Cirrus Logic FY Conference Summary Company Overview - **Company**: Cirrus Logic (NasdaqGS:CRUS) - **Date of Conference**: December 11, 2025 Key Industry Insights - **AI Spending Trend**: There is a significant trend in AI spending, particularly in data centers, with over $3 trillion announced for data center investments. Cirrus Logic sees potential in the edge computing space as AI applications expand beyond data centers [3][4][5] - **Automotive Sector**: Cirrus Logic is entering the automotive haptics market, addressing consumer dissatisfaction with current automotive interfaces. The company aims to enhance user experience through advanced haptic feedback technology [8][10][13] - **PC Market Dynamics**: The transition from legacy audio interfaces (HDA) to new architectures (SDCA) is expected to drive growth in the PC segment. Cirrus Logic estimates that 15%-20% of laptops currently use SDCA, with a target of nearly 100% adoption in the next few years [39][41][89] Core Company Strategies - **Power Efficiency**: Cirrus Logic focuses on creating power-efficient chips to support intensive computing at the edge, which is crucial for AI applications [4][5] - **Voice Technology**: The company has a strong portfolio in voice-enabling IP, positioning itself to capitalize on the growing trend of voice interfaces in AI devices [6][92] - **Automotive Haptics**: The company has announced automotive haptics products aimed at improving user interaction in vehicles, which is currently lagging behind consumer electronics [10][13][21] Financial Outlook - **Revenue Growth**: Cirrus Logic anticipates doubling its revenue from the PC segment in fiscal 2026, starting from low tens of millions in fiscal 2025 [37][39] - **Mainstream PC Revenue**: By fiscal 2026, approximately 50% of Cirrus Logic's PC-related revenue is expected to come from mainstream devices priced between $800 and $1,000, marking a significant growth trajectory [89] Product Development and Innovation - **Camera Controllers**: The company has seen a sixfold increase in processing capabilities for camera controllers over five years, indicating ongoing innovation in this area [70][74] - **Battery Technology**: Cirrus Logic is developing differentiated IP around battery technology to enhance system performance and power efficiency [81][82] M&A and Capital Allocation - **M&A Strategy**: Cirrus Logic is open to pursuing acquisitions that can accelerate growth in non-phone segments, leveraging its strong IP assets [98] - **Capital Return Strategy**: The company maintains a consistent capital allocation strategy, prioritizing organic growth opportunities, followed by potential acquisitions, and then share buybacks [101][103] Conclusion - **Future Focus**: Investors should pay attention to Cirrus Logic's growth in the PC and automotive markets, as well as its ongoing efforts to expand content at its largest customer. The transition to SDCA in laptops and advancements in AI-enabled devices are expected to be significant growth drivers [105][107]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Cirrus Logic (CRUS) - Cirrus Logic currently holds a Momentum Style Score of B, indicating potential for strong performance based on price changes and earnings estimate revisions [3] - The company has a Zacks Rank of 1 (Strong Buy), which historically outperforms the market when combined with a Style Score of A or B [4] Price Performance - Over the past week, CRUS shares increased by 2.89%, while the Zacks Electronics - Semiconductors industry rose by 4.96% [6] - In a longer timeframe, CRUS shares have gained 5.57% over the past quarter and 18.64% over the last year, outperforming the S&P 500's gains of 5.34% and 14.25%, respectively [7] Trading Volume - The average 20-day trading volume for CRUS is 478,999 shares, which serves as a baseline for assessing price movements [8] Earnings Outlook - In the last two months, three earnings estimates for CRUS have been revised upwards, raising the consensus estimate from $7.07 to $7.73 [10] - For the next fiscal year, three estimates have also moved higher, with no downward revisions during the same period [10] Conclusion - Given the positive momentum indicators and earnings outlook, CRUS is positioned as a strong buy candidate for investors seeking short-term opportunities [12]

Core Insights - Cirrus Logic Inc. (CRUS) has launched its first automotive haptic driver family, the CS40L51, CS40L52, and CS40L53, achieving AEC-Q100 automotive reliability certification [1][11] - The company aims to enhance in-car experiences with advanced haptic technology, improving tactile feedback for drivers and passengers [3][4] Product Launch and Features - Engineering samples of the new haptic drivers are currently available, with mass production expected to start in December 2025 [2][11] - The CS40L51 features Sensor-less Velocity Control (SVC), real-time Audio-to-Haptics (A2H) synchronization, and active vibration compensation for high-fidelity feedback [5] - The CS40L52 improves closed-loop performance with faster response and automatic compensation for manufacturing and temperature variations [6] - The CS40L53 utilizes Click Compensation to ensure consistent haptic effects across different actuators, enhancing user experience [6][7] Market Position and Strategy - Cirrus Logic is capitalizing on strong demand for components in smartphones and diversifying into new markets such as automotive, industrial, and professional audio [8] - The company is focused on leveraging its mixed-signal expertise to expand its addressable market and drive shareholder value [8] Financial Outlook - For the fiscal third quarter, Cirrus Logic expects revenues between $500 million and $560 million, with an estimated revenue of $531 million [9] - The company is experiencing a stronger product mix that is positively impacting margins, although rising R&D spending is increasing operating expenses [9]

