CIRRUS LOGIC, INC. (CRUS)

ITEM 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Please read the following discussion in conjunction with our audited historical consolidated financial statements and notes thereto, which are included elsewhere in this Form 10-K. Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors. Actual results could differ materially because of the factors discussed in Part I, Item 1A. “Risk Factors” of this Form 10-K and elsewhere in this report, as well as in the documents we file with the SEC, including our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Critical Accounting Estimates

Our discussion and analysis of the Company’s financial condition and results of operations are based upon the consolidated financial statements included in this report, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts. We evaluate the estimates on an on-going basis. We base these estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. Our accounting policies are more fully described in Note 2 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements contained in Item 8.

The Company considers the following accounting policies to involve the highest degree of judgment in the preparation of the consolidated financial statements:

Inventory Valuation

Inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis. Cost is computed using standard costs, which approximate actual cost. The Company writes down inventories to net realizable value based on forecasted customer unit demand while taking into account product release schedules and product life cycles. The Company also reviews and writes down inventory, as appropriate, based on the age and condition of the inventory. Actual demand and market conditions may be different from those projected by management, which could have a material effect on our operating results and financial position.

Uncertain Tax Positions

The calculation of our tax liabilities involves assessing uncertainties with respect to the application of complex tax rules. Uncertain tax positions must meet a more likely than not threshold to be recognized in the financial statements and the tax benefits recognized are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon final settlement. The ultimate settlement of uncertain tax positions may differ from our estimates, which could result in the recognition of a tax benefit or an additional charge to the income tax provision in the relevant period. See Note 17 — Income Taxes of the Notes to Consolidated Financial Statements contained in Item 8 for additional details.

Recently Issued Accounting Pronouncements

For a discussion of recently issued accounting pronouncements, refer to Note 2 - Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements.

Overview

Cirrus Logic develops low-power, high-precision mixed-signal processing solutions for a broad range of customers. We track operating results in one reportable segment, but report revenue performance by product line: Audio and HPMS products. In fiscal year 2025, the Company made good progress executing on strategic initiatives. In our flagship smartphone audio business we began shipping the latest-generation of our boosted amplifier and first 22-nanometer smart codec. We also expanded our HPMS content in smartphones as we benefited from increased unit shipments of our camera controllers and broadened our footprint with our general market haptic components.

Additionally, we made considerable progress leveraging our investments in Audio and HPMS into new applications and markets. Our achievements in the laptop market, which is our most immediate growth opportunity, included securing our first high-volume mainstream design win with our latest PC codec, increasing our direct engagement with PC OEMs, and further expanding our presence in leading reference designs. During fiscal year 2025, we also made advancements with our general market business where we have been selectively developing new components that offer sustained differentiation.

33

Table of Contents

Fiscal year 2025 net sales of $1.90 billion represented an increase over fiscal year 2024 net sales of $1.79 billion. Audio product line sales of $1.14 billion in fiscal year 2025 increased 5 percent from fiscal year 2024 sales of $1.08 billion. The most significant drivers of the increase were sales associated with our latest-generation products and higher smartphone volumes, partially offset by weakness in general market sales versus the prior fiscal year. HPMS product line sales of $758.9 million represented an 8 percent increase from fiscal year 2024 sales of $705.0 million, largely attributable to higher content in smartphones and sales associated with latest-generation products, partially offset by lower general market sales.

Overall, gross margin for fiscal year 2025 was 52.5 percent. The increase in gross margin for fiscal year 2025 reflects a more favorable product mix. This was partially offset by unfavorable inventory reserve expense and higher supply chain costs. The Company’s number of employees increased from 1,625 as of March 30, 2024 to 1,660 as of March 29, 2025. The Company achieved net income of $331.5 million in fiscal year 2025, which included an income tax provision in the amount of $113.4 million.

Results of Operations

A discussion regarding our financial condition and results of operations for fiscal year 2025 compared to fiscal year 2024 is presented below. A discussion regarding our financial condition and results of operations for fiscal year 2024, which was a 53-week fiscal year, compared to fiscal year 2023 can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended March 30, 2024, filed with the SEC on May 24, 2024.

The following table summarizes the results of our operations for each of the past three fiscal years as a percentage of net sales. All percentage amounts were calculated using the underlying data, in thousands:

Net Sales

We report sales in two product line categories: Audio products and HPMS products. Our sales by product line are shown in the table below (in thousands).

Net sales for fiscal year 2025 increased by 6 percent, to $1.90 billion from $1.79 billion in fiscal year 2024. Audio product sales increased $53.2 million, or 5 percent in fiscal year 2025. The most significant drivers of the increase were sales associated with our latest-generation products and higher smartphone volumes, offset by weakness in general market sales versus the prior fiscal year. The increase in net sales also reflects a $54.0 million increase in HPMS product sales, or 8 percent, from fiscal year 2024 sales of $705.0 million, primarily due to higher content in smartphones and sales associated with latest-generation products, partially offset by lower general market sales.

34

Table of Contents

International sales, including sales to U.S.-based end customers that manufacture products through contract manufacturers or plants located overseas, were approximately $1.9 billion in 2025 and $1.8 billion in each of fiscal years 2024 and 2023, representing 99 percent, 99 percent, and 97 percent of net sales in fiscal year 2025, 2024, and 2023, respectively. Our sales are denominated primarily in U.S. dollars.

Gross Margin

Overall gross margin of 52.5 percent for fiscal year 2025 increased from fiscal year 2024 gross margin of 51.2 percent. The increase reflects a more favorable product mix. This was partially offset by unfavorable inventory reserve expense and higher supply chain costs, compared to fiscal year 2024. Changes in excess and obsolete inventory charges, including scrapped inventory, and sales of product written down in prior periods did not have a material impact on margin in fiscal year 2025.

Research and Development Expenses

Fiscal year 2025 research and development expenses of $434.7 million reflect an increase of $8.2 million, or 2 percent, from fiscal year 2024. The increase was attributable to increased employee-related, variable compensation, and facilities-related costs, offset by decreased stock-based compensation, and acquisition-related costs, in addition to increased R&D incentives versus fiscal year 2024. See Note 2 - Summary of Significant Accounting Policies - Government Assistance of the Notes to Consolidated Financial Statements in Item 8 for additional details relating to R&D incentives.

Selling, General and Administrative Expenses

Fiscal year 2025 selling, general and administrative expenses of $151.0 million reflect an increase of $6.8 million, or 5 percent, compared to fiscal year 2024. The increase was primarily attributable to increased employee-related and variable compensation costs in fiscal year 2025.

Restructuring

In fiscal year 2024, the Company recorded $2.0 million in net costs primarily related to a workforce reduction action taken in the second quarter of fiscal year 2024.

Interest Income

Interest income in fiscal years 2025 and 2024 was $34.0 million and $21.5 million, respectively. The increase in interest income in fiscal year 2025 versus prior year was a function of higher yields on higher combined average cash, cash equivalent, and marketable securities balances throughout the year.

Interest Expense

The Company reported interest expense of $0.9 million and $0.9 million for fiscal years 2025 and 2024, respectively, primarily as a result of commitment fees under the Revolving Credit Facility, described in Note 8 of the Notes to Consolidated Financial Statements in Item 8.

Other Income (Expense)

In fiscal years 2025 and 2024, the Company reported $1.5 million and $(0.1) million, respectively, in other income (expense), related to remeasurement on foreign currency denominated monetary assets and liabilities and other non-operating income and expenses.

Provision for Income Taxes

We recorded income tax expense of $113.4 million in fiscal year 2025 on pre-tax income of $444.9 million, yielding an effective tax rate of 25.5 percent. We recorded income tax expense of $89.4 million in fiscal year 2024 on pre-tax income of $363.9 million, yielding an effective tax rate of 24.6 percent.

