crus-20251227

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 27, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ____ to ____

Commission File Number 0-17795

CIRRUS LOGIC, INC.

(Exact name of registrant as specified in its charter)

Delaware

77-0024818

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

800 W. 6th Street

Austin,

Texas

78701

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:

(512)

851-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, $0.001 par value

CRUS

The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☑	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

The number of shares of the registrant's common stock, $0.001 par value, outstanding as of January 30, 2026 was 51,007,389.

CIRRUS LOGIC, INC.

FORM 10-Q QUARTERLY REPORT

QUARTERLY PERIOD ENDED DECEMBER 27, 2025

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION








Item 1.	Financial Statements

	Consolidated Condensed Balance Sheets - December 27, 2025 (unaudited) and March 29, 2025	3

	Consolidated Condensed Statements of Income (unaudited) - Three and Nine Months Ended December 27, 2025 and December 28, 2024	4

	Consolidated Condensed Statements of Comprehensive Income (unaudited) - Three and Nine Months Ended December 27, 2025 and December 28, 2024	5

	Consolidated Condensed Statements of Cash Flows (unaudited) - Nine Months Ended December 27, 2025 and December 28, 2024	6

	Consolidated Condensed Statements of Stockholders' Equity (unaudited) - Three and Nine Months Ended December 27, 2025 and December 28, 2024	7

	Notes to Consolidated Condensed Financial Statements (unaudited)	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22

Item 4.	Controls and Procedures	22

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	22

Item 1A.	Risk Factors	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Mine Safety Disclosures	25

Item 5.	Other Information	26

Item 6.	Exhibits	26

	Signatures	27

Part I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands)


	December 27,		March 29,
	2025		2025
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	778,083	$	539,620
Marketable securities	44,280		56,160
Accounts receivable, net	278,989		216,009
Inventories	189,483		299,092
Prepaid assets	54,373		48,236
Prepaid wafers	32,873		52,560
Other current assets	31,268		28,057
Total current assets	1,409,349		1,239,734

Long-term marketable securities	259,564		239,036
Right-of-use lease assets	123,432		126,688
Property and equipment, net	148,352		159,900
Intangibles, net	22,619		27,461
Goodwill	435,936		435,936
Deferred tax assets	38,247		48,150
Long-term prepaid wafers	—		15,512
Other assets	19,021		34,656
Total assets	$	2,456,520	$	2,327,073

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	68,863	$	63,162
Accrued salaries and benefits	49,769		52,075
Software license agreements	26,803		26,745
Current lease liabilities	19,713		21,811

Other accrued liabilities	19,043		31,395
Total current liabilities	184,191		195,188

Long-term liabilities:

Non-current lease liabilities	117,599		121,908
Non-current income taxes	46,033		44,040

Software license agreements	5,468		16,488


Total long-term liabilities	169,100		182,436

Stockholders' equity:
Capital stock	1,925,238		1,860,281
Accumulated earnings	178,693		90,351
Accumulated other comprehensive loss	(702)		(1,183)
Total stockholders' equity	2,103,229		1,949,449
Total liabilities and stockholders' equity	$	2,456,520	$	2,327,073

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(in thousands, except per share amounts; unaudited)


	Three Months Ended				Nine Months Ended
	December 27,		December 28,		December 27,		December 28,
	2025		2024		2025		2024
Net sales	$	580,624	$	555,738	$	1,548,856	$	1,471,621
Cost of sales	272,498		257,951		732,326		702,319
Gross profit	308,126		297,787		816,530		769,302
Operating expenses
Research and development	113,553		112,976		326,466		331,264
Selling, general and administrative	41,646		39,042		119,979		113,625

Total operating expenses	155,199		152,018		446,445		444,889
Income from operations	152,927		145,769		370,085		324,413
Interest income	9,494		8,364		27,273		25,162
Interest expense	(218)		(218)		(680)		(680)
Other income (expense)	246		(214)		(205)		1,414
Income before income taxes	162,449		153,701		396,473		350,309
Provision for income taxes	22,139		37,696		63,870		90,069
Net income	$	140,310	$	116,005	$	332,603	$	260,240

