What changed in CIRRUS LOGIC, INC.'s 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of CIRRUS LOGIC, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+216 added−223 removedSource: 10-K (2025-05-23) vs 10-K (2024-05-24)
Top changes in CIRRUS LOGIC, INC.'s 2025 10-K
216 paragraphs added · 223 removed · 177 edited across 7 sections
- Item 1A. Risk Factors+112 / −104 · 89 edited
- Item 7. Management's Discussion & Analysis+43 / −64 · 39 edited
- Item 1. Business+32 / −34 · 31 edited
- Item 1C. Cybersecurity+14 / −3 · 3 edited
- Item 5. Market for Registrant's Common Equity+7 / −9 · 7 edited
Item 1. Business
Business — how the company describes what it does
31 edited+1 added−3 removed50 unchanged
Item 1. Business
Business — how the company describes what it does
31 edited+1 added−3 removed50 unchanged
2024 filing
2025 filing
Biggest changeSee Note 15 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements for additional details. The Company’s primary assembly and test houses include Advanced Semiconductor Engineering, Inc., STATS ChipPAC Pte. Ltd., Amkor Technology, Inc., SFA Semicon Co., Ltd., and Siliconware Precision Industries Co., Ltd.
Biggest changeOn February18, 2025, the Capacity Reservation Agreement was amended (the "Amendment") to define the quarterly spread of the remaining wafer quantities under the agreement. See Note 13 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements for additional details. The Company’s primary assembly and test houses include Advanced Semiconductor Engineering, Inc., STATS ChipPAC Pte.
Our primary facility, which houses engineering, sales and marketing, and administrative functions, is located in Austin, Texas. We also have offices in various other locations in the United States, United Kingdom, the People’s Republic of China, South Korea, Japan, Singapore, and Taiwan.
Our primary facility, which houses engineering, sales and marketing, and administrative functions, is located in Austin, Texas. We also have offices in various other locations in the United States, United Kingdom, Taiwan, the People’s Republic of China, South Korea, Japan, and Singapore.
We believe that we offer competitive compensation, learning and development programs, and health and wellness benefits, designed to improve the quality of our employees’ lives. Cirrus Logic prides itself on providing continuous learning and development opportunities, such as, technical training and professional development programs to support our employees’ growth.
We believe that we offer competitive compensation and health and wellness benefits, designed to improve the quality of our employees’ lives. Cirrus Logic prides itself on providing continuous learning and development opportunities, such as, technical training and professional development programs to support our employees’ growth.
The Company is committed to our three-pronged strategy for growing our business: first, maintaining our leadership position in smartphone audio; second, increasing high-performance mixed-signal ("HPMS") content in smartphones; and third, leveraging our strength in audio and HPMS to expand into additional applications and markets with both new and existing components.
The Company is committed to a three-pronged strategy for growing our business: first, maintaining our leadership position in smartphone audio; second, increasing high-performance mixed-signal ("HPMS") content in smartphones; and third, leveraging our strength in audio and HPMS to expand into additional applications and markets with both new and existing components.
Our primary competitors include, but are not limited to, AKM Semiconductor Inc., Analog Devices Inc., Realtek Semiconductor Corporation, Renesas Electronics Corporation, Shanghai Awinic Technology Co., Ltd., Shenzhen Goodix Technology Co, Ltd., Skyworks Solutions Inc., ST Microelectronics N.V., Synaptics Incorporated and Texas Instruments, Inc.
Our primary competitors include, but are not limited to, AKM Semiconductor Inc., Analog Devices Inc., QUALCOMM Incorporated, Realtek Semiconductor Corporation, Renesas Electronics Corporation, Shanghai Awinic Technology Co., Ltd., Shenzhen Goodix Technology Co, Ltd., Skyworks Solutions Inc., ST Microelectronics N.V., Synaptics Incorporated and Texas Instruments, Inc.
Our worldwide sales force provides geographically specific support to our customers and specialized selling of product lines with unique customer bases. See Note 20—Segment Information, of the Notes to Consolidated Financial Statements contained in Item 8 for further detail and for additional disclosure regarding sales and property, plant and equipment, net, by geographic locations.
Our worldwide sales force provides geographically specific support to our customers and specialized selling of product lines with unique customer bases. See Note 18—Segment Information, of the Notes to Consolidated Financial Statements contained in Item 8 for further detail and for additional disclosure regarding sales and property, plant and equipment, net, by geographic locations.
See Note 10 - Revenues for disclosure of revenue by product line categories. The following provides a detailed description of our audio and HPMS product lines. Audio Products : Amplifiers, codecs, smart codecs, analog-to-digital converters, digital-to-analog converters and standalone digital signal processors. HPMS Products : Camera controllers, haptics and sensing solutions, and battery and power ICs .
See Note 9 - Revenues for disclosure of revenue by product line categories. The following provides a detailed description of our Audio and HPMS product lines. Audio Products : Amplifiers, codecs, smart codecs, analog-to-digital converters, digital-to-analog converters and standalone digital signal processors. HPMS Products : Camera controllers, haptics and sensing solutions, and battery and power ICs .
No other customer or distributor represented more than 10 percent of net sales in fiscal years 2024, 2023, or 2022. 4 Table of Contents Manufacturing As a fabless semiconductor company, we contract with third parties for wafer fabrication and product assembly and test.
No other customer or distributor represented more than 10 percent of net sales in fiscal years 2025, 2024, or 2023. 4 Table of Contents Manufacturing As a fabless semiconductor company, we contract with third parties for wafer fabrication and product assembly and test.
We do not anticipate any material effect on our business due to any patents expiring in 2024, and we continue to obtain new patents through our ongoing research and development. We have maintained U.S. federal trademark registrations for CIRRUS LOGIC, CIRRUS, Cirrus Logic logo designs, and SoundClear, among others.
We do not anticipate any material effect on our business due to any patents expiring in 2025, and we continue to obtain new patents through our ongoing research and development. We have maintained U.S. federal trademark registrations for CIRRUS LOGIC, CIRRUS, Cirrus Logic logo designs, and SoundClear, among others.
To receive a free copy of this Annual Report on Form 10-K, please forward your written request to Cirrus Logic, Inc., Attn: Investor Relations, 800 W. 6 th Street, Austin, Texas 78701, or via email at [email protected] .
To receive a free copy of this Annual Report on Form 10-K, please forward your written request to Cirrus Logic, Inc., Attn: Investor Relations, 800 W. 6 th Street, Austin, Texas 78701, or via email at Investor@cirrus.com.
Our U.S. patents expire in calendar years 2024 through 2045. While our patents are an important element of our success, our business as a whole is not dependent on any one patent or group of patents.
Our U.S. patents expire in calendar years 2025 through 2045. While our patents are an important element of our success, our business as a whole is not dependent on any one patent or group of patents.
The Company also provides fitness facilities and classes at several locations, as well as other employee benefits including health screenings, COVID-19 testing and vaccinations, flu shots, free confidential virtual mental health support, and ergonomic assessments.
The Company also provides fitness facilities and classes at several locations, as well as other employee benefits including health screenings, COVID-19 testing and vaccinations, flu shots, and free confidential virtual mental health support.
Governmental Regulations Our business and operations around the world are subject to government regulation at the national, state or local level addressing, among other matters, applicable environmental laws, health and safety laws and regulations, and laws relating to export controls and economic sanctions.
Governmental Regulations Our business and operations around the world are subject to government regulation at the national, state or local level addressing, among other matters, applicable environmental laws, health and safety laws and regulations, and laws relating to export controls, economic sanctions, and trade, including tariffs.
In fiscal year 2024, the Company had no monetary losses as a result of legal proceedings associated with employee health and safety violations, and have not received any notices of violation related to health and safety at our facilities, nor have we ever had a work-related fatality.
In fiscal year 2025, the Company had no monetary losses as a result of legal proceedings associated with employee health and safety violations and received no notices of violation related to health and safety at our facilities, nor have we ever had a work-related fatality.
For fiscal years 2024, 2023, and 2022, we had one end customer, Apple, Inc., who purchased through multiple contract manufacturers and represented approximately 87 percent, 83 percent, and 79 percent, of the Company’s total sales, respectively.
For fiscal years 2025, 2024, and 2023, we had one end customer, Apple, Inc., who purchased through multiple contract manufacturers and represented approximately 89 percent, 87 percent, and 83 percent, of the Company’s total net sales, respectively.
As of March 30, 2024, 14 percent of our employees worldwide were foreign nationals and 64 percent of our total workforce reside in the U.S., with 36 percent residing offshore. We also employ individuals on a temporary basis and use the services of contractors as necessary.
As of March 29, 2025, 13 percent of our employees worldwide were foreign nationals and 64 percent of our total workforce reside in the U.S., with 36 percent residing offshore. We also employ individuals on a temporary basis and use the services of contractors as necessary.
We have an extensive portfolio of products: amplifiers; “codecs,” which are components that integrate analog-to-digital converters (“ADCs”) and digital-to-analog converters (“DACs”) into a single integrated circuit ("IC"); “smart codecs,” which are codecs with integrated digital signal processing; and standalone digital signal processors (“DSPs”).
Our extensive portfolio of audio products include: amplifiers; “codecs,” which are components that integrate analog-to-digital converters (“ADCs”) and digital-to-analog converters (“DACs”) into a single integrated circuit ("IC"); “smart codecs,” which are codecs with integrated digital signal processing; and standalone digital signal processors (“DSPs”).
As of March 30, 2024, our global workforce was 81 percent male and 19 percent female, and based on self-reported identification, our workforce in the United States was composed of 53 percent White, 35 percent Asian, 8 percent Hispanic or Latino, 2 percent Black or African American, and 2 percent Other.
As of March 29, 2025, our global workforce was 81 percent male and 19 percent female, and based on self-reported identification, our workforce in the United States was composed of 52 percent White, 35 percent Asian, 8 percent Hispanic or Latino, 3 percent Black or African American, and 2 percent Other.
Our approach has been to develop custom and general market components that embody our latest innovations, which we use to engage key players in a particular market or application. 3 Table of Contents Cirrus Logic focuses on building strong engineering relationships with our customers’ product teams and developing highly differentiated components that address their technical and price requirements across product tiers.
The Company develops custom and general market components that embody our latest innovations, which we use to engage key players in a particular market or application. We focus on building strong engineering relationships with our 3 Table of Contents customers’ product teams and developing highly differentiated components that address their technical and price requirements across product tiers.
Markets and Products The Company's product line categories are audio and HPMS. While we continue to see new opportunities for growth with audio products, we believe the largest opportunity to drive product diversification and fuel exciting avenues of growth in the coming years is with our HPMS product line.
Markets and Products The Company's product lines are categorized into Audio and HPMS. While we continue to see new opportunities with audio products, we believe that our HPMS product line presents the largest opportunity to drive product diversification and fuel exciting avenues of growth in the coming years.
Our comprehensive benefits, such as health insurance coverage and emotional well-being support are tailored for each country. Our benefits focus on family care, including fertility coverage, paid parental leave, subsidized daycare and backup care for children and elders, benefits for surrogacy and adoption assistance programs, and programs for new parents.
Our comprehensive benefits, such as health insurance coverage and emotional well-being support are tailored for each country. Our benefits focus on family care, including fertility coverage, paid parental leave, dependent care benefits, and benefits for surrogacy and adoption assistance programs.
For fiscal year 2024, 2023 and 2022, our ten largest end customers, represented approximately 95 percent, 92 percent and 93 percent of our sales, respectively.
For fiscal year 2025, 2024 and 2023, our ten largest end customers, represented approximately 96 percent, 95 percent and 92 percent of our net sales, respectively.
Patents, Licenses and Trademarks We rely on patent, copyright, trademark, and trade secret laws to protect our intellectual property, products, and technology. As of March 30, 2024, we held approximately 3,880 pending and issued patents worldwide, which include approximately 1,500 granted U.S. patents, 360 U.S. pending patent applications and various international patents and applications.
Patents, Licenses and Trademarks We rely on patent, copyright, trademark, and trade secret laws to protect our intellectual property, products, and technology. As of March 29, 2025, we held approximately 4,130 pending and issued patents worldwide, which include approximately 1,570 granted U.S. patents, 350 U.S. pending patent applications and various international patents and applications.
As of March 30, 2024, we had 1,625 employees, 99 percent of whom were full-time, 72 percent were engaged in research and product development activities, 23 percent in sales, marketing, general and administrative activities, and 5 percent in manufacturing-related activities.
As of March 29, 2025, we had 1,660 employees, 99 percent of whom were full-time, 71 percent were engaged in research and product development activities, 24 percent in sales, marketing, general and administrative activities, and 5 percent in manufacturing-related activities.
In fiscal year 2024, our voluntary turnover rate was 6 percent, below the technology industry benchmarks (2023 Radford Salary Increase and Turnover Study).
In fiscal year 2025, our voluntary turnover rate was 8 percent, below the technology industry benchmarks (2024 Radford Salary Increase and Turnover Study_Second Edition Refresh (December 2024)).
The finished products are then tested before shipment to our customers. While we believe we are able to mitigate certain risks in the fabrication processes by using multiple outside foundries, an interruption of supply by one or more of these foundries could materially impact the Company.
After wafer fabrication by the foundry, third-party assembly vendors package the wafer die. The finished products are then tested before shipment to our customers. While we believe we are able to mitigate the risk of supply disruption by using multiple outside foundries, an interruption of supply by one or more of these foundries could materially impact the Company.