Our effective tax rates in fiscal years 2025 and 2024 were higher than the U.S. statutory rate of 21.0 percent, primarily due to U.S. tax paid on our foreign earnings resulting from an increase in global intangible low-taxed income (GILTI), which is treated as a period cost, and a reduction in foreign tax credits. GILTI is unfavorably impacted by a provision in the Tax Cuts and Jobs Act of 2017 that requires research and development expenditures incurred starting in fiscal year 2023 to be capitalized and amortized ratably over five or fifteen years depending on the location in which the research activities are conducted. In addition, U.S. tax rules introduced in fiscal year 2023 related to refundable tax credits, including R&D expenditure credits available to us in the United Kingdom, reduce the amount of foreign tax credits available to offset GILTI.

The Organization for Economic Cooperation and Development has announced an Inclusive Framework on Base Erosion and Profit Shifting, including Pillar Two Model Rules for a global minimum tax that call for the taxation of large multinational

35

Table of Contents

corporations at a minimum rate of 15%. Certain jurisdictions in which we operate, including the United Kingdom, have enacted Pillar Two legislation. There was no material impact on our consolidated financial statements in fiscal year 2025.

For additional discussion about our income taxes, see Note 17 - Income Taxes of the Notes to Consolidated Financial Statements in Item 8.

Liquidity and Capital Resources

Operating Activities

In fiscal year 2025, cash flow from operations was $444.4 million. Operating cash flow during fiscal year 2025 was related to the cash components of our net income and a $23.4 million unfavorable change in working capital. The unfavorable change in working capital was driven primarily by increases in inventory and accounts receivable, partially offset by prepaid wafer usage (related to the Capacity Reservation Agreement). In fiscal year 2024, cash flow from operations was $421.7 million. Operating cash flow during fiscal year 2024 was related to the cash components of our net income and an $18.4 million favorable change in working capital, primarily driven by prepaid wafer usage (related to the Capacity Reservation Agreement), decreases in other assets and increased income taxes payable, partially offset by decreased accounts payable and acquisition-related liabilities, as well as increases in accounts receivable.

Investing Activities

In fiscal year 2025, the Company used $124.3 million in cash for investing activities primarily related to $95.5 million in net purchases of marketable securities and capital expenditures and technology investments of $28.8 million. In fiscal year 2024, the Company used $163.0 million in cash for investing activities primarily related to $124.7 million in net purchases of marketable securities and capital expenditures and technology investments of $38.3 million.

Financing Activities

In fiscal years 2025 and 2024, the Company used $283.2 million and $201.7 million, respectively, related to financing activities. In fiscal years 2025 and 2024, the Company utilized approximately $261.0 million and $186.0 million, respectively, in cash to repurchase and retire portions of its outstanding common stock. See Note 15 - Stockholders' Equity of the Notes to Consolidated Financial Statements in Item 8 for a description of our share repurchase authorization.

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 the forward-looking secured overnight financing rate ("Term SOFR"), for the purposes of calculating interest under the terms of the Second Amended Credit Agreement.

As of March 29, 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.

See Note 8 — Revolving Credit Facility of the Notes to Consolidated Financial Statements in Item 8 for additional information including material terms and related covenants.

Capital Requirements

Our future capital requirements will depend on many factors, including the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, and potential future acquisitions of companies or technologies, commitments under the Capacity Reservation Agreement with GlobalFoundries (discussed further in Note 13 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements and Item 1A. Risk Factors) and the expansion of our sales and marketing activities. We believe our expected future cash earnings, existing cash, cash equivalents, investment balances, and available borrowings under our Revolving Credit Facility will be sufficient to meet our capital requirements both domestically and internationally, in the short-term (i.e. the next 12 months) and in the long-term, although we could be required, or could elect, to seek additional funding prior to that time. As of March 29, 2025, the Company did not

36

Table of Contents

have any off-balance-sheet arrangements, that were reasonably likely to have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Contractual Cash Obligations

In our business activities, we incur certain commitments to make future payments under contracts such as debt agreements, purchase orders, operating leases and other long-term contracts.  See Note 8 - Revolving Credit Facility, Note 10 - Leases and Note 13 - Commitments and Contingencies, of the notes to the Consolidated Financial Statements in Item 8, for additional information related to these contractual obligations.

ITEM 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Please read the following discussion in conjunction with our audited historical consolidated financial statements and notes thereto, which are included elsewhere in this Form 10-K. Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors. Actual results could differ materially because of the factors discussed in Part I, Item 1A. “Risk Factors” of this Form 10-K and elsewhere in this report, as well as in the documents we file with the SEC, including our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Critical Accounting Estimates

Our discussion and analysis of the Company’s financial condition and results of operations are based upon the consolidated financial statements included in this report, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts. We evaluate the estimates on an on-going basis. We base these estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. Our accounting policies are more fully described in Note 2 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements contained in Item 8.

The Company considers the following accounting policies to involve the highest degree of judgment in the preparation of the consolidated financial statements:

Inventory Valuation

Inventories are stated at the lower of cost or net realizable value, with cost being determined on a first-in, first-out basis. The Company writes down inventories to net realizable value based on forecasted customer unit demand while taking into account product release schedules and product life cycles. The Company also reviews and writes down inventory, as appropriate, based on the age and condition of the inventory. Actual demand and market conditions may be different from those projected by management, which could have a material effect on our operating results and financial position.

Uncertain Tax Positions

The calculation of our tax liabilities involves assessing uncertainties with respect to the application of complex tax rules. Uncertain tax positions must meet a more likely than not threshold to be recognized in the financial statements and the tax benefits recognized are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon final settlement. The ultimate settlement of uncertain tax positions may differ from our estimates, which could result in the recognition of a tax benefit or an additional charge to the income tax provision in the relevant period. See Note 19 — Income Taxes of the Notes to Consolidated Financial Statements contained in Item 8 for additional details.

Recently Issued Accounting Pronouncements

For a discussion of recently issued accounting pronouncements, refer to Note 2 of the Notes to the Consolidated Financial Statements.

Overview

Cirrus Logic develops low-power, high-precision mixed-signal processing solutions for a broad range of customers. We track operating results in one reportable segment, but report revenue performance by product line: audio and HPMS products. In fiscal year 2024, the Company made good progress executing on our strategic initiatives. In our flagship audio business we completed design work on, and sampled, two next-generation products: a boosted amplifier and a smart codec during the year. We also introduced our third-generation camera controller, and gained traction in the laptop market.

While we are proud of our achievements in fiscal year 2024, we also encountered and successfully navigated through short-term challenges that were associated with our new HPMS product not coming to market as planned in fall 2023. Throughout the year we remained committed to disciplined execution, seeking to increase both operational efficiency and the efficiency and competitiveness within our supply chain.

31

Table of Contents

Fiscal Year 2024

Fiscal year 2024 net sales of $1.79 billion represented a decrease over fiscal year 2023 net sales of $1.90 billion. Audio product line sales of $1.08 billion in fiscal year 2024 decreased 7.5 percent from fiscal year 2023 sales of $1.17 billion. The most significant drivers of the decrease were continued weakness in general market sales, and to a lesser extent, a reduction in components shipping in tablets versus the prior fiscal year. HPMS product line sales of $705.0 million represented a 2.8 percent decrease from fiscal year 2023 sales of $725.6 million, largely attributable to a decline in general market sales, primarily in non-smartphone applications.

Overall, gross margin for fiscal year 2024 was 51.2 percent. The increase in gross margin for fiscal year 2024 was primarily attributable to a decline in supply chain costs, including the absence of wafer premiums and lower freight expense, in addition to a reduction in inventory reserves, partially offset by a less favorable product mix. The Company’s number of employees decreased to 1,625 as of March 30, 2024. The Company achieved net income of $274.6 million in fiscal year 2024, which included an income tax provision in the amount of $89.4 million.

