Cirrus Logic Stepped Back From Synaptics Once Price Moved Past Its Value Line
The chipmaker's CFO says it made proposals, is not pursuing a deal, and guided December-quarter revenue to $510 million to $570 million.
Cirrus Logic, which designs low-power chips that handle sound and other signals in phones and other electronics, made acquisition proposals for Synaptics and is not currently pursuing a deal, CFO Jeff Woolard said on the company's earnings call Wednesday. "When the price moved beyond that, we stepped back," he said, referring to the company's view of value.
A bid held to a price
Woolard said Cirrus pursued Synaptics because the strategic logic was strong: pairing its mixed-signal, audio and power expertise with Synaptics' connectivity and sensing would have built a broader edge platform and diversified its customer and end-market mix. He said Cirrus "went in with a clear view of value and we held to it," and put forward what it believed was a compelling proposal for Synaptics shareholders.
Asked by an analyst whether such deals remain of interest, CEO John Forsyth said Cirrus is "very keen to engage in M&A" where it can authentically create value. He said organic opportunities come first in capital allocation and M&A second.
Forsyth pointed to overlaps with Synaptics in PCs and automotive: Synaptics makes touch and display controllers for the cabin, while Cirrus makes haptics (touch feedback) there. He said Cirrus will stay disciplined and does not want to put at risk the value its organic plan is going to create.
Woolard also said that, under company policy, Cirrus will not discuss specifics of its relationship with its largest customer. Apple accounted for about 91 percent of net sales in fiscal 2026, according to the company's annual report.
Quarter, guidance and buyback
Cirrus reported September-quarter revenue of $559.5 million, up 22% from the prior quarter and flat from a year earlier. Adjusted earnings were $2.70 a share, and adjusted gross margin was 53.8%.
For the December quarter, the company guided revenue to $510 million to $570 million, with gross margin of 51% to 53%. Woolard said the September quarter was a high point for margin, helped by a temporary benefit from wafers bought under earlier agreements. He said some December revenue was pulled into September, calling it a timing issue rather than a change in demand.
The board has authorized an additional $500 million share buyback. In the September quarter Cirrus spent $125.5 million repurchasing 991,983 shares at an average $126.51. After the quarter it spent $18.6 million on 170,757 shares at an average $108.67. The company ended the quarter with $1.1 billion in cash and investments and no debt.
Inventum and a soft PC market
Forsyth said Cirrus completed its acquisition of Inventum, a mixed-signal and power-management chip company based in Pavia, Italy, after the quarter ended. Cirrus has worked with the team for five years, and the deal adds engineering capacity for wearables and AI gadgets.
PCs remain a drag. Forsyth said shortages of memory and other components, and the higher prices that follow, are weighing on demand, and some OEMs have pushed out new model launches.
Cirrus still has $114.1 million left on its older repurchase authorization, on top of the new $500 million.
Sources
- Cirrus Logic slips on back of Q2 results, guidance; unveils $500M buyback (CRUS:NASDAQ) | Seeking Alpha — seekingalpha.com
- Cirrus Logic Non-GAAP EPS of $2.70 beats by $0.28, revenue of $559.46M beats by $19.21M (NASDAQ:CRUS) | Seeking Alpha — seekingalpha.com
- Cirrus Logic: Fiscal Q2 Earnings Snapshot | khou.com — Associated Press
- Cirrus Logic Reports Fiscal Second Quarter Revenue of $559.5 Million — businesswire.com
