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 second quarter fiscal year
2024, which ended September 23, 2023, as well as the company’s
current business outlook.
“Cirrus Logic delivered revenue near the top end of guidance in
the September quarter,” said John Forsyth, Cirrus Logic president
and chief executive officer. “We also continued our strong track
record of engineering execution, ramping shipments of our new
camera controller and passing key milestones in the development of
the next-generation components that we expect to introduce next
year. Looking forward, we remain focused on delivering innovative
products that will expand our market reach and enable us to
capitalize on the growth opportunities that we see ahead of
us.”
Reported Financial Results – Second Quarter FY24
- Revenue of $481.1 million;
- GAAP and non-GAAP gross margin of 51.3 percent;
- GAAP operating expenses of $140.8 million and non-GAAP
operating expenses of $114.4 million; and
- GAAP earnings per share of $1.34 and non-GAAP earnings per
share of $1.80.
A reconciliation of GAAP to non-GAAP financial information is
included in the tables accompanying this press release.
Business Outlook – Third Quarter FY24
- Revenue is expected to range between $510 million and $570
million;
- GAAP gross margin is expected to be between 49 percent and 51
percent;
- Combined GAAP R&D and SG&A expenses are anticipated to
range between $145 million and $151 million, including
approximately $23 million in stock-based compensation expense and
$2 million in amortization of acquisition intangibles, resulting in
a non-GAAP operating expense range between $120 million and $126
million; and
- The December quarter will span 14 weeks instead of the typical
13 weeks as FY24 is a 53-week year.
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, operating income and profit, operating expenses, gross
margin and profit, tax expense, tax expense impact on earnings per
share, effective tax rate, free cash flow, and free cash flow
margin. A reconciliation of the adjustments to GAAP results is
included in the tables below. Non-GAAP financial information is not
meant as a substitute for GAAP results but is included because
management believes such information is useful to our investors for
informational and comparative purposes. In addition, certain
non-GAAP financial information is used internally by management to
evaluate and manage the company. The non-GAAP financial information
used by Cirrus Logic may differ from that used by other companies.
These non-GAAP measures should be considered in addition to, and
not as a substitute for, the results prepared in accordance with
GAAP.
Safe Harbor Statement
Except for historical information contained herein, the matters
set forth in this news release contain forward-looking statements
including our statements about our expectation that our
next-generation components will be introduced next year; our
ability to deliver innovative products that will expand our market
reach and enable us to capitalize on the growth opportunities; and
our estimates for the third quarter fiscal year 2024 revenue, gross
margin, combined research and development and selling, general and
administrative expense levels, stock compensation expense, and
amortization of acquisition intangibles. In some cases,
forward-looking statements are identified by words such as
“expect,” “anticipate,” “target,” “project,” “believe,” “goals,”
“opportunity,” “estimates,” “intend,” and variations of these types
of words and similar expressions. In addition, any statements that
refer to our plans, expectations, strategies, or other
characterizations of future events or circumstances are
forward-looking statements. These forward-looking statements are
based on our current expectations, estimates, and assumptions and
are subject to certain risks and uncertainties that could cause
actual results to differ materially, and readers should not place
undue reliance on such statements. These risks and uncertainties
include, but are not limited to, the following: our ability to
develop and ramp new products in a timely manner, including our
next-generation boosted amplifier and our first 22-nm smart codec;
our ability to commercialize new research and development efforts
into new markets outside of smartphones; and the level and timing
of orders and shipments during the third quarter of fiscal year
2024, customer cancellations of orders, or the failure to place
orders consistent with forecasts, along with the risk factors
listed in our Form 10-K for the year ended March 25, 2023 and in
our other filings with the Securities and Exchange Commission,
which are available at www.sec.gov. The foregoing information
concerning our business outlook represents our outlook as of the
date of this news release, and we expressly disclaim any obligation
to update or revise any forward-looking statements, whether as a
result of new developments or otherwise.