Core Insights - Artificial intelligence is significantly transforming spending across various industries, benefiting companies like Nvidia and AMD, while negatively impacting others [1] Semiconductor and PC Industry - Wedbush Securities highlights that soaring demand for computer memory is squeezing companies linked to traditional PC and mobile sectors, adversely affecting Intel, HP, Synaptics, Qualcomm, Qorvo, and Cirrus Logic [1] - The report indicates that due to concentrated memory supply and AI-driven demand, DRAM contract prices are expected to rise over 30% by Q4 2025, with NAND flash prices potentially increasing by at least 20% [2] - Memory constitutes about 20% of the PC bill of materials, and a 27.5% average price increase in memory could lead to a 5.5% impact on sales costs, compressing gross margins for manufacturers like HP by 300-440 basis points [2] Autonomous Vehicles - The rise of autonomous vehicles is projected to negatively impact ride-hailing companies such as Uber and Lyft, as Tesla's first fleet of driverless cars is set to launch in Austin, Texas by the end of the year [2][3] - Autonomous fleets can transport people and goods without human labor, marking a significant shift in transportation economics since the introduction of ride-hailing services a decade ago [3] - As autonomous networks scale, value will shift towards platforms that own fleets, have data accumulation, and benefit from closed-loop economic advantages, undermining the asset-light models of Uber and Lyft [3] Advertising Sector - The emergence of agentic AI is causing a significant shift in advertising spending, with Wedbush downgrading Pinterest's rating and predicting negative impacts on The Trade Desk as advertisers move towards platforms with proven conversion rates, such as Amazon, Meta, Google, and AppLovin [2][3] - In an agentic AI landscape, advertising budgets are expected to flow towards platforms that offer rich first-party data, measurable conversion rates, and short feedback loops from signal to sale [3] Software as a Service (SaaS) Companies - Major SaaS companies like Adobe, Docusign, and Workday may face negative impacts as some firms pivot towards usage-based models, while high-cost product companies are likely to be more affected [3][4] - Historically, disruptors in enterprise software first succeed in niche applications before threatening established competitors, with Adobe, Docusign, and Workday facing the greatest risks [4] - Wedbush downgraded Nice Systems from "outperform" to "neutral," lowering the target price from $170 to $120 [4] Retail Sector - The impact of agentic AI is also disrupting various areas within the retail sector, including intermediary organizations like Instacart [4]

Core Viewpoint - Cirrus Logic reported strong second-quarter fiscal 2026 earnings, exceeding expectations, driven by robust demand in the smartphone component market, while also making strides in diversification efforts across various sectors [2][3][4]. Financial Performance - Adjusted EPS for Q2 fiscal 2026 was $2.83, surpassing the Zacks Consensus Estimate of $2.10, and up from $2.25 in the prior-year quarter [2]. - Revenues reached $561 million, at the high end of guidance ($510-$570 million), with a 38% sequential increase and a 4% year-over-year rise [3]. - Non-GAAP gross margin improved to 52.5% from 52.2% year-over-year, attributed to a favorable product mix [7]. - Non-GAAP operating income grew 6.9% year-over-year to $167 million, with an operating profit margin increase to 29.8% from 28.8% [9]. Segment Performance - The High-Performance Mixed-Signal segment contributed 43% to total revenues, with a year-over-year revenue growth of 7.8% to $242.8 million [6]. - The Audio segment's sales increased by 0.5% to $318.2 million, contributing 57% to total revenues [6]. Diversification Efforts - The company is expanding its presence in the PC market, announcing its first mainstream consumer laptop design and enhancing partnerships with leading PC platform vendors [4]. - Cirrus Logic's audio and voice processing chips are increasingly adopted in laptops and tablets, with growing engagement in emerging segments like professional audio, industrial, automotive, and imaging [5]. Cash Flow and Shareholder Returns - The company ended the fiscal second quarter with cash and marketable securities of $645.9 million, up from $478.3 million a year earlier [11]. - Cirrus Logic generated $92.2 million in net cash from operations, significantly higher than $8.2 million in the previous year, and reported free cash flow of $87.7 million [11]. - The company repurchased 362,000 shares worth $40 million during the quarter, with $414.1 million remaining under its share repurchase authorization [12]. Outlook - For Q3 fiscal 2026, Cirrus Logic expects revenues between $500 million and $560 million, with GAAP gross margin projected between 51-53% [13]. - Estimates for the company have trended upward, with a consensus estimate shift of 8.72% in the past month, indicating positive market sentiment [14][16].

