Cirrus Logic : Shareholder Letter Q1FY2024

Q1 FY24

Letter to Shareholders

August 3, 2023

August 3, 2023

Dear Shareholders,

In Q1 FY24, Cirrus Logic delivered revenue of $317.0 million and GAAP and non-GAAP earnings per share of $0.28 and $0.67, respectively. During the quarter, we made excellent progress on our next-generation audio components, taping out a custom boosted amplifier and completing product validation on our first 22-nanometer smart codec. We were also encouraged by the momentum in our efforts to diversify into new markets, with our audio components being actively designed into multiple laptops expected to be introduced in the next 12 months. Our progress in this space since last quarter includes securing our first business-oriented laptop socket and being selected as part of the SoundWire®-compatible reference design from Intel. Additionally, we launched our first of several core products in development that aims to drive growth in professional audio, automotive, and industrial applications.

As we noted in the Q4 FY23 shareholder letter, the new high-performancemixed-signal (HPMS) product that we had previously stated we expected to ship this year is no longer coming to market as planned. The company has removed the revenue associated with this component from our internal model. We have made good progress with both our customer and foundry partner on the disposition of wafers associated with this product, and we do not anticipate the disposition to have a material financial impact. While this product was intended to be manufactured at GlobalFoundries as part of our long-term Capacity Reservation and Wafer Supply Commitment Agreement, the agreement allows for wafer allocation flexibility within our product portfolio. As a result, these wafers are being reallocated to other products that utilize the same underlying 55-nanometerhigh-voltage process technology, including amplifiers, haptic drivers, and battery and power integrated circuits (ICs). Our customer relationship remains strong as we continue to collaborate on a range of technologies and programs. With a proven track record of execution and strategic investments in leading-edge technology, we continue to focus on our long-term strategy to drive content expansion with this customer as we pursue a variety of opportunities for both the next generation of our existing components as well as new products.

We remain committed to disciplined execution, including improving operational efficiency through resource allocation, product prioritization, and targeted investments in R&D. As a result of the change in our key customer's plan and overall market conditions, in July we implemented a workforce reduction of approximately five percent to better align our cost structure with our revised expectations. Looking forward, we will continue to invest in the many custom and general market opportunities that we believe will drive our long-term growth, profitability, and diversification.

Q1 FY24 Letter to Shareholders

2

Figure A: Cirrus Logic Q1 FY24 Results

Q1 FY24	GAAP	Adj.	Non-GAAP*
Revenue	$317.0		$317.0
Gross Profit	$159.4	$0.3	$159.7
Gross Margin	50.3%		50.4%
Operating Expense	$141.6	($27.8)	$113.8
Operating Income	$17.8	$28.0	$45.8
Operating Profit	5.6%		14.5%
Interest Income	$4.6		$4.6
Other Income	$0.4		$0.4
Income Tax Expense	$7.2	$5.6	$12.8
Net Income	$15.6	$22.4	$38.0
Diluted EPS	$0.28	$0.39	$0.67

*Complete GAAP to Non-GAAP reconciliations available on page 13 Numbers may not sum due to rounding

$ millions, except EPS

Revenue and Gross Margin

Cirrus Logic revenue for the June quarter was $317.0 million, down 15 percent quarter over quarter and 19 percent year over year. Our revenue this quarter was towards the top end of our guidance range due to higher-than-expected unit volumes. The decline in revenue on a sequential and year-over-year basis reflects a reduction in components shipping in smartphones, and to a lesser extent, continued weakness in general market sales. In the September quarter, we expect revenue to range from $430 million to $490 million, up 45 percent sequentially and down 15 percent year over year at the midpoint.

In Q1 FY24, revenue derived from our audio and HPMS product lines represented 62 percent and 38 percent of total revenue. One customer contributed approximately 83 percent of total revenue in Q1 FY24. Our relationship with our largest customer remains outstanding with continued strong design activity across a wide range of products. While we understand there is intense interest in this customer, in accordance with our policy, we do not discuss specifics about this business.

Q1 FY24 Letter to Shareholders

3

Figure B: Cirrus Logic Revenue ($M) Q2 FY22 to Q2 FY24

$600

$500

	$591
$548	$541
$466	$490
$460*

$400

$300

$200

$100

$0

$394

$373

$317

Q2/FY22	Q3/FY22	Q4/FY22	Q1/FY23	Q2/FY23	Q3/FY23	Q4/FY23	Q1/FY24	Q2/FY24
		Audio	High-PerformanceMixed-Signal

*Midpoint of guidance as of August 3, 2023

Figure C: Audio and High-PerformanceMixed-Signal Revenue Contribution Trend

FY19

FY23

Future

12%

38%

88%

50%50%

62%

n HPMS n Audio

Audio solutions include amplifiers and codecs. High-performancemixed-signal solutions include camera controllers, haptics and sensing, and battery and power ICs.

GAAP gross margin in the June quarter was 50.3 percent, compared to 50.0 percent in Q4 FY23 and 51.5 percent in Q1 FY23. On a sequential basis, gross margin increased slightly. On a year-over-year basis, gross margin declined by 120 basis points reflecting higher inventory reserves that are unrelated to the new HPMS product that is no longer coming to market as planned, and a less favorable product mix. Non- GAAP gross margin in the June quarter was 50.4 percent, compared to 50.1 percent in Q4 FY23 and 51.5

Q1 FY24 Letter to Shareholders

4

percent in Q1 FY23. In the September quarter, we expect gross margin to range from 49 percent to 51 percent.

Operating Profit, Tax, and EPS

Operating profit for Q1 FY24 was 5.6 percent on a GAAP basis and 14.5 percent on a non-GAAP basis. GAAP operating expense was $141.6 million, down $107.6 million sequentially and $6.8 million year over year. GAAP operating expense included $22.4 million in stock-based compensation, $2.2 million in amortization of acquisition intangibles, and $3.2 million in acquisition-related costs. The sequential decrease in expenses reflects the absence of the intangibles impairment and lease impairments and restructuring costs recognized in Q4 FY23, as well as a reduction in amortization of acquisition intangibles, lower product development costs, and increased R&D incentives. The year-over-year decrease in expenses is largely due to a reduction in variable compensation, amortization of acquisition intangibles, and to a lesser extent, increased R&D incentives. This was offset partially by higher employee-related expenses and stock-based compensation. Non-GAAP operating expense for the quarter was below the low end of guidance at $113.8 million, down $6.0 million sequentially and down $5.7 million year over year due to product development prioritization and discretionary spending controls. The company's total headcount exiting Q1 FY24 was 1,719, which does not reflect the approximately five percent workforce reduction in workforce that we announced recently.

GAAP R&D and SG&A expenses for Q2 FY24 are expected to range from $141 million to $147 million, including approximately $22 million in stock-based compensation, $2 million in amortization of acquired intangibles, and $3 million in acquisition-related costs and restructuring charges associated with our recently announced workforce reduction. Costs associated with this action are not expected to be material and are reflected in the Q2 FY24 GAAP operating expense guidance.

Q1 FY24 Letter to Shareholders

5