See Note 20 — Segment Information, for details on sales and property, plant and equipment, net, by geographic locations. 5 Table of Contents Research and Development We concentrate our research and development efforts on the design and development of new products for each of our principal markets.
See Note 9 - Revenues and Note 18 — Segment Information, of the Notes to Consolidated Financial Statements contained in Item 8 for further details including sales by product line and sales and property, plant and equipment, net, by geographic locations. 5 Table of Contents Research and Development We concentrate our research and development efforts on the design and development of new products for each of our principal markets.
Our outsourced manufacturing strategy allows us to concentrate on our design strengths and minimize fixed costs and capital expenditures while giving us access to advanced manufacturing facilities. It also provides the flexibility to source multiple leading-edge technologies through strategic relationships. After wafer fabrication by the foundry, third-party assembly vendors package the wafer die.
Ltd., Amkor Technology, Inc., Siliconware Precision Industries Co., Ltd., and SFA Semicon Co., Ltd. Our outsourced manufacturing strategy allows us to concentrate on our design strengths and minimize fixed costs and capital expenditures while giving us access to advanced manufacturing facilities. It also provides the flexibility to source multiple leading-edge technologies through strategic relationships.
Cirrus Logic is a leading supplier of audio and high-performance mixed-signal processing solutions including boosted amplifiers, codecs, smart codecs, camera controllers, haptic and sensing solutions, and battery and power ICs. We expect to face additional competition from new entrants in our markets, which may include both large domestic and international IC manufacturers, as well as smaller, emerging companies.
We expect to face additional competition from new entrants in our markets, which may include both large domestic and international IC manufacturers, as well as smaller, emerging companies.
HPMS PRODUCTS Drawing on our extensive mixed-signal design and low-power processing expertise, Cirrus Logic has expanded beyond our traditional audio domain to now also provide a range of HPMS products, such as camera controllers, haptic and sensing solutions, and battery and power ICs.
HPMS PRODUCTS By leveraging our extensive mixed-signal design and low-power processing expertise, Cirrus Logic has expanded beyond our traditional audio domain into HPMS products, which are primarily used in smartphones.
Additionally, in calendar year 2023, we reported zero recordable and lost-time incidents to the U.S. Occupational Safety and Health Administration. 7 Table of Contents Following the Covid-19 pandemic, our employees have returned to working in the office at least two days per week.
In calendar year 2024, we had one recordable injury and zero lost-time incidents as defined by the U.S. Occupational Safety and Health Administration. 7 Table of Contents For more information on the commitment to our employees and other Environmental, Social and Governance ("ESG") topics visit https://www.cirrus.com/company/esg.
Removed
These products are primarily used in smartphones to help deliver a more immersive and compelling user experience while also improving battery health and performance. This product line also includes legacy industrial and energy applications such as digital utility meters, power supplies, energy control, energy measurement and energy exploration.
Added
Our portfolio of HPMS products include: camera controllers for automatic focus and optical image stabilization; haptic and sensing solutions to deliver highly responsive and consistent tactile feedback; and battery and power ICs for improving battery health and performance. This product line also includes a broad product portfolio that services automotive, industrial, and imaging applications.
Removed
See Note 10 - Revenues of the Notes to Consolidated Financial Statements contained in Item 8 for further details including sales by product line.
Removed
We believe it is important to create opportunities for our hybrid workforce to collaborate and to make connections with their colleagues, supporting our culture of innovation. For more information on the commitment to our employees and other Environmental, Social and Governance ("ESG") topics visit https://www.cirrus.com/company/esg.
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
89 edited+23 added−15 removed161 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
89 edited+23 added−15 removed161 unchanged
2024 filing
2025 filing
Biggest changeBusiness & Operational Risks • Risks related to dependence on a limited number of customers and distributors and a lack of diversification in our revenue base, including risks related to the loss of, or a significant reduction in orders from, or pricing on products sold to, any key customer or distributor • Risks related to third-party manufacturing and supply chain relationships • Risks related to our long-term capacity reservation and wafer supply agreement with GlobalFoundries • Risks related to fluctuation in sales in the consumer electronics and smartphone markets • Risks related to global economic conditions, including economic downturns or recessions and the effects of inflationary pressures • Risks related to our international operations, including government trade policies and delays or disruptions to our international subcontractors, which may be impacted by political/economic factors • Risks related to system security, cyber-attacks, and data breaches • Risks related to strong competition in the semiconductor market, including competition to attract, hire, and retain highly qualified personnel • Risks related to our fabless business model • Risks related to the use or application of emerging technologies, including artificial intelligence • Risks related to acquiring other companies or technologies • Risks related to product concentration, difficulty in forecasting sales due to customers' ability to cancel or reschedule orders, and declining average selling prices Strategic & Industry Risks • Risks related to joint development or other custom product collaborations, including the development of products for specific system architectures • Risks related to the timely development, production, and acceptance of new and advanced technologies while complying with increasingly stringent environmental regulations • Risks related to increasing complexity of our products and the potential for security vulnerabilities or other product defects and difficulties in transitioning to advanced manufacturing process technologies • Risks related to changes in the system architecture of our customers' end products • Risks related to our ability to protect our intellectual property rights Financial Risks • Risks related to exposure to tax liabilities and changes in tax laws • Risks related to fluctuations in inventory, including risks related to our customers’ ability to cancel/reschedule orders on short notice • Risks related to fluctuations in operating results, stock price, and foreign currency exposures 8 Table of Contents • Risks related to debt obligations, including under our Second Amended Credit Agreement Legal & General Risks • Risks related to intellectual property claims and litigation and export control regulations • Risks related to certain provisions of Delaware law and our Certificate of Incorporation and Bylaws • Risks related to corporate social responsibility initiatives and ESG matters • Risks related to owning real property Business and Operational Risks We depend on a limited number of customers and distributors for a substantial portion of our sales, and the loss of, or a significant reduction in orders from, or pricing on products sold to, any key customer or distributor could significantly reduce our sales and our profitability.
Biggest changeBusiness & Operational Risks • Risks related to dependence on a limited number of customers and distributors and a lack of diversification in our revenue base, including risks related to the loss of, or a significant reduction in orders from, or pricing on products sold to, any key customer or distributor • Risks related to global economic conditions, including economic downturns or recessions and the effects of tariffs and inflationary pressures • Risks related to third-party manufacturing and supply chain relationships, including risks associated with our efforts to increase the geographic diversity and regional resilience of our supply chain • Risks related to our long-term capacity reservation and wafer supply agreement with GlobalFoundries • Risks related to fluctuation in sales in the consumer electronics and smartphone markets • Risks related to our international operations, including government trade policies and delays or disruptions to our international subcontractors, which may be impacted by political/economic factors • Risks related to system security, cyber-attacks, data breaches, and disruptions to our IT systems • Risks related to strong competition in the semiconductor market, including competition to attract, hire, and retain highly qualified personnel • Risks related to our fabless business model • Risks related to the use or application of emerging technologies, including artificial intelligence • Risks related to acquiring other companies or technologies • Risks related to product concentration, difficulty in forecasting sales due to customers' ability to cancel or reschedule orders, and declining average selling prices Strategic & Industry Risks • Risks related to joint development or other custom product collaborations, including the development of products for specific system architectures • Risks related to the timely development, production, and acceptance of new and advanced technologies while complying with environmental regulations • Risks related to increasing complexity of our products and the potential for security vulnerabilities or other product defects and difficulties in transitioning to advanced manufacturing process technologies • Risks related to changes in the system architecture of our customers' end products • Risks related to our ability to protect our intellectual property rights Financial Risks • Risks related to exposure to tax liabilities and changes in tax laws • Risks related to fluctuations in inventory, including risks related to our customers’ ability to cancel/reschedule orders on short notice • Risks related to fluctuations in operating results, stock price, and foreign currency exposures • Risks related to debt obligations, including under our Second Amended Credit Agreement 8 Table of Contents Legal & General Risks • Risks related to intellectual property claims and litigation and export control regulations, including the potential for illicit diversion of products • Risks related to certain provisions of Delaware law and our Certificate of Incorporation and Bylaws • Risks related to corporate social responsibility initiatives and ESG matters • Risks related to owning real property Business and Operational Risks We depend on a limited number of customers and distributors for a substantial portion of our sales, and the loss of, or a significant reduction in orders from, or pricing on products sold to, any key customer or distributor could significantly reduce our sales and our profitability.
Since low yields may result from either design or process technology failures, yield problems may not be effectively determined or resolved until an actual product exists that can be analyzed and tested to identify process sensitivities relating to the design rules that are used.
Since low yields may result from either design or process technology failures, yield problems may not be effectively determined or resolved until an actual product exists that can be analyzed and tested to identify process sensitivities relating to the design rules that are used.
As a result, we are subject to risks associated with these third parties, including: - insufficient capacity available to meet our demand on time; - inability of our suppliers to obtain the equipment or replacement parts necessary to fully operate their facilities or expand available manufacturing capacity; - inadequate manufacturing yields and excessive costs; - inability of these third parties to obtain an adequate supply of raw materials; - extended lead times on supplies used in the manufacturing of our products; - difficulties selecting and integrating new subcontractors; - limited warranties on products supplied to us; - potential increases in prices (including the cost of freight); and - increased exposure to potential misappropriation of our intellectual property.
As a result, we are subject to risks associated with these third parties, including: - insufficient capacity available to meet our demand on time; - inability of our suppliers to obtain the equipment or replacement parts necessary to fully operate their facilities or expand available manufacturing capacity; - inadequate manufacturing yields and excessive costs; - inability of these third parties to obtain an adequate supply of raw materials; - extended lead times on supplies used in the manufacturing of our products; - difficulties selecting and integrating new subcontractors; - limited warranties on products supplied to us; - potential increases in prices (including the cost of freight and potential tariffs); and - increased exposure to potential misappropriation of our intellectual property.
Factors that could cause fluctuations and materially and adversely affect our net sales, gross margin and/or operating results include, but are not limited to: - the volume and timing of orders received; - changes in the mix of our products sold; - market acceptance of our products and the products of our customers; - excess or obsolete inventory; - pricing pressures from competitors and key customers; - our ability to introduce new products on a timely basis; - the timing and extent of our research and development expenses; - the failure to anticipate changing customer product requirements; - disruption in the supply of wafers, assembly, or test services; - reduction of manufacturing yields; 23 Table of Contents - certain production and other risks associated with using independent manufacturers, assembly houses, and testers; and - product obsolescence, price erosion, competitive developments, and other competitive factors.
Factors that could cause fluctuations and materially and adversely affect our net sales, gross margin and/or operating results include, but are not limited to: - the volume and timing of orders received; - changes in the mix of our products sold; - market acceptance of our products and the products of our customers; - excess or obsolete inventory; 22 Table of Contents - pricing pressures from competitors and key customers; - our ability to introduce new products on a timely basis; - the timing and extent of our research and development expenses; - the failure to anticipate changing customer product requirements; - disruption in the supply of wafers, assembly, or test services; - reduction of manufacturing yields; - certain production and other risks associated with using independent manufacturers, assembly houses, and testers; and - product obsolescence, price erosion, competitive developments, and other competitive factors.
Even with a long-term supply agreement, we are still subject to risks that GlobalFoundries will be unable to meet their supply commitments, achieve anticipated manufacturing yields, manufacture our products on a timely basis, or provide additional wafer capacity beyond its current contractual commitments sufficient to meet our customers' product demands.
Even with a long-term supply agreement, we are still subject to risks that GlobalFoundries will be unable to meet its supply commitments, achieve anticipated manufacturing yields, manufacture our products on a timely basis, or provide additional wafer capacity beyond its current contractual commitments sufficient to meet our customers' product demands.
There are risks inherent in expanding our presence into non-U.S. regions, including, but not limited to: - difficulties in staffing and managing non-U.S. operations, including compliance with local employment regulations; - failure in non-U.S. regions to adequately protect our intellectual property, patent, trademarks, copyrights, know-how, and other proprietary rights and the risk of potential theft or compromise of our intellectual property; - global health conditions and potential natural disasters, including those resulting from climate change; - power or water shortages or other operational disruptions, including those resulting from extreme weather conditions; - political, social and economic instability in international regions, including wars; - international currency controls and exchange rate fluctuations; - financial accounting and reporting burdens and complexities; - vulnerability to terrorist groups targeting U.S. interests abroad; - legal uncertainty regarding liability and compliance with non-U.S. laws and regulatory requirements; and - changing U.S. regulation of foreign operations, including potential sanctions.
There are risks inherent in expanding our presence into non-U.S. regions, including, but not limited to: - difficulties in staffing and managing non-U.S. operations, including compliance with local employment regulations; - failure in non-U.S. regions to adequately protect our intellectual property, patent, trademarks, copyrights, know-how, and other proprietary rights and the risk of potential theft or compromise of our intellectual property; - global health conditions and potential natural disasters, including those resulting from climate change; - power or water shortages or other operational disruptions, including those resulting from extreme weather conditions; 16 Table of Contents - political, social and economic instability in international regions, including wars; - international currency controls and exchange rate fluctuations; - financial accounting and reporting burdens and complexities; - vulnerability to terrorist groups targeting U.S. interests abroad; - legal uncertainty regarding liability and compliance with non-U.S. laws and regulatory requirements; and - changing U.S. regulation of foreign operations, including potential sanctions.
