CIRRUS LOGIC (CRUS)·Q3 2026 Earnings Summary

Cirrus Logic Delivers Record EPS as HPMS Content Expands

February 3, 2026 · by Fintool AI Agent

Cirrus Logic (NASDAQ: CRUS) posted record earnings for fiscal Q3 2026, with revenue of $580.6M coming in above the high end of guidance and non-GAAP EPS of $2.97 marking an all-time high. The beat was driven by stronger-than-anticipated smartphone demand and favorable product mix, with High-Performance Mixed-Signal (HPMS) products continuing to gain share. Despite the strong results, shares initially traded down 4.5% during regular hours before reversing sharply to gain 8% in after-hours trading following management's Q&A commentary.

Did Cirrus Logic Beat Earnings?

Yes. Cirrus Logic beat on both revenue and earnings, extending its streak of consistent outperformance.

Revenue increased 4% both sequentially and year-over-year, driven by higher smartphone unit volumes. The gross margin of 53.1% reflected inventory reserve reductions and supply chain efficiencies.

Beat/miss history: Cirrus Logic has beaten EPS estimates for 8 consecutive quarters.

What Did Management Guide?

Q4 FY26 guidance came in below consensus expectations, reflecting seasonal patterns in smartphone builds:

The midpoint of $440M represents a 24% sequential decline but 4% year-over-year growth. Management noted the guidance reflects typical seasonality in their largest customer's product cycle.

Tax benefit: The company highlighted continued benefit from the One Big Beautiful Bill Act, which reinstated immediate R&D expense deductibility, resulting in a non-GAAP effective tax rate of ~15-18% for FY26.

What Changed From Last Quarter?

Several notable developments emerged this quarter:

1. HPMS content continues expanding HPMS grew to 41% of revenue (vs. 38% in Q3 FY25), driven by camera controllers and haptic solutions. The segment revenue of $236M was up 13% YoY.

2. PC momentum accelerating with quantifiable metrics Management highlighted multiple wins at CES 2026, including a first-time win with a new customer for their high-end laptop platform featuring up to 6 Cirrus Logic amplifiers. A new AI voice interface component is now sampling with strong OEM interest—and could command up to 2x the ASP of the prior codec generation. Revenue contribution expected in calendar 2027-2028.

Key PC metrics:

• SDCA penetration: 15-20% of PC market today → expected ~50% by end of calendar 2026
• Socket wins: Cirrus winning ~75% of SDCA sockets
• Program count: 19 SDCA programs in FY25 → 60+ in FY27
• Revenue trajectory: PC revenue expected to roughly double in FY26 from "low $10s of millions" in FY25; now shipping with top 6 laptop vendors

3. Cash generation exceptional Operating cash flow hit $291M in Q3, representing 50% of revenue. Total cash and investments reached $1.08B, up from $896M last quarter.

4. New market entries with quantified TAM

• Announced new automotive haptic component series targeting in-cabin touch interfaces
• Automotive SAM: Management sees TAM "north of $800 million" by 2029
• Strategic philosophy: Any new market must have "multiple pathways to participation... becoming at least a 10% business"
• Began sampling new prosumer audio product family

Key Financial Trends

TTM non-GAAP operating margin expanded to 27.6%, up from 25.6% a year ago.

What Did Management Say?

CEO John Forsyth highlighted diversification progress:

"We delivered revenue above the high end of our guidance range for the December quarter driven by stronger-than-anticipated demand for components shipping into smartphones and a favorable mix of end devices... We also made solid progress executing on our strategy to expand our addressable market and drive product diversification."

On AI-enabled PCs:

"To address the increasing importance of voice as an interface for AI-enabled PCs, we are developing new products that enhance voice and audio capture functionality... The first product with this technology is now sampling, and we are seeing strong interest from several leading OEMs."

On the Apple relationship:

"Our relationship with our largest customer remains outstanding, with continued strong design activity across a wide range of products."

Q&A Highlights

Why did you beat by $50M and guide above seasonal? CFO Jeff Woolard: "While the seasonal shape is the same, we just were further away from the peak than we thought when we gave guidance last quarter... the peak of units and a favorable mix is really the story there."

Why is General Market revenue declining? Management explained three temporary headwinds:

1. Android exit: The strategic shift away from Android several years ago is the "single biggest contributor" to YoY decline
2. Product end-of-life: A "long tail" of 10+ year old products on legacy process nodes are being discontinued as fabs shut down—customers pre-ordered, creating lumpy revenue
3. Timing: New products (PC, automotive, prosumer) are just beginning to ramp in FY26-FY27

Any supply constraints? "We don't currently see any supply constraints. Things are tighter in the industry, and so we'll continue to manage that."

Impact of rising memory costs on pricing negotiations? "We've been in a normalized pricing environment for some time now... working collaboratively with our customers on pricing. Some of our larger customers are not exactly known for being gentle in pricing negotiations, no matter what's happening with commodity prices."

FY27 seasonality unchanged? "At this point in time, when we look at the long-term forecast signals we have, we don't see anything that significantly changes our historic seasonality."

How Did the Stock React?

The stock exhibited a volatile trading pattern:

The initial selloff likely reflected Q4 guidance below seasonal expectations. However, after-hours trading reversed sharply, suggesting the earnings call Q&A addressed investor concerns about the guidance trajectory and diversification progress.

Context: CRUS is trading near 52-week highs ($136.92) and is up ~65% from its 52-week low of $75.83.

Capital Allocation

Cirrus Logic continues to prioritize shareholder returns through buybacks:

Cash and investments of $1.08B provide substantial flexibility for M&A and continued buybacks.

Forward Catalysts

Near-term (Q4 FY26 - Q1 FY27):

• Mainstream PC platform launches with latest-gen amplifier/codec
• New prosumer audio product family ramping
• Design wins from CES 2026 entering production
• SDCA adoption accelerating to ~50% of PC market by year-end

Medium-term (Calendar 2027-2028):

• AI voice interface products for PCs (up to 2x ASP vs prior codecs)
• Next-gen camera controllers for smartphones
• 60+ SDCA PC programs in FY27 (vs 19 in FY25)

Longer-term (2029):

• Automotive haptic component revenue—SAM "north of $800M"
• Must see path to 10%+ of business before committing to new markets

Risks:

• 94% customer concentration with Apple
• Smartphone market cyclicality
• Normalized pricing pressure despite commodity cost increases

Key Takeaways

1. Record quarter: $2.97 non-GAAP EPS marked an all-time high, with revenue beating the high end of guidance by $50M
2. HPMS expansion continues: Now 41% of revenue vs 38% a year ago, driven by camera and haptic solutions
3. PC momentum quantified: 60+ SDCA programs in FY27 (vs 19 in FY25), winning 75% of sockets, shipping with top 6 laptop vendors
4. AI voice upside: New codec for AI PCs could command 2x ASP, revenue in calendar 2027-2028
5. Cash machine: 50% operating cash flow margin in Q3, $1.08B cash position
6. Automotive TAM: $800M+ SAM by 2029 for haptics and other automotive solutions

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View the full Q3 FY26 earnings transcript | Company profile