Cirrus Logic Reports Fiscal Fourth Quarter Revenue of $372.8 Million and Full Fiscal Year 2023 Revenue of $1.90 Billion

Record Fiscal Year 2023 Revenue Driven By Higher Sales of Components Shipping in Smartphones

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 fourth quarter and full fiscal year 2023, which ended March 25, 2023, as well as the company’s current business outlook.

“We delivered solid financial results in FY23 as higher sales of products shipping in smartphones drove seven percent year-over-year revenue growth,” said John Forsyth, Cirrus Logic president and chief executive officer. “Additionally, the company made significant progress in our strategy of driving product diversification through our high-performance mixed-signal products, with revenue derived from these solutions increasing to 38 percent of total sales. With an extensive portfolio of existing products and a pipeline of innovations in development, we look forward to capitalizing on the many opportunities ahead of us to further broaden our technology and market reach.”

Reported Financial Results – Fourth Quarter FY23

Revenue of $372.8 million;
GAAP and non-GAAP gross margin of 50.0 percent and 50.1 percent;
GAAP operating expenses of $249.2 million and non-GAAP operating expenses of $119.8 million; and
GAAP loss per share of $(0.97) and non-GAAP earnings per share of $0.92.

Reported Financial Results – Full Year FY23

Revenue of $1.90 billion;
GAAP and non-GAAP gross margin of 50.4 percent and 50.5 percent;
GAAP operating expenses of $707.9 million and non-GAAP operating expenses of $486.4 million; and
GAAP earnings per share of $3.09 and non-GAAP earnings per share of $6.42.

GAAP operating expense for Q4 FY23 and the full fiscal year 2023 included $85.8 million in intangibles impairment and $10.6 million in lease impairments and restructuring costs.

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

Business Outlook – First Quarter FY24

Revenue is expected to range between $260 million and $320 million;
GAAP gross margin is forecasted to be between 49 percent and 51 percent; and
Combined GAAP R&D and SG&A expenses are anticipated to range between $142 million and $148 million, including approximately $23 million in stock-based compensation expense, $2 million in amortization of acquired intangibles, and $3 million in acquisition-related costs.

Cirrus Logic will host a live Q&A session at 6 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 (647) 362-9199, 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, diluted share count, 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 ability to drive product diversification through high-performance mixed-signal; our ability to capitalize on the many opportunities ahead and broaden our technology and market reach; and our estimates for the first quarter fiscal year 2024 revenue, gross margin, combined research and development and selling, general and administrative expense levels, stock compensation expense, amortization of acquired intangibles and acquisition-related costs. 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 effects of the global COVID-19 outbreak and the measures taken to limit the spread of COVID-19, including any disruptions to our business that could result from measures to contain the outbreak that may be taken by governmental authorities in the jurisdictions in which we and our supply chain operate; the susceptibility of the markets we address to economic downturns, including as a result of the COVID-19 outbreak and the actions taken to mitigate the spread of COVID-19; increased industry-wide capacity constraints that may impact our ability to meet current customer demand, which could cause an unanticipated decline in our sales and damage our existing customer relationships and our ability to establish new customer relationships; the potential for increased prices due to capacity constraints in our supply chain, which, if we are unable to increase our selling price to our customers, could result in lower revenues and margins that could adversely affect our financial results; recent significant increases in inflation in the U.S and overseas; the level and timing of orders and shipments during the first quarter of fiscal year 2024, 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 26, 2022 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									Twelve Months Ended
	Mar. 25,			Dec. 24,			Mar. 26,			Mar. 25,			Mar. 26,
		2023			2022			2022			2023			2022
	Q4'23			Q3'23			Q4'22			Q4'23			Q4'22
Audio	$	232,402		$	347,297		$	327,099		$	1,172,007		$	1,187,126
High-Performance Mixed-Signal		140,420			243,285			162,873			725,610			594,334
Net sales		372,822			590,582			489,972			1,897,617			1,781,460
Cost of sales		186,468			293,877			231,243			940,638			857,819
Gross profit		186,354			296,705			258,729			956,979			923,641
Gross margin		50.0	%		50.2	%		52.8	%		50.4	%		51.8	%

