PART I - FINANCIAL INFORMATION This section provides the unaudited consolidated condensed financial statements and management's discussion and analysis for the quarter ended June 28, 2025 ITEM 1. FINANCIAL STATEMENTS This section presents Cirrus Logic's unaudited consolidated financial statements and detailed notes for the quarter ended June 28, 2025 Consolidated Condensed Balance Sheets This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time Consolidated Condensed Balance Sheets | Metric | June 28, 2025 (in thousands) | March 29, 2025 (in thousands) | | :-------------------------- | :--------------------------- | :---------------------------- | | Total Assets | $2,294,717 | $2,327,073 | | Total Current Assets | $1,241,122 | $1,239,734 | | Total Liabilities | $364,433 | $377,624 | | Total Stockholders' Equity | $1,930,284 | $1,949,449 | Consolidated Condensed Statements of Income This section details the company's revenues, expenses, and net income over a specific period Consolidated Condensed Statements of Income | Metric | Three Months Ended June 28, 2025 (in thousands) | Three Months Ended June 29, 2024 (in thousands) | YoY Change (%) | | :-------------------------- | :------------------------------------ | :------------------------------------ | :------------- | | Net Sales | $407,272 | $374,026 | 8.9% | | Gross Profit | $214,030 | $188,925 | 13.3% | | Income from Operations | $72,394 | $46,792 | 54.7% | | Net Income | $60,697 | $42,095 | 44.2% | | Basic EPS | $1.17 | $0.79 | 48.1% | | Diluted EPS | $1.14 | $0.76 | 50.0% | Consolidated Condensed Statements of Comprehensive Income This section presents the company's net income and other comprehensive income components Consolidated Condensed Statements of Comprehensive Income | Metric | Three Months Ended June 28, 2025 (in thousands) | Three Months Ended June 29, 2024 (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Net Income | $60,697 | $42,095 | | Foreign Currency Translation Gain (Loss) | $769 | $(358) | | Unrealized Gain (Loss) on Marketable Securities | $242 | $(358) | | Comprehensive Income | $61,657 | $41,454 | Consolidated Condensed Statements of Cash Flows This section outlines the cash inflows and outflows from operating, investing, and financing activities Consolidated Condensed Statements of Cash Flows | Metric | Three Months Ended June 28, 2025 (in thousands) | Three Months Ended June 29, 2024 (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Net Cash Provided by Operating Activities | $116,131 | $87,161 | | Net Cash Used in Investing Activities | $(6,215) | $(66,559) | | Net Cash Used in Financing Activities | $(100,666) | $(32,015) | | Net Increase (Decrease) in Cash and Cash Equivalents | $9,250 | $(11,413) | | Cash and Cash Equivalents at End of Period | $548,870 | $491,351 | Consolidated Condensed Statements of Stockholders' Equity This section details changes in the company's equity, including net income, stock repurchases, and stock-based compensation Consolidated Condensed Statements of Stockholders' Equity | Metric | June 28, 2025 (in thousands) | March 29, 2025 (in thousands) | | :-------------------------- | :--------------------------- | :---------------------------- | | Total Stockholders' Equity | $1,930,284 | $1,949,449 | | Accumulated Earnings | $49,035 | $90,351 | | Repurchase and Retirement of Common Stock (Q1 FY26) | $(100,965) | N/A | | Stock-based Compensation (Q1 FY26) | $20,809 | N/A | Notes to Consolidated Condensed Financial Statements This section provides detailed explanations and disclosures supporting the consolidated financial statements Note 1. Basis of Presentation This note describes the accounting principles and estimates used in preparing the financial statements - The unaudited consolidated condensed financial statements are prepared in accordance with U.S. GAAP and SEC rules, requiring management estimates and assumptions26 Note 2. Recently Issued Accounting Pronouncements This note discusses new accounting standards and their potential impact on the company's financial reporting - The Company is evaluating ASU 2023-09 (Income Taxes), effective for annual periods after December 15, 2024, and ASU 2024-03 (Expense Disaggregation Disclosures), effective for fiscal years after December 15, 20262728 Note 3. Marketable Securities This note provides details on the company's marketable securities, including fair value and unrealized gains/losses Marketable Securities | Metric | June 28, 2025 (in thousands) | March 29, 2025 (in thousands) | | :-------------------------- | :--------------------------- | :---------------------------- | | Total Securities (Fair Value) | $298,884 | $295,196 | | Gross Unrealized Gains | $1,881 | $1,680 | | Gross Unrealized Losses | $(17) | $(58) | - The Company classifies investments as available-for-sale securities; no investments were considered impaired as of June 28, 20252931 Note 4. Fair Value of Financial