Q3 2026 Cirrus Logic Inc Earnings Call

February 3, 2026

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic Q3 Fiscal Year 2026 Financial Results Q&A Session. At this time, all participants are in a listen-only mode. After a brief statement, we will open up the call for questions from analysts. Instructions for queuing up will be provided at that time. As a reminder, this conference call is being recorded for replay purposes. I would now like to turn the conference call over to Ms. Chelsea Heffernan, Vice President of Investor Relations. Ms. Heffernan, you may begin.

Speaker #1: Ladies and gentlemen, thank you for standing by. Welcome to the Cirrus Logic third quarter fiscal year 2026 financial results Q&A session. At this time, all participants are in a listen-only mode.

Speaker #1: After a brief statement, we will open up the call for questions from analysts. Instructions for queuing up will be provided at that time. As a reminder, this conference call is being recorded for replay purposes.

Speaker #1: I would now like to turn the conference call over to Ms. Chelsea Heffernan, Vice President of Investor Relations. Ms. Heffernan, you may begin.

Speaker #2: Thank you, and good afternoon. Joining me Forsyth, CIRRUS LOGIC's Chief Executive Officer and Jeff Woolard, our Chief Financial Officer. Today, at approximately 4:00 PM Eastern Time, we announced our financial results for the third quarter fiscal year 2026.

Chelsea Heffernan: Thank you, and good afternoon. Joining me on today's call is John Forsyth, Cirrus Logic's Chief Executive Officer, and Jeff Woolard, our Chief Financial Officer. Today, at approximately 4:00 PM Eastern Time, we announced our financial results for Q3 fiscal year 2026. The shareholder letter discussing our financial results, the earnings press release, and the webcast of this Q&A session are all available at the company's investor relations website. This call will feature questions from the analysts covering our company. Additionally, the results and guidance we will discuss on this call will include non-GAAP financial measures that exclude certain items. Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures are included in our earnings release and are all available on the company's investor relations website.

Q3 2026 Cirrus Logic Inc Earnings Call

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Cirrus Logic

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Q3 2026 Cirrus Logic Inc Earnings Call

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Tuesday, February 3rd, 2026 at 10:00 PM

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Speaker #2: The shareholder letter discussing our financial results; the earnings press release; and the webcast of this Q&A session are all available at the company's investor relations website.

Speaker #2: This call will feature questions from the analysts covering our company. Additionally, the results and guidance we will discuss on this call will include non-GAAP financial items.

Speaker #2: This call will feature questions from the analysts covering our company. Additionally, the results and guidance we will discuss on this call will include non-GAAP financial measures that exclude certain of these non-GAAP measures to their most directly comparable GAAP measures are included in our earnings release and are all available on the company's investor relations website.

Speaker #2: Please note that during the session, we may make projections and other forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially from projections.

Chelsea Heffernan: Please note that during this session, we may make projections and other forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially from projections. By providing this information, the company expressly disclaims any obligation to update or revise any projections or forward-looking statements, whether as a result of new developments or otherwise. Please refer to the press release and the shareholder letter issued today, which are available on the Cirrus Logic website, and the latest Form 10-K, as well as other corporate filings registered with the Securities and Exchange Commission, for additional discussion of risk factors that could cause actual results to differ materially from current expectations. Now I'd like to turn the call over to John.

Speaker #2: By providing this information, the company expressly disclaims any obligation to update or revise any projections or forward-looking statements, whether as a result of new developments or otherwise.

Speaker #2: the shareholder letter issued today, which Please refer to the press release and are available on the CIRRUS LOGIC website, and the latest Form 10-K, as well as other corporate filings registered with the securities and exchange commission, for additional discussion of risk factors that could cause actual results to differ materially from current

Speaker #1: Now I'd like to turn the

Speaker #1: call over to John.

Speaker #3: Thank you, Chelsea, and welcome to everyone joining today's call. As expectations. you've seen in the press release, CIRRUS LOGIC reported outstanding results for revenue of $580.6 the December quarter, delivering million above the top end of our stronger-than-anticipated demand for guidance range.

John Forsyth: Thank you, Chelsea, and welcome to everyone joining today's call. As you've seen in the press release, Cirrus Logic reported outstanding results for the December quarter, delivering revenue of $580.6 million above the top end of our guidance range. This was driven by stronger-than-anticipated demand for components shipping into smartphones and a favorable mix of end devices. We are also proud to have delivered record GAAP and non-GAAP earnings per share in the third quarter. In a few moments, I'll hand the call over to Jeff to discuss the financial results for the December quarter in detail, along with our outlook for the March quarter. Before we get to that, I'd like to provide an update on the recent progress we've been making across the key pillars of our strategy.

Speaker #3: This was driven by components shipping into smartphones and a favorable mix of end devices. We were also proud to have delivered record GAAP and non-GAAP earnings per share in the third quarter.

Speaker #3: In a few moments, I'll hand the call over to Jeff to discuss the financial results for the December quarter in detail. Along with our outlook for the March quarter.