Research and development		115,162			118,063			111,394			458,412			406,307
Selling, general and administrative		37,642			37,262			39,470			153,144			150,996
Lease impairments and restructuring		10,632			—			—			10,632			—
Intangibles impairment		85,760			—			—			85,760			—
Total operating expenses		249,196			155,325			150,864			707,948			557,303

Income (loss) from operations		(62,842	)		141,380			107,865			249,031			366,338

Interest income (expense)		4,720			2,777			(103	)		9,087			615
Other income (expense)		(464	)		(3,716	)		180			(3,379	)		1,710
Income (loss) before income taxes		(58,586	)		140,441			107,942			254,739			368,663
Provision for income taxes		(4,917	)		36,964			11,528			78,036			42,308
Net income (loss)	$	(53,669	)	$	103,477		$	96,414		$	176,703		$	326,355

Basic earnings (loss) per share	$	(0.97	)	$	1.87		$	1.69		$	3.18		$	5.70
Diluted earnings (loss) per share:	$	(0.97	)	$	1.83		$	1.64		$	3.09		$	5.52

Weighted average number of shares:
Basic		55,219			55,239			56,993			55,614			57,278
Diluted		55,219			56,583			58,625			57,226			59,143

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									Twelve Months Ended
	Mar. 25,			Dec. 24,			Mar. 26,			Mar. 25,			Mar. 26,
		2023			2022			2022			2023			2022
Net Income (Loss) Reconciliation	Q4'23			Q3'23			Q4'22			Q4'23			Q4'22
GAAP Net Income (Loss)	$	(53,669	)	$	103,477		$	96,414		$	176,703		$	326,355
Amortization of acquisition intangibles		7,657			8,807			7,882			32,086			27,017
Stock-based compensation expense		22,533			20,487			17,024			81,641			66,392
Lease impairments and restructuring		10,632			—			—			10,632			—
Intangibles impairment		85,760			—			—			85,760			—
Acquisition-related costs		3,166			3,176			3,164			12,670			12,153
Investment write off		—			2,746			—			2,746			—
Adjustment to income taxes		(23,461	)		(2,936	)		(6,778	)		(34,832	)		(23,675	)
Non-GAAP Net Income	$	52,618		$	135,757		$	117,706		$	367,406		$	408,242

Earnings (Loss) Per Share Reconciliation
GAAP Diluted earnings (loss) per share	$	(0.97	)	$	1.83		$	1.64		$	3.09		$	5.52
Effect of Amortization of acquisition intangibles		0.14			0.15			0.14			0.56			0.46
Effect of Stock-based compensation expense		0.40			0.36			0.29			1.43			1.12
Effect of Lease impairments and restructuring		0.19			—			—			0.18			—
Effect of Intangibles impairment		1.51			—			—			1.50			—
Effect of Acquisition-related costs		0.06			0.06			0.05			0.22			0.20
Effect of Investment write off		—			0.05			—			0.05			—
Effect of Adjustment to income taxes		(0.41	)		(0.05	)		(0.11	)		(0.61	)		(0.40	)
Non-GAAP Diluted earnings per share	$	0.92		$	2.40		$	2.01		$	6.42		$	6.90

Diluted Shares Reconciliation
GAAP Diluted shares		55,219			56,583			58,625			57,226			59,143
Effect of weighted dilutive shares		1,821			—			—			—			—
Non-GAAP Diluted shares		57,040			56,583			58,625			57,226			59,143

Operating Income (Loss) Reconciliation
GAAP Operating Income (Loss)	$	(62,842	)	$	141,380		$	107,865		$	249,031		$	366,338
GAAP Operating Profit (Loss)		(16.9	)%		23.9	%		22.0	%		13.1	%		20.6	%
Amortization of acquisition intangibles		7,657			8,807			7,882			32,086			27,017
Stock-based compensation expense - COGS		372			309			261			1,270			1,024
Stock-based compensation expense - R&D		15,782			14,710			11,786			57,312			44,154
Stock-based compensation expense - SG&A		6,379			5,468			4,977			23,059			21,214
Lease impairments and restructuring		10,632			—			—			10,632			—
Intangibles impairment		85,760			—			—			85,760			—
Acquisition-related costs		3,166			3,176			3,164			12,670			12,153
Non-GAAP Operating Income	$	66,906		$	173,850		$	135,935		$	471,820		$	471,900
Non-GAAP Operating Profit		17.9	%		29.4	%		27.7	%		24.9	%		26.5	%

