Cirrus Logic Reports Fiscal First Quarter Revenue of $374.0 Million

Cirrus Logic, Inc. (NASDAQ: CRUS) today posted on its website at investor.cirrus.com the quarterly Shareholder Letter that contains the complete financial results for the first quarter of fiscal year 2025, which ended June 29, 2024, as well as the company’s current business outlook.

“Cirrus Logic delivered revenue above the top end of our guidance range in the June quarter driven by stronger-than-expected shipments into smartphones,” said John Forsyth, Cirrus Logic president and chief executive officer. “In addition to these strong results, during the quarter we began ramping production of our custom boosted amplifier and first 22-nanometer smart codec ahead of new smartphone launches that are expected later this year. We also executed against our growth strategy to drive product and end-market diversification as we saw strong design activity in laptops and introduced the latest products in a series of data converters targeting professional audio, consumer, and industrial applications. With a compelling roadmap of products and an outstanding track record of execution, we believe we are well-positioned to grow long-term shareholder value.”

Reported Financial Results – First Quarter FY25

Revenue of $374.0 million;
GAAP and non-GAAP gross margin of 50.5 percent and 50.6 percent;
GAAP operating expenses of $142.1 million and non-GAAP operating expenses of $118.0 million; and
GAAP earnings per share of $0.76 and non-GAAP earnings per share of $1.12.

A reconciliation of GAAP to non-GAAP financial information is included in the tables accompanying this press release.

Business Outlook – Second Quarter FY25

Revenue is expected to range between $490 million and $550 million;
GAAP gross margin is forecasted to be between 50 percent and 52 percent; and
Combined GAAP R&D and SG&A expenses are anticipated to range between $149 million and $155 million, including approximately $22 million in stock-based compensation expense and $2 million in amortization of acquired intangibles, resulting in a non-GAAP operating expense range between $125 million and $131 million.

Cirrus Logic will host a live Q&A session at 5 p.m. EDT today to discuss its financial results and business outlook. Participants may listen to the conference call on the investor relations website at investor.cirrus.com. A replay of the webcast can be accessed on the Cirrus Logic website approximately two hours following its completion or by calling (609) 800-9909 or toll-free at (800) 770-2030 (Access Code: 95424).

About Cirrus Logic, Inc.

Cirrus Logic is a leader in low-power, high-precision mixed-signal processing solutions that create innovative user experiences for the world’s top mobile and consumer applications. With headquarters in Austin, Texas, Cirrus Logic is recognized globally for its award-winning corporate culture.

Cirrus Logic, Cirrus and the Cirrus Logic logo are registered trademarks of Cirrus Logic, Inc. All other company or product names noted herein may be trademarks of their respective holders.

Use of non-GAAP Financial Information

To supplement Cirrus Logic's financial statements presented on a GAAP basis, the company has provided non-GAAP financial information, including non-GAAP net income, diluted earnings per share, operating income and profit, operating expenses, gross margin and profit, tax expense, tax expense impact on earnings per share, effective tax rate, free cash flow, and free cash flow margin. A reconciliation of the adjustments to GAAP results is included in the tables below. Non-GAAP financial information is not meant as a substitute for GAAP results but is included because management believes such information is useful to our investors for informational and comparative purposes. In addition, certain non-GAAP financial information is used internally by management to evaluate and manage the company. The non-GAAP financial information used by Cirrus Logic may differ from that used by other companies. These non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP.

Safe Harbor Statement

Except for historical information contained herein, the matters set forth in this news release contain forward-looking statements including our statements about our expectation for new smartphone launches later this year; our belief that we are well-positioned to grow long-term shareholder value; and our estimates for the second quarter fiscal year 2025 revenue, gross margin, combined research and development and selling, general and administrative expense levels, stock-based compensation expense, and amortization of acquired intangibles. In some cases, forward-looking statements are identified by words such as “expect,” “anticipate,” “target,” “project,” “believe,” “goals,” “opportunity,” “estimates,” “intend,” and variations of these types of words and similar expressions. In addition, any statements that refer to our plans, expectations, strategies, or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements are based on our current expectations, estimates, and assumptions and are subject to certain risks and uncertainties that could cause actual results to differ materially, and readers should not place undue reliance on such statements. These risks and uncertainties include, but are not limited to, the following: the level and timing of orders and shipments during the second quarter of fiscal year 2025, customer cancellations of orders, or the failure to place orders consistent with forecasts, along with the risk factors listed in our Form 10-K for the year ended March 30, 2024 and in our other filings with the Securities and Exchange Commission, which are available at www.sec.gov. The foregoing information concerning our business outlook represents our outlook as of the date of this news release, and we expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.

