Table of security-related products, such as user authentication solutions, may make us a particularly attractive target of cyber-attacks. Sophisticated individuals or entities acting maliciously may attempt to penetrate our networks in an effort to undermine or disclose information related to the design and security of our user authentication products. Any failure to prevent or mitigate security breaches and improper access to the algorithms, techniques, or authentication keys used in our user authentication solution could harm our business reputation, diminish our competitive position in that market, and expose us to significant expense and liability associated with a customer's implementation of our solution.Contents

The costs to us to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful and could result in interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions.

Any breach of our security measures or the ~~accidental~~ loss, inadvertent disclosure, or unapproved dissemination of proprietary information or sensitive or confidential data about us, our customers, our suppliers or our ~~customers,~~employees, including the potential loss or disclosure of such information or data, ~~as a result of fraud, trickery or other forms of deception,~~ could result in numerous risks and adverse consequences. Such consequences include remediation costs, litigation and potential liability for us, including as a result of U.S. or foreign governmental investigations or enforcement actions, penalties for violation of applicable laws or regulations, including laws and regulations in the United States and other jurisdictions relating to the collection, use and security of user and other personally identifiable information and data, damage to our brand and reputation, the loss of sales and customer or ~~otherwise~~supplier relationships, negative impacts to our employee recruiting and retention, loss of intellectual property protection, risk of inadequate insurance coverage and increased insurance premiums, and numerous other financial, legal and business risks, any or all of which could harm our business, financial condition and results of operations and result in significant stock price volatility. 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 face risks related to global health epidemics that could impact our sales, supply chain and operations, resulting in significantly reduced revenue and operating results.

On March 11, 2020, the World Health Organization declared a pandemic related to a novel coronavirus ("COVID-19"). With the pandemic on-going, we are unable to predict the full extent and nature of the impact that COVID-19 may have on our business, financial condition, and results of operations. The COVID-19 pandemic will likely heighten or exacerbate many of the other risks described in the risk factors listed in our filings with the Securities and Exchange Commission.

Any increase in the severity of the outbreak or additional government measures restricting movement or business operations due to COVID-19, could cause a disruption to our supply of products to our customers – particularly with respect to the manufacture of semiconductor wafers that would have to go through extensive qualification to relocate manufacturing to a different fabrication facility. Although the U.S. and U.K. governments have eased restrictions and adopted plans for “living with COVID”, the Chinese government’s zero-COVID strategy has continued to result in business disruptions. Even if our suppliers and service providers are operational, other third-party suppliers may be closed or not fully operational, resulting in a shortage of some components needed for our products or our customers’ end products. Any disruption of our suppliers or customers and their contract manufacturers would likely impact our inventory, backlog, sales, and operating results, as customers may cancel or reschedule orders on short notice. In addition, we have seen some reductions in commercial airline and cargo flights, and disruption to ports and other shipping infrastructure that resulted in increased transport times and costs, which, if those disruptions were to intensify, could affect our ability to timely deliver our products.

Although we did not experience a significant reduction in our overall productivity due to COVID-19 in fiscal year 2022, we have experienced, and expect to continue to experience, disruptions to our business operations, including those resulting from remote work arrangements, the implementation of certain measures at our facilities worldwide to protect our employees’ health and safety, government stay-at-home directives, quarantines, self-isolations, travel restrictions, or other restrictions on the ability of our employees to perform their jobs that may impact our ability to develop and design our products in a timely manner, meet required milestones, or win new business. Any increased or additional disruptions to our business operations would likely impact our ability to continue to maintain current levels of productivity.

In the longer term, the COVID-19 pandemic may continue to adversely affect the economies and financial markets of many countries, which could lead to a global economic downturn or recession. If this were to occur, it may adversely affect demand for our and our customers' products, which may negatively affect our revenue and operating results.

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.

The products we supply our customers are typically a portion of the many components provided from multiple suppliers to complete the final assembly of an end product. If other component suppliers are unable to deliver their required component(s) for the final end product to be assembled, our customers may delay, or ultimately cancel, their orders from us.

If we fail to attract, hire, and retain qualified personnel, we may not be able to develop, market, or sell our products or successfully manage our business.

Competition for highly qualified personnel in our industry, particularly for employees with technical backgrounds, is intense. The number of technology companies in the geographic areas in which we operate is greater than it has been historically. In addition, some companies in our industry have announced plans to adopt flexible remote work arrangements that further increase competition for talent. Accordingly, we expect competition for qualified personnel to intensify because there are only a limited number of individuals in the job market with the skills that we require.

There also is a risk that changes in immigration laws and regulations, or their administration or enforcement, can impair our ability to attract and retain qualified engineering personnel. In the U.S., where a significant portion of our research and

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development teams are located, tightening of immigration controls may adversely affect the employment status of non-U.S. engineers and other key technical employees or further impact our ability to hire new non-U.S. employees. Moreover, certain immigration policies in the U.S. may make it more difficult for us to recruit and retain highly skilled foreign national graduates of universities in the U.S., additionally limiting the pool of available talent. In the U.K., where we maintain several design centers, changes to the immigration system brought about by Brexit will likely make it more difficult to employ E.U. nationals to work in the U.K., also limiting our ability to attract and retain qualified technical personnel.

There are significant costs to the Company associated with attracting and retaining qualified personnel in key technology positions. Recruiting and employee costs, such as cash and stock-based compensation, have increased relative to historic levels and may continue to increase, which could adversely affect our results of operations. 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.

Strong competition in the semiconductor market may harm our business.

Our industry is intensely competitive and is frequently characterized by rapid technological change, price erosion, technological obsolescence, and a push towards IC component integration. Because of shortened product life cycles and even shorter design-in cycles in a number of the markets that we serve, our competitors have increasingly frequent opportunities to achieve design wins in next-generation systems. As markets mature and components become 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.

We compete in a number of markets. Our principal competitors in these markets include AKM Semiconductor Inc., Analog Devices Inc., Goodix Technology, Qualcomm Incorporated, Realtek Semiconductor Corporation, Renesas Electronics Corporation, Richtek Technology, Shanghai Awinic Technology Co., Ltd., Skyworks Solutions Inc., Southchip Semiconductor Technology (China), ST Microelectronics N.V., Synaptics Incorporated and Texas Instruments, Inc. Many of these competitors have greater financial, engineering, manufacturing, marketing, technical, distribution, and other resources; broader product lines; and broader intellectual property portfolios. We also expect intensified competition from emerging companies and from customers who develop their own IC products or other technologies. In addition, some of our current and future competitors maintain their own fabrication facilities, which could benefit them in connection with cost, capacity, and technical issues.

We cannot provide assurances that we will be able to compete successfully in the future or that competitive pressures will not adversely affect our financial condition and results of operations. Competitive pressures could reduce market acceptance of our products, reduce selling prices, and increase expenses, which could adversely affect our business and financial condition.

Because we depend on subcontractors internationally to perform key manufacturing functions for us, we are subject to political, economic, climate and natural disaster risks that could disrupt the fabrication, assembly, packaging, or testing of our products.

Although we seek to reduce our dependence on any one subcontractor, the substantial majority of our semiconductor wafers are manufactured by TSMC at fabs in Taiwan, and GlobalFoundries in Singapore and Germany. This concentration of subcontractors and manufacturing operations, subjects us to the risks of conducting business internationally, including associated political and economic conditions. If we experience manufacturing problems at a particular location, or a supplier is unable to continue operating due to financial difficulties, natural disasters, political or economic turmoil or conflict, or other reasons, we would be required to transfer manufacturing to a backup supplier. Transferring from a primary supplier to another facility would likely result in increased production costs and a delay in production. Further, such a transition may not be possible, particularly in a supply constrained environment. There are only a few foundries that are currently available for certain advanced processing technologies that we utilize or may utilize. 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. Any deterioration in the social, political, or economic conditions in Taiwan may disrupt our business operations and materially and adversely affect our results of

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operations. Similarly, our operations also could be harmed, and our costs could increase, if Russia’s invasion of Ukraine results in a shortage of materials that our suppliers require to manufacture our products.

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.

In general, we rely on customers issuing purchase orders to buy our products rather than long-term supply contracts. Customers may cancel or reschedule orders on short notice without incurring significant penalties. This risk is potentially heightened for those customers with whom we have less experience regarding the reliability of their forecasts. While the industry is experiencing manufacturing capacity constraints, it is also possible that some customers may place orders for our products that exceed their actual demand and may cancel all or portions of their order if circumstances change. Cancellations, reductions, or delays of orders from any significant customer could have an adverse effect on our business, financial condition, and results of operations.

Because our expense levels are based in part on our expectations as to future revenue and 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.

We are subject to risks relating to product concentration.

We derive a substantial portion of our revenues from a limited number of products, and we expect these products to represent a large percentage of our revenues in the near term. Customer acceptance of these products is critical to our future success. 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; and

▪the failure of our new products to achieve market acceptance.

We have significant international sales, and risks associated with these sales could harm our operating results.

International sales represented ~~99 percent of our net sales in fiscal year 2020, and~~ 98 percent of our net sales in each of fiscal years ~~2019~~2022 and ~~2018.~~2021, and 99 percent of our net sales in fiscal year 2020. We expect international sales to continue to represent a significant portion of product sales. This reliance on international sales subjects us to ~~the~~certain risks, ~~of conducting business internationally,~~ including risks associated with political and economic instability, global health conditions, currency controls, exchange rate fluctuations, ~~and~~ changes in import/export regulations, and tariff and freight rates. For example, the political or economic instability in a given region may have an adverse impact on the financial position of end users in the region, which could affect future orders and harm our results of 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;~~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;

▪tariffs and other barriers and restrictions, particularly in China;

▪competition with non-U.S. companies or other domestic companies entering ~~the~~ non-U.S. markets in which we operate;

▪longer sales and payment cycles;

▪~~problems in collecting accounts receivable;~~

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▪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 China, where we have significant ~~operations; and~~

▪~~the burdens of complying with a variety of non-U.S. laws.~~operations.

In addition, our competitive position may be affected by the exchange rate of the U.S. dollar against other currencies. While our sales are predominately denominated in U.S. dollars, increases in the value of the dollar would increase the price in local currencies of our products in non-U.S. markets and make our products relatively more expensive. We cannot provide assurances that regulatory, political, and other factors will not adversely affect our operations in the future or require us to modify our current business practices.

~~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, 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. Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation, including in the U.S. and the United Kingdom. We are also subject to the examination of our tax returns and other tax matters by the Internal Revenue Service of the United States (the “IRS”) and other tax authorities and governmental bodies. We regularly assess the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of our provision for taxes. There can be no assurance as to the outcome of these examinations. 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.

Significant judgment is required in the calculation of our tax provision and the resulting tax liabilities. Our estimates of future taxable income and the regional mix of this income can change as new information becomes available. Any such changes in our estimates or assumptions can significantly impact our tax provision in a given period.

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. 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;~~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;~~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;~~regions, including wars;

▪international currency controls and exchange rate fluctuations;

▪financial accounting and reporting burdens and complexities;

▪vulnerability to terrorist groups targeting ~~American~~U.S. interests abroad; ~~and~~

▪legal uncertainty regarding liability and compliance with non-U.S. laws and regulatory ~~requirements.~~requirements; and

▪changing U.S. regulation of foreign operations, including potential sanctions.

If we are unable to successfully manage the demands of our international operations, it may have ~~a material~~an adverse effect on our business, financial condition, or results of operations.

~~On June 23, 2016,~~

We may acquire other companies or technologies, which may create additional risks associated with our ability to successfully integrate them into our business.

We recently acquired Lion Semiconductor and continue to consider future acquisitions of other companies, or their technologies or products, to improve our market position, broaden our technological capabilities, and expand our product offerings. If we are able to acquire companies, products or technologies that would enhance our business, we could experience difficulties in integrating them. Integrating acquired businesses involves a number of risks, including, but not limited to:

▪the ~~United Kingdom (U.K.) held a referendum~~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 ~~voters approved an exit from the European Union (the “E.U.”), commonly referred to~~we have little experience; and

▪acquired intangible assets, including goodwill, becoming impaired as ~~“Brexit.” Following the referendum~~a result ~~the British government invoked Article 50~~of technological advancements or worse-than-expected performance of the ~~Lisbon Treaty on March 29, 2017, and the U.K. formally left the E.U. on 31 January 2020. The E.U. and the U.K. have until 31 December 2020, the end~~acquired business.