Operating Expense Reconciliation
GAAP Operating Expenses	$	249,196		$	155,325		$	150,864		$	707,948		$	557,303
Amortization of acquisition intangibles		(7,657	)		(8,807	)		(7,882	)		(32,086	)		(27,017	)
Stock-based compensation expense - R&D		(15,782	)		(14,710	)		(11,786	)		(57,312	)		(44,154	)
Stock-based compensation expense - SG&A		(6,379	)		(5,468	)		(4,977	)		(23,059	)		(21,214	)
Lease impairments and restructuring		(10,632	)		—			—			(10,632	)		—
Intangibles impairment		(85,760	)		—			—			(85,760	)		—
Acquisition-related costs		(3,166	)		(3,176	)		(3,164	)		(12,670	)		(8,692	)
Non-GAAP Operating Expenses	$	119,820		$	123,164		$	123,055		$	486,429		$	456,226

Gross Margin/Profit Reconciliation
GAAP Gross Profit	$	186,354		$	296,705		$	258,729		$	956,979		$	923,641
GAAP Gross Margin		50.0	%		50.2	%		52.8	%		50.4	%		51.8	%
Acquisition-related costs		—			—			—			—			3,461
Stock-based compensation expense - COGS		372			309			261			1,270			1,024
Non-GAAP Gross Profit	$	186,726		$	297,014		$	258,990		$	958,249		$	928,126
Non-GAAP Gross Margin		50.1	%		50.3	%		52.9	%		50.5	%		52.1	%


	Three Months Ended									Twelve Months Ended
	Mar. 25,			Dec. 24,			Mar. 26,			Mar. 25,			Mar. 26,
		2023			2022			2022			2023			2022
Effective Tax Rate Reconciliation	Q4'23			Q3'23			Q4'22			Q4'23			Q4'22
GAAP Tax Expense (Benefit)	$	(4,917	)	$	36,964		$	11,528		$	78,036		$	42,308
GAAP Effective Tax Rate		8.4	%		26.3	%		10.7	%		30.6	%		11.5	%
Adjustments to income taxes		23,461			2,936			6,778			34,832			23,675
Non-GAAP Tax Expense	$	18,544		$	39,900		$	18,306		$	112,868		$	65,983
Non-GAAP Effective Tax Rate		26.1	%		22.7	%		13.5	%		23.5	%		13.9	%

Tax Impact to EPS Reconciliation
GAAP Tax Expense (Benefit)	$	(0.09	)	$	0.65		$	0.20		$	1.36		$	0.72
Adjustments to income taxes		0.41			0.05			0.11			0.61			0.40
Non-GAAP Tax Expense	$	0.32		$	0.70		$	0.31		$	1.97		$	1.12

CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands; unaudited)

	Mar. 25,			Dec. 24,			Mar. 26,
		2023			2022			2022
ASSETS
Current assets
Cash and cash equivalents	$	445,784		$	434,544		$	369,814
Marketable securities		34,978			28,373			10,601
Accounts receivable, net		150,473			270,493			240,264
Inventories		233,450			152,426			138,436
Prepaid wafers		60,638			40,425			—
Other current assets		92,533			87,224			80,900
Total current Assets		1,017,856			1,013,485			840,015

Long-term marketable securities		36,509			44,784			63,749
Right-of-use lease assets		128,145			150,938			171,003
Property and equipment, net		162,972			156,602			157,077
Intangibles, net		38,876			133,032			158,145
Goodwill		435,936			435,936			435,791
Deferred tax asset		35,580			8,630			11,068
Long-term prepaid wafers		134,363			154,575			195,000
Other assets		73,729			67,907			91,552
Total assets	$	2,063,966		$	2,165,889		$	2,123,400

