Cirrus Logic Reports Fiscal Fourth Quarter Revenue of $372.8 Million and Full Fiscal Year 2023 Revenue of $1.90 Billion

Record Fiscal Year 2023 Revenue Driven By Higher Sales of Components Shipping in Smartphones

AUSTIN, Texas--(BUSINESS WIRE)-- 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 fourth quarter and full fiscal year 2023, which ended March 25, 2023, as well as the company’s current business outlook.

“We delivered solid financial results in FY23 as higher sales of products shipping in smartphones drove seven percent year-over-year revenue growth,” said John Forsyth, Cirrus Logic president and chief executive officer. “Additionally, the company made significant progress in our strategy of driving product diversification through our high-performance mixed-signal products, with revenue derived from these solutions increasing to 38 percent of total sales. With an extensive portfolio of existing products and a pipeline of innovations in development, we look forward to capitalizing on the many opportunities ahead of us to further broaden our technology and market reach.”

Reported Financial Results – Fourth Quarter FY23

• Revenue of $372.8 million;
• GAAP and non-GAAP gross margin of 50.0 percent and 50.1 percent;
• GAAP operating expenses of $249.2 million and non-GAAP operating expenses of $119.8 million; and
• GAAP loss per share of $(0.97) and non-GAAP earnings per share of $0.92.

Reported Financial Results – Full Year FY23

• Revenue of $1.90 billion;
• GAAP and non-GAAP gross margin of 50.4 percent and 50.5 percent;
• GAAP operating expenses of $707.9 million and non-GAAP operating expenses of $486.4 million; and
• GAAP earnings per share of $3.09 and non-GAAP earnings per share of $6.42.

GAAP operating expense for Q4 FY23 and the full fiscal year 2023 included $85.8 million in intangibles impairment and $10.6 million in lease impairments and restructuring costs.

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

Business Outlook – First Quarter FY24

• Revenue is expected to range between $260 million and $320 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 $142 million and $148 million, including approximately $23 million in stock-based compensation expense, $2 million in amortization of acquired intangibles, and $3 million in acquisition-related costs.

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).