Fiscal Year 2023

Fiscal year 2023 net sales of $1.90 billion represented an increase over fiscal year 2022 net sales of $1.78 billion. HPMS product line sales of $725.6 million represented a 22.1 percent increase from fiscal year 2022 sales of $594.3 million, primarily attributable to content gains in smartphones and higher ASPs. Audio product line sales of $1.17 billion in fiscal year 2023 decreased from fiscal year 2022 sales of $1.19 billion. The most significant driver of the decrease was the softening in general market and smartphone demand, partially offset by ASP increases during fiscal year 2023.

Overall, gross margin for fiscal year 2023 was 50.4 percent. The decrease in gross margin for fiscal year 2023 was primarily attributable to an increase in supply chain costs, partially offset by higher ASPs and the absence of the purchase price fair value adjustment to inventory, which was a one-time event in the second quarter of fiscal year 2022, as a result of the Lion Semiconductor, Inc. ("Lion") acquisition (the "Acquisition"). The Company’s number of employees increased to 1,702 as of March 25, 2023. The Company achieved net income of $176.7 million in fiscal year 2023, which included an income tax provision in the amount of $78.0 million.

Results of Operations

The following table summarizes the results of our operations for each of the past three fiscal years as a percentage of net sales. All percentage amounts were calculated using the underlying data, in thousands:

32

Table of Contents

Net Sales

We report sales in two product line categories: audio products and HPMS products. Our sales by product line are shown in the table below (in thousands).

Net sales for fiscal year 2024 decreased by 5.7 percent, to $1.79 billion from $1.90 billion in fiscal year 2023. Audio product sales decreased $88.1 million, or 7.5 percent in fiscal year 2024. The most significant drivers of the decrease were continued weakness in general market sales, primarily in non-smartphone applications, and to a lesser extent, a reduction in components shipping in tablets versus the prior fiscal year. The decrease in net sales also reflects a $20.7 million decrease in HPMS product sales, or 2.8 percent, from fiscal year 2023 sales of $725.6 million, largely due to a decline in general market sales, primarily in non-smartphone applications.

Net sales for fiscal year 2023 increased by 6.5 percent, to $1.90 billion from $1.78 billion in fiscal year 2022. The increase in net sales reflects a $131.3 million increase in HPMS product sales, or 22.1 percent, from fiscal year 2022 sales of $594.3 million, which was primarily attributable to content gains in smartphones and higher ASPs. Additionally, audio product sales decreased $15.1 million in fiscal year 2023. The most significant driver of the decrease was the softening in general market and smartphone demand, partially offset by ASP increases versus fiscal year 2022.

International sales, including sales to U.S.-based end customers that manufacture products through contract manufacturers or plants located overseas, were approximately $1.8 billion in each of fiscal years 2024, 2023, and 2022, representing 99 percent, 97 percent, and 98 percent of net sales in fiscal year 2024, 2023, and 2022, respectively. Our sales are denominated primarily in U.S. dollars.

Gross Margin

Overall gross margin of 51.2 percent for fiscal year 2024 increased from fiscal year 2023 gross margin of 50.4 percent. The increase was primarily due to a decline in supply chain costs, including the absence of wafer premiums and lower freight expense, in addition to a reduction in inventory reserves compared to fiscal year 2023. The increase was partially offset by a less favorable product mix. Changes in excess and obsolete inventory charges, including scrapped inventory, and sales of product written down in prior periods did not have a material impact on margin in fiscal year 2024.

Overall gross margin of 50.4 percent for fiscal year 2023 decreased from fiscal year 2022 gross margin of 51.8 percent. The decrease reflects an increase in supply chain costs, partially offset by higher ASPs and the absence of the purchase price fair value adjustment to inventory, as a result of the Acquisition. Changes in excess and obsolete inventory charges, including scrapped inventory, and sales of product written down in prior periods did not have a material impact on margin in fiscal year 2023.

Research and Development Expenses

Fiscal year 2024 research and development expenses of $426.5 million reflect a decrease of $31.9 million, or 7.0 percent, from fiscal year 2023. The decrease was attributable to reduced amortization of acquisition intangibles expense, increased R&D incentives compared to the prior fiscal year, and a decrease in acquisition-related charges, variable compensation and product development costs, partially offset by an increase in employee-related expenses, stock-based compensation and facilities-related costs. See Note 2 - Summary of Significant Accounting Policies - Government Assistance for additional details relating to R&D incentives.

Fiscal year 2023 research and development expenses of $458.4 million reflect an increase of $52.1 million, or 12.8 percent, from fiscal year 2022. The increase was attributable to increased stock-based compensation, product development costs, employee-related expenses, primarily driven by a 7.0 percent increase in total R&D headcount, facilities-related costs, amortization of acquisition intangibles, and acquisition-related expenses, partially offset by reduced variable compensation and increased R&D incentives compared to fiscal year 2022.

Selling, General and Administrative Expenses

Fiscal year 2024 selling, general and administrative expenses of $144.2 million reflect a decrease of $9.0 million, or 5.9 percent, compared to fiscal year 2023. The decrease was primarily attributable to decreased employee-related and variable compensation costs, partially offset by increased stock-based compensation costs in fiscal year 2024.

33

Table of Contents

Fiscal year 2023 selling, general and administrative expenses of $153.1 million reflect an increase of $2.1 million, or 1.4 percent, compared to fiscal year 2022. The increase was primarily attributable to increased employee-related and stock-based compensation costs, partially offset by reduced variable compensation costs in fiscal year 2023.

Restructuring

During the fourth quarter of fiscal year 2023, as part of our strategy to improve operational efficiency, the Company abandoned or subleased office space at various properties to align our real property lease arrangements with our anticipated operating needs. In fiscal year 2024, the Company recorded an additional $2.0 million in net costs related to a workforce reduction action taken in the second quarter of fiscal year 2024 and the described events above. The Company recorded restructuring costs of $10.6 million related to impairment of right-of-use lease assets and leasehold improvements of $6.9 million, as well as other related charges of $3.7 million in fiscal year 2023. See Note 12 - Restructuring for additional details.

Intangibles Impairment

Due to the prolonged weakness in the China smartphone market, the sales of our general market battery and power products associated with the Acquisition were adversely affected. As a result, the Company revalued the acquired intangible assets recorded in purchase accounting. In the fourth quarter of fiscal year 2023, the Company impaired the related acquired intangible assets by $85.8 million. See additional details in Note 7 - Intangibles, net and Goodwill.

Interest Income

Interest income in fiscal years 2024, 2023, and 2022, was $21.5 million, $10.0 million, and $1.6 million, respectively. The increases in interest income in fiscal year 2024 and 2023 versus prior years were a function of higher interest rates on average cash, cash equivalent, and marketable securities balances throughout the year.

Interest Expense

The Company reported interest expense of $0.9 million, $0.9 million and $0.9 million for fiscal years 2024, 2023, and 2022, respectively, primarily as a result of commitment fees under the Revolving Credit Facility, described in Note 9.

Other Income (Expense)

In fiscal years 2024, 2023, and 2022 the Company reported $(0.1) million, $(3.4) million, and $1.7 million respectively, in other income (expense), related to remeasurement on foreign currency denominated monetary assets and liabilities and other non-operating income and expenses. Additionally, in fiscal year 2023, the Company recorded a $2.7 million write down related to a technology start-up equity investment.