If we are unable to successfully address any of ~~a “transition period,” to negotiate an agreement on the terms of the U.K.’s withdrawal, i.e., the U.K.'s future relationship with the E.U. It is still unknown what those terms will~~these risks, our business could be however, it is recognized that there will be greater restrictions on immigration between the U.K. and E.U. countries that make it more difficult to staff our U.K. operations, changes in tax laws that negatively impact our effective tax rate, restrictions on imports and exports between the U.K. and E.U. member states, and increased regulatory complexities. It remains possible that there could still be a “no deal” outcome, whereby the U.K. exits the transition period without an agreement related to the withdrawal from the E.U., or that the transition period is extended beyond 31 December 2020. These changes may adversely affect our operations and financial results.harmed.

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Because we depend on subcontractors internationally to perform key manufacturing functions for us, we are subject to political, economic, and natural disaster risks that could disrupt the fabrication, assembly, packaging, or testing of our products.

We depend on third-party subcontractors, primarily in Asia, for the fabrication, assembly, packaging, and testing of most of our products. International operations may be subject to a variety of risks, including political instability, global health conditions, currency controls, exchange rate fluctuations, changes in import/export regulations, tariff and freight rates, as well as the risks of natural disasters such as earthquakes, tsunamis, and floods. Although we seek to reduce our dependence on any one subcontractor, this concentration of subcontractors and manufacturing operations in Asia subjects us to the risks of conducting business internationally, including associated political and economic conditions. If we experience manufacturing problems at a particular location, or a supplier is unable to continue operating due to financial difficulties, natural disasters, or other reasons, we would be required to transfer manufacturing to a backup supplier. The substantial majority of our semiconductor wafers are manufactured by TSMC at fabs in Taiwan, and Global Foundries in Singapore and Germany. Converting or transferring manufacturing from a primary supplier to a backup facility could be expensive and time consuming. 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.

Our products may be subject to average selling prices that decline over time. If we are unable to maintain average selling prices for existing products, increase our volumes, introduce new or enhanced products with higher selling prices, or reduce our costs, our business and operating results could be harmed.

Historically in the semiconductor industry, average selling prices of products have decreased over time. Moreover, our dependence on a limited number of key customers may make it easier for key customers to pressure us to reduce ~~the prices of the products we sell to them.~~prices. If the average selling price of any of our products declines and we are unable to increase our unit volumes, introduce new or enhanced products with higher margins, and/or reduce manufacturing costs to offset anticipated decreases in the prices of our existing products, our operating results may be adversely affected. In addition, because of procurement lead times, we are limited in our ability to reduce total costs quickly in response to any reductions in prices or sales shortfalls. Because of these factors, we may experience material adverse fluctuations in our future operating results on a quarterly or annual basis.

~~As we carry only limited insurance coverage, uninsured or under-insured losses~~

Strategic and Industry Risks

We have entered into joint development agreements, custom product arrangements, and strategic relationships with some of our largest customers. These arrangements subject us to a number of risks, and any failure to execute on any of these arrangements could ~~adversely affect~~have a material adverse effect on our ~~financial condition and~~business, results of ~~operations.~~operations, and financial condition.

~~Our insurance policies may not be adequate to fully offset losses from covered incidents,~~We have entered into joint development, product collaboration and technology licensing arrangements with some of our largest customers, and we ~~do not have coverage~~expect to enter into new strategic arrangements of these kinds from time to time in the future. Such arrangements can magnify several risks for ~~certain losses. For example, there is limited coverage available~~us, including loss of control over the development and development timeline of jointly developed products, risks associated with ~~respect~~the ownership of the intellectual property developed pursuant to ~~the services provided by our third-party foundries~~such arrangements, and ~~assembly and test subcontractors. Although we believe~~increased risk that our existing insurance coverage is consistent with common practices of companies in our industry, our insurance coverage may be inadequate to protect us against product recalls, natural disasters, cybersecurity attacks, and other unforeseen catastrophes that could adversely affect our financial condition and results of operations.

~~Shifts in industry-wide capacity and our practice of ordering and purchasing our products based on sales forecasts~~joint development activities may result in ~~significant fluctuations~~products that are not commercially successful or that are not available in ~~inventory and our quarterly and annual operating results.~~

We rely on independent foundries and assembly and test houses to manufacture our products. Our reliance on these third- party suppliers involves certain risks and uncertainties. For example, 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.a timely fashion. In addition, any third party with whom we enter into a joint development, product collaboration, or technology licensing arrangement may fail to commit sufficient resources to the project, change its policies or priorities, or abandon or fail to perform its obligations related to such arrangement. We have previously and may in the future enter into customer product arrangements that provide for exclusivity periods during which we may ~~order wafers~~only sell specified products or technologies to that particular customer. Any failure to timely develop commercially successful products through our joint development activities as a result of any of these 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 isother challenges could have a risk that we will forecast inaccurately and produce excess inventories of particular products. In addition, if we experience supply constraints or manufacturing problems at a particular supplier, we could be required to switch suppliers or qualify additional suppliers. The substantial majority of our semiconductor wafers are manufactured at a limited number of fabrication facilities and, for a given product, the wafers are typically sourced at a single facility. Switching and/or qualifying additional suppliers could be an expensive process and take as long as six to twelve months to complete, which could result in material adverse ~~fluctuations~~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.

~~We generally order~~Our success depends upon our ability to develop new products ~~through non-cancelable purchase orders from third-party foundries based~~for new and existing customers, and to introduce these products in a timely and cost-effective manner. The development of new products involves significant investment and is highly complex. From time-to-time, we have experienced delays in developing and introducing these new products. Successful product development and introduction depend on our sales forecasts, and our customers can generally cancel or reschedule orders they place with us without significant penalties. If we do not receive orders as anticipated by our forecasts, or our customers cancel orders that are placed, we may experience increased inventory levels.

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~~surpluses of certain products. 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 in future periods.~~

~~Our quarterly and annual operating results are affected by a wide variety~~number of factors that could materially and adversely affect our net sales, gross margin, and operating results. If our operating results fall below expectations of market analysts or investors, the market price of our common stock could decrease significantly. 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.

~~Factors that could cause fluctuations and materially and adversely affect our net sales, gross margin and/or operating results include,~~including, but ~~are~~ not limited to:

▪~~the volume and timing of orders received;~~proper new product definition;

▪~~changes in the mix~~timely completion of design and testing of new products;

▪assisting our customers with integration of our components into their new products, ~~sold;~~including providing support from the concept stage through design, launch and production ramp;

▪successfully developing and implementing software necessary to integrate our products into our customers’ products;

▪achievement of acceptable manufacturing yields;

▪availability of wafer fabrication, assembly, and test capacity; and

▪market acceptance of our products and the products of our ~~customers;~~customers.

Both sales and/or margins may be materially affected if new product introductions are delayed, or if our products are not designed into successive generations of new or existing customers’ products. Our failure to develop and introduce new products successfully could harm our business and operating results.

In addition, difficulties associated with adapting our technology and product design to the proprietary process technology and design rules of outside foundries can lead to reduced yields of our products. 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, 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. 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.

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We continue to invest in research and development efforts for several new markets. If we are unable to commercialize these technologies, our future results and profits could be negatively affected.

Our investments into new markets subjects us to additional risks. We may have limited or no experience in these markets, and our customers may not adopt our new offerings. These new offerings may present new and difficult challenges, including risks related to technology, customers, competitors, product cycles, customer demand, terms and conditions and other industry specific issues which could negatively affect our operating results. These developing products and market segments may not grow as significantly 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.

Our products are increasingly complex and could contain defects, which could result in material costs to us.

Product development in the markets we serve is becoming more focused on the integration of multiple functions on individual devices. There is a general trend towards increasingly complex products, including software or firmware developed by us and/or third parties. The greater integration of functions and complexity of operations of our products increases the risk that we or our customers or end users could discover latent defects or subtle faults after volumes of product have been shipped. Quality and reliability issues could result in material costs and other adverse consequences to us, including, but not limited to:

▪reduced margins;

▪~~excess or obsolete inventory;~~damage to our reputation;

▪~~pricing pressures from competitors~~replacement costs for product warranty and ~~key customers;~~support;

▪payments to our ~~ability~~customers related to ~~introduce new products on~~recall claims, or the delivery of product replacements as part of a ~~timely basis;~~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 ~~timing and extent~~occurrence of ~~our research and development expenses;~~significant defects;

▪~~the~~a delay in recognition or loss of revenues, loss of market share, or failure to ~~anticipate changing customer product requirements;~~achieve market acceptance;

▪~~disruption in~~writing off or reserving the ~~supply~~value of ~~wafers, assembly, or test services;~~

▪~~reduction~~inventory of ~~manufacturing yields;~~

▪~~certain production and other risks associated with using independent manufacturers, assembly houses, and testers;~~such products; and

▪a diversion of the attention of our engineering personnel from our product ~~obsolescence, price erosion,~~development efforts.

In addition, any defects or other problems with our products could result in financial losses or other damages to our customers who could seek damages from us for their losses. A product liability or warranty claim brought against us, even if unsuccessful, would likely be time consuming and costly to defend. In particular, the sale of systems and components that are incorporated into certain applications for the automotive industry involves a high degree of risk that such claims may be made.

While we believe that we are reasonably insured against some of these risks and that we have attempted to contractually limit our financial exposure with many of our customers, a warranty or product liability claim against us in excess of our available insurance coverage and established reserves, or a requirement that we participate in a customer product recall, could have material adverse effects on our business, results of operations, and financial condition.

We may experience difficulties developing and transitioning to advanced manufacturing process technologies, which could materially adversely affect our results.

Our future success depends in part on our ability to expand our manufacturing capacity and transition our current development and production efforts to advanced manufacturing process technologies. We are currently making a significant investment to transition our products and intellectual property to next-generation circuit geometries, for example, 22 nanometers. If we are unable to reliably model behaviors required for circuit design and product requirements, then our product development may be adversely impacted. To the extent that we do not timely develop additional capacity or transition to smaller geometries, experience difficulties in shifting to smaller geometries, or have significant quality or reliability issues, our results could be materially adversely affected. Further, if there are delays from such development or transition, we may have insufficient capacity to meet customer demand, which may impact our future operating results.

Security vulnerabilities may exist in our products, which could expose us to significant costs and damage our business.

Our hardware and software products, including software tools deployed by our customers, may be vulnerable to cyber-attacks. An attack could disrupt the proper functioning of our products, disrupt or cause errors in our customers' products, allow unauthorized access to our or our customers' proprietary information, or cause other destructive outcomes. A failure to prevent or mitigate such an attack could harm our business reputation, diminish our competitive ~~developments,~~position in the market, and expose us to significant expense and liability.

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The costs to eliminate or alleviate cyber or other ~~competitive factors.~~security problems, bugs, viruses, worms, phishing attempts, ransomware, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not succeed and could result in interruptions, delays, an inability to access information, cessation of service and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions.

We frequently develop our products for the specific system architecture of our customers’ end products. If our customers were to change system architectures, develop competing technologies and integrated circuits, incorporate some of the functionality of our products into other parts of the system, or eliminate certain functionality that our products provide in their future end products, we risk the potential loss of revenue and reduced average selling prices.

Our customers, particularly in the portable market, could potentially transition to different audio and system architectures, develop their own competing technologies and integrated circuits, integrate the functionality that our integrated circuits and software have historically provided into other components in their systems, or eliminate certain functionality that our products provide in their future end products. For example, some of the audio and voice functionality that we have historically provided in smartphones could be performed outside of our customers’ end product. If our customers were to transition to these different system architectures or to eliminate certain functionality in their future end products, our results of operations could be adversely affected, resulting in reduced average selling prices for our components and loss of revenue.

We may be unable to protect our intellectual property rights.

Our success depends in part on our ability to obtain patents and to preserve our other intellectual property rights covering our products. We seek patent protection for those inventions and technologies for which we believe such protection is suitable and is likely to provide a competitive advantage to us. 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. We cannot provide assurances that steps taken by us to protect our intellectual property will be adequate, that our competitors will not independently develop or design around our patents, or that our intellectual property will not be misappropriated. In addition, the laws of some non-U.S. countries may not protect our intellectual property as well as the laws of the United States.