Instruments This note explains the valuation methodologies and inputs used for financial instruments measured at fair value Fair Value of Financial Instruments | Asset Category (June 28, 2025) | Level 1 (in thousands) | Level 2 (in thousands) | Total (in thousands) | | :----------------------------- | :--------------------- | :--------------------- | :------------------- | | Money Market Funds | $500,160 | $0 | $500,160 | | Corporate Debt Securities | $0 | $290,165 | $290,165 | | U.S. Treasury Securities | $8,719 | $0 | $8,719 | - The Company measures cash equivalents and marketable securities at fair value using Level 1 and Level 2 inputs; no Level 3 assets or liabilities were held3538 Note 5. Derivative Financial Instruments This note describes the company's use of derivatives to manage financial risks, primarily foreign currency exposure Derivative Financial Instruments | Metric | Three Months Ended June 28, 2025 (in thousands) | Three Months Ended June 29, 2024 (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Gain (loss) from Foreign Currency Forward Contracts | $1,164 | $(32) | - The Company uses foreign currency forward contracts to reduce the earnings impact of exchange rate fluctuations, recognizing gains and losses in 'Other income (expense)'40 Note 6. Accounts Receivable, net This note provides a breakdown of accounts receivable and the allowance for doubtful accounts Accounts Receivable, Net | Metric | June 28, 2025 (in thousands) | March 29, 2025 (in thousands) | | :-------------------------- | :--------------------------- | :---------------------------- | | Gross Accounts Receivable | $214,085 | $216,009 | | Allowance for Doubtful Accounts | $0 | $0 | | Accounts Receivable, Net | $214,085 | $216,009 | Note 7. Inventories This note details the composition of the company's inventory, including work in process and finished goods Inventories | Metric | June 28, 2025 (in thousands) | March 29, 2025 (in thousands) | | :-------------------------- | :--------------------------- | :---------------------------- | | Work in Process | $189,990 | $216,173 | | Finished Goods | $88,994 | $82,919 | | Total Inventories | $278,984 | $299,092 | Note 8. Revolving Credit Facility This note describes the company's credit facility, its terms, and outstanding balances - The Company has a $300 million senior secured revolving credit facility maturing on July 8, 2026, with no outstanding amounts as of June 28, 20254550 - The facility's benchmark interest rate was updated from LIBOR to Term SOFR in March 202346 Note 9. Revenues This note disaggregates revenue by product line and geographic region, highlighting key sales drivers Revenues by Product Line | Product Line | Three Months Ended June 28, 2025 (in thousands) | Three Months Ended June 29, 2024 (in thousands) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | Audio Products | $240,043 | $218,970 | | HPMS Products | $167,229 | $155,056 | | Total Net Sales | $407,272 | $374,026 | Revenues by Geographic Region | Geographic Region | Three Months Ended June 28, 2025 (in thousands) | Three Months Ended June 29, 2024 (in thousands) | | :---------------- | :------------------------------------ | :------------------------------------ | | China | $189,955 | $205,708 | | United States | $4,648 | $5,216 | | Rest of World | $212,669 | $163,102 | Note 10. Income Taxes This note provides details on income tax provision, effective tax rates, and significant tax-related developments Income Taxes | Metric | Three Months Ended June 28, 2025 (in thousands) | Three Months Ended June 29, 2024 (in thousands) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | Income before Income Taxes | $80,628 | $56,603 | | Provision for Income Taxes | $19,931 | $14,508 | | Effective Tax Rate | 24.7% | 25.6% | - Effective tax rates were unfavorably impacted by R&D capitalization requirements and U.S. tax rules on refundable tax credits56 - The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, permanently eliminates the U.S. R&D capitalization requirement, with effects expected in Q2 FY2657 - The Company is disputing IRS proposed adjustments of $168.3 million in additional tax and $63.7 million in penalties related to transfer pricing for fiscal years 2017-201961 Note 11. Net Income Per Share This note presents the calculation of basic and diluted net income per share Net Income Per Share | Metric | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Net Income (in thousands) | $60,697 | $42,095 | | Basic Earnings Per Share | $1.17 | $0.79 | | Diluted Earnings Per Share | $1.14 | $0.76 | | Diluted Weighted Average Common Shares Outstanding (in thousands) | 53,319 | 55,665 | Note 12. Commitments and Contingencies This note outlines the company's contractual obligations and potential future liabilities - The Company has a Capacity Reservation Agreement with GlobalFoundries for wafer supply through 2026, with a remaining $15 million