CRUS

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How CRUS rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

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The Company is committed to a three-pronged strategy for growing our business: first, maintaining our leadership position in smartphone audio; second, increasing high-performance mixed-signal ("HPMS") content in smartphones; and third, leveraging our strength and intellectual property in audio and HPMS to expand into additional applications and markets with both new and existing components.
While we continue to see new opportunities with audio products, we believe that our HPMS product line presents the largest opportunity to drive application diversification and fuel exciting avenues of growth in the coming years.
AUDIO PRODUCTS Cirrus Logic is a leading supplier of low-power, low-latency, high-precision audio components that are used in a variety of applications including smartphones, PCs , tablets, AR/VR headsets, wearables, home theater systems, automotive entertainment systems and professional audio systems.
Our extensive portfolio of audio products includes: amplifiers; "codecs," which are components that integrate analog-to-digital converters ("ADCs") and digital-to-analog converters ("DACs") into a single integrated circuit ("IC"); "smart codecs," which are codecs with integrated digital signal processing; and standalone digital signal processors ("DSPs").
Our portfolio of HPMS products includes: camera controllers for automatic focus and optical image stabilization; haptic and sensing solutions to deliver highly responsive and consistent tactile feedback; and battery and power ICs for improving battery health and performance.
For fiscal year 2026, 2025 and 2024, our ten largest end customers, represented approximately 96 percent, 96 percent, and 95 percent of our net sales, respectively.
For fiscal years 2026, 2025, and 2024, we had one end customer, Apple Inc., who purchased through multiple contract manufacturers and represented approximately 91 percent, 89 percent, and 87 percent, of the Company’s total net sales, respectively.
No other customer or distributor represented more than 10 percent of net sales in fiscal years 2026, 2025, or 2024.
In fiscal year 2022, the Company entered into a Capacity Reservation and Wafer Supply Commitment Agreement with GlobalFoundries to reserve capacity and set wafer pricing for products purchased pursuant to the agreement through calendar year 2026.
On February 18, 2025, the Capacity Reservation Agreement was amended (the "Amendment") to define the quarterly spread of the remaining wafer quantities under the agreement.
The Company’s primary assembly and test houses include Advanced Semiconductor Engineering, Inc., Amkor Technology, Inc., STATS ChipPAC Pte.
Ltd., SFA Semicon Co., Ltd., and Siliconware Precision Industries Co., Ltd.
As of March 28, 2026, we held approximately 4,340 pending and issued patents worldwide, which include approximately 1,620 granted U.S. patents, 430 U.S. pending patent applications and various international patents and applications.
Our U.S. patents expire in calendar years 2026 through 2046.
We do not anticipate any material effect on our business due to any patents expiring in 2026, and we continue to obtain new patents through our ongoing research and development.
In fiscal year 2026, our voluntary turnover rate was 7 percent, below the technology industry benchmarks (Aon Radford "2025 Salary Increase and Turnover Study - Second Edition Refresh (September 2025) | Total Turnover for the period June 1, 2024 – June 1, 2025").
As of March 28, 2026, we had 1,668 employees, 99 percent of whom were full-time, 71 percent were engaged in research and product development activities, 24 percent in sales, marketing, general and administrative activities, and 5 percent in manufacturing-related activities.
As of March 28, 2026, 14 percent of our employees worldwide were foreign nationals and 64 percent of our total workforce reside in the U.S., with 36 percent residing offshore.
As of March 28, 2026, our global workforce was 81 percent male and 19 percent female, and based on self-reported identification, our workforce in the United States was composed of 51 percent White, 36 percent Asian, 8 percent Hispanic or Latino, 2 percent Black or African American, and 3 percent Other.
In fiscal year 2026, the Company had no monetary losses as a result of legal proceedings associated with employee health and safety violations and received no notices of violation related to health and safety at our facilities, nor have we ever had a work-related fatality.
In calendar year 2025, we had no recordable injuries or zero lost-time incidents as defined by the U.S.
