Cirrus Logic Reports Fiscal First Quarter Revenue of $374.0 Million
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 of fiscal year 2025, which ended June 29, 2024, as well as the company’s current business outlook.
“Cirrus Logic delivered revenue above the top end of our guidance range in the June quarter driven by stronger-than-expected shipments into smartphones,” said John Forsyth, Cirrus Logic president and chief executive officer. “In addition to these strong results, during the quarter we began ramping production of our custom boosted amplifier and first 22-nanometer smart codec ahead of new smartphone launches that are expected later this year. We also executed against our growth strategy to drive product and end-market diversification as we saw strong design activity in laptops and introduced the latest products in a series of data converters targeting professional audio, consumer, and industrial applications. With a compelling roadmap of products and an outstanding track record of execution, we believe we are well-positioned to grow long-term shareholder value.”
Reported Financial Results – First Quarter FY25
Revenue of $374.0 million; GAAP and non-GAAP gross margin of 50.5 percent and 50.6 percent; GAAP operating expenses of $142.1 million and non-GAAP operating expenses of $118.0 million; and GAAP earnings per share of $0.76 and non-GAAP earnings per share of $1.12.A reconciliation of GAAP to non-GAAP financial information is included in the tables accompanying this press release.
Business Outlook – Second Quarter FY25
Revenue is expected to range between $490 million and $550 million; GAAP gross margin is forecasted to be between 50 percent and 52 percent; and Combined GAAP R and SG expenses are anticipated to range between $149 million and $155 million, including approximately $22 million in stock-based compensation expense and $2 million in amortization of acquired intangibles, resulting in a non-GAAP operating expense range between $125 million and $131 million.Cirrus Logic will host a live Q session at 5 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 (609) 800-9909 or toll-free at (800) 770-2030 (Access Code: 95424).
About Cirrus Logic, Inc.
Cirrus Logic is a leader in low-power, high-precision mixed-signal processing solutions that create innovative user experiences for the world’s top mobile and consumer applications. With headquarters in Austin, Texas, Cirrus Logic is recognized globally for its award-winning corporate culture.
Cirrus Logic, Cirrus and the Cirrus Logic logo are registered trademarks of Cirrus Logic, Inc. All other company or product names noted herein may be trademarks of their respective holders.
Use of non-GAAP Financial Information
To supplement Cirrus Logic's financial statements presented on a GAAP basis, the company has provided non-GAAP financial information, including non-GAAP net income, diluted earnings per share, 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 expectation for new smartphone launches later this year; our belief that we are well-positioned to grow long-term shareholder value; and our estimates for the second quarter fiscal year 2025 revenue, gross margin, combined research and development and selling, general and administrative expense levels, stock-based compensation expense, and amortization of acquired intangibles. In some cases, forward-looking statements are identified by words such as “expect,” “anticipate,” “target,” “project,” “believe,” “goals,” “opportunity,” “estimates,” “intend,” and variations of these types of words and similar expressions. In addition, any statements that refer to our plans, expectations, strategies, or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements are based on our current expectations, estimates, and assumptions and are subject to certain risks and uncertainties that could cause actual results to differ materially, and readers should not place undue reliance on such statements. These risks and uncertainties include, but are not limited to, the following: the level and timing of orders and shipments during the second quarter of fiscal year 2025, 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 30, 2024 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. 29,
