Cirrus Logic, Inc. (CRUS): history, ownership, mission, how it works & makes money

A Brief History of Cirrus Logic, Inc.

Foundation and Early Years

Cirrus Logic, Inc. was founded in 1984, focusing initially on the design of high-performance analog and mixed-signal integrated circuits (ICs). The company quickly gained traction in the audio market, developing products for various applications, including consumer electronics.

Public Offering and Growth

In 1994, Cirrus Logic went public, listing its shares on the NASDAQ under the symbol CRUS. The initial public offering (IPO) provided the company with the capital necessary to expand its research and development efforts, particularly in the audio IC space.

Acquisitions and Diversification

Throughout the late 1990s and early 2000s, Cirrus Logic diversified its product offerings through strategic acquisitions. Notably, in 1999, it acquired the audio division of Crystal Semiconductor, enhancing its capabilities in digital audio processing.

Recent Developments and Financial Performance

As of September 28, 2024, Cirrus Logic reported significant financial metrics reflecting its operational success:

Market Position and Customer Base

Cirrus Logic primarily serves the audio and high-performance mixed-signal markets. The company’s largest customer, Apple Inc., accounted for approximately 90% of its total net sales for the second quarter of fiscal year 2025. This concentration highlights both the potential for revenue growth and the risks associated with reliance on a single customer.

Research and Development Investments

In fiscal year 2025, Cirrus Logic allocated significant resources towards research and development, with expenses reaching $112.9 million in Q2 FY 2025, an increase from $104.2 million in Q2 FY 2024. This investment underscores the company’s commitment to innovation and maintaining competitive advantage within the industry.

Financial Position

As of September 28, 2024, Cirrus Logic's total assets amounted to $2.36 billion, with total liabilities standing at $428.0 million. The equity position reflects a strong balance sheet, further enhanced by robust cash flow generation from operations, which was $95.4 million for the first six months of fiscal year 2025.

Share Repurchase Program

The company has been actively repurchasing its own shares, with $91.0 million spent on repurchases in the first six months of fiscal year 2025. This program is part of Cirrus Logic's strategy to return capital to shareholders while managing its equity structure effectively.

Outlook

Looking ahead, Cirrus Logic aims to leverage its strong market position and continued investment in R&D to drive growth in the audio semiconductor market. The company’s focus on next-generation products and strategic partnerships will play a critical role in its future performance.

A Who Owns Cirrus Logic, Inc. (CRUS)

Ownership Structure

As of 2024, Cirrus Logic, Inc. (CRUS) has a diverse ownership structure comprising institutional investors, individual shareholders, and company executives. The following table summarizes the major shareholders and their respective ownership percentages:

Institutional Ownership Trends

Institutional ownership in Cirrus Logic, Inc. has shown a steady increase over recent years. As of the latest reporting period, institutions held approximately 35.9 million shares, representing about 67.5% of total shares outstanding. This trend indicates growing confidence among institutional investors in Cirrus Logic's business model and financial prospects.

Recent Shareholder Activity

In the first half of fiscal year 2025, Cirrus Logic executed a share repurchase program, having repurchased approximately 0.7 million shares for $91 million, at an average cost of $126.78 per share. This reflects a strategic move to enhance shareholder value, particularly in light of the company's strong performance metrics.

Executive Compensation and Stock Ownership

As of September 28, 2024, total stockholder equity for Cirrus Logic stood at $1.93 billion. The company's executives, including CEO Jason Rhode, have a vested interest in its performance through stock ownership. The following table outlines executive compensation details for the fiscal year 2024:

Market Performance

The stock performance of Cirrus Logic has been robust, with a year-to-date return of 25% as of early October 2024. This performance has contributed to increased interest from both institutional and retail investors. The stock price reached a high of $145.00 per share during the fiscal year 2025, reflecting investor confidence in the company's growth trajectory.

Investor Relations

Cirrus Logic maintains a proactive approach to investor relations, providing regular updates and financial disclosures. The company’s investor relations website includes access to quarterly earnings reports, annual shareholder meetings, and strategic updates. This transparency fosters a strong relationship with its shareholders and potential investors.

Cirrus Logic, Inc. (CRUS) Mission Statement

Cirrus Logic, Inc. focuses on developing high-performance mixed-signal processing solutions for a range of applications, including portable electronics, automotive, and industrial markets. The company aims to create innovative products that enhance the user experience and drive advancements in technology.

Financial Overview as of 2024

As of September 28, 2024, Cirrus Logic reported the following key financial metrics:

Revenue Breakdown

For the first six months of fiscal year 2025, revenue was categorized as follows:

Geographic Revenue Distribution

Revenue distribution by geographic region for the first six months of fiscal year 2025:

Customer Concentration

Cirrus Logic's customer concentration highlights the reliance on major clients:

• Apple Inc. represented approximately 89% of total net sales for the first six months of fiscal year 2025.
• The company’s ten largest customers accounted for 96% of net sales during the same period.

