025, mainly for stock repurchases totaling $161.0 million[109]. - Cash flow from operations in FY2025 was impacted by a $57.4 million unfavorable change in working capital, primarily due to increases in accounts receivable and inventory[107]. Customer and Market Information - International sales accounted for approximately 99% of net sales for the third quarters of fiscal years 2025 and 2024[90]. - The largest customer, Apple Inc., represented approximately 91% of total net sales for the third quarter of fiscal year 2025[92]. Financial Facilities and Future Outlook - The company has a $300 million Revolving Credit Facility, which matures on July 8, 2026, and had no outstanding amounts as of December 28, 2024[111]. - Future capital requirements will depend on sales growth, market acceptance, R&D projects, and potential acquisitions, with sufficient cash and credit available for the next 12 months[110]. Taxation - The effective tax rates were adversely affected by provisions in the Tax Cuts and Jobs Act of 2017, impacting R&D expenditure treatment and GILTI inclusions[105]. Risk Management - The company uses forward contracts to manage foreign currency exchange risk, with no material changes in market risk assessments since the last annual report[115].

[Executive Summary](index=2&type=section&id=Executive%20Summary) Cirrus Logic exceeded Q3 FY25 revenue guidance, driven by strong smartphone demand and new market momentum [Q3 FY25 Highlights](index=2&type=section&id=Q3%20FY25%20Highlights) Cirrus Logic reported Q3 FY25 revenue of $555.7 million, exceeding guidance, driven by strong smartphone product demand Q3 FY25 Key Financial Metrics | Metric | GAAP | Non-GAAP | | :---------------- | :----- | :------- | | Revenue | $555.7M | $555.7M | | Gross Profit | $297.8M | $298.1M | | Gross Margin | **53.6%** | **53.6%** | | Operating Income | $145.8M | $168.9M | | Operating Profit | **26.2%** | **30.4%** | | Net Income | $116.0M | $138.3M | | Diluted EPS | **$2.11** | **$2.51** | - Q3 FY25 revenue of **$555.7 million** was significantly above the top end of guidance, primarily due to stronger-than-expected demand for **smartphone products**[2](index=2&type=chunk)[4](index=4&type=chunk) - The company gained momentum in the **laptop business**, aligning with previous expectations, and began sampling **timing products** for automotive and professional audio applications[2](index=2&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) Q3 FY25 saw revenue growth from smartphones, improved gross margins, and increased operating expenses [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) Q3 FY25 revenue reached $555.7 million, marking a 3% sequential increase driven by higher smartphone unit volumes, but a 10% year-over-year decrease partly due to fiscal quarter timing and lower smartphone unit volumes Revenue Breakdown by Quarter and Product Line | Metric | Q3 FY25 | Q2 FY25 | Q3 FY24 | Sequential Change | YoY Change | | :---------------- | :------ | :------ | :------ | :---------------- | :--------- | | Revenue | $555.7M | $541.8M | $618.9M | **+3%** | **-10%** | | Audio Revenue | $346.3M | $316.6M | $378.6M | **+9.4%** | **-8.5%** | | HPMS Revenue | $209.5M | $225.3M | $240.4M | **-7.1%** | **-12.9%** | - The sequential increase in revenue was driven by higher smartphone unit volumes, while the year-over-year decrease was primarily due to lower smartphone unit volumes and fiscal quarter timing, partially offset by increased revenue from latest-generation products[4](index=4&type=chunk) - **Audio and High-Performance Mixed-Signal (HPMS) product lines** contributed **62%** and **38%** of total revenue, respectively, in Q3 FY25. **One customer** accounted for approximately **91%** of total revenue[6](index=6&type=chunk) [Gross Margin](index=3&type=section&id=Gross%20Margin) GAAP gross margin improved to 53.6% in Q3 FY25, up from 52.2% sequentially and 51.3% year-over-year Gross Margin Trends | Metric | Q3 FY25 | Q2 FY25 | Q3 FY24 | Sequential Change (bps) | YoY Change (bps) | | :---------------- | :------ | :------ | :------ | :---------------------- | :--------------- | | GAAP Gross Margin | **53.6%** | **52.2%** | **51.3%** | **+140** | **+230** | | Non-GAAP