Provision for Income Taxes

We recorded income tax expense of $89.4 million in fiscal year 2024 on pre-tax income of $363.9 million, yielding an effective tax rate of 24.6 percent. We recorded income tax expense of $78.0 million in fiscal year 2023 on pre-tax income of $254.7 million, yielding an effective tax rate of 30.6 percent. Our effective tax rates in both fiscal year 2024 and 2023 were higher than the U.S. statutory rate of 21.0 percent, primarily due to U.S. tax paid on our foreign earnings resulting from an increase in global intangible low-taxed income (GILTI), which is treated as a period cost, and a reduction in foreign tax credits. GILTI is unfavorably impacted by a provision in the Tax Cuts and Jobs Act of 2017 that requires research and development expenditures incurred starting in fiscal year 2023 to be capitalized and amortized ratably over five or fifteen years depending on the location in which the research activities are conducted. In addition, U.S. tax rules introduced in fiscal year 2023 related to refundable tax credits, including R&D expenditure credits available to us in the United Kingdom, reduce the amount of foreign tax credits available to offset GILTI.

We recorded income tax expense of $42.3 million in fiscal year 2022 on pre-tax income of $368.7 million, yielding an effective tax provision rate of 11.5 percent. Our effective tax rate was lower than the U.S. statutory rate of 21.0 percent, primarily due to the effect of income earned in certain foreign jurisdictions that is taxed below the federal statutory rate and excess tax benefits from stock-based compensation.

The Organization for Economic Cooperation and Development has announced an Inclusive Framework on Base Erosion and Profit Shifting, including Pillar Two Model Rules for a global minimum tax that call for the taxation of large multinational corporations at a minimum rate of 15%. Certain jurisdictions, including the United Kingdom, have enacted Pillar Two legislation that will start to become effective for our fiscal year 2025. Based on enacted laws, Pillar Two is not expected to have a material impact on our consolidated financial statements.

For additional discussion about our income taxes, see Note 19 - Income Taxes.

34

Table of Contents

Liquidity and Capital Resources

Operating Activities

In fiscal year 2024, cash flow from operations was $421.7 million. Operating cash flow during fiscal year 2024 was related to the cash components of our net income and an $18.4 million favorable change in working capital. The favorable change in working capital was driven primarily by prepaid wafer usage (related to the Capacity Reservation Agreement), decreases in other assets and increased income taxes payable, partially offset by decreased accounts payable and acquisition-related liabilities, as well as increases in accounts receivable. In fiscal year 2023, cash flow from operations was $339.6 million. Operating cash flow during fiscal year 2023 was related to the cash components of our net income and a $55.6 million unfavorable change in working capital, primarily driven by an increase in inventory and decreases in accounts payable and other accrued liabilities, partially offset by a decrease in accounts receivable. In fiscal year 2022, cash flow from operations was $124.8 million. Operating cash flow during fiscal year 2022 was related to the cash components of our net income and a $316.1 million unfavorable change in working capital, primarily as a result of increases in long-term prepaid wafers associated with terms of the Capacity Reservation Agreement with GlobalFoundries (discussed further in Note 15 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements), accounts receivables and other assets (a portion of which resulted from terms of the Capacity Reservation Agreement with GlobalFoundries), partially offset by increases in acquisition-related liabilities and decreases in inventory for the period.

Investing Activities

In fiscal year 2024, the Company used $163.0 million in cash for investing activities primarily related to $124.7 million in net purchases of marketable securities and capital expenditures and technology investments of $38.3 million. In fiscal year 2023, the Company used $33.3 million in cash for investing activities principally related to capital expenditures and technology investments of $36.7 million, offset by $3.4 million in net sales of marketable securities. In fiscal year 2022, the Company used approximately $18.4 million in cash for investing activities primarily related to $276.9 million associated with the acquisition of Lion and capital expenditures and technology investments of $30.0 million, partially offset by $288.5 million in net sales of marketable securities.

Financing Activities

In fiscal years 2024, 2023, and 2022, the Company used $201.7 million, $230.3 million, and $178.7 million, respectively, related to financing activities. In fiscal years 2024, 2023, and 2022, the Company utilized approximately $186.0 million, $191.4 million, and $167.5 million, respectively, in cash to repurchase and retire portions of its outstanding common stock. See Note 17 - Stockholders' Equity for a description of our share repurchase authorization.

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 the forward-looking secured overnight financing rate ("Term SOFR"), for the purposes of calculating interest under the terms of the Second Amended Credit Agreement.

As of March 30, 2024, the Company had no amounts outstanding under the Revolving Credit Facility and was in compliance with all covenants under the Second Amended Credit Agreement.

See Note 9 — Revolving Credit Facility for additional information including material terms and related covenants.

Capital Requirements

Our future capital requirements will depend on many factors, including the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, and potential future acquisitions of companies or technologies, commitments under the Capacity Reservation Agreement with GlobalFoundries (discussed further in Note 15 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements and Item 1A. Risk Factors) and the expansion of our sales and marketing activities. We believe our expected future cash earnings, existing cash, cash equivalents,

35

Table of Contents

investment balances, and available borrowings under our Revolving Credit Facility will be sufficient to meet our capital requirements both domestically and internationally, in the short-term (i.e. the next 12 months) and in the long-term, although we could be required, or could elect, to seek additional funding prior to that time. As of March 30, 2024, the Company did not have any off-balance-sheet arrangements, that were reasonably likely to have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Contractual Cash Obligations

In our business activities, we incur certain commitments to make future payments under contracts such as debt agreements, purchase orders, operating leases and other long-term contracts.  See Note 9 - Revolving Credit Facility, Note 11 - Leases and Note 15 - Commitments and Contingencies, of the notes to the Consolidated Financial Statements in Item 8, for additional information related to these contractual obligations.

ITEM 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Please read the following discussion in conjunction with our audited historical consolidated financial statements and notes thereto, which are included elsewhere in this Form 10-K. Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors. Actual results could differ materially because of the factors discussed in Part I, Item 1A. “Risk Factors” of this Form 10-K and elsewhere in this report, as well as in the documents we file with the SEC, including our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Critical Accounting Estimates

Our discussion and analysis of the Company’s financial condition and results of operations are based upon the consolidated financial statements included in this report, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts. We evaluate the estimates on an on-going basis. We base these estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. Our accounting policies are more fully described in Note 2 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements contained in Item 8.

The Company considers the following accounting policies to involve the highest degree of judgment in the preparation of the consolidated financial statements:

Inventory Valuation

Inventories are stated at the lower of cost or net realizable value, with cost being determined on a first-in, first-out basis. The Company writes down inventories to net realizable value based on forecasted customer unit demand while taking into account product release schedules and product life cycles. The Company also reviews and writes down inventory, as appropriate, based on the age and condition of the inventory. Actual demand and market conditions may be different from those projected by management, which could have a material effect on our operating results and financial position.

Uncertain Tax Positions

The calculation of our tax liabilities involves assessing uncertainties with respect to the application of complex tax rules. Uncertain tax positions must meet a more likely than not threshold to be recognized in the financial statements and the tax benefits recognized are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon final settlement. The ultimate settlement of uncertain tax positions may differ from our estimates, which could result in the recognition of a tax benefit or an additional charge to the income tax provision in the relevant period. See Note 19 — Income Taxes of the Notes to Consolidated Financial Statements contained in Item 8 for additional details.

Recently Adopted Accounting Pronouncements

For a discussion of recently adopted accounting pronouncements, refer to Note 2 of the Notes to the Consolidated Financial Statements.

Overview

Cirrus Logic develops low-power, high-precision mixed-signal processing solutions for a broad range of customers. We track operating results in one reportable segment, but report revenue performance by product line: audio and HPMS products. In fiscal year 2023, the Company delivered record revenue, driven by higher sales of products shipping in smartphones. This past year, we believe that we made excellent progress in many areas of our long-term growth strategy. The Company remained a leader in our foundational business of smartphone audio, with a number of customers launching flagship devices using our components. Moreover, our team began design of our next-generation boosted amplifier and smart codec, both of which are in advanced stages of development today and are expected to extend our market leadership and deliver significant revenue for many years following their introduction. Additionally, the Company completed the successful production qualification for our next-generation camera controller for introduction in fiscal year 2024.

