Audio-chip developer Cirrus Logic (CRUS 3.35%) reported its fiscal fourth-quarter results after the market closed on May 1. Revenue and profit continued to decline as a weak market for smartphones took its toll. The company made some progress getting its chips in Android devices, but it so far hasn't been enough to reverse the negative impact of weakening iPhone sales.

Cirrus Logic results: The raw numbers


Q4 2019

Q4 2018

Year-Over-Year Change


$240.4 million

$303.2 million


GAAP net income

$6.2 million

$12.0 million


Non-GAAP earnings per share




Data source: Cirrus Logic.

What happened with Cirrus Logic this quarter?

  • Revenue from portable products was $207.1 million, down 21.2% year over year, while revenue for nonportable and other products was $33.3 million, down 17.5% year over year.
  • The sales drop was mostly due to lower sales of portable products shipping in smartphones, particularly Apple's iPhones. An increase in amplifier sales at Android customers partially offset this decline.
  • Cirrus generated 66% of revenue in the first quarter from Apple, its largest customer.
  • GAAP gross margin was 51.8%, up from 50.3% in the prior-year period. Non-GAAP gross margin was 52%, up from 50.5% in the prior-year period.
  • Cirrus spent $10 million repurchasing shares during the fourth quarter. It had $240 million remaining on its current share repurchase authorization as of March 30.
  • Cirrus ended the fourth quarter with $445 million of cash, up slightly from the third quarter.
A smartphone with a cracked screen.

Image source: Getty Images.

What management had to say

Cirrus laid out the progress it's made diversifying in its letter to shareholders:

We significantly expanded our penetration of the Android market, including the addition of a second 10 percent customer in the fourth quarter, as sales of boosted amplifiers accelerated. Additionally, we gained momentum with our haptic driver product line as we continue to move beyond audio and voice into adjacent markets. Our components are now shipping in six of the top 10 smartphone manufacturers, including four in China.

Cirrus' second-largest customer accounted for 15% of total revenue in the fourth quarter.

During the earnings call, CEO Jason Rhode talked about the company's philosophy on acquisitions:

We'd love to find M&A, if we find quality companies where we believe it would be a great addition, where it would be a key addition to our strategy, where it's philosophically and culturally aligned with what we do. ... They're rare. They're very hard to find, far more of them are things that don't end up adding a ton of shareholder value in the long term and we're very careful to make sure we avoid those.

Looking forward

Cirrus provided the following guidance for the first quarter of fiscal 2020:

  • Revenue between $200 million and $240 million, down 13.4% year over year at the midpoint. Compared to the first quarter two years ago, revenue will be down 31.5% at the midpoint.
  • GAAP gross margin between 49% and 51%.
  • Combined GAAP research and development and selling, general, and administrative expenses between $120 million and $126 million.

Cirrus called fiscal 2019 a challenging year financially, with fewer growth opportunities than expected in the smartphone market. The company successfully increased its share of the Android market, and it developed a slate of new products set to launch in the next 18 months, but a weak smartphone market pushed down revenue and profit.

Despite its diversification, Cirrus is still highly dependent on the iPhone. If the next generation of Apple's pricey phones falls short, Cirrus' results will continue to suffer.