Summary Financial Data Follows:
CONSOLIDATED CONDENSED
STATEMENT OF OPERATIONS
(in thousands, except per
share data; unaudited)
Three Months Ended
Six Months Ended
Sep. 23,
Jun. 24,
Sep. 24,
Sep. 23,
Sep. 24,
2023
2023
2022
2023
2022
Q2'24
Q1'24
Q2'23
Q2'24
Q2'23
Audio
$
282,855
$
195,806
$
337,811
$
478,661
$
592,307
High-Performance Mixed-Signal
198,208
121,210
202,763
319,418
341,906
Net sales
481,063
317,016
540,574
798,079
934,213
Cost of sales
234,467
157,629
269,288
392,096
460,293
Gross profit
246,596
159,387
271,286
405,983
473,920
Gross margin
51.3
%
50.3
%
50.2
%
50.9
%
50.7
%
Research and development
104,205
106,215
115,471
210,420
225,187
Selling, general and administrative
34,323
35,379
39,598
69,702
78,240
Restructuring and related costs
2,319
—
—
2,319
—
Total operating expenses
140,847
141,594
155,069
282,441
303,427
Income from operations
105,749
17,793
116,217
123,542
170,493
Interest income (expense)
3,729
4,600
1,285
8,329
1,590
Other income (expense)
(70
)
377
295
307
801
Income before income taxes
109,408
22,770
117,797
132,178
172,884
Provision for income taxes
34,001
7,170
30,609
41,171
45,989
Net income
$
75,407
$
15,600
$
87,188
$
91,007
$
126,895
Basic earnings per share
$
1.38
$
0.28
$
1.56
$
1.66
$
2.27
Diluted earnings per share:
$
1.34
$
0.28
$
1.52
$
1.61
$
2.20
Weighted average number of shares:
Basic
54,503
54,862
55,726
54,683
56,002
Diluted
56,278
56,631
57,418
56,453
57,620
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
Six Months Ended
Sep. 23,
Jun. 24,
Sep. 24,
Sep. 23,
Sep. 24,
2023
2023
2022
2023
2022
Net Income Reconciliation
Q2'24
Q1'24
Q2'23
Q2'24
Q2'23
GAAP Net Income
$
75,407
$
15,600
$
87,188
$
91,007
$
126,895
Amortization of acquisition
intangibles
2,170
2,170
7,787
4,340
15,622
Stock-based compensation expense
21,331
22,715
20,483
44,046
38,621
Restructuring and related costs
2,319
—
—
2,319
—
Acquisition-related costs
939
3,166
3,164
4,105
6,328
Adjustment to income taxes
(604
)
(5,628
)
(4,135
)
(6,232
)
(8,435
)
Non-GAAP Net Income
$
101,562
$
38,023
$
114,487
$
139,585
$
179,031
Earnings Per Share Reconciliation
GAAP Diluted earnings per share
$
1.34
$
0.28
$
1.52
$
1.61
$
2.20
Effect of Amortization of acquisition
intangibles
0.04
0.04
0.14
0.08
0.27
Effect of Stock-based compensation
expense
0.38
0.40
0.35
0.78
0.67
Effect of Restructuring and related
costs
0.04
—
—
0.04
—
Effect of Acquisition-related costs
0.01
0.05
0.05
0.07
0.11
Effect of Adjustment to income taxes
(0.01
)
(0.10
)
(0.07
)
(0.11
)
(0.14
)
Non-GAAP Diluted earnings per
share
$
1.80
$
0.67
$
1.99
$
2.47
$
3.11
Operating Income Reconciliation
GAAP Operating Income
$
105,749
$
17,793
$
116,217
$
123,542
$
170,493
GAAP Operating Profit
22.0
%
5.6
%
21.5
%
15.5
%
18.2
%
Amortization of acquisition
intangibles
2,170
2,170
7,787
4,340
15,622
Stock-based compensation expense -
COGS
361
285
312
646
589
Stock-based compensation expense -
R&D
15,472
15,952
14,228
31,424
26,820
Stock-based compensation expense -
SG&A
5,498
6,478
5,943
11,976
11,212
Restructuring and related costs
2,319
—
—
2,319
—
Acquisition-related costs
939
3,166
3,164
4,105
6,328
Non-GAAP Operating Income
$
132,508
$
45,844