Basic earnings per share	$	2.75	$	2.19	$	6.48	$	4.89
Diluted earnings per share	$	2.66	$	2.11	$	6.27	$	4.69
Basic weighted average common shares outstanding	51,037		53,081		51,313		53,263
Diluted weighted average common shares outstanding	52,698		55,076		53,041		55,529

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands; unaudited)


	Three Months Ended				Nine Months Ended
	December 27,		December 28,		December 27,		December 28,
	2025		2024		2025		2024
Net income	$	140,310	$	116,005	$	332,603	$	260,240
Other comprehensive income (loss), before tax
Foreign currency translation gain (loss)	(377)		(937)		183		(578)
Unrealized gain (loss) on marketable securities	(132)		(3,116)		377		1,377

Benefit (provision) for income taxes	28		654		(79)		(290)
Comprehensive income	$	139,829	$	112,606	$	333,084	$	260,749

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(in thousands; unaudited)


	Nine Months Ended
	December 27,		December 28,
	2025		2024
Cash flows from operating activities:
Net income	$	332,603	$	260,240
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	38,954		37,801
Stock-based compensation expense	61,964		64,655
Deferred income taxes	9,824		7,466
Loss on retirement or write-off of long-lived assets	—		381

Other non-cash adjustments	26		812

Net change in operating assets and liabilities:
Accounts receivable	(62,980)		(99,465)
Inventories	109,609		(48,310)
Prepaid wafers	35,199		58,296
Other assets	2,320		(4,080)
Accounts payable and other accrued liabilities	(9,823)		17,749
Income taxes payable	(18,517)		18,435

Net cash provided by operating activities	499,179		313,980

Cash flows from investing activities:
Maturities and sales of available-for-sale marketable securities	113,439		25,904
Purchases of available-for-sale marketable securities	(121,710)		(117,505)
Purchases of property, equipment and software	(11,592)		(19,347)
Investments in technology	(848)		(225)



Net cash used in investing activities	(20,711)		(111,173)

Cash flows from financing activities:



Net proceeds from the issuance of common stock	2,992		15,433
Repurchase of stock to satisfy employee tax withholding obligations	(33,032)		(33,538)
Repurchase and retirement of common stock	(209,965)		(161,022)
Net cash used in financing activities	(240,005)		(179,127)

Net increase in cash and cash equivalents	238,463		23,680

Cash and cash equivalents at beginning of period	539,620		502,764
Cash and cash equivalents at end of period	$	778,083	$	526,444

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands; unaudited)


	Common Stock			Additional Paid-In Capital		Accumulated Earnings (Deficit)		Accumulated Other Comprehensive Loss		Total
Three Months Ended	Shares	Amount
Balance, September 28, 2024	53,132	$	53	$	1,819,536	$	107,233	$	1,305	$	1,928,127
Net income	—	—		—		116,005		—		116,005
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		(2,462)		(2,462)
Change in foreign currency translation adjustments	—	—		—		—		(937)		(937)
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	685	1		379		(29,112)		—		(28,732)
Repurchase and retirement of common stock	(679)	(1)		—		(70,025)		—		(70,026)
Stock-based compensation	—	—		20,823		—		—		20,823
Balance, December 28, 2024	53,138	$	53	$	1,840,738	$	124,101	$	(2,094)	$	1,962,798

