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Call sheet · Q4'26

Cirrus Logic (CRUS)

Q4'26 earnings call · held May 6, 2026 · compared with the Q3'26 call · management-credibility review
8/12
Disclosure score
3 medium, 3 low flags
Financial quality
Bottom line
The sleeper story everyone's missing: Face ID power management isn't just a single chip win, it's Cirrus expanding beyond audio into smart power ICs after 20 years, potentially unlocking billions in 3D sensing markets. The obvious headline about record $2B revenue masks the real story - PC business quietly doubled to $40M+ and is accelerating toward $100M+ with 80% SDCA penetration expected. But here's the binding constraint: they're about to spend aggressively on R&D 'throughout fiscal 27' with only vague promises about returns 'over time' - this will pressure their industry-leading 27% operating margins. Most revealing quote: 'We plan to increase our R&D investment throughout fiscal '27... we believe these investments will generate substantial returns over time' - classic setup for margin compression without accountability. My view changes if they quantify R&D spending amounts and provide specific ROI timelines next quarter.

The 30-second version

  • The sleeper story: Face ID power management is the new growth vector
  • PC business quietly doubled to low $40M range but management suddenly cautious on '27
  • Operating expenses spiking 'throughout fiscal 27' with zero specificity on returns

What changed this quarter

MetricQ3'26Q4'26Change
Revenue$580.6M (Q3), up 4% YoY$448.5M (Q4), up 6% YoY-23% sequential decline, typical but steeper
Non-GAAP EPS$2.97 (Q3), record quarter$1.95 (Q4)-34% sequential drop, still solid
Gross Margin53.1% (Q3), up 60 bps sequentially53.0% (Q4)Essentially flat, freight headwinds
Operating Margin30.2% (Q3)24.9% (Q4)-530 bps sequential compression
Full Year Revenue$1.9B implied for FY26$2.0B actual, record+5% YoY growth achieved
Full Year EPS$7.54 (FY25)$9.26 (FY26), record+23% YoY earnings growth
Operating Cash Flow$290.8M (Q3)$151.4M (Q4)-48% sequential decline
Free Cash Flow Margin49% (Q3)33% (Q4)-1600 bps sequential drop
Inventory$189.5M (Q3), 63 days$240.9M (Q4), 104 days+27% sequential build, +41 days
Cash Position$1.08B (Q3)$1.2B (Q4)+$120M increase despite buybacks

Accountability tracked

8 new promises made5 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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