Cash Flow and Capital Structure

Cirrus Logic's cash flow and capital structure as of September 28, 2024:

Research and Development Focus

Research and development expenses reflect Cirrus Logic's commitment to innovation:

• Total R&D expense for the first six months of fiscal year 2025 was $218.3 million.
• R&D represents approximately 24% of total revenue for the same period.

Tax Information

Provision for income taxes for the first six months of fiscal year 2025:

How Cirrus Logic, Inc. (CRUS) Works

Overview of Operations

Cirrus Logic, Inc. (CRUS) specializes in high-precision analog and digital signal processing components for a variety of audio and mixed-signal applications. The company primarily serves the consumer electronics market, with a significant focus on audio products.

Financial Performance

As of the second quarter of fiscal year 2025, Cirrus Logic reported net sales of $541.9 million, compared to $481.1 million in the same period of the previous year, marking a 13% increase. For the first six months of fiscal year 2025, net sales totaled $915.9 million, indicating a 15% increase from $798.1 million in the first half of fiscal year 2024.

Revenue Breakdown

The revenue generated from audio products in Q2 FY 2025 was $316.6 million, while High-Performance Mixed-Signal (HPMS) products contributed $225.3 million. The geographic distribution of sales shows a strong presence in China, accounting for approximately 60% of total sales.

Cost Structure

Cirrus Logic's cost of sales for Q2 FY 2025 was $259.3 million, resulting in a gross margin of 52.2%, an increase from 51.3% in Q2 FY 2024. Operating expenses totaled $150.7 million, comprised of research and development costs of $112.9 million and selling, general, and administrative expenses of $37.8 million.

Liquidity and Capital Resources

As of September 28, 2024, Cirrus Logic had cash and cash equivalents totaling $445.8 million. The company maintains a $300 million revolving credit facility, which was undrawn as of the latest reporting date.

Stockholder Activities

The company has been active in stock repurchases, with $91.0 million spent on buybacks during the first six months of fiscal year 2025. As of September 28, 2024, approximately $224.1 million remained available under the stock repurchase authorization.

Research and Development

Research and development expenses for Q2 FY 2025 were $112.9 million, reflecting an increase due to higher employee-related costs and product development expenses. The total R&D expense for the first six months was $218.3 million.

Taxation

The provision for income taxes for Q2 FY 2025 was $37.9 million, with an effective tax rate of 27.0%. For the first six months, the tax provision totaled $52.4 million, yielding an effective rate of 26.6%.

Conclusion

Cirrus Logic, Inc. continues to demonstrate strong financial performance, driven by increased demand in audio and mixed-signal product lines, solid cost management, and strategic stock repurchase initiatives.

How Cirrus Logic, Inc. (CRUS) Makes Money

Revenue Streams

Cirrus Logic, Inc. generates revenue primarily through two product lines: Audio Products and High-Performance Mixed-Signal (HPMS) Products. For the first six months of fiscal year 2025, total net sales reached $915.9 million, a 15% increase from $798.1 million in the first half of fiscal year 2024.

Key Customers and Market Dependency

Cirrus Logic relies heavily on a limited number of customers. Apple Inc. accounted for approximately 90% of total net sales during the second quarter of fiscal year 2025. The company's ten largest customers represented around 97% of net sales for the same period.

Geographic Sales Distribution

The majority of Cirrus Logic's sales are international. For the second quarter of fiscal year 2025, the geographic breakdown of net sales was as follows:

Gross Margin and Operating Expenses

Cirrus Logic's gross margin for the second quarter of fiscal year 2025 was 52.2%, an improvement from 51.3% in the same quarter of the previous year. This increase was attributed to a favorable product mix, despite higher supply chain costs.

Operating expenses for the second quarter of fiscal year 2025 were broken down as follows:

Net Income and Earnings Per Share

For the second quarter of fiscal year 2025, Cirrus Logic reported a net income of $102,140 thousand, compared to $75,407 thousand in the same period of fiscal year 2024. Basic earnings per share for this quarter were $1.92, up from $1.38 the previous year.

Cash Flows and Financing Activities

Cirrus Logic's cash flows from operating activities for the first six months of fiscal year 2025 amounted to $95,392 thousand, compared to a cash outflow of $62,544 thousand for the same period in fiscal year 2024. Cash used in financing activities during this period totaled $80,356 thousand, primarily related to stock repurchases of $91,000 thousand.

Research and Development Investments

Research and development expenses for the second quarter of fiscal year 2025 were $112,925 thousand, an increase from $104,205 thousand in the previous year. This increase reflects higher variable compensation and product development costs.

Updated on 16 Nov 2024

Resources:

1. Cirrus Logic, Inc. (CRUS) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of Cirrus Logic, Inc. (CRUS)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Cirrus Logic, Inc. (CRUS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.