Any of these events could materially and adversely affect our business, operating results, or financial condition. Policing infringement of our technology is difficult, and litigation may be necessary in the future to enforce our intellectual property rights. Any such litigation could be expensive, take significant time, and divert management’s attention.

Financial Risks

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 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 regularly assess the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of our provision for taxes. There can be no assurance as to the outcome of these examinations. 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.

The Company's fiscal year 2017, 2018, and 2019 federal income tax returns are under examination by the IRS. The IRS has proposed adjustments that would increase U.S. taxable income related to transfer pricing matters with respect to our U.S. and U.K. affiliated companies and on May 17, 2022, the IRS issued a Revenue Agent’s Report asserting additional tax of approximately $170.5 million, plus interest and imposing penalties of approximately $63.7 million. We do not agree with the IRS's positions and we intend to vigorously dispute the proposed adjustments. We intend to pursue resolution through the administrative process with the IRS Independent Office of Appeals and, if necessary, through judicial remedies. We expect it could take a number of years to reach resolution on these matters. Although the final resolution of these matters is uncertain,

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the Company believes adequate amounts have been reserved for any adjustments to the provision for income taxes that may ultimately result. 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.

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. 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. In addition, if we experience supply constraints or manufacturing problems at a particular supplier, we may seek to switch suppliers or qualify additional suppliers. Other suppliers may not be available at the time we seek to switch or qualify additional suppliers. Even if additional capacity is available elsewhere, the switching and/or qualifying of additional suppliers could be an expensive process and could take as long as six to twelve months to complete, which could result in material adverse fluctuations to our operating results.

Due to the product manufacturing cycle characteristic of IC manufacturing and the inherent imprecision in the accuracy of our customers’ forecasts, product inventories may not always correspond to product demand, leading to shortages or surpluses of certain products. 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.

Our quarterly and annual operating results are affected by a wide variety of factors that could materially and adversely affect our net sales, gross margin, and operating results. If our operating results fall below expectations of market analysts or investors, the market price of our common stock could decrease significantly. 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.

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;

▪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.

Our stock price has been and is likely to continue to be volatile.

The market price of our common stock fluctuates significantly. This fluctuation has been or may be the result of numerous factors, including, but not limited to:

▪actual or anticipated fluctuations in our operating results;

▪announcements concerning our business or those of our competitors, customers, or suppliers;

▪loss of a significant customer, or customers;

▪changes in financial estimates by securities analysts or our failure to perform as anticipated by the analysts;

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▪news, commentary, and rumors emanating from the media relating to our customers, the industry, or us. 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.

Our foreign currency exposures may change over time as the level of activity in foreign markets grows and could have an adverse impact upon financial results.

As a global enterprise, we face exposure to adverse movements in foreign currency exchange rates. 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.

If the value of the U.S. dollar weakens relative to these specific currencies, the cost of doing business in terms of U.S. dollars rises. With the growth of our international business, our foreign currency exposures may grow and under certain circumstances, could harm our business.

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.

On July 8, 2021, the Company entered into a second amended and restated credit agreement (the “Second Amended Credit Agreement”) which 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”). As of March 26, 2022, the Company did not have an outstanding balance under the Revolving Credit Facility. To the extent the Company has an outstanding balance, our ability to repay the principal of, to pay interest on or to refinance our indebtedness, depends on our future performance, which is subject to economic, financial, competitive, regulatory, and other factors, some of which are beyond our control. Our business may not generate cash flow from operations in the future sufficient to satisfy our obligations or to make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, or refinancing or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance any indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on the Second Amended Credit Agreement.

Our Second Amended Credit Agreement contains restrictions that could limit our flexibility in operating our business.

Our Second Amended Credit Agreement contains various covenants that could limit our ability to engage in specified types of transactions under certain conditions. 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.

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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. 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.

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.

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. Any changes regarding such regulations or U.S. trade policy more generally, including potential adoption and expansion of trade restrictions or export controls, particularly with respect to China, may impact overall customer demand for our products or affect our ability to manufacture and/or sell our products overseas. Additionally, in response to Russia’s invasion of Ukraine, the U.S. government has imposed numerous export controls and sanctions related to Russia.

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 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.

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. 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. We cannot provide assurances that rights granted under our patents will provide competitive advantages to us, or that any of our pending or future patent applications will be issued with the scope of the claims sought by us, if at all.

As is typical in the IC industry, our customers and we have, from time to time, received and may in the future receive, communications from third parties asserting patents, mask work rights, or copyrights. In the event third parties were to make a valid intellectual property claim and a license was not available on commercially reasonable terms, our operating results could be harmed. Litigation, which could result in substantial cost to us and diversion of our management, technical and financial resources, may also be necessary to defend us against claimed infringement of the rights of others. An unfavorable outcome in any such litigation could have an adverse effect on our future operations and/or liquidity.

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~~If we fail to attract, hire and retain qualified personnel, we may not be able to develop, market, or sell our products or successfully manage our business.~~

Competition for highly qualified personnel in our industry is intense. The number of technology companies in the geographic areas in which we operate is greater than it has been historically and we expect competition for qualified personnel to intensify. There are only a limited number of individuals in the job market with the requisite skills. Furthermore, changes in immigration laws and regulations, or the administration or enforcement of such laws or regulations, can also impair our ability to attract and retain qualified personnel. Anticipated changes to the immigration system in the U.K. brought about by Brexit will make it harder to employ E.U. nationals to work in the U.K. Our Human Resources organization focuses significant efforts on attracting and retaining individuals in key technology positions. 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 enhance existing products in a timely manner, sell products to our customers, or manage our business effectively.

~~We may acquire other companies or technologies, which may create additional risks associated with our ability to successfully integrate them into our business.~~

We continue to consider future acquisitions of other companies, or their technologies or products, to improve our market position, broaden our technological capabilities, and expand our product offerings. If we are able to acquire companies, products or technologies that would enhance our business, we could experience difficulties in integrating them. Integrating acquired businesses 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.~~

~~If we are unable to successfully address any of these risks, our business could be harmed.~~

~~Our stock price has been and is likely to continue to be volatile.~~

~~The market price of our common stock fluctuates significantly. This fluctuation has been or may be the result of numerous factors, including, but not limited to:~~

▪~~actual or anticipated fluctuations in our operating results;~~

▪~~announcements concerning our business or those of our competitors, customers, or suppliers;~~

▪~~loss of a significant customer, or customers;~~

▪~~changes in financial estimates by securities analysts or our failure to perform as anticipated by the analysts;~~

▪~~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, among others, employment matters and intellectual property matters;~~

▪~~departure of key personnel;~~

▪~~a significant stockholder selling for any reason;~~

▪~~general conditions in the IC industry; and~~

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▪~~general market conditions and interest rates.~~

~~Our foreign currency exposures may change over time as the level of activity in foreign markets grows and could have an adverse impact upon financial 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.~~

~~Our debt obligations may be a burden on our future cash flows and cash resources.~~

On July 12, 2016, Cirrus Logic entered into an amended and restated credit agreement (the “Credit Agreement”) which provides for a $300 million senior secured revolving credit facility (the “Credit Facility”). As of March 28, 2020, the Company did not have an outstanding balance under the Credit Facility. The Credit Facility matures on July 12, 2021. To the extent the Company has an outstanding balance, our ability to repay the principal of, to pay interest on or to refinance our indebtedness, depends on our future performance, which is subject to economic, financial, competitive, regulatory and other factors, some of which are beyond our control. Our business may not generate cash flow from operations in the future sufficient to satisfy our obligations or to make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, or refinancing or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance any indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on the Credit Agreement.

~~Our Credit Agreement contains restrictions that could limit our flexibility in operating our business.~~

Our Credit Agreement contains various covenants that could limit our ability to engage in specified types of transactions under certain conditions. 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.~~

A breach of any of these covenants could result in a default under the Credit Agreement. In the event of a default under the Credit Agreement, the lenders could elect to declare all amounts 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. 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.

We have provisions in our Certificate of Incorporation and Bylaws, and are subject to certain provisions of Delaware law, which could prevent, delay, or impede a change of control of our company. These provisions could affect the market price of our stock.

Certain provisions of Delaware law and of our Certificate of Incorporation and Bylaws could make it more difficult for a third party to acquire us, even if our stockholders support the acquisition. 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.

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We are also subject to the anti-takeover laws of Delaware that may prevent, delay, or impede a third party from acquiring or merging with us, which may adversely affect the market price of our common stock.

Our Bylaws include a forum selection provision that could increase costs to bring a claim, discourage claims, or limit the ability of the Company’s stockholders to bring a claim in a judicial forum viewed by the stockholders as more favorable for disputes with the Company or the Company’s directors, officers, or other employees.

Our Bylaws provide, to the fullest extent permitted by law, that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware or, if the Court of Chancery does not have jurisdiction,

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a state court located within the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware, will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for certain legal actions between the Company and its stockholders. The 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. Alternatively, if a court were to find the forum selection provision contained in the Company’s Bylaws to be inapplicable or unenforceable in an action, the Company could incur additional costs associated with resolving such action in other jurisdictions.

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. Certain organizations currently, and other organizations may in the future, use such disclosures to evaluate companies regarding ESG activities and publish scores or ratings based upon ESG or “sustainability” metrics. Potential and current investors may use the Company’s ESG ratings to guide their investment strategies and may decrease or withdraw investment, or alternatively increase investment in our competitors, if our ESG performance is perceived to be lagging. The qualitative and quantitative criteria regarding ESG may continue to evolve and we may need to modify our practices and/or incur additional or unexpected costs to satisfy these expectations. We may communicate certain goals or initiatives regarding our ESG activities from time to time, including goals relating to our carbon footprint, and if we are unable to meet those goals or they are perceived to be inadequate, we could be exposed to reputational damage and other emerging areas of risk.

In addition, one or more of our customers have also requested, and other customers may in the future request, that we achieve certain carbon emission reductions. Such requests may require us to modify our supply chain practices, make capital investments to modify certain aspects of our operations or increase our operating costs. 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. If we do not meet these goals, we could incur adverse publicity and reaction or the loss of business from certain of our customers, which could adversely impact our reputation, and in turn adversely impact our results of operations.

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. With these additional regulations and disclosures, we may see our legal compliance, financial reporting and auditing costs increase along with the emergence of risks associated with the collection, data assurance, and disclosure related to such ESG information.

As we carry only limited insurance coverage, uninsured or under-insured losses could adversely affect our financial condition and results of operations.

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. Although we believe that our existing insurance coverage is consistent with common practices of companies in our industry, our insurance coverage may be inadequate to protect us against product recalls, natural disasters, cybersecurity and/or information security breaches, and other unforeseen catastrophes that could adversely affect our financial condition and results of operations.

We are subject to the risks of owning real property.

We currently own our U.S. headquarters and research facility in Austin, Texas. 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.

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ITEM 1B. Unresolved Staff Comments

None.

ITEM 2. Properties

As of March ~~28, 2020,~~26, 2022, 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. 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 ~~157,000~~281,000 square feet. This includes approximately ~~151,000~~275,000 square feet of leased space that houses a mixture of administrative personnel as well as research and development personnel.

~~In connection with our acquisition of Wolfson Microelectronics (“Wolfson~~”) on August 21, 2014, we acquired Wolfson’s corporate headquarters located in Edinburgh, Scotland, United Kingdom. This building consisted of approximately 50,000 square feet of office space. We sold this building in the fourth quarter of fiscal year 2019 and recorded a $4.9 million gain on the sale. This gain is presented as a separate line item in the Consolidated Statements of Income as “~~Gain on sale of assets”.~~Additionally, we lease approximately 110,000 square feet of office space and 27,000 square feet of high quality lab space in ~~Edinburgh.~~Edinburgh, Scotland, United Kingdom. See further details below in Results of Operation.

Below is a detailed schedule that identifies our principal locations of occupied leased and owned property as of March ~~28, 2020,~~26, 2022, with various contractual lease terms through calendar year ~~2028.~~2033. We believe that these facilities are suitable and adequate to meet our current operating needs.