Mar. 30,
Jun. 24,
2024
2024
2023
Q1'25
Q4'24
Q1'24
Audio
$
218,970
$
226,681
$
195,806
High-Performance Mixed-Signal
155,056
145,146
121,210
Net sales
374,026
371,827
317,016
Cost of sales
185,101
179,202
157,629
Gross profit
188,925
192,625
159,387
Gross margin
50.5
%
51.8
%
50.3
%
Research and development
105,363
103,383
106,215
Selling, general and administrative
36,770
36,866
35,379
Total operating expenses
142,133
140,249
141,594
Income from operations
46,792
52,376
17,793
Interest income
8,202
7,360
4,600
Other income (expense)
1,609
(78
)
377
Income before Income taxes
56,603
59,658
22,770
Provision for income taxes
14,508
14,816
7,170
Net income
$
42,095
$
44,842
$
15,600
Basic earnings per share
$
0.79
$
0.83
$
0.28
Diluted earnings per share:
$
0.76
$
0.81
$
0.28
Weighted average number of shares:
Basic
53,433
53,739
54,862
Diluted
55,665
55,559
56,631
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. 29,
Mar. 30,
Jun. 24,
2024
2024
2023
Net Income Reconciliation
Q1'25
Q4'24
Q1'24
GAAP Net Income
$
42,095
$
44,842
$
15,600
Amortization of acquisition intangibles
1,972
1,973
2,170
Stock-based compensation expense
21,385
22,158
22,715
Lease impairment
1,019
—
—
Acquisition-related costs
—
—
3,166
Adjustment to income taxes
(4,105
)
75
(5,628
)
Non-GAAP Net Income
$
62,366
$
69,048
$
38,023
Earnings Per Share Reconciliation
GAAP Diluted earnings per share
$
0.76
$
0.81
$
0.28
Effect of Amortization of acquisition intangibles
0.03
0.03
0.04
Effect of Stock-based compensation expense
0.38
0.40
0.40
Effect of Lease impairment
0.02
—
—
Effect of Acquisition-related costs
—
—
0.05
Effect of Adjustment to income taxes
(0.07
)
—
(0.10
)
Non-GAAP Diluted earnings per share
$
1.12
$
1.24
$
0.67
Operating Income Reconciliation
GAAP Operating Income
$
46,792
$
52,376
$
17,793
GAAP Operating Profit
12.5
%
14.1
%
5.6
%
Amortization of acquisition intangibles
1,972
1,973
2,170
Stock-based compensation expense - COGS
266
362
285
Stock-based compensation expense - R
15,763
15,483
15,952
Stock-based compensation expense - SG
5,356
6,313
6,478
Lease impairment
1,019
—
—
Acquisition-related costs
—
—
3,166
Non-GAAP Operating Income
$
71,168
$
76,507
$
45,844
Non-GAAP Operating Profit
19.0
%
20.6
%
14.5
%
Operating Expense Reconciliation
GAAP Operating Expenses
$
142,133
$
140,249
$
141,594
Amortization of acquisition intangibles
(1,972
)
(1,973
)
(2,170
)
Stock-based compensation expense - R
(15,763
)
(15,483
)
(15,952
)
Stock-based compensation expense - SG
(5,356
)
(6,313
)
(6,478
)
Lease impairment
1,019
—
—
Acquisition-related costs
—
—
(3,166
)
Non-GAAP Operating Expenses
$
118,023
$
116,480
$
113,828
Gross Margin/Profit Reconciliation
GAAP Gross Profit
$
188,925
$
192,625
$
159,387
GAAP Gross Margin
50.5
%
51.8
%
50.3
%
Stock-based compensation expense - COGS
266
362
285
Non-GAAP Gross Profit
$
189,191
$
192,987
$
159,672
Non-GAAP Gross Margin
50.6
%
51.9
%
50.4
%
GAAP Tax Expense
$
14,508
$
14,816
$
7,170
GAAP Effective Tax Rate
25.6
%
24.8
%
31.5
%
Adjustments to income taxes
4,105
(75
)
5,628
Non-GAAP Tax Expense
$
18,613
$
14,741
$
12,798
Non-GAAP Effective Tax Rate
23.0
%
17.6
%
25.2
%
Tax Impact to EPS Reconciliation
GAAP Tax Expense
$
0.26
$
0.27
$
0.13
Adjustments to income taxes
0.07
—
0.10
Non-GAAP Tax Expense
$
0.33
$
0.27
$
0.23
CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands; unaudited)
Jun. 29,
Mar. 30,
Jun. 24,
2024
2024
2023
ASSETS
Current assets
Cash and cash equivalents
$
491,351
$
502,764
$
352,346
Marketable securities
25,680
23,778
35,765
Accounts receivable, net
190,079
162,478
186,033
Inventories
232,566
227,248
300,956
Prepaid wafers
84,700
86,679
84,739
Other current assets
77,365
103,245
88,829
Total current Assets