Business & Operational Risks • Risks related to dependence on a limited number of customers and distributors and a lack of diversification in our revenue base, including risks related to the loss of, or a significant reduction in orders from, or pricing on products sold to, any key customer or distributor • Risks related to global economic conditions, including economic downturns or recessions and the effects of tariffs and inflationary pressures • Risks related to third-party manufacturing and supply chain relationships, including risks associated with our efforts to increase the geographic diversity and regional resilience of our supply chain • Risks related to fluctuation in sales in the consumer electronics and smartphone markets • Risks related to our international operations, including government trade policies and delays or disruptions to our international subcontractors, which may be impacted by political/economic factors • Risks related to system security, cyber-attacks, data breaches, and disruptions to our IT systems • Risks related to strong competition in the semiconductor market, including competition to attract, hire, and retain highly qualified personnel • Risks related to our long-term capacity reservation and wafer supply agreement with GlobalFoundries • Risks related to our fabless business model • Risks related to the use or application of emerging technologies, including artificial intelligence • Risks related to acquiring other companies or technologies • Risks related to product concentration, difficulty in forecasting sales due to customers' ability to cancel or reschedule orders, and declining average selling prices Strategic & Industry Risks • Risks related to joint development or other custom product collaborations, including the development of products for specific system architectures • Risks related to the timely development, production, and acceptance of new and advanced technologies while complying with environmental regulations • Risks related to increasing complexity of our products and the potential for security vulnerabilities or other product defects and difficulties in transitioning to advanced manufacturing process technologies • Risks related to changes in the system architecture of our customers' end products • Risks related to our ability to protect our intellectual property rights Financial Risks • Risks related to exposure to tax liabilities and changes in tax laws • Risks related to fluctuations in inventory, including risks related to our customers’ ability to cancel/reschedule orders on short notice • Risks related to fluctuations in operating results, stock price, and foreign currency exposures • Risks related to debt obligations, including under our Second Amended Credit Agreement Legal & General Risks • Risks related to intellectual property claims and litigation and export control regulations, including the potential for illicit diversion of products • Risks related to certain provisions of Delaware law and our Certificate of Incorporation and Bylaws • Risks related to corporate social responsibility initiatives and ESG matters • Risks related to owning real property Business and Operational Risks We depend on a limited number of customers and distributors for a substantial portion of our sales, and the loss of, or a significant reduction in orders from, or pricing on products sold to, any key customer or distributor could significantly reduce our sales and our profitability.
For the twelve-month periods ending March 28, 2026, March 29, 2025, and March 30, 2024, our ten largest end customers represented approximately 96 percent, 96 percent and 95 percent of our net sales, respectively.
For the twelve-month periods ending March 28, 2026, March 29, 2025, and March 30, 2024, we had one end customer, Apple Inc., who purchased through multiple contract manufacturers and represented approximately 91 percent, 89 percent and 87 percent of the Company’s total net sales, respectively.
Foundries we use have faced increased demand associated with data center build-outs and AI-related applications, which could increase pricing, limit available capacity, result in changes in how available capacity is allocated by our suppliers, and extend lead times.
Our reliance on third-party foundries, assembly and test providers, logistics providers, and other suppliers also exposes us to geopolitical and armed-conflict risks that may disrupt shipping lanes and transportation routes, increase fuel, freight, insurance, security and other logistics costs, and delay the movement of raw materials, wafers, components and finished goods.
For example, conflicts and instability in the Middle East, including tensions involving Iran and potential disruption in and around key regional shipping routes, have adversely affected, and may continue to adversely affect, portions of the global supply chain on which we rely, including by increasing freight and related logistic costs and potentially affecting the timing and reliability of certain aspects of our supply chain.
If these or similar events result in increased supply-chain costs and we are unable to offset them through pricing or other measures, or if we have previously committed to pricing, our gross margins, operating results and financial condition could be adversely affected.
Customers may also increasingly seek or require certain manufacturing, fabrication, assembly, testing or other supply chain activities to occur within the United States.
If we are unable to meet customer expectations for geographic diversity, U.S.-based supply chain activities, inventory management, or supply continuity, we may experience delays in product qualifications, pricing pressure, or loss of business opportunities.
The risk of state-sponsored or geopolitical-related cybersecurity incidents has also increased due to ongoing geopolitical tensions with China and geopolitical conflicts and instability in other regions, including the war in Ukraine, the Israel-Hamas war, and escalating hostilities involving Iran, Israel and the United States.
Such conflicts may increase the risk of retaliatory or opportunistic cyberattacks by nation-state actors, their proxies or other threat actors against us, our customers, our suppliers or other third parties on which we rely.
Additionally, shortages of, or price increases in, certain components, such as memory, may limit our customers’ ability to manufacture their products or increase their costs, which could reduce demand for our components.
Some companies in our industry have adopted flexible remote work arrangements that provide more flexibility than our working arrangements, which may put us at a competitive disadvantage for talent.
Accordingly, we expect competition for qualified personnel to continue to be intense because there are a limited number of individuals in the job market with the skills that we and our competitors require.
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. and abroad, additionally limiting the pool of available talent.
Recent and potential changes to U.S. immigration laws, regulations, and administrative practices, including those affecting prevailing wage requirements and the selection or allocation processes for employment-based visa programs (for example, the implementation of a weighted lottery system based on wage levels or increases in prevailing wage levels), may favor higher-compensated positions and increase the compensation and administrative burdens required to sponsor foreign national employees.