In the past year the Company saw both our R&D investment and the number of opportunities in high-performance mixed-signal ("HPMS") increase. Among the HPMS opportunities we have previously discussed in shareholder communications, a new product previously scheduled for introduction this fall is no longer expected to come to market as planned. Our customer

30

Table of Contents

relationship remains very strong and we continue to collaborate on a range of technologies and products in the HPMS space. We continue to believe that the HPMS product line represents a significant opportunity to grow and diversify revenue.

Fiscal Year 2023

Fiscal year 2023 net sales of $1.90 billion represented an increase over fiscal year 2022 net sales of $1.78 billion. HPMS product line sales of $725.6 million represented a 22.1 percent increase from fiscal year 2022 sales of $594.3 million, primarily attributable to content gains in smartphones and higher ASPs. Audio product line sales of $1.17 billion in fiscal year 2023 decreased from fiscal year 2022 sales of $1.19 billion. The most significant drivers of the decrease were the softening in general market and smartphone demand, partially offset by ASP increases during fiscal year 2023.

Overall, gross margin for fiscal year 2023 was 50.4 percent. The decrease in gross margin for fiscal year 2023 was primarily attributable to an increase in supply chain costs, partially offset by higher ASPs and the absence of the purchase price fair value adjustment to inventory, which was a one-time event in the second quarter of fiscal year 2022, as a result of the Lion Semiconductor, Inc. ("Lion") acquisition (the "Acquisition"). The Company’s number of employees increased to 1,702 as of March 25, 2023. The Company achieved net income of $176.7 million in fiscal year 2023, which included an income tax provision in the amount of $78.0 million.

Fiscal Year 2022

Fiscal year 2022 net sales of $1.78 billion represented an increase over fiscal year 2021 net sales of $1.37 billion. HPMS product line sales of $594.3 million represented a 124.1 percent increase from fiscal year 2021 sales of $265.2 million, primarily attributable to content gains in smartphones and, to a lesser extent, higher sales of general market battery and power products. Audio product line sales of $1.19 billion in fiscal year 2022 increased from fiscal year 2021 sales of $1.10 billion. The most significant driver of the increase was higher sales of audio products in laptops.

Overall, gross margin for fiscal year 2022 was 51.8 percent. The increase in gross margin for fiscal year 2022 was primarily attributable to the impact of higher ASPs, which were mostly offset by increased supply chain costs. The Company’s number of employees increased to 1,591 as of March 26, 2022. The Company achieved net income of $326.4 million in fiscal year 2022, which included an income tax provision in the amount of $42.3 million.

Results of Operations

The following table summarizes the results of our operations for each of the past three fiscal years as a percentage of net sales. All percentage amounts were calculated using the underlying data, in thousands:

31

Table of Contents

Net Sales

We report sales in two product categories: audio products and HPMS products. Our sales by product line are shown in the table below (in thousands).

Net sales for fiscal year 2023 increased by 6.5 percent, to $1.90 billion from $1.78 billion in fiscal year 2022. The increase in net sales reflects a $131.3 million increase in HPMS product sales, or 22.1 percent, from fiscal year 2022 sales of $594.3 million, which was primarily attributable to content gains in smartphones and higher ASPs. Audio product sales decreased $15.1 million in fiscal year 2023. The most significant drivers of the decrease were the softening in general market and smartphone demand, partially offset by ASP increases versus the prior fiscal year.

Net sales for fiscal year 2022 increased by 30.1 percent, to $1.78 billion from $1.37 billion in fiscal year 2021. The increase in net sales reflects a $329.2 million increase in HPMS product sales, or 124.1 percent, from fiscal year 2021 sales of $265.2 million, which was primarily attributable to content gains in smartphones, and to a lesser extent, higher sales of general market battery and power products. Additionally, audio product sales increased $83.1 million in fiscal year 2022. The most significant driver of the increase was higher sales of audio products in laptops.

International sales, including sales to U.S.-based end customers that manufacture products through contract manufacturers or plants located overseas, were approximately $1.8 billion in in each of fiscal years 2023 and 2022, and $1.3 billion in fiscal year 2021, representing 97 percent of net sales in fiscal year 2023, and 98 percent in fiscal years 2022 and 2021. Our sales are denominated primarily in U.S. dollars.

Gross Margin

Overall gross margin of 50.4 percent for fiscal year 2023 reflects a decrease from fiscal year 2022 gross margin of 51.8 percent. The decrease reflects an increase in supply chain costs, partially offset by higher ASPs and the absence of the purchase price fair value adjustment to inventory, as a result of the Acquisition. Changes in excess and obsolete inventory charges, including scrapped inventory, and sales of product written down in prior periods did not have a material impact on margin in fiscal year 2023.

Overall gross margin of 51.8 percent for fiscal year 2022 reflects a slight increase from fiscal year 2021 gross margin of 51.7 percent. The increase was primarily attributable to the impact of higher ASPs, which were mostly offset by increased supply chain costs. Changes in excess and obsolete inventory charges, including scrapped inventory, and sales of product written down in prior periods did not have a material impact on margin in fiscal year 2022.

Research and Development Expenses

Fiscal year 2023 research and development expenses of $458.4 million reflect an increase of $52.1 million, or 12.8 percent, from fiscal year 2022. The increase was attributable to increased stock-based compensation, product development costs, employee-related expenses, primarily driven by a 7.0 percent increase in total R&D headcount, facilities-related costs, amortization of acquisition intangibles, and acquisition-related expenses, partially offset by reduced variable compensation and increased R&D incentives compared to the prior fiscal year. See Note 2 - Summary of Significant Accounting Policies / Government Assistance for additional details relating to R&D incentives.

Fiscal year 2022 research and development expenses of $406.3 million reflect an increase of $63.5 million, or 18.5 percent, from fiscal year 2021. The increase was attributable to increased employee-related expenses, primarily driven by a 9.0 percent increase in total R&D headcount, amortization of acquisition intangibles, variable compensation, acquisition-related, stock-based compensation, and facilities-related costs, offset by increased R&D incentives and reduced product development costs.

Selling, General and Administrative Expenses

Fiscal year 2023 selling, general and administrative expenses of $153.1 million reflect an increase of $2.1 million, or 1.4 percent, compared to fiscal year 2022. The increase was primarily attributable to increased employee-related and stock-based compensation costs, partially offset by reduced variable compensation costs in fiscal year 2023.

32

Table of Contents

Fiscal year 2022 selling, general and administrative expenses of $151.0 million reflect an increase of $24.0 million, or 18.9 percent, compared to fiscal year 2021. The increase was primarily attributable to increased employee-related expenses, professional services, variable compensation and stock-based compensation costs in fiscal year 2022.

Lease Impairments and Restructuring

During the fourth quarter of fiscal year 2023, as part of our strategy to improve operational efficiency, the Company abandoned or subleased office space at various properties to align our real property lease arrangements with our anticipated operating needs. The Company recorded lease impairments and restructuring costs of $10.6 million related to impairment of right-of-use lease assets and leasehold improvements of $6.9 million, as well as other related charges of $3.7 million. See Note 12 - Lease Impairments and Restructuring for additional details.

Intangibles Impairment

Due to the prolonged weakness in the China smartphone market, the sales of our general market battery and power products associated with the Acquisition were adversely affected. As a result, the Company revalued the acquired intangible assets recorded in purchase accounting. In the fourth quarter of fiscal year 2023, the Company impaired the related acquired intangible assets by $85.8 million. See additional details in Note 7 - Intangibles, net and Goodwill.