Quality and reliability issues could result in material costs and other adverse consequences to us, including, but not limited to: - reduced margins; - damage to our reputation; - replacement costs for product warranty and support; - payments to our customers related to recall claims, or the delivery of product replacements as part of a recall claim, as a result of various industry or business practices, contractual requirements, or in order to maintain good customer relationships; - an adverse impact to our customer relationships by the occurrence of significant defects; - a delay in recognition or loss of revenues, loss of market share, or failure to achieve market acceptance; - writing off or reserving the value of inventory of such products; and - a diversion of the attention of our engineering personnel from our product development efforts.
Quality and reliability issues could result in material costs and other adverse consequences to us, including, but not limited to: - reduced margins; - damage to our reputation; - replacement costs for product warranty and support; - payments to our customers related to recall claims, or the delivery of product replacements as part of a recall claim, as a result of various industry or business practices, contractual requirements, or in order to maintain good customer relationships; - an adverse impact to our customer relationships by the occurrence of significant defects; - a delay in recognition or loss of revenues, loss of market share, or failure to achieve market acceptance; 20 Table of Contents - writing off or reserving the value of inventory of such products; and - a diversion of the attention of our engineering personnel from our product development efforts.
Acquiring companies or technologies involves a number of risks, including, but not limited to: - the potential disruption of our ongoing business; - unexpected costs or incurring unknown liabilities; - the diversion of management resources from other strategic and operational issues; - the inability to retain the employees of the acquired businesses; - difficulties relating to integrating the operations and personnel of the acquired businesses; - adverse effects on our existing customer relationships or the existing customer relationships of acquired businesses; - the potential incompatibility of the acquired business or their business customers; - adverse effects associated with entering into markets and acquiring technologies in areas in which we have little experience; and - acquired intangible assets, including goodwill, becoming impaired as a result of technological advancements or worse-than-expected performance of the acquired business.
Acquiring companies or technologies involves a number of risks, including, but not limited to: - the potential disruption of our ongoing business; - unexpected costs or incurring unknown liabilities; 18 Table of Contents - the diversion of management resources from other strategic and operational issues; - the inability to retain the employees of the acquired businesses; - difficulties relating to integrating the operations and personnel of the acquired businesses; - adverse effects on our existing customer relationships or the existing customer relationships of acquired businesses; - the potential incompatibility of the acquired business or their business customers; - adverse effects associated with entering into markets and acquiring technologies in areas in which we have little experience; and - acquired intangible assets, including goodwill, becoming impaired as a result of technological advancements or worse-than-expected performance of the acquired business.
Although we believe this agreement is a good use of our financial resources and secures capacity for certain products through 2026, the agreement with GlobalFoundries involves certain risks that may result in excess inventory, place us at a competitive disadvantage, have a negative impact on our liquidity, or adversely affect our results of operations and financial condition.
Although we believe this agreement is a good use of our financial resources and secures capacity for certain products through 2026, the agreement with GlobalFoundries involves certain risks that have resulted and may in the future result in excess inventory, or may place us at a competitive disadvantage, have a negative impact on our liquidity, or adversely affect our results of operations and financial condition.
While we have received licenses from the U.S. government to export certain items to companies on the BIS Entity List, there can be no assurances that we will be able to continue to obtain or maintain licenses for the manufacture or sale of future products or for other entities if the U.S government adds other companies to the BIS Entity List and/or subjects them to additional trade restrictions.
While we have in the past received licenses from the U.S. government to export certain items to companies on the BIS Entity List, there can be no assurances that we will be able to continue to obtain or maintain licenses for the manufacture or sale of future products or for other entities if the U.S government adds other companies to the BIS Entity List and/or subjects them to additional trade restrictions.
Additionally, export restrictions imposed by the U.S. government, including the addition of licensing requirements by the United States Department of Commerce's Bureau of Industry and Security ("BIS") through the addition of companies to the BIS Entity List, as well as trade restrictions imposed by the U.S. related to goods imported from regions in China with records of forced labor and other human rights issues, may require us to suspend our business with certain international customers and/or manufacturing entities 11 Table of Contents if we conclude or are notified by the U.S. government that such business presents a risk of noncompliance with U.S. regulations.
Additionally, export restrictions imposed by the U.S. government, including the addition of licensing requirements by the United States Department of Commerce's Bureau of Industry and Security ("BIS") through the addition of companies to the BIS Entity List, as well as trade restrictions imposed by the U.S. related to goods imported from regions in China with records of forced labor and other human rights issues, may require us to suspend our business with certain international customers and/or manufacturing entities if we conclude or are notified by the U.S. government that such business presents a risk of noncompliance with U.S. regulations.
These reports may be unrelated to the actual operating performance of the Company, and in some cases, may be potentially misleading or incorrect; - announcements regarding technological innovations or new products by us or our competitors; - announcements by us of significant acquisitions, strategic partnerships, joint ventures, or capital commitments; - announcements by us of significant divestitures or sale of certain assets or intellectual property; - litigation arising out of a wide variety of matters, including, employment matters and intellectual property matters; - departure of key personnel; - a significant stockholder selling for any reason; - general conditions in the IC industry; and - general market conditions and interest rates.
These reports may be unrelated to the actual operating performance of the Company, and in some cases, may be potentially misleading or incorrect; - announcements regarding technological innovations or new products by us or our competitors; - announcements by us of significant acquisitions, strategic partnerships, joint ventures, or capital commitments; - announcements by us of significant divestitures or sale of certain assets or intellectual property; 24 Table of Contents - litigation arising out of a wide variety of matters, including, employment matters and intellectual property matters; - departure of key personnel; - a significant stockholder selling for any reason; - general conditions in the IC industry; and - general market conditions and interest rates.
Our international sales operations involve a number of other risks including, but not limited to: - unexpected changes in government regulatory requirements; - sales, VAT, or other indirect tax regulations and treaties and potential changes in regulations and treaties in the United States and in and between countries in which we manufacture or sell our products; - changes to countries’ banking and credit requirements; - changes in diplomatic and trade relationships, including as a result of geopolitical conflict; - delays resulting from difficulties in obtaining export licenses for technology, particularly in China; - any changes in U.S. trade policy, including potential adoption and expansion of trade restrictions, higher tariffs, or cross border taxation by the U.S. government involving other countries, particularly China, that might impact overall customer demand for our products or affect our ability to manufacture and/or sell our products overseas; 17 Table of Contents - tariffs and other barriers and restrictions, particularly in China; - competition with non-U.S. companies or other domestic companies entering non-U.S. markets in which we operate; - longer sales and payment cycles; - problems in collecting accounts receivable; - the burdens of complying with a variety of non-U.S. laws; and - changes to economic, social, or political conditions in countries such as Taiwan and China, where we have significant operations.
Our international sales operations involve a number of other risks including, but not limited to: - unexpected changes in government regulatory requirements; - sales, VAT, or other indirect tax regulations and treaties and potential changes in regulations and treaties in the United States and in and between countries in which we manufacture or sell our products; - changes to countries’ banking and credit requirements; - changes in diplomatic and trade relationships, including as a result of geopolitical conflict; - delays resulting from difficulties in obtaining export licenses for technology, particularly in China; - further changes in U.S. trade policy, including potential adoption and expansion of trade restrictions, higher tariffs, or cross border taxation by the U.S. government involving other countries, particularly China, that might impact overall customer demand for our products or affect our ability to manufacture and/or sell our products overseas; - tariffs and other barriers and restrictions, particularly in China; - competition with non-U.S. companies or other domestic companies entering non-U.S. markets in which we operate; - longer sales and payment cycles; - problems in collecting accounts receivable; - the burdens of complying with a variety of non-U.S. laws; and - changes to economic, social, or political conditions in countries such as Taiwan and China, where we have significant operations.
The ownership of our U.S. properties subjects us to the risks of owning real property, which may include: - the possibility of environmental contamination and the costs associated with correcting any environmental problems; - adverse changes in the value of these properties, due to interest rate changes, changes in the neighborhood in which the 27 Table of Contents property is located, or other factors; and - the risk of financial loss in excess of amounts covered by insurance, or uninsured risks, such as the loss caused by damage to the buildings as a result of fire, floods, or other natural disasters (including those related to changes in climate).
The ownership of our U.S. properties subjects us to the risks of owning real property, which may include: - the possibility of environmental contamination and the costs associated with correcting any environmental problems; - adverse changes in the value of these properties, due to interest rate changes, changes in the neighborhood in which the property is located, or other factors; and - the risk of financial loss in excess of amounts covered by insurance, or uninsured risks, such as the loss caused by damage to the buildings as a result of fire, floods, or other natural disasters (including those related to changes in climate).
Our customers, particularly in the portable market, could potentially transition to different audio and system architectures, develop their own competing technologies and ICs, integrate the functionality that our ICs and software have historically provided into other components in their systems, or eliminate certain functionality that our products provide in their future end products.
Our customers, particularly in the smartphone market, could potentially transition to different audio and system architectures, develop their own competing technologies and ICs, integrate the functionality that our ICs and software have historically provided into other components in their systems, or eliminate certain functionality that our products provide in their future end products.
These covenants could limit our ability to, among other things: - pay dividends on, repurchase, or make distributions in respect of our capital stock or make other restricted payments; - incur additional indebtedness or issue certain preferred shares; - make certain investments; - sell certain assets; - create liens; - consolidate, merge, sell, or otherwise dispose of all or substantially all of our assets; and - enter into certain transactions with our affiliates.
These covenants could limit our ability to, among other things: - pay dividends on, repurchase, or make distributions in respect of our capital stock or make other restricted payments; - incur additional indebtedness or issue certain preferred shares; - make certain investments; - sell certain assets; - create liens; 25 Table of Contents - consolidate, merge, sell, or otherwise dispose of all or substantially all of our assets; and - enter into certain transactions with our affiliates.
If significant tariffs or other restrictions are placed on goods exported from China or any related counter-measures are taken, our revenue and results of operations may be materially harmed. These tariffs may also make our customers' products more expensive for consumers, which may reduce consumer demand.
If significant tariffs or other restrictions are placed on goods exported and/or imported from/to China or other countries, or any related counter-measures are taken, our revenue and results of operations may be materially harmed. These tariffs may also make our customers' products more expensive for consumers, which may reduce consumer demand.
Customers may on occasion cancel, reschedule orders, or change future product plans on short notice, leaving us with the potential for excess inventory. In addition, if we experience supply constraints or manufacturing problems at a particular supplier, we may seek to switch suppliers or qualify additional suppliers.
On occasion, customers have cancelled, and may in the future cancel, reschedule orders, or change future product plans on short notice, leaving us with the potential for excess inventory. In addition, if we experience supply constraints or manufacturing problems at a particular supplier, we may seek to switch suppliers or qualify additional suppliers.
Although we currently have licenses to export certain products and technologies, particularly to China, and we have historically had limited sales to companies in Russia, any alleged violation could expose us to significant cost, with any final determination of a violation of these export control regulations potentially resulting in monetary penalties and denial of export privileges.
Although we have had licenses in the past to export certain products and technologies, particularly to China, and we have historically had limited sales to companies in Russia, any alleged violation could expose us to significant cost, with any final determination of a violation of these export control regulations potentially resulting in monetary penalties and denial of export privileges.
Any failure to timely develop commercially successful products through our joint development activities as a result of any of these and other challenges could have a material adverse effect on our business, results of operations, and financial condition. Our failure to develop and ramp new products into production in a timely manner could harm our operating results.
Any failure to timely develop commercially successful products through our joint development activities as a result of any of these and other challenges could have a material adverse effect on our business, results of operations, and financial condition. 19 Table of Contents Our failure to develop and ramp new products into production in a timely manner could harm our operating results.
These provisions include, but are not limited to: - the inability of stockholders to call a special meeting of stockholders; - a prohibition on stockholder action by written consent; and - a requirement that stockholders provide advance notice of any stockholder nominations of directors or any proposal of new business to be considered at any meeting of stockholders.
These provisions include, but are not limited to: 26 Table of Contents - the inability of stockholders to call a special meeting of stockholders; - a prohibition on stockholder action by written consent; and - a requirement that stockholders provide advance notice of any stockholder nominations of directors or any proposal of new business to be considered at any meeting of stockholders.
If our effective tax rates were to increase, particularly in the U.S. or the United Kingdom, or if the ultimate determination of taxes owed is for an amount in excess of amounts previously accrued, our operating results, cash flows, and financial condition could be adversely affected.
If our effective tax rates were to increase, particularly in the U.S. or the U.K., or if the ultimate determination of taxes owed is for an amount in excess of amounts previously accrued, our operating results, cash flows, and financial condition could be adversely affected.
There can be no assurance of the extent to which any of our climate goals or the goals of our customers will be achieved or that any future investments that we make in furtherance of achieving our climate goals or the goals of our customers will produce the expected results or meet increasing stakeholder environmental, social and governance expectations.
There can be no assurance of the extent to which any of our climate goals or the goals of our customers will be achieved or that any future investments that we make in furtherance of achieving our climate goals or the goals of our customers will produce the expected results or meet increasing stakeholder environmental, social and 27 Table of Contents governance expectations.
The Company makes estimates of the RDEC receivable as of each balance sheet date, based upon facts known at the time. Although the 22 Table of Contents Company does not expect its estimates to be materially different from the amounts ultimately recognized, its estimates could differ from actual results.
The Company makes estimates of the RDEC receivable as of each balance sheet date, based upon facts known at the time. Although the Company does not expect its estimates to be materially different from the amounts ultimately recognized, its estimates could differ from actual results.