Speaker #3: Before we get to that, I'd like to provide an update on the recent progress we've been making across the key pillars of our strategy.

Speaker #3: As I've outlined previously, our long-term strategy for growth at principles. First, we seek to CIRRUS is based around three maintain a strong leadership position in our core flagship smartphone audio business.

John Forsyth: As I have outlined previously, our long-term strategy for growth at Cirrus is based around three principles. First, we seek to maintain a strong leadership position in our core flagship smartphone audio business. Second, we aim to expand the value and range of high-performance mixed-signal solutions with which we serve our customers in smartphones and similar products. And third, we aim to leverage our world-class expertise and IP in both audio and high-performance mixed-signal to grow and broaden our business in new markets. I want to say a few words now about the progress we've made in the past quarter in each of these areas. In our flagship smartphone audio business, we saw very strong demand for our latest generation custom boosted amplifier and 22-nanometer smart codec.

Speaker #3: Second, we aim to expand the value and range with which we serve our customers in smartphones and similar products. And third, we aim to leverage our world-class expertise and IP in both audio and high-performance mixed-signal to grow and broaden our business in new markets.

Speaker #3: I want to say a few words now about the progress we've made in the past quarter in each of these areas. In our flagship smartphone audio business, we saw very strong demand for our latest generation custom-boosted amplifier and 22 nanometer smart codec.

Speaker #3: These products are based on innovative new architectures that are designed to enable system-level improvements with each new smartphone generation. Extending our product life cycles while also providing longer-term visibility and sustained revenue contribution.

John Forsyth: These products are based on innovative new architectures that are designed to enable system-level improvements with each new smartphone generation, extending our product life cycles, while also providing longer-term visibility and sustained revenue contribution. In our high-performance mixed-signal business, customer engagement around our camera controller roadmap remained strong during the December quarter. We are actively developing next-generation camera products that will deliver enhanced features, improved performance, and greater system efficiency, and we are excited about the opportunities in this space for the future. We also continue to invest R&D dollars in IP and capabilities around advanced battery and power applications, where we believe there is both opportunity to enhance existing content and grow content further. Across a range of areas, we see considerable opportunity to expand our value in smartphones with HPMS solutions and believe this will be an important driver for shareholder value creation in the coming years.

Speaker #3: In our high-performance mixed-signal business, customer engagement around our camera controller roadmap remained strong during the December quarter. We are actively developing next-generation camera products that will deliver enhanced features, improved performance, and greater system efficiency.

Speaker #3: And we are excited about the opportunities in this space for the future. We also continue to invest R&D dollars in IP and capabilities around advanced battery; we believe there is both opportunity to and power applications.

Speaker #3: content further. Across a range Where we of areas, we see considerable opportunity to expand our value in smartphones with HPMS solutions. And believe this will be an important driver for shareholder value creation in the coming years.

Speaker #3: Our third strategic priority is to leverage our audio and high-performance mixed-signal expertise into new applications and markets outside of smartphones. We've made great progress here, particularly in PCs, where we continued to build momentum.

John Forsyth: Our third strategic priority is to leverage our audio and high-performance mixed-signal expertise into new applications and markets outside of smartphones. We've made great progress here, particularly in PCs, where we continued to build momentum. Our progress in the December quarter included ramping the first shipments of our latest generation amplifier and codec in mainstream PC platforms ahead of new customer product launches. An important milestone as we focus on expanding our footprint in higher volume mainstream PCs and capturing a larger share of our serviceable addressable market. During the quarter, we also sampled a new component designed to enable and enhance the use of voice as an interface for future AI-enabled PCs, and we were pleased to see strong interest in this product from several leading OEMs and PC platform vendors.

Speaker #3: Our progress in the December quarter included ramping the first shipments of our latest-generation amplifier and codec in mainstream PC platforms ahead of new customer product launches.

Speaker #3: An important milestone as we focus on expanding our footprint in higher volume mainstream PCs and capturing a larger share of our serviceable, addressable market.

Speaker #3: During the quarter, we also sampled a new component designed to enable and enhance the use of voice as an interface for future AI-enabled PCs.

Speaker #3: We were pleased to see strong interest in this, and we and PC platform product from several leading OEM vendors. Finally, we were excited to see multiple new customer products introduced at the Consumer Electronics Show in January, with the use of a variety of our amplifiers, codecs, and haptic drivers.

John Forsyth: Finally, we were excited to see multiple new customer products introduced at the Consumer Electronics Show in January that use a variety of our amplifiers, codecs, and haptic drivers. These product launches included our first win with a new customer in their high-end laptop platform that features up to 6 Cirrus Logic amplifiers and our latest generation codec, setting a new standard for the audio experiences end users can expect from PCs. While we are very pleased with our achievements in PCs, the company also continued to gain momentum in other applications within our general market business. A growing number of our new general market components span the professional audio, automotive, industrial, and imaging end markets.

