crus-20250927

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 27, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ____ to ____

Commission File Number 0-17795

CIRRUS LOGIC, INC.

(Exact name of registrant as specified in its charter)

Delaware

77-0024818

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

800 W. 6th Street

Austin,

Texas

78701

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:

(512)

851-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, $0.001 par value

CRUS

The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☑	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

The number of shares of the registrant's common stock, $0.001 par value, outstanding as of October 31, 2025 was 51,030,389.

CIRRUS LOGIC, INC.

FORM 10-Q QUARTERLY REPORT

QUARTERLY PERIOD ENDED SEPTEMBER 27, 2025

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION








Item 1.	Financial Statements

	Consolidated Condensed Balance Sheets - September 27, 2025 (unaudited) and March 29, 2025	3

	Consolidated Condensed Statements of Income (unaudited) - Three and Six Months Ended September 27, 2025 and September 28, 2024	4

	Consolidated Condensed Statements of Comprehensive Income (unaudited) - Three and Six Months Ended September 27, 2025 and September 28, 2024	5

	Consolidated Condensed Statements of Cash Flows (unaudited) - Six Months Ended September 27, 2025 and September 28, 2024	6

	Consolidated Condensed Statements of Stockholders' Equity (unaudited) - Three and Six Months Ended September 27, 2025 and September 28, 2024	7

	Notes to Consolidated Condensed Financial Statements (unaudited)	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21

Item 4.	Controls and Procedures	22

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	22

Item 1A.	Risk Factors	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Mine Safety Disclosures	25

Item 5.	Other Information	25

Item 6.	Exhibits	26

	Signatures	26

Part I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands)


	September 27,		March 29,
	2025		2025
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	593,476	$	539,620
Marketable securities	52,424		56,160
Accounts receivable, net	355,397		216,009
Inventories	236,409		299,092
Prepaid assets	51,657		48,236
Prepaid wafers	45,056		52,560
Other current assets	32,581		28,057
Total current assets	1,367,000		1,239,734

Long-term marketable securities	250,146		239,036
Right-of-use lease assets	125,315		126,688
Property and equipment, net	151,154		159,900
Intangibles, net	24,451		27,461
Goodwill	435,936		435,936
Deferred tax assets	46,511		48,150
Long-term prepaid wafers	—		15,512
Other assets	29,170		34,656
Total assets	$	2,429,683	$	2,327,073

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	79,974	$	63,162
Accrued salaries and benefits	52,689		52,075
Software license agreements	26,803		26,745
Current lease liabilities	19,481		21,811

Other accrued liabilities	31,376		31,395
Total current liabilities	210,323		195,188

Long-term liabilities:

Non-current lease liabilities	120,985		121,908
Non-current income taxes	45,357		44,040

Software license agreements	10,576		16,488


Total long-term liabilities	176,918		182,436

Stockholders' equity:
Capital stock	1,903,638		1,860,281
Accumulated earnings	139,025		90,351
Accumulated other comprehensive loss	(221)		(1,183)
Total stockholders' equity	2,042,442		1,949,449
Total liabilities and stockholders' equity	$	2,429,683	$	2,327,073

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(in thousands, except per share amounts; unaudited)


	Three Months Ended				Six Months Ended
	September 27,		September 28,		September 27,		September 28,
	2025		2024		2025		2024
Net sales	$	560,960	$	541,857	$	968,232	$	915,883
Cost of sales	266,586		259,267		459,828		444,368
Gross profit	294,374		282,590		508,404		471,515
Operating expenses
Research and development	110,021		112,925		212,913		218,288
Selling, general and administrative	39,589		37,813		78,333		74,583

Total operating expenses	149,610		150,738		291,246		292,871
Income from operations	144,764		131,852		217,158		178,644
Interest income	8,938		8,378		17,779		16,798
Interest expense	(243)		(244)		(462)		(462)
Other income (expense)	(63)		19		(451)		1,628
Income before income taxes	153,396		140,005		234,024		196,608
Provision for income taxes	21,800		37,865		41,731		52,373
Net income	$	131,596	$	102,140	$	192,293	$	144,235

Basic earnings per share	$	2.57	$	1.92	$	3.74	$	2.70
Diluted earnings per share	$	2.48	$	1.83	$	3.61	$	2.59
Basic weighted average common shares outstanding	51,175		53,275		51,451		53,354
Diluted weighted average common shares outstanding	53,054		55,800		53,195		55,753