These changes could adversely affect our ability to hire early-career or entry-level engineers, limit our access to qualified foreign technical talent, increase uncertainty in our ability to secure employment-based visas in the United States, and increase our costs and reduce our flexibility in recruiting and retaining qualified technical talent.
Specifically, our operations and our suppliers’ operations could be harmed, our shipment times could be extended, and our costs could increase if geopolitical conflicts or related government actions disrupt critical trade routes, logistics networks, or the supply of materials our suppliers require to manufacture our products.
For example, any deterioration in the social, political, or economic conditions in Taiwan, particularly as it relates to China-Taiwan relations, may disrupt our business operations and materially and adversely affect our results of operations.

and 14 more.

Gone since FY2025

The Company is committed to a three-pronged strategy for growing our business: first, maintaining our leadership position in smartphone audio; second, increasing high-performance mixed-signal ("HPMS") content in smartphones; and third, leveraging our strength in audio and HPMS to expand into additional applications and markets with both new and existing components.
While we continue to see new opportunities with audio products, we believe that our HPMS product line presents the largest opportunity to drive product diversification and fuel exciting avenues of growth in the coming years.
AUDIO PRODUCTS Cirrus Logic is a leading supplier of low-power, low-latency, high-precision audio components that are used in a variety of applications including smartphones, l aptops, tablets, AR/VR headsets, wearables, home theater systems, automotive entertainment systems and professional audio systems.
Our extensive portfolio of audio products include: amplifiers; “codecs,” which are components that integrate analog-to-digital converters (“ADCs”) and digital-to-analog converters (“DACs”) into a single integrated circuit ("IC"); “smart codecs,” which are codecs with integrated digital signal processing; and standalone digital signal processors (“DSPs”).
Our portfolio of HPMS products include: camera controllers for automatic focus and optical image stabilization; haptic and sensing solutions to deliver highly responsive and consistent tactile feedback; and battery and power ICs for improving battery health and performance.
For fiscal year 2025, 2024 and 2023, our ten largest end customers, represented approximately 96 percent, 95 percent and 92 percent of our net sales, respectively.
For fiscal years 2025, 2024, and 2023, we had one end customer, Apple, Inc., who purchased through multiple contract manufacturers and represented approximately 89 percent, 87 percent, and 83 percent, of the Company’s total net sales, respectively.
No other customer or distributor represented more than 10 percent of net sales in fiscal years 2025, 2024, or 2023.
In fiscal year 2022, the Company entered a Capacity Reservation and Wafer Supply Commitment Agreement with GlobalFoundries to reserve capacity and set wafer pricing for products purchased pursuant to the agreement through calendar year 2026.
On February18, 2025, the Capacity Reservation Agreement was amended (the "Amendment") to define the quarterly spread of the remaining wafer quantities under the agreement.
The Company’s primary assembly and test houses include Advanced Semiconductor Engineering, Inc., STATS ChipPAC Pte.
Ltd., Amkor Technology, Inc., Siliconware Precision Industries Co., Ltd., and SFA Semicon Co., Ltd.
As of March 29, 2025, we held approximately 4,130 pending and issued patents worldwide, which include approximately 1,570 granted U.S. patents, 350 U.S. pending patent applications and various international patents and applications.
Our U.S. patents expire in calendar years 2025 through 2045.
We do not anticipate any material effect on our business due to any patents expiring in 2025, and we continue to obtain new patents through our ongoing research and development.
In fiscal year 2025, our voluntary turnover rate was 8 percent, below the technology industry benchmarks (2024 Radford Salary Increase and Turnover Study_Second Edition Refresh (December 2024)).
As of March 29, 2025, we had 1,660 employees, 99 percent of whom were full-time, 71 percent were engaged in research and product development activities, 24 percent in sales, marketing, general and administrative activities, and 5 percent in manufacturing-related activities.
As of March 29, 2025, 13 percent of our employees worldwide were foreign nationals and 64 percent of our total workforce reside in the U.S., with 36 percent residing offshore.
As of March 29, 2025, our global workforce was 81 percent male and 19 percent female, and based on self-reported identification, our workforce in the United States was composed of 52 percent White, 35 percent Asian, 8 percent Hispanic or Latino, 3 percent Black or African American, and 2 percent Other.
In fiscal year 2025, the Company had no monetary losses as a result of legal proceedings associated with employee health and safety violations and received no notices of violation related to health and safety at our facilities, nor have we ever had a work-related fatality.
In calendar year 2024, we had one recordable injury and zero lost-time incidents as defined by the U.S.