If we do not hedge against these risks, or our attempts to hedge against these risks are not successful, our financial condition and results of operations could be adversely affected. 24 Table of Contents Our debt obligations may be a burden on our future cash flows and cash resources.
If we do not hedge against these risks, or our attempts to hedge against these risks are not successful, our financial condition and results of operations could be adversely affected. Our debt obligations may be a burden on our future cash flows and cash resources.
General Risks Corporate social responsibility initiatives, specifically related to environmental, social and governance ("ESG") matters, may impose additional costs and expose us to emerging areas of risk. Providing public disclosures regarding ESG matters, for example sustainability reporting, is becoming more broadly expected by investors, shareholders, existing and potential employees, customers, and other third parties.
General Risks Corporate social responsibility initiatives, specifically related to environmental, social and governance ("ESG") matters, may impose additional costs and expose us to emerging areas of risk. Providing public disclosures regarding ESG matters, for example sustainability reporting, has become more broadly expected by investors, shareholders, existing and potential employees, customers, and other third parties.
Global economic conditions could make it difficult for our customers, our suppliers, and us to accurately forecast and plan future business activities and could cause global businesses to defer or reduce spending on our products, or increase the costs of manufacturing our products.
Global economic conditions could make it difficult for our customers, our 13 Table of Contents suppliers, and us to accurately forecast and plan future business activities and could cause global businesses to defer or reduce spending on our products, or increase the costs of manufacturing our products.
Manufacturing defects that we do not discover during the manufacturing or testing process may lead to costly product recalls. These risks may lead to increased costs or delayed product delivery, which would harm our profitability and customer relationships. 19 Table of Contents Our products are increasingly complex and could contain defects, which could result in material costs to us.
Manufacturing defects that we do not discover during the manufacturing or testing process may lead to costly product recalls. These risks may lead to increased costs or delayed product delivery, which would harm our profitability and customer relationships. Our products are increasingly complex and could contain defects, which could result in material costs to us.
Our failure to utilize AI responsibly may impact our reputation and could have a negative impact our business, operating results, and financial condition. 15 Table of Contents In general, our customers may cancel or reschedule orders on short notice without incurring significant penalties; therefore, our sales and operating results in any quarter are difficult to forecast.
Our failure to utilize AI responsibly may impact our reputation and could have a negative impact our business, operating results, and financial condition. In general, our customers may cancel or reschedule orders on short notice without incurring significant penalties; therefore, our sales and operating results in any quarter are difficult to forecast.
Additionally, while we have developed internal policies to govern the use of AI, risks exist relating to the protection of data (including the potential exposure of our or our customers’ proprietary and confidential information), the misuse of third-party intellectual property, or our failure to identify and correct deficiencies or inaccuracies generated by AI.
While we have implemented security measures and developed internal policies to govern the use of AI, risks exist relating to the protection of data (including the potential exposure of our or our customers’ proprietary and confidential information), the misuse of third-party intellectual property, or our failure to identify and correct deficiencies or inaccuracies generated by AI.
This forum selection provision may increase costs to bring a claim, discourage claims, or limit a stockholder’s ability to bring a claim in a judicial forum that such stockholder finds favorable for disputes with the Company or the Company’s directors, officers, or other employees, which may discourage such lawsuits against the Company 26 Table of Contents or the Company’s directors, officers, and other employees.
This forum selection provision may increase costs to bring a claim, discourage claims, or limit a stockholder’s ability to bring a claim in a judicial forum that such stockholder finds favorable for disputes with the Company or the Company’s directors, officers, or other employees, which may discourage such lawsuits against the Company or the Company’s directors, officers, and other employees.
International sales represented 99 percent, 97 percent, and 98 percent of our net sales in fiscal year 2024, 2023, and 2022, respectively. We expect international sales to continue to represent a significant portion of product sales.
International sales represented 99 percent, 99 percent, and 97 percent of our net sales in fiscal year 2025, 2024 and 2023, respectively. We expect international sales to continue to represent a significant portion of product sales.
If so, we may experience delays in product launches or supply shortages for certain products, which could cause an unanticipated decline in our sales and damage our existing customer relationships and our ability to establish new customer relationships.
If this were to occur, we may experience delays in product launches or supply shortages for certain products, which could cause an unanticipated decline in our sales and damage our existing customer relationships and our ability to establish new customer relationships.
We also rely on trade secrets, proprietary technology, non- 21 Table of Contents disclosure and other contractual terms, and technical measures to protect our technology and manufacturing knowledge. We actively work to foster continuing technological innovation to maintain and protect our competitive position.
We also rely on trade secrets, proprietary technology, non-disclosure and other contractual terms, and technical measures to protect our technology and manufacturing knowledge. We actively work to foster continuing technological innovation to maintain and protect our competitive position.
Certain of our assets, including certain bank accounts, exist in non-U.S. dollar-denominated currencies, which are sensitive to foreign currency exchange rate fluctuations. The non-U.S. dollar-denominated currencies are principally the British Pound Sterling. We also have a significant number of employees that are paid in foreign currency, the largest group being United Kingdom-based employees who are paid in British Pounds Sterling.
Certain of our assets, including certain bank accounts, exist in non-U.S. dollar-denominated currencies, which are sensitive to foreign currency exchange rate fluctuations. The principal non-U.S. dollar-denominated currency is the British Pound Sterling. We also have a significant number of employees that are paid in foreign currency, the largest group being U.K.-based employees who are paid in British Pounds Sterling.
For example, we receive a research and development expenditure credit in the United Kingdom ("RDEC"), which is recorded for accounting purposes as an offset to research and development expenses in the Company’s consolidated income statement and resulted in a benefit of $40.9 million in fiscal year 2024.
For example, we receive a research and development expenditure credit in the United Kingdom ("RDEC"), which is recorded for accounting purposes as an offset to research and development expenses in the Company’s consolidated income statement and resulted in a benefit of $43 million in fiscal year 2025.
Further, a decline in consumer confidence and consumer spending relating to economic conditions, inflationary pressures, terrorist attacks, armed conflicts, oil prices, global health conditions, natural disasters, and/or the political stability of countries in which we operate or sell products could have an adverse effect on consumer demand in these markets, which would likely impact our business, operating results, and financial condition.
Further, a decline in consumer confidence and consumer spending relating to economic conditions, increases in our customers' products' prices (including any potential impact of increased tariffs), inflationary pressures, terrorist attacks, armed conflicts, oil prices, global health conditions, natural disasters, and/or the political stability of countries in which we operate or sell products could have an adverse effect on consumer demand in these markets, which would likely impact our business, operating results, and financial condition.
In addition to our own systems, our business also is reliant upon the security of various third parties in our supply chain, and any breach of their systems and securities could result in our being subjected to the numerous risks and adverse consequences noted above. Strong competition in the semiconductor market may harm our business.
In addition to our own systems, our business also is reliant upon the security of various third parties in our supply chain, and any breach of their systems and securities could result in our being subjected to the numerous risks and adverse consequences noted above.
We compete in a number of markets. Our principal competitors in these markets include AKM Semiconductor Inc., Analog Devices Inc., Realtek Semiconductor Corporation, Renesas Electronics Corporation, Shanghai Awinic Technology Co., Ltd., Shenzhen Goodix Technology Co, Ltd., Skyworks Solutions Inc., ST Microelectronics N.V., Synaptics Incorporated and Texas Instruments, Inc.
Our principal competitors in these markets include AKM Semiconductor Inc., Analog Devices Inc., Qualcomm Incorporated, Realtek Semiconductor Corporation, Renesas Electronics Corporation, Shanghai Awinic Technology Co., Ltd., Shenzhen Goodix Technology Co, Ltd., Skyworks Solutions Inc., ST Microelectronics N.V., Synaptics Incorporated and Texas Instruments, Inc.
For the twelve-month periods ending March 30, 2024, March 25, 2023, and March 26, 2022, we had one end customer, Apple Inc., who purchased through multiple contract manufacturers and represented approximately 87 percent, 83 percent and 79 percent of the Company’s total sales, respectively.
For the twelve-month periods ending March 29, 2025, March 30, 2024, and March 25, 2023, we had one end customer, Apple Inc., who purchased through multiple contract manufacturers and represented approximately 89 percent, 87 percent and 83 percent of the Company’s total net sales, respectively.
Our business, operating results, financial condition and cash flows could therefore be adversely affected by: - a decline in demand for any of our more significant products; - a decline in the average selling prices of our more significant products; - failure of our products to achieve continued market acceptance; - competitive products; - new technological standards or changes to existing standards that we are unable to address with our products; - manufacturing or supply issues that prevent us from meeting our customers’ demand for these products; - a failure to release new products or enhanced versions of our existing products on a timely basis; - the failure of our new products to achieve market acceptance; and - any changes to a customer's future product plans. 16 Table of Contents Our international operations subject our business to additional political and economic risks that could have an adverse impact on our business.
Our business, operating results, financial condition and cash flows could therefore be adversely affected by: - a decline in demand for any of our more significant products; - a decline in the average selling prices of our more significant products; - failure of our products to achieve continued market acceptance; - competitive products; - new technological standards or changes to existing standards that we are unable to address with our products; - manufacturing or supply issues that prevent us from meeting our customers’ demand for these products; - a failure to release new products or enhanced versions of our existing products on a timely basis; - the failure of our new products to achieve market acceptance or grow as expected; and - any changes to a customer's future product plans. 17 Table of Contents We have significant international sales, and risks associated with these sales could harm our operating results.
We may be adversely impacted by global economic conditions. As a result, our financial results and the market price of our common shares may decline. We have been and may continue to be adversely impacted by global economic conditions.
As a result, our financial results and the market price of our common shares may decline. We have been and may continue to be adversely impacted by global economic conditions, including as a result of rapid and fluctuating changes in global trade policies.
As of March 30, 2024, the Company did not have an outstanding balance under the Revolving Credit Facility.
As of March 29, 2025, the Company did not have an outstanding balance under the Revolving Credit Facility.
Because our expense levels to a large extent are fixed in the short term, we likely will be unable to adjust spending on a timely basis to compensate for any unexpected shortfall in sales and our operating results could be harmed in any particular quarter. Our products may be subject to average selling prices that decline over time.
Because our expense levels to a large extent are fixed in the short term, we likely will be unable to adjust spending on a timely basis to compensate for any unexpected shortfall in sales and our operating results could be harmed in any particular quarter.
For the twelve-month periods ending March 30, 2024, March 25, 2023, and March 26, 2022, our ten largest end customers represented approximately 95 percent, 92 percent and 93 percent of our sales, respectively.
For the twelve-month periods ending March 29, 2025, March 30, 2024, and March 25, 2023, our ten largest end customers represented approximately 96 percent, 95 percent and 92 percent of our net sales, respectively.
Because our industry is highly cyclical and is subject to significant downturns resulting from excess capacity, overproduction, reduced demand, order cancellations, or technological obsolescence, there is a risk that we will forecast inaccurately and produce excess inventories of particular products.
In addition, we may order wafers and build inventory in advance of receiving purchase orders from our customers. Because our industry is highly cyclical and is subject to significant downturns resulting from excess capacity, overproduction, reduced demand, order cancellations, or technological obsolescence, there is a risk that we will forecast inaccurately and produce excess inventories of particular products.
For discussion of our income taxes, see Note 19, "Income Taxes." We are also subject to the examination of our tax returns and other tax matters by the U.S Internal Revenue Service (“IRS”) and other tax authorities and governmental bodies.
For discussion of our income taxes, see Note 17 - Income Taxes, of the Notes to Consolidated Financial Statements contained in Item 8. We are also subject to the examination of our tax returns and other tax matters by the U.S Internal Revenue Service (“IRS”) and other tax authorities and governmental bodies.
We are subject to business cycles and it is difficult to predict the timing, length, or volatility of these cycles. These business cycles may create pressure on our sales, gross margin, and/or operating results and make it difficult for us to predict operating results as between subsequent fiscal quarters.
These business cycles may create pressure on our sales, gross margin, and/or operating results and make it difficult for us to predict operating results as between subsequent fiscal quarters.
Legal and Regulatory Risks We are subject to the export control regulations of the U.S. Department of State and the Department of Commerce. A violation of these export control regulations could have a material adverse effect on our business or our results of operations, cash flows, or financial position.
A violation of these export control regulations could have a material adverse effect on our business or our results of operations, cash flows, or financial position. The nature of our international business subjects us to the export control regulations of the U.S. Department of State and the Department of Commerce.
Manufacturing defects that we do not discover during the manufacturing or testing process may lead to costly product recalls. These risks may lead to increased costs or delayed product delivery, which would harm our profitability and customer relationships. In some cases, our requirements may represent a small portion of the total production of the third-party suppliers.
These risks may lead to increased costs or delayed product delivery, which would harm our profitability and customer relationships. In some cases, our requirements may represent a small portion of the total production of the third-party suppliers.
Any deterioration in the social, political, or economic conditions in Taiwan, particularly as it relates to China-Taiwan relations, may disrupt our business operations and materially and adversely affect our results of operations.
For example, we rely on several third-party suppliers located in Taiwan. Any deterioration in the social, political, or economic conditions in Taiwan, particularly as it relates to China-Taiwan relations, may disrupt our business operations and materially and adversely affect our results of operations.
Our reliance on certain customers may continue to increase, which could heighten the risks associated with having key customers, including making us more vulnerable to significant reductions in revenue, margins, and earnings; pricing pressure; and other adverse effects on our business. We are dependent on third-party manufacturing and supply chain relationships for all of our products.