Core Viewpoint - Cirrus Aircraft Ltd. has launched 'Cirrus Next', an aircraft trade-in and upgrade program aimed at simplifying the process of purchasing a new Cirrus aircraft [1] Group 1: Program Features - Cirrus Next provides a streamlined upgrade pathway to a new aircraft [1] - The program includes a trade-in option for the aircraft currently owned by customers [1] - It also offers a transition aircraft that can be purchased through the Cirrus Next program [1] Group 2: Customer Benefits - The program eliminates the complexities associated with managing two aircraft simultaneously [1] - It addresses potential gaps in aircraft ownership during the upgrade process [1]

Core Viewpoint - Cirrus Logic (CRUS) is identified as a strong buy with a Zacks Rank of 1, despite having a C for Value and a D for Growth, indicating potential undervaluation in the context of a hot semiconductor sector [1] Company Overview - Cirrus Logic, Inc. specializes in mixed-signal processing solutions, with product lines including audio and High-Performance Mixed-Signal (HPMS) products. The company operates in various geographical segments including China, Hong Kong, Vietnam, South Korea, India, the United States, and the Rest of the World [2] Earnings Performance - Cirrus Logic has consistently exceeded the Zacks Consensus Estimate in the last four quarters, with the most recent EPS reported at $2.83, surpassing the estimate of $2.40 by $0.43, resulting in a 17.9% positive earnings surprise. The average positive surprise over the last four quarters is 31% [4] Earnings Estimates Revisions - Earnings estimates for Cirrus Logic have been revised upwards, with the full year 2025 estimate increasing from $7.07 to $7.73 and the 2026 estimate rising from $7.05 to $7.32 over the past 60 days [5] Valuation Metrics - The forward earnings multiple for Cirrus Logic is 15.5x, which is considered low, especially as the fiscal year revenue is projected to contract by 1.65%. However, the next fiscal year is expected to see a revenue growth of 1.2%. The price to book multiple is slightly over 3x, which may attract value investors [6] Operating Margins - Operating margins for Cirrus Logic have shown a positive trend, increasing from 17.9% to 18.5% and then to 19.8% over the last three quarters [7]

Core Insights - Three stocks are highlighted with strong momentum characteristics and a Zacks Rank of 1, indicating potential investment opportunities for investors [1][2][3] Company Summaries - **Dillard's, Inc. (DDS)**: - Zacks Consensus Estimate for current year earnings increased by 5.2% over the last 60 days - Shares gained 21.2% over the last three months, while the S&P 500 declined by 7.6% - Momentum Score: A [1] - **Installed Building Products, Inc. (IBP)**: - Zacks Consensus Estimate for current year earnings increased by 8.6% over the last 60 days - Shares gained 69.2% over the past six months, compared to the S&P 500's decline of 16.8% - Momentum Score: A [2] - **Cirrus Logic, Inc. (CRUS)**: - Zacks Consensus Estimate for current year earnings increased by 9.3% over the last 60 days - Shares gained 23.1% over the last six months, while the S&P 500 declined by 16.8% - Momentum Score: B [3]

Core Insights - Five stocks have been added to the Zacks Rank 1 (Strong Buy) List, indicating strong potential for investment Group 1: Company Earnings Estimates - TAL Education Group (TAL) has seen a Zacks Consensus Estimate for its current year earnings increase of 18% over the last 60 days [1] - Cirrus Logic, Inc. (CRUS) has experienced a 9.3% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Third Coast Bancshares, Inc. (TCBX) has also seen a 9.3% increase in its current year earnings estimate over the last 60 days [2] - Installed Building Products, Inc. (IBP) has had an 8.6% increase in its current year earnings estimate over the last 60 days [2] - The Vita Coco Company, Inc. (COCO) has experienced a 5.1% increase in its current year earnings estimate over the last 60 days [3]

Core Insights - The semiconductor industry is experiencing growth driven by the increasing demand for AI, Generative AI, IoT, and advanced manufacturing processes [1][5][9] - Key players such as Lam Research, Cirrus Logic, and FormFactor are positioned to benefit from this trend, with strong earnings outlooks and stock performance [1][16][20] Industry Overview - The Zacks Electronics - Semiconductors industry includes companies providing a variety of semiconductor technologies, including packaging, testing services, and factory automation [3] - The industry serves multiple end markets, including consumer electronics, communications, computing, industrial, and automotive sectors [4] Growth Drivers - The demand for AI-supportive chips from hyperscalers is a significant growth driver, supported by increased AI-related spending [1][5] - The rise of smart devices requiring advanced computing capabilities is further propelling industry demand [7] - Advanced packaging technologies are in high demand due to the need for miniaturization and improved performance [8] Market Performance - The Zacks Electronics - Semiconductors industry has outperformed the S&P 500 and the broader Zacks Computer and Technology sector, appreciating 57.8% over the past year compared to 26.8% and 16.1% respectively [14] - The industry's current forward 12-month price-to-earnings ratio stands at 34.81X, higher than the S&P 500's 23.47X and the sector's 29.15X [15] Company Highlights - **Lam Research (LRCX)**: Strong demand for high-bandwidth memory (HBM) and expected robust equipment spending in 2026, with a year-to-date stock appreciation of 128.5% [16][17] - **Cirrus Logic (CRUS)**: Benefiting from demand for custom-boosted amplifiers and expanding market share in the Android ecosystem, with a year-to-date stock appreciation of 19.9% [18][19] - **FormFactor (FORM)**: Dominating in HBM and DRAM markets, with a year-to-date stock appreciation of 25.8% and increasing earnings estimates [20]