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 fiscal year 2024, which ended June 24, 2023, as well as the company's current business outlook.

"Cirrus Logic reported revenue for the June quarter towards the top end of guidance as we benefited from higher-than-expected unit volumes," said John Forsyth, Cirrus Logic president and chief executive officer. "During the quarter, we taped out our next-generation boosted amplifier, completed product validation on our first 22-nanometer smart codec, and began ramping production of our latest camera controller. We also made progress on product and end-market diversification as we gained momentum in laptops and began selectively refreshing certain core product lines that are expected to drive expansion outside of smartphones."

Reported Financial Results – First Quarter FY24

Revenue of $317.0 million;
GAAP and non-GAAP gross margin of 50.3 percent and 50.4 percent;
GAAP operating expenses of $141.6 million and non-GAAP operating expenses of $113.8 million; and
GAAP earnings per share of $0.28 and non-GAAP earnings per share of $0.67.

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

Business Outlook – Second Quarter FY24

Revenue is expected to range between $430 million and $490 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 $141 million and $147 million, including approximately $22 million in stock-based compensation expense, $2 million in amortization of acquired intangibles, and $3 million in acquisition-related costs and restructuring charges associated with our recently announced workforce reduction.

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).

Cirrus Logic to Present at Upcoming Conference

Cirrus Logic Chief Financial Officer Venk Nathamuni and Vice President of Mixed-Signal Products Carl Alberty will present at the KeyBanc Technology Leadership Forum in Vail, Colorado on August 7, 2023 at 2:30 p.m. MDT. A live webcast and replay of the presentation will be available on the company's investor relations website.

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 make progress with product and end-market diversification and refresh certain core product lines that are expected to drive expansion outside of smartphones; and our estimates for the second 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 and restructuring charges associated with our recently announced workforce reduction. 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: our ability to develop and ramp new products in a timely manner, including our next-generation boosted amplifier, our first 22-nm smart codec, and latest camera controller; our ability to commercialize new research and development efforts into new markets outside of smartphones; and the level and timing of orders and shipments during the second 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 25, 2023 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. 24,			Mar. 25,			Jun. 25,
	2023			2023			2022
	Q1'24			Q4'23			Q1'23
Audio	$	195,806		$	232,402		$	254,496
High-Performance Mixed-Signal		121,210			140,420			139,143
Net sales		317,016			372,822			393,639
Cost of sales		157,629			186,468			191,005
Gross profit		159,387			186,354			202,634
Gross margin		50.3	%		50.0	%		51.5	%

Research and development		106,215			115,162			109,716
Selling, general and administrative		35,379			37,642			38,642
Lease impairments and restructuring		—			10,632			—
Intangibles impairment		—			85,760			—
Total operating expenses		141,594			249,196			148,358

Income (loss) from operations		17,793			(62,842	)		54,276

Interest income (expense)		4,600			4,720			305
Other income (expense)		377			(464	)		506
Income (loss) before income taxes		22,770			(58,586	)		55,087
Provision for income taxes		7,170			(4,917	)		15,380
Net income (loss)	$	15,600		$	(53,669	)	$	39,707

Basic earnings (loss) per share	$	0.28		$	(0.97	)	$	0.71
Diluted earnings (loss) per share:	$	0.28		$	(0.97	)	$	0.69

Weighted average number of shares:
Basic		54,862			55,219			56,277
Diluted		56,631			55,219			57,804

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. 24,			Mar. 25,			Jun. 25,
	2023			2023			2022
Net Income (Loss) Reconciliation	Q1'24			Q4'23			Q1'23
GAAP Net Income (Loss)	$	15,600		$	(53,669	)	$	39,707
Amortization of acquisition intangibles		2,170			7,657			7,835
Stock-based compensation expense		22,715			22,533			18,138
Lease impairments and restructuring		—			10,632			—
Intangibles impairment		—			85,760			—
Acquisition-related costs		3,166			3,166			3,164
Adjustment to income taxes		(5,628	)		(23,461	)		(4,300	)
Non-GAAP Net Income	$	38,023		$	52,618		$	64,544