1,101,741
1,106,192
1,048,668
Long-term marketable securities
227,527
173,374
38,029
Right-of-use lease assets
136,295
138,288
125,538
Property and equipment, net
170,953
170,175
167,238
Intangibles, net
27,624
29,578
36,447
435,936
435,936
435,936
Deferred tax asset
54,622
48,649
44,991
Long-term prepaid wafers
50,375
60,750
110,262
Other assets
60,552
68,634
49,483
Total assets
$
2,265,625
$
2,231,576
$
2,056,592
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$
77,562
$
55,545
$
75,941
Accrued salaries and benefits
41,101
47,612
36,465
Lease liability
22,058
20,640
19,903
Acquisition-related liabilities
—
—
24,527
Other accrued liabilities
61,021
62,596
46,018
Total current liabilities
201,742
186,393
202,854
Non-current lease liability
132,016
134,576
125,071
Non-current income taxes
52,704
52,013
59,587
Other long-term liabilities
31,533
41,580
12,286
Total long-term liabilities
216,253
228,169
196,944
Stockholders' equity:
1,792,283
1,760,701
1,693,420
Accumulated earnings (deficit)
58,591
58,916
(33,621
)
Accumulated other comprehensive loss
(3,244
)
(2,603
)
(3,005
)
Total stockholders' equity
1,847,630
1,817,014
1,656,794
Total liabilities and stockholders' equity
$
2,265,625
$
2,231,576
$
2,056,592
Prepared in accordance with Generally Accepted Accounting Principles
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(in thousands; unaudited)
Three Months Ended
Jun. 29,
Jun. 24,
2024
2023
Q1'25
Q1'24
Cash flows from operating activities:
Net income
$
42,095
$
15,600
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization
12,359
11,941
Stock-based compensation expense
21,385
22,715
Deferred income taxes
(5,897
)
(9,411
)
Loss on retirement or write-off of long-lived assets
—
6
Other non-cash charges
1,104
1,334
Net change in operating assets and liabilities:
Accounts receivable, net
(27,601
)
(35,560
)
Inventories
(5,318
)
(67,506
)
Prepaid wafers
12,354
—
Other assets
(5,459
)
8,101
Accounts payable and other accrued liabilities
12,037
(10,278
)
Income taxes payable
30,102
20,079
Acquisition-related liabilities
—
3,166
Net cash provided by (used in) operating activities
87,161
(39,813
)
Cash flows from investing activities:
Maturities and sales of available-for-sale marketable securities
12,646
11,048
Purchases of available-for-sale marketable securities
(69,060
)
(13,372
)
Purchases of property, equipment and software
(9,990
)
(12,310
)
Investments in technology
(155
)
—
Net cash used in investing activities
(66,559
)
(14,634
)
Cash flows from financing activities:
Net proceeds from the issuance of common stock
10,196
560
Repurchase of stock to satisfy employee tax withholding obligations
(1,219
)
(1,047
)
Repurchase and retirement of common stock
(40,992
)
(38,504
)
Net cash used in financing activities
(32,015
)
(38,991
)
Net decrease in cash and cash equivalents
(11,413
)
(93,438
)
Cash and cash equivalents at beginning of period
502,764
445,784
Cash and cash equivalents at end of period
$
491,351
$
352,346
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. 29,
Jun. 29,
Mar. 30,
Dec. 30,
Sep. 23,
2024
2024
2024
2023
2023
Q1'25
Q1'25
Q4'24
Q3'24
Q2'24
Net cash provided by (used in) operating activities (GAAP)
$
548,648
$
87,161
$
170,526
$
313,692
$
(22,731
)
Capital expenditures
(36,180
)
(10,145
)
(7,695
)
(9,813
)
(8,527
)
Free Cash Flow (Non-GAAP)
$
512,468
$
77,016
$
162,831
$
303,879
$
(31,258
)
Cash Flow from Operations as a Percentage of Revenue (GAAP)
30
%
23
%
46
%
51
%
(5
)%
Capital Expenditures as a Percentage of Revenue (GAAP)
2
%
3
%
2
%
2
%
2
%
Free Cash Flow Margin (Non-GAAP)
28
%
21
%
44
%
49
%
(6
)%
RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION
(in millions; unaudited)
(not prepared in accordance with GAAP)
Q2 FY25
Guidance
Operating Expense Reconciliation
GAAP Operating Expenses
$
149 - 155
Stock-based compensation expense
(22
)
Amortization of acquisition intangibles
(2
)
Non-GAAP Operating Expenses
$
125 - 131
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