Cirrus Logic (CRUS) Q1 FY2027 Earnings: Record Quarter, 90% Apple

Cirrus Logic, Inc. (CRUS) Q1 FY2027 — Q1 FY2027: revenue $459.7M, +12.9% y/y, a record first quarter. GAAP EPS $1.47; non-GAAP $1.84 vs a $1.81 non-GAAP bar. But the 10-Q puts one end customer at 90% of net sales vs 86%. Reported AMC Aug 5; Aug 6 close -4.57%. Cirrus Logic posted a record June quarter - revenue up 12.9%, non-GAAP EPS up 21.9%. It also came out of that quarter MORE dependent on one customer: Apple went from 86% of net sales to 90%, and non-Apple revenue FELL 19.4% to $46M. The stock closed down 4.57% the next day. THE CALL: HOLD (3/5, THE QUARTER IS REAL; THE CONCENTRATION IS THE RISK) — base-case value ~$131.00 vs ~$124.92 today. KEY METRICS: - CALL: HOLD 3/5, fair value $131 vs the $124.92 close (+4.8%), and 18.1% BELOW the $160 Street target. Owner earnings = GAAP net income $430.6M + D&A $52.6M - capex $27.6M = $455.6M; growth 4%/2.5%/2% terminal at 11.0%. EV $5.69B (terminal only 44%) + $1.12B net cash over 52.0M shares = $130.88. Bull $145, bear $114. - THE PRINT: revenue $459.723M, +12.9% y/y, a record first quarter. Audio $249.0M (+3.7%); High-Performance Mixed-Signal $210.7M (+26.0%), now 46% of sales. Gross margin 52.6% GAAP / 52.7% non-GAAP, flat y/y. GAAP EPS $1.47, non-GAAP $1.84 vs $1.81. Q2 FY27 guided $510-570M. - EPS BASIS, PROVEN NOT ASSUMED: the 1.84 vs 1.81 is the NON-GAAP line, not GAAP's $1.47. Proof the basis does not switch: FY26 non-GAAP EPS 1.51+2.83+2.97+1.95 = $9.26, exactly the $9.26 full-year figure Cirrus Logic reported. The beat is real - and it is 3 cents, 1.7%. - THE ANGLE - DIVERSIFICATION IN REVERSE: the 10-Q puts one end customer, Apple, at ~90% of net sales vs 86% a year ago. Applied to reported net sales, Apple rose 18.1% to $413.8M while everything else FELL 19.4%, $57.0M to $46.0M. The largest customer grew faster than the company - so every non-Apple dollar went backwards. - THE GUIDANCE CUSHION HIT ZERO: guide midpoint vs actual - Q4 FY25 +11.7%, Q1 FY26 +13.1%, Q2 FY26 +3.9%, Q3 FY26 +9.5%, Q4 FY26 +1.9%, then Q1 FY27 at -0.1%, the first miss of their own midpoint. Q2 FY27 is guided $510-570M, the IDENTICAL range guided a year ago that printed $561.0M - now 'down 4% y/y at the midpoint'. - QUALITY OF THE EPS GROWTH: non-GAAP pre-tax income $116.4M vs $103.1M = +12.9%, identical to revenue - zero operating leverage. Net income +19.7% purely on the tax rate falling 22.1% to 17.4% (FY27 guided 16-18%). Buyback test: $96.1M over LAST year's 53.3M shares = $1.80 vs $1.84 - only 10% of the gain. - BALANCE SHEET AND STREET: cash and securities $1.167B, no drawn debt, $350M revolver undrawn. Trailing FCF $571.0M (28% margin) on $598.6M operating cash flow. Inventory $262.7M, DOWN from $279.0M. Q1 buyback 211,099 shares at $163.43; post-quarter 359,350 at $140.53. FMP consensus $160 (high $190, low $130), 15 buy / 5 hold / 2 sell. What to watch: UP: record Q1 revenue $459.7M (+12.9%), non-GAAP EPS $1.84 (+21.9%), HPMS +26.0% and now 46% of sales, $571M trailing FCF, $1.167B cash with no drawn debt, and a price implying only 2.6% growth. DOWN: Apple 86% to 90% of sales, non-Apple revenue -19.4%, FY27 PC expectations LOWERED, zero operating leverage, September guided -4% y/y. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.