Cirrus Logic's Q3 2025 Earnings Call: Unpacking Contradictions in Margins, Revenue, and Product Development

These are the key contradictions discussed in Cirrus Logic's latest 2025 Q3 earnings call, specifically including: Gross Margin Expectations, Revenue Expectations, Inventory Management, and Product Development and Market Focus:



Strong Financial Performance:
- For the third quarter fiscal year 2025, Cirrus Logic delivered revenue of $555.7 million, surpassing the top end of its guidance range.
- The growth was primarily due to strong demand for products shipping into smartphones and a favorable mix of higher-margin products.
- The guidance for Q4 FY '25 is expected to range from $350 million to $410 million, reflecting the anticipation of stable demand conditions.

Expansion into Laptop Market:
- Cirrus Logic's entry into the laptop market is expected to contribute to its revenue growth, with aspirations to address half of the estimated 200 million to 220 million units per year.
- The company aims to expand its content in laptops from a single component to high single-digit configurations, targeting higher price points and diverse audio architectures.
- The growth in this market is anticipated to roughly double during fiscal '26 and see further meaningful step-ups beyond that.

Investment in New Markets and Technologies:
- The company is exploring new markets such as automotive and professional audio, with a focus on low-jitter clocks and timing products.
- Despite the long-term nature of these investments, Cirrus Logic has seen significant customer interest, which is expected to contribute to future growth.
- Ongoing R&D efforts in battery and power management hold promise, with the company currently shipping power-related products and developing high-precision sensing capabilities.

Gross Margin Improvement:
- Cirrus Logic reported a non-GAAP gross margin of 53.6% for Q3, up 140 basis points sequentially and 230 basis points year-over-year.
- The increase was driven by a shift in mix towards higher-margin products and lower supply chain costs, which are expected to continue to improve as new products ramp up.