Gross Margin | **53.6%** | **52.2%** | **51.4%** | **+140** | **+220** | - The sequential and year-over-year increases in gross margin were largely due to a shift in product mix toward **higher-margin products**, with **lower supply chain costs** also contributing sequentially[7](index=7&type=chunk) [Operating Expenses and Profit](index=4&type=section&id=Operating%20Expenses%20and%20Profit) Q3 FY25 GAAP operating profit was 26.2% and non-GAAP was 30.4%, with GAAP operating expense increasing sequentially to $152.0 million Operating Performance Metrics | Metric | Q3 FY25 (GAAP) | Q3 FY25 (Non-GAAP) | | :---------------- | :------------- | :----------------- | | Operating Profit | **26.2%** | **30.4%** | | Operating Expense | **$152.0M** | **$129.2M** | - GAAP operating expense increased sequentially by **$1.3 million**, primarily due to higher **employee-related expenses**, offset by lower **stock-based compensation** and **product development costs**[9](index=9&type=chunk) - Total headcount at the end of Q3 FY25 was **1,667**[9](index=9&type=chunk) [Tax and Earnings Per Share (EPS)](index=4&type=section&id=Tax%20and%20Earnings%20Per%20Share%20(EPS)) GAAP diluted EPS for Q3 FY25 was $2.11, and non-GAAP diluted EPS was $2.51, both tax rates unfavorably impacted by R&D capitalization EPS and Effective Tax Rates | Metric | Q3 FY25 | Q2 FY25 | Q3 FY24 | | :----------------------- | :------ | :------ | :------ | | GAAP Diluted EPS | **$2.11** | **$1.83** | **$2.50** | | Non-GAAP Diluted EPS | **$2.51** | **$2.25** | **$2.89** | | GAAP Effective Tax Rate | **24.5%** | **27.0%** | **19.4%** | | Non-GAAP Effective Tax Rate | **21.8%** | **23.8%** | **18.4%** | - Both GAAP and non-GAAP effective tax rates were unfavorably impacted by the requirement to **capitalize and amortize R&D expenses**, a provision of the **Tax Cuts and Jobs Act of 2017**[12](index=12&type=chunk) - The company anticipates the impact of capitalized R&D will become less pronounced as additional years of R&D expenses are amortized[13](index=13&type=chunk) [Financial Position and Cash Flow](index=6&type=section&id=Financial%20Position%20and%20Cash%20Flow) Strong financial position with increased cash, investments, and substantial cash flow from operations [Balance Sheet Overview](index=6&type=section&id=Balance%20Sheet%20Overview) Cirrus Logic's cash and investment balance increased to $816.6 million at the end of Q3 FY25, with inventory expected to peak in the first half of FY26 Key Balance Sheet Items | Metric | Q3 FY25 | Q2 FY25 | Q3 FY24 | | :------------------------ | :------ | :------ | :------ | | Cash and Investment Balance | **$816.6M** | **$706.6M** | **$587.0M** | | Inventory | **$275.6M** | **$271.8M** | **$256.7M** | - The company expects **inventory to peak** during the first half of FY26 as it continues to fulfill demand and manage wafer purchase commitments[15](index=15&type=chunk) [Cash Flow and Capital Allocation](index=6&type=section&id=Cash%20Flow%20and%20Capital%20Allocation) Cash flow from operations for Q3 FY25 was $218.6 million, with $70.0 million returned to shareholders through share repurchases Cash Flow and Share Repurchase Summary | Metric | Q3 FY25 | | :-------------------------------- | :------ | | Cash Flow from Operations | **$218.6M** | | Shares Repurchased | **678,768** | | Average Repurchase Price | **$103.18** | | Cash Returned via Buybacks | **$70.0M** | | Remaining Repurchase Authorization | **$154.1M** | - Cirrus Logic anticipates strong cash flow generation over the long term and will continue to evaluate uses including **organic growth, M&A, and returning capital to shareholders**[14](index=14&type=chunk) [Business Strategy and Product Development](index=6&type=section&id=Business%20Strategy%20and%20Product%20Development) Strategy focuses on smartphone leadership, HPMS expansion, and diversification into new markets [Company Growth Strategy](index=6&type=section&id=Company%20Growth%20Strategy) Cirrus Logic's growth strategy is three-pronged: maintaining leadership in smartphone audio, increasing HPMS content in smartphones, and expanding into new applications and markets - The company's strategy focuses on **maintaining leadership in