Earnings (Loss) Per Share Reconciliation
GAAP Diluted earnings (loss) per share	$	0.28		$	(0.97	)	$	0.69
Effect of Amortization of acquisition intangibles		0.04			0.14			0.14
Effect of Stock-based compensation expense		0.40			0.40			0.31
Effect of Lease impairments and restructuring		—			0.19			—
Effect of Intangibles impairment		—			1.51			—
Effect of Acquisition-related costs		0.05			0.06			0.05
Effect of Adjustment to income taxes		(0.10	)		(0.41	)		(0.07	)
Non-GAAP Diluted earnings per share	$	0.67		$	0.92		$	1.12

Diluted Shares Reconciliation
GAAP Diluted shares		56,631			55,219			57,804
Effect of weighted dilutive shares		—			1,821			—
Non-GAAP Diluted shares		56,631			57,040			57,804

Operating Income (Loss) Reconciliation
GAAP Operating Income (Loss)	$	17,793		$	(62,842	)	$	54,276
GAAP Operating Profit (Loss)		5.6	%		(16.9	)%		13.8	%
Amortization of acquisition intangibles		2,170			7,657			7,835
Stock-based compensation expense - COGS		285			372			277
Stock-based compensation expense - R&D		15,952			15,782			12,592
Stock-based compensation expense - SG&A		6,478			6,379			5,269
Lease impairments and restructuring		—			10,632			—
Intangibles impairment		—			85,760			—
Acquisition-related costs		3,166			3,166			3,164
Non-GAAP Operating Income	$	45,844		$	66,906		$	83,413
Non-GAAP Operating Profit		14.5	%		17.9	%		21.2	%

Operating Expense Reconciliation
GAAP Operating Expenses	$	141,594		$	249,196		$	148,358
Amortization of acquisition intangibles		(2,170	)		(7,657	)		(7,835	)
Stock-based compensation expense - R&D		(15,952	)		(15,782	)		(12,592	)
Stock-based compensation expense - SG&A		(6,478	)		(6,379	)		(5,269	)
Lease impairments and restructuring		—			(10,632	)		—
Intangibles impairment		—			(85,760	)		—
Acquisition-related costs		(3,166	)		(3,166	)		(3,164	)
Non-GAAP Operating Expenses	$	113,828		$	119,820		$	119,498

Gross Margin/Profit Reconciliation
GAAP Gross Profit	$	159,387		$	186,354		$	202,634
GAAP Gross Margin		50.3	%		50.0	%		51.5	%
Stock-based compensation expense - COGS		285			372			277
Non-GAAP Gross Profit	$	159,672		$	186,726		$	202,911
Non-GAAP Gross Margin		50.4	%		50.1	%		51.5	%


	Three Months Ended
	Jun. 24,			Mar. 25,			Jun. 25,
	2023			2023			2022
Effective Tax Rate Reconciliation	Q1'24			Q4'23			Q1'23
GAAP Tax Expense (Benefit)	$	7,170		$	(4,917	)	$	15,380
GAAP Effective Tax Rate		31.5	%		8.4	%		27.9	%
Adjustments to income taxes		5,628			23,461			4,300
Non-GAAP Tax Expense	$	12,798		$	18,544		$	19,680
Non-GAAP Effective Tax Rate		25.2	%		26.1	%		23.4	%

Tax Impact to EPS Reconciliation
GAAP Tax Expense (Benefit)	$	0.13		$	(0.09	)	$	0.27
Adjustments to income taxes		0.10			0.41			0.07
Non-GAAP Tax Expense	$	0.23		$	0.32		$	0.34

CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands; unaudited)

	Jun. 24,			Mar. 25,			Jun. 25,
	2023			2023			2022
ASSETS
Current assets
Cash and cash equivalents	$	352,346		$	445,784		$	379,335
Marketable securities		35,765			34,978			18,397
Accounts receivable, net		186,033			150,473			206,272
Inventories		300,956			233,450			174,370
Prepaid wafers		84,739			60,638			—
Other current assets		88,829			92,533			82,634
Total current Assets		1,048,668			1,017,856			861,008