Speaker #3: These product launches included our first win with a new customer in their high-end laptop platform, that features up to six CIRRUS LOGIC amplifiers and our latest generation codec.

Speaker #3: Setting a new standard for the audio experiences end users can expect from PCs. While we are very pleased with our achievements in PCs, the company also continued to gain momentum in other applications within our general market business.

Speaker #3: A growing number of our new general market components span the professional audio, automotive, industrial, and imaging end markets. Leveraging our world-class IP, these products typically enjoy long product life cycles and gross margins that are well above our corporate average.

John Forsyth: Leveraging our world-class IP, these products typically enjoy long product life cycles and gross margins that are well above our corporate average, and hence, act as a strong complement to the rest of our business. In the December quarter, we began sampling a new prosumer audio product family that will expand our addressable market by delivering solutions that span additional tiers and categories of products. This builds upon our portfolio of class-leading components that already service many of these markets today, particularly in professional audio and prosumer applications. Further, we also announced a new series of automotive haptic components that are designed to consistently deliver a range of tactile responses in real time for applications across a wide range of in-cabin interfaces. Although we are in the early stages of participation in the automotive haptic market, we believe this represents an important growth opportunity for Cirrus Logic.

Speaker #3: And hence, act as a strong complement to the rest of our business. In the December quarter, we began sampling a new prosumer audio product family that will expand our addressable market by delivering solutions that span additional tiers and categories of products.

Speaker #3: This builds upon our portfolio of class-leading components that already service many of these markets today. Particularly in professional audio and prosumer applications. Further, we also announced a new series of automotive haptic components, that are designed to consistently deliver a range of tactile responses in real time for applications across a wide range of in-cabin interfaces.

Speaker #3: Although we are in the early stages of participation in the automotive haptic market, we believe this represents an important growth opportunity for CIRRUS LOGIC.

Speaker #3: In summary, we are proud of our progress this past quarter as we continue to execute on our strategy to diversify our product portfolio and drive growth in new applications and markets.

John Forsyth: In summary, we are proud of our progress this past quarter as we continue to execute on our strategy to diversify our product portfolio and drive growth in new applications and markets. That concludes the latest update on our long-term growth strategy. Let me now turn the call over to Jeff to provide an overview of our financial results as well as the outlook.

Speaker #3: And that concludes the latest update on our long-term growth strategy. So let me now turn the call over to Jeff to provide an overview of our financial results, as well as the

Speaker #3: outlook. Thank you,

Jeff Woolard: Thank you, John. Good afternoon, everyone. I'll now walk through our Q3 financial results and provide guidance for Q4. In Q3 fiscal 2026, we delivered revenue of $580.6 million, which was above the top end of our guidance range, driven by demand for components, shipping into smartphones, and a favorable mix of end devices. On a sequential basis, revenue was up 4% due to higher smartphone unit volumes, partially offset by a decline in general market sales. On a year-over-year basis, sales were also up 4%, primarily driven by higher smartphone unit volumes. This was partially offset by previously anticipated pricing reductions and lower general market sales. Turning to gross profit and gross margin. Non-GAAP gross profit in the December quarter was $308.2 million, and non-GAAP gross margin was 53.1%.

Speaker #2: John. Good afternoon, everyone. I'll now walk through our Q3 financial results and provide guidance for Q4. In Q3 fiscal 2026, we delivered revenue of $580.6 million, which was above the top end of our guidance range, driven by demand for components shipping into smartphones and a favorable mix of end devices.

Speaker #2: On a sequential basis, revenue was up 4% due to higher smartphone unit volumes, partially offset by a decline in general market sales. On a year-over-year basis, sales were also up 4%, primarily driven by higher smartphone unit volumes.

Speaker #2: This was partially offset by previously anticipated pricing reductions and lower general market sales. Turning to gross profit and gross margin. Non-GAAP gross profit in the December quarter was $308.2 million, and non-GAAP gross margin was $53.1%.

Speaker #2: On a sequential basis, the 60 basis point increase in gross margin reflects the benefit of a reduction in inventory reserves and to a lesser extent, supply chain efficiencies.

Jeff Woolard: On a sequential basis, the 60 basis points increase in gross margin reflects the benefit of a reduction in inventory reserves and, to a lesser extent, supply chain efficiencies. On a year-over-year basis, a 50 basis points decrease in gross margin was largely due to the impact of previously anticipated pricing reductions, which were mostly offset by cost reductions. Now I'll turn to operating expenses. Our non-GAAP operating expense for the third quarter was $133 million. On a sequential basis, OpEx was up $5.3 million, primarily due to higher employee-related expenses. This was partially offset by lower product development costs, largely associated with the timing of tapeouts. On a year-over-year basis, operating expense was up $3.8 million, primarily due to higher employee-related expenses and, to a lesser extent, professional expenses.

Speaker #2: On a year-over-year basis, a 50 basis point decrease in gross margin was largely due to the impact of previously anticipated pricing reductions, which were mostly offset by cost reductions.