smartphone audio**, **increasing HPMS content in smartphones**, and **expanding into additional applications and markets** with existing and new components[16](index=16&type=chunk) [Smartphone Business](index=6&type=section&id=Smartphone%20Business) The company is experiencing success with its latest-generation custom boosted amplifier and first 22-nanometer smart codec in smartphones, expanding its HPMS presence - **Latest-generation custom boosted amplifier** and **first 22-nanometer smart codec** are shipping in recent smartphones, offering significant power and efficiency improvements and system design flexibility[17](index=17&type=chunk) - The company is expanding its **HPMS presence in smartphones**, benefiting from a favorable mix of devices including its **camera controllers** and actively pursuing opportunities in **high-efficiency charging, battery management, and system-side power delivery**[18](index=18&type=chunk)[19](index=19&type=chunk) - A **leading Android OEM** introduced a flagship smartphone featuring two Cirrus Logic boosted amplifiers and a **haptic driver**, receiving positive reviews[17](index=17&type=chunk) [New Applications and Markets](index=7&type=section&id=New%20Applications%20and%20Markets) Cirrus Logic is actively expanding beyond smartphones, with immediate opportunities in laptops and longer-term targets in professional audio, automotive, and industrial markets - The company is focused on leveraging its IP in laptops, shipping content to the **top five laptop OEMs**, with products included in **Intel's Lunar Lake and Arrow Lake processor reference designs**[20](index=20&type=chunk) - Market trends fueling demand for laptop products include thinner/lighter devices, **MIPI SoundWire® adoption**, and **AI-enabled devices**[20](index=20&type=chunk) - New products are being introduced for **professional audio, automotive, and industrial end markets**, including **timing products** designed for superior audio experiences and **high-performance audio data converters**[21](index=21&type=chunk) [Summary and Guidance](index=8&type=section&id=Summary%20and%20Guidance) Q4 FY25 guidance anticipates sequential revenue decrease, year-over-year increase, and stable gross margins [Q4 FY25 Outlook](index=8&type=section&id=Q4%2520FY25%20Outlook) For Q4 FY25 (March quarter), Cirrus Logic expects revenue between $350 million and $410 million, GAAP gross margin between 51% and 53%, and combined GAAP R&D and SG&A expenses between $141 million and $147 million Q4 FY25 Financial Guidance | Metric | Q4 FY25 Guidance | | :-------------------------------- | :---------------- | | Revenue | **$350M - $410M** | | GAAP Gross Margin | **51% - 53%** | | Combined GAAP R&D and SG&A Expenses | **$141M - $147M** | | Non-GAAP Operating Expenses | **$119M - $125M** | - At the midpoint, Q4 FY25 revenue is expected to be **down 32% sequentially but up 2% year over year**[5](index=5&type=chunk) [Use of Non-GAAP Financial Information](index=9&type=section&id=Non-GAAP%20Financial%20Information) Non-GAAP financial measures supplement GAAP results, offering insights for management and investors [Non-GAAP Disclosure](index=9&type=section&id=Non-GAAP%20Disclosure) Cirrus Logic provides non-GAAP financial information to supplement GAAP results, used internally for evaluation and believed useful for investors - Non-GAAP financial information is provided to **supplement GAAP results** and is used internally by management to evaluate and manage the company[27](index=27&type=chunk)[28](index=28&type=chunk) - The company is unable to provide GAAP effective tax rate guidance or reconciliation without unreasonable efforts due to **future stock price and stock-based compensation information** not being available[27](index=27&type=chunk) [Safe Harbor Statement](index=9&type=section&id=Safe%20Harbor%20Statement) Forward-looking statements are subject to risks and uncertainties that could impact future results [Forward-Looking Statements and Risks](index=9&type=section&id=Forward-Looking%20Statements%20and%20Risks) The report contains forward-looking statements regarding future business growth, cash flow, inventory, market expansion, and financial forecasts, subject to