Our reliance on certain customers may continue to increase, which could heighten the risks associated with having key customers, including making us more vulnerable to significant reductions in revenue, margins, and earnings; pricing pressure; and other adverse effects on our business.
As a result, delays in our production or shipping by the parties to whom we outsource these functions could reduce our sales, damage our customer relationships, and damage our reputation in the marketplace, any of which could harm our business, results of operations, and financial condition. For example, we rely on several third-party suppliers located in Taiwan.
As a result, delays in our production or shipping by the 15 Table of Contents parties to whom we outsource these functions could reduce our sales, damage our customer relationships, and damage our reputation in the marketplace, any of which could harm our business, results of operations, and financial condition.
In addition, inflationary pressures could also result in a decline in consumer confidence and spending, potentially impacting demand for our customers' end products in the consumer electronics and smartphone markets.
In addition, inflationary pressures could also result in a decline in consumer confidence and spending, potentially impacting demand for our customers' end products in the consumer electronics and smartphone markets. Any such decline would likely impact our business, operating results, and financial condition.
Further, we are subject to increased government laws, regulations, and other standards that impose operational and reporting requirements related to ESG matters, and we will likely be subject to further evolving ESG reporting standards in the future.
Further, we are subject to increased government laws, regulations, and other standards that impose operational and reporting requirements related to ESG matters, and we will likely be subject to further evolving ESG reporting standards in the future. Collecting, measuring, and reporting ESG information and metrics in response to these increased requirements can be costly, difficult, and time consuming.
In addition to international sales constituting a large portion of our net sales, we maintain international operations, sales, and technical support personnel. International expansion has required, and will continue to require, significant management attention and resources.
Our international operations subject our business to additional political and economic risks that could have an adverse impact on our business. In addition to international sales constituting a large portion of our net sales, we maintain international operations, sales, and technical support personnel. International expansion has required, and will continue to require, significant management attention and resources.
A breach of any of these covenants could result in a default under the Second Amended Credit Agreement. In the event of a default under the Second Amended Credit Agreement, the lenders could elect to declare all amounts outstanding to be immediately due and payable.
A breach of any of these covenants could result in a default under the Second Amended Credit Agreement. In the event of a default, the lenders could elect to declare all amounts then outstanding to be immediately due and payable. If our lenders accelerate the repayment of borrowings, we may not be able to repay our debt obligations.
For example, a number of domestic and foreign jurisdictions regulate, or may seek to regulate, the use of a class of chemicals known as per- and poly-fluoroalkyl substances (“PFAS”), which are currently used in our products or the manufacture of some of our products.
Additionally, our customers have certain requirements and expectations related to the potential environmental impacts of their products and the processes used to manufacture them. 21 Table of Contents For example, a number of domestic and foreign jurisdictions regulate, or may seek to regulate, the use of a class of chemicals known as per- and poly-fluoroalkyl substances (“PFAS”), which are currently used in our products or the manufacture of some of our products.
Any such decline would likely impact our business, operating results, and financial condition. 12 Table of Contents Moreover, we regularly maintain cash balances at third-party financial institutions in excess of the Federal Deposit Insurance Corporation ("FDIC") insurance limit or at financial institutions located outside the U.S. where FDIC insurance does not apply.
Moreover, we regularly maintain cash balances at third-party financial institutions in excess of the Federal Deposit Insurance Corporation ("FDIC") insurance limit or at financial institutions located outside the U.S. where FDIC insurance does not apply.
Accordingly, we have in the past and may in the future devote a substantial amount of resources to strategic relationships, which could detract from or delay our completion of other important development projects or the development of next-generation products 9 Table of Contents and technologies, and notwithstanding our efforts, our customers may not be obligated to purchase new products that we develop for them, which could impact our operating results, financial condition, and cash flows.
Accordingly, we have in the past and may in the future devote a substantial amount of resources to strategic relationships, which could 9 Table of Contents detract from or delay our completion of other important development projects or the development of next-generation products and technologies.
We cannot predict what actions may be taken with respect to tariffs or trade relations, what products may be subject to such actions, or what actions may be taken by other countries in response. It also may not be possible to anticipate the timing or duration of such tariffs, export restrictions, or other regulatory actions.
We cannot predict what actions may be taken with respect to tariffs or trade relations, what products may be subject to such actions, or what actions may be taken by other countries in response.
We cannot provide assurances that we will ultimately be successful in any lawsuit, nor can we provide assurances that any patent owned by us will not be invalidated, circumvented, or challenged.
These legal proceedings could be expensive, take significant time, and divert management’s attention. We cannot provide assurances that we will ultimately be successful in any lawsuit, nor can we provide assurances that any patent owned by us will not be invalidated, circumvented, or challenged.
The lack of diversification in our revenue and customer base increases the risk of an investment in our company, and our consolidated financial condition, results of operations, and stock price may deteriorate if we fail to diversify.
Any of the foregoing could materially harm our liquidity, financial condition and results of operations and could put us at a disadvantage relative to our competitors. 12 Table of Contents The lack of diversification in our revenue and customer base increases the risk of an investment in our company, and our consolidated financial condition, results of operations, and stock price may deteriorate if we fail to diversify.
These developing products and market segments may not grow as significantly or as quickly as projected, or at all, and we may not realize an adequate return on our investments or may be required to write-down the value of certain tangible and intangible assets. 20 Table of Contents We may experience difficulties developing and transitioning to advanced manufacturing process technologies, which could materially adversely affect our results.
These developing products and market segments may not grow as significantly or as quickly as projected, or at all, and we may not realize an adequate return on our investments or may be required to write-down the value of certain tangible and intangible assets. We frequently develop our products for the specific system architecture of our customers’ end products.
Further, the loss of the services of key personnel or our inability to hire new personnel with the requisite skills or to assimilate talent could restrict our ability to develop new products or timely enhance existing products, sell products to our customers, or manage our business effectively. 14 Table of Contents Our sales could be materially impacted by the failure of other component suppliers to deliver required parts needed in the final assembly of our customers’ end products.
Further, the loss of the services of key personnel or our inability to hire new personnel with the requisite skills or to assimilate talent could restrict our ability to develop new products or timely enhance existing products, sell products to our customers, or manage our business effectively.
The sophistication, scale and frequency of cyber-attacks has continued to increase and evolve at a rapid pace, and the risk of attack may be heightened when our employees are working remotely. The risk of state-sponsored or geopolitical-related cybersecurity incidents has also increased recently due to geopolitical tensions or incidents, such as the war in Ukraine or the Israel-Hamas war.
The sophistication, scale and frequency of cyber-attacks has continued to increase and evolve at a rapid pace, and the risk of attack may be heightened when our employees are working remotely.
The IC industry is characterized by frequent litigation regarding patent and other intellectual property rights. We may find it necessary to initiate lawsuits to assert our patent or other intellectual property rights. These legal proceedings could be expensive, take significant time, and divert management’s attention.
Potential intellectual property claims and litigation could subject us to significant liability for damages and could invalidate our proprietary rights. The IC industry is characterized by frequent litigation regarding patent and other intellectual property rights. We may find it necessary to initiate lawsuits to assert our patent or other intellectual property rights.
Although we are not aware of any violation of any export control regulations, a failure to comply with any of these 25 Table of Contents regulations could have an adverse effect on our business. Potential intellectual property claims and litigation could subject us to significant liability for damages and could invalidate our proprietary rights.
Although we are not aware of any violation of any export control regulations, a failure to comply with any of these regulations could have an adverse effect on our business.
For example, there is limited coverage available with respect to the services provided by our third-party foundries and assembly and test subcontractors.
Our insurance policies may not be adequate to fully offset losses from covered incidents, and we do not have coverage for certain losses. For example, there is limited coverage available with respect to the services provided by our third-party foundries and assembly and test subcontractors.
As markets mature and components become 13 Table of Contents commoditized, competitors that can tolerate lower margins/operating income pose a risk to our profitability and growth. In the event that competitors succeed in supplanting our products, our market share may not be sustainable and our net sales, gross margin and operating results would be adversely affected.
In the event that competitors succeed in supplanting our products, our market share may not be sustainable and our net sales, gross margin and operating results would be adversely affected. We compete in a number of markets.
See further discussion of the research and development expenditure credit in the U.K. in Note 2, "Government Assistance." Shifts in industry-wide capacity and our practice of ordering and purchasing our products based on sales forecasts may result in significant fluctuations in inventory and our quarterly and annual operating results.
Shifts in industry-wide capacity and our practice of ordering and purchasing our products based on sales forecasts may result in significant fluctuations in inventory and our quarterly and annual operating results. Shifts in industry-wide capacity from shortages to oversupply, or from oversupply to shortages, may result in significant fluctuations in our quarterly and annual operating results.
If certain tax credits or incentives we receive change or cease to be in effect or applicable for any reason, or if our assumptions and interpretations regarding tax laws and incentives prove to be incorrect, our financial results could be adversely impacted.
However, if the IRS prevails in these matters, the assessed tax, interest, and penalties, if any, could have an adverse impact on our financial position, results of operations, and cash flows in future periods. 23 Table of Contents If certain tax credits or incentives we receive change or cease to be in effect or applicable for any reason, or if our assumptions and interpretations regarding tax laws and incentives prove to be incorrect, our financial results could be adversely impacted.
If we are unable to successfully manage the demands of our international operations, it may have an adverse effect on our business, financial condition, or results of operations. We have significant international sales, and risks associated with these sales could harm our operating results.
If we are unable to successfully manage the demands of our international operations, it may have an adverse effect on our business, financial condition, or results of operations. Our products may be subject to average selling prices that decline over time.
We are subject to taxes in the U.S. and numerous foreign jurisdictions, including the United Kingdom, where a number of our subsidiaries are organized. Due to economic and political conditions, tax laws in various jurisdictions may be subject to significant change.
We could be subject to changes in tax laws, the adoption of new U.S. or international tax legislation or exposure to additional tax liabilities. We are subject to taxes in the U.S. and numerous foreign jurisdictions, including the United Kingdom (“U.K.”), where a number of our subsidiaries are organized.
As a result of such inventory imbalances, future inventory write-downs and charges to gross margin may occur due to lower of cost or market accounting, excess inventory, and inventory obsolescence. We have historically experienced fluctuations in our operating results and expect these fluctuations to continue.
As a result of such inventory imbalances, future inventory write-downs and charges to gross margin may occur due to lower of cost or market accounting, excess inventory, and inventory obsolescence. Our stock price has been and is likely to continue to be volatile. The market price of our common stock fluctuates significantly.
As a 10 Table of Contents result, yield problems may not be identified until well into the production process, and resolution of yield problems may require cooperation between our manufacturer and us. This risk could be compounded by the offshore location of certain of our manufacturers, increasing the effort and time required to identify, communicate, and resolve manufacturing yield problems.
As a result, yield problems may not be identified until well into the production process, and resolution of yield problems may require cooperation between our manufacturer and us.
These government trade policies may materially adversely affect our sales and operations with current customers as well as impede our ability to develop relationships with new customers.
The current global trade situation is highly dynamic, and it is not possible to anticipate the timing or duration of such tariffs, export restrictions, or other regulatory actions. These government trade policies may materially adversely affect our sales and operations with current customers as well as impede our ability to develop relationships with new customers.
If our lenders accelerate the repayment of borrowings, we may not be able to repay our debt obligations. If we were unable to repay amounts due to the lenders under our credit facility, those lenders could proceed against the collateral granted to them to secure that indebtedness.
If we were unable to repay amounts due to the lenders under our credit facility, those lenders could proceed against the collateral granted to them to secure that indebtedness. Legal and Regulatory Risks We are subject to the export control regulations of the U.S. Department of State and the Department of Commerce.
For further detail, see Note 7, "Intangibles, net and Goodwill." If we are unable to successfully address any of these risks, our business could be harmed. 18 Table of Contents Strategic and Industry Risks We have entered into, and may enter into in the future, joint development agreements, custom product arrangements, and strategic relationships with some of our largest customers.
Strategic and Industry Risks We have entered into, and may enter into in the future, joint development agreements, custom product arrangements, and strategic relationships with some of our largest customers.
Our prioritization of security measures and remediation of known vulnerabilities may prove inadequate and we may be unable to anticipate or protect against attacks. If an incident occurs, we may be unable to detect it for an extended period of time.
If an incident occurs, we may be unable to detect it for an extended period of time.
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Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
3 edited+11 added−0 removed3 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
3 edited+11 added−0 removed3 unchanged
2024 filing
2025 filing
Biggest changeITEM 1C. Cybersecurity The Board of Directors’ overall risk oversight function includes receiving reports on the Company’s cybersecurity risks and our risk management processes, and assessing whether our risk management strategies are reasonably designed to address such risks. The Board has delegated this oversight responsibility to our Audit Committee, which reports periodically to the Board as appropriate.
Biggest changeCybersecurity Governance The Board of Directors’ overall risk oversight function includes receiving reports on the Company’s cybersecurity risks and our risk management processes, and assessing whether our risk management strategies are reasonably designed to address such risks. The Board has delegated this oversight responsibility to our Audit Committee, which reports periodically to the Board as appropriate.
Our Senior Vice President of Global Operations and Director of Information Security review and evaluate our cybersecurity readiness through internal cybersecurity measures and metrics, as well as third-party penetration tests and control assessments against industry standards. We also employ various defensive and continuous monitoring techniques designed to escalate potential issues in a timely manner to our Director of Information Security.