Speaker #2: Now I'll turn to operating expenses. Our non-GAAP operating expense for the third quarter was $133 million. On a sequential basis, OPEX was up $5.3 million, primarily due to higher employee-related expenses.

Speaker #2: This was partially offset by lower product development costs, largely associated with the timing of tape-outs. On a year-over-year basis, operating expense was up $3.8 million, primarily due to higher employee-related expenses, and to a lesser extent, professional expenses.

Speaker #2: This was partially offset by a decrease in product development costs, associated with lower wafer and tape-out expenses. Non-GAAP operating income for the quarter was $175.1 revenue.

Speaker #2: This was partially offset by a decrease in product development costs, associated with lower wafer and tape-out expenses. Non-GAAP operating income for the quarter was $175.1 million, or 30.2% of Turning now to taxes.

Jeff Woolard: This was partially offset by a decrease in product development costs associated with lower wafer and tapeout expenses. Non-GAAP operating income for the quarter was $175.1 million, or 30.2% of revenue. Turning now to taxes. For the December quarter, our non-GAAP tax rate was 15.1%, which incorporates the impact of the One Big Beautiful Bill Act. And lastly, on the P&L, non-GAAP net income was $156.7 million, resulting in record earnings per share for the December quarter of $2.97. Let me now turn to the balance sheet. Our balance sheet continues to be strong, and we ended the December quarter with $1.08 billion in cash and investments.

Speaker #2: For the December quarter, our non-GAAP tax rate was 15.1%, which incorporates the impact of the one big, beautiful bill act. And lastly on the P&L, non-GAAP net income was $156.7 million, resulting in record earnings per share for the December quarter of $2.97.

Speaker #2: Let me now turn to the balance sheet. Our balance sheet continues to be strong, and we ended the December quarter with $1.08 billion in cash and investments.

Jeff Woolard: Our ending cash and investments balance was up $185.9 million from the prior quarter, as cash generated from operations was partially offset by share repurchases. We continue to have no debt outstanding. Inventory at the end of the third quarter was $189.5 million, down from $236.4 million in the prior quarter. Days of inventory were down sequentially, and we ended the quarter with approximately 63 days of inventory. Turning to cash flow. Cash flow from operations was $290.8 million in the December quarter, and CapEx was $5.2 million, resulting in a non-GAAP free cash flow margin of 49%. For the trailing twelve-month period, cash flow from operations was $629.6 million, and CapEx was $21.6 million.

Speaker #2: and investments balance was up Our ending cash $185.9 million, from the prior quarter as cash generated from operations was partially offset by share repurchases.

Speaker #2: We continue to have no debt outstanding. Inventory at the end of the third quarter was $189.5 million, down from $236.4 million in the prior quarter.

Speaker #2: Days of inventory were down sequentially, and we ended the quarter with approximately $63 days of inventory. Turning to cash flow. Cash flow from operations was $290.8 million, in the December quarter, and CAPEX was $5.2 million, resulting in a non-GAAP free cash flow margin of 49%.

Speaker #2: For the trailing 12-month period, cash flow from operations was $629.6 million, and CAPEX was $21.6 million. This resulted in non-GAAP free cash flow margin of 31%.

Jeff Woolard: This resulted in non-GAAP free cash flow margin of 31%. On the share buybacks in Q3, we utilized $70 million to repurchase approximately 591,000 shares of our common stock at an average price of $118.33. At the end of Q3, fiscal 2026, the company had $344.1 million remaining on its share repurchase authorization. Now on to guidance. For Q4 fiscal 2026, we expect revenue in the range of $410 to $470 million. GAAP gross margin is expected to range from 51% to 53%. Non-GAAP operating expense is expected to range from $124 to $130 million. The fiscal year 2026 non-GAAP effective tax rate is expected to range from 16% to 18%.

Speaker #2: On the share buybacks in Q3, we utilized $70 million to repurchase approximately $591,000 shares of our common stock, at an average price of $118.33.

Speaker #2: At the end of Q3 fiscal 2026, the company had $344.1 million remaining on its share repurchase authorization. Now on to guidance. For Q4 fiscal 2026, we expect revenue in the range of $410 to $470 million.

Speaker #2: CAP gross margin is expected to range from 51 to 53%. Non-GAAP operating expense is expected to range from $124 to $130 million. The fiscal year 2026 non-GAAP effective tax rate is expected to range from 16 to 18%.

Speaker #2: In closing, we delivered strong results for the December quarter. We remain focused on executing our strategy to drive long-term growth across our business and deliver shareholder value.

Jeff Woolard: In closing, we delivered strong results for the December quarter. We remain focused on executing our strategy to drive long-term growth across our business and deliver shareholder value. Before we begin the Q&A, I would like to note that while we understand there is intense interest related to our largest customer, in accordance with Cirrus Logic company policy, we will not discuss specifics about our business relationship. With that, let me turn the call over to Chelsea to start the Q&A session.