Interest Income

Interest income in fiscal years 2023, 2022, and 2021, was $10.0 million, $1.6 million, and $6.3 million, respectively. The fluctuations in interest income in fiscal year 2023 and 2022 versus prior years were a function of earnings on average cash, cash equivalent, and marketable securities balances throughout the year.

Interest Expense

The Company reported interest expense of $0.9 million, $0.9 million and $1.1 million for fiscal years 2023, 2022, and 2021, respectively, primarily as a result of the Revolving Credit Facility, described in Note 9.

Other Income (Expense)

In fiscal years 2023, 2022, and 2021 the Company reported $(3.4) million, $1.7 million, and $2.8 million respectively, in other income (expense), related to remeasurement on foreign currency denominated monetary assets and liabilities and other non-operating income and expenses. Additionally, in fiscal year 2023, the Company recorded a $2.7 million write down related to a technology start-up equity investment.

Provision for Income Taxes

We recorded income tax expense of $78.0 million in fiscal year 2023 on pre-tax income of $254.7 million, yielding an effective tax rate of 30.6 percent. Our effective tax rate was higher than the U.S. statutory rate of 21.0 percent, primarily due to an increase in U.S. tax paid on our foreign earnings. A provision in the Tax Cuts and Jobs Act of 2017 requires research and development 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, resulting in higher global intangible low-taxed income (GILTI), which is treated as a period cost. In addition, U.S. tax rules introduced in fiscal year 2023 related to refundable tax credits, including R&D expenditure credits available to us in the United Kingdom, reduce the amount of foreign tax credits available to offset GILTI.

We recorded income tax expense of $42.3 million in fiscal year 2022 on pre-tax income of $368.7 million, yielding an effective tax rate of 11.5 percent. Our effective tax rate was lower than the U.S. statutory rate of 21.0 percent, primarily due to the effect of income earned in certain foreign jurisdictions that is taxed below the federal statutory rate and excess tax benefits from stock-based compensation.

We recorded income tax expense of $27.9 million in fiscal year 2021 on pre-tax income of $245.2 million, yielding an effective tax provision rate of 11.4 percent. Our effective tax rate was lower than the U.S. statutory rate of 21.0 percent, primarily due to the effect of income earned in certain foreign jurisdictions that is taxed below the federal statutory rate, the release of prior year unrecognized tax benefits during fiscal year 2021, and excess tax benefits from stock-based compensation.

For additional discussion about our income taxes, see Note 19 - Income Taxes.

Liquidity and Capital Resources

Operating Activities

In fiscal year 2023, cash flow from operations was $339.6 million. Operating cash flow during fiscal year 2023 was related to the cash components of our net income and a $55.6 million unfavorable change in working capital. The unfavorable

33

Table of Contents

change in working capital was driven primarily by an increase in inventory and decreases in accounts payable and other accrued liabilities, partially offset by a decrease in accounts receivable. In fiscal year 2022, cash flow from operations was $124.8 million. Operating cash flow during fiscal year 2022 was related to the cash components of our net income and a $316.1 million unfavorable change in working capital, primarily as a result of increases in long-term prepaid wafers associated with terms of the Capacity Reservation Agreement with GlobalFoundries (discussed further in Note 15 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements), accounts receivables and other assets (a portion of which resulted from terms of the Capacity Reservation Agreement with GlobalFoundries), partially offset by increases in acquisition-related liabilities and decreases in inventory for the period. In fiscal year 2021, cash flow from operations was $348.9 million. Operating cash flow during fiscal year 2021 was related to the cash components of our net income, offset by a $33.2 million favorable change in working capital. The favorable change in working capital was driven primarily by a decrease in accounts receivable and an increase in accounts payable, partially offset by an increase in inventories.

Investing Activities

In fiscal year 2023, the Company used $33.3 million in cash for investing activities primarily related to capital expenditures and technology investments of $36.7 million and $3.4 million in net sales of marketable securities. In fiscal year 2022, the Company used approximately $18.4 million in cash for investing activities principally related to $276.9 million associated with the acquisition of Lion and capital expenditures and technology investments of $30.0 million, partially offset by $288.5 million in net sales of marketable securities. In fiscal year 2021, the Company used approximately $77.7 million in cash for investing activities primarily related to $57.2 million in net purchases of marketable securities, and capital expenditures and technology investments of $20.5 million.

Financing Activities

In fiscal years 2023, 2022, and 2021, the Company used $230.3 million, $178.7 million, and $121.2 million, respectively, related to financing activities. In fiscal years 2023, 2022, and 2021, the Company utilized approximately $191.4 million, $167.5 million, and $110.0 million, respectively, in cash to repurchase and retire portions of its outstanding common stock. See Note 17 - Stockholders' Equity for a description of our share repurchase authorization.

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 the forward-looking secured overnight financing rate ("Term SOFR"), for the purposes of calculating interest under the terms of the Second Amended Credit Agreement.

As of March 25, 2023, the Company had no amounts outstanding under the Revolving Credit Facility and was in compliance with all covenants under the Second Amended Credit Agreement.

See Note 9 — Revolving Credit Facility for additional information including material terms and related covenants.

Capital Requirements

Our future capital requirements will depend on many factors, including the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, and potential future acquisitions of companies or technologies, commitments under the Capacity Reservation Agreement with GlobalFoundries (discussed further in Note 15 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements and Item 1A. Risk Factors) and the expansion of our sales and marketing activities. We believe our expected future cash earnings, existing cash, cash equivalents, investment balances, and available borrowings under our Revolving Credit Facility will be sufficient to meet our capital requirements both domestically and internationally, in the short-term (i.e. the next 12 months) and in the long-term, although we could be required, or could elect, to seek additional funding prior to that time. As of March 25, 2023, the Company did not have any off-balance-sheet arrangements, that were reasonably likely to have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

34

Table of Contents

Contractual Cash Obligations

In our business activities, we incur certain commitments to make future payments under contracts such as debt agreements, purchase orders, operating leases and other long-term contracts.  See Part II, Item 8 Notes to Consolidated Financial Statements Note 9 - Revolving Credit Facility, Note 11 - Leases and Note 15 - Commitments and Contingencies for additional information related to these contractual obligations.

ITEM 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Please read the following discussion in conjunction with our audited historical consolidated financial statements and notes thereto, which are included elsewhere in this Form 10-K. Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors. Actual results could differ materially because of the factors discussed in Part I, Item 1A. “Risk Factors” of this Form 10-K and elsewhere in this report, as well as in the documents we file with the SEC, including our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

25

Table of Contents

Critical Accounting Estimates

Our discussion and analysis of the Company’s financial condition and results of operations are based upon the consolidated financial statements included in this report, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts. We evaluate the estimates on an on-going basis. We base these estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. Our accounting policies are more fully described in Note 2 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements contained in Item 8.

The Company considers the following accounting policies to involve the highest degree of judgment in the preparation of the consolidated financial statements:

Inventory Valuation

Inventories are stated at the lower of cost or net realizable value, with cost being determined on a first-in, first-out basis. The Company writes down inventories to net realizable value based on forecasted customer unit demand while taking into account product release schedules and product life cycles. The Company also reviews and writes down inventory, as appropriate, based on the age and condition of the inventory. Actual demand and market conditions may be different from those projected by management, which could have a material effect on our operating results and financial position.

Uncertain Tax Positions

The calculation of our tax liabilities involves assessing uncertainties with respect to the application of complex tax rules. Uncertain tax positions must meet a more likely than not threshold to be recognized in the financial statements and the tax benefits recognized are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon final settlement. The ultimate settlement of uncertain tax positions may differ from our estimates, which could result in the recognition of a tax benefit or an additional charge to the income tax provision in the relevant period. See Note 19 — Income Taxes of the Notes to Consolidated Financial Statements contained in Item 8 for additional details.