non-refundable fee and $62 million prepayment balance6566 Note 13. Legal Matters This note discusses ongoing legal proceedings and management's assessment of their potential impact - Management believes no pending legal matters will have a material adverse effect on the Company's business, financial condition, results of operations, or cash flows68 Note 14. Stockholders' Equity This note details changes in stockholders' equity, including share repurchase programs and related tax implications - The Board authorized a new $500 million share repurchase program in March 2025, with approximately $454.1 million remaining as of June 28, 202571 - During the quarter, the Company repurchased 1.0 million shares for $100.0 million at an average cost of $98.66 per share71 - Net stock repurchases are subject to a 1% excise tax under the Inflation Reduction Act70 Note 15. Segment Information This note provides financial information by operating segment and disaggregated revenue by product and geography - The Company operates as one reportable segment, disaggregating revenue into Audio and High-Performance Mixed-Signal (HPMS) product lines73 Operating Expenses by Category | Operating Expense Category | Three Months Ended June 28, 2025 (in thousands) | Three Months Ended June 29, 2024 (in thousands) | | :------------------------- | :------------------------------------ | :------------------------------------ | | Personnel-related | $88,318 | $84,501 | | Product development | $13,731 | $14,916 | | Other segment items | $39,587 | $42,716 | | Total Operating Expense | $141,636 | $142,133 | Sales by Geographic Area | Geographic Area | Three Months Ended June 28, 2025 (in thousands) | Three Months Ended June 29, 2024 (in thousands) | | :-------------- | :------------------------------------ | :------------------------------------ | | China | $189,955 | $205,708 | | India | $75,429 | $38,032 | | Hong Kong | $49,175 | $41,649 | | Vietnam | $36,263 | $26,283 | | South Korea | $32,893 | $38,883 | | United States | $4,648 | $5,216 | | Rest of World | $18,909 | $18,255 | | Total Sales | $407,272 | $374,026 | ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's perspective on the Company's financial performance and condition for the quarter ended June 28, 2025, highlighting sales growth, liquidity, and operational strategies Overview This section introduces Cirrus Logic's business, strategic focus, and recent operational achievements - Cirrus Logic is a leader in low-power, high-precision mixed-signal processing solutions for mobile and consumer applications81 - The Company's strategy focuses on maintaining smartphone audio leadership, increasing HPMS content in smartphones, and expanding into new applications and markets82 - Recent achievements include success with latest-generation smartphone audio components, traction in the laptop market, and ramping production of general market products82 Critical Accounting Policies and Estimates This section discusses the key accounting judgments and assumptions that significantly impact the financial statements - No significant changes to critical accounting estimates or policies were reported for the three months ended June 28, 202584 Recently Issued Accounting Pronouncements This section refers to disclosures about new accounting standards and their potential effects on the company - Refer to Note 2 of the Notes to the Consolidated Condensed Financial Statements for a discussion of recently issued accounting pronouncements85 Results of Operations This section analyzes the company's financial performance, including revenue, gross margin, and operating expenses Results of Operations Summary | Metric | Three Months Ended June 28, 2025 (%) | Three Months Ended June 29, 2024 (%) | | :-------------------------- | :----------------------------------- | :----------------------------------- | | Net Sales | 100% | 100% | | Gross Margin | 53% | 51% | | Research and Development | 25% | 28% | | Selling, General and Administrative | 10% | 10% | | Income from Operations | 18% | 13% | | Net Income | 15% | 11% | Net Sales This section analyzes the drivers of net sales, including product line performance and customer concentration Net Sales | Metric | Three Months Ended June 28, 2025 (in millions) | Three Months Ended June 29, 2024 (in millions) | YoY Change (%) | | :-------------------------- | :------------------------------------ | :------------------------------------ | :------------- | | Total Net Sales | $407.3 | $374.0 | 9% | | Audio Products Sales | $240.0 | $218.9 | 9.6% | | HPMS Products Sales | $167.2 | $155.0 | 7.9% | - Net sales increased due to latest-generation products and higher smartphone unit volumes88 - Apple Inc. represented approximately 86% of the Company's total net sales for the first quarter of fiscal year 202691 Gross Margin This section discusses factors influencing the company's gross profit margin, such as product mix and