Cirrus Logic, Inc. (CRUS)

Cirrus Logic designs chips for the place where sound and other analog signals meet digital computing, and it reports sales in two product lines. Audio Products are amplifiers, codecs (a codec puts an analog-to-digital converter and a digital-to-analog converter on one chip), smart codecs with digital signal processing built in, and standalone digital signal processors; they go into smartphones, PCs, tablets, AR/VR headsets, wearables, home theater systems, car entertainment systems and professional audio. High Performance Mixed Signal Products, which the company shortens to HPMS, are camera controllers for automatic focus and image stabilization, haptic and sensing parts that make a screen feel like it clicks, and battery and power chips; they are used mainly in smartphones, with a further range serving automotive, industrial and imaging uses. SoundClear is the company's name for the tools, software and algorithms that ride on the audio hardware. 192021

How it operates

Cirrus Logic designs chips for the place where sound and other analog signals meet digital computing, and it reports sales in two product lines. Audio Products are amplifiers, codecs (a codec puts an analog-to-digital converter and a digital-to-analog converter on one chip), smart codecs with digital signal processing built in, and standalone digital signal processors; they go into smartphones, PCs, tablets, AR/VR headsets, wearables, home theater systems, car entertainment systems and professional audio. High Performance Mixed Signal Products, which the company shortens to HPMS, are camera controllers for automatic focus and image stabilization, haptic and sensing parts that make a screen feel like it clicks, and battery and power chips; they are used mainly in smartphones, with a further range serving automotive, industrial and imaging uses. SoundClear is the company's name for the tools, software and algorithms that ride on the audio hardware. 192021

The stated strategy has three prongs: hold the lead in smartphone audio, put more high-performance mixed-signal content into smartphones, and use both to reach other applications and markets. The customer list is short to the point of being one name. In fiscal year 2026 the ten largest end customers were about 96 percent of net sales, and one of them, Apple Inc., buying through several contract manufacturers, was about 91 percent, against 89 percent the year before and 87 percent the year before that. No other customer or distributor reached 10 percent. Because the parts are proprietary and generally not available from second sources, the company treats the end customer as whoever specifies the chip in a design, even when the invoice goes to an assembler: Foxconn and Luxshare, grouped at their parent level, were 39 percent and 22 percent of gross trade receivables at the end of the year. 222324

Sales are split by where the goods ship, not by where the finished product is sold, and 99 percent of them are international, a figure that includes sales to United States based end customers whose products are built by contract manufacturers or plants overseas. By ship-to country in fiscal year 2026: China 1.1 billion dollars, 53.4 percent of revenue; India 313.8 million, 15.7 percent; Hong Kong 222.7 million, 11.2 percent; Vietnam 185.1 million, 9.3 percent; South Korea 120.0 million, 6.0 percent; other countries outside the United States 74.1 million, 3.7 percent; and the United States itself 14.9 million, 0.7 percent. 252627

Cirrus Logic owns no chip factories. It is fabless, meaning it designs the chips and contracts out every step of making them, buying wafers mainly from GLOBALFOUNDRIES Inc. and Taiwan Semiconductor Manufacturing Company, Limited, and having them packaged and tested by Advanced Semiconductor Engineering, Amkor Technology, STATS ChipPAC, SFA Semicon and Siliconware Precision Industries. The substantial majority of its wafers are made by TSMC in Taiwan and by GlobalFoundries in Singapore and Germany. In July 2021 it reserved capacity and fixed wafer pricing with GlobalFoundries for calendar years 2022 through 2026, paying a 60 million dollar non-refundable reservation fee and prepaying 195 million dollars for future wafers; by the end of fiscal year 2026 the unamortized fee was down to 6.7 million dollars, the prepayment to 14.7 million, and the remaining obligation to buy wafers to about 180 million. 282930313233

The specifics

The company was incorporated in California in 1984, became public in 1989 and reincorporated in Delaware in February 1999. Its principal sites are Austin, Texas and Edinburgh, Scotland. It owns about 155,000 square feet of Austin offices, filled mostly with research staff and test equipment, leases about another 280,000 square feet there, and leases about 125,000 square feet of office and laboratory space in Edinburgh. On the record this site holds it has been filing with the SEC since 1994. 34353637

Patents are the fence around the designs. As of March 28, 2026 the company held about 4,340 pending and issued patents worldwide, among them about 1,620 granted United States patents and 430 United States applications still pending, with the American ones expiring between 2026 and 2046. It says the business as a whole does not depend on any one patent or group of patents, and that no patent expiring in 2026 matters materially to it. SoundClear sits among its registered United States trademarks. 3839

No single company competes across all of the product lines, but the filing names as principal competitors AKM Semiconductor Inc., Analog Devices Inc., QUALCOMM Incorporated, Realtek Semiconductor Corporation, Renesas Electronics Corporation, Shanghai Awinic Technology Co., Ltd., Shenzhen Goodix Technology Co, Ltd., Skyworks Solutions Inc., ST Microelectronics N.V., Synaptics Incorporated and Texas Instruments, Inc. The company describes an industry marked by rapid technological change, price erosion and a push to fold more functions into fewer chips, expects sharper competition from newcomers and from customers who build their own chips, and notes that some rivals own fabrication plants, which can help them on cost and capacity. 40414243