Design Centers						Sales Support Offices – International
Austin, Texas						~~Hong Kong,~~Beijing, China
Mesa, Arizona						Shanghai, China
Salt Lake City, Utah						Shenzhen, China
~~Edinburgh, Scotland, United Kingdom~~San Francisco, California						Tokyo, Japan
~~Newbury, England,~~Edinburgh, Scotland, United Kingdom						Singapore
~~London,~~Newbury, England, United Kingdom						Seoul, South Korea
~~Madrid, Spain~~London, England, United Kingdom						Taipei, Taiwan

See Note 1411 — ~~Commitments and Contingencies~~Leases of the Notes to Consolidated Financial Statements contained in Item 8 for further detail.

ITEM 3. Legal Proceedings

From time to time, we are involved in legal proceedings concerning matters arising in connection with the conduct of our business activities. We regularly evaluate the status of legal proceedings in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss or additional loss may have been incurred and to determine if accruals are appropriate. We further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made.

Based on current knowledge, management does not believe that there are any pending matters that could potentially have a material adverse effect on our business, financial condition, results of operations or cash flows. However, we are engaged in various legal actions in the normal course of business. While there can be no assurances in light of the inherent uncertainties

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involved in any potential legal proceedings, some of which are beyond our control, an adverse outcome in any legal proceeding could be material to our results of operations or cash flows for any particular reporting period.

ITEM 4. Mine Safety Disclosures

Not applicable.

PART II

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 18, ~~2020,~~2022, there were approximately ~~390~~351 holders of record of our common stock.

The information under the caption “Equity Compensation Plan Information” in the proxy statement to be delivered to stockholders in connection with our Annual Meeting of Stockholders to be held on July ~~31, 2020~~29, 2022 (the “Proxy Statement”) is incorporated herein by reference.

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Dividend Policy

We have not paid any dividends on our capital stock. We do not anticipate declaring or paying in the foreseeable future any dividends on our capital stock. Any future determination to pay dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend upon our results of operations, financial condition, contractual restrictions, capital requirements, and other factors. 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.

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 ~~28, 2020~~26, 2022 (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, 2019 -
January 25, 2020 $ — $ — $ — $ —
January 26, 2020 -
February 22, 2020 255 78.43 255 149,981
February 23, 2020 -
March 28, 2020 428 70.06 428 120,001
Total $ 683 $ 73.18 683 $ 120,001


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 26, 2021 - January 22, 2022	—	$	—	—	$	267,514
January 23, 2022 - February 19, 2022	631	83.94		631	214,589
February 20, 2022 - March 26, 2022	261	84.56		261	192,514
Total	892	$	84.12	892	$	192,514

(1) The Company currently has one active share repurchase program: the $350 million share repurchase program authorized by the Board of Directors ~~authorized a share repurchase program of up to $200 million~~ in January ~~2019.~~2021. The Company repurchased ~~0.7~~0.9 million shares of its common stock for ~~$50.0~~$75.0 million during the fourth quarter of fiscal year ~~2020.~~2022. All of these shares were repurchased in the open market and were funded from existing cash. All shares of our common stock that were repurchased were retired as of March ~~28, 2020.~~26, 2022. The repurchases are to be funded from existing cash and intended to be effected from time to time in accordance with applicable securities laws through the open market or in privately negotiated transactions. The timing of the repurchases and the actual amount purchased depend on a variety of factors including general market and economic conditions and other corporate considerations. The ~~programs do~~program does not have an expiration date, dodoes not obligate the Company to repurchase any particular amount of common stock, and may be modified or suspended at any time at the Company's discretion.

2024

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Stock Price Performance Graph

The following graph and table show a comparison of the five-year cumulative total stockholder return, calculated on a dividend reinvestment basis, for Cirrus Logic, the Standard & Poor’s 500 Composite Index (the “S&P 500 Index”), and the Semiconductor Subgroup of the Standard & Poor’s Electronics Index (the “S&P 500 Semiconductors Index”).

3/28/2015 3/26/2016 3/25/2017 3/31/2018 3/30/2019 3/28/2020
Cirrus Logic, Inc. 100.00 103.54 180.41 122.05 126.37 186.00
S&P 500 Index 100.00 100.93 118.70 136.43 149.38 136.61
S&P 500 Semiconductors Index 100.00 100.74 139.11 192.13 201.41 210.86


	3/25/2017	3/31/2018	3/30/2019	3/28/2020	3/27/2021	3/26/2022
Cirrus Logic, Inc.	100.00	67.65	70.05	103.09	138.21	146.00
S&P 500 Index	100.00	114.93	125.85	115.08	183.07	212.22
S&P 500 Semiconductors Index	100.00	138.11	144.78	151.57	272.04	355.96

(1)The graph assumes that $100 was invested in our common stock and in each index at the market close on March ~~28, 2015,~~25, 2017, and that all dividends were reinvested. 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.

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 ~~Securities~~ Exchange ~~Act of 1934, as amended.~~Act.

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ITEM 6. ~~Selected Financial Data~~

~~The information contained below should be read along with~~ ~~Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8 – Financial Statements and Supplementary Data~~ ~~(amounts in thousands, except per share amounts).~~

Fiscal Years
2020 2019 2018 2017 2016
(1) (1) (1)
Net sales $ 1,281,124 $ 1,185,524 $ 1,532,186 $ 1,538,940 $ 1,169,251
Net income 159,498 89,991 161,995 261,209 123,630
Basic earnings per share $ 2.74 $ 1.50 $ 2.55 $ 4.12 $ 1.96
Diluted earnings per share $ 2.64 $ 1.46 $ 2.46 $ 3.92 $ 1.87
Financial position at year end:
Cash, cash equivalents, restricted investments and marketable securities $ 597,700 $ 445,323 $ 434,500 $ 450,979 $ 250,006
Total assets 1,592,677 1,352,640 1,430,117 1,413,470 1,181,883
Working capital 491,559 509,443 473,465 631,853 378,005
Long-term liabilities 204,261 96,860 128,180 117,703 194,276
Total stockholders’ equity $ 1,229,779 $ 1,140,240 $ 1,161,728 $ 1,151,692 $ 859,483

~~(1)~~Refer to the consolidated financial statements and the Notes thereto contained in Item 8 of this Form 10-K for fiscal years 2020, 2019, and 2018, for an expanded discussion of factors that materially affect the comparability of the information reflected in the selected consolidated financial data presented above.

[Reserved]

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Please read the following discussion in conjunction with our audited historical consolidated financial statements and notes thereto, which are included elsewhere in this Form 10-K. Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors. Actual results could differ materially because of the factors discussed in Part I, Item 1A. “Risk Factors” of this Form 10-K and elsewhere in this report, as well as in the documents ~~filed by us~~we file with the SEC, ~~specifically the most recent reports~~including our Quarterly Reports on ~~Forms~~Form 10-Q and ~~8-K, each as it may be amended from time to time.~~Current Reports on Form 8-K.

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Critical Accounting ~~Policies~~Estimates

Our discussion and analysis of the Company’s financial condition and results of operations are based upon the consolidated financial statements included in this report, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts. We evaluate the estimates on an on-going basis. We base these estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

~~We believe the following critical~~ Our accounting policies ~~involve significant judgments and estimates that~~ are ~~used~~more fully described in ~~the preparation of the consolidated financial statements:~~

▪We recognize revenue upon the transfer of promised goods or services to customers, in an amount that reflects the consideration the Company expects to be entitled in exchange for those goods or services. See Note 2 - Summary of Significant Accounting Policies - ~~Revenue Recognition~~ of the Notes to Consolidated Financial Statements contained in Item ~~8 for discussion on~~8.

The Company considers the ~~identification~~following accounting policies to involve the highest degree of judgment in the preparation of the ~~Company's performance obligations and determination of transaction price, including treatment of rebates, right of returns, warranties, price protection and stock rotation.~~consolidated financial statements:

Inventory Valuation

▪Inventories are ~~recorded~~stated at the lower of cost or net realizable value, with cost being determined on a first-in, first-out basis. ~~We write~~The Company writes down inventories to net realizable value based on forecasted customer unit demand while taking into account product release schedules and product life ~~cycles, which may drive management judgment. We~~cycles. The Company also ~~review~~reviews and ~~write~~writes down inventory, as appropriate, based on the age and condition of the inventory. Actual demand and market conditions may be different from those projected by management, which could have a material effect on our operating

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results and financial position. ~~See Note 2 — Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements contained in Item 8.~~

▪We evaluate the recoverability of property, plant, and equipment and intangible assets by testing for impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. An impairment loss is recognized in the event the carrying value of these assets exceeds the fair value of the applicable assets. Impairment evaluations involve management estimates of asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management, which could have a material effect on our operating results and financial position. See Note 2 - Summary of Significant Accounting Policies and Note 7 — Intangibles, net and Goodwill of the Notes to Consolidated Financial Statements contained in Item 8. See also Note 11 - Restructuring Costs for discussion of fiscal year 2020 asset disposals related to the MEMS restructuring.

▪The Company evaluates goodwill and other intangible assets. Goodwill is recorded at the time of an acquisition and is calculated as the difference between the total consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. The Company tests goodwill and other intangible assets for impairment on an annual basis or more frequently if the Company believes indicators of impairment exist. Impairment evaluations involve management’s assessment of qualitative factors to determine whether it is more likely than not that goodwill and other intangible assets are impaired. If management concludes from its assessment of qualitative factors that it is more likely than not that impairment exists, then a quantitative impairment test will be performed involving management estimates of asset useful lives and future cash flows. Significant management judgment is required in the forecasts of future operating results that are used in these evaluations. If our actual results, or the plans and estimates used in future impairment analyses, are lower than the original estimates used to assess the recoverability of these assets, we could incur additional impairment charges in a future period. The Company has recorded no goodwill impairments in fiscal years 2020, 2019, and 2018. There were no material intangible asset impairments in fiscal years 2019 and 2018. See Note 11 - Restructuring Costs for discussion of fiscal year 2020 impairments related to the MEMS restructuring.

▪~~We are subject to the possibility of loss contingencies for various legal matters. See Note 15 — Legal Matters of the Notes to Consolidated Financial Statements contained in Item 8~~. We regularly evaluate current information available to us to determine whether any accruals should be made based on the status of the case, the results of the discovery process and other factors. If we ultimately determine that an accrual should be made for a legal matter, this accrual could have a material effect on our operating results and financial position and the ultimate outcome may be materially different than our estimate.

▪We report income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the financial reporting basis and tax basis of assets and liabilities, which are measured using the enacted tax laws and tax rates that will be in effect when the differences are expected to reverse. We assess the likelihood that the deferred tax assets will be realized. A valuation allowance is established against deferred tax assets to the extent the Company believes that it is more likely than not that the deferred tax assets will not be realized, taking into consideration the level of historical taxable income and projections for future taxable income over the periods in which the temporary differences are deductible.Uncertain Tax Positions

The calculation of our tax liabilities involves assessing uncertainties with respect to the application of complex tax rules. Uncertain tax positions must meet a more likely than not threshold to be recognized in the financial statements and the tax benefits recognized are measured based on the largest benefit that has a greater than ~~50%~~50 percent likelihood of being realized upon final settlement. 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 1819 — Income Taxes of the Notes to Consolidated Financial Statements contained in Item 8 for additional details.

Accounting for Acquisitions

The Company accounts for business combinations using the acquisition method of accounting and allocates the fair value of acquisition consideration to the assets acquired and liabilities assumed based on their fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair value of the assets acquired and liabilities assumed is recorded as goodwill. The fair value of identifiable intangible assets was determined primarily using the income approach, which required the Company to project discounted future cash flows. The significant estimation uncertainty is primarily due to the sensitivity of the respective fair values to underlying assumptions about the future performance of the acquired business and the limited historical data and market data on which those assumptions are based. The Company's estimates are based upon assumptions believed to be reasonable, but are inherently uncertain and unpredictable. Incorrect estimates could result in future impairment charges, and those charges could be material to the results of operations. See Note 8 — Acquisition of the Notes to Consolidated Financial Statements contained in Item 8 for additional details.