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands; unaudited)


	Three Months Ended				Six Months Ended
	September 27,		September 28,		September 27,		September 28,
	2025		2024		2025		2024
Net income	$	131,596	$	102,140	$	192,293	$	144,235
Other comprehensive loss, before tax
Foreign currency translation gain (loss)	(209)		717		560		359
Unrealized gain on marketable securities	267		4,851		509		4,493

Provision for income taxes	(56)		(1,019)		(107)		(944)
Comprehensive income	$	131,598	$	106,689	$	193,255	$	148,143

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(in thousands; unaudited)


	Six Months Ended
	September 27,		September 28,
	2025		2024
Cash flows from operating activities:
Net income	$	192,293	$	144,235
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	25,877		24,977
Stock-based compensation expense	41,406		43,832
Deferred income taxes	1,532		(913)
Loss on retirement or write-off of long-lived assets	—		12

Other non-cash adjustments	52		1,191

Net change in operating assets and liabilities:
Accounts receivable	(139,388)		(161,620)
Inventories	62,683		(44,517)
Prepaid wafers	23,016		37,885
Other assets	(6,471)		(5,800)
Accounts payable and other accrued liabilities	20,645		39,305
Income taxes payable	(13,300)		16,805

Net cash provided by operating activities	208,345		95,392

Cash flows from investing activities:
Maturities and sales of available-for-sale marketable securities	62,742		13,481
Purchases of available-for-sale marketable securities	(69,606)		(72,637)
Purchases of property, equipment and software	(6,506)		(12,660)
Investments in technology	(774)		(225)



Net cash used in investing activities	(14,144)		(72,041)

Cash flows from financing activities:



Net proceeds from the issuance of common stock	1,950		15,055
Repurchase of stock to satisfy employee tax withholding obligations	(2,310)		(4,426)
Repurchase and retirement of common stock	(139,985)		(90,985)
Net cash used in financing activities	(140,345)		(80,356)

Net increase (decrease) in cash and cash equivalents	53,856		(57,005)

Cash and cash equivalents at beginning of period	539,620		502,764
Cash and cash equivalents at end of period	$	593,476	$	445,759

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands; unaudited)


	Common Stock			Additional Paid-In Capital		Accumulated Earnings (Deficit)		Accumulated Other Comprehensive Loss		Total
Three Months Ended	Shares	Amount
Balance, June 29, 2024	53,335	$	53	$	1,792,230	$	58,591	$	(3,244)	$	1,847,630
Net income	—	—		—		102,140		—		102,140
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		3,832		3,832
Change in foreign currency translation adjustments	—	—		—		—		717		717
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	154	—		4,859		(3,207)		—		1,652
Repurchase and retirement of common stock	(357)	—		—		(50,291)		—		(50,291)
Stock-based compensation	—	—		22,447		—		—		22,447
Balance, September 28, 2024	53,132	$	53	$	1,819,536	$	107,233	$	1,305	$	1,928,127

Balance, June 28, 2025	51,314	$	51	$	1,881,421	$	49,035	$	(223)	$	1,930,284
Net income	—	—		—		131,596		—		131,596
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		211		211
Change in foreign currency translation adjustments	—	—		—		—		(209)		(209)
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	66	—		1,569		(1,262)		—		307
Repurchase and retirement of common stock	(362)	—		—		(40,344)		—		(40,344)
Stock-based compensation	—	—		20,597		—		—		20,597
Balance, September 27, 2025	51,018	$	51	$	1,903,587	$	139,025	$	(221)	$	2,042,442
Six Months Ended
Balance, March 30, 2024	53,491	$	53	$	1,760,648	$	58,916	$	(2,603)	$	1,817,014
Net income	—	—		—		144,235		—		144,235
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		3,549		3,549
Change in foreign currency translation adjustments	—	—		—		—		359		359
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	359	—		15,056		(4,426)		—		10,630
Repurchase and retirement of common stock	(718)	—		—		(91,492)		—		(91,492)
Stock-based compensation	—	—		43,832		—		—		43,832
Balance, September 28, 2024	53,132	$	53	$	1,819,536	$	107,233	$	1,305	$	1,928,127

Balance, March 29, 2025	52,291	$	52	$	1,860,229	$	90,351	$	(1,183)	$	1,949,449
Net income	—	—		—		192,293		—		192,293
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		402		402
Change in foreign currency translation adjustments	—	—		—		—		560		560
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	103	—		1,952		(2,311)		—		(359)
Repurchase and retirement of common stock	(1,376)	(1)		—		(141,308)		—		(141,309)
Stock-based compensation	—	—		41,406		—		—		41,406
Balance, September 27, 2025	51,018	$	51	$	1,903,587	$	139,025	$	(221)	$	2,042,442

The accompanying notes are an integral part of these consolidated condensed financial statements.

