Cirrus Logic : Investor Relations Update Presentation

Investor Relations Update

As of February 1, 2021

Safe Harbor Statement

Except for historical information contained herein, the matters set forth in this presentation contain forward-looking statements, including industry market projections; our revenue growth opportunities; our ability to grow the percent revenue derived from high-performancemixed-signal solutions beyond audio; our ability to increase audio content and share in smartphones; our ability to expand share in audio beyond smartphones; our ability to introduce new high-performancemixed-signal solutions; our ability to invest in products that push the boundaries of power and performance; our ability to leverage our existing portfolio and invest in new products to drive growth; our ability to leverage our mixed-signal expertise into new product categories; our ability to meaningfully expand our SAM with new applications and technologies; our forecasted revenue, gross margin and R&D and SG&A expenses, stock-based compensation expense, and amortization of acquired intangibles; and our estimate for our FY21 and future years' effective tax rate. These forward-looking statements are based on our current expectations, estimates and assumptions and are subject to certain risks and uncertainties that could cause actual results to differ materially from our current expectations, estimates and assumptions and the forward-looking statements made in this presentation. These risks and uncertainties include, but are not limited to, the effects of the global COVID-19 pandemic, and the risk factors listed in our Form 10-K for the year ended March 28, 2020 and in other filings with the Securities and Exchange Commission. The foregoing information concerning our business outlook represents our outlook as of the date of this presentation, and we expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.

2

Cirrus Logic at a Glance

PROFILE		PRODUCTS		CORE STRENGTHS

Founded in 1984	Smart codecs
Listed on NASDAQ: CRUS	Audio amplifiers
FY20 revenue: $1.28B	Haptic driver and sensing solutions
Headquarters in Austin, Texas	Camera controllers
~1,470 employees worldwide	Product applications: flagship/mid-tier
	smartphones, tablets, truly wireless headsets,
	wearables, laptops and AR/VR headsets

Analog and digital-signal processing

Engineering execution

World-class customer support

and application expertise

Supply chain management and quality

Extensive IP portfolio (over 3,580

pending and issued patents worldwide)

3

Proven Operating Model

Expand with

more content & more products

Design

best-in-class

custom,

semi-custom & general market products

Leverage

best-in-class IP

Target

fast-growing

markets

Engage tier-one market leaders

Develop

meaningful engineering relationships

SOLID OPERATING

MARGINS

STRONG CASH FLOW

LEADING SUPPLIER OF LOW-POWER, HIGH-

PERFORMANCE, MIXED-

SIGNAL ICS

4

Compelling Strategy for Growth & Diversification

Audio

First Choice in Signal Processing

Advanced	Low-Latency	Low-Power	Outstanding	Customer
Mixed-Signal
Processing	Leadership	Execution	Focus
Design

5

Unique

Corporate

Culture

6

Technology & Market Overview

7

Cirrus Logic Growth Vectors

Tablets

Truly Wireless Headsets

Wearables

Laptops

Other

Smartphones

FOCUSING ON KEY GROWTH VECTORS:

1. Increasing audio content and share in smartphones
2. Expanding share in audio beyond smartphones
3. New high-performance mixed- signal solutions beyond audio

Audio High-Performance

Mixed-Signal

Beyond Audio

FY19	FY20	FY21
12%	13%	~19%*

HIGH-PERFORMANCEMIXED-SIGNAL SOLUTIONS

BEYOND AUDIO (% REVENUE)

*Based on midpoint of guidance as of February 1, 2021

8

Leading Supplier of Audio in Smartphones

• High market share: supplier to the top 7 smartphone OEMs
• Expanding content with new and existing customers in mid-tier and flagship smartphones
• Continued investment in products that push the boundaries of power and performance while enabling a compelling user experience

Boosted

Amplifiers

Smart

Codecs

Boosted

Amplifiers

Top OEMs & brands based on units Source: GFK and company estimates as of February 1, 2021

