Why Is Cirrus Logic (CRUS) Up 2.2% Since Last Earnings Report?

It has been about a month since the last earnings report for Cirrus Logic (CRUS). Shares have added about 2.2% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Cirrus Logic due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Cirrus Logic, Inc. before we dive into how investors and analysts have reacted as of late.

Cirrus Logic Q3 Earnings & Revenues Beat

Cirrus Logic reported third-quarter fiscal 2026 adjusted earnings per share (EPS) of $2.97, which surpassed the Zacks Consensus Estimate of $2.42. The company reported adjusted EPS of $2.83 in the prior-year quarter.

Cirrus Logic generated revenues of $580.6 million for the December quarter, up 24.7% year over year. The figure exceeded the company’s guidance ($500-$560 million), driven by strong demand components supplied to smartphones, along with a favorable mix of end devices. Sequentially, revenues increased 4%, reflecting higher shipments of smartphones. Year over year, sales rose 4%, mainly due to increased smartphone volumes. The top line beat the Zacks Consensus Estimate by 8.3%.

Also, the company made solid progress in executing its strategy to expand its addressable market and diversify its product portfolio. Key initiatives included sampling a new component designed to enable and enhance voice-based interfaces for future AI-enabled PCs, ramping its latest-generation amplifiers and codecs across mainstream PC platforms, and adding new product families aimed at prosumer and automotive markets. Looking ahead, the company expects to leverage its extensive intellectual property portfolio and deep engineering expertise to support sustained growth and long-term success.

Segment Details

This Texas-based company rearranged its reportable segments and created separate categories — High-Performance Mixed-Signal and Audio — in 2021.

Cirrus Logic’s High-Performance Mixed-Signal segment includes a few of its non-audio products. It contributed 41% to total revenues in the fiscal third quarter. Revenues from the same division grew 12.8% year over year to $236.2 million.

The Audio segment’s sales were down marginally by 0.5% to $344.5 million and contributed 59% to total revenues.

Margins

Non-GAAP gross margin contracted to 53.1% from 53.6% in the prior-year quarter, mainly due to pricing reductions, including anticipated declines that are even more pronounced. The company is focused on offsetting this pressure through cost reductions and improved efficiencies across its supply chain and operations.

It reported non-GAAP operating expenses of $133 million for the third quarter, near the high end the company’s guidance ($128-$134 million). Sequentially, OpEx increased by $5.3 million, primarily reflecting higher employee-related costs. This increase was partially offset by lower product development expenses, largely driven by the timing of tape-outs. Year over year, operating expenses jumped by $3.8 million, mainly due to higher employee-related costs and, to a lesser extent, increased professional fees, partially offset by lower product development expenses, reflecting reduced wafer and tape-out costs.

Non-GAAP operating income of $175.1 million grew 3.7% year over year.

Non-GAAP operating profit margin decreased to 30.2% from 30.4%.

Balance Sheet and Cash Flow

The company exited the fiscal third quarter with cash and marketable securities of $822.4 million compared with $564 million as of Dec. 28, 2024.

As of Dec. 27, 2025, accounts receivable were $279 million.

In the fiscal third quarter, it generated $290.8 million of net cash from operations compared with $92.2 million in the previous-year quarter. Free cash flow was $285.7 million in the quarter under review.

The company repurchased 591,000 shares worth $70 million in the reported quarter. As of Dec. 27, 2025, it had $344.1 million worth of shares under its existing share repurchase authorization.

Fiscal Q4 2026 Outlook

For the fourth quarter of fiscal 2026, Cirrus Logic provided a revenue outlook between $410 million and $470 million.

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

Combined GAAP R&D and SG&A are anticipated to be between $147 million and $153 million.

Non-GAAP operating expenses are estimated to be in the band of $124-$130 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

The consensus estimate has shifted 57.02% due to these changes.

VGM Scores

At this time, Cirrus Logic has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cirrus Logic has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Cirrus Logic is part of the Zacks Electronics - Semiconductors industry. Over the past month, Lam Research (LRCX), a stock from the same industry, has gained 6.3%. The company reported its results for the quarter ended December 2025 more than a month ago.

Lam Research reported revenues of $5.34 billion in the last reported quarter, representing a year-over-year change of +22.1%. EPS of $1.27 for the same period compares with $0.91 a year ago.

Lam Research is expected to post earnings of $1.33 per share for the current quarter, representing a year-over-year change of +27.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.1%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Lam Research. Also, the stock has a VGM Score of F.

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This article originally published on Zacks Investment Research (zacks.com).

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