Speaker #2: would like to note that while we Before we begin the Q&A, I understand there is intense interest related to our largest customer, in accordance with CIRRUS LOGIC company policy, we will not discuss specifics about our business relationship.

Speaker #2: With that, let me turn the call over to Chelsea to start the Q&A session.

Speaker #3: Thank you, Jeff. We will now start the Q&A portion of our earnings call. Please limit yourself to a single question and one follow-up. Operator, we are now ready to take questions.

Chelsea Heffernan: Thanks, Jeff. We will now start the Q&A portion of our earnings call. Please limit yourself to a single question and one follow-up. Operator, we are now ready to take questions.

Speaker #4: If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, please press star 1 again.

Operator: If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, please press star one again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Tore Svanberg with Stifel. Tore, your line is open. Please go ahead.

Speaker #4: Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we roster.

Speaker #4: Your first question comes from the compile the Q&A line of Tori Svanberg with Stifel. Tori, your line is open. Please go ahead.

Speaker #5: Yes, thank you. Congrats on the record earnings and especially those impressive cash flows. First question is, you came in $50 million higher for this quarter.

Tore Svanberg: Yes, thank you. Congrats on the record earnings and especially those impressive cash flows. First question is, you know, you came in $50 million higher for this quarter. You're guiding quite a bit better than seasonal for the March quarter. So I was hoping you could just add a little bit more color on what's going on. I mean, I understand, obviously, your largest customer and the higher mix, but, you know, any more color you can show us, because those are pretty, pretty big beats.

Speaker #5: You're March quarter. So I was hoping guiding quite a bit better than seasonal for the you could just add a little bit more color on what's going on.

Speaker #5: I mean, I understand obviously your largest customer and the higher mixed, but any more color you could show us because those are pretty big beats.

Speaker #6: Yeah, I think from a seasonality perspective—sorry, Jeff—it does still look like from Q3 to Q4, it’s in the range of where we've been historically, transitioning between those two quarters. I think the color of the commentary is really that, while the seasonal shape is the same, we just were further away from the peak.

Jeff Woolard: Yeah. Tore, it's Jeff. You know, I think from a seasonality perspective, it does still look like from Q3 to Q4, you know, in the range of where we've been historically transitioning between those two quarters. I think the color commentary is really, while the seasonal shape is the same, we just were further away from the peak than we thought when we gave guidance last quarter. So I think the peak of units and a favorable mix is really the story there. It really is just we were not... We just didn't call the peak, and we were a little further away from the top than we thought.

Speaker #6: Than we thought when we gave guidance last quarter. So I think the peak of units and a favorable mix is really the story there.

Speaker #6: It really is just we were not we just the top than we

Speaker #6: thought. Sounds

Tore Svanberg: Sounds good. As my follow-up, for you, John, you mentioned some interest in the voice as an interface for AI. I mean, I assume that's primarily in the notebook market, but, you know, perhaps there's some interest in other applications as well. And, you know, when should we expect the company to start seeing revenues from a technology like that? Thanks.

Speaker #5: good. And as my follow-up for you, John, you mentioned some interest in the voice as an interface for AI. I mean, I assume that's primarily in the notebook market, but perhaps there's some interest in other applications as well.

Speaker #5: And when should we expect the company to start seeing revenues for a technology like that mix?

Speaker #6: Yeah, thanks, Tori. In the first instance, yes, I was referring to, in particular, a product that we've been sampling to PC OEMs, which is focused on really significantly enhancing the voice interface for interaction with conversational agents and AI.

John Forsyth: Yeah, thanks, Tore. In the first instance, yes, I was referring to, in particular, a product that we've been sampling to PC OEMs, which is focused on really significantly enhancing the voice interface for interaction with conversational agents and AI through their laptops. So that's something that today is obviously pretty limited. We believe we can bring a lot in terms of new features and performance improvements to that. We started sampling the first product targeting the PC market, which is aiming to do that to customers, and the interest has been really strong. That obviously gives us the opportunity to grow the value of some of the products that we ship into the PC space.

Speaker #6: Through their laptops. So that's something that today is obviously pretty limited. We believe we can bring a lot in terms of new features and performance improvements to that.

Speaker #6: We started sampling the first product targeting the PC market, which is aiming to do that strong. That to customers. obviously gives us the opportunity to grow the And the interest has been really value of some of the products that we ship into the PC product, it's a codec space.

John Forsyth: Specifically, when you look at that voice product, it's a codec with a lot of smart voice features and processing capability on it. That could represent, you know, anywhere up to something of the order of double the value of the preceding generation of codec when you look at it from an ASP perspective. It also has the potential, I think, to be just stickier and obviously have a direct impact on the user experience. So we're excited about that in the PC space. We're sampling it right now means that that's really gonna be something that we see in calendar 2027 and 2028. It's obviously part of a roadmap of products that we're working on and looking at around that area.

Speaker #6: Voice features and processing capability on it. That represent anywhere up—specifically, when you look at to something of the order of double the value of the preceding generation of codec, when you look at it from an ASP perspective.