Summary Financial Data Follows:

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

(in thousands, except per share data; unaudited)

Three Months Ended

Jun. 29,

Mar. 30,

Jun. 24,

2024

2023

Q1'25

Q4'24

Q1'24

Audio

218,970

226,681

195,806

High-Performance Mixed-Signal

155,056

145,146

121,210

Net sales

374,026

371,827

317,016

Cost of sales

185,101

179,202

157,629

Gross profit

188,925

192,625

159,387

Gross margin

50.5

51.8

50.3

Research and development

105,363

103,383

106,215

Selling, general and administrative

36,770

36,866

35,379

Total operating expenses

142,133

140,249

141,594

Income from operations

46,792

52,376

17,793

Interest income

8,202

7,360

4,600

Other income (expense)

1,609

(78

)

377

Income before income taxes

56,603

59,658

22,770

Provision for income taxes

14,508

14,816

7,170

Net income

42,095

44,842

15,600

Basic earnings per share

0.79

0.83

0.28

Diluted earnings per share:

0.76

0.81

0.28

Weighted average number of shares:

Basic

53,433

53,739

54,862

Diluted

55,665

55,559

56,631

Prepared in accordance with Generally Accepted Accounting Principles

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION

(in thousands, except per share data; unaudited)

(not prepared in accordance with GAAP)

Non-GAAP financial information is not meant as a substitute for GAAP results, but is included because management believes such information is useful to our investors for informational and comparative purposes. In addition, certain non-GAAP financial information is used internally by management to evaluate and manage the company. As a note, the non-GAAP financial information used by Cirrus Logic may differ from that used by other companies. These non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP.

Three Months Ended

Jun. 29,

Mar. 30,

Jun. 24,

2024

2023

Net Income Reconciliation

Q1'25

Q4'24

Q1'24

GAAP Net Income

42,095

44,842

15,600

Amortization of acquisition intangibles

1,972

1,973

2,170

Stock-based compensation expense

21,385

22,158

22,715

Lease impairment

1,019

—

Acquisition-related costs

—

3,166

Adjustment to income taxes

(4,105

)

(5,628

)

Non-GAAP Net Income

62,366

69,048

38,023

Earnings Per Share Reconciliation

GAAP Diluted earnings per share

0.76

0.81

0.28

Effect of Amortization of acquisition intangibles

0.03

0.04

Effect of Stock-based compensation expense

0.38

0.40

Effect of Lease impairment

0.02

—

Effect of Acquisition-related costs

—

0.05

Effect of Adjustment to income taxes

(0.07

)

—

(0.10

)

Non-GAAP Diluted earnings per share

1.12

1.24

0.67

Operating Income Reconciliation

GAAP Operating Income

46,792

52,376

17,793

GAAP Operating Profit

12.5

14.1

5.6

Amortization of acquisition intangibles

1,972

1,973

2,170

Stock-based compensation expense - COGS

266

362

285

Stock-based compensation expense - R&D

15,763

15,483

15,952

Stock-based compensation expense - SG&A

5,356

6,313

6,478

Lease impairment

1,019

—

Acquisition-related costs

—

3,166

Non-GAAP Operating Income

71,168

76,507

45,844

Non-GAAP Operating Profit

19.0

20.6

14.5

Operating Expense Reconciliation

GAAP Operating Expenses

142,133

140,249

141,594

Amortization of acquisition intangibles

(1,972

)

(1,973

)

(2,170

)

Stock-based compensation expense - R&D

(15,763

)

(15,483

)

(15,952

)

Stock-based compensation expense - SG&A

(5,356

)

(6,313

)

(6,478

)

Lease impairment

1,019

—

Acquisition-related costs

—

(3,166

)

Non-GAAP Operating Expenses

118,023

116,480

113,828

Gross Margin/Profit Reconciliation

GAAP Gross Profit

188,925

192,625

159,387

GAAP Gross Margin

50.5

51.8

50.3

Stock-based compensation expense - COGS

266

362

285

Non-GAAP Gross Profit

189,191

192,987

159,672

Non-GAAP Gross Margin

50.6

51.9

50.4

GAAP Tax Expense

14,508

14,816

7,170

GAAP Effective Tax Rate

25.6

24.8

31.5

Adjustments to income taxes

4,105

(75

)