pricing Gross Margin | Metric | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | Gross Margin | 52.6% | 50.5% | - Gross margin improved primarily due to a more favorable product mix92 Research and Development Expense This section analyzes changes in R&D spending and their impact on product innovation Research and Development Expense | Metric | Three Months Ended June 28, 2025 (in millions) | Three Months Ended June 29, 2024 (in millions) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | R&D Expense | $102.9 | $105.4 | - R&D expense decreased due to reduced stock-based compensation and product development costs, partially offset by increased employee-related costs93 Selling, General and Administrative Expense This section discusses trends in SG&A expenses, including employee-related costs and other administrative overhead Selling, General and Administrative Expense | Metric | Three Months Ended June 28, 2025 (in millions) | Three Months Ended June 29, 2024 (in millions) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | SG&A Expense | $38.7 | $36.8 | - SG&A expense increased primarily due to higher stock-based compensation and employee-related expenses, offset by the absence of prior year lease impairment costs94 Interest Income This section explains the sources and changes in the company's interest income from investments Interest Income | Metric | Three Months Ended June 28, 2025 (in millions) | Three Months Ended June 29, 2024 (in millions) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | Interest Income | $8.8 | $8.4 | - Interest income increased due to returns generated from higher combined average cash, cash equivalents, and marketable securities balances95 Interest Expense This section details the company's interest costs, primarily related to its revolving credit facility Interest Expense | Metric | Three Months Ended June 28, 2025 (in millions) | Three Months Ended June 29, 2024 (in millions) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | Interest Expense | $0.2 | $0.2 | - Interest expense primarily consists of commitment fees associated with the Revolving Credit Facility96 Other Income (Expense) This section covers non-operating income and expenses, including foreign currency remeasurement effects Other Income (Expense) | Metric | Three Months Ended June 28, 2025 (in millions) | Three Months Ended June 29, 2024 (in millions) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | Other Income (Expense) | $(0.4) | $1.6 | - This activity primarily related to non-investment income (expense) and remeasurement on foreign currency denominated monetary assets and liabilities97 Income Taxes This section analyzes the provision for income taxes, effective tax rates, and the impact of tax legislation Income Taxes Provision and Rate | Metric | Three Months Ended June 28, 2025 (in millions) | Three Months Ended June 29, 2024 (in millions) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | Provision for Income Taxes | $19.9 | $14.5 | | Effective Tax Rate | 24.7% | 25.6% | - Effective tax rates were unfavorably impacted by R&D capitalization requirements and U.S. tax rules on refundable tax credits100 - The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, is expected to impact future tax provisions by permanently eliminating the U.S. R&D capitalization requirement101 Liquidity and Capital Resources This section assesses the company's ability to generate and manage cash, including sources and uses of funds - Principal liquidity sources include cash on hand, cash from operations, marketable securities, and a $300 million Revolving Credit Facility102 - Cash generated from operating activities increased to $116.1 million for Q1 FY26, up from $87.2 million in Q1 FY25103 - Net cash used in investing activities decreased significantly to $6.2 million in Q1 FY26 from $66.6 million in Q1 FY25, primarily due to lower net purchases of marketable securities and capital expenditures104 - Net cash used in financing activities increased to $100.7 million in Q1 FY26, primarily due to higher stock repurchases105 - The Company believes its expected future cash earnings and existing resources are sufficient to meet short-term and long-term capital requirements106 Revolving Credit Facility This section provides details on the company's credit facility, its terms, and current utilization - The Company maintains a $300 million senior secured revolving credit facility, maturing on July 8, 2026107 - The facility's benchmark interest rate was updated to Term SOFR in March 2023108 - As of June 28, 2025, there were no amounts outstanding under the facility, and the Company was in compliance with all covenants109 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to market risks related to interest rates, currency movements, and marketable securities, which it manages using derivative instruments - The Company is exposed to market risks associated with