Financial Analysis

Commitments and Contingencies Capacity Reservation Agreement On July 28, 2021, the Company entered into a Capacity Reservation and Wafer Supply Commitment Agreement (the Capacity Reservation Agreement) with GlobalFoundries to provide the Company a wafer capacity commitment and wafer pricing for Company products for calendar years 2022-2026 (the Commitment Period). On February 18, 2025, the Capacity Reservation Agreement was amended (the Amendment) to define the quarterly spread of the remaining wafer quantities under the agreement. The Capacity Reservation Agreement requires GlobalFoundries to provide, and the Company to purchase, a defined number of wafers on a quarterly basis for the Commitment Period, subject to shortfall payments. In exchange for GlobalFoundries capacity commitment, the Company paid a $60 million non-refundable capacity reservation fee, which is amortized over the Commitment Period. The balance of this reservation fee is $10 million as of December 27, 2025, and is recorded in Other current assets on the Consolidated Condensed Balance Sheets. In addition, the Company pre-paid GlobalFoundries $195 million for future wafer purchases, which are credited back to the Company as a portion of the price of wafers purchased, which began in the Company's second fiscal quarter of 2024. The balance of the prepayment is $33 million at December 27, 2025, and is currently recorded in Prepaid wafers on the Consolidated Condensed Balance Sheets. …

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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 Logics 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 Term SOFR, for the purposes of calculating interest under the terms of the Second Amended Credit Agreement. Borrowings under the Revolving Credit Facility may bear interest, at Cirrus Logics election, at either (a) a base rate plus the applicable margin (Base Rate Loans) or (b) a Term SOFR rate plus a 10 basis point credit spread adjustment plus the applicable margin. The applic …

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Total net sales based on the product line disaggregation criteria described above are shown in the table below (in thousands). Three Months Ended Nine Months Ended December 27, December 28, December 27, December 28, 2025 2024 2025 2024 Audio Products $ 344,455 $ 346,272 $ 902,713 $ 881,830 HPMS Products 236,169 209,466 646,143 589,791 $ 580,624 $ 555,738 $ 1,548,856 $ 1,471,621 The geographic regions that are reviewed are China, the United States, and the rest of the world. Total net sales based on the geographic disaggregation criteria described are as follows (in thousands): Three Months Ended Nine Months Ended December 27, December 28, December 27, December 28, 2025 2024 2025 2024 China $ 357,155 $ 373,449 $ 850,060 $ 904,899 United States 3,272 5,638 10,953 13,325 Rest of World 220,197 176,651 687,843 553,397 $ 580,624 $ 555,738 $ 1,548,856 $ 1,471,621

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Fair Value of Financial Instruments The Company has determined that the only material assets and liabilities in the Companys financial statements that are required to be measured at fair value on a recurring basis are the Companys cash equivalents and marketable securities portfolio. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value o …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes Our provision for income taxes is based on estimated effective tax rates derived from an estimate of annual consolidated earnings before taxes, adjusted for nondeductible expenses, other permanent items, and any applicable income tax credits. The following table presents the provision for income taxes (in thousands) and the effective tax rates: Three Months Ended Nine Months Ended December 27, December 28, December 27, December 28, 2025 2024 2025 2024 Income before income taxes $ 162,449 $ 153,701 $ 396,473 $ 350,309 Provision for income taxes $ 22,139 $ 37,696 $ 63,870 $ 90,069 Effective tax rate 13.6 % 24.5 % 16.1 % 25.7 % Our income tax expense was $22.1 million and $37.7 million for the third quarters of fiscal years 2026 and 2025, respectively, resulting in effective tax rates of 13.6 percent and 24.5 percent, respectively. Our income tax expense was $63.9 million and $90.1 million for the first nine months of fiscal years 2026 and 2025, respectively, resulting in effective tax rates of 16.1 percent and 25.7 percent, respectively. Effective tax rates for fiscal year 2025 were unfavorably impacted by a provision in the Tax Cuts and Jobs Act of 2017 that required research and development (R&D) 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, which resulted in increased GILTI inclusions in these per …

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Legal Matters From time to time, we are involved in legal proceedings concerning matters arising in connection with the conduct of our business activities. We regularly evaluate the status of legal proceedings in which we are involved in order to assess whether a loss is probable or there is a reasonable possibility that a loss or additional loss may have been incurred, and to determine if accruals are appropriate. We further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made. Based on current knowledge, management does not believe that there are any pending matters that could potentially have a material adverse effect on our business, financial condition, results of operations or cash flows. However, we are engaged in various legal actions in the normal course of business. There can be no assurances in light of the inherent uncertainties involved in any potential legal proceedings, some of which are beyond our control, and an adverse outcome in any legal proceeding could be material to our results of operations or cash flows for any particular reporting period.