Recently Adopted and Issued Accounting Pronouncements

~~In February 2016,~~

For a discussion of recently adopted and issued accounting pronouncements, refer to Note 2 of the ~~Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02,~~ ~~Leases~~, which the Company adopted in the first quarter of fiscal year 2020. The new standard provides a number of optional practical expedients in transition. We elected the use-of-hindsight practical expedient and the ‘package of practical expedients’ which permit us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs. The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. This means, for qualifying leases, which are those with terms of less than twelve months, we will not recognize right-of-use ("ROU") assets or lease liabilities. We also do not separate lease and non-lease components for all classes of assets. Most of our operating lease commitments were subjectNotes to the new standard and recognized as ROU assets and operating lease liabilities upon adoption, which materially increased the total assets and total liabilities that we reported relative to such amounts prior to adoption.

In applying the use-of-hindsight practical expedient, we re-assessed whether we were reasonably certain to exercise extension options within our lease agreements. This resulted in the lease term being extended on a number of leases. The

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previously capitalized initial direct costs and accrued lease payments were recalculated assuming these extended lease terms had always applied, resulting in an adjustment of $0.7 million net of tax, to opening retained earnings on transition.

On adoption, we recognized additional operating liabilities, with corresponding ROU assets based on the present value of the lease payments over the lease term under current leasing contracts for existing operating leases. In addition, existing capitalized initial direct costs and accrued lease payments were reclassified from prepayments and accruals to the ROU asset. There was no income statement or cash flow statement impact on adoption, nor were prior periods adjusted.

~~The effects of the changes made to our balance sheet at adoption were as follows (in thousands):~~

Balance at March 30, 2019 Impact from ASU 2016-02 Adoption Balance at March 31, 2019
Financial statement line item:
Prepaid assets $ 30,794 $ (2,833) $ 27,961
Right-of-use lease assets — 149,746 149,746
Lease liabilities — (14,899) (14,899)
Other accrued liabilities (16,339) 11,071 (5,268)
Non-current lease liabilities — (143,085) (143,085)
Other long-term liabilities (9,889) (965) (10,854)
Accumulated deficit $ (222,430) $ 965 $ (221,465)

~~In June 2016, the FASB issued ASU No. 2016-13,~~ Consolidated Financial ~~Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~. This ASU requires credit losses on available-for-sale debt securities to be presented as an allowance rather than a write-down. Unlike current U.S. GAAP, the credit losses could be reversed with changes in estimates, and recognized in current year earnings. This ASU is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018, including interim periods. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption in the first quarter of fiscal year 2021.

~~In January 2017, the FASB issued ASU No. 2017-04,~~ ~~Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~. This ASU eliminates step two of the goodwill impairment test. An impairment charge is to be recognized for the amount by which the current value exceeds the fair value. This ASU is effective for annual periods beginning after December 15, 2019, including interim periods. Early adoption is permitted, for interim or annual goodwill impairment tests performed after January 1, 2017, and should be applied prospectively. An entity is required to disclose the nature of and reason for the change in accounting principle upon transition. That disclosure should be provided in the first annual period and in the interim period within the first annual period when the entity initially adopts the amendments in this update. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption.

~~In February 2018, the FASB issued ASU No. 2018-02,~~ ~~Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income~~. This ASU allows for the classification of stranded tax effects resulting from the Tax Cuts and Jobs Act (the “Tax Act”) from accumulated other comprehensive income to retained earnings. This ASU is effective for annual periods beginning after December 15, 2018, with early adoption permitted. The standard should be applied in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in tax rate is recognized. The Company adopted this ASU in the first quarter of fiscal year 2020 and elected to reclassify the stranded tax effects of $0.3 million from accumulated other comprehensive income to retained earnings in the period of adoption.

~~In June 2018, the FASB issued ASU No. 2018-07,~~ ~~Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting~~. This ASU expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees and will apply to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year, with early adoption permitted. The Company adopted this ASU in the first quarter of fiscal year 2020, with no material impact to the financial statements.

~~In August 2018, the FASB issued ASU No. 2018-13,~~ ~~Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. This ASU adjusts current required disclosures related to~~

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fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year, with early adoption permitted. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption.

~~In August 2018, the Commission adopted the final rule under SEC Release No. 33-10532,~~ ~~Disclosure Update and Simplification~~, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The final rule was published in the Federal Register on October 4, 2018, effective November 5, 2018. The Company adopted the amendments in the first quarter of fiscal year 2020.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year, with early adoption permitted. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption.

~~In January 2020, the FASB issued ASU No. 2020-01,~~ Investments - Equity Securities (Topic 321) - Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force). This ASU clarifies the interaction of the accounting for equity securities, investments accounted for under the equity method of accounting, and the accounting for certain forward contracts and purchased options. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year, with early adoption permitted. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption.

~~In March 2020, the FASB issued ASU No. 2020-04,~~ ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting~~. The ASU, effective immediately for reporting periods through December 31, 2022, provides accounting relief for contract modifications that replace an interest rate impacted by reference rate reform (e.g., LIBOR) with a new alternative reference rate. The guidance is applicable to investment securities, receivables, debt, leases, hedging relationships and other contractual arrangements. The Company is currently evaluating the impact of this ASU, but does not expect a material impact to the financial statements upon adoption.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, currently portable~~line: audio and ~~non-portable and other~~high-performance mixed-signal products. In fiscal year ~~2020,~~2022, the Company ~~increased our penetration of new~~delivered record revenue and ~~existing customers, primarily~~EPS, driven by ~~demand for~~high-performance mixed-signal dollar content gains in smartphones. This past year, we made significant progress driving both product diversification and revenue growth through our ~~boosted amplifiers~~high-performance mixed-signal business as we shipped our first-generation power conversion and ~~haptic drivers in the smartphone market, gained share in tablets, wearables and truly wireless headsets,~~control IC, broadened our ~~customer base,~~power footprint with the addition of fast-charging solutions, and ~~executed on new product development activities. The Company~~increased the attach rate of our camera controllers. In audio, we maintained our leadership position in smartphones while also ~~made progress~~expanding our presence in laptops.

Cirrus Logic continues to experience demand significantly above available capacity and are actively working with our ~~longer-term investments~~suppliers to meet as much demand as possible while also balancing our customer relationships and financial health. In the second quarter of fiscal year 2022, we entered into a long-term Capacity Reservation and Wafer Supply Commitment Agreement with GlobalFoundries, a foundry partner for many of our strategic products. This expands our ability to address

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existing and incremental demand and provides customers with much-needed supply assurance, while also providing the company with the flexibility to pursue additional capacity.

Additionally, the Company has observed increased competition in ~~audio, voice~~hiring and ~~other adjacent mixed-signal processing markets. With an extensive product roadmap, we are dedicated~~retaining qualified executives and employees, which is expected to ~~delivering differentiated products that we believe will enable us to capitalize on the increasing demand for complex analog~~result in increased research and ~~mixed-signal processing, which we expect to drive our long-term success.~~development costs in future periods. For more information, please see Item 1A. "Risk Factors".

Fiscal Year ~~2020~~2022

Fiscal year ~~2020~~2022 net sales of ~~$1.28~~$1.78 billion represented an increase over fiscal year ~~2019~~2021 net sales of ~~$1.19~~$1.37 billion. ~~Portable~~High-performance mixed-signal product line sales of ~~$1.15~~$594.3 million represented a 124.1 percent increase from fiscal year 2021 sales of $265.2 million, primarily attributable to content gains in smartphones and, to a lesser extent, higher sales of fast-charging ICs in smartphones. Audio product line sales of $1.19 billion in fiscal year ~~2020~~2022 increased from fiscal year ~~2019~~2021 sales of ~~$1.03 billion, attributable to strong demand for components shipping in smartphones. Non-portable and other product line~~$1.10 billion. The most significant driver of the increase was higher sales of ~~$134.2 million represented a 12.6 percent decrease from fiscal year 2019 sales of $153.5 million.~~audio products in laptops.

Overall, gross margin for fiscal year ~~2020~~2022 was ~~52.6~~51.8 percent. The increase in gross margin for fiscal year ~~2020~~2022 was primarily ~~due~~attributable to ~~favorable product mix and cost reductions on certain products, and, to a lesser extent,~~ the ~~benefit~~impact of ~~lower reserves and~~higher ASPs, which were mostly offset by increased supply chain ~~efficiencies in the current fiscal year versus the prior year.~~costs. The Company’s number of employees ~~decreased~~increased to ~~1,443~~1,591 as of March ~~28, 2020.~~26, 2022. The Company achieved net income of ~~$159.5~~$326.4 million in fiscal year ~~2020,~~2022, which included an income tax provision in the amount of ~~$21.8~~$42.3 million.

Fiscal Year ~~2019~~2021

Fiscal year ~~2019~~2021 net sales of ~~$1.19~~$1.37 billion represented ~~a decrease from~~an increase over fiscal year ~~2018~~2020 net sales of ~~$1.53~~$1.28 billion. ~~Portable~~High-performance mixed signal product line sales of ~~$1.03~~$265.2 million represented a 54.9 percent increase from fiscal year 2020 sales of $171.2 million, primarily attributable to content gains in smartphones. Audio product line sales of $1.10 billion in fiscal year ~~2019~~2021 decreased from fiscal year ~~2018~~2020 sales of ~~$1.36~~$1.11 billion, attributable ~~primarily~~ to ~~reduced unit volumes of our portable products shipping~~headwinds in ~~smartphones, which~~wired headset codecs and decreased smart codec sales in Android. The decrease was partially offset by ~~increased~~

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~~amplifier sales at Android customers. Non-portable~~higher unit volumes in smartphones as well as content gains in smartphones, tablets and ~~other product line sales of $153.5 million represented an 8.8 percent decrease from fiscal year 2018 sales of $168.3 million.~~wearables.

Overall, gross margin for fiscal year ~~2019~~2021 was ~~50.4~~51.7 percent. The ~~increase~~decrease in gross margin for fiscal year ~~2019~~2021 was primarily due to ~~more favorable~~a shift in product mix and pricing reductions on certain ~~portable~~ products, ~~and, to a lesser extent, supply chain efficiencies versus~~partially offset by cost reductions associated with exiting the ~~prior year.~~MEMS product line. The Company’s number of employees ~~decreased~~increased to ~~1,551~~1,481 as of March ~~30, 2019.~~27, 2021. The Company achieved net income of ~~$90.0~~$217.3 million in fiscal year ~~2019,~~2021, which included an income tax provision in the amount of ~~$3.8~~$27.9 million.

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. All percentage amounts were calculated using the underlying data, in thousands:

Fiscal Years Ended
March 28, 2020 March 30, 2019 March 31, 2018
Net sales 100 % 100 % 100 %
Gross margin 53 % 50 % 50 %
Research and development 27 % 32 % 24 %
Selling, general and administrative 10 % 11 % 9 %
Restructuring 2 % — % — %
Gain on sale of assets — % (1) % — %
Income from operations 14 % 8 % 17 %
Interest income — % 1 % — %
Interest expense — % — % — %
U.K. pension settlement — % (1) % — %
Other expense — % — % — %
Income before income taxes 14 % 8 % 17 %
Provision for income taxes 2 % — % 6 %
Net income 12 % 8 % 11 %


	Fiscal Years Ended
	March 26, 2022		March 27, 2021		March 28, 2020
Net sales	100	%	100	%	100	%
Gross margin	52	%	52	%	53	%
Research and development	23	%	25	%	27	%
Selling, general and administrative	8	%	10	%	10	%

Restructuring	—	%	—	%	2	%
Income from operations	21	%	17	%	14	%
Interest income	—	%	1	%	—	%
Interest expense	—	%	—	%	—	%
Other expense	—	%	—	%	—	%
Income before income taxes	21	%	18	%	14	%
Provision for income taxes	3	%	2	%	2	%
Net income	18	%	16	%	12	%

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Net Sales

We report sales in two product categories: ~~portable~~audio products and ~~non-portable and other~~high-performance mixed-signal products. Our sales by product line are ~~as follows~~shown in the table below (in thousands):.

