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Call sheet · Q3'26

Cirrus Logic (CRUS)

Q3'26 earnings call · held February 3, 2026 · compared with the Q2'26 call · management-credibility review
9/12
Disclosure score
1 high, 3 medium, 3 low flags
Financial quality
Bottom line
The real story is Android ecosystem collapse driving Cirrus into dangerous 94% Apple dependence while management distracts with PC AI timeline pushouts. Record margins came from inventory reserve releases, not operational improvements, and the $35M general market business is cratering from Android decline plus legacy end-of-life products. Voice AI sampling means 2027-2028 revenue at earliest, not the near-term catalyst investors expect. Forsyth's quote captures the bind: 'We don't invest a huge amount in Android as a strategic business area for us, but it still remains a valuable contributor.' My view changes if they can prove PC revenue hits $50M+ in fiscal 2026 and show concrete progress on battery/power monetization beyond 'continue to invest' language.

The 30-second version

  • 94% customer concentration isn't Apple risk-it's Android collapse accelerating
  • Record margins (53.1%) driven by inventory reserve releases, not operations
  • PC voice AI sampling means calendar 2027 revenue at earliest, not 2026

What changed this quarter

MetricQ2'26Q3'26Change
Revenue$561M (+4% YoY)$580.6M (+4% YoY)+$19.6M sequential but same YoY growth rate
Non-GAAP EPS$2.83$2.97+$0.14 to record high
Non-GAAP Gross Margin52.5%53.1%+60bps driven by inventory reserve reduction
Operating Cash Flow$92.2M (16% margin)$290.8M (49% margin)+215% sequential, massive working capital benefit
Free Cash Flow Margin TTM27%31%+400bps improvement
Inventory$236.4M (81 days)$189.5M (63 days)-18 days inventory, -$47M absolute
Cash Position$896M$1.08B+$184M sequential
Operating Expenses$127.7M$133M+$5.3M higher employee costs
Largest Customer Mix~90% (implied)94%+400bps concentration increase
General Market Revenue~56M (implied)~35M (implied)-37% collapse in non-flagship

Accountability tracked

7 new promises made4 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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