Two outside forces shape the business. Export rules reach the customer list: certain products fall under the Export Administration Regulations administered by the Commerce Department's Bureau of Industry and Security, and the company says some of its Chinese customers or their affiliated entities have been added to the BIS Entity List, which limits what it can do for them. And the end market is consumer electronics and smartphones, where the company says it has experienced, and expects to keep experiencing, slowing growth in a maturing smartphone market as developed countries saturate, replacement cycles lengthen and the market for refurbished devices grows. 4445

What drives growth, line by line

Revenue reached 2.0 billion dollars in fiscal year 2026, 5 percent above fiscal year 2025 and the sixth step in a run that started at 1.4 billion in 2021. Gross margin was 52.8 percent against 52.5 percent, which the filing puts down to a more favorable product mix. Research and development spending was 434.0 million dollars, 0.7 million below the year before. Net income was 414.4 million dollars and cash from operations 650.6 million, the latter helped by a 103.4 million favorable swing in working capital as inventory and prepaid wafer balances came down and payables rose. 464748495051

Audio Products. The bigger line, at 1.2 billion dollars, 58.1 percent of revenue, up 2.0 percent on the year. The filing credits demand for components shipping into smartphones and higher PC sales. It singles out a custom boosted amplifier and a 22 nanometer smart codec as the parts behind what it calls robust smartphone demand, and says it gained share across all PC segments. 25475253

High Performance Mixed Signal Products. 837.4 million dollars, 41.9 percent of revenue and the faster-growing line, up 10.3 percent or 78.5 million dollars, which the filing attributes primarily to demand for components shipping into smartphones. During the year the company began developing next-generation camera controller components and says it validated several new battery and power technologies in silicon. 254752

Where the goods went moved as much as how many went. Shipments to India rose 52.4 percent to 313.8 million dollars and to Vietnam 50.4 percent to 185.1 million, while China, still much the largest destination at 1.1 billion dollars, fell 5.3 percent and South Korea fell 15.9 percent. The figures are net sales by ship-to location of the customer, and the filing notes that its international sales include sales to United States based end customers whose products are made by contract manufacturers or plants overseas. 252627

What comes next, in the company's own words: it recently joined its largest customer's American Manufacturing Program and is working with that customer and GlobalFoundries on new process technologies, including a first attempt to manufacture at the Malta, New York plant; it is designing a smart power chip to support that customer's FaceID, which it calls a new application space for the company; it says new amplifiers and codecs aimed at a wider range of platforms and AI-enabled PCs have positioned it well for continued growth in fiscal year 2027; and it expects research and development spending to rise in fiscal year 2027 on planned headcount growth and product development costs. 5253545556

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What the desk infers Inferred

1. Inferred

   The largest customer the results discussion never names is Apple Inc., and the year's news in that relationship is that it is widening: a new kind of chip for FaceID, and a place in that customer's American manufacturing program.

   Because

   • The filing names one end customer, Apple Inc., buying through multiple contract manufacturers, at about 91 percent of net sales in fiscal year 2026, and says no other customer or distributor reached 10 percent. 23
   • The results discussion speaks of the largest customer without naming it: a collaboration supporting that customer's FaceID, and that customer's American Manufacturing Program, which brings work with GlobalFoundries at the Malta, New York plant. 5255
   • At about 91 percent of net sales, with no other customer or distributor above 10 percent, no other buyer can be the one the discussion calls largest. 23
   • The chair of the board, David J. Tupman, rose to vice president of hardware engineering at Apple Inc. between 2001 and 2011. 12
   Confidence 95 of 100Wrong if A filing or a company statement that names a company other than Apple Inc. as its largest customer, or that puts another end customer above it in net sales.
2. Inferred

   The geography table is a map of where phones are assembled, not of where they are bought: the jump in India and Vietnam and the dip in China track assembly moving out of China rather than demand moving with it.

   Because

   • The revenue split is net sales by ship-to location of the customer. 27
   • The one end customer at about 91 percent of net sales buys through multiple contract manufacturers rather than directly. 23
   • Foxconn and Luxshare, grouped at their parent level, held 39 percent and 22 percent of gross trade receivables at the end of fiscal year 2026, the only two above 10 percent. 24
   • Shipments to India rose 52.4 percent and to Vietnam 50.4 percent while China fell 5.3 percent, and the United States took 0.7 percent of the total. 25
   • International sales, 99 percent of the total, are said to include sales to United States based end customers that manufacture through contract manufacturers or plants located overseas. 26
   Confidence 85 of 100Wrong if A filing that reports revenue by the market where the finished products are sold and shows India and Vietnam as end markets on that scale, or that names an Indian or Vietnamese end customer above 10 percent of net sales.
3. Inferred

   The GlobalFoundries capacity deal is nearly run out, and the working capital release that lifted fiscal year 2026 cash from operations is largely the last of that prepayment coming back rather than a new source of cash.

   Because

   • The agreement covers calendar years 2022 through 2026, and a February 2025 amendment set the quarterly spread of the wafers left under it. 31
   • Of a 60 million dollar reservation fee, 6.7 million was still unamortized at the end of fiscal year 2026; of a 195 million dollar wafer prepayment, 14.7 million was left. 3233
   • Cash from operations was 650.6 million dollars, helped by a 103.4 million favorable change in working capital driven primarily by decreases in inventory and prepaid wafer balances and increases in accounts payable. 49
   • Capital spending has fallen two years running, to 14.0 million dollars in fiscal year 2026 from 37.6 million in 2024. 46
   Confidence 75 of 100Wrong if A filing that extends or replaces the Capacity Reservation Agreement past calendar year 2026, or that reports a fresh wafer prepayment restoring the prepaid wafer balance.