Cirrus Logic Reports Fiscal First Quarter Revenue of $374.0 Million

About this update from Cirrus Logic, Inc.

AUSTIN, Texas --(BUSINESS WIRE)-- 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 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 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 ) 75 (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 0.03 0.04 Effect of Stock-based compensation expense 0.38 0.40 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 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 435,936 435,936 435,936 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 — 6 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. Twelve Months Ended Three Months Ended Jun. 29 , Jun. 29 , Mar. 30 , Dec. 30 , Sep. 23 , 2024 2024 2024 2023 2023 Q1'25 Q1'25 Q4'24 Q3'24 Q2'24 Net cash provided by (used in) operating activities (GAAP) $ 548,648 $ 87,161 $ 170,526 $ 313,692 $ (22,731 ) Capital expenditures (36,180 ) (10,145 ) (7,695 ) (9,813 ) (8,527 ) Free Cash Flow (Non-GAAP) $ 512,468 $ 77,016 $ 162,831 $ 303,879 $ (31,258 ) Cash Flow from Operations as a Percentage of Revenue (GAAP) 30 % 23 % 46 % 51 % (5 )% Capital Expenditures as a Percentage of Revenue (GAAP) 2 % 3 % 2 % 2 % 2 % Free Cash Flow Margin (Non-GAAP) 28 % 21 % 44 % 49 % (6 )% RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION (in millions; unaudited) (not prepared in accordance with GAAP) Q2 FY25 Guidance Operating Expense Reconciliation GAAP Operating Expenses $ 149 - 155 Stock-based compensation expense (22 ) Amortization of acquisition intangibles (2 ) Non-GAAP Operating Expenses $ 125 - 131 View source version on businesswire.com : https://www.businesswire.com/news/home/20240806516771/en/ Investor Contact: Chelsea Heffernan Vice President, Investor Relations Cirrus Logic, Inc. (512) 851-4125 [email protected] Source: Cirrus Logic, Inc.

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