interest rates on debt securities, currency movements on non-functional currency assets and liabilities, and market factors affecting marketable securities111 - Foreign currency forward contracts are used to manage exposure to foreign currency exchange risk111 - No material changes to market risk disclosures were reported as of June 28, 2025, compared to the fiscal year 2025 Annual Report on Form 10-K111 ITEM 4. CONTROLS AND PROCEDURES This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting Evaluation of disclosure controls and procedures This section reports on the effectiveness of the company's disclosure controls as assessed by management - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of June 28, 2025113 Changes in control over financial reporting This section discloses any material changes in the company's internal control over financial reporting - No changes in the Company's internal control over financial reporting occurred during the quarter ended June 28, 2025, that materially affected or are reasonably likely to materially affect it114 PART II - OTHER INFORMATION This section includes disclosures on legal proceedings, risk factors, equity security sales, and other miscellaneous information ITEM 1. LEGAL PROCEEDINGS Information regarding legal proceedings is incorporated by reference from Note 13 to the unaudited consolidated condensed financial statements, indicating management's belief that no pending matters will have a material adverse effect - Information regarding legal proceedings is incorporated by reference from Note 13 of the financial statements116 ITEM 1A. RISK FACTORS The Company's significant dependence on a limited number of key customers, particularly Apple Inc. (86% of net sales), poses substantial risks including potential reductions in sales, pricing pressure, and customer diversification - The Company depends on a limited number of customers and distributors for a substantial portion of its sales; Apple Inc. represented approximately 86% of net sales for the first quarter of fiscal year 2026118119 - Risks include customers stopping product incorporation with limited notice, lack of minimum purchase requirements, competition, internal technology development by customers, and pricing pressure120121 - No other material changes to risk factors were disclosed since the fiscal year 2025 Annual Report on Form 10-K117 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS During the quarter, the Company repurchased 1.013 million shares for $100.0 million, completing the 2022 authorization and initiating repurchases under a new $500 million authorization from March 2025, with $454.1 million remaining Share Repurchase Program Activity | Monthly Period | Total Shares Purchased (in thousands) | Average Price Paid Per Share | Approximate Dollar Value Remaining Under Plans (in thousands) | | :-------------------------- | :------------------------------------ | :--------------------------- | :------------------------------------------------------------ | | March 30, 2025 - April 26, 2025 | 297 | $84.26 | $529,108 | | April 27, 2025 - May 24, 2025 | 628 | $105.02 | $463,108 | | May 25, 2025 - June 28, 2025 | 88 | $101.73 | $454,108 | | Total | 1,013 | $98.66 | $454,108 | - The Company repurchased 1.0 million shares for $100.0 million during the first quarter of fiscal year 2026, completing the previous 2022 share repurchase authorization and beginning repurchases under the 2025 authorization124 - Approximately $454.1 million remains available for repurchase under the March 2025 authorization124 - Net stock repurchases are subject to a 1% excise tax under the Inflation Reduction Act125 ITEM 3. DEFAULTS UPON SENIOR SECURITIES The Company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported126 ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable to the Company - Not applicable127 ITEM 5. OTHER INFORMATION This section discloses trading arrangements, specifically a Rule 10b5-1(c) plan adopted by Denise Grode, EVP, Chief Human Resources Officer, to sell up to 4,410 securities - Denise Grode, EVP, Chief Human Resources Officer, adopted a Rule 10b5-1(c) trading arrangement on May 30, 2025, to sell up to 4,410 securities by October 31, 2025129 ITEM 6. EXHIBITS This section lists all exhibits filed as part of or incorporated by reference into the report, including corporate governance documents, CEO/CFO certifications, and Inline XBRL documents - Lists all exhibits filed or incorporated by reference, including the Amended and Restated Certificate of Incorporation, Bylaws, CEO/CFO certifications, and Inline XBRL documents130 Signatures The report is formally signed by Jeff Woolard, Chief Financial Officer of Cirrus Logic, Inc., on August 5, 2025, certifying its submission - The report was signed by Jeff Woolard, Chief Financial Officer of Cirrus Logic, Inc., on August 5, 2025135
Cirrus Logic(CRUS) - 2026 Q1 - Quarterly Report