Our Executive Vice President of Global Operations and Director of Information Security review and evaluate our cybersecurity readiness through internal cybersecurity measures and metrics, as well as third-party penetration tests and control assessments against industry standards. We also employ various defensive and continuous monitoring techniques designed to escalate potential issues in a timely manner to our Director of Information Security.
Our Senior Vice President of Global Operations and our Director of Information Security are responsible for ongoing assessment and supervision of cybersecurity risks, supported by a dedicated Information Security team who reports up to those individuals.
Our Executive Vice President of Global Operations and our Director of Information Security are responsible for ongoing assessment and supervision of cybersecurity risks, supported by a dedicated Information Security team who reports up to those individuals.
Added
ITEM 1C. Cybersecurity Cybersecurity risk management and strategy We have policies and processes in place that are designed to assess, identify and manage material risks from cybersecurity threats.
Added
We regularly assess risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity or availability of our information systems or any information residing therein. We use recognized industry frameworks and standards as guides in identifying, assessing and managing cybersecurity risks relevant to our operations.
Added
For example, we primarily use NIST CSF (National Institute of Standards and Technology Cybersecurity Framework) for this purpose.
Added
Key components of our cybersecurity risk management strategy include: • We have a dedicated Information Security team principally responsible for implementing and managing our cybersecurity strategy and controls. • We use industry standard technologies and tools appropriate to our operations which are designed to prevent and detect unauthorized access to, or compromise of, our network, servers, endpoints and external applications, such as multi-factor authentication, malware protection, firewalls and monitoring controls. • We regularly train our personnel on cybersecurity awareness and conduct periodic additional awareness and training activities such as simulated phishing campaigns. 28 Table of Contents • We have in place an Incident Response Plan that governs how we respond to and manage cybersecurity incidents.
Added
We conduct regular tabletop exercises to test our response to potential incidents. • We use third-party service providers where appropriate to design, implement and support aspects of our security processes as well as to monitor and test our safeguards. Our cybersecurity risk management strategy forms part of our overall enterprise risk management program.
Added
We conduct regular risk assessments designed to identify cybersecurity threats and other risks to the company. These risk assessments include identifying reasonably foreseeable potential internal and external risks, the likelihood of occurrence, and any potential damage that could result from such risks. We also evaluate the sufficiency of our existing internal controls and monitor the effectiveness of such safeguards.
Added
In response, we adjust our processes and controls as necessary. Our risk management process also encompasses cybersecurity risks associated with our use of third-party service providers.
Added
For example, as part of our contract management process, we conduct IT security reviews, and require executive approval by the General Counsel, Chief Financial Officer and Executive Vice President of Global Operations in relation to products or services that could potentially expose our company to cybersecurity risks.
Added
As of the end of fiscal year 2025, we have not identified any risks from known cybersecurity threats (including as a result of any prior cybersecurity incidents) that have materially affected, or are reasonably likely to materially affect, our business strategy, results of operations or financial conditions.
Added
While our cybersecurity risk management strategy is intended to assess, identify and manage material risks from cybersecurity threats, it may not adequately do so in every instance, particularly given the evolving nature of the cybersecurity threat landscape. We expect that our policies and processes will continue to be subject to update as the risks from cybersecurity threats change.
Added
For more information about risks from cybersecurity threats, and whether they are reasonably likely to materially affect our business strategy, results of operations or financial conditions, please see the Risk factors discussion in Item 1A of this Form 10-K, including “Risks related to system security, cyber-attacks and data breaches”.
Item 2. Properties
Properties — owned and leased real estate
4 edited+0 added−1 removed0 unchanged
Item 2. Properties
Properties — owned and leased real estate
4 edited+0 added−1 removed0 unchanged
2024 filing
2025 filing
Biggest changeAdditionally, we lease approximately 110,000 square feet of office space and 27,000 square feet of high quality lab space in Edinburgh, Scotland, United Kingdom. See further details below in Results of Operation.
Biggest changeWe also have leased facilities in Austin, Texas, consist of approximately 280,000 square feet that house a mixture of administrative personnel as well as research and development personnel. Additionally, we lease approximately 125,000 square feet of office space and high quality lab space in Edinburgh, Scotland, United Kingdom. See further details below in Item 7.
Design Centers Sales Support Offices – International Austin, Texas Beijing, China Chandler, Arizona Shanghai, China Cupertino, California Shenzhen, China Greensboro, North Carolina Tokyo, Japan Edinburgh, Scotland, United Kingdom Singapore Newbury, England, United Kingdom Seoul, South Korea Taipei, Taiwan See Note 11 — Leases of the Notes to Consolidated Financial Statements contained in Item 8 for further detail. 28 Table of Contents
Design Centers Sales Support Offices – International Austin, Texas Beijing, China Chandler, Arizona Shanghai, China Cupertino, California Shenzhen, China Greensboro, North Carolina Tokyo, Japan Edinburgh, Scotland, United Kingdom Singapore Newbury, England, United Kingdom Seoul, South Korea Taipei, Taiwan See Note 10 — Leases of the Notes to Consolidated Financial Statements contained in Item 8 for further detail.
ITEM 2. Properties As of March 30, 2024, our principal facilities are located in Austin, Texas and Edinburgh, Scotland, United Kingdom. The Austin facilities, which we own, consist of approximately 155,000 square feet of office space and are primarily occupied by research and development personnel and testing equipment.
ITEM 2. Properties As of March 29, 2025, our principal facilities are located in Austin, Texas and Edinburgh, Scotland, United Kingdom. The Austin facilities, which we own, consist of approximately 155,000 square feet of office space and are primarily occupied by research and development personnel and testing equipment.
Below is a detailed schedule that identifies our principal locations of occupied leased and owned property as of March 30, 2024, with various contractual lease terms through calendar year 2034. We believe that these facilities are suitable and adequate to meet our current operating needs.
Management's Discussion and Analysis of Financial Condition and Results of Operation. 29 Table of Contents Below is a schedule that identifies our principal locations of occupied leased and owned property as of March 29, 2025, with various contractual lease terms through calendar year 2048. We believe that these facilities are suitable and adequate to meet our current operating needs.
Removed
In addition, our failure analysis and reliability facility occupies approximately 27,000 square feet. Additionally, we have various leased facilities in Austin, Texas, consisting of approximately 281,000 square feet, which includes approximately 275,000 square feet of leased space that houses a mixture of administrative personnel as well as research and development personnel.
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
7 edited+0 added−2 removed3 unchanged
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
7 edited+0 added−2 removed3 unchanged
2024 filing
2025 filing
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information about purchases of equity securities that are registered by us pursuant to Section 12 of the Exchange Act during the three months ended March 30, 2024 (in thousands, except per share amounts): Monthly Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) December 31, 2023 - January 27, 2024 — $ — — $ 365,126 January 28, 2024 - February 24, 2024 451 90.96 451 324,130 February 25, 2024 - March 30, 2024 97 92.51 97 315,133 Total 548 $ 91.23 548 $ 315,133 (1) The Company currently has one active share repurchase authorization: $500 million in share repurchases authorized by the Board of Directors in July 2022.
Biggest changeOur future ability to pay dividends on our capital stock may be limited by the terms of any future debt that we may incur or any preferred securities that we may issue in the future. 30 Table of Contents Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information about purchases of equity securities that are registered by us pursuant to Section 12 of the Exchange Act during the three months ended March 29, 2025 (in thousands, except per share amounts): Monthly Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) December 29, 2024 - January 25, 2025 — $ — — $ 154,110 January 26, 2025 - February 22, 2025 699 107.35 699 79,049 February 23, 2025 - March 29, 2025 228 109.39 228 554,108 Total 927 $ 107.85 927 $ 554,108 (1) The Company currently has two active share repurchase authorizations: $500 million in share repurchases authorized by the Board of Directors in July 2022 and $500 million in share repurchases authorized by the Board of Directors in March 2025.
The information in this Annual Report on Form 10-K appearing under the heading “Stock Price Performance Graph” is being “furnished” pursuant to Item 201(e) of Regulation S-K under the Securities Act of 1933, as amended, and shall not be deemed to be “soliciting material” or “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C, other than as provided in Item 201(e) of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act. 30 Table of Contents ITEM 6. [Reserved]
The information in this Annual Report on Form 10-K appearing under the heading “Stock Price Performance Graph” is being “furnished” pursuant to Item 201(e) of Regulation S-K under the Securities Act of 1933, as amended, and shall not be deemed to be “soliciting material” or “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C, other than as provided in Item 201(e) of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the NASDAQ's Global Select Market under the symbol CRUS. As of May 22, 2024, there were 324 holders of record of our common stock. Dividend Policy We have not paid any dividends on our capital stock.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the NASDAQ's Global Select Market under the symbol CRUS. As of May 21, 2025, there were 299 holders of record of our common stock. Dividend Policy We have not paid any dividends on our capital stock.
The 29 Table of Contents Company repurchased 0.5 million shares of its common stock for $50.0 million during the fourth quarter of fiscal year 2024. All shares of our common stock that were repurchased were retired as of March 30, 2024.
The Company repurchased 0.9 million shares of its common stock for $100.0 million during the fourth quarter of fiscal year 2025 under the 2022 authorization. All shares of our common stock that were repurchased were retired as of March 29, 2025.
No cash dividends were declared on our common stock during the periods presented. (2) Stockholder returns over the indicated period should not be considered indicative of future stockholder returns. (3) For fiscal year 2024, the Company selected the Russell 3000 Index to include in its stock price performance graph.
No cash dividends were declared on our common stock during the periods presented. (2) Stockholder returns over the indicated period should not be considered indicative of future stockholder returns.
In fiscal year 2024, the Company's net stock repurchases were subject to a 1 percent excise tax under the Inflation Reduction Act, which are a reduction to accumulated earnings (deficit) in the Consolidated Condensed Statements of Stockholders' Equity. Disclosure of repurchased amounts and related average price paid per share in the table above excludes the impact of excise taxes.
The Company's net stock repurchases are subject to a 1 percent excise tax under the Inflation Reduction Act, which is a reduction to accumulated earnings in the Consolidated Statements of Stockholders' Equity.
Stock Price Performance Graph The following graph and table show a comparison of the five-year cumulative total stockholder return ("TSR"), calculated on a dividend reinvestment basis, for Cirrus Logic, the Russell 3000 Index, the Philadelphia Semiconductor Index, and the NASDAQ Composite Index. 3/30/2019 3/28/2020 3/27/2021 3/26/2022 3/25/2023 3/30/2024 Cirrus Logic, Inc. 100.00 147.18 197.31 208.43 250.95 219.95 Russell 3000 Index 100.00 89.43 147.70 165.63 145.75 195.39 Philadelphia Semiconductor Index 100.00 108.78 230.38 264.61 237.87 378.21 NASDAQ Composite Index 100.00 98.09 173.16 187.97 158.27 221.02 (1) The graph assumes that $100 was invested in our common stock and in each index at the market close on March 30, 2019, and that all dividends were reinvested.
Disclosure of repurchased amounts and related average price paid per share in the table above excludes the impact of excise taxes. 31 Table of Contents Stock Price Performance Graph The following graph and table show a comparison of the five-year cumulative total stockholder return ("TSR"), calculated on a dividend reinvestment basis, for Cirrus Logic, the Russell 3000 Index, and the Philadelphia Semiconductor Index. 3/28/2020 3/27/2021 3/26/2022 3/25/2023 3/30/2024 3/29/2025 Cirrus Logic, Inc. 100.00 134.06 141.62 170.50 149.44 160.64 Russell 3000 Index 100.00 165.16 185.21 162.98 218.50 233.21 Philadelphia Semiconductor Index 100.00 211.79 243.25 218.67 347.68 306.43 (1) The graph assumes that $100 was invested in our common stock and in each index at the market close on March 28, 2020, and that all dividends were reinvested.
Removed
Our future ability to pay dividends on our capital stock may be limited by the terms of any future debt that we may incur or any preferred securities that we may issue in the future.
Removed
The Company is making the change away from using the NASDAQ Composite Index due to recent changes to the index used in the Company's performance-based equity grants to executives. This year's stock price performance graph includes both the newly selected index and the index used in the immediately preceding fiscal year.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
39 edited+4 added−25 removed15 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
39 edited+4 added−25 removed15 unchanged
2024 filing
2025 filing
Biggest changeInternational sales, including sales to U.S.-based end customers that manufacture products through contract manufacturers or plants located overseas, were approximately $1.8 billion in each of fiscal years 2024, 2023, and 2022, representing 99 percent, 97 percent, and 98 percent of net sales in fiscal year 2024, 2023, and 2022, respectively. Our sales are denominated primarily in U.S. dollars.
Biggest changeThe increase in net sales also reflects a $54.0 million increase in HPMS product sales, or 8 percent, from fiscal year 2024 sales of $705.0 million, primarily due to higher content in smartphones and sales associated with latest-generation products, partially offset by lower general market sales. 34 Table of Contents International sales, including sales to U.S.-based end customers that manufacture products through contract manufacturers or plants located overseas, were approximately $1.9 billion in 2025 and $1.8 billion in each of fiscal years 2024 and 2023, representing 99 percent, 99 percent, and 97 percent of net sales in fiscal year 2025, 2024, and 2023, respectively.
Results of Operations The following table summarizes the results of our operations for each of the past three fiscal years as a percentage of net sales.
The following table summarizes the results of our operations for each of the past three fiscal years as a percentage of net sales.
