Q4 Revenue: $424.5 million, above guidance range. Full Fiscal Year 2025 Revenue: $1.9 billion, up 6% year-over-year. Non-GAAP Gross Profit (Q4): $227.1 million. Non-GAAP Gross Margin (Q4): 53.5%. Non-GAAP Gross Profit (Fiscal Year 2025): $997.4 million. Non-GAAP Gross Margin (Fiscal Year 2025): 52.6%. Non-GAAP Operating Expenses (Q4): $120 million. Non-GAAP Operating Income (Q4): $107.1 million, 25.2% of revenue. Non-GAAP Operating Expenses (Fiscal Year 2025): $494.1 million. Non-GAAP Operating Income (Fiscal Year 2025): $503.3 million, 26.5% operating margin. Non-GAAP Net Income (Q4): $90.6 million, $1.67 per share. Non-GAAP Net Income (Fiscal Year 2025): $416.6 million, $7.54 per share. Cash and Investments: $835 million at fiscal year-end. Inventory (Q4): $299.1 million, 138 days of inventory. Cash Flow from Operations (Q4): $130.4 million. CapEx (Q4): $9.2 million. Non-GAAP Free Cash Flow Margin (Q4): 29%. Share Repurchases (Fiscal Year 2025): $261 million, 2.3 million shares. Q1 Fiscal Year 2026 Revenue Guidance: $330 million to $390 million. Q1 Fiscal Year 2026 Gross Margin Guidance: 51% to 53%.

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Release Date: May 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Cirrus Logic Inc (NASDAQ:CRUS) delivered revenue of $424.5 million in the March quarter, exceeding the top end of their guidance range. For the full fiscal year 2025, the company achieved revenue of $1.9 billion, marking a 6% year-over-year increase. The company reported record GAAP and non-GAAP earnings per share for the full fiscal year. Cirrus Logic Inc (NASDAQ:CRUS) returned $261 million to shareholders through share repurchases, setting a new record for a full fiscal year. The company made significant progress in expanding its product portfolio, including new generation products in the smartphone audio business and high-performance mixed signal areas.

Negative Points

Revenue in Q4 fiscal year 2025 was down 24% sequentially, primarily due to a reduction in smartphone volumes. The company is facing uncertainties related to the macroeconomic environment and potential impacts from tariffs. Non-GAAP operating expenses for the fiscal year 2025 increased by $23.7 million, primarily due to higher employee-related expenses and variable compensation. Inventory levels increased, with days of inventory rising to 138 days, up 40 days sequentially. Guidance for Q1 fiscal year 2026 indicates a revenue decline of 15% sequentially and 4% year-over-year at the midpoint.

Story Continues

Q & A Highlights

Q: Can you provide a preview of what your largest customer represented for your fiscal year '25 revenue, and did you see any pull forward in production due to tariffs? A: Our largest customer represented 89% of our fiscal year '25 revenue. Regarding pull forwards, we observed a very limited extent of pull-ins in the March quarter due to anticipated tariffs, but they were not material to our results. The tariffs were announced after the March quarter, so their impact was minimal. - John Forsyth, CEO

Q: Can you give us a progress report on your PC-related traction and expectations for the current fiscal year? A: We achieved low tens of millions of dollars in revenue from the PC market in fiscal '25, as expected. For fiscal '26, we anticipate doubling that revenue as more designs come to market. We are expanding our design wins and expect to ship in over 150 different SKUs across major laptop OEMs, which will drive future growth. - John Forsyth, CEO

Q: Is HPMS expected to surpass audio, and what is the timeline for this transition? A: Yes, we expect HPMS to surpass audio over time, but we haven't set a specific timeline. Both segments are growing, and HPMS offers significant SAM expansion opportunities. Currently, there's a pause in the ratio due to a major refresh of our audio content, but we anticipate continued growth in HPMS. - John Forsyth, CEO

Q: What is the potential opportunity in the automotive market, and when can we expect to see revenues? A: We've been shipping legacy products into the automotive market and are now refreshing those products. We see long-term opportunities in audio, timing, and haptic solutions, potentially representing a $1 billion additional SAM. However, the timeline for significant revenue impact is uncertain due to the long automotive design cycles. - John Forsyth, CEO

Q: Can you provide insights into the camera controller content roadmap and its future potential? A: We see continued opportunity in camera controllers through increased attach rates, enhanced processing capabilities, and additional channels for driving camera components. We have a rich roadmap and expect to continue growing value in this space. - Jeff Woolard, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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