Balance, September 27, 2025	51,018	$	51	$	1,903,587	$	139,025	$	(221)	$	2,042,442
Net income	—	—		—		140,310		—		140,310
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		(104)		(104)
Change in foreign currency translation adjustments	—	—		—		—		(377)		(377)
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	574	1		1,042		(30,721)		—		(29,678)
Repurchase and retirement of common stock	(591)	(1)		—		(69,921)		—		(69,922)
Stock-based compensation	—	—		20,558		—		—		20,558
Balance, December 27, 2025	51,001	$	51	$	1,925,187	$	178,693	$	(702)	$	2,103,229
Nine Months Ended
Balance, March 30, 2024	53,491	$	53	$	1,760,648	$	58,916	$	(2,603)	$	1,817,014
Net income	—	—		—		260,240		—		260,240
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		1,087		1,087
Change in foreign currency translation adjustments	—	—		—		—		(578)		(578)
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	1,044	1		15,435		(33,538)		—		(18,102)
Repurchase and retirement of common stock	(1,397)	(1)		—		(161,517)		—		(161,518)
Stock-based compensation	—	—		64,655		—		—		64,655
Balance, December 28, 2024	53,138	$	53	$	1,840,738	$	124,101	$	(2,094)	$	1,962,798

Balance, March 29, 2025	52,291	$	52	$	1,860,229	$	90,351	$	(1,183)	$	1,949,449
Net income	—	—		—		332,603		—		332,603
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		298		298
Change in foreign currency translation adjustments	—	—		—		—		183		183
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	677	1		2,994		(33,032)		—		(30,037)
Repurchase and retirement of common stock	(1,967)	(2)		—		(211,229)		—		(211,231)
Stock-based compensation	—	—		61,964		—		—		61,964
Balance, December 27, 2025	51,001	$	51	$	1,925,187	$	178,693	$	(702)	$	2,103,229

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation

The unaudited consolidated condensed financial statements have been prepared by Cirrus Logic, Inc. (“Cirrus Logic,” “we,” “us,” “our,” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”). The accompanying unaudited consolidated condensed financial statements do not include complete footnotes and financial presentations. As a result, these financial statements should be read along with the audited consolidated financial statements and notes thereto for the year ended March 29, 2025, included in our Annual Report on Form 10-K filed with the Commission on May 23, 2025. In our opinion, the financial statements reflect all material adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial position, operating results and cash flows for those periods presented. The preparation of financial statements in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect reported assets, liabilities, revenues and expenses. Actual results could differ from those estimates and assumptions. Moreover, the results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the entire year.

2. Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The guidance provides qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, requiring more consistent categories and greater disaggregation of information by jurisdiction. This ASU is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted, to be applied on a prospective basis, although retrospective application is also permitted. The Company is currently evaluating the impact of this guidance on financial statement disclosures and expects to provide these disclosures in the fourth quarter of fiscal year 2026.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregation of certain expense categories in the notes to the financial statements in order to provide enhanced transparency into the expense captions presented on the face of the income statement. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption and prospective or retrospective application permitted. The Company is currently evaluating the impact of this guidance on financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Topic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removes references to software development stages, or “project stages,” in assessing the timing of software cost capitalization. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted using the prospective, modified, or retrospective adoption methods. The Company is currently evaluating the impact of this guidance on financial statement disclosures.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which provides guidance on the recognition, measurement, and presentation of government grants. The amendments are effective for annual reporting periods beginning after December 15, 2028, and interim periods within those annual reporting periods. Early adoption is permitted using the modified prospective, modified retrospective, or full retrospective adoption methods. The Company is currently evaluating the impact of this guidance on financial statement disclosures.

3. Marketable Securities

The Company’s investments have been classified as available-for-sale securities in accordance with U.S. GAAP. Marketable securities are categorized on the Consolidated Condensed Balance Sheet as “Marketable securities,” within the short-term or long-term classification, as appropriate, based on the original maturity.