9

Increasing Audio Penetration Beyond Smartphones

TABLETS / LAPTOPS

WEARABLES / TRULY WIRELESS HEADSETS

• Stable market: Growth driven by content expansion and increased penetration
• Tablets: Supplier to 3 of the top 5 OEMs
• Laptops: Supplier to 2 of the top 5 OEMs
• Industrial design trends (thinner/larger screen sizes) fueling demand for small, high- performance/low-power products

• Expanding market: Growth driven by increased share and content
• Wearables: Supplier to 2 of the top 5 brands
• Truly wireless headsets: Supplier to 2 of the top 3 brands
• Form factors require ultra-low power, consistent user experience, and very small footprint

LEVERAGING EXISTING PORTFOLIO AND INVESTING IN NEW PRODUCTS TARGETING THESE

APPLICATIONS TO DRIVE GROWTH

Top OEMs & brands based on units

Source: Canalys, Futuresource, IDC, Strategy Analytics and company estimates as of February 1, 2021

10

High-PerformanceMixed-Signal Capabilities

Low-Power		High-
	Performance
MCU / DSP
	ADC /DAC
55-nm / 22-		Closed-Loop
nm Process		Control
Nodes		Algorithms
Low-Power		Boosted
Sensing		Amplifiers /
AFE		Drivers

CIRRUS LOGIC CORE INTELLECTUAL PROPERTY

Meaningfully expanding SAM with new applications and technologies:

• Leveraging mixed-signal expertise into new product categories
• Fully integrated low-power ICs, small footprint and high-performance mixed- signal

Haptic Driver &		Camera		New
Sensing		Controller		Content
Solutions		OIS / AF *		Opportunities

*OIS: Optical Image Stabilization; AF: Automatic Focus

11

Broadening Product Portfolio

Audio Amplifiers

ASP $0.35 - $0.75

Audio Amplifiers

ASP $0.35 - $0.75

Haptics Drivers

ASP $0.35 - $0.85

Haptics Drivers

ASP $0.35 - $0.85

Smart Codecs	Digital Accessory Codecs
ASP $0.75 - $2.00	ASP $0.60 - $1.50

SMARTPHONES	BEYOND SMARTPHONES

12

Expanding SAM in a Vast Mixed-Signal Market

2019

2024

			Further Adjacent Mobile
	Haptic Drivers		Opportunities
	$240M		$1B
Total Mixed-Signal	Total	-	Camera Controllers
	TotalMixed Signal
Market*		Market*	$0.5B
$30B	Audio & Voice:	$45B	Haptic Drivers
	Mobile, Accessories		$0.5B

$2.5B	Audio & Voice:
	Mobile, Accessories
	$3.5B

*Total Mixed-Signal Market represents the worldwide market for analog / mixed-signal components including audio, data conversion, power devices, RF and other interfaces

Total Mixed-Signal Market for Mobile in 2024 ~$20B Source: Databeans, IC insights and company estimates as of February 1, 2021

13

Product Overview

14

Audio Amplifiers

• Delivering a louder and higher quality audio experience from micro speakers
• Smartphones transitioning from mono to stereo speakers
• Ultra-lowpower required for extended playback
• Advanced power management applied to protect speakers and manage battery performance
• Demand expanding beyond smartphones into tablets, truly wireless headsets, wearables, laptops and AR/VR headsets

Boosted Amplifier

Speaker Protection

Ultra-Low Power DSP

High-Quality Audio

Battery Management

Monitoring ADCs

15

Haptic Driver & Sensing Solutions

• Waterproofing and advanced industrial design trends are driving customers to replace mechanical buttons with sensor and LRA-based haptic driver and sensing solutions
• Ultra-lowlatency boosted driver required to deliver highly responsive and consistent haptic feedback to user
• Enabling new user experiences with custom tactile feedback
• Demand expanding beyond

smartphones into tablets,	Boosted Driver
wearables, laptops and AR/VR	Home Button
headsets

• Haptic drivers are an example of the company's expansion into adjacent markets where real-time edge processing is critical

Ultra-Low Power DSP

Virtual Side Buttons

Custom Tactile Feedback

Monitoring ADCs

16

Smart Codecs

Cirrus Logic's extensive portfolio of audio and voice technology delivers complete product solutions for smartphones, tablets, truly wireless headsets, wearables, laptops and AR/VR headsets.

