Company: CRUS
Filing Date: 2025-02-04
Form Type: 10-Q
Source: 0000772406-25-000007
Chunk: 15

Company: CIRRUS LOGIC, INC.
Filing Date: 2025-02-04
Form: 10-Q
Item: Item 2
Chunk 15
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 Months EndedNine Months EndedDecember 28,December 30,December 28,December 30,2024202320242023Income before income taxes$153,701 $172,100 $350,309 $304,278 Provision for income taxes$37,696 $33,377 $90,069 $74,548 Effective tax rate24.5 %19.4 %25.7 %24.5 %

Our income tax expense for the third quarter of fiscal year 2025 was $37.7 million compared to $33.4 million for the third quarter of fiscal year 2024, resulting in effective tax rates of 24.5 percent and 19.4 percent, respectively.  Our income tax expense was $90.1 million and $74.5 million for the first nine months of fiscal years 2025 and 2024, respectively, resulting in effective tax rates of 25.7 percent and 24.5 percent, respectively.  Effective tax rates for all periods presented were unfavorably impacted by a provision in the Tax Cuts and Jobs Act of 2017 that requires R&D expenditures incurred in tax years beginning after December 31, 2021 to be capitalized and amortized ratably over five or fifteen years depending on the location in which the research activities are conducted, resulting in higher GILTI, which is treated as a period cost.  In addition, our effective tax rates for all periods presented were unfavorably impacted by U.S. tax rules related to refundable tax credits, including R&D expenditure credits available to us in the United Kingdom, that reduce the amount of foreign tax credits available to offset GILTI.  Our effective tax rates for the third quarter of fiscal year 2025 and the first nine months of fiscal years 2025 and 2024, respectively, were higher than the federal statutory rate primarily due to these two items, partially offset by the effect of income earned in certain foreign jurisdictions that is taxed below the federal statutory rate.  Our effective tax rate for the third quarter of fiscal year 2024 was lower than the federal statutory rate due to a one-time tax benefit recorded during that period for a change in capitalized R&D expenditures that decreased GILTI inclusions in our fiscal year 2023 U.S. tax return. 

Liquidity and Capital Resources 

We require cash to fund our operating expenses and working capital requirements, including outlays for inventory,