Company: CRUS
Filing Date: 2025-05-23
Form Type: 10-K
Source: 0000772406-25-000014
Chunk: 69

Company: CIRRUS LOGIC, INC.
Filing Date: 2025-05-23
Form: 10-K
Item: Item 7
Chunk 69
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GILTI), which is treated as a period cost, and a reduction in foreign tax credits.  GILTI is unfavorably impacted by a provision in the Tax Cuts and Jobs Act of 2017 that requires research and development expenditures incurred starting in fiscal year 2023 to be capitalized and amortized ratably over five or fifteen years depending on the location in which the research activities are conducted.  In addition, U.S. tax rules introduced in fiscal year 2023 related to refundable tax credits, including R&D expenditure credits available to us in the United Kingdom, reduce the amount of foreign tax credits available to offset GILTI.  

The Organization for Economic Cooperation and Development has announced an Inclusive Framework on Base Erosion and Profit Shifting, including Pillar Two Model Rules for a global minimum tax that call for the taxation of large multinational 

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corporations at a minimum rate of 15%.  Certain jurisdictions in which we operate, including the United Kingdom, have enacted Pillar Two legislation.  There was no material impact on our consolidated financial statements in fiscal year 2025.

For additional discussion about our income taxes, see Note 17 - Income Taxes of the Notes to Consolidated Financial Statements in Item 8.

Liquidity and Capital Resources

Operating Activities

In fiscal year 2025, cash flow from operations was $444.4 million.  Operating cash flow during fiscal year 2025 was related to the cash components of our net income and a $23.4 million unfavorable change in working capital.  The unfavorable change in working capital was driven primarily by increases in inventory and accounts receivable, partially offset by prepaid wafer usage (related to the Capacity Reservation Agreement).  In fiscal year 2024, cash flow from operations was $421.7 million.  Operating cash flow during fiscal year 2024 was related to the cash components of our net income and an $18.4 million favorable change in working capital, primarily driven by prepaid wafer usage (related to the Capacity Reservation Agreement), decreases in other assets and increased income taxes payable, partially offset by decreased accounts payable and acquisition-related liabilities, as well as increases in accounts receivable.   

Investing Activities

In fiscal year 2025, the Company used $124.3 million in cash for investing activities primarily related to $95.5 million in net purchases of marketable securities and capital expenditures and technology investments of $28.8 million.  In fiscal year 2024, the Company used