CIRRUS LOGIC, INC.

Previous wording

The Company remains committed to our three-pronged strategy for growing our business: first, maintaining our leadership position in smartphone audio; second, increasing HPMS content in smartphones; and third, leveraging our strength in audio and HPMS to expand into additional applications and markets with new and existing components. During the second quarter of fiscal year 2026, we continued to execute on these strategic initiatives. We were delighted to see multiple smartphone customers introduce their latest generation devices featuring our audio and HPMS components. Outside of smartphones, we continued to execute on our plan to grow market share in the PC market. Progress in this space included securing our first mainstream consumer laptop design, expanding our collaboration with leading System-on-a-Chip (SoC) vendors, and developing new products with superior voice and audio capture capabilities. Additionally, we continue to focus on our general market business. During the quarter, we gained design momentum with customers on our latest-generation ADCs, DACs, and ultra-high-performance audio codec. We also received positive initial feedback on our family of analog front-end components targeting imaging applications and saw increased engagement on our latest timing product family. Looking forward, we are optimistic about the opportunities ahead of us as we continue to seek to leverage our mixed-signal design and signal processing expertise to diversify our product portfolio and expand our addressable market.

Current wording

The Company remains committed to our three-pronged strategy for growing our business: first, maintaining our leadership position in smartphone audio; second, increasing HPMS content in smartphones; and third, leveraging our strength in audio and HPMS to expand into additional applications and markets with new and existing components. During the third quarter of fiscal year 2026, we continued to execute on these strategic initiatives. Revenue exceeded expectations due to stronger-than-anticipated demand for our components shipping into smartphones, as well as a favorable mix of end devices. In PCs, we advanced our growth strategy by ramping our latest-generation amplifier and codec in mainstream platforms and sampling a new voice interface component for AI-enabled PCs. Multiple leading OEMs introduced PCs incorporating our amplifiers, codecs, and haptic drivers at the Consumer Electronics Show (CES) in early January.

Previous wording

There have been no significant changes during the three and six months ended September 27, 2025, to the information provided under the headings “Critical Accounting Estimates” and “Summary of Significant Accounting Policies” included in our fiscal year 2025 Annual Report on Form 10-K for the fiscal year ended March 29, 2025.

Current wording

There have been no significant changes during the three and nine months ended December 27, 2025, to the information provided under the headings “Critical Accounting Estimates” and “Summary of Significant Accounting Policies” included in our fiscal year 2025 Annual Report on Form 10-K for the fiscal year ended March 29, 2025.

Previous wording

The following table summarizes the results of our operations for thethree and six months of fiscal years 2026 and 2025, respectively, as a percentage of net sales. All percentage amounts were calculated using the underlying data in thousands, unaudited:

Current wording

The following table summarizes the results of our operations for thethree and nine months of fiscal years 2026 and 2025, respectively, as a percentage of net sales. All percentage amounts were calculated using the underlying data in thousands, unaudited:

Previous wording

Net sales for the second quarter of fiscal year 2026 increased $19.1 million, or 4 percent, to $561.0 million from $541.9 million in the second quarter of fiscal year 2025. Net sales from our audio products increased $1.6 million, primarily driven by higher smartphone unit volumes in the second quarter of fiscal year 2026 and sales associated with latest-generation products, partially offset by declines in average sales prices (“ASPs”). Net sales from HPMS products increased $17.5 million for the quarter versus the second quarter of fiscal year 2025, primarily due to higher general market sales, smartphone unit volumes and sales associated with latest-generation products, partially offset by declines in ASPs.

Current wording

Net sales for the third quarter of fiscal year 2026 increased $24.9 million, or 4 percent, to $580.6 million from $555.7 million in the third quarter of fiscal year 2025. Net sales from our audio products decreased $1.8 million, primarily driven by lower general market sales and declines in average sales prices ("ASPs") due to previously anticipated pricing reductions. This decrease was mostly offset by higher smartphones units. Net sales from HPMS products increased $26.7 million for the quarter versus the third quarter of fiscal year 2025, primarily due to higher smartphone unit volumes, partially offset by declines in ASPs due to previously anticipated pricing reductions.