Long-term marketable securities		38,029			36,509			55,965
Right-of-use lease assets		125,538			128,145			168,680
Property and equipment, net		167,238			162,972			157,165
Intangibles, net		36,447			38,876			149,984
Goodwill		435,936			435,936			435,936
Deferred tax asset		44,991			35,580			16,928
Long-term prepaid wafers		110,262			134,363			195,000
Other assets		49,483			73,729			65,236
Total assets	$	2,056,592		$	2,063,966		$	2,105,902

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	75,941		$	81,462		$	121,451
Accrued salaries and benefits		36,465			50,606			41,026
Lease liability		19,903			18,442			13,988
Acquisition-related liabilities		24,527			21,361			30,964
Other accrued liabilities		46,018			44,469			45,167
Total current liabilities		202,854			216,340			252,596

Non-current lease liability		125,071			122,631			159,344
Non-current income taxes		59,587			59,013			73,735
Long-term acquisition-related liabilities		—			—			11,856
Other long-term liabilities		12,286			7,700			9,184
Total long-term liabilities		196,944			189,344			254,119

Stockholders' equity:
Capital stock		1,693,420			1,670,141			1,596,684
Accumulated earnings (deficit)		(33,621	)		(9,320	)		5,894
Accumulated other comprehensive loss		(3,005	)		(2,539	)		(3,391	)
Total stockholders' equity		1,656,794			1,658,282			1,599,187
Total liabilities and stockholders' equity	$	2,056,592		$	2,063,966		$	2,105,902

Prepared in accordance with Generally Accepted Accounting Principles

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

	Three Months Ended

	Jun. 24,			Jun. 25,
	2023			2022
	Q1'24			Q1'23
Cash flows from operating activities:
Net income	$	15,600		$	39,707
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		11,941			16,515
Stock-based compensation expense		22,715			18,138
Deferred income taxes		(9,411	)		(5,860	)
Loss on retirement or write-off of long-lived assets		6			292
Other non-cash charges		1,334			99
Net change in operating assets and liabilities:
Accounts receivable, net		(35,560	)		33,992
Inventories		(67,506	)		(35,934	)
Other assets		8,101			549
Accounts payable and other accrued liabilities		(10,278	)		(20,327	)
Income taxes payable		20,079			24,030
Acquisition-related liabilities		3,166			3,164
Net cash provided by (used in) operating activities		(39,813	)		74,365
Cash flows from investing activities:
Maturities and sales of available-for-sale marketable securities		11,048			4,694
Purchases of available-for-sale marketable securities		(13,372	)		(5,186	)
Purchases of property, equipment and software		(12,310	)		(6,776	)
Investments in technology		—			(448	)
Net cash used in investing activities		(14,634	)		(7,716	)
Cash flows from financing activities:
Issuance of common stock, net of shares withheld for taxes		560			120
Repurchase of stock to satisfy employee tax withholding obligations		(1,047	)		(866	)
Repurchase and retirement of common stock		(38,504	)		(56,382	)
Net cash used in financing activities		(38,991	)		(57,128	)
Net increase (decrease) in cash and cash equivalents		(93,438	)		9,521
Cash and cash equivalents at beginning of period		445,784			369,814
Cash and cash equivalents at end of period	$	352,346		$	379,335

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

Net cash provided by (used in) operating activities (GAAP)	$	225,390		$	(39,813	)	$	48,266		$	180,948		$	35,989
Capital expenditures		(41,800	)		(12,310	)		(11,635	)		(7,608	)		(10,247	)
Free Cash Flow (Non-GAAP)	$	183,590		$	(52,123	)	$	36,631		$	173,340		$	25,742

Cash Flow from Operations as a Percentage of Revenue (GAAP)		12	%		(13	)%		13	%		31	%		7	%
Capital Expenditures as a Percentage of Revenue (GAAP)		2	%		4	%		3	%		1	%		2	%
Free Cash Flow Margin (Non-GAAP)		10	%		(16	)%		10	%		29	%		5	%

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Cirrus Logic Reports Fiscal First Quarter Revenue of $317.0 Million