Cirrus Logic(CRUS) - 2026 Q3 - Quarterly Report

Financial Performance - Net sales for Q3 FY2026 increased by $24.9 million, or 4%, to $580.6 million compared to $555.7 million in Q3 FY2025[89] - Net sales for the first nine months of FY2026 rose by $77.2 million, or 5%, to $1.55 billion from $1.47 billion in the same period of FY2025[90] - Approximately 99% of net sales for both Q3 FY2026 and FY2025 were international sales[91] - Apple Inc. accounted for approximately 94% of total net sales in Q3 FY2026, down from 91% in Q3 FY2025[93] Gross Margin - Gross margin for Q3 FY2026 was 53.1%, down from 53.6% in Q3 FY2025, primarily due to ASP reductions[94] - Gross margin for the first nine months of FY2026 was 52.7%, up from 52.3% in the same period of FY2025, driven by a more favorable product mix[95] Expenses - Research and development expense for Q3 FY2026 was $113.6 million, a slight increase from $113.0 million in Q3 FY2025[96] - Selling, general and administrative expense for Q3 FY2026 was $41.6 million, up from $39.0 million in Q3 FY2025[98] Cash Flow - Cash generated from operations for the first nine months of fiscal year 2026 was $499.2 million, up from $314.0 million in the same period of fiscal year 2025, reflecting a favorable change in working capital of $55.8 million[108] - Net cash used in investing activities decreased to $20.7 million in the first nine months of fiscal year 2026 from $111.2 million in the same period of fiscal year 2025, with capital expenditures and technology investments totaling $12.4 million[109] - Net cash used in financing activities was $240.0 million in the first nine months of fiscal year 2026, primarily for stock repurchases of $210.0 million, compared to $179.1 million in the same period of fiscal year 2025[110] Tax and Interest - Interest income for Q3 FY2026 was $9.5 million, compared to $8.4 million in Q3 FY2025, reflecting higher cash and marketable securities balances[100] - Effective tax rate for Q3 FY2026 was 13.6%, significantly lower than 24.5% in Q3 FY2025, due to changes in R&D expenditure capitalization rules[104] Future Outlook - Future capital requirements will depend on sales growth, market acceptance of products, and potential acquisitions, with expected future cash earnings and available borrowings deemed sufficient to meet both short-term and long-term needs[111] Credit and Market Risks - The company has a $300 million senior secured revolving credit facility, maturing on July 8, 2026, with no amounts outstanding as of December 27, 2025[112] - The company amended its credit agreement to replace LIBOR with Term SOFR for interest calculations as of March 20, 2023[113] - The company is exposed to market risks related to interest rates, currency movements, and the value of marketable securities, with established policies to mitigate these risks[115]