Previous wording

Net sales for the first six months of fiscal year 2026 increased $52.3 million, or 6 percent, to $968.2 million from $915.9 million for the first six months of fiscal year 2025. Net sales from our audio products increased $22.7 million, primarily driven by higher smartphone unit volumes and sales associated with latest-generation products, partially offset by declines in ASPs. Net sales from HPMS products increased $29.7 million for the year versus the first six months of fiscal year 2025, primarily due to higher general market sales, smartphone unit volumes, and sales associated with latest-generation products, partially offset by declines in ASPs.

Current wording

Net sales for the first nine months of fiscal year 2026 increased $77.2 million, or 5 percent, to $1.55 billion from $1.47 billion for the first nine months of fiscal year 2025. Net sales from our audio products increased $20.9 million, primarily driven by higher smartphone unit volumes and sales associated with latest-generation products, partially offset by declines in ASPs due to previously anticipated pricing reductions and lower general market sales. Net sales from HPMS products increased $56.4 million for the year versus the first nine months of fiscal year 2025, primarily due to higher smartphone unit volumes and, to a lesser extent, increased sales of custom components in non-smartphone applications and higher general market sales. Declines in ASPs due to previously anticipated pricing reductions partially offset the increase.

Previous wording

International sales, including sales to U.S.-based end customers that manufacture products through contract manufacturers or plants located overseas, were approximately 99 percent and 100 percent of net sales for the second quarters of fiscal years 2026 and 2025, respectively, and 99 percent for each of the first six month periods of fiscal years 2026 and 2025. Our sales are denominated primarily in U.S. dollars.

Current wording

International sales, including sales to U.S.-based end customers that manufacture products through contract manufacturers or plants located overseas, were approximately 99 percent of net sales for each of the third quarters and nine month periods of fiscal years 2026 and 2025. Our sales are denominated primarily in U.S. dollars.

Previous wording

Since the components we produce are largely proprietary, we consider our end customer to be the entity specifying the use of our component in their design. These end customers may purchase our products directly from us, through distributors, or third-party manufacturers contracted to produce their designs. For each of the second quarters of fiscal years 2026 and 2025, our ten largest end customers represented approximately 97 percent, of our net sales, and 97 percent and 96 percent of our net sales for the first six months of fiscal years 2026 and 2025, respectively.

Current wording

Since the components we produce are largely proprietary, we consider our end customer to be the entity specifying the use of our component in their design. These end customers may purchase our products directly from us, through distributors, or third-party manufacturers contracted to produce their designs. For the third quarters of fiscal years 2026 and 2025, our ten largest end customers represented approximately 97 percent and 96 percent, of our net sales, respectively, and 96 percent of our net sales for each of the first nine months of fiscal years 2026 and 2025.

Previous wording

We had one end customer, Apple Inc., that purchased through multiple contract manufacturers and represented approximately 90 percent of the Company’s total net sales for each of the second quarters of fiscal years 2026 and 2025, and 88 percent and 89 percent for the first six months of fiscal years 2026 and 2025, respectively.

Current wording

We had one end customer, Apple Inc., that purchased through multiple contract manufacturers and represented approximately 94 percent and 91 percent of the Company’s total net sales for the third quarters of fiscal years 2026 and 2025, respectively, and 90 percent for each of the first nine months of fiscal years 2026 and 2025.

Previous wording

No other end customer or distributor represented more than 10 percent of net sales for the three and six months ended September 27, 2025 or September 28, 2024.

Current wording

No other end customer or distributor represented more than 10 percent of net sales for the three and nine months ended December 27, 2025 or December 28, 2024.

Previous wording

Gross margin was 52.5 percent for the first six months of fiscal year 2026, up from 51.5 percent for the first six months of fiscal year 2025 due to a more favorable product mix, partially offset by higher inventory reserves.

Current wording

Gross margin was 52.7 percent for the first nine months of fiscal year 2026, up from 52.3 percent for the first nine months of fiscal year 2025, primarily due to a more favorable product mix. Additionally, ASP reductions due to previously anticipated pricing reductions were mostly offset by reduced product costs.

Previous wording

Research and development expense for the second quarter of fiscal year 2026 was $110.0 million, a decrease of $2.9 million, from $112.9 million in the second quarter of fiscal year 2025. Significant drivers included reduced stock-based compensation and product development costs, partially offset by increased employee-related costs in the current quarter.

