Cirrus logic reports fiscal fourth quarter revenue of $372.8 million and full fiscal year 2023 revenue of $1.90 billion
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 %