Speaker #6: It also has the potential, I think, to be just stickier and, obviously, have a direct impact on the user experience. So we're excited about that in the PC space.

Speaker #6: Us sampling it right now means that that's really going to be something that we see in calendar '27 and '28. It's obviously part of a roadmap of products that we're working on and looking at around that area.

Speaker #6: And yeah, to your broader point, although that's something which specifically I was referring to in the context of the PC market, I think there was a feature which is going to be relevant elsewhere as well.

John Forsyth: And, yeah, to your broader point, although that's something which, specifically I was referring to in the context of the PC market, I think those are features which are gonna be relevant elsewhere as well. And one of the areas where we've had some great engagement with customers is around AI devices that we're anticipating coming to market over the next couple of years. And I think, again, that's a place where over time, we'd like to be bringing voice and voice-enabling features.

Speaker #6: And one of the areas where we've had some great engagement with customers is around AI devices, that we're anticipating coming to market over the next couple of years.

Speaker #6: And I think, again, that's a place where over time we'd like to be bringing voice and voice enabling

Speaker #6: features.

Operator: ... Your next question comes from the line of David Williams with StoneX. Oh, sorry, just one moment here. Your next question actually comes from Christopher Rolland with Susquehanna International Group. Your line is now open.

Speaker #4: The question comes from the line of David Williams with Your Next, StoneX. Sorry, just one moment here. Your next question actually comes from Christopher Roland with...

Speaker #1: Susquehanna With International Group . is now open .

Speaker #1: Susquehanna with International Group. The line is now open.

Speaker #2: Hi . Thanks for question . This is Dylan Olivier on for taking my Chris . Congrats on the great result So for my .

Dylan Olivier: Hi, thanks for taking my question. This is Dylan Olivier on for Chris. Congrats on the great result. So for my first question: it seems from your shareholder letter, it seems like the revenue at your largest customer represented a higher percentage of your mix at 94%. So this would imply that your revenue outside of this flagship declined pretty significantly quarter-over-quarter. I was wondering if you had any color on what sort of caused that decline, and if you anticipate it to remain at that run rate or tick back up?

Dylan Ollivier: Hi, thanks for taking my question. This is Dylan Olivier on for Chris. Congrats on the great result. So for my first question: it seems from your shareholder letter, it seems like the revenue at your largest customer represented a higher percentage of your mix at 94%. So this would imply that your revenue outside of this flagship declined pretty significantly quarter-over-quarter. I was wondering if you had any color on what sort of caused that decline, and if you anticipate it to remain at that run rate or tick back up?

Speaker #2: first question for , congrats on the great result . So for my first question , it so from your shareholder . seems Shareholder letter , it seems like your the revenue at your largest customer represented a higher percentage percentage of your mix at 94% .

Speaker #2: So this would imply that revenue outside of this flagship declined pretty your significantly . of a quarter . Quarter wondering if you was had any color on what I sort of decline .

Speaker #2: So this would imply that revenue outside of this flagship declined pretty your significantly . of a quarter . Quarter wondering if you was had any color on what I sort of that And if you anticipate it caused at that or to remain take up back .

John Forsyth: Yeah. Thanks, thanks, Dylan. I'll start us off here, and Jeff can chime in if he has additional commentary. But yes, definitely this is an area we'd like to add color on. Partly, of course, that proportion of our revenue is very high because of the strength of the product launch from our largest customer. But there have been some other temporary factors that have acted as headwinds in our general market business, which we're mostly through now, but I think are worth calling out for our investor community. One of those, when you look at the strategic shift that we made away from focusing on Android a few years back, that obviously has led to a decline over time in our Android revenues.

Speaker #3: Yeah , thanks . Dylan Thanks , . I'll start us off here and Jeff can can chime in if he has commentary . additional but But yes , definitely .

Speaker #3: This is an area we'd like to add color on . Partly of course , that that proportion of our revenue is very high of because the , of the strength product launch from our largest the But there customer .

Speaker #3: some have been other temporary factors have that headwinds in our acted as general business , market which we're mostly now . But I through worth calling out for our investor community think are those , when you look at the .

Speaker #3: strategic that we shift made away from focusing One of on Android a few years back , that that obviously has led to a decline time in our over Android revenues .

John Forsyth: That's the single biggest contributor to the year-over-year decline from our general market revenue perspective there. There is another factor, which is that we have a long tail of products. There's a rather large number of products which address automotive, industrial, prosumer, imaging segments, where the products themselves are 10+ years old, and typically based on old process nodes, in many cases, in facilities which are no longer gonna be functioning. So, a number of those have been coming to their end of life, which, you know, resulted in customers ordering ahead, giving us some sales momentum, but ultimately that gets unwound as those products are end of life.

Speaker #3: That's the single contributor biggest to the year over year decline from our general market revenue perspective . There . There is another factor , which is that we have a long tail of products , a rather large number of products which are which address automotive , industrial , prosumer , imaging segments where the products are themselves ten plus years old and typically typically based old process on in many cases in nodes facilities which are no longer going to be going to be functioning .