Capital Requirements Our future capital requirements will depend on many factors, including the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, and potential future acquisitions of companies or technologies, commitments under the Capacity Reservation Agreement with GlobalFoundries (discussed further in Note 15 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements and Item 1A.
Capital Requirements Our future capital requirements will depend on many factors, including the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, and potential future acquisitions of companies or technologies, commitments under the Capacity Reservation Agreement with GlobalFoundries (discussed further in Note 13 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements and Item 1A.
The ultimate settlement of uncertain tax positions may differ from our estimates, which could result in the recognition of a tax benefit or an additional charge to the income tax provision in the relevant period. See Note 19 — Income Taxes of the Notes to Consolidated Financial Statements contained in Item 8 for additional details .
The ultimate settlement of uncertain tax positions may differ from our estimates, which could result in the recognition of a tax benefit or an additional charge to the income tax provision in the relevant period. See Note 17 — Income Taxes of the Notes to Consolidated Financial Statements contained in Item 8 for additional details .
We believe our expected future cash earnings, existing cash, cash equivalents, 35 Table of Contents investment balances, and available borrowings under our Revolving Credit Facility will be sufficient to meet our capital requirements both domestically and internationally, in the short-term (i.e. the next 12 months) and in the long-term, although we could be required, or could elect, to seek additional funding prior to that time.
We believe our expected future cash earnings, existing cash, cash equivalents, investment balances, and available borrowings under our Revolving Credit Facility will be sufficient to meet our capital requirements both domestically and internationally, in the short-term (i.e. the next 12 months) and in the long-term, although we could be required, or could elect, to seek additional funding prior to that time.
The Organization for Economic Cooperation and Development has announced an Inclusive Framework on Base Erosion and Profit Shifting, including Pillar Two Model Rules for a global minimum tax that call for the taxation of large multinational corporations at a minimum rate of 15%.
The Organization for Economic Cooperation and Development has announced an Inclusive Framework on Base Erosion and Profit Shifting, including Pillar Two Model Rules for a global minimum tax that call for the taxation of large multinational 35 Table of Contents corporations at a minimum rate of 15%.
Our effective tax rates in both fiscal year 2024 and 2023 were higher than the U.S. statutory rate of 21.0 percent, primarily due to U.S. tax paid on our foreign earnings resulting from an increase in global intangible low-taxed income (GILTI), which is treated as a period cost, and a reduction in foreign tax credits.
Our effective tax rates in fiscal years 2025 and 2024 were higher than the U.S. statutory rate of 21.0 percent, primarily due to U.S. tax paid on our foreign earnings resulting from an increase in global intangible low-taxed income (GILTI), which is treated as a period cost, and a reduction in foreign tax credits.
See Note 9 - Revolving Credit Facility, Note 11 - Leases and Note 15 - Commitments and Contingencies, of the notes to the Consolidated Financial Statements in Item 8, for additional information related to these contractual obligations.
See Note 8 - Revolving Credit Facility, Note 10 - Leases and Note 13 - Commitments and Contingencies, of the notes to the Consolidated Financial Statements in Item 8, for additional information related to these contractual obligations.
As of March 30, 2024, the Company did not have any off-balance-sheet arrangements, that were reasonably likely to have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
As of March 29, 2025, the Company did not 36 Table of Contents have any off-balance-sheet arrangements, that were reasonably likely to have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Investing Activities In fiscal year 2024, the Company used $163.0 million in cash for investing activities primarily related to $124.7 million in net purchases of marketable securities and capital expenditures and technology investments of $38.3 million.
In fiscal year 2024, the Company used $163.0 million in cash for investing activities primarily related to $124.7 million in net purchases of marketable securities and capital expenditures and technology investments of $38.3 million. Financing Activities In fiscal years 2025 and 2024, the Company used $283.2 million and $201.7 million, respectively, related to financing activities.
All percentage amounts were calculated using the underlying data, in thousands: Fiscal Years Ended March 30, 2024 March 25, 2023 March 26, 2022 Net sales 100 % 100 % 100 % Gross margin 51 % 50 % 52 % Research and development 24 % 24 % 23 % Selling, general and administrative 8 % 8 % 8 % Restructuring — % 1 % — % Intangibles impairment — % 4 % — % Income from operations 19 % 13 % 21 % Interest income 1 % — % — % Interest expense — % — % — % Other income (expense) — % — % — % Income before income taxes 20 % 13 % 21 % Provision for income taxes 5 % 4 % 3 % Net income 15 % 9 % 18 % 32 Table of Contents Net Sales We report sales in two product line categories: audio products and HPMS products.
All percentage amounts were calculated using the underlying data, in thousands: Fiscal Years Ended March 29, 2025 March 30, 2024 March 25, 2023 Net sales 100 % 100 % 100 % Gross margin 53 % 51 % 50 % Research and development 23 % 24 % 24 % Selling, general and administrative 8 % 8 % 8 % Restructuring — % — % 1 % Intangibles impairment — % — % 4 % Income from operations 22 % 19 % 13 % Interest income 2 % 1 % — % Interest expense — % — % — % Other income (expense) — % — % — % Income before income taxes 24 % 20 % 13 % Provision for income taxes 6 % 5 % 4 % Net income 18 % 15 % 9 % Net Sales We report sales in two product line categories: Audio products and HPMS products.
Other Income (Expense) In fiscal years 2024, 2023, and 2022 the Company reported $(0.1) million, $(3.4) million, and $1.7 million respectively, in other income (expense), related to remeasurement on foreign currency denominated monetary assets and liabilities and other non-operating income and expenses.
Other Income (Expense) In fiscal years 2025 and 2024, the Company reported $1.5 million and $(0.1) million, respectively, in other income (expense), related to remeasurement on foreign currency denominated monetary assets and liabilities and other non-operating income and expenses.
The Company considers the following accounting policies to involve the highest degree of judgment in the preparation of the consolidated financial statements: Inventory Valuation Inventories are stated at the lower of cost or net realizable value, with cost being determined on a first-in, first-out basis.
The Company considers the following accounting policies to involve the highest degree of judgment in the preparation of the consolidated financial statements: Inventory Valuation Inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis. Cost is computed using standard costs, which approximate actual cost.
Interest Expense The Company reported interest expense of $0.9 million, $0.9 million and $0.9 million for fiscal years 2024, 2023, and 2022, respectively, primarily as a result of commitment fees under the Revolving Credit Facility, described in Note 9.
Interest Expense The Company reported interest expense of $0.9 million and $0.9 million for fiscal years 2025 and 2024, respectively, primarily as a result of commitment fees under the Revolving Credit Facility, described in Note 8 of the Notes to Consolidated Financial Statements in Item 8.
Changes in excess and obsolete inventory charges, including scrapped inventory, and sales of product written down in prior periods did not have a material impact on margin in fiscal year 2023. Research and Development Expenses Fiscal year 2024 research and development expenses of $426.5 million reflect a decrease of $31.9 million, or 7.0 percent, from fiscal year 2023.
Changes in excess and obsolete inventory charges, including scrapped inventory, and sales of product written down in prior periods did not have a material impact on margin in fiscal year 2025. Research and Development Expenses Fiscal year 2025 research and development expenses of $434.7 million reflect an increase of $8.2 million, or 2 percent, from fiscal year 2024.
The favorable change in working capital was driven primarily by prepaid wafer usage (related to the Capacity Reservation Agreement), decreases in other assets and increased income taxes payable, partially offset by decreased accounts payable and acquisition-related liabilities, as well as increases in accounts receivable. In fiscal year 2023, cash flow from operations was $339.6 million.
Operating cash flow during fiscal year 2024 was related to the cash components of our net income and an $18.4 million favorable change in working capital, primarily driven by prepaid wafer usage (related to the Capacity Reservation Agreement), decreases in other assets and increased income taxes payable, partially offset by decreased accounts payable and acquisition-related liabilities, as well as increases in accounts receivable.
As of March 30, 2024, the Company had no amounts outstanding under the Revolving Credit Facility and was in compliance with all covenants under the Second Amended Credit Agreement. See Note 9 — Revolving Credit Facility for additional information including material terms and related covenants.
As of March 29, 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. See Note 8 — Revolving Credit Facility of the Notes to Consolidated Financial Statements in Item 8 for additional information including material terms and related covenants.
The increases in interest income in fiscal year 2024 and 2023 versus prior years were a function of higher interest rates on average cash, cash equivalent, and marketable securities balances throughout the year.
The increase in interest income in fiscal year 2025 versus prior year was a function of higher yields on higher combined average cash, cash equivalent, and marketable securities balances throughout the year.
See Note 17 - Stockholders' Equity for a description of our share repurchase authorization. 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.
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”).
Fiscal Years Ended March 30, 2024 March 25, 2023 March 26, 2022 Audio Products $ 1,083,939 $ 1,172,007 $ 1,187,126 HPMS Products 704,951 725,610 594,334 $ 1,788,890 $ 1,897,617 $ 1,781,460 Net sales for fiscal year 2024 decreased by 5.7 percent, to $1.79 billion from $1.90 billion in fiscal year 2023.
Fiscal Years Ended March 29, 2025 March 30, 2024 March 25, 2023 Audio Products $ 1,137,157 $ 1,083,939 $ 1,172,007 HPMS Products 758,920 704,951 725,610 $ 1,896,077 $ 1,788,890 $ 1,897,617 Net sales for fiscal year 2025 increased by 6 percent, to $1.90 billion from $1.79 billion in fiscal year 2024.
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.
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 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 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.
Recently Issued Accounting Pronouncements For a discussion of recently issued accounting pronouncements, refer to Note 2 of the Notes to the Consolidated Financial Statements. Overview Cirrus Logic develops low-power, high-precision mixed-signal processing solutions for a broad range of customers. We track operating results in one reportable segment, but report revenue performance by product line: audio and HPMS products.
Recently Issued Accounting Pronouncements For a discussion of recently issued accounting pronouncements, refer to Note 2 - Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements. Overview Cirrus Logic develops low-power, high-precision mixed-signal processing solutions for a broad range of customers.
In fiscal year 2024, the Company recorded an additional $2.0 million in net costs related to a workforce reduction action taken in the second quarter of fiscal year 2024 and the described events above.
Restructuring In fiscal year 2024, the Company recorded $2.0 million in net costs primarily related to a workforce reduction action taken in the second quarter of fiscal year 2024. Interest Income Interest income in fiscal years 2025 and 2024 was $34.0 million and $21.5 million, respectively.
In fiscal year 2023, the Company used $33.3 million in cash for investing activities principally related to capital expenditures and technology investments of $36.7 million, offset by $3.4 million in net sales of marketable securities.
Investing Activities In fiscal year 2025, the Company used $124.3 million in cash for investing activities primarily related to $95.5 million in net purchases of marketable securities and capital expenditures and technology investments of $28.8 million.
The increase in gross margin for fiscal year 2024 was primarily attributable to a decline in supply chain costs, including the absence of wafer premiums and lower freight expense, in addition to a reduction in inventory reserves, partially offset by a less favorable product mix. The Company’s number of employees decreased to 1,625 as of March 30, 2024.
The increase in gross margin for fiscal year 2025 reflects a more favorable product mix. This was partially offset by unfavorable inventory reserve expense and higher supply chain costs. The Company’s number of employees increased from 1,625 as of March 30, 2024 to 1,660 as of March 29, 2025.
Additionally, in fiscal year 2023, the Company recorded a $2.7 million write down related to a technology start-up equity investment. Provision for Income Taxes We recorded income tax expense of $89.4 million in fiscal year 2024 on pre-tax income of $363.9 million, yielding an effective tax rate of 24.6 percent.
Provision for Income Taxes We recorded income tax expense of $113.4 million in fiscal year 2025 on pre-tax income of $444.9 million, yielding an effective tax rate of 25.5 percent. We recorded income tax expense of $89.4 million in fiscal year 2024 on pre-tax income of $363.9 million, yielding an effective tax rate of 24.6 percent.
The decrease was primarily attributable to decreased employee-related and variable compensation costs, partially offset by increased stock-based compensation costs in fiscal year 2024. 33 Table of Contents Fiscal year 2023 selling, general and administrative expenses of $153.1 million reflect an increase of $2.1 million, or 1.4 percent, compared to fiscal year 2022.
Selling, General and Administrative Expenses Fiscal year 2025 selling, general and administrative expenses of $151.0 million reflect an increase of $6.8 million, or 5 percent, compared to fiscal year 2024. The increase was primarily attributable to increased employee-related and variable compensation costs in fiscal year 2025.
For additional discussion about our income taxes, see Note 19 - Income Taxes. 34 Table of Contents Liquidity and Capital Resources Operating Activities In fiscal year 2024, cash flow from operations was $421.7 million. Operating cash flow during fiscal year 2024 was related to the cash components of our net income and an $18.4 million favorable change in working capital.
Liquidity and Capital Resources Operating Activities In fiscal year 2025, cash flow from operations was $444.4 million. Operating cash flow during fiscal year 2025 was related to the cash components of our net income and a $23.4 million unfavorable change in working capital.
Audio product line sales of $1.08 billion in fiscal year 2024 decreased 7.5 percent from fiscal year 2023 sales of $1.17 billion. The most significant drivers of the decrease were continued weakness in general market sales, and to a lesser extent, a reduction in components shipping in tablets versus the prior fiscal year.
Audio product line sales of $1.14 billion in fiscal year 2025 increased 5 percent from fiscal year 2024 sales of $1.08 billion. The most significant drivers of the increase were sales associated with our latest-generation products and higher smartphone volumes, partially offset by weakness in general market sales versus the prior fiscal year.