Business & Operational Risks • Risks related to dependence on a limited number of customers and distributors and a lack of diversification in our revenue base, including risks related to the loss of, or a significant reduction in orders from, or pricing on products sold to, any key customer or distributor • Risks related to global economic conditions, including economic downturns or recessions and the effects of tariffs and inflationary pressures • Risks related to third-party manufacturing and supply chain relationships, including risks associated with our efforts to increase the geographic diversity and regional resilience of our supply chain • Risks related to our long-term capacity reservation and wafer supply agreement with GlobalFoundries • Risks related to fluctuation in sales in the consumer electronics and smartphone markets • Risks related to our international operations, including government trade policies and delays or disruptions to our international subcontractors, which may be impacted by political/economic factors • Risks related to system security, cyber-attacks, data breaches, and disruptions to our IT systems • Risks related to strong competition in the semiconductor market, including competition to attract, hire, and retain highly qualified personnel • Risks related to our fabless business model • Risks related to the use or application of emerging technologies, including artificial intelligence • Risks related to acquiring other companies or technologies • Risks related to product concentration, difficulty in forecasting sales due to customers' ability to cancel or reschedule orders, and declining average selling prices Strategic & Industry Risks • Risks related to joint development or other custom product collaborations, including the development of products for specific system architectures • Risks related to the timely development, production, and acceptance of new and advanced technologies while complying with environmental regulations • Risks related to increasing complexity of our products and the potential for security vulnerabilities or other product defects and difficulties in transitioning to advanced manufacturing process technologies • Risks related to changes in the system architecture of our customers' end products • Risks related to our ability to protect our intellectual property rights Financial Risks • Risks related to exposure to tax liabilities and changes in tax laws • Risks related to fluctuations in inventory, including risks related to our customers’ ability to cancel/reschedule orders on short notice • Risks related to fluctuations in operating results, stock price, and foreign currency exposures • Risks related to debt obligations, including under our Second Amended Credit Agreement Legal & General Risks • Risks related to intellectual property claims and litigation and export control regulations, including the potential for illicit diversion of products • Risks related to certain provisions of Delaware law and our Certificate of Incorporation and Bylaws • Risks related to corporate social responsibility initiatives and ESG matters • Risks related to owning real property Business and Operational Risks We depend on a limited number of customers and distributors for a substantial portion of our sales, and the loss of, or a significant reduction in orders from, or pricing on products sold to, any key customer or distributor could significantly reduce our sales and our profitability.
For the twelve-month periods ending March 29, 2025, March 30, 2024, and March 25, 2023, our ten largest end customers represented approximately 96 percent, 95 percent and 92 percent of our net sales, respectively.
For the twelve-month periods ending March 29, 2025, March 30, 2024, and March 25, 2023, we had one end customer, Apple Inc., who purchased through multiple contract manufacturers and represented approximately 89 percent, 87 percent and 83 percent of the Company’s total net sales, respectively.
If we are unable to meet customer expectations for geographic diversity, inventory management, or supply continuity, we may experience delays in product qualifications, pricing pressure, or loss of business opportunities.
The risk of state-sponsored or geopolitical-related cybersecurity incidents has also increased due to ongoing geopolitical tensions with China or incidents, such as the war in Ukraine or the Israel-Hamas war.
Some companies in our industry have adopted flexible remote work arrangements providing more flexibility than ours 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.
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.
For example, we rely on several third-party suppliers located in Taiwan.
Any deterioration in the social, political, or economic conditions in Taiwan, particularly as it relates to China-Taiwan relations, may disrupt our business operations and materially and adversely affect our results of operations.
Similarly, our operations could be harmed, and our costs could increase, if the war in Ukraine results in a shortage of materials that our suppliers require to manufacture our products.
In addition, we are currently working with a supplier that is headquartered in Israel on the development of additional manufacturing alternatives.
The declaration of war by Israel against Hamas, the rising tensions in the Middle East, and the resulting actions that may be taken by governments in response to the war could potentially impact or delay the supplier's ability to provide timely engineering support that may be required to advance our efforts to develop future manufacturing alternatives.
Our failure to utilize AI responsibly may impact our reputation and could have a negative impact our business, operating results, and financial condition.
International sales represented 99 percent, 99 percent, and 97 percent of our net sales in fiscal year 2025, 2024 and 2023, respectively.
Financial Risks We have historically experienced fluctuations in our operating results and expect these fluctuations to continue.
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.
For discussion of our income taxes, see Note 17 - Income Taxes, of the Notes to Consolidated Financial Statements contained in Item 8.
We do not agree with the IRS’s positions and we are vigorously defending against the proposed adjustments.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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