$
147,651
$
178,352
$
231,064
Non-GAAP Operating Profit
27.5
%
14.5
%
27.3
%
22.3
%
24.7
%
Operating Expense Reconciliation
GAAP Operating Expenses
$
140,847
$
141,594
$
155,069
$
282,441
$
303,427
Amortization of acquisition
intangibles
(2,170
)
(2,170
)
(7,787
)
(4,340
)
(15,622
)
Stock-based compensation expense -
R&D
(15,472
)
(15,952
)
(14,228
)
(31,424
)
(26,820
)
Stock-based compensation expense -
SG&A
(5,498
)
(6,478
)
(5,943
)
(11,976
)
(11,212
)
Restructuring and related costs
(2,319
)
—
—
(2,319
)
—
Acquisition-related costs
(939
)
(3,166
)
(3,164
)
(4,105
)
(6,328
)
Non-GAAP Operating Expenses
$
114,449
$
113,828
$
123,947
$
228,277
$
243,445
Gross Margin/Profit Reconciliation
GAAP Gross Profit
$
246,596
$
159,387
$
271,286
$
405,983
$
473,920
GAAP Gross Margin
51.3
%
50.3
%
50.2
%
50.9
%
50.7
%
Stock-based compensation expense -
COGS
361
285
312
646
589
Non-GAAP Gross Profit
$
246,957
$
159,672
$
271,598
$
406,629
$
474,509
Non-GAAP Gross Margin
51.3
%
50.4
%
50.2
%
51.0
%
50.8
%
Three Months Ended
Six Months Ended
Sep. 23,
Jun. 24,
Sep. 24,
Sep. 23,
Sep. 24,
2023
2023
2022
2023
2022
Effective Tax Rate Reconciliation
Q2'24
Q1'24
Q2'23
Q2'24
Q2'23
GAAP Tax Expense
$
34,001
$
7,170
$
30,609
$
41,171
$
45,989
GAAP Effective Tax Rate
31.1
%
31.5
%
26.0
%
31.1
%
26.6
%
Adjustments to income taxes
604
5,628
4,135
6,232
8,435
Non-GAAP Tax Expense
$
34,605
$
12,798
$
34,744
$
47,403
$
54,424
Non-GAAP Effective Tax Rate
25.4
%
25.2
%
23.3
%
25.4
%
23.3
%
Tax Impact to EPS Reconciliation
GAAP Tax Expense
$
0.60
$
0.13
$
0.53
$
0.73
$
0.80
Adjustments to income taxes
0.01
0.10
0.07
0.11
0.14
Non-GAAP Tax Expense
$
0.61
$
0.23
$
0.60
$
0.84
$
0.94
CONSOLIDATED CONDENSED BALANCE
SHEET
(in thousands;
unaudited)
Sep. 23,
Mar. 25,
Sep. 24,
2023
2023
2022
ASSETS
Current assets
Cash and cash equivalents
$
277,805
$
445,784
$
355,043
Marketable securities
34,636
34,978
23,869
Accounts receivable, net
271,894
150,473
304,546
Inventories
328,930
233,450
164,571
Prepaid wafers
79,468
60,638
—
Other current assets
104,138
92,533
108,538
Total current Assets
1,096,871
1,017,856
956,567
Long-term marketable securities
40,042
36,509
49,013
Right-of-use lease assets
144,104
128,145
162,859
Property and equipment, net
171,047
162,972
158,722
Intangibles, net
33,801
38,876
141,909
Goodwill
435,936
435,936
435,936
Deferred tax asset
44,126
35,580
13,094
Long-term prepaid wafers
94,474
134,363
174,787
Other assets
44,052
73,729
71,180
Total assets
$
2,104,453
$
2,063,966
$
2,164,067
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$
87,340
$
81,462
$
118,000
Accrued salaries and benefits
46,504
50,606
59,140
Lease liability
19,859
18,442
13,583
Acquisition-related liabilities
—
21,361
45,984
Other accrued liabilities
47,487
44,469
45,658
Total current liabilities
201,190
216,340
282,365
Non-current lease liability
136,042
122,631
152,294
Non-current income taxes
51,589
59,013
65,255
Other long-term liabilities
7,277
7,700
9,539
Total long-term liabilities
194,908
189,344
227,088
Stockholders' equity:
Capital stock
1,712,710
1,670,141
1,618,177
Accumulated earnings (deficit)
(1,213
)
(9,320
)
40,927
Accumulated other comprehensive loss