Hi-Fi DACs

	Voice Capture
Secure Voice Authentication	Voice Activation
	Barge-In
Ultra-Low Power DSP	Far-Field Voice
	Customer Software
Adaptive & Hybrid ANC	3rd Party Ecosystems
	Anti-Spoofing
High-Performance ADCs

17

Financials

18

Track Record of Long-Term Revenue Growth

10-YEAR CAGR OF 19%	ANNUAL REVENUE FY10-FY20 (M)
Growth fueled by strong
demand for audio, voice and	$1,539	$1,532
other signal processing
products		$1,281
	$1,169	$1,186
	$917

$370

$221

$810

$714

$427

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

19

Financial Highlights

BALANCE SHEET

BUYBACK

TAXES

• $697M total cash, up from $612M in the September quarter
• Q3 ending inventory $143M, down from the prior quarter
• In Q3, we utilized $35M to repurchase 459,170 shares at an average price of $76.22
• In FY20, we used $120M to repurchase ~2M shares at an average price of $56.32
• As of December 26, 2020, we have $55M remaining in the January 2019 share repurchase program. The Board of Directors recently authorized an additional $350M for share repurchases.
• FY21 worldwide non-GAAP effective tax rate expected to range from ~12% to 14%
• FY22 worldwide non-GAAP effective tax rate expected to range from ~13% to 15%

20

Strong Cash Generation

CASH GENERATION

• Generated $1.3B of operating cash flow over last 5 full fiscal years
• Ended Q3 FY21 with $697M cash and investments globally

TRAILING TWELVE MONTH OPERATING CASH FLOW AND CAPEX (M)

$296

$256

$239

$220 $226

USE OF CASH

• Investment in R&D, M&A and share repurchases
• Share repurchases over the last 5 full fiscal years:
• • Total cash used: $532M
  • Total shares repurchased: ~12M
• Infrastructure improvements and capital expenditures

$27	$21	$16	$16	$16
Q3/FY20	Q4/FY20	Q1/FY21	Q2/FY21	Q3/FY21
			TTM CF Ops		TTM Capex

21

Operating Profit Profile

35%									GAAP			Non-GAAP*
30%										30%
		28%							27%
25%				25%			24%
		22%
20%				19%			19%
				17%
15%						15%
10%
10%						8%
5%					4%
2%
0%		Q1/FY20	Q2/FY20	Q3/FY20	Q4/FY20	Q1/FY21	Q2/FY21		Q3/FY21

*GAAP to non-GAAP reconciliations available on slide 25 and at https://investor.cirrus.com

22

Financial Results and Outlook

RESULTS	REVENUE	GROSS MARGIN
Q3 FY21	$485.8M	51.8%

GUIDANCE*	REVENUE	GROSS MARGIN
Q4 FY21	$280 - $320M	50% - 52%

COMBINED

R&D / SG&A

$121.8M

(includes $13.1M in stock-based comp, $3M in amortization of acquisition intangibles)

COMBINED

R&D / SG&A

$121 - $127M

(includes $15M in stock-based comp, $3M in amortization of acquisition intangibles)

*As of February 1, 2021

23

Quarterly Revenue and EPS

CIRRUS LOGIC REVENUE Q1 FY20 TO Q4 FY21 (M)

CIRRUS LOGIC EPS Q1 FY20 TO Q3 FY21

$500							$486		$2.50					GAAP EPS
														Non-GAAP EPS**
$450															$2.13
$400		$389							$2.00						$1.91
	$375
$350						$347
									$1.55
$300								$300*	$1.50		$1.41
			$279
					$243					$1.27				$1.26
$250	$238									$1.13
									$1.00					$0.99
$200
$150												$0.68
													$0.53
$100									$0.50
									$0.35				$0.30
$50												$0.17
									$0.08
$0									$0.00
	Q1/FY20	Q2/FY20	Q3/FY20	Q4/FY20	Q1/FY21	Q2/FY21	Q3/FY21	Q4/FY21	Q1/FY20	Q2/FY20	Q3/FY20	Q4/FY20	Q1/FY21	Q2/FY21	Q3/FY21

