Cirrus Logic (CRUS, Financial) saw its stock fall by 2% despite reporting strong Q4 results. The company achieved its eighth consecutive EPS beat, surpassing expectations by at least $0.23. Revenue increased by 14.2% year-over-year to $424.5 million, exceeding the high end of guidance.
The guidance for Q1 is particularly notable, with expected revenues ranging from $330 million to $390 million. The midpoint of this guidance is above analyst expectations, indicating a positive outlook. Known for its conservative guidance, Cirrus Logic's above-midpoint forecast is a promising sign.
Year-over-year results for the March quarter benefited from higher-than-expected smartphone volumes and increased revenue from new-generation products. However, revenue was down 24% sequentially due to reduced smartphone volumes. During a Q&A, Cirrus Logic confirmed that pull-forward sales in March were limited.
In FY25, Cirrus Logic began shipping two new-generation products in its smartphone audio business: a boosted amplifier and a smart codec. The amplifier enhances system performance and efficiency, while the smart codec, the company's first 22-nanometer product, advances audio and mixed-signal processing. These products are expected to contribute to revenue from multiple smartphone generations in the coming years.
Cirrus Logic aims to diversify beyond smartphones, showing enthusiasm for its growing laptop business. The company reported low tens of millions in laptop revenue for FY25 and anticipates doubling this in FY26 due to increased design activity, a positive leading indicator.
The reason for the stock's decline is unclear, but it may be a "sell-the-news" reaction following a 30% stock increase in recent weeks.