various risks and uncertainties - Forward-looking statements are based on current expectations and are subject to **risks and uncertainties** that could cause actual results to differ materially[29](index=29&type=chunk)[30](index=30&type=chunk) - Key risks include the **level and timing of orders and shipments**, **customer cancellations**, and **changes in future smartphone unit volumes**[30](index=30&type=chunk) [Consolidated Financial Statements](index=11&type=section&id=Consolidated%20Financial%20Statements) Detailed GAAP financial statements include operations, balance sheets, and cash flows [Consolidated Condensed Statement of Operations](index=11&type=section&id=Statement%20of%20Operations) The Consolidated Condensed Statement of Operations provides detailed GAAP financial results for Q3 FY25, Q2 FY25, and Q3 FY24, as well as the nine months ended December 28, 2024, and December 30, 2023 Consolidated Condensed Statement of Operations (GAAP) | Metric (in thousands) | Q3'25 (Dec. 28, 2024) | Q2'25 (Sep. 28, 2024) | Q3'24 (Dec. 30, 2023) | | :---------------------- | :-------------------- | :-------------------- | :-------------------- | | Net sales | $555,738 | $541,857 | $618,984 | | Cost of sales | $257,951 | $259,267 | $301,520 | | Gross profit | $297,787 | $282,590 | $317,464 | | Income from operations | $145,769 | $131,852 | $167,548 | | Net income | $116,005 | $102,140 | $138,723 | | Diluted earnings per share | $2.11 | $1.83 | $2.50 | [Consolidated Condensed Balance Sheet](index=14&type=section&id=Balance%20Sheet) The Consolidated Condensed Balance Sheet presents the company's financial position as of December 28, 2024, March 30, 2024, and December 30, 2023 Consolidated Condensed Balance Sheet (GAAP) | Metric (in thousands) | Dec. 28, 2024 | Mar. 30, 2024 | Dec. 30, 2023 | | :-------------------------- | :------------ | :------------ | :------------ | | Total current Assets | $1,250,450 | $1,106,192 | $1,185,385 | | Total assets | $2,363,240 | $2,231,576 | $2,217,113 | | Total current liabilities | $210,913 | $186,393 | $178,594 | | Total long-term liabilities | $189,529 | $228,169 | $237,759 | | Total stockholders' equity | $1,962,798 | $1,817,014 | $1,800,760 | [Consolidated Condensed Statement of Cash Flows](index=15&type=section&id=Statement%20of%20Cash%20Flows) The Consolidated Condensed Statement of Cash Flows outlines the cash inflows and outflows from operating, investing, and financing activities for Q3 FY25 and Q3 FY24 Consolidated Condensed Statement of Cash Flows (GAAP) | Metric (in thousands) | Q3'25 (Dec. 28, 2024) | Q3'24 (Dec. 30, 2023) | | :------------------------------------ | :-------------------- | :-------------------- | | Net cash provided by operating activities | $218,588 | $313,692 | | Net cash used in investing activities | $(39,132) | $(36,971) | | Net cash used in financing activities | $(98,771) | $(70,595) | | Net increase in cash and cash equivalents | $80,685 | $206,126 | | Cash and cash equivalents at end of period | $526,444 | $483,931 | [GAAP to Non-GAAP Reconciliations](index=12&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) This section provides detailed reconciliations between GAAP and non-GAAP financial measures for various metrics, highlighting adjustments for items like stock-based compensation and acquisition intangibles GAAP to Non-GAAP Reconciliation Summary | Metric (in thousands) | Q3'25 GAAP | Q3'25 Non-GAAP | | :------------------------------------ | :--------- | :------------- | | Net Income | $116,005 | $138,309 | | Diluted EPS | $2.11 | $2.51 | | Operating Income | $145,769 | $168,900 | | Operating Expenses | $152,018 | $129,238 | | Gross Profit | $297,787 | $298,138 | | Effective Tax Rate | **24.5%** | **21.8%** | | Free Cash Flow | N/A | $211,901 | - Adjustments for non-GAAP measures primarily include amortization of acquisition intangibles, **stock-based compensation expense**, lease impairment, restructuring costs, and acquisition-related costs[37](index=37&type=chunk) - Free cash flow is calculated as GAAP cash flow from operations less capital expenditures[47](index=47&type=chunk)