Fiscal Years Ended
March 28,
2020 March 30,
2019 March 31,
2018
Portable Products $ 1,146,918 $ 1,032,049 $ 1,363,876
Non-Portable and Other Products 134,206 153,475 168,310
$ 1,281,124 $ 1,185,524 $ 1,532,186


	Fiscal Years Ended
	March 26, 2022		March 27, 2021		March 28, 2020
Audio Products	$	1,187,126	$	1,104,060	$	1,109,958
High-Performance Mixed-Signal Products	594,334		265,170		171,166
	$	1,781,460	$	1,369,230	$	1,281,124

Net sales for fiscal year ~~2020~~2022 increased by ~~8.1%~~30.1 percent, to ~~$1.28~~$1.78 billion from ~~$1.19~~$1.37 billion in fiscal year ~~2019.~~2021. The increase in net sales reflects a ~~$114.9~~$329.2 million increase in ~~portable~~high-performance mixed-signal product sales, ~~and a $19.3~~or 124.1 percent, from fiscal year 2021 sales of $265.2 million, ~~decrease in non-portable and other product sales. The portable product line experienced an increase in net sales~~which was primarily attributable to content gains ~~primarily~~ in smartphones, and to a lesser extent, higher ~~unit volumes. In Android, increased~~ sales of ~~boosted amplifiers and haptic drivers were offset somewhat by a reduction~~fast-charging ICs in ~~smart codec revenue. Non-portable and other~~smartphones. Additionally, audio product ~~line~~sales increased $83.1 million in fiscal year 2022. The most significant driver of the increase was higher sales of ~~$134.2~~audio products in laptops.

Net sales for fiscal year 2021 increased by 6.9 percent, to $1.37 billion from $1.28 billion in fiscal year 2020. The increase in net sales reflects a $94.0 million ~~represented a 12.6~~increase in high-performance mixed-signal product sales, or 54.9 percent, ~~decrease~~ from fiscal year ~~2019~~2020 sales of ~~$153.5~~$171.2 million, which was primarily attributable to ~~decreases~~content gains in ~~legacy product sales.~~

~~Net sales for fiscal year 2019 decreased~~smartphones. This increase was offset by ~~22.6%, to $1.19 billion from $1.53 billion in fiscal year 2018. The decrease in net sales reflects~~ a ~~$331.8~~$5.9 million decrease in ~~portable product sales and a $14.8 million decrease in non-portable and other~~audio product sales. The ~~portable~~audio product line experienced a decrease in net sales attributable to ~~a reduction~~headwinds in wired headset codecs and decreased smart codec sales ~~of portable products shipping~~ in ~~smartphones, along with digital headsets and adaptors, which~~Android. The decrease was partially offset by ~~increased amplifier~~higher unit volumes in smartphones as well as content gains in smartphones, tablets and wearables.

International sales, at Android customers. Non-portable and other product line sales of $153.5 million represented a 8.8% decrease from fiscal year 2018 sales of $168.3 million, which was primarily attributable to decreases in legacy product sales.

~~Sales to non-U.S. customers, principally located in Asia,~~ including sales to U.S.-based end customers that manufacture products through contract manufacturers or plants located overseas, were approximately ~~$1.3~~$1.8 billion in fiscal year ~~2020, $1.2~~

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2022 and $1.3 billion in each of fiscal ~~year 2019~~years 2021 and ~~$1.5 billion in fiscal year 2018,~~2020, representing ~~99 percent of net sales in fiscal year 2020 and~~ 98 percent of net sales in fiscal years ~~2019~~2022 and ~~2018.~~2021, and 99 percent in fiscal year 2020. Our sales are denominated primarily in U.S. dollars.

Gross Margin

Overall gross margin of ~~52.6~~51.8 percent for fiscal year ~~2020~~2022 reflects ana slight increase from fiscal year ~~2019~~2021 gross margin of ~~50.4~~51.7 percent. The increase was primarily attributable to ~~favorable product mix and cost reductions on certain products, and, to a lesser extent,~~ the ~~benefit~~impact of ~~lower reserves and~~higher ASPs, which were mostly offset by increased supply chain ~~efficiencies in the current fiscal year versus the prior year~~costs.. 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 ~~2020.~~2022.

Overall gross margin of ~~50.4~~51.7 percent for fiscal year ~~2019~~2021 reflects ~~an increase~~a decrease from fiscal year ~~2018~~2020 gross margin of ~~49.6~~52.6 percent. The ~~increase~~decrease was primarily attributable to ~~favorable~~a shift in product mix and pricing reductions on certain ~~portable products, and, to a lesser extent, supply chain efficiencies versus fiscal year 2018.~~products. This was partially offset by cost reductions associated with exiting the MEMS product line. 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 ~~2019.~~2021.

Research and Development Expenses

Fiscal year ~~2020~~2022 research and development expenses of ~~$347.6~~$406.3 million reflect an increase of $63.5 million, or 18.5 percent, from fiscal year 2021. The increase was attributable to increased employee-related expenses, primarily driven by a 9.0 percent increase in total R&D headcount, which was mostly associated with the expansion of our power-related products team, amortization of acquisition intangibles, variable compensation, acquisition-related, stock-based compensation, and facilities-related costs, offset by increased R&D incentives and reduced product development costs.

Fiscal year 2021 research and development expenses of $342.8 million reflect a decrease of ~~$27.5~~$4.9 million, or 71.4 percent, from fiscal year ~~2019.~~2020. The overall decrease was attributable to reduced amortization of acquisition intangibles, travel and employee events expenses, depreciation and amortization costs on non-acquisition-related intangibles, and ~~increased R&D incentives,~~product development costs after exiting the MEMS product line, partially offset by increases in employee-related expenses, primarily salaries, variable compensation and stock-based compensation.

Fiscal year 2019 research and development expenses of $375.1 million reflect an increase of $8.7 million, or 2 percent, from fiscal year 2018. The increase was attributable to an increase in average monthly research and development headcount during fiscal year 2019 versus the prior fiscal year and the associated salary and employee-related expenses, higher facilities and infrastructure-related costs, and fiscal year 2018 adjustments to contingent consideration, offset by decreases to product development expenses and amortization of acquisition-related intangibles.

Selling, General and Administrative Expenses

Fiscal year ~~2020~~2022 selling, general and administrative expenses of ~~$131.1~~$151.0 million reflect an increase of ~~$4.6~~$24.0 million, or 418.9 percent, compared to fiscal year ~~2019.~~2021. The ~~primary drivers were~~increase was primarily attributable to increased employee-related expenses, ~~primarily~~professional services, variable compensation and stock-based compensation costs in fiscal year ~~2020.~~2022.

Table of Contents

Fiscal year ~~2019~~2021 selling, general and administrative expenses of ~~$126.5~~$127.0 million reflect a decrease of ~~$5.3~~$4.1 million, or 43.1 percent, compared to fiscal year ~~2018.~~2020. The primary drivers of the decrease ~~was primarily attributable to decreased salary~~were reduced travel and ~~employee-related~~employee events expenses in fiscal year ~~2019.~~2021.

Restructuring Costs

During the fourth quarter of fiscal year 2020, the Company approved a restructuring plan (the "MEMS Restructuring"), including discontinuing efforts relating to the MEMS microphone product line. The Company recorded charges of approximately $0.4 million in the first quarter of fiscal year 2021 and $21.9 million in fiscal year 2020, as part of the MEMS Restructuring, which included equipment disposal costs, asset impairment and write-off of intangible assets, and other nonrecurring costs. No additional restructuring charges were incurred for the remainder of fiscal year 2021 or 2022. See Note 1112 - Restructuring Costs for additional details.

~~Gain on Sale of Assets~~

~~In the fourth quarter of fiscal year 2019, the Company sold the previously-acquired Edinburgh, Scotland property, for a gain of $4.9 million, presented as "Gain on sale of assets" in the Consolidated Statements of Income. See Item 2. Properties for additional information.~~

Interest Income

Interest income in fiscal years 2022, 2021, and 2020, ~~2019, and 2018,~~ was ~~$10.5~~$1.6 million, ~~$8.0~~$6.3 million, and ~~$4.8~~$10.5 million, respectively. The ~~increase~~fluctuations in interest income in fiscal year ~~2020~~2022 and ~~2019 was due to higher~~2021 versus prior years were a function of earnings on ~~higher~~ average cash, cash equivalent, and marketable securities balances throughout the ~~year versus the previous~~ year.

Interest Expense

The Company reported interest expense of ~~$1.1~~$0.9 million, $1.1 million and ~~$1.2~~$1.1 million for fiscal years ~~2020, 2019,~~2022, 2021, and ~~2018,~~2020, respectively, primarily as a result of the ~~revolving credit facility,~~Revolving Credit Facility, described in Note 8.

~~Table of Contents~~

~~U.K. Pension Settlement~~

The Company settled its defined benefit pension scheme in the third quarter of fiscal year 2019. A settlement loss of $13.8 million was recognized, which was the amount of the previously recorded unamortized actuarial pension loss in AOCI. The loss is presented as a separate line item in the Consolidated Statements of Income under the caption "~~U.K. pension settlement". The Company has no further contribution obligations going forward.~~9.

Other ~~Expense~~Income (Expense)

In fiscal years ~~2020, 2019,~~2022, 2021, and ~~2018~~2020 the Company reported ~~$1.6~~$1.7 million, ~~$0.2~~$2.8 million, and ~~$1.0~~$(1.6) million respectively, in other ~~expense, primarily~~income (expense), related to remeasurement on foreign currency denominated monetary assets and ~~liabilities.~~liabilities and other non-operating income and expenses.

Provision for Income Taxes

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 rate of 11.5 percent. 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.

We recorded income tax expense of $27.9 million in fiscal year 2021 on pre-tax income of $245.2 million, yielding an effective tax rate of 11.4 percent. 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, the release of prior year unrecognized tax benefits during fiscal year 2021, and excess tax benefits from stock-based compensation.

We recorded income tax expense of $21.8 million in fiscal year 2020 on a pre-tax income of $181.3 million, yielding an effective tax provision rate of 12.0 percent. 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, excess tax benefits from stock-based compensation, and the release of prior year unrecognized tax benefits during fiscal year 2020.

We recorded income tax expense of $3.8 million in fiscal year 2019 on a pre-tax income of $93.7 million, yielding an effective tax rate of 4.0 percent. Our effective tax rate was lower than the U.S. statutory rate of 21.0 percent, primarily due to a decrease in the provisional enactment-date effects of the legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”), as well as the U.S. federal research and development tax credit and the effect of income earned in certain foreign jurisdictions that is taxed below the federal statutory rate. This overall decrease was partially offset by an increase in valuation allowance related to certain U.S. federal deferred tax assets and state tax attributes due to the likelihood that they will expire or go unutilized.

We recorded income tax expense of $103.1 million in fiscal year 2018 on pre-tax income of $265.1 million, yielding an effective tax provision rate of 38.9 percent. Our effective tax rate was higher than the blended U.S. statutory rate of 31.6 percent, primarily due to the inclusion of the provisional enactment-date tax effects of the Tax Act, partially offset by income earned in certain foreign jurisdictions that is taxed below the federal statutory rate and excess benefits from stock-based compensation. The reduction in the U.S. federal corporate income tax rate was administratively effective at the beginning of our fiscal year 2018, resulting in a blended U.S. federal corporate income tax rate of 31.6% for the annual period.

The Tax Act was enacted on December 22, 2017. The Tax Act reduced the U.S. federal corporate income tax rate from 35% to 21%, restricted the deductibility of certain business expenses, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax-deferred, and created new taxes on certain foreign sourced earnings, among other provisions. We recognized a provisional amount of $60.1 million during fiscal year 2018, which was included as a component of income tax expense from continuing operations. Our accounting for the enactment-date effects of the Tax Act was completed during the quarter ended December 29, 2018 and we recognized an $11.1 million reduction to the provisional amounts, which was included as a component of income tax expense from continuing operations during fiscal year 2019.

For additional discussion about our income taxes, see Note 1819 - Income Taxes.

Outlook

Given the wide array of uncertainties surrounding the implications of the COVID-19 pandemic, industry-wide supply constraints and the ~~macroeconomic environment and their unknown impact on smartphone volumes,~~timing of when these challenges will be alleviated, it is difficult to predict our revenue, gross margin and operating expense outlook for fiscal year ~~2021.~~2023. However, Cirrus Logic made ~~meaningful~~significant progress in fiscal year ~~2020 with numerous~~2022, and expects to continue to leverage our expertise in mixed-signal design and advanced low-power signal processing to execute on our product roadmap and strategic ~~initiatives that we believe position the Company for~~vision to capitalize on growth opportunities in new applications and markets in the ~~coming years.~~years to come. Going forward, we expect gross margins to normalize around our long-term model as we ship inventory built at higher costs compared to fiscal year 2022.