Speaker #3: So a number of those have been coming to the end of life their , which resulted in ordering customers ahead , giving us some sales momentum .

Speaker #3: Ultimately , that gets that gets unwound as those products are of end life . Now . We've been in parallel to all of course , we've that .

John Forsyth: Now, we've been in parallel to all that, of course, we've been strategically investing in new growth markets like the PC market and in new product families in the past few years that will more than make up for those headwinds. So that's all the PC opportunity that I've talked about, other opportunities in AI devices that I alluded to, and then these products which we've been announcing periodically and sampling to customers and beginning to ramp around pro audio, imaging, timing, and so on. So I think the positive thing is that where we're at now to between FY 2026 and FY 2027, those are the points where a lot of those new products are starting to ship.

Speaker #3: We’ve been strategically investing in new growth markets like the PC market and in new families. In the past few years, that product faced those headwinds.

Speaker #3: So that's all the PC opportunity that I've talked about. Other opportunities in AI devices that I alluded to, and then these products, which we've been announcing periodically and sampling to customers, beginning and ramp around pro imaging timing, and so audio on. So, I think the positive thing is the—

Speaker #3: So that's the all the PC opportunity that I've talked about . Other opportunities in AI devices that I alluded to . And then these products , which we've been announcing periodically and sampling to customers beginning and ramp around pro imaging timing and so audio on So I positive thing think the is where we're at now , between FY 26 and FY 27 , that those are the points where a lot of those new products are starting to ship .

John Forsyth: And so when we look out over the next few years, we have a very healthy growth ramp for our general market business, which of course includes the PC space, but goes well beyond that as well.

Speaker #3: And so when we look out over the next few years , we have a very healthy ramp for growth our general market of course includes the PC business , which space but goes well beyond well .

Jeff Woolard: Yeah, I think the only thing I'd-

Dylan Olivier: Thanks.

Dylan Ollivier: Thanks.

Jeff Woolard: Yeah, the only thing I'd add is, you know, we're still very pleased with where we're at from a PC perspective and how we're growing there, per our plans, and think there is a lot of runway for us to continue to grow that business. And the products that we've refreshed, that John mentioned, while early, we're very pleased with the customer traction they're getting, and the design wins we're getting, and think, again, there's a lot of room to grow there. And it's just against those headwinds, but we're very pleased with the progress in those segments.

Speaker #4: Yeah , I think the only thing I'd the only thing I'd add is , you know , the pleased with where we're very we're still at from a PC perspective and growing there how we're for our plans and think there is a lot runway for of us to continue to grow that business .

Speaker #4: products that we've And refreshed that John mentioned while early , we're very pleased with the customer traction . They're getting and the design wins , we're think again , there's getting and lot of room to grow a there and it's just against those headwinds .

Speaker #4: pleased with progress segments in those we're very But the .

Dylan Olivier: Yeah, thanks. That's, that's helpful. And that's actually a nice segue for my next question, because I wanted to pivot to the PC opportunity. So first of all, I mean, you addressed it a little bit, but I was wondering if you had any color on how you're tracking to what you've previously said for your revenue opportunity in PCs in fiscal 2026, and to see if you had any expectations for fiscal 2027.

Dylan Ollivier: Yeah, thanks. That's, that's helpful. And that's actually a nice segue for my next question, because I wanted to pivot to the PC opportunity. So first of all, I mean, you addressed it a little bit, but I was wondering if you had any color on how you're tracking to what you've previously said for your revenue opportunity in PCs in fiscal 2026, and to see if you had any expectations for fiscal 2027.

Speaker #2: Yeah , thanks . That's that's helpful . And that's actually a nice segue for my next question because wanted to I PC pivot to the opportunity .

Speaker #2: So first of all , I mean , you addressed it a little bit , but I was wondering if you had any you're tracking color on how to what said previously for your revenue opportunity in PCs in fiscal 26 , and to see if you had any expectations for fiscal 27 .

John Forsyth: Yeah, I think it's a little early to put something on the scoreboard for fiscal 2027, and you know, we'll see how the next quarter goes. But I previously said that we expected PC revenue in fiscal 2026 to roughly double from the low $10s of millions that we saw in fiscal 2025. And you know, I think that continues to be our ballpark expectation there. I think we'll exit the fiscal year with very good growth momentum into fiscal 2027, so I don't wanna put a number on that yet, but we're feeling very good about the momentum that we've got across the customer base there. And that's really that optimism is driven by what we see when we look at key indicators around the PC space.

Speaker #3: Yeah , I think it's it's a little early to put something on the scoreboard for fiscal 27 . you know , we'll see how quarter goes .

Speaker #3: the next previously But I'd And , and , said we that expected PC revenue in fiscal 26 to double roughly from the low tens of millions that we saw in fiscal 25 .