5,628

Non-GAAP Tax Expense

18,613

14,741

12,798

Non-GAAP Effective Tax Rate

23.0

17.6

25.2

Tax Impact to EPS Reconciliation

GAAP Tax Expense

0.26

0.27

0.13

Adjustments to income taxes

0.07

—

0.10

Non-GAAP Tax Expense

0.33

0.27

0.23

CONSOLIDATED CONDENSED BALANCE SHEET

(in thousands; unaudited)

Jun. 29,

Mar. 30,

Jun. 24,

2024

2023

ASSETS

Current assets

Cash and cash equivalents

491,351

502,764

352,346

Marketable securities

25,680

23,778

35,765

Accounts receivable, net

190,079

162,478

186,033

Inventories

232,566

227,248

300,956

Prepaid wafers

84,700

86,679

84,739

Other current assets

77,365

103,245

88,829

Total current Assets

1,101,741

1,106,192

1,048,668

Long-term marketable securities

227,527

173,374

38,029

Right-of-use lease assets

136,295

138,288

125,538

Property and equipment, net

170,953

170,175

167,238

Intangibles, net

27,624

29,578

36,447

Goodwill

435,936

Deferred tax asset

54,622

48,649

44,991

Long-term prepaid wafers

50,375

60,750

110,262

Other assets

60,552

68,634

49,483

Total assets

2,265,625

2,231,576

2,056,592

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

77,562

55,545

75,941

Accrued salaries and benefits

41,101

47,612

36,465

Lease liability

22,058

20,640

19,903

Acquisition-related liabilities

—

24,527

Other accrued liabilities

61,021

62,596

46,018

Total current liabilities

201,742

186,393

202,854

Non-current lease liability

132,016

134,576

125,071

Non-current income taxes

52,704

52,013

59,587

Other long-term liabilities

31,533

41,580

12,286

Total long-term liabilities

216,253

228,169

196,944

Stockholders' equity:

Capital stock

1,792,283

1,760,701

1,693,420

Accumulated earnings (deficit)

58,591

58,916

(33,621

)

Accumulated other comprehensive loss

(3,244

)

(2,603

)

(3,005

)

Total stockholders' equity

1,847,630

1,817,014

1,656,794

Total liabilities and stockholders' equity

2,265,625

2,231,576

2,056,592

Prepared in accordance with Generally Accepted Accounting Principles

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

(in thousands; unaudited)

Three Months Ended

Jun. 29,

Jun. 24,

2024

2023

Q1'25

Q1'24

Cash flows from operating activities:

Net income

42,095

15,600

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

12,359

11,941

Stock-based compensation expense

21,385

22,715

Deferred income taxes

(5,897

)

(9,411

)

Loss on retirement or write-off of long-lived assets

—

Other non-cash charges

1,104

1,334

Net change in operating assets and liabilities:

Accounts receivable, net

(27,601

)

(35,560

)

Inventories

(5,318

)

(67,506

)

Prepaid wafers

12,354

—

Other assets

(5,459

)

8,101

Accounts payable and other accrued liabilities

12,037

(10,278

)

Income taxes payable

30,102

20,079

Acquisition-related liabilities

—

3,166

Net cash provided by (used in) operating activities

87,161

(39,813

)

Cash flows from investing activities:

Maturities and sales of available-for-sale marketable securities

12,646

11,048

Purchases of available-for-sale marketable securities

(69,060

)

(13,372

)

Purchases of property, equipment and software

(9,990

)

(12,310

)

Investments in technology

(155

)

—

Net cash used in investing activities

(66,559

)

(14,634

)

Cash flows from financing activities:

Net proceeds from the issuance of common stock

10,196

560

Repurchase of stock to satisfy employee tax withholding obligations

(1,219

)

(1,047

)

Repurchase and retirement of common stock

(40,992

)

(38,504

)

Net cash used in financing activities

(32,015

)

(38,991

)

Net decrease in cash and cash equivalents

(11,413

)

(93,438

)

Cash and cash equivalents at beginning of period

502,764

445,784

Cash and cash equivalents at end of period

491,351

352,346

Prepared in accordance with Generally Accepted Accounting Principles

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION

(in thousands; unaudited)

Free cash flow, a non-GAAP financial measure, is GAAP cash flow from operations (or cash provided by operating activities) less capital expenditures. Capital expenditures include purchases of property, equipment and software as well as investments in technology, as presented within our GAAP Consolidated Condensed Statement of Cash Flows. Free cash flow margin represents free cash flow divided by revenue.