Current wording

Research and development expense for the third quarter of fiscal year 2026 was $113.6 million, an increase of $0.6 million, from $113.0 million in the third quarter of fiscal year 2025. Significant drivers included increased employee-related expenses, partially offset by reduced product development and stock-based compensation costs in the quarter.

Previous wording

Research and development expense for the first six months of fiscal year 2026 was $212.9 million, a decrease of $5.4 million, from $218.3 million for the first six months of fiscal year 2025, primarily due to reduced stock-based compensation, product development, and facilities-related costs, partially offset by increased employee-related costs for the period.

Current wording

Research and development expense for the first nine months of fiscal year 2026 was $326.5 million, a decrease of $4.8 million, from $331.3 million for the first nine months of fiscal year 2025, primarily due to reduced stock-based compensation and product development costs, partially offset by increased employee-related costs for the period.

Previous wording

Selling, general and administrative expense for the second quarter of fiscal year 2026 was $39.6 million, an increase of $1.8 million, from $37.8 million in the second quarter of fiscal year 2025, due primarily to increased stock-based compensation costs.

Current wording

Selling, general and administrative expense for the third quarter of fiscal year 2026 was $41.6 million, an increase of $2.6 million, from $39.0 million in the third quarter of fiscal year 2025, due primarily to increased professional services and stock-based compensation costs.

Previous wording

Selling, general and administrative expense for the first six months of fiscal year 2026 was $78.3 million, an increase of $3.8 million, from $74.6 million for the first six months of fiscal year 2025, primarily due to increased stock-based compensation and employee-related expenses, partially offset by the non-recurring lease impairment costs related to the prior comparable period.

Current wording

Selling, general and administrative expense for the first nine months of fiscal year 2026 was $120.0 million, an increase of $6.4 million, from $113.6 million for the first nine months of fiscal year 2025, primarily due to increased stock-based compensation, professional services, employee-related expenses, and software maintenance contract costs. The increase was partially offset by the absence of non-recurring lease impairment costs incurred in the prior comparable period.

Previous wording

The Company reported interest income of $8.9 million and $17.8 million for the three and six months ended September 27, 2025, respectively, and $8.4 million and $16.8 million for the three and six months ended September 28, 2024, respectively. Interest income increased in the current period due to returns generated from higher combined average cash, cash equivalents and marketable securities balances, compared to the prior period.

Current wording

The Company reported interest income of $9.5 million and $27.3 million for the three and nine months ended December 27, 2025, respectively, and $8.4 million and $25.2 million for the three and nine months ended December 28, 2024, respectively. Interest income increased in the current period due to returns generated from higher combined average cash, cash equivalents and marketable securities balances, compared to the prior period.

Previous wording

The Company reported interest expense of $0.2 million and $0.5 million for the three and six months ended September 27, 2025, respectively, and $0.2 million and $0.5 million for the three and six months ended September 28, 2024, respectively. Interest expense consists primarily of commitment fees associated with the Company's Revolving Credit Facility (see Note 8 - Revolving Credit Facility of the Notes to the Consolidated Condensed Financial Statements).

Current wording

The Company reported interest expense of $0.2 million and $0.7 million for the three and nine months ended December 27, 2025, respectively, and $0.2 million and $0.7 million for the three and nine months ended December 28, 2024, respectively. Interest expense consists primarily of commitment fees associated with the Company's Revolving Credit Facility (see Note 8 - Revolving Credit Facility of the Notes to the Consolidated Condensed Financial Statements).

Previous wording

For the three and six months ended September 27, 2025, the Company reported other expense of $0.1 million and $0.5 million, respectively. For the three and six months ended September 28, 2024, the Company reported other income of an immaterial amount and $1.6 million, respectively. This activity primarily related to non-investment related income (expense) and remeasurement on foreign currency denominated monetary assets and liabilities.

Current wording

For the three and nine months ended December 27, 2025, the Company reported other income of $0.2 million and other expense of $0.2 million, respectively. For the three and nine months ended December 28, 2024, the Company reported other expense of $0.2 million and $1.4 million in other income, respectively. This activity primarily related to non-investment related income (expense) and remeasurement on foreign currency denominated monetary assets and liabilities.