CIRRUS LOGIC, INC.

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation

The unaudited consolidated condensed financial statements have been prepared by Cirrus Logic, Inc. (“Cirrus Logic,” “we,” “us,” “our,” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”). The accompanying unaudited consolidated condensed financial statements do not include complete footnotes and financial presentations. As a result, these financial statements should be read along with the audited consolidated financial statements and notes thereto for the year ended March 29, 2025, included in our Annual Report on Form 10-K filed with the Commission on May 23, 2025. In our opinion, the financial statements reflect all material adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial position, operating results and cash flows for those periods presented. The preparation of financial statements in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect reported assets, liabilities, revenues and expenses. Actual results could differ from those estimates and assumptions. Moreover, the results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the entire year.

2. Recently Issued Accounting Pronouncements

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 financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Topic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removes references to software development stages, or “project stages,” in assessing the timing of software cost capitalization. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted using the prospective, modified, or retrospective transition methods. The Company is currently evaluating the impact of this guidance on financial statement disclosures.

3. Marketable Securities

The Company’s investments have been classified as available-for-sale securities in accordance with U.S. GAAP. Marketable securities are categorized on the Consolidated Condensed Balance Sheet as “Marketable securities,” within the short-term or long-term classification, as appropriate, based on the original maturity.

The following table is a summary of available-for-sale securities at September 27, 2025 (in thousands):


As of September 27, 2025	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value (Net Carrying Amount)
Corporate debt securities	$	298,125	$	2,143	$	(35)	$	300,233

U.S. Treasury securities	2,314		23		—		2,337



Total securities	$	300,439	$	2,166	$	(35)	$	302,570

The Company typically invests in highly-rated securities with original maturities generally ranging from one to three years. The Company's specifically identified gross unrealized losses were immaterial related to securities with total amortized

costs of approximately $18.2 million at September 27, 2025. There were no securities in a continuous unrealized loss position for more than 12 months as of September 27, 2025. The Company may sell certain of its marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipated or actual changes in credit rating and duration management. The Company records an allowance for credit loss when a decline in investment market value is due to credit-related factors. When evaluating an investment for impairment, the Company reviews factors including the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer, changes in market interest rates and whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s cost basis. As of September 27, 2025, the Company does not consider any of its investments to be impaired.

The following table is a summary of available-for-sale securities at March 29, 2025 (in thousands):


As of March 29, 2025	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value (Net Carrying Amount)
Corporate debt securities	$	284,885	1,635		$	(55)	$	286,465

U.S. Treasury securities	8,689		45		(3)		8,731



Total securities	$	293,574	$	1,680	$	(58)	$	295,196

The Company's specifically identified gross unrealized losses of $0.1 million related to securities with total amortized costs of approximately $29.8 million at March 29, 2025. Securities in a continuous unrealized loss position for more than 12 months as of March 29, 2025 had an aggregate amortized cost of $1.9 million and an immaterial aggregate unrealized loss. As of March 29, 2025, the Company did not consider any of its investments to be impaired.

The cost and estimated fair value of available-for-sale securities by contractual maturities were as follows (in thousands):


	September 27, 2025				March 29, 2025
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
Within 1 year	$	52,111	$	52,424	$	56,044	$	56,160
After 1 year	248,328		250,146		237,530		239,036
Total	$	300,439	$	302,570	$	293,574	$	295,196

4. Fair Value of Financial Instruments

The Company has determined that the only material assets and liabilities in the Company’s financial statements that are required to be measured at fair value on a recurring basis are the Company’s 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 of the assets or liabilities.

The Company’s cash equivalents and marketable securities portfolio consist of money market funds, debt securities, and U.S Treasury securities, and are reflected on our Consolidated Condensed Balance Sheets under the headings cash and cash equivalents, marketable securities, and long-term marketable securities. The Company determines the fair value of its marketable securities portfolio by obtaining non-binding market prices from third-party pricing providers on the last day of the quarter, whose sources may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value.