Liquidity and Capital Resources

Operating Activities

In fiscal year 2022, cash flow from operations was $124.8 million. 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

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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. In fiscal year 2021, cash flow from operations was $348.9 million. Operating cash flow during fiscal year 2021 was related to the cash components of our net income and a $33.2 million favorable change in working capital. The favorable change in working capital was driven primarily by a decrease in accounts receivable and an increase in accounts payable, partially offset by an increase in inventories. In fiscal year 2020, cash flow from operations was $295.8 million. Operating cash flow during fiscal year 2020 was related to the cash components of our net income, offset by a $2.8 million unfavorable change in working capital. The unfavorable change in working capital was driven primarily by an increase in accounts receivable, partially offset by an increase in payables. In fiscal year 2019, cash flow from operations was $206.7 million. Operating cash flow during fiscal year 2019 was related to the cash components of our net income, offset by a $23.4 million unfavorable change in working capital. The unfavorable change in working capital was driven primarily by a decrease in payables and an increase in accounts receivable, partially offset by a decrease in inventories. In fiscal year 2018, cash flow from operations was $318.7 million. Operating cash flow during fiscal year 2018 was related to the cash components of our net income, and a $29.1 million favorable change in working capital. The favorable change in working capital was driven primarily by a decrease in accounts receivable and an increase in income taxes payable ~~partially offset by an increase in inventories~~ during the period.

Investing Activities


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


	Payment due by period (in thousands)
	< 1 year		1-3 years		3-5 years		> 5 years		Total

Facilities leases, net	$	12,501	$	24,742	$	24,823	$	147,593	$	209,659
Wafer purchase commitments	131,911		—		—		—		131,911
Assembly purchase commitments	4,003		—		—		—		4,003
Outside test purchase commitments	14,983		—		—		—		14,983
Other purchase commitments	17,808		3,806		—		—		21,614
Interest on revolving line of credit (1)	610		325		—		—		935
Total	$	181,816	$	28,873	$	24,823	$	147,593	$	383,105


Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42 )			3233
Consolidated Balance Sheets as of March 2 ~~March 28, 2020~~6 , 202 2 and March ~~30, 2019~~27, 2021			3537
Consolidated Statements of Income for the Fiscal Years Ended March ~~28, 2020,~~26, 2022. March ~~30, 2019,~~27, 2021, and March ~~31, 2018~~28, 2020			3638
Consolidated Statements of Comprehensive Income for the Fiscal Years Ended March 26, 2022. March 27, 2021, and March 28, 2020 ~~March 30, 2019,~~ ~~and~~ ~~March 31, 2018~~			3739
Consolidated Statements of Cash Flows for the Fiscal Years Ended March 26, 2022. March 27, 2021, and March 28, 2020 ~~March 30, 2019,~~ ~~and~~ ~~March 31, 2018~~			3840
Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended March 26, 2022. March 27, 2021, and March 28, 2020 ~~March 30, 2019,~~ ~~and~~ ~~March 31, 2018~~			3941
Notes to Consolidated Financial Statements			4042


How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement relating to the valuation of inventory. For example, we tested controls over management’s review of forecasted demand, the significant assumptions, and the data underlying the excess and obsolete inventory valuation estimate. Among other audit procedures performed, we evaluated the significant assumptions discussed above, including the forecasted customer unit demand utilized in the estimate, and tested the completeness and accuracy of the underlying data used in management’s calculation. We evaluated adjustments to forecasted demand for specific product considerations, assessed the historical accuracy of management’s estimates by performing a retrospective analysis comparing prior period forecasted demand to actual historical sales and inspected historical gross margins to assess whether any items were being sold at a loss.

						Uncertain tax positions
Description of the Matter						As described in Note 1819 to the consolidated financial statements, the Company has recorded accrued liabilities relating to unrecognized tax benefits resulting from uncertain tax positions of ~~$36.2~~$32.9 million as of March ~~28, 2020.~~26, 2022. The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions. Furthermore, the Company’s fiscal years 2017 to ~~2020~~2022 remain open to examination by the major taxing jurisdictions. Auditing management’s analysis of the uncertainties in its tax positions was complex and judgmental because the Company’s evaluation and measurement of each tax position involves assessing uncertainties with respect to the application of complex tax rules, which are subject to interpretation. The Company uses significant judgment in determining whether a tax position is more likely than not to be sustained and measuring the amount of tax benefit that qualifies for recognition.

How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement relating to the existence of uncertain tax positions and measurement of the benefit of those positions. For example, we tested controls over management’s review of the technical merits of tax positions, the events and information that impacted tax positions, the estimate of the most likely outcome, and the data utilized in the estimate. To test the valuation of uncertain tax positions, our audit procedures included, among others, analyzing the Company’s assumptions and data used to determine the amount of tax benefit to recognize and testing the accuracy of the calculations. In considering the measurement criteria, we involved our tax professionals to assess the technical merits of the Company’s tax positions. This included assessing the Company’s correspondence with the relevant tax authorities and evaluating income tax opinions or other third-party advice obtained by the Company. We also used our knowledge of, and experience with, the application of international and local income tax laws by the relevant income tax authorities to evaluate the Company’s accounting for those tax positions. We also evaluated the Company’s income tax disclosures included in Note 1819 to the consolidated financial statements in relation to these matters.

						Accounting for acquisitions
Description of the Matter						During fiscal year 2022, the Company completed the acquisition of Lion Semiconductor Inc. (“Lion”) for a purchase price of $312.8 million, as disclosed in Note 8 to the consolidated financial statements. The transaction was accounted for as a business combination. Auditing the Company's accounting for its acquisition of Lion was complex due to the significant estimation uncertainty in the Company’s determination of the fair value of the developed technology intangible asset ($144 million). The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values to underlying assumptions about the future performance of the acquired business and the limited historical data and market data on which those assumptions were based. The Company used a discounted cash flow model to measure the existing developed technology intangible asset. The significant assumptions used to estimate the value of the intangible asset included certain assumptions that form the basis of the forecasted results (e.g., revenue growth rates and obsolescence curves). These significant assumptions are forward looking and could be affected by future economic and market conditions.


	March 28, 2020		March 30, 2019
Assets
Current assets:
Cash and cash equivalents	$	292,119	$	216,172
Marketable securities	22,008		70,183
Accounts receivable, net	153,998		120,656
Inventories	146,725		164,733
Prepaid assets	23,594		30,794
Other current assets	11,752		22,445
Total current assets	650,196		624,983
Long-term marketable securities	283,573		158,968
Right-of-use lease assets	141,274		—
Property and equipment, net	158,244		186,185
Intangibles, net	34,430		67,847
Goodwill	287,088		286,241
Deferred tax assets	10,052		8,727
Other assets	27,820		19,689
Total assets	$	1,592,677	$	1,352,640
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	78,412	$	48,398
Accrued salaries and benefits	42,439		29,289
Software license agreements	10,888		21,514
Current lease liabilities	13,580		—
Other accrued liabilities	13,318		16,339
Total current liabilities	158,637		115,540
Long-term liabilities:

Software license agreements	3,806		8,662
Non-current income taxes	71,143		78,309
Non-current lease liabilities	129,312		—
Other long-term liabilities	—		9,889
Total long-term liabilities	204,261		96,860
Stockholders’ equity:
Preferred stock, 5.0 million shares authorized but unissued	—		—
Common stock, $0.001 par value, 280,000 shares authorized, 58,242 shares and 58,954 shares issued and outstanding at March 28, 2020 and March 30, 2019, respectively	58		59
Additional paid-in capital	1,434,871		1,363,677
Accumulated deficit	(201,681)		(222,430)
Accumulated other comprehensive loss	(3,469)		(1,066)
Total stockholders’ equity	1,229,779		1,140,240
Total liabilities and stockholders’ equity	$	1,592,677	$	1,352,640


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


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


	3/28/2015	3/26/2016	3/25/2017	3/31/2018	3/30/2019	3/28/2020
Cirrus Logic, Inc.	100.00	103.54	180.41	122.05	126.37	186.00
S&P 500 Index	100.00	100.93	118.70	136.43	149.38	136.61
S&P 500 Semiconductors Index	100.00	100.74	139.11	192.13	201.41	210.86


	Fiscal Years
	2020		2019		2018		2017		2016
	(1)		(1)		(1)
Net sales	$	1,281,124	$	1,185,524	$	1,532,186	$	1,538,940	$	1,169,251
Net income	159,498		89,991		161,995		261,209		123,630
Basic earnings per share	$	2.74	$	1.50	$	2.55	$	4.12	$	1.96
Diluted earnings per share	$	2.64	$	1.46	$	2.46	$	3.92	$	1.87
Financial position at year end:
Cash, cash equivalents, restricted investments and marketable securities	$	597,700	$	445,323	$	434,500	$	450,979	$	250,006
Total assets	1,592,677		1,352,640		1,430,117		1,413,470		1,181,883
Working capital	491,559		509,443		473,465		631,853		378,005
Long-term liabilities	204,261		96,860		128,180		117,703		194,276
Total stockholders’ equity	$	1,229,779	$	1,140,240	$	1,161,728	$	1,151,692	$	859,483


	Balance at March 30, 2019		Impact from ASU 2016-02 Adoption		Balance at March 31, 2019
Financial statement line item:
Prepaid assets	$	30,794	$	(2,833)	$	27,961
Right-of-use lease assets	—		149,746		149,746
Lease liabilities	—		(14,899)		(14,899)
Other accrued liabilities	(16,339)		11,071		(5,268)
Non-current lease liabilities	—		(143,085)		(143,085)
Other long-term liabilities	(9,889)		(965)		(10,854)
Accumulated deficit	$	(222,430)	$	965	$	(221,465)


	Fiscal Years Ended
	March 28, 2020		March 30, 2019		March 31, 2018
Net sales	100	%	100	%	100	%
Gross margin	53	%	50	%	50	%
Research and development	27	%	32	%	24	%
Selling, general and administrative	10	%	11	%	9	%

Restructuring	2	%	—	%	—	%
Gain on sale of assets	—	%	(1)	%	—	%


Income from operations	14	%	8	%	17	%
Interest income	—	%	1	%	—	%
Interest expense	—	%	—	%	—	%
U.K. pension settlement	—	%	(1)	%	—	%
Other expense	—	%	—	%	—	%
Income before income taxes	14	%	8	%	17	%
Provision for income taxes	2	%	—	%	6	%
Net income	12	%	8	%	11	%


						Inventory valuation
Description of the Matter						At March ~~28, 2020,~~26, 2022, the Company’s net inventory balance was ~~$146.7~~$138.4 million. As discussed in Note 2 of the financial statements, inventories are stated at the lower of cost or net realizable value, which includes considerations for inventory becoming obsolete or in excess of management’s forecasted customer unit demand. The Company writes down inventories to net realizable value based on forecasted customer unit demand while taking into account product release schedules and product life cycles. The Company also writes down inventory, as appropriate, based on the age and condition of the inventory. Auditing management’s estimate of excess and obsolete inventory involved subjective auditor judgment because management’s determination of whether a write down is warranted is judgmental and the estimate is sensitive to changes in assumptions, including management’s assumptions over forecasted demand which may be impacted by, among other things, future market and economic conditions outside of the Company’s control.