Accounting for Acquisitions

The Company accounts for business combinations using the acquisition method of accounting and allocates the fair value of acquisition consideration to the assets acquired and liabilities assumed based on their fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair value of the assets acquired and liabilities assumed is recorded as goodwill. The fair value of identifiable intangible assets was determined primarily using the income approach, which required the Company to project discounted future cash flows. The significant estimation uncertainty is primarily due to the sensitivity of the respective fair values to underlying assumptions about the future performance of the acquired business and the limited historical data and market data on which those assumptions are based. The Company's estimates are based upon assumptions believed to be reasonable, but are inherently uncertain and unpredictable. Incorrect estimates could result in future impairment charges, and those charges could be material to the results of operations. See Note 8 — Acquisition of the Notes to Consolidated Financial Statements contained in Item 8 for additional details.

Recently Adopted and Issued Accounting Pronouncements

For a discussion of recently adopted and issued accounting pronouncements, refer to Note 2 of the Notes to the Consolidated Financial Statements.

Overview

Cirrus Logic develops low-power, high-precision mixed-signal processing solutions for a broad range of customers. We track operating results in one reportable segment, but report revenue performance by product line: audio and high-performance mixed-signal products. In fiscal year 2022, the Company delivered record revenue and EPS, driven by high-performance mixed-signal dollar content gains in smartphones. This past year, we made significant progress driving both product diversification and revenue growth through our high-performance mixed-signal business as we shipped our first-generation power conversion and control IC, broadened our power footprint with the addition of fast-charging solutions, and increased the attach rate of our camera controllers. In audio, we maintained our leadership position in smartphones while also expanding our presence in laptops.

Cirrus Logic continues to experience demand significantly above available capacity and are actively working with our suppliers to meet as much demand as possible while also balancing our customer relationships and financial health. In the second quarter of fiscal year 2022, we entered into a long-term Capacity Reservation and Wafer Supply Commitment Agreement with GlobalFoundries, a foundry partner for many of our strategic products. This expands our ability to address

26

Table of Contents

existing and incremental demand and provides customers with much-needed supply assurance, while also providing the company with the flexibility to pursue additional capacity.

Additionally, the Company has observed increased competition in hiring and retaining qualified executives and employees, which is expected to result in increased research and development costs in future periods. For more information, please see Item 1A. "Risk Factors".

Fiscal Year 2022

Fiscal year 2022 net sales of $1.78 billion represented an increase over fiscal year 2021 net sales of $1.37 billion. High-performance mixed-signal product line sales of $594.3 million represented a 124.1 percent increase from fiscal year 2021 sales of $265.2 million, primarily attributable to content gains in smartphones and, to a lesser extent, higher sales of fast-charging ICs in smartphones. Audio product line sales of $1.19 billion in fiscal year 2022 increased from fiscal year 2021 sales of $1.10 billion. The most significant driver of the increase was higher sales of audio products in laptops.

Overall, gross margin for fiscal year 2022 was 51.8 percent. The increase in gross margin for fiscal year 2022 was primarily attributable to the impact of higher ASPs, which were mostly offset by increased supply chain costs. The Company’s number of employees increased to 1,591 as of March 26, 2022. The Company achieved net income of $326.4 million in fiscal year 2022, which included an income tax provision in the amount of $42.3 million.

Fiscal Year 2021

Fiscal year 2021 net sales of $1.37 billion represented an increase over fiscal year 2020 net sales of $1.28 billion. High-performance mixed signal product line sales of $265.2 million represented a 54.9 percent increase from fiscal year 2020 sales of $171.2 million, primarily attributable to content gains in smartphones. Audio product line sales of $1.10 billion in fiscal year 2021 decreased from fiscal year 2020 sales of $1.11 billion, attributable to headwinds in wired headset codecs and decreased smart codec sales in Android. The decrease was partially offset by higher unit volumes in smartphones as well as content gains in smartphones, tablets and wearables.

Overall, gross margin for fiscal year 2021 was 51.7 percent. The decrease in gross margin for fiscal year 2021 was primarily due to a shift in product mix and pricing reductions on certain products, partially offset by cost reductions associated with exiting the MEMS product line. The Company’s number of employees increased to 1,481 as of March 27, 2021. The Company achieved net income of $217.3 million in fiscal year 2021, which included an income tax provision in the amount of $27.9 million.

Results of Operations

The following table summarizes the results of our operations for each of the past three fiscal years as a percentage of net sales. All percentage amounts were calculated using the underlying data, in thousands:

27

Table of Contents

Net Sales

We report sales in two product categories: audio products and high-performance mixed-signal products. Our sales by product line are shown in the table below (in thousands).

Net sales for fiscal year 2022 increased by 30.1 percent, to $1.78 billion from $1.37 billion in fiscal year 2021. The increase in net sales reflects a $329.2 million increase in high-performance mixed-signal product sales, or 124.1 percent, from fiscal year 2021 sales of $265.2 million, which was primarily attributable to content gains in smartphones, and to a lesser extent, higher sales of fast-charging ICs in smartphones. Additionally, audio product sales increased $83.1 million in fiscal year 2022. The most significant driver of the increase was higher sales of audio products in laptops.

Net sales for fiscal year 2021 increased by 6.9 percent, to $1.37 billion from $1.28 billion in fiscal year 2020. The increase in net sales reflects a $94.0 million increase in high-performance mixed-signal product sales, or 54.9 percent, from fiscal year 2020 sales of $171.2 million, which was primarily attributable to content gains in smartphones. This increase was offset by a $5.9 million decrease in audio product sales. The audio product line experienced a decrease in net sales attributable to headwinds in wired headset codecs and decreased smart codec sales in Android. The decrease was partially offset by higher unit volumes in smartphones as well as content gains in smartphones, tablets and wearables.

International sales, including sales to U.S.-based end customers that manufacture products through contract manufacturers or plants located overseas, were approximately $1.8 billion in fiscal year 2022 and $1.3 billion in each of fiscal years 2021 and 2020, representing 98 percent of net sales in fiscal years 2022 and 2021, and 99 percent in fiscal year 2020. Our sales are denominated primarily in U.S. dollars.

Gross Margin

Overall gross margin of 51.8 percent for fiscal year 2022 reflects a slight increase from fiscal year 2021 gross margin of 51.7 percent. The increase was primarily attributable to the impact of higher ASPs, which were mostly offset by increased supply chain costs. Changes in excess and obsolete inventory charges, including scrapped inventory, and sales of product written down in prior periods did not have a material impact on margin in fiscal year 2022.

Overall gross margin of 51.7 percent for fiscal year 2021 reflects a decrease from fiscal year 2020 gross margin of 52.6 percent. The decrease was primarily attributable to a shift in product mix and pricing reductions on certain products. This was partially offset by cost reductions associated with exiting the MEMS product line. Changes in excess and obsolete inventory charges, including scrapped inventory, and sales of product written down in prior periods did not have a material impact on margin in fiscal year 2021.

Research and Development Expenses

Fiscal year 2022 research and development expenses of $406.3 million reflect an increase of $63.5 million, or 18.5 percent, from fiscal year 2021. The increase was attributable to increased employee-related expenses, primarily driven by a 9.0 percent increase in total R&D headcount, which was mostly associated with the expansion of our power-related products team, amortization of acquisition intangibles, variable compensation, acquisition-related, stock-based compensation, and facilities-related costs, offset by increased R&D incentives and reduced product development costs.

Fiscal year 2021 research and development expenses of $342.8 million reflect a decrease of $4.9 million, or 1.4 percent, from fiscal year 2020. The overall decrease was attributable to reduced amortization of acquisition intangibles, travel and employee events expenses, depreciation and amortization costs on non-acquisition-related intangibles, and product development costs after exiting the MEMS product line, partially offset by increases in employee-related expenses, primarily salaries, variable compensation and stock-based compensation.

