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Call sheet · Q4'25

Cirrus Logic (CRUS)

Q4'25 earnings call · held May 6, 2025 · compared with the Q3'25 call · management-credibility review
11/12
Disclosure score
1 high, 3 medium, 3 low flags
Financial quality
Bottom line
The sleeper story is CRUS quietly building a meaningful PC diversification hedge - doubling revenue to expand into 150+ SKUs isn't just incremental growth, it's structural diversification that the 89% customer concentration warrants. The obvious headline is the beat and margin expansion, but the real story is they're paying up front (138 days inventory, geographic diversification costs) to derisk the business model. The binding constraint is customer concentration - until they meaningfully diversify beyond that 89%, they're hostage to one customer's cycle. Forsyth's most telling quote: 'I don't see why not' on general market reaching 10% - first time he's gotten specific about diversification scale. My view changes if PC revenue doesn't actually double in FY26 or if inventory doesn't peak in H1 FY26 as promised - these are the measurable diversification binders that matter more than the smartphone beat.

The 30-second version

  • SLEEPER STORY: Audio content refresh windfall hiding structural PC growth inflection
  • Beat driven by sustained December demand, not typical seasonal modulation
  • Margin expansion story intact but inventory building to 138 days signals supply chain paranoia

What changed this quarter

MetricQ3'25Q4'25Change
Revenue$555.7M (+3% seq, -10% YoY)$424.5M (-24% seq, +14% YoY)Beat guide by $14.5M on sustained demand
Full Year Revenue$1.79B (+3% YoY)$1.9B (+6% YoY)Accelerated growth from new products
Non-GAAP Gross Margin53.6% (+140bps seq)53.5% (+380bps YoY)Stable at elevated levels from mix
Non-GAAP Operating Margin30.4% of revenue25.2% of revenue500bps compression on lower revenue base
Non-GAAP EPS$2.51$1.67 (-33% seq)Full year record $7.54 vs $6.59 prior
Cash and Investments$816.6M$835M (+$134.9M YoY)Strong cash generation despite buybacks
Days of Inventory98 days138 days (+40 days seq)Major inventory build for capacity agreement
Free Cash Flow Margin38% in Q329% in Q4Full year 22% vs 25% trailing twelve
Share Repurchases$70M in Q3$100M in Q4Record $261M full year vs prior
Operating Expenses$129.2M$120M (-$9.2M seq)Lower employee expenses and tape-out timing

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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