The following table is a summary of available-for-sale securities at December 27, 2025 (in thousands):


As of December 27, 2025	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value (Net Carrying Amount)
Corporate debt securities	$	301,177	$	2,043	$	(50)	$	303,170

U.S. Treasury securities	668		6		—		674



Total securities	$	301,845	$	2,049	$	(50)	$	303,844

The Company typically invests in highly-rated securities with original maturities generally ranging from one to three years. The Company's specifically identified gross unrealized losses were $0.1 million related to securities with total amortized costs of approximately $34.6 million at December 27, 2025. There were no securities in a continuous unrealized loss position for more than 12 months as of December 27, 2025. The Company may sell certain of its marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipated or actual changes in credit rating and duration management. The Company records an allowance for credit loss when a decline in investment market value is due to credit-related factors. When evaluating an investment for impairment, the Company reviews factors including the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer, changes in market interest rates and whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s cost basis. As of December 27, 2025, the Company does not consider any of its investments to be impaired.

The following table is a summary of available-for-sale securities at March 29, 2025 (in thousands):


As of March 29, 2025	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value (Net Carrying Amount)
Corporate debt securities	$	284,885	1,635		$	(55)	$	286,465

U.S. Treasury securities	8,689		45		(3)		8,731



Total securities	$	293,574	$	1,680	$	(58)	$	295,196

The Company's specifically identified gross unrealized losses of $0.1 million related to securities with total amortized costs of approximately $29.8 million at March 29, 2025. Securities in a continuous unrealized loss position for more than 12 months as of March 29, 2025 had an aggregate amortized cost of $1.9 million and an immaterial aggregate unrealized loss. As of March 29, 2025, the Company did not consider any of its investments to be impaired.

The cost and estimated fair value of available-for-sale securities by contractual maturities were as follows (in thousands):


	December 27, 2025				March 29, 2025
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
Within 1 year	$	43,982	$	44,280	$	56,044	$	56,160
After 1 year	257,863		259,564		237,530		239,036
Total	$	301,845	$	303,844	$	293,574	$	295,196

4. Fair Value of Financial Instruments

The Company has determined that the only material assets and liabilities in the Company’s financial statements that are required to be measured at fair value on a recurring basis are the Company’s cash equivalents and marketable securities portfolio. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s cash equivalents and marketable securities portfolio consist of money market funds, debt securities, and U.S Treasury securities, and are reflected on our Consolidated Condensed Balance Sheets under the headings cash and cash equivalents, marketable securities, and long-term marketable securities. The Company determines the fair value of its marketable securities portfolio by obtaining non-binding market prices from third-party pricing providers on the last day of the quarter, whose sources may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value.

The Company's revolving credit facility, described in Note 8 - Revolving Credit Facility, bears interest at a base rate plus applicable margin or forward-looking secured overnight financing rate (“Term SOFR”) plus 10 basis points plus applicable margin. As of December 27, 2025, there are no amounts drawn under the facility and the fair value is zero.

As of December 27, 2025 and March 29, 2025, the Company has no Level 3 assets or liabilities. There were no transfers between Level 1, Level 2, or Level 3 measurements for the three months ended December 27, 2025.

The following summarizes the fair value of our financial instruments at December 27, 2025 (in thousands):


	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total
Assets:
Cash equivalents
Money market funds	$	721,568	$	—	$	—	$	721,568



Available-for-sale securities
Corporate debt securities	$	—	$	303,170	$	—	$	303,170

U.S. Treasury securities	674		—		—		674



	$	674	$	303,170	$	—	$	303,844

The following summarizes the fair value of our financial instruments at March 29, 2025 (in thousands):


	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total
Assets:
Cash equivalents
Money market funds	491,467		—		—		491,467



Available-for-sale securities
Corporate debt securities	$	—	$	286,465	$	—	$	286,465

U.S. Treasury securities	8,731		—		—		8,731



	$	8,731	$	286,465	$	—	$	295,196

5. Derivative Financial Instruments

Foreign Currency Forward Contracts

The Company uses foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on non-functional currency balance sheet exposures. The Company recognizes both the gains and losses on foreign currency forward contracts and the gains and losses on the remeasurement of non-functional currency assets and liabilities within “Other income (expense)” in the Consolidated Condensed Statements of Income. The Company does not apply hedge accounting to these foreign currency derivative instruments.