The Company's long-term revolving credit facility, described in Note 8 - Revolving Credit Facility, bears interest at a base rate plus applicable margin or forward-looking secured overnight financing rate (“Term SOFR”) plus 10 basis points plus applicable margin. As of September 27, 2025, there are no amounts drawn under the facility and the fair value is zero.

As of September 27, 2025 and March 29, 2025, the Company has no Level 3 assets or liabilities. There were no transfers between Level 1, Level 2, or Level 3 measurements for the three months ended September 27, 2025.

The following summarizes the fair value of our financial instruments at September 27, 2025 (in thousands):


	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total
Assets:
Cash equivalents
Money market funds	$	543,774	$	—	$	—	$	543,774



Available-for-sale securities
Corporate debt securities	$	—	$	300,233	$	—	$	300,233

U.S. Treasury securities	2,337		—		—		2,337



	$	2,337	$	300,233	$	—	$	302,570

The following summarizes the fair value of our financial instruments at March 29, 2025 (in thousands):


	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total
Assets:
Cash equivalents
Money market funds	491,467		—		—		491,467



Available-for-sale securities
Corporate debt securities	$	—	$	286,465	$	—	$	286,465

U.S. Treasury securities	8,731		—		—		8,731



	$	8,731	$	286,465	$	—	$	295,196

5. Derivative Financial Instruments

Foreign Currency Forward Contracts

The Company uses foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on non-functional currency balance sheet exposures. The Company recognizes both the gains and losses on foreign currency forward contracts and the gains and losses on the remeasurement of non-functional currency assets and liabilities within “Other income (expense)” in the Consolidated Condensed Statements of Income. The Company does not apply hedge accounting to these foreign currency derivative instruments.

As of September 27, 2025, the Company held one foreign currency forward contract denominated in British Pound Sterling with a notional value of $19.2 million. The fair value of this contract was not material as of September 27, 2025.

The before-tax effect of derivative instruments not designated as hedging instruments was as follows (in thousands):


	Three Months Ended				Six Months Ended
	September 27,		September 28,		September 27,		September 28,
	2025		2024		2025		2024		Location
Gain (loss) recognized in income:
Foreign currency forward contracts	$	(266)	$	684	$	898	$	652	Other income (expense)

6. Accounts Receivable, net

The following are the components of accounts receivable, net (in thousands):


	September 27,		March 29,
	2025		2025
Gross accounts receivable	$	355,397	$	216,009
Allowance for doubtful accounts	—		—
Accounts receivable, net	$	355,397	$	216,009

The increase in accounts receivable is due to the timing of collections and billings during the quarter.

7. Inventories

Inventories are comprised of the following (in thousands):


	September 27,		March 29,
	2025		2025
Work in process	$	182,307	$	216,173
Finished goods	54,102		82,919
	$	236,409	$	299,092

8. 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 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 Logic’s 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 applicable margin ranges from 0% to 0.75% per annum for Base Rate Loans and 1.00% to 1.75% per annum for SOFR Loans based on the ratio of consolidated funded indebtedness to consolidated EBITDA for the most recently ended period of four consecutive fiscal quarters (the “Consolidated Leverage Ratio”). A Commitment Fee accrues at a rate per annum ranging from 0.175% to 0.275% (based on the Consolidated Leverage Ratio) on the average daily unused portion of the commitment of the lenders.

The Revolving Credit Facility contains certain financial covenants providing that (a) the ratio of consolidated funded indebtedness (minus up to $200 million of unrestricted cash and cash equivalents available on such date) to consolidated EBITDA for the prior four consecutive quarters must not be greater than 3.00 to 1.00 (the “Consolidated Net Leverage Ratio”) and (b) the ratio of consolidated EBITDA for the prior four consecutive quarters to consolidated interest expense paid or payable in cash for the prior four consecutive quarters must not be less than 3.00 to 1.00 (the “Consolidated Interest Coverage Ratio”). The Second Amended Credit Agreement also contains customary negative covenants limiting the ability of Cirrus Logic or any Subsidiary to, among other things, incur debt, grant liens, make investments, effect certain fundamental changes, make certain asset dispositions, and make certain restricted payments. Further, the Second Amended Credit Agreement contains customary affirmative covenants, including, among others, covenants regarding the payment of taxes and other obligations, maintenance of insurance, reporting requirements, and compliance with applicable laws and regulations.