In Q3 FY21, our largest customer represented 87% total revenue

*Midpoint of guidance as of February 1, 2021 **GAAP to non-GAAP reconciliation available on slide 25 and at https://investor.cirrus.com

24

GAAP to Non-GAAP Reconciliation

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION

(unaudited, in thousands, except per share data)

(not prepared in accordance with GAAP)

We use these Non-GAAP financial numbers to assist us in the management of the Company because we believe that this information provides a more consistent and complete understanding of the underlying results and trends of the ongoing business due to the uniqueness of these charges. We are not able to provide guidance on our GAAP tax rate or a related reconciliation without unreasonable efforts since our future GAAP tax rate depends on our future stock price and related stock-based compensation information that is not currently available.

		Dec. 26,			Sep. 26,			Jun. 27,			Mar. 28,		Dec. 28,		Sep. 28,		Jun. 29,			Mar. 30,			Dec. 29,
Net Income Reconciliation		2020			2020			2020			2020		2019		2019		2019			2019			2018
	Q3'21			Q2'21			Q1'21			Q4'20		Q3'20		Q2'20		Q1'20			Q4'19			Q3'19
GAAP Net Income	$	114,368		$	59,486		$	18,209		$	10,158	$	68,512	$	76,210	$	4,618		$	6,157		$	29,933
Amortization & other acquisition related items		2,998			2,998			2,998			3,000		6,470		6,722		7,228			7,228			7,630
Stock-based compensation expense		13,287			15,476			13,306			14,052		14,160		13,759		11,786			12,583			11,181
U.K. pension settlement		-			-			-			-		-		-		-			-			13,768
Other expenses *		-			-			352			20,602		1,323		-		-			(4,913)			-
Adjustment for income taxes		(2,897)			(2,293)			(2,982)			(6,320)		(4,871)		(3,417)		(2,803)			1,202			(7,003)
Non-GAAP Net Income	$	127,756		$	75,667		$	31,883		$	41,492	$	85,594	$	93,274	$	20,829		$	22,257		$	55,509
Earnings Per Share reconciliation
GAAP Diluted earnings per share	$	1.91	$	0.99	$	0.30	$	0.17	$	1.13	$	1.27	$	0.08	$	0.10	$	0.49
Effect of Amortization & other acquisition related items		0.05			0.05			0.05			0.05		0.11		0.11		0.12			0.12			0.13
Effect of Stock-based compensation expense		0.22			0.26			0.22			0.23		0.23		0.23		0.20			0.21			0.18
Effect of U.K. pension settlement		-			-			-			-		-		-		-			-			0.23
Effect of Other expenses *		-			-			0.01			0.34		0.02		-		-			(0.08)			-
Effect of Adjustment for income taxes		(0.05)			(0.04)			(0.05)			(0.11)		(0.08)		(0.06)		(0.05)			0.02			(0.12)
Non-GAAP Diluted earnings per share	$	2.13		$	1.26		$	0.53		$	0.68	$	1.41	$	1.55	$	0.35		$	0.37		$	0.91
Operating Income Reconciliation
GAAP Operating Income	$	129,650	$	64,153	$	18,675	$	9,981	$	72,679	$	86,676	$	4,144	$	7,107	$	44,241
GAAP Operating Margin		26.7%			18.5%			7.7%			3.6%		19.4%		22.3%		1.7%			3.0%			13.6%
Amortization & other acquisition related items		2,998			2,998			2,998			3,000		6,470		6,722		7,228			7,228			7,630