As of December 27, 2025, the Company held one foreign currency forward contract denominated in British Pound Sterling with a notional value of $18.5 million. The fair value of this contract was not material as of December 27, 2025.

The before-tax effect of derivative instruments not designated as hedging instruments was as follows (in thousands):


	Three Months Ended				Nine Months Ended
	December 27,		December 28,		December 27,		December 28,
	2025		2024		2025		2024		Location
Gain (loss) recognized in income:
Foreign currency forward contracts	$	(80)	$	(1,220)	$	817	$	(568)	Other income (expense)

6. Accounts Receivable, net

The following are the components of accounts receivable, net (in thousands):


	December 27,		March 29,
	2025		2025
Gross accounts receivable	$	278,989	$	216,009
Allowance for doubtful accounts	—		—
Accounts receivable, net	$	278,989	$	216,009

The increase in accounts receivable is due to the timing of collections and billings during the year.

7. Inventories

Inventories are comprised of the following (in thousands):


	December 27,		March 29,
	2025		2025
Work in process	$	139,138	$	216,173
Finished goods	50,345		82,919
	$	189,483	$	299,092

8. Revolving Credit Facility

On July 8, 2021, the Company entered into a second amended and restated credit agreement (the “Second Amended Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto. The Second Amended Credit Agreement provides for a $300 million senior secured revolving credit facility (the “Revolving Credit Facility”). The Revolving Credit Facility matures on July 8, 2026 (the “Maturity Date”). The Revolving Credit Facility is required to be guaranteed by all of Cirrus Logic’s material domestic subsidiaries (the “Subsidiary Guarantors”). The Revolving Credit Facility is secured by substantially all the assets of Cirrus Logic and any Subsidiary Guarantors, except for certain excluded assets.

On March 20, 2023, the Company, entered into the First Amendment (the “Amendment”) to its Second Amended Credit Agreement, with the lending institutions party thereto and Wells Fargo Bank, National Association, as administrative agent. The Amendment updates the benchmark interest rate provisions to replace the London interbank offered rate (“LIBOR”) with Term SOFR, for the purposes of calculating interest under the terms of the Second Amended Credit Agreement.

Borrowings under the Revolving Credit Facility may bear interest, at Cirrus Logic’s election, at either (a) a base rate plus the applicable margin (“Base Rate Loans”) or (b) a Term SOFR rate plus a 10 basis point credit spread adjustment plus the applicable margin. The applicable margin ranges from 0% to 0.75% per annum for Base Rate Loans and 1.00% to 1.75% per annum for SOFR Loans based on the ratio of consolidated funded indebtedness to consolidated EBITDA for the most recently ended period of four consecutive fiscal quarters (the “Consolidated Leverage Ratio”). A Commitment Fee accrues at a rate per annum ranging from 0.175% to 0.275% (based on the Consolidated Leverage Ratio) on the average daily unused portion of the commitment of the lenders.

The Revolving Credit Facility contains certain financial covenants providing that (a) the ratio of consolidated funded indebtedness (minus up to $200 million of unrestricted cash and cash equivalents available on such date) to consolidated EBITDA for the prior four consecutive quarters must not be greater than 3.00 to 1.00 (the “Consolidated Net Leverage Ratio”) and (b) the ratio of consolidated EBITDA for the prior four consecutive quarters to consolidated interest expense paid or payable in cash for the prior four consecutive quarters must not be less than 3.00 to 1.00 (the “Consolidated Interest Coverage Ratio”). The Second Amended Credit Agreement also contains customary negative covenants limiting the ability of Cirrus Logic or any Subsidiary to, among other things, incur debt, grant liens, make investments, effect certain fundamental changes, make certain asset dispositions, and make certain restricted payments. Further, the Second Amended Credit Agreement contains customary affirmative covenants, including, among others, covenants regarding the payment of taxes and other obligations, maintenance of insurance, reporting requirements, and compliance with applicable laws and regulations.