As of September 27, 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.

9. 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				Six Months Ended
	September 27,		September 28,		September 27,		September 28,
	2025		2024		2025		2024
Audio Products	$	318,214	$	316,588	$	558,257	$	535,558
HPMS Products	242,746		225,269		409,975		380,325
	$	560,960	$	541,857	$	968,232	$	915,883

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				Six Months Ended
	September 27,		September 28,		September 27,		September 28,
	2025		2024		2025		2024
China	$	302,950	$	325,742	$	492,905	$	531,450
United States	3,033		2,471		7,681		7,687
Rest of World	254,977		213,644		467,646		376,746
	$	560,960	$	541,857	$	968,232	$	915,883

10. 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						Six Months Ended
	September 27,			September 28,			September 27,			September 28,
	2025			2024			2025			2024
Income before income taxes	$	153,396		$	140,005		$	234,024		$	196,608
Provision for income taxes	$	21,800		$	37,865		$	41,731		$	52,373
Effective tax rate	14.2		%	27.0		%	17.8		%	26.6		%

Our income tax expense was $21.8 million and $37.9 million for the second quarters of fiscal years 2026 and 2025, respectively, 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.

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 periods. In addition, those periods were unfavorably impacted by U.S. tax rules related to refundable tax credits, including R&D expenditure credits available to us in the United Kingdom, that reduce the amount of foreign tax credits available to offset GILTI.

The effective tax rates for the second quarter and first six months of fiscal year 2026 were lower than the prior periods presented due to the current quarter enactment of the legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), which was signed into law on July 4, 2025. The OBBBA includes a broad range of tax reform provisions and extends or modifies several provisions initially enacted by the Tax Cuts and Jobs Act of 2017. Beginning with fiscal year 2026, the OBBBA permanently eliminates the requirement to capitalize and amortize U.S. R&D expenditures. A number of other provisions of the OBBBA, including modifications to existing international tax provisions, will take effect in fiscal year 2027.

In connection with its initial analysis of the OBBBA, the Company determined that its forecasted annual effective tax rate for fiscal year 2026 decreased, primarily due to U.S. R&D expenditures no longer being capitalized within GILTI (renamed by the OBBBA as net controlled foreign corporation tested income), which the Company has elected to treat as a period cost.

The Company records unrecognized tax benefits for the estimated risk associated with tax positions taken on tax returns. At September 27, 2025, the Company had unrecognized tax benefits of $32.1 million, all of which would impact the effective tax rate if recognized. The Company’s total unrecognized tax benefits are classified as “Non-current income taxes” in the Consolidated Condensed Balance Sheets. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. As of September 27, 2025, the balance of accrued interest and penalties, net of tax, was $13.3 million.

On July 27, 2015, the U.S. Tax Court issued an opinion in Altera Corp. et al. v. Commissioner which concluded that the regulations relating to the treatment of stock-based compensation expense in intercompany cost-sharing arrangements were invalid. In 2016 the U.S. Internal Revenue Service appealed the decision to the U.S. Court of Appeals for the Ninth Circuit (the “Ninth Circuit”). On June 7, 2019, the Ninth Circuit reversed the decision of the U.S. Tax Court and upheld the cost-sharing regulations. On February 10, 2020, Altera Corp. filed a Petition for a Writ of Certiorari with the Supreme Court of the United States, which was denied by the Supreme Court on June 22, 2020. Although the issue is now resolved in the Ninth Circuit, the Ninth Circuit's opinion is not binding in other circuits. The potential impact of this issue on the Company, which is not located within the jurisdiction of the Ninth Circuit, is unclear at this time. We will continue to monitor developments related to this issue and the potential impact of those developments on the Company's current and prior fiscal years.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions. Fiscal years 2017 through 2019 and 2022 through 2025 remain open to examination by the major taxing jurisdictions in which the Company operates.

The Company's fiscal year 2017, 2018, and 2019 federal income tax returns are under examination by the U.S. Internal Revenue Service (“IRS”). The IRS has proposed adjustments that would increase U.S. taxable income related to transfer pricing matters with respect to our U.S. and U.K. affiliated companies. The final Revenue Agent’s Report asserted additional tax of approximately $168.3 million, excluding interest, and imposed penalties of approximately $63.7

SEC Form 10-Q filed by Cirrus Logic Inc.