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 drive product diversification through high-performance mixed-signal; our ability to capitalize on the many opportunities ahead and broaden our technology and market reach; and our estimates for the first 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. 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 effects of the global COVID-19 outbreak and the measures taken to limit the spread of COVID-19, including any disruptions to our business that could result from measures to contain the outbreak that may be taken by governmental authorities in the jurisdictions in which we and our supply chain operate; the susceptibility of the markets we address to economic downturns, including as a result of the COVID-19 outbreak and the actions taken to mitigate the spread of COVID-19; increased industry-wide capacity constraints that may impact our ability to meet current customer demand, which could cause an unanticipated decline in our sales and damage our existing customer relationships and our ability to establish new customer relationships; the potential for increased prices due to capacity constraints in our supply chain, which, if we are unable to increase our selling price to our customers, could result in lower revenues and margins that could adversely affect our financial results; recent significant increases in inflation in the U.S and overseas; the level and timing of orders and shipments during the first 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 26, 2022 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												Twelve Months Ended
	Mar. 25,				Dec. 24,				Mar. 26,				Mar. 25,				Mar. 26,
		2023				2022				2022				2023				2022
	Q4'23				Q3'23				Q4'22				Q4'23				Q4'22
Audio	$	232,402			$	347,297			$	327,099			$	1,172,007			$	1,187,126
High-Performance Mixed-Signal		140,420				243,285				162,873				725,610				594,334
Net sales		372,822				590,582				489,972				1,897,617				1,781,460
Cost of sales		186,468				293,877				231,243				940,638				857,819
Gross profit		186,354				296,705				258,729				956,979				923,641
Gross margin		50.0	%			50.2	%			52.8	%			50.4	%			51.8	%
Research and development		115,162				118,063				111,394				458,412				406,307
Selling, general and administrative		37,642				37,262				39,470				153,144				150,996
Lease impairments and restructuring		10,632				—				—				10,632				—
Intangibles impairment		85,760				—				—				85,760				—
Total operating expenses		249,196				155,325				150,864				707,948				557,303
Income (loss) from operations		(62,842	)			141,380				107,865				249,031				366,338
Interest income (expense)		4,720				2,777				(103	)			9,087				615
Other income (expense)		(464	)			(3,716	)			180				(3,379	)			1,710
Income (loss) before income taxes		(58,586	)			140,441				107,942				254,739				368,663
Provision for income taxes		(4,917	)			36,964				11,528				78,036				42,308
Net income (loss)	$	(53,669	)		$	103,477			$	96,414			$	176,703			$	326,355
Basic earnings (loss) per share	$	(0.97	)		$	1.87			$	1.69			$	3.18			$	5.70
Diluted earnings (loss) per share:	$	(0.97	)		$	1.83			$	1.64			$	3.09			$	5.52
Weighted average number of shares:
Basic		55,219				55,239				56,993				55,614				57,278
Diluted		55,219				56,583				58,625				57,226				59,143
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												Twelve Months Ended
	Mar. 25,				Dec. 24,				Mar. 26,				Mar. 25,				Mar. 26,
		2023				2022				2022				2023				2022
Net Income (Loss) Reconciliation	Q4'23				Q3'23				Q4'22				Q4'23				Q4'22
GAAP Net Income (Loss)	$	(53,669	)		$	103,477			$	96,414			$	176,703			$	326,355
Amortization of acquisition intangibles		7,657				8,807				7,882				32,086				27,017
Stock-based compensation expense		22,533				20,487				17,024				81,641				66,392
Lease impairments and restructuring		10,632				—				—				10,632				—
Intangibles impairment		85,760				—				—				85,760				—
Acquisition-related costs		3,166				3,176				3,164				12,670				12,153
Investment write off		—				2,746				—				2,746				—
Adjustment to income taxes		(23,461	)			(2,936	)			(6,778	)			(34,832	)			(23,675	)
Non-GAAP Net Income	$	52,618			$	135,757			$	117,706			$	367,406			$	408,242
Earnings (Loss) Per Share Reconciliation
GAAP Diluted earnings (loss) per share	$	(0.97	)		$	1.83			$	1.64			$	3.09			$	5.52
Effect of Amortization of acquisition intangibles		0.14				0.15				0.14				0.56				0.46
Effect of Stock-based compensation expense		0.40				0.36				0.29				1.43				1.12
Effect of Lease impairments and restructuring		0.19				—				—				0.18				—
Effect of Intangibles impairment		1.51				—				—				1.50				—
Effect of Acquisition-related costs		0.06				0.06				0.05				0.22				0.20
Effect of Investment write off		—				0.05				—				0.05				—
Effect of Adjustment to income taxes		(0.41	)			(0.05	)			(0.11	)			(0.61	)			(0.40	)
Non-GAAP Diluted earnings per share	$	0.92			$	2.40			$	2.01			$	6.42			$	6.90
Diluted Shares Reconciliation
GAAP Diluted shares		55,219				56,583				58,625				57,226				59,143
Effect of weighted dilutive shares		1,821				—				—				—				—
Non-GAAP Diluted shares		57,040				56,583				58,625				57,226				59,143
Operating Income (Loss) Reconciliation
GAAP Operating Income (Loss)	$	(62,842	)		$	141,380			$	107,865			$	249,031			$	366,338
GAAP Operating Profit (Loss)		(16.9	)%			23.9	%			22.0	%			13.1	%			20.6	%
Amortization of acquisition intangibles		7,657				8,807				7,882				32,086				27,017
Stock-based compensation expense - COGS		372				309				261				1,270				1,024
Stock-based compensation expense - R&D		15,782				14,710				11,786				57,312				44,154
Stock-based compensation expense - SG&A		6,379				5,468				4,977				23,059				21,214
Lease impairments and restructuring		10,632				—				—				10,632				—
Intangibles impairment		85,760				—				—				85,760				—
Acquisition-related costs		3,166				3,176				3,164				12,670				12,153
Non-GAAP Operating Income	$	66,906			$	173,850			$	135,935			$	471,820			$	471,900
Non-GAAP Operating Profit		17.9	%			29.4	%			27.7	%			24.9	%			26.5	%
Operating Expense Reconciliation
GAAP Operating Expenses	$	249,196			$	155,325			$	150,864			$	707,948			$	557,303
Amortization of acquisition intangibles		(7,657	)			(8,807	)			(7,882	)			(32,086	)			(27,017	)
Stock-based compensation expense - R&D		(15,782	)			(14,710	)			(11,786	)			(57,312	)			(44,154	)
Stock-based compensation expense - SG&A		(6,379	)			(5,468	)			(4,977	)			(23,059	)			(21,214	)
Lease impairments and restructuring		(10,632	)			—				—				(10,632	)			—
Intangibles impairment		(85,760	)			—				—				(85,760	)			—
Acquisition-related costs		(3,166	)			(3,176	)			(3,164	)			(12,670	)			(8,692	)
Non-GAAP Operating Expenses	$	119,820			$	123,164			$	123,055			$	486,429			$	456,226
Gross Margin/Profit Reconciliation
GAAP Gross Profit	$	186,354			$	296,705			$	258,729			$	956,979			$	923,641
GAAP Gross Margin		50.0	%			50.2	%			52.8	%			50.4	%			51.8	%
Acquisition-related costs		—				—				—				—				3,461
Stock-based compensation expense - COGS		372				309				261				1,270				1,024
Non-GAAP Gross Profit	$	186,726			$	297,014			$	258,990			$	958,249			$	928,126
Non-GAAP Gross Margin		50.1	%			50.3	%			52.9	%			50.5	%			52.1	%
	Three Months Ended												Twelve Months Ended
	Mar. 25,				Dec. 24,				Mar. 26,				Mar. 25,				Mar. 26,
		2023				2022				2022				2023				2022
Effective Tax Rate Reconciliation	Q4'23				Q3'23				Q4'22				Q4'23				Q4'22
GAAP Tax Expense (Benefit)	$	(4,917	)		$	36,964			$	11,528			$	78,036			$	42,308
GAAP Effective Tax Rate		8.4	%			26.3	%			10.7	%			30.6	%			11.5	%
Adjustments to income taxes		23,461				2,936				6,778				34,832				23,675
Non-GAAP Tax Expense	$	18,544			$	39,900			$	18,306			$	112,868			$	65,983
Non-GAAP Effective Tax Rate		26.1	%			22.7	%			13.5	%			23.5	%			13.9	%
Tax Impact to EPS Reconciliation
GAAP Tax Expense (Benefit)	$	(0.09	)		$	0.65			$	0.20			$	1.36			$	0.72
Adjustments to income taxes		0.41				0.05				0.11				0.61				0.40
Non-GAAP Tax Expense	$	0.32			$	0.70			$	0.31			$	1.97			$	1.12

CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands; unaudited)
		Mar. 25,				Dec. 24,				Mar. 26,
			2023				2022				2022
ASSETS
Current assets
Cash and cash equivalents		$	445,784			$	434,544			$	369,814
Marketable securities			34,978				28,373				10,601
Accounts receivable, net			150,473				270,493				240,264
Inventories			233,450				152,426				138,436
Prepaid wafers			60,638				40,425				—
Other current assets			92,533				87,224				80,900
Total current Assets			1,017,856				1,013,485				840,015
Long-term marketable securities			36,509				44,784				63,749
Right-of-use lease assets			128,145				150,938				171,003
Property and equipment, net			162,972				156,602				157,077
Intangibles, net			38,876				133,032				158,145
Goodwill			435,936				435,936				435,791
Deferred tax asset			35,580				8,630				11,068
Long-term prepaid wafers			134,363				154,575				195,000
Other assets			73,729				67,907				91,552
Total assets		$	2,063,966			$	2,165,889			$	2,123,400
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable		$	81,462			$	117,406			$	115,417
Accrued salaries and benefits			50,606				42,187				65,261
Lease liability			18,442				14,024				14,680
Acquisition-related liabilities			21,361				18,195				30,964
Other accrued liabilities			44,469				36,737				38,461
Total current liabilities			216,340				228,549				264,783
Non-current lease liability			122,631				143,252				163,162
Non-current income taxes			59,013				72,267				73,383
Long-term acquisition-related liabilities			—				—				8,692
Other long-term liabilities			7,700				5,501				13,563
Total long-term liabilities			189,344				221,020				258,800
Stockholders' equity:
Capital stock			1,670,141				1,639,056				1,578,427
Accumulated earnings (deficit)			(9,320	)			80,865				23,435
Accumulated other comprehensive loss			(2,539	)			(3,601	)			(2,045	)
Total stockholders' equity			1,658,282				1,716,320				1,599,817
Total liabilities and stockholders' equity		$	2,063,966			$	2,165,889			$	2,123,400
Prepared in accordance with Generally Accepted Accounting Principles