As of December 27, 2025, the Company had no amounts outstanding under the Revolving Credit Facility and was in compliance with all covenants under the Second Amended Credit Agreement.

9. Revenues

Disaggregation of revenue

We disaggregate revenue from contracts with customers by product line and ship to location of the customer. Sales are designated in the respective product line categories of Audio and High-Performance Mixed-Signal (“HPMS”).

Total net sales based on the product line disaggregation criteria described above are shown in the table below (in thousands).


	Three Months Ended				Nine Months Ended
	December 27,		December 28,		December 27,		December 28,
	2025		2024		2025		2024
Audio Products	$	344,455	$	346,272	$	902,713	$	881,830
HPMS Products	236,169		209,466		646,143		589,791
	$	580,624	$	555,738	$	1,548,856	$	1,471,621

The geographic regions that are reviewed are China, the United States, and the rest of the world. Total net sales based on the geographic disaggregation criteria described are as follows (in thousands):


	Three Months Ended				Nine Months Ended
	December 27,		December 28,		December 27,		December 28,
	2025		2024		2025		2024
China	$	357,155	$	373,449	$	850,060	$	904,899
United States	3,272		5,638		10,953		13,325
Rest of World	220,197		176,651		687,843		553,397
	$	580,624	$	555,738	$	1,548,856	$	1,471,621

10. Income Taxes

Our provision for income taxes is based on estimated effective tax rates derived from an estimate of annual consolidated earnings before taxes, adjusted for nondeductible expenses, other permanent items, and any applicable income tax credits.

The following table presents the provision for income taxes (in thousands) and the effective tax rates:


	Three Months Ended						Nine Months Ended
	December 27,			December 28,			December 27,			December 28,
	2025			2024			2025			2024
Income before income taxes	$	162,449		$	153,701		$	396,473		$	350,309
Provision for income taxes	$	22,139		$	37,696		$	63,870		$	90,069
Effective tax rate	13.6		%	24.5		%	16.1		%	25.7		%

Our income tax expense was $22.1 million and $37.7 million for the third quarters of fiscal years 2026 and 2025, respectively, resulting in effective tax rates of 13.6 percent and 24.5 percent, respectively. Our income tax expense was $63.9 million and $90.1 million for the first nine months of fiscal years 2026 and 2025, respectively, resulting in effective tax rates of 16.1 percent and 25.7 percent, respectively.

Effective tax rates for fiscal year 2025 were unfavorably impacted by a provision in the Tax Cuts and Jobs Act of 2017 that required research and development (“R&D”) expenditures incurred in tax years beginning after December 31, 2021 to be capitalized and amortized ratably over five or fifteen years depending on the location in which the research activities are conducted, which resulted in increased GILTI inclusions in these periods. In addition, those periods were unfavorably impacted by U.S. tax rules related to refundable tax credits, including R&D expenditure credits available to us in the United Kingdom, that reduce the amount of foreign tax credits available to offset GILTI.

The effective tax rates for the third quarter and first nine months of fiscal year 2026 were lower than the prior periods presented primarily due to U.S. R&D expenditures no longer being capitalized within GILTI (also known as net controlled foreign corporation tested income) beginning in fiscal year 2026 as a result of the One Big Beautiful Bill Act (“OBBBA”) enacted on July 4, 2025.

The Company records unrecognized tax benefits for the estimated risk associated with tax positions taken on tax returns. At December 27, 2025, the Company had unrecognized tax benefits of $32.1 million, all of which would impact the effective tax rate if recognized. The Company’s total unrecognized tax benefits are classified as “Non-current income taxes” in

the Consolidated Condensed Balance Sheets. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. As of December 27, 2025, the balance of accrued interest and penalties, net of tax, was $14.0 million.