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In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures . The guidance provides qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, requiring more consistent categories and greater disaggregation of information by jurisdiction. This ASU is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted, to be applied on a prospective basis, although retrospective application is also permitted. The Company is currently evaluating the impact of this guidance on financial statement disclosures and expects to provide these disclosures in the fourth quarter of fiscal year 2026. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220-40): Disaggregation of Income Statement Expenses , which requires disaggregation of certain expense categories in the notes to the financial statements in order to provide enhanced transparency into the expense captions presented on the face of the income statement. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption and prospective or retrospective application permitted. The Company is currently evaluating the impact of this guidance on fina …

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Revenues Disaggregation of revenue We disaggregate revenue from contracts with customers by product line and ship to location of the customer. Sales are designated in the respective product line categories of Audio and High-Performance Mixed-Signal (HPMS). Total net sales based on the product line disaggregation criteria described above are shown in the table below (in thousands). Three Months Ended Nine Months Ended December 27, December 28, December 27, December 28, 2025 2024 2025 2024 Audio Products $ 344,455 $ 346,272 $ 902,713 $ 881,830 HPMS Products 236,169 209,466 646,143 589,791 $ 580,624 $ 555,738 $ 1,548,856 $ 1,471,621 The geographic regions that are reviewed are China, the United States, and the rest of the world. Total net sales based on the geographic disaggregation criteria described are as follows (in thousands): Three Months Ended Nine Months Ended December 27, December 28, December 27, December 28, 2025 2024 2025 2024 China $ 357,155 $ 373,449 $ 850,060 $ 904,899 United States 3,272 5,638 10,953 13,325 Rest of World 220,197 176,651 687,843 553,397 $ 580,624 $ 555,738 $ 1,548,856 $ 1,471,621 …

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Segment Information We determine our operating segments in accordance with FASB guidelines. Our Chief Executive Officer (CEO) has been identified as the chief operating decision maker (CODM) under these guidelines. The Company operates and tracks its results in one reportable segment, but reports revenue in two product lines, Audio and HPMS. Our CEO receives and uses enterprise-wide financial information to assess financial performance and allocate resources. Our product lines have similar characteristics and customers and share operations support functions such as sales, public relations, supply chain management, various research and development and engineering support, in addition to the general and administrative functions of human resources, legal, finance and information technology. Therefore, there is no complete, discrete financial information maintained for these product lines. Revenue by product line is disclosed in Note 9 - Revenues. The CODM evaluates Company performance based on net income, and this information is used to measure profitability, make budgeting and forecasting decisions, monitor performance trends, and to compare actual results to forecasts. The CODM regularly reviews the consolidated statement of income and a disaggregation of operating expenses, with a focus on personnel-related and product development expenses. The measure of segment assets is reported on the balance sheet as total consolidated assets. The table below presents the Company's signi …

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Stockholders' Equity Common Stock The Company issued a net 0.6 million and 0.7 million shares of common stock during the three and nine months ended December 27, 2025, respectively, and issued a net 0.7 million and 1.0 million shares of common stock for the three and nine months ended December 28, 2024, respectively, pursuant to the Company's equity incentive plans. Share Repurchase Program The Company's net stock repurchases are subject to a 1 percent excise tax under the Inflation Reduction Act, which is included as a reduction to accumulated earnings in the Consolidated Condensed Statements of Stockholders' Equity. As of December 27, 2025, approximately $1.2 million is accrued related to this excise tax. Disclosure of repurchased amounts and related average costs exclude the impact of excise taxes. In July 2022, the Board of Directors authorized the repurchase of up to $500 million of the Company's stock. During the three months ended June 28, 2025, the Company completed share repurchases under the 2022 authorization. In March 2025 , the Board of Directors authorized the repurchase of up to an additional $500 million of the Company's common stock . As of December 27, 2025, a pproximately $155.9 million of the Company's common stock has been repurchased, leaving approximately $344.1 million available for repurchase under the 2025 authorization . Du ring the three months ended December 27, 2025, the Company repurchased 0.6 million shares of the Company's common stock for $70 …

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