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(in thousands; unaudited)
		Three Months Ended
		Mar. 25,				Mar. 26,
			2023				2022
		Q4'23				Q4'22
Cash flows from operating activities:
Net income (loss)		$	(53,669	)		$	96,414
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			18,844				16,905
Stock-based compensation expense			22,533				17,024
Deferred income taxes			(40,943	)			(6,759	)
Loss on retirement or write-off of long-lived assets			350				115
Other non-cash charges			85				88
Lease impairments and restructuring			10,632				—
Intangibles impairment			85,760				—
Net change in operating assets and liabilities:
Accounts receivable, net			120,020				85,868
Inventories			(81,024	)			10,089
Other assets			(2,664	)			8,576
Accounts payable and other accrued liabilities			(32,260	)			27,711
Income taxes payable			(2,564	)			(963	)
Acquisition-related liabilities			3,166				3,163
Net cash provided by operating activities			48,266				258,231
Cash flows from investing activities:
Maturities and sales of available-for-sale marketable securities			8,337				4,963
Purchases of available-for-sale marketable securities			(5,830	)			(5,307	)
Purchases of property, equipment and software			(11,326	)			(8,048	)
Investments in technology			(309	)			(408	)
Net cash used in investing activities			(9,128	)			(8,800	)
Cash flows from financing activities:
Issuance of common stock, net of shares withheld for taxes			8,621				4,658
Repurchase of stock to satisfy employee tax withholding obligations			(1,519	)			(4,397	)
Repurchase and retirement of common stock			(35,000	)			(74,999	)
Net cash used in financing activities			(27,898	)			(74,738	)
Net increase in cash and cash equivalents			11,240				174,693
Cash and cash equivalents at beginning of period			434,544				195,121
Cash and cash equivalents at end of period		$	445,784			$	369,814
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
		Mar. 25,				Mar. 25,				Dec. 24,				Sep. 24,				Jun. 25,
			2023				2023				2022				2022				2022
		Q4'23				Q4'23				Q3'23				Q2'23				Q1'23
Net cash provided by operating activities (GAAP)		$	339,568			$	48,266			$	180,948			$	35,989			$	74,365
Capital expenditures			(36,714	)			(11,635	)			(7,608	)			(10,247	)			(7,224	)
Free Cash Flow (Non-GAAP)		$	302,854			$	36,631			$	173,340			$	25,742			$	67,141
Cash Flow from Operations as a Percentage of Revenue (GAAP)			18	%			13	%			31	%			7	%			19	%
Capital Expenditures as a Percentage of Revenue (GAAP)			2	%			3	%			1	%			2	%			2	%
Free Cash Flow Margin (Non-GAAP)			16	%			10	%			29	%			5	%			17	%

 

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Investor Contact:

Chelsea Heffernan

Vice President, Investor Relations

Cirrus Logic, Inc.

(512) 851-4125

Investor@cirrus.com

 

Source: Cirrus Logic, Inc.