Cirrus Logic : Press Release Q1FY2024

FINANCIAL NEWS

Cirrus Logic Reports Fiscal First Quarter Revenue of $317.0 Million

AUSTIN, Texas - Aug. 3, 2023 - 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 [phone], or toll-free at [phone] (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-precisionmixed-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.

Investor Contact:

Chelsea Heffernan

Vice President, Investor Relations

Cirrus Logic, Inc.

1. [e-mail]

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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.

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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-PerformanceMixed-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

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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 %

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