Stock-based compensation expense - COGS		236			197			207			213		200		254		241			288			220
Stock-based compensation expense - R&D		9,526			9,235			8,653			9,446		9,343		7,830		7,240			8,270			6,761
Stock-based compensation expense - SG&A		3,525			6,044			4,446			4,393		4,617		5,675		4,305			4,025			4,200
Other expenses *		-			-			352			20,602		1,323		-		-			(4,913)			-
Non-GAAP Operating Income	$	145,935		$	82,627		$	35,331		$	47,635	$	94,632	$	107,157	$	23,158		$	22,005		$	63,052
Non-GAAP Operating Margin		30.0%			23.8%			14.6%			17.1%		25.3%		27.6%		9.7%			9.2%			19.4%
Operating Expense Reconciliation
GAAP Operating Expenses	$	121,850	$	116,057	$	108,797	$	136,254	$	124,826	$	121,257	$	118,350	$	117,532	$	118,939
Amortization & other acquisition related items		(2,998)			(2,998)			(2,998)			(3,000)		(6,470)		(6,722)		(7,228)			(7,228)			(7,630)
Stock-based compensation expense - R&D		(9,526)			(9,235)			(8,653)			(9,446)		(9,343)		(7,830)		(7,240)			(8,270)			(6,761)
Stock-based compensation expense - SG&A		(3,525)			(6,044)			(4,446)			(4,393)		(4,617)		(5,675)		(4,305)			(4,025)			(4,200)
Other expenses *		-			-			(352)			(20,724)		(1,201)		-		-			4,913			-
Non-GAAP Operating Expenses	$	105,801		$	97,780		$	92,348		$	98,691	$	103,195	$	101,030	$	99,577		$	102,922		$	100,348
Gross Margin/Profit Reconciliation
GAAP Gross Profit	$	251,500	$	180,210	$	127,472	$	146,235	$	197,505	$	207,933	$	122,494	$	124,639	$	163,180
GAAP Gross Margin		51.8%			51.9%			52.6%			52.4%		52.7%		53.5%		51.4%			51.8%			50.3%
Stock-based compensation expense - COGS		236			197			207			213		200		254		241			288			220
Other expenses *		-			-			-			(122)		122		-		-			-			-
Non-GAAP Gross Profit	$	251,736	$	180,407	$	127,679	$	146,326	$	197,827	$	208,187	$	122,735	$	124,927	$	163,400
Non-GAAP Gross Margin
	51.8%			51.9%			52.6%			52.4%		52.8%		53.5%		51.5%			52.0%			50.4%
Effective Tax Rate Reconciliation
GAAP Tax Expense	$	16,281	$	6,829	$	2,153	$	2,191	$	5,996	$	12,148	$	1,433	$	3,048	$	2,381
GAAP Effective Tax Rate		12.5%			10.3%			10.6%			17.7%		8.0%		13.7%		23.7%			33.1%			7.4%
Adjustments to income taxes		2,897			2,293			2,982			6,320		4,871		3,417		2,803			(1,202)			7,003
Non-GAAP Tax Expense	$	19,178		$	9,122		$	5,135		$	8,511	$	10,867	$	15,565	$	4,236		$	1,846		$	9,384
Non-GAAP Effective Tax Rate		13.1%			10.8%			13.9%			17.0%		11.3%		14.3%		16.9%			7.7%			14.5%
Tax Impact to EPS Reconciliation
GAAP Tax Expense	$	0.27	$	0.11	$	0.04	$	0.04	$	0.10	$	0.20	$	0.02	$	0.05	$	0.04
Adjustments to income taxes		0.05			0.04			0.05			0.11		0.08		0.06		0.05			(0.02)			0.12
Non-GAAP Tax Expense	$	0.32		$	0.15		$	0.09		$	0.15	$	0.18	$	0.26	$	0.07		$	0.03		$	0.16

• Other expenses may contain certain items such as acquisition expenses, litigation expenses, proceeds from a patent agreement, restructuring items, sales reorganizations, asset gains and impairments. GAAP to non-GAAP reconciliations also available at www.cirrus.com.

25