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	81,462		$	117,406		$	115,417
Accrued salaries and benefits		50,606			42,187			65,261
Lease liability		18,442			14,024			14,680
Acquisition-related liabilities		21,361			18,195			30,964
Other accrued liabilities		44,469			36,737			38,461
Total current liabilities		216,340			228,549			264,783

Non-current lease liability		122,631			143,252			163,162
Non-current income taxes		59,013			72,267			73,383
Long-term acquisition-related liabilities		—			—			8,692
Other long-term liabilities		7,700			5,501			13,563
Total long-term liabilities		189,344			221,020			258,800

Stockholders' equity:
Capital stock		1,670,141			1,639,056			1,578,427
Accumulated earnings (deficit)		(9,320	)		80,865			23,435
Accumulated other comprehensive loss		(2,539	)		(3,601	)		(2,045	)
Total stockholders' equity		1,658,282			1,716,320			1,599,817
Total liabilities and stockholders' equity	$	2,063,966		$	2,165,889		$	2,123,400

Prepared in accordance with Generally Accepted Accounting Principles

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(in thousands; unaudited)

	Three Months Ended
	Mar. 25,			Mar. 26,
		2023			2022
	Q4'23			Q4'22
Cash flows from operating activities:
Net income (loss)	$	(53,669	)	$	96,414
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		18,844			16,905
Stock-based compensation expense		22,533			17,024
Deferred income taxes		(40,943	)		(6,759	)
Loss on retirement or write-off of long-lived assets		350			115
Other non-cash charges		85			88
Lease impairments and restructuring		10,632			—
Intangibles impairment		85,760			—
Net change in operating assets and liabilities:
Accounts receivable, net		120,020			85,868
Inventories		(81,024	)		10,089
Other assets		(2,664	)		8,576
Accounts payable and other accrued liabilities		(32,260	)		27,711
Income taxes payable		(2,564	)		(963	)
Acquisition-related liabilities		3,166			3,163
Net cash provided by operating activities		48,266			258,231
Cash flows from investing activities:
Maturities and sales of available-for-sale marketable securities		8,337			4,963
Purchases of available-for-sale marketable securities		(5,830	)		(5,307	)
Purchases of property, equipment and software		(11,326	)		(8,048	)
Investments in technology		(309	)		(408	)
Net cash used in investing activities		(9,128	)		(8,800	)
Cash flows from financing activities:
Issuance of common stock, net of shares withheld for taxes		8,621			4,658
Repurchase of stock to satisfy employee tax withholding obligations		(1,519	)		(4,397	)
Repurchase and retirement of common stock		(35,000	)		(74,999	)
Net cash used in financing activities		(27,898	)		(74,738	)
Net increase in cash and cash equivalents		11,240			174,693
Cash and cash equivalents at beginning of period		434,544			195,121
Cash and cash equivalents at end of period	$	445,784		$	369,814

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
	Mar. 25,			Mar. 25,			Dec. 24,			Sep. 24,			Jun. 25,
		2023			2023			2022			2022			2022
	Q4'23			Q4'23			Q3'23			Q2'23			Q1'23

Net cash provided by operating activities (GAAP)	$	339,568		$	48,266		$	180,948		$	35,989		$	74,365
Capital expenditures		(36,714	)		(11,635	)		(7,608	)		(10,247	)		(7,224	)
Free Cash Flow (Non-GAAP)	$	302,854		$	36,631		$	173,340		$	25,742		$	67,141

Cash Flow from Operations as a Percentage of Revenue (GAAP)		18	%		13	%		31	%		7	%		19	%
Capital Expenditures as a Percentage of Revenue (GAAP)		2	%		3	%		1	%		2	%		2	%
Free Cash Flow Margin (Non-GAAP)		16	%		10	%		29	%		5	%		17	%

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Contacts

Investor Contact:

Chelsea Heffernan

Vice President, Investor Relations

Cirrus Logic, Inc.

(512) 851-4125

Investor@cirrus.com