(3,142
)
(2,539
)
(4,490
)
Total stockholders' equity
1,708,355
1,658,282
1,654,614
Total liabilities and stockholders'
equity
$
2,104,453
$
2,063,966
$
2,164,067
Prepared in accordance with
Generally Accepted Accounting Principles
CONSOLIDATED CONDENSED
STATEMENT OF CASH FLOWS
(in thousands;
unaudited)
Three Months Ended
Sep. 23,
Sep. 24,
2023
2022
Q2'24
Q2'23
Cash flows from operating activities:
Net income
$
75,407
$
87,188
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
11,610
17,219
Stock-based compensation expense
21,331
20,483
Deferred income taxes
810
1,404
Loss on retirement or write-off of
long-lived assets
58
11
Other non-cash charges
274
86
Restructuring and related costs
2,319
—
Net change in operating assets and
liabilities:
Accounts receivable, net
(86,046
)
(98,274
)
Inventories
(27,974
)
9,799
Prepaid wafers
21,058
—
Other assets
(14,392
)
(2,491
)
Accounts payable and other accrued
liabilities
10,200
14,229
Income taxes payable
(12,859
)
(16,829
)
Acquisition-related liabilities
(24,527
)
3,164
Net cash provided by (used in) operating
activities
(22,731
)
35,989
Cash flows from investing activities:
Maturities and sales of available-for-sale
marketable securities
7,194
1,961
Purchases of available-for-sale marketable
securities
(7,819
)
(850
)
Purchases of property, equipment and
software
(8,470
)
(10,211
)
Investments in technology
(57
)
(36
)
Net cash used in investing activities
(9,152
)
(9,136
)
Cash flows from financing activities:
Issuance of common stock, net of shares
withheld for taxes
—
1,011
Repurchase of stock to satisfy employee
tax withholding obligations
(2,082
)
(2,156
)
Repurchase and retirement of common
stock
(40,576
)
(50,000
)
Net cash used in financing activities
(42,658
)
(51,145
)
Net decrease in cash and cash
equivalents
(74,541
)
(24,292
)
Cash and cash equivalents at beginning of
period
352,346
379,335
Cash and cash equivalents at end of
period
$
277,805
$
355,043
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
Sep. 23,
Sep. 23,
Jun. 24,
Mar. 25,
Dec. 24,
2023
2023
2023
2023
2022
Q2'24
Q2'24
Q1'24
Q4'23
Q3'23
Net cash provided by (used in) operating
activities (GAAP)
$
166,670
$
(22,731
)
$
(39,813
)
$
48,266
$
180,948
Capital expenditures
(40,080
)
(8,527
)
(12,310
)
(11,635
)
(7,608
)
Free Cash Flow (Non-GAAP)
$
126,590
$
(31,258
)
$
(52,123
)
$
36,631
$
173,340
Cash Flow from Operations as a
Percentage of Revenue (GAAP)
9
%
(5
)%
(13
)%
13
%
31
%
Capital Expenditures as a Percentage of
Revenue (GAAP)
2
%
2
%
4
%
3
%
1
%
Free Cash Flow Margin
(Non-GAAP)
7
%
(6
)%
(16
)%
10
%
29
%
RECONCILIATION BETWEEN GAAP
AND NON-GAAP FINANCIAL INFORMATION
(in millions;
unaudited)
(not prepared in accordance
with GAAP)
Q3'24
Guidance
Operating Expense Reconciliation
GAAP Operating Expenses
$145 - 151
Stock-based compensation expense
(23)
Amortization of acquisition
intangibles
(2)
Non-GAAP Operating Expenses
$120 - 126
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102798810/en/
Investor Contact: Chelsea Heffernan Vice President,
Investor Relations Cirrus Logic, Inc. (512) 851-4125
Investor@cirrus.com
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