Previous wording

Our income tax expense for the second quarter of fiscal year 2026 was $21.8 million compared to $37.9 million for the second quarter of fiscal year 2025, resulting in effective tax rates of 14.2 percent and 27.0 percent, respectively. Our income tax expense was $41.7 million and $52.4 million for the first six months of fiscal years 2026 and 2025, respectively, resulting in effective tax rates of 17.8 percent and 26.6 percent, respectively.

Current wording

Our income tax expense for the third quarter of fiscal year 2026 was $22.1 million compared to $37.7 million for the third quarter of fiscal year 2025, 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.

Previous wording

Cash generated from our operating activities is net income adjusted for certain non-cash items and changes in working capital. Cash generated from operations was $208.3 million for the first six months of fiscal year 2026 versus $95.4 million generated for the corresponding period of fiscal year 2025. The cash flow from operations during the first six months of fiscal year 2026 was related to the cash components of our net income and a $52.8 million unfavorable change in working capital, primarily as a result of an increase in accounts receivables and decreases in income taxes payables, partially offset by decreases in inventory, and increases in prepaid wafer usage (related to the Capacity Reservation Agreement) and accounts payable and other accrued liabilities. The cash flow from operations during the corresponding period of fiscal year 2025 was related to the cash components of our net income and a $117.9 million unfavorable change in working capital, primarily as a result of increases in accounts receivables and inventory, partially offset by increases in accounts payable and other accrued liabilities, prepaid wafer usage (related to the Capacity Reservation Agreement), and income taxes payable.

Current wording

Cash generated from our operating activities is net income adjusted for certain non-cash items and changes in working capital. Cash generated from operations was $499.2 million for the first nine months of fiscal year 2026 versus $314.0 million generated for the corresponding period of fiscal year 2025. The cash flow from operations during the first nine months of fiscal year 2026 was related to the cash components of our net income and a $55.8 million favorable change in working capital, primarily as a result of decreases in inventory and prepaid wafer balances (related to the Capacity Reservation Agreement), partially offset by increases in accounts receivables, and decreases in taxes payable. The cash flow from operations during the corresponding period of fiscal year 2025 was related to the cash components of our net income and a $57.4 million unfavorable change in working capital, primarily as a result of increases in accounts receivables and inventory, partially offset by decreases in prepaid wafer balances (related to the Capacity Reservation Agreement), income taxes payable, and accounts payable and other accrued liabilities.

Previous wording

Net cash used in investing activities was $14.1 million during the first six months of fiscal year 2026 versus $72.0 million during the first six months of fiscal year 2025. The cash used in investing activities in the first six months of fiscal year 2026 was related to net purchases of marketable securities of $6.9 million and capital expenditures and technology investments of $7.3 million. The cash used in investing activities in the corresponding period in fiscal year 2025 was related to net purchases of marketable securities of $59.2 million and capital expenditures and technology investments of $12.9 million.

Current wording

Net cash used in investing activities was $20.7 million during the first nine months of fiscal year 2026 versus $111.2 million during the first nine months of fiscal year 2025. The cash used in investing activities in the first nine months of fiscal year 2026 was related to net purchases of marketable securities of $8.3 million and capital expenditures and technology investments of $12.4 million. The cash used in investing activities in the corresponding period in fiscal year 2025 was related to net purchases of marketable securities of $91.6 million and capital expenditures and technology investments of $19.6 million.

Previous wording

Net cash used in financing activities was $140.3 million during the first six months of fiscal year 2026 and was primarily associated with stock repurchases for the period of $140.0 million. The cash used in financing activities during the first six months of fiscal year 2025 of $80.4 million was primarily associated with stock repurchases during the period of $91.0 million, partially offset by $10.6 million in net proceeds from the issuance of common stock, primarily related to stock option exercises.

Current wording

Net cash used in financing activities was $240.0 million during the first nine months of fiscal year 2026 and was primarily associated with stock repurchases for the period of $210.0 million. The cash used in financing activities during the first nine months of fiscal year 2025 of $179.1 million was primarily associated with stock repurchases during the period of $161.0 million.