	Common Stock					Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income / (Loss)		Total
	Shares	Amount
Balance, March 25, 2017	64,295	$	64	$	1,259,215	$	(107,014)	$	(573)	$	1,151,692
Net income	—	—		—		161,995		—		161,995
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		(1,630)		(1,630)
Change in defined benefit pension plan liability, net of tax	—	—		—		—		(11,949)		(11,949)
Change in foreign currency translation adjustments	—	—		—		—		2,791		2,791
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	1,054	1		4,416		(17,806)		—		(13,389)
Cumulative effect of adoption of ASU 2016-16	—	—				(747)		—		(747)
Repurchase and retirement of common stock	(3,389)	(3)		—		(175,773)		—		(175,776)
Amortization of deferred stock compensation	—	—		48,741		—		—		48,741
Balance, March 31, 2018	61,960	$	62	$	1,312,372	$	(139,345)	$	(11,361)	$	1,161,728
Net income	—	—		—		89,991		—		89,991
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		2,231		2,231
Change in defined benefit pension plan liability, net of tax	—	—		—		—		11,189		11,189
Change in foreign currency translation adjustments	—	—		—		—		(3,125)		(3,125)
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	964	1		1,616		(13,083)		—		(11,466)
Repurchase and retirement of common stock	(3,970)	(4)		—		(159,993)		—		(159,997)
Amortization of deferred stock compensation	—	—		49,689		—		—		49,689

Balance, March 30, 2019	58,954	$	59	$	1,363,677	$	(222,430)	$	(1,066)	$	1,140,240
Net income	—	—		—		159,498		—		159,498
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		(2,214)		(2,214)
Change in foreign currency translation adjustments	—	—		—		—		68		68
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	1,418	1		18,634		(18,280)		—		355
Cumulative effect of adoption of ASU 2016-02, net of tax	—	—		—		(726)		—		(726)
Cumulative effect of adoption of ASU 2018-02	—	—		—		257		(257)		—
Repurchase and retirement of common stock	(2,130)	(2)		—		(120,000)		—		(120,002)
Amortization of deferred stock compensation	—	—		52,560		—		—		52,560
Balance, March 28, 2020	58,242	$	58	$	1,434,871	$	(201,681)	$	(3,469)	$	1,229,779


	Common Stock			Additional Paid-In Capital		Accumulated Earnings (Deficit)		Accumulated Other Comprehensive Income / (Loss)		Total
	Shares	Amount
Balance, March 30, 2019	58,954	$	59	$	1,363,677	$	(222,430)	$	(1,066)	$	1,140,240
Net income	—	—		—		159,498		—		159,498
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		(2,214)		(2,214)
Change in foreign currency translation adjustments	—	—		—		—		68		68
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	1,418	1		18,634		(18,280)		—		355
Cumulative effect of adoption of ASU 2016-02, net of tax	—	—		—		(726)		—		(726)
Cumulative effect of adoption of ASU 2018-02	—	—		—		257		(257)		—
Repurchase and retirement of common stock	(2,130)	(2)		—		(120,000)		—		(120,002)
Amortization of deferred stock compensation	—	—		52,560		—		—		52,560
Balance, March 28, 2020	58,242	$	58	$	1,434,871	$	(201,681)	$	(3,469)	$	1,229,779
Net income	—	—		—		217,344		—		217,344
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		4,482		4,482

Change in foreign currency translation adjustments	—	—		—		—		1,862		1,862
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	862	1		7,128		(18,367)		—		(11,238)
Repurchase and retirement of common stock	(1,452)	(1)		—		(109,985)		—		(109,986)
Amortization of deferred stock compensation	—	—		56,762		—		—		56,762

Balance, March 27, 2021	57,652	$	58	$	1,498,761	$	(112,689)	$	2,875	$	1,389,005
Net income	—	—		—		326,355		—		326,355
Change in unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		(4,413)		(4,413)
Change in foreign currency translation adjustments	—	—		—		—		(507)		(507)
Issuance of stock under stock option plans and other, net of shares withheld for employee taxes	1,008	1		13,217		(22,732)		—		(9,514)
Repurchase and retirement of common stock	(2,064)	(2)		—		(167,499)		—		(167,501)
Amortization of deferred stock compensation	—	—		66,392		—		—		66,392
Balance, March 26, 2022	56,596	$	57	$	1,578,370	$	23,435	$	(2,045)	$	1,599,817


	March 28, 2020		March 30, 2019
Work in process	$	82,494	$	80,100
Finished goods	64,231		84,633
	$	146,725	$	164,733


	March 28, 2020		March 30, 2019
Land	$	23,853	$	23,853
Buildings	63,803		63,172
Furniture and fixtures	23,059		22,762
Leasehold improvements	51,525		45,286
Machinery and equipment	159,201		157,994
Capitalized software	25,942		25,763
Construction in progress and other	892		3,689
Total property, plant and equipment	348,275		342,519
Less: Accumulated depreciation and amortization	(190,031)		(156,334)
Property, plant and equipment, net	$	158,244	$	186,185


	March 26, 2022		March 27, 2021
Land	$	23,853	$	23,853
Buildings	63,730		63,803
Furniture and fixtures	24,122		23,733
Leasehold improvements	53,611		52,041
Machinery and equipment	175,966		160,400
Capitalized software	26,491		26,152
Construction in progress and other	5,566		950
Total property, plant and equipment	373,339		350,932
Less: Accumulated depreciation and amortization	(216,262)		(195,990)
Property, plant and equipment, net	$	157,077	$	154,942


As of March 26, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value (Net Carrying Amount)
Corporate debt securities	$	70,296	$	2	$	(2,133)	$	68,165
Non-U.S. government securities	509		—		(9)		500
U.S. Treasury securities	5,483		—		(169)		5,314

Agency discount notes	385		—		(14)		371
Total securities	$	76,673	$	2	$	(2,325)	$	74,350


As of March 28, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value (Net Carrying Amount)
Corporate debt securities	$	286,668	$	1,157	$	(3,993)	$	283,832
Non-US government securities	12,483		260		—		12,743
US Treasury securities	8,839		167		—		9,006


Total securities	$	307,990	$	1,584	$	(3,993)	$	305,581


As of March 30, 2019		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value (Net Carrying Amount)
As of March 27, 2021										As of March 27, 2021	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value (Net Carrying Amount)
Corporate debt securities	Corporate debt securities	$	215,098	$	1,027	$	(600)	$	215,525	Corporate debt securities	$	348,971	$	3,403	$	(313)	$	352,061
Non-US government securities		13,209		8		(40)		13,177
Non-U.S. government securities										Non-U.S. government securities	13,462		172		(1)		13,633

Agency discount notes	Agency discount notes	450		—		(1)		449		Agency discount notes	2,759		4		(1)		2,762
Total securities	Total securities	$	228,757	$	1,035	$	(641)	$	229,151	Total securities	$	365,192	$	3,579	$	(315)	$	368,456


	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total
Assets:
Cash equivalents
Money market funds	$	237,714	$	—	$	—	$	237,714
Available-for-sale securities
Corporate debt securities	$	—	$	283,832	$	—	$	283,832
Non-US government securities	—		12,743		—		12,743
US Treasury securities	9,006		—		—		9,006



	$	9,006	$	296,575	$	—	$	305,581


	March 28, 2020		March 30, 2019
Gross accounts receivable	$	153,998	$	120,926
Allowance for doubtful accounts	—		(270)
Accounts receivable, net	$	153,998	$	120,656


~~Balance, March 25, 2017~~	$	~~(434)~~
~~Bad debt expense, net of~~and recoveries	~~231~~
~~Balance, March 31, 2018~~	~~(203)~~
~~Bad debt expense, net of recoveries~~	~~(67)~~
~~Balance, March 30, 2019~~	~~(270)~~
~~Bad debt expense, net or recoveries~~	~~270~~
~~Balance, March 28, 2020~~	$	—


	March 28, 2020						March 30, 2019
Intangible Category / Weighted-Average Amortization period (in years)	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Core technology (a)	$	1,390	$	(1,390)	$	1,390	$	(1,390)
License agreement (a)	440		(440)		440		(440)
Existing technology (6.7)	111,005		(100,145)		117,976		(94,136)
In-process research & development (“IPR&D”) (7.5)	70,936		(58,284)		97,972		(69,794)
Trademarks and tradename (10.0)	3,037		(2,589)		3,037		(2,461)
Customer relationships (10.0)	15,381		(8,808)		15,381		(7,270)
Backlog (a)	220		(220)		220		(220)
Non-compete agreements (a)	470		(470)		470		(470)
Technology licenses (3.0)	23,820		(19,923)		28,336		(21,194)
Total	$	226,699	$	(192,269)	$	265,222	$	(197,375)


~~For the year ended March 27, 2021~~	$	~~14,368~~
~~For the year ended March 26, 2022~~	$	~~11,817~~
~~For the year ended March 25, 2023~~	$	~~6,009~~
~~For the year ended March 30, 2024~~	$	~~1,695~~
~~For the year ended March 29, 2025~~	$	~~541~~
~~Thereafter~~	$	—


Fiscal Year
2023	$	31,619
2024	$	27,214
2025	$	25,276
2026	$	24,455
2027	$	21,964
Thereafter	$	27,617


	July 20, 2021
Cash	$	4,924
Account receivable	6,725
Inventory	7,675
Manufacturing advances	8,502
Other current assets	321
Intangibles	163,700
Goodwill	148,273
Other non-current assets	453
Current liabilities	(2,927)
Deferred tax liabilities	(24,871)
Total purchase price	$	312,775


	Amount		Weighted Average Amortization Period (years)
Developed Technology	$	144,990	7
Customer Relationships	18,710		5
Total	$	163,700


	Fiscal Years Ended
	March 28,		March 30,		March 31,
	2020		2019		2018
Non-United States	$	1,264,025	$	1,159,342	$	1,498,454
United States	17,099		26,182		33,732
	$	1,281,124	$	1,185,524	$	1,532,186


	Fiscal Years Ended
	March 26,		March 27,		March 28,
	2022		2021		2020
China	$	1,197,812	$	1,024,178	$	975,090
United States	29,513		21,708		17,099
Rest of World	554,135		323,344		288,935
Total	$	1,781,460	$	1,369,230	$	1,281,124


	~~Fiscal Year Ended~~
	~~March 28, 2020~~
~~Operating lease - in excess of 12 months~~	$	~~13,518~~
~~Variable lease~~	~~4,721~~
~~Short-term lease~~	~~119~~
~~Operating lease income~~	~~(1,296)~~
~~Total net operating lease expense~~	$	~~17,062~~


	~~Fiscal Year Ended~~
	~~March 28, 2020~~
~~Cash paid for amounts included in the measurement of lease liabilities (in thousands)~~
~~Operating cash flows from operating leases~~	$	~~13,955~~
~~Right-of-use assets obtained in exchange for new operating lease liabilities (in thousands)~~	~~1,107~~
~~Weighted-average remaining lease term - operating leases (in years)~~	20
~~Weighted-average discount rate - operating leases~~	4		%


Fiscal Year	Operating Lease Expense
2023	$	14,913
2024	18,750
2025	19,450
2026	17,852
2027	16,365
Thereafter	172,170
Total	$	259,500
Less imputed interest	(81,658)
Total	$	177,842


Fiscal Year	Operating Lease Expense		Operating Lease Income
2021	$	13,823	$	1,322
2022	13,459		1,356
2023	13,174		535
2024	12,850		264
2025	12,507		270
Thereafter	147,661		68
Total	$	213,474	$	3,815
Less imputed interest	(70,582)		—
Total	$	142,892	$	3,815


	~~March 28, 2020~~
~~Current lease liabilities~~	$	~~13,580~~
~~Non-current lease liabilities~~	~~129,312~~
~~Total operating lease liabilities~~	$	~~142,892~~


	~~Fiscal Year Ended~~
	~~March 28, 2020~~
~~Disposal of equipment, net of recovery from sales (a)~~	$	~~9,578~~
~~Impairment and write-off of intangible assets~~	~~9,961~~
~~Other exit costs (b)~~	~~1,903~~
~~Personnel-related charges, net of equity cancellations (c)~~	~~483~~
~~Total~~	$	~~21,925~~


			Shares
			Available for
			Grant
Balance, March ~~25, 2017~~			~~4,692~~
~~Shares added~~			—
~~Granted~~			~~(1,755)~~
~~Forfeited~~			~~128~~
~~Balance, March 31, 2018~~			~~3,065~~
~~Shares added~~			~~2,509~~
~~Granted~~			~~(2,371)~~
~~Forfeited~~			~~120~~
~~Balance, March~~ 30, 2019			3,323
Shares added			248
Granted			(1,686)
Forfeited			210
Balance, March 28, 2020			2,095
Shares added			3,223
Granted			(1,491)
Forfeited			198
Balance, March 27, 2021			4,025
Shares added			—
Granted			(1,679)
Forfeited			271
Balance, March 26, 2022			2,617