Cirrus Logic (CRUS, Financial) saw its stock climb by 10% after reporting robust Q4 (March) earnings. Despite expectations of a significant year-over-year revenue decline, the company posted a marginal decrease of 0.3% to $371.8 million, buoyed by unexpected strong demand for smartphone products. Furthermore, Cirrus Logic provided an optimistic revenue guidance for Q1 (June), surpassing analyst expectations.
Apple (AAPL, Financial), which accounts for 83% of Cirrus Logic's FY23 sales, remains its largest customer. The relationship underscores a strong correlation between their performances. Cirrus Logic is known for its audio and voice signal processing chips but has recently expanded into mixed-signal chips, focusing on power as a key growth area. This expansion includes entering the wired and wireless fast-charging market, following its acquisition of Lion Semiconductor.
Despite a 10.5% year-over-year drop in March quarter iPhone revenue for Apple, Cirrus Logic's shipments remained strong. Although revenue fell 40% sequentially due to reduced smartphone volumes, this followed a better-than-expected December quarter. Additionally, the company reported a non-GAAP gross margin of 51.9%, topping guidance due to supply chain efficiencies and reduced freight costs. The guidance for the June quarter gross margin is set between 49-51%.
Cirrus Logic is progressing in its three strategic growth areas: maintaining leadership in flagship smartphone audio, expanding high-performance mixed-signal capabilities in smartphones, and penetrating new markets with its audio and mixed-signal technologies. In FY24, the company launched a new boosted amplifier and smart codec, with plans for these products to feature in devices by fall. Cirrus Logic has also invested in camera controllers to leverage its mixed-signal design expertise.
The fiscal year concluded impressively for Cirrus Logic, setting a positive tone for FY25. The strong quarterly performance and future guidance have propelled the stock price above $100 for the first time since April 2023.