Selling, General and Administrative Expenses

Fiscal year 2022 selling, general and administrative expenses of $151.0 million reflect an increase of $24.0 million, or 18.9 percent, compared to fiscal year 2021. The increase was primarily attributable to increased employee-related expenses, professional services, variable compensation and stock-based compensation costs in fiscal year 2022.

28

Table of Contents

Fiscal year 2021 selling, general and administrative expenses of $127.0 million reflect a decrease of $4.1 million, or 3.1 percent, compared to fiscal year 2020. The primary drivers of the decrease were reduced travel and employee events expenses in fiscal year 2021.

Restructuring Costs

During the fourth quarter of fiscal year 2020, the Company approved a restructuring plan (the "MEMS Restructuring"), including discontinuing efforts relating to the MEMS microphone product line. The Company recorded charges of approximately $0.4 million in the first quarter of fiscal year 2021 and $21.9 million in fiscal year 2020, as part of the MEMS Restructuring, which included equipment disposal costs, asset impairment and write-off of intangible assets, and other nonrecurring costs. No additional restructuring charges were incurred for the remainder of fiscal year 2021 or 2022. See Note 12 - Restructuring Costs for additional details.

Interest Income

Interest income in fiscal years 2022, 2021, and 2020, was $1.6 million, $6.3 million, and $10.5 million, respectively. The fluctuations in interest income in fiscal year 2022 and 2021 versus prior years were a function of earnings on average cash, cash equivalent, and marketable securities balances throughout the year.

Interest Expense

The Company reported interest expense of $0.9 million, $1.1 million and $1.1 million for fiscal years 2022, 2021, and 2020, respectively, primarily as a result of the Revolving Credit Facility, described in Note 9.

Other Income (Expense)

In fiscal years 2022, 2021, and 2020 the Company reported $1.7 million, $2.8 million, and $(1.6) million respectively, in other income (expense), related to remeasurement on foreign currency denominated monetary assets and liabilities and other non-operating income and expenses.

Provision for Income Taxes

We recorded income tax expense of $42.3 million in fiscal year 2022 on pre-tax income of $368.7 million, yielding an effective tax rate of 11.5 percent. Our effective tax rate was lower than the U.S. statutory rate of 21.0 percent, primarily due to the effect of income earned in certain foreign jurisdictions that is taxed below the federal statutory rate and excess tax benefits from stock-based compensation.

We recorded income tax expense of $27.9 million in fiscal year 2021 on pre-tax income of $245.2 million, yielding an effective tax rate of 11.4 percent. Our effective tax rate was lower than the U.S. statutory rate of 21.0 percent, primarily due to the effect of income earned in certain foreign jurisdictions that is taxed below the federal statutory rate, the release of prior year unrecognized tax benefits during fiscal year 2021, and excess tax benefits from stock-based compensation.

We recorded income tax expense of $21.8 million in fiscal year 2020 on pre-tax income of $181.3 million, yielding an effective tax provision rate of 12.0 percent. Our effective tax rate was lower than the U.S. statutory rate of 21.0 percent, primarily due to the effect of income earned in certain foreign jurisdictions that is taxed below the federal statutory rate, excess tax benefits from stock-based compensation, and the release of prior year unrecognized tax benefits during fiscal year 2020.

For additional discussion about our income taxes, see Note 19 - Income Taxes.

Outlook

Given the wide array of uncertainties surrounding the implications of the COVID-19 pandemic, industry-wide supply constraints and the timing of when these challenges will be alleviated, it is difficult to predict our revenue, gross margin and operating expense outlook for fiscal year 2023. However, Cirrus Logic made significant progress in fiscal year 2022, and expects to continue to leverage our expertise in mixed-signal design and advanced low-power signal processing to execute on our product roadmap and strategic vision to capitalize on growth opportunities in new applications and markets in the years to come. Going forward, we expect gross margins to normalize around our long-term model as we ship inventory built at higher costs compared to fiscal year 2022.

Liquidity and Capital Resources

Operating Activities

In fiscal year 2022, cash flow from operations was $124.8 million. Operating cash flow during fiscal year 2022 was related to the cash components of our net income and a $316.1 million unfavorable change in working capital, primarily as a result of increases in long-term prepaid wafers associated with terms of the Capacity Reservation Agreement with GlobalFoundries (discussed further in Note 15 - Commitments and Contingencies of the Notes to the Consolidated Financial

29

Table of Contents

Statements), accounts receivables and other assets (a portion of which resulted from terms of the Capacity Reservation Agreement with GlobalFoundries), partially offset by increases in acquisition-related liabilities and decreases in inventory for the period. In fiscal year 2021, cash flow from operations was $348.9 million. Operating cash flow during fiscal year 2021 was related to the cash components of our net income and a $33.2 million favorable change in working capital. The favorable change in working capital was driven primarily by a decrease in accounts receivable and an increase in accounts payable, partially offset by an increase in inventories. In fiscal year 2020, cash flow from operations was $295.8 million. Operating cash flow during fiscal year 2020 was related to the cash components of our net income, offset by a $2.8 million unfavorable change in working capital. The unfavorable change in working capital was driven primarily by an increase in accounts receivable, partially offset by an increase in accounts payable during the period.

Investing Activities

In fiscal year 2022, the Company used $18.4 million in cash for investing activities primarily related to $276.9 million associated with the acquisition of Lion Semiconductor, Inc. ("Lion") and capital expenditures and technology investments of $30.0 million, partially offset by $288.5 million in net sales of marketable securities. In fiscal year 2021, the Company used approximately $77.7 million in cash for investing activities principally related to $57.2 million in net purchases of marketable securities, and capital expenditures and technology investments of $20.5 million. In fiscal year 2020, the Company used approximately $100.2 million in cash for investing activities primarily related to $78.6 million in net purchases of marketable securities, and capital expenditures and technology investments of $21.6 million.

Financing Activities

In fiscal year 2022, the Company used $178.7 million related to financing activities. In fiscal year 2021, the Company used $121.2 million in financing activities. In fiscal year 2020, the Company used $119.6 million in financing activities. In fiscal years 2022, 2021, and 2020, the Company utilized approximately $167.5 million, $110.0 million, and $120.0 million, respectively, in cash to repurchase and retire portions of its outstanding common stock. See Note 17 - Stockholders' Equity for a description of our share repurchase programs.

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.

As of March 26, 2022, the Company had no amounts outstanding under the Revolving Credit Facility and was in compliance with all covenants under the Second Amended Credit Agreement.

See Note 9 — Revolving Credit Facility for additional information including material terms and related covenants.

Capital Requirements

Our future capital requirements will depend on many factors, including the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, the Acquisition (discussed further in Note 8 - Acquisition of the Notes to the Consolidated Financial Statements and Item 1A. Risk Factors) and potential future acquisitions of companies or technologies, commitments under the Capacity Reservation Agreement with GlobalFoundries (discussed further in Note 15 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements and Item 1A. Risk Factors) and the expansion of our sales and marketing activities. We believe our expected future cash earnings, existing cash, cash equivalents, investment balances, and available borrowings under our Revolving Credit Facility will be sufficient to meet our capital requirements both domestically and internationally, through at least the next 12 months, although we could be required, or could elect, to seek additional funding prior to that time. As of March 26, 2022, the Company did not have any off-balance-sheet arrangements, that were reasonably likely to have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Contractual Cash Obligations

In our business activities, we incur certain commitments to make future payments under contracts such as debt agreements, purchase orders, operating leases and other long-term contracts.  See Part II, Item 8 Notes to Consolidated Financial Statements Note 9 - Revolving Credit Facility, Note 11 - Leases and Note 15 - Commitments and Contingencies for additional information related to these contractual obligations.

30

Table of Contents