Cirrus Logic Inc. CRUS reported third-quarter fiscal 2025 adjusted earnings per share (EPS) of $2.51, which surpassed the Zacks Consensus Estimate by 23.65%. The company reported adjusted EPS of $2.89 in the prior-year quarter.

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Quarterly revenues of $555.7 million were down 10.2% year over year. The downside resulted from lower smartphone sales partly because of its fiscal quarters' timing. This fall was partially offset by higher revenues from its latest product. The top line exceeded management’s revenue forecast for the third quarter ($480-$540 million), fueled by higher-than-expected smartphone shipments and increasing demand for audio components. 

Cirrus Logic, Inc. Price, Consensus and EPS Surprise

Cirrus Logic, Inc. price-consensus-eps-surprise-chart | Cirrus Logic, Inc. Quote

The Zacks Consensus Estimate for revenues was pegged at $510 million. The company’s largest customer accounted for 91% of total revenues in the fiscal third quarter.

Post the announcement of better-than-anticipated sales performance, the company’s shares gained 2% in trading and closed the session at $101.39 on Feb. 4, 2025. Shares jumped 10.5% in pre-market trading on Feb. 5. The stock has gained 39.8% in the past year compared with the electronics-semiconductors industry’s growth of 44.6%.

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Segment Details

This Texas-based company rearranged its reportable segments and created separate categories — High-Performance Mixed-Signal and Audio — in the fourth quarter of fiscal 2021. Cirrus Logic is expanding into other applications such as laptops, gaming, tablets and AR/VR.

Cirrus Logic’s High-Performance Mixed-Signal segment includes a few of its non-audio products. It contributed 38% to total revenues in the fiscal third quarter. Revenues from the same division fell 12.9% year over year to $209.5 million. We estimated the metric to be $205 million.

The Audio segment’s sales decreased 8.5% to $346.3 million and contributed 62% to total revenues. Our estimate was $305 million for the segment.

Margins

Non-GAAP gross margin expanded 230 basis points year over year to 53.6%. The expansion is driven by a shift to higher-margin products, partly offset by higher inventory reserves and supply chain costs.

Cirrus Logic’s non-GAAP operating expenses rose 2.9% year over year to $129.2 million, owing to higher employee costs, partly offset by increased R&D incentives.

Non-GAAP operating income of $168.9 million declined 12.1% year over year. Non-GAAP operating profit margin fell to 30.4% from 31.1%.

Balance Sheet and Cash Flow

The company exited the fiscal third quarter with cash and marketable securities of $564 million compared with $478.3 million as of Sept. 28, 2024.

As of Dec. 28, 2024, accounts receivables were $261.9 million compared with $324.1 million as of Sept. 28, 2024.

In the fiscal third quarter, CRUS reported $218.6 million of cash flow from operations. In the prior-year quarter, it generated $313.7 million of net cash from operations. Free cash flow was $211.9 million in the quarter under review.

The company repurchased almost 679,000 shares worth $70 million in the reported quarter. As of Dec. 28, 2024, it had $154.1 million worth of shares under its existing share repurchase authorization.

Fiscal Q4 Outlook

Management projects revenues between $350 million and $410 million.

Combined GAAP R&D and SG&A are anticipated to be between $141 million and $147 million, respectively. 

The GAAP gross margin is expected to be in the range of 51-53%.

Non-GAAP operating expenses are estimated to be in the band of $119-$125 million.

CRUS’ Zacks Rank

Cirrus Logic currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies

Western Digital Corporation WDC reported second-quarter fiscal 2025 non-GAAP earnings of $1.77 per share, surpassing the Zacks Consensus Estimate of $1.75. The company incurred a loss of 75 cents per share in the prior-year quarter. 

Shares of WDC have gained 9% in the past year.

Plexus Corp PLXS reported first-quarter fiscal 2025 adjusted EPS of $1.73, up 40.7% year over year. The figure outpaced the Zacks Consensus Estimate of $1.59 per share.

In the past year, shares of PLXS have surged 50%.

Seagate Technology Holdings plc STX reported second-quarter fiscal 2025 non-GAAP earnings of $2.03 per share, beating the Zacks Consensus Estimate by 7.98%. The company reported non-GAAP earnings of 12 cents per share in the year-ago quarter.

In the past year, STX shares have gained 10.6%.

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