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Call sheet · Q3'25

Cirrus Logic (CRUS)

Q3'25 earnings call · held February 4, 2025 · compared with the Q2'25 call · management-credibility review
8/12
Disclosure score
2 medium, 3 low flags
Financial quality
Bottom line
The sleeper story is demand durability - management was surprised by sustained December demand when they expected the usual seasonal modulation. This suggests end-user strength that won't show up in most analyses focused on the obvious Q4 guide-down. The binding constraint is their GlobalFoundries commitment forcing inventory builds that will peak in H1 FY26, creating a working capital headwind just as they're trying to scale new markets. Most revealing quote: 'it's not in a year, I don't think' when asked about HPMS reaching audio revenue parity - they're walking back the timeline on their biggest growth narrative. My view changes if PC revenue specifics show actual traction beyond the 'tens of millions' denominator games they're playing.

The 30-second version

  • THE SLEEPER: Sustained December demand broke their seasonal playbook
  • Record gross margins (53.6%) but they're front-loading inventory for GlobalFoundries commitments
  • PC revenue trajectory doubling each year but they won't quantify the base

What changed this quarter

MetricQ2'25Q3'25Change
Revenue$541.9M (+13% YoY)$555.7M (-10% YoY)Beat guidance high-end by $15.7M
Non-GAAP Gross Margin52.2% (+90bps YoY)53.6% (+230bps YoY)+140bps sequential, record high
Non-GAAP Operating Income$156.2M (28.8% margin)$168.9M (30.4% margin)+160bps operating leverage
Non-GAAP EPS$2.25 (record)$2.51+12% sequential beat
Cash Flow from Operations$8.2M (1% margin)$218.6M (38% margin)Massive working capital normalization
Free Cash Flow Margin (TTM)29%25%-400bps deterioration
Inventory$271.8M (96 days)$275.6M (98 days)Slight build, expect peak in H1 FY26
Cash and Investments$706.6M$816.6M+$110M despite buybacks
Share Repurchases$50M (356k shares @ $140)$70M (679k shares @ $103)Accelerated pace at lower price
Q4 FY25 Revenue Guide$480-540M midpoint $510M$350-410M midpoint $380M-25% sequential at midpoint

Accountability tracked

8 new promises made3 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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