Article Summary - The article discusses the challenges of predicting future results and emphasizes the importance of experience and valuable news in making reasonable estimates for Cirrus Logic's December quarter performance [1] - The author shares their extensive investment experience, including surviving major market crashes, and highlights their use of trading systems developed with TradeStation [1] - The author's professional background includes several decades as a process control engineer and holding a JD from an eastern law school [1] Analyst's Position - The analyst holds a beneficial long position in Cirrus Logic (CRUS) through stock ownership, options, or other derivatives [2] - The article represents the analyst's personal opinions and is not influenced by compensation or business relationships with the mentioned company [2] Seeking Alpha's Disclosure - Seeking Alpha clarifies that past performance does not guarantee future results and does not provide investment recommendations or advice [3] - The views expressed in the article may not reflect those of Seeking Alpha as a whole, and the platform is not a licensed securities dealer, broker, or investment adviser [3] - Seeking Alpha's analysts include both professional and individual investors who may not be licensed or certified by any regulatory body [3]

Cirrus Logic Inc. (CRUS) recently teamed up with Intel Corporation (INTC) to unveil a reference design based on the new Intel Core Ultra processors (series 2), formerly codenamed Arrow Lake. The collaboration emphasizes CRUS’ commitment to innovation and delivering premium audio experiences for PC users across mainstream, premium and high-end market segments.Investors responded positively to this partnership, with CRUS’ shares going up 2.7% and closing the session at $105.2 on Jan. 7.The new Intel reference ...

Core Insights - Cirrus Logic reported strong Q2 fiscal 2025 earnings, with adjusted EPS of $2.25, exceeding estimates by 10.8% and growing 25% year-over-year [2] - Quarterly revenues reached $541.9 million, surpassing estimates by 4.2% and increasing 12.6% year-over-year, driven by demand in the smartphone and laptop markets [3] Financial Performance - The company's largest customer accounted for 90% of total revenues in Q2 [4] - The High-Performance Mixed-Signal segment contributed 42% to total revenues, with revenues rising 13.6% year-over-year to $225.3 million [6] - The Audio segment's sales grew 11.9% to $316.6 million, contributing 58% to total revenues [7] - Non-GAAP gross margin expanded to 52.2%, a 90 basis point increase year-over-year, while non-GAAP operating income grew 17.9% to $156.2 million [8] Balance Sheet and Cash Flow - Cirrus Logic ended Q2 with cash and marketable securities of $478.3 million, up from $312.4 million [9] - The company generated $8.2 million of net cash from operations, a significant improvement from a cash utilization of $22.7 million in the prior-year quarter [10] - Free cash flow for the quarter was $5.5 million, and the company repurchased shares worth $50 million [10] Fiscal Q3 Outlook - Management projects revenues between $480 million and $540 million for Q3 [11] - GAAP gross margin is expected to be in the range of 51-53% [13] - Non-GAAP operating expenses are estimated to be between $124 million and $130 million [14] Market Position and Estimates - Estimates for Cirrus Logic have trended downward, with a consensus estimate shift of -14.07% [15][16] - The company holds a Zacks Rank 3 (Hold), indicating an expectation of in-line returns in the coming months [18] Industry Comparison - Cirrus Logic is part of the Zacks Electronics - Semiconductors industry, where Amkor Technology reported revenues of $1.86 billion, reflecting a year-over-year change of +2.2% [19]

Cirrus Logic (NASDAQ: CRUS ) reported record revenue for September followed by a flat quarter-over-quarter and 10% lower year-over-year December guidance. Our title wasn't just concerning Cirrus, but rather it considers the strangeness of two other heavily biased Apple (I have been an investor for several decades enduring the 87 crash, 2000 crash, and 08 crash. I do use trading systems developed with TradeStation. I have enjoyed the rewards from both buy and hold and trading. My professional experiences inc ...