On July 27, 2015, the U.S. Tax Court issued an opinion in Altera Corp. et al. v. Commissioner which concluded that the regulations relating to the treatment of stock-based compensation expense in intercompany cost-sharing arrangements were invalid. In 2016 the U.S. Internal Revenue Service appealed the decision to the U.S. Court of Appeals for the Ninth Circuit (the “Ninth Circuit”). On June 7, 2019, the Ninth Circuit reversed the decision of the U.S. Tax Court and upheld the cost-sharing regulations. On February 10, 2020, Altera Corp. filed a Petition for a Writ of Certiorari with the Supreme Court of the United States, which was denied by the Supreme Court on June 22, 2020. Although the issue is now resolved in the Ninth Circuit, the Ninth Circuit's opinion is not binding in other circuits. The potential impact of this issue on the Company, which is not located within the jurisdiction of the Ninth Circuit, is unclear at this time. We will continue to monitor developments related to this issue and the potential impact of those developments on the Company's current and prior fiscal years.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions. Fiscal years 2017 through 2019 and 2022 through 2025 remain open to examination by the major taxing jurisdictions in which the Company operates.

The Company's fiscal year 2017, 2018, and 2019 federal income tax returns are under examination by the U.S. Internal Revenue Service (“IRS”). The IRS has proposed adjustments that would increase U.S. taxable income related to transfer pricing matters with respect to our U.S. and U.K. affiliated companies. The final Revenue Agent’s Report asserted additional tax of approximately $168.3 million, excluding interest, and imposed penalties of approximately $63.7 million. The Company does not agree with the IRS's positions and has not accrued an additional liability. In July 2024, the Company entered the administrative dispute process with the IRS Independent Office of Appeals (“IRS Appeals”). The Company continues to vigorously dispute the proposed adjustments, including through ongoing discussions as part of the administrative process with IRS Appeals. If an acceptable outcome cannot be reached with IRS Appeals, the Company is prepared to pursue judicial remedies, which could take a number of years to resolve. Although the final resolution of these matters is uncertain, the Company believes adequate amounts have been reserved in accordance with ASC 740 for any adjustments to the provision for income taxes that may ultimately result. However, the ultimate amount of assessed tax, interest, and penalties, if any, could be material and may have an adverse impact on our financial position, results of operations, and cash flows in future periods. The Company is not under an income tax audit in any other major taxing jurisdiction.

11. Net Income Per Share

Basic net income per share is based on the weighted effect of common shares issued and outstanding and is calculated by dividing net income by the basic weighted average shares outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average number of common shares used in the basic net income per share calculation, plus the equivalent number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding. These potentially dilutive items consist primarily of restricted stock units and outstanding stock options.

The following table details the calculation of basic and diluted earnings per share for the three and nine months ended December 27, 2025 and December 28, 2024 (in thousands, except per share amounts):


	Three Months Ended				Nine Months Ended
	December 27,		December 28,		December 27,		December 28,
	2025		2024		2025		2024
Numerator:
Net income	$	140,310	$	116,005	$	332,603	$	260,240
Denominator:
Weighted average shares outstanding	51,037		53,081		51,313		53,263
Effect of dilutive securities	1,661		1,995		1,728		2,266
Weighted average diluted shares	52,698		55,076		53,041		55,529
Basic earnings per share	$	2.75	$	2.19	$	6.48	$	4.89
Diluted earnings per share	$	2.66	$	2.11	$	6.27	$	4.69

The weighted outstanding shares excluded from our diluted calculation for the three and nine months ended December 27, 2025 were 44 thousand and 167 thousand, respectively, as the shares were anti-dilutive. The weighted outstanding shares excluded from our diluted calculation for the three and nine months ended December 28, 2024 were 228 thousand and 224 thousand, respectively, as the shares were anti-dilutive.

SEC Form 10-Q filed by Cirrus Logic Inc.