HPMS product line sales of $705.0 million represented a 2.8 percent decrease from fiscal year 2023 sales of $725.6 million, largely attributable to a decline in general market sales, primarily in non-smartphone applications. Overall, gross margin for fiscal year 2024 was 51.2 percent.
HPMS product line sales of $758.9 million represented an 8 percent increase from fiscal year 2024 sales of $705.0 million, largely attributable to higher content in smartphones and sales associated with latest-generation products, partially offset by lower general market sales. Overall, gross margin for fiscal year 2025 was 52.5 percent.
Certain jurisdictions, including the United Kingdom, have enacted Pillar Two legislation that will start to become effective for our fiscal year 2025. Based on enacted laws, Pillar Two is not expected to have a material impact on our consolidated financial statements.
Certain jurisdictions in which we operate, including the United Kingdom, have enacted Pillar Two legislation. There was no material impact on our consolidated financial statements in fiscal year 2025. For additional discussion about our income taxes, see Note 17 - Income Taxes of the Notes to Consolidated Financial Statements in Item 8.
Gross Margin Overall gross margin of 51.2 percent for fiscal year 2024 increased from fiscal year 2023 gross margin of 50.4 percent. The increase was primarily due to a decline in supply chain costs, including the absence of wafer premiums and lower freight expense, in addition to a reduction in inventory reserves compared to fiscal year 2023.
Our sales are denominated primarily in U.S. dollars. Gross Margin Overall gross margin of 52.5 percent for fiscal year 2025 increased from fiscal year 2024 gross margin of 51.2 percent. The increase reflects a more favorable product mix. This was partially offset by unfavorable inventory reserve expense and higher supply chain costs, compared to fiscal year 2024.
Operating cash flow during fiscal year 2023 was related to the cash components of our net income and a $55.6 million unfavorable change in working capital, primarily driven by an increase in inventory and decreases in accounts payable and other accrued liabilities, partially offset by a decrease in accounts receivable.
The unfavorable change in working capital was driven primarily by increases in inventory and accounts receivable, partially offset by prepaid wafer usage (related to the Capacity Reservation Agreement). In fiscal year 2024, cash flow from operations was $421.7 million.
Audio product sales decreased $88.1 million, or 7.5 percent in fiscal year 2024. The most significant drivers of the decrease were continued weakness in general market sales, primarily in non-smartphone applications, and to a lesser extent, a reduction in components shipping in tablets versus the prior fiscal year.
Audio product sales increased $53.2 million, or 5 percent in fiscal year 2025. The most significant drivers of the increase were sales associated with our latest-generation products and higher smartphone volumes, offset by weakness in general market sales versus the prior fiscal year.
Financing Activities In fiscal years 2024, 2023, and 2022, the Company used $201.7 million, $230.3 million, and $178.7 million, respectively, related to financing activities. In fiscal years 2024, 2023, and 2022, the Company utilized approximately $186.0 million, $191.4 million, and $167.5 million, respectively, in cash to repurchase and retire portions of its outstanding common stock.
In fiscal years 2025 and 2024, the Company utilized approximately $261.0 million and $186.0 million, respectively, in cash to repurchase and retire portions of its outstanding common stock. See Note 15 - Stockholders' Equity of the Notes to Consolidated Financial Statements in Item 8 for a description of our share repurchase authorization.
The decrease was attributable to reduced amortization of acquisition intangibles expense, increased R&D incentives compared to the prior fiscal year, and a decrease in acquisition-related charges, variable compensation and product development costs, partially offset by an increase in employee-related expenses, stock-based compensation and facilities-related costs.
The increase was attributable to increased employee-related, variable compensation, and facilities-related costs, offset by decreased stock-based compensation, and acquisition-related costs, in addition to increased R&D incentives versus fiscal year 2024. See Note 2 - Summary of Significant Accounting Policies - Government Assistance of the Notes to Consolidated Financial Statements in Item 8 for additional details relating to R&D incentives.
In fiscal year 2024, the Company made good progress executing on our strategic initiatives. In our flagship audio business we completed design work on, and sampled, two next-generation products: a boosted amplifier and a smart codec during the year. We also introduced our third-generation camera controller, and gained traction in the laptop market.
We track operating results in one reportable segment, but report revenue performance by product line: Audio and HPMS products. In fiscal year 2025, the Company made good progress executing on strategic initiatives. In our flagship smartphone audio business we began shipping the latest-generation of our boosted amplifier and first 22-nanometer smart codec.
The Company achieved net income of $274.6 million in fiscal year 2024, which included an income tax provision in the amount of $89.4 million. Fiscal Year 2023 Fiscal year 2023 net sales of $1.90 billion represented an increase over fiscal year 2022 net sales of $1.78 billion.
The Company achieved net income of $331.5 million in fiscal year 2025, which included an income tax provision in the amount of $113.4 million. Results of Operations A discussion regarding our financial condition and results of operations for fiscal year 2025 compared to fiscal year 2024 is presented below.
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While we are proud of our achievements in fiscal year 2024, we also encountered and successfully navigated through short-term challenges that were associated with our new HPMS product not coming to market as planned in fall 2023.
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We also expanded our HPMS content in smartphones as we benefited from increased unit shipments of our camera controllers and broadened our footprint with our general market haptic components. Additionally, we made considerable progress leveraging our investments in Audio and HPMS into new applications and markets.
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Throughout the year we remained committed to disciplined execution, seeking to increase both operational efficiency and the efficiency and competitiveness within our supply chain. 31 Table of Contents Fiscal Year 2024 Fiscal year 2024 net sales of $1.79 billion represented a decrease over fiscal year 2023 net sales of $1.90 billion.
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Our achievements in the laptop market, which is our most immediate growth opportunity, included securing our first high-volume mainstream design win with our latest PC codec, increasing our direct engagement with PC OEMs, and further expanding our presence in leading reference designs.
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HPMS product line sales of $725.6 million represented a 22.1 percent increase from fiscal year 2022 sales of $594.3 million, primarily attributable to content gains in smartphones and higher ASPs. Audio product line sales of $1.17 billion in fiscal year 2023 decreased from fiscal year 2022 sales of $1.19 billion.
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During fiscal year 2025, we also made advancements with our general market business where we have been selectively developing new components that offer sustained differentiation. 33 Table of Contents Fiscal year 2025 net sales of $1.90 billion represented an increase over fiscal year 2024 net sales of $1.79 billion.
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The most significant driver of the decrease was the softening in general market and smartphone demand, partially offset by ASP increases during fiscal year 2023. Overall, gross margin for fiscal year 2023 was 50.4 percent.
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A discussion regarding our financial condition and results of operations for fiscal year 2024, which was a 53-week fiscal year, compared to fiscal year 2023 can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended March 30, 2024, filed with the SEC on May 24, 2024.
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The decrease in gross margin for fiscal year 2023 was primarily attributable to an increase in supply chain costs, partially offset by higher ASPs and the absence of the purchase price fair value adjustment to inventory, which was a one-time event in the second quarter of fiscal year 2022, as a result of the Lion Semiconductor, Inc.
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("Lion") acquisition (the "Acquisition"). The Company’s number of employees increased to 1,702 as of March 25, 2023. The Company achieved net income of $176.7 million in fiscal year 2023, which included an income tax provision in the amount of $78.0 million.
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The decrease in net sales also reflects a $20.7 million decrease in HPMS product sales, or 2.8 percent, from fiscal year 2023 sales of $725.6 million, largely due to a decline in general market sales, primarily in non-smartphone applications. Net sales for fiscal year 2023 increased by 6.5 percent, to $1.90 billion from $1.78 billion in fiscal year 2022.
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The increase in net sales reflects a $131.3 million increase in HPMS product sales, or 22.1 percent, from fiscal year 2022 sales of $594.3 million, which was primarily attributable to content gains in smartphones and higher ASPs. Additionally, audio product sales decreased $15.1 million in fiscal year 2023.
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The most significant driver of the decrease was the softening in general market and smartphone demand, partially offset by ASP increases versus fiscal year 2022.
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The increase was partially offset by a less favorable product mix. Changes in excess and obsolete inventory charges, including scrapped inventory, and sales of product written down in prior periods did not have a material impact on margin in fiscal year 2024.
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Overall gross margin of 50.4 percent for fiscal year 2023 decreased from fiscal year 2022 gross margin of 51.8 percent. The decrease reflects an increase in supply chain costs, partially offset by higher ASPs and the absence of the purchase price fair value adjustment to inventory, as a result of the Acquisition.
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See Note 2 - Summary of Significant Accounting Policies - Government Assistance for additional details relating to R&D incentives. Fiscal year 2023 research and development expenses of $458.4 million reflect an increase of $52.1 million, or 12.8 percent, from fiscal year 2022.
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The increase was attributable to increased stock-based compensation, product development costs, employee-related expenses, primarily driven by a 7.0 percent increase in total R&D headcount, facilities-related costs, amortization of acquisition intangibles, and acquisition-related expenses, partially offset by reduced variable compensation and increased R&D incentives compared to fiscal year 2022.
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Selling, General and Administrative Expenses Fiscal year 2024 selling, general and administrative expenses of $144.2 million reflect a decrease of $9.0 million, or 5.9 percent, compared to fiscal year 2023.
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The increase was primarily attributable to increased employee-related and stock-based compensation costs, partially offset by reduced variable compensation costs in fiscal year 2023.
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Restructuring During the fourth quarter of fiscal year 2023, as part of our strategy to improve operational efficiency, the Company abandoned or subleased office space at various properties to align our real property lease arrangements with our anticipated operating needs.
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The Company recorded restructuring costs of $10.6 million related to impairment of right-of-use lease assets and leasehold improvements of $6.9 million, as well as other related charges of $3.7 million in fiscal year 2023. See Note 12 - Restructuring for additional details.
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Intangibles Impairment Due to the prolonged weakness in the China smartphone market, the sales of our general market battery and power products associated with the Acquisition were adversely affected. As a result, the Company revalued the acquired intangible assets recorded in purchase accounting.
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In the fourth quarter of fiscal year 2023, the Company impaired the related acquired intangible assets by $85.8 million. See additional details in Note 7 - Intangibles, net and Goodwill. Interest Income Interest income in fiscal years 2024, 2023, and 2022, was $21.5 million, $10.0 million, and $1.6 million, respectively.
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We recorded income tax expense of $78.0 million in fiscal year 2023 on pre-tax income of $254.7 million, yielding an effective tax rate of 30.6 percent.
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We recorded income tax expense of $42.3 million in fiscal year 2022 on pre-tax income of $368.7 million, yielding an effective tax provision rate of 11.5 percent.
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Our effective tax rate was lower than the U.S. statutory rate of 21.0 percent, primarily due to the effect of income earned in certain foreign jurisdictions that is taxed below the federal statutory rate and excess tax benefits from stock-based compensation.
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In fiscal year 2022, cash flow from operations was $124.8 million.
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Operating cash flow during fiscal year 2022 was related to the cash components of our net income and a $316.1 million unfavorable change in working capital, primarily as a result of increases in long-term prepaid wafers associated with terms of the Capacity Reservation Agreement with GlobalFoundries (discussed further in Note 15 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements), accounts receivables and other assets (a portion of which resulted from terms of the Capacity Reservation Agreement with GlobalFoundries), partially offset by increases in acquisition-related liabilities and decreases in inventory for the period.
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In fiscal year 2022, the Company used approximately $18.4 million in cash for investing activities primarily related to $276.9 million associated with the acquisition of Lion and capital expenditures and technology investments of $30.0 million, partially offset by $288.5 million in net sales of marketable securities.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
4 edited+0 added−0 removed8 unchanged
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
4 edited+0 added−0 removed8 unchanged
2024 filing
2025 filing
Biggest changeBased on investment positions as of March 30, 2024 and March 25, 2023, a hypothetical 100 basis point increase in interest rates across all maturities would result in a $3.5 million and $0.8 million decline in the fair market value of the portfolio, respectively. Such losses would only be realized if the Company sold the investments prior to maturity.
Biggest changeBased on investment positions as of March 29, 2025 and March 30, 2024, a hypothetical 100 basis point increase in interest rates across all maturities would result in a $4.1 million and $3.5 million decline in the fair market value of the portfolio, respectively. Such losses would only be realized if the Company sold the investments prior to maturity.
Foreign Currency Exchange Risk Our revenue and spending is transacted primarily in U.S. dollars; however, in fiscal years 2024, 2023, and 2022, we entered into routine transactions in other currencies to fund the operating needs of certain legal entities outside of the U.S.
Foreign Currency Exchange Risk Our revenue and spending is transacted primarily in U.S. dollars; however, in fiscal years 2025, 2024, and 2023, we entered into routine transactions in other currencies to fund the operating needs of certain legal entities outside of the U.S.
We assess these risks on a regular basis and have established policies that are designed to protect against the adverse effects of these and other potential exposures. All of the potential changes noted below are based on sensitivity analyses as of March 30, 2024. Actual results may differ materially.
We assess these risks on a regular basis and have established policies that are designed to protect against the adverse effects of these and other potential exposures. All of the potential changes noted below are based on sensitivity analyses as of March 29, 2025. Actual results may differ materially.
See Note 5 - Derivative Financial Instruments for additional information related to our hedging activities. 36 Table of Contents
See Note 5 - Derivative Financial Instruments for additional information related to our hedging activities. 37 Table of Contents