Speaker #3: And , you know , I think that that continues to be our . Ballpark expectation there . I think we'll fiscal year exit the with very good growth momentum into fiscal 27 .

Speaker #3: So I to put a number on don't want yet . that feeling very good about the momentum that we've But we're got across customer the base there .

Speaker #3: And that's really that that optimism is driven by what we see when we look at indicators at key around the PC space. So firstly, we're shipping with the—we're top six PC at this point, or laptop vendors—vendors, I'd say.

John Forsyth: So firstly, we're shipping with the top 6 PC vendors at this point, or laptop vendors, I should say. And then we also look at penetration of the mainstream category or mainstream tier. I've highlighted that as being important. In fiscal 2027, we expect that our revenue driven by mainstream platforms will roughly double for us. That'll be a very significant proportion of the overall revenue that we see from this PC space. And then another indicator that is a really good kind of leading indicator for our market penetration, I think, is the adoption of the SDCA interface, the SoundWire Device Class Audio. Because coming into this year, SDCA represented only about 15% to 20% of the overall PC market.

Speaker #3: And then we also look at penetration of the category or mainstream tier. I've highlighted mainstream being important, that as in fiscal '27, we expect that our revenue driven by mainstream platforms will roughly double for us.

Speaker #3: be a very There'll proportion of the overall that we see revenue from this PC space . And then another , another that is indicator a kind of leading really good indicator for our market penetration , I think , is the adoption of the SDK the interface , sound wire device class , audio , because coming into this year , SDK represented only about 15 to 20% of the overall PC market .

John Forsyth: By the end of this calendar year, we expect that to be closer to 50%, and that will continue to increase. In those SDCA slots, you know, we've been winning to date somewhere of the order of 75% of the sockets. So certainly, you know, even if that figure gets diluted a bit as it goes more across the portfolio, it indicates how well-positioned we are to take advantage of the SDCA opportunity. So we see that transition underway now at scale, and that's also visible in the sheer number of programs that we're active in, in the PC space. You look back to fiscal 2025, we had 19 SDCA programs that came to market. In fiscal 2027, there'll be over 60.

Speaker #3: By end of the this calendar year , we expect that to be closer to and that will 50% , continue to increase . And in SDK those slots , we've been winning to date somewhere of the order of 75% of the sockets .

Speaker #3: So certainly , you know , even if that figure gets diluted a bit as as it goes more across the portfolio , it indicates how well positioned we are to take the advantage of opportunity .

Speaker #3: So we see that transition now underway scale . And that's that's also visible in the sheer number of programs in the active in PC that we're You look space .

Speaker #3: back fiscal 25 . We 19 SDK had came to programs that market in fiscal 27 . There'll be over 60 . So when we across those look indicators and the momentum that we're exiting fiscal year with , the we feel really the good about opportunity and what's ahead of us there .

John Forsyth: So when we look across those indicators and the momentum that we're exiting the fiscal year with, we feel really good about the opportunity and what's ahead of us there.

Operator: Your next question comes from the line of David Williams with StoneX. Your line is open. Please go ahead.

Speaker #1: Your next question comes from the line of David Williams with Stonex. Your line is open. Please go ahead.

David Williams: Hey, good afternoon, and congrats on the really solid results here. And I guess maybe first, just kind of thinking about the guidance, where you guys are. Are you seeing any major supply constraints that could have impacted either the quarter or the outlook?

Speaker #5: Hey , good afternoon and congrats on the really solid results here . And I guess maybe first just kind of thinking about the guidance where you the guys are .

Speaker #5: Are you seeing any major supply constraints that could have impacted either the quarter or the outlook?

Jeff Woolard: We don't currently see any supply constraints. You know, I think things are tighter in the industry, and so we'll continue to manage that. You know, we do have the benefits. A lot of our products are, you know, have a very long life, so if we need to shuffle things around to make sure we can manage that capacity on both sides, we're able to do that, but right now there's no constraints.

Speaker #4: We don't currently see any supply constraints . You know , I think things are industry . And so we'll continue to manage that .

Speaker #4: You know , we we do have the benefits . A lot of our products are , you know , have a very long life .

Speaker #4: So if we shuffle things around to make sure that we can manage capacity on both sides, we're able to do that.

David Williams: Okay, great. And then, maybe a little bit longer term, but just thinking about the automotive opportunity, it sounds like the zonal architectures and just the increased haptics maybe in the in-cabin would be a big opportunity. Is there a way to kind of think about when you could start seeing the revenue, real contribution from that? And then how do you think that market plays out over the next two to three years in terms of dollar content for Cirrus? Thanks.

Speaker #4: But right now, there's no constraints.

Speaker #5: Okay , great . And then maybe a little bit longer term . just thinking But about the automotive opportunity , like the zonal it sounds architectures and just the increased haptics , in , in the , maybe in the a big opportunity .

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Q3 2026 Cirrus Logic Inc Earnings Call

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Q3 2026 Cirrus Logic Inc Earnings Call

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