ADI 10-K & 10-Q changes, risk factors and insider trading

•political, legal and economic changes, crises or instability and civil unrest that may impact markets in which we do business, such as macroeconomic weakness related to trade and political disputes between the United States and Europe or China, tensions across the Taiwan Strait that may adversely affect our operations in Taiwan, our customers and the technology industry supply chain, and the ongoing conflictsconflict between Russia and Ukraine and tensions in Israel and the Middle East;

•currency conversion risks and exchange rate and interest rate fluctuations,fluctuations includingand the potential impact of elevated interest ratesuncertainty;

•instability of global credit and financial markets due to uncertainty and adverse macroeconomic conditions such as elevatedinflation, inflation,tariffs and trade restrictions, high interest rates, bank failures and slower economic growth or recession that could, among other impacts, affect our ability to timely access external financing sources on acceptable terms or lead to financial difficulties or uncertainty of our customers, suppliers and distributors exposing us to late payments, cancelled orders and inventory challenges;

•natural disasters, public health emergencies, such as the COVID-19 pandemic,emergencies or other catastrophic events;

Many of these factors and risks are present and may be exacerbated within our business operations in China. For example, changes in U.S.-China relations, the political environment or international trade policies could result in further revisions to laws or regulations or their interpretation and enforcement, increased taxation, trade sanctions, the imposition of import or export duties and tariffs, restrictions on imports or exports, currency revaluations or retaliatory actions, which have had and may continue to have an adverse effect on our business plans and operating results. The incoming administration has

indicatedadditional that it intends to imposeimport or significantlyexport increaseduties tariffsand tariffs, restrictions on imports toor theexports, Unitedcurrency States,revaluations or retaliatory actions, which couldhave exacerbatehad manyand ofmay thesecontinue issues.to have an adverse effect on our business plans and operating results. In addition, expanded export restrictions limit our ability to sell to certain Chinese companies and to third parties that do business with those companies. These restrictions, which have continued to expand over the past several years, have impacted our revenues and results of operations in China and elsewhere. These and similar restrictions have created, and these and similar restrictions may continue to create, uncertainty and caution with our current or prospective customers and may cause them to amass large inventories of our products, replace our products with products from another supplier that is not subject to the export restrictions or focus on building indigenous semiconductor capacity to reduce reliance on U.S. suppliers. Furthermore, if these export restrictions cause our current or potential customers to view U.S. companies as unreliable, we could suffer reputational damage or lose business to foreign competitors who are not subject to such export restrictions, and our business could be materially harmed. We are continuingcontinue to evaluate the impact of these restrictions on our business,business butas thesethey actionsare updated and expanded, and we expect that they may continue to have direct and indirect adverse impacts on our revenues and results of operations in China and elsewhere. In addition, our success may be adversely affected by China’s continuously evolving policies, laws and regulations, including those relating to imports and exports, rare earth materials, antitrust, AI, cybersecurity, data protection and data privacy, the environment, indigenous innovation, the promotion of a domestic semiconductor industry, intellectual property rights and enforcement and protection of those rights.

The cyclical nature of the semiconductor industry has resulted in periods when demand for our products has increased or decreased rapidly. The demand for our products may vary based on market conditions in our major end markets. Demand in these end markets can fluctuate significantly based upon, for example, consumer spending, consumer preferences, the development of new technologies and macroeconomic conditions.conditions, including impacts related to tariffs and other trade restrictions. If we overbuild inventory in a period of decreased demand, or we expand our operations and workforce too rapidly or procure excessive resources in anticipation of increased demand for our products, and that demand does not materialize at the pace at which we expect, or declines, our operating results may be adversely affected as a result of underutilization of capacity, charges related to obsolete inventory, asset impairment or inventory write-downs, increased operating expenses or reduced margins. For example, we have experienced, and may in the future experience, periods of customer inventory adjustments and other customer behaviors that may adversely affect our operating results. Further, any capacity expansions by us or other semiconductor manufacturers could also lead to overcapacity in our target markets which could lead to price erosion that could adversely impact our operating results. Conversely, during periods of rapid increases in demand, our available capacity may not be sufficient to satisfy the demand. In addition, we may not be able to expand our workforce and operations in a sufficiently timely manner, procure adequate resources and raw materials, locate suitable third-party suppliers or respond effectively to changes in demand for our existing products or to demand for new products requested by our customers, and our current or future business could be materially and adversely affected.

We rely, and plan to continue to rely, on third-party suppliers and service providers, including raw material and components suppliers, semiconductor wafer foundries, assembly and test contractors and freight carriers (collectively, vendors), in manufacturing and shipping our products. This reliance involves several risks, including reduced control over availability, pricing, capacity utilization, delivery schedules, manufacturing yields, costs and supply chain allocations. We currently source more than half of our wafer requirements annually from third-party wafer foundries, including Taiwan Semiconductor Manufacturing Company (TSMC) and others. These foundries often provide wafer foundry services to our competitors and therefore periods of increased industry demand may result in capacity constraints. With respect to TSMC in particular, tensions across the Taiwan Strait or other geopolitical events could disrupt TSMC’s operations, which would adversely affect our ability to manufacture certain products and as a result, could adversely affect our business and results of operations.

Our manufacturing processes require availability of certain raw materials and supplies. Limited or delayed access to these items, including as a result of,of global trade issues, supply chain constraints, difficulties obtaining import or export licenses, natural disasters, public health emergencies or changes in or new laws or regulations, could adversely affect our results of operations. Further, the imposition of tariffs or other trade restrictions may significantly increase the costs, and otherwise adversely impact the availability, of certain raw materials and supplies that we need to operate. In certain instances, one of our vendors may be the sole source of highly specialized processing services or materials. If such vendor is unable or unwilling to manufacture and deliver components to us on the time schedule and of the quality or quantity that we require, we may be forced to seek to engage an additional or replacement vendor, which could result in additional expenses and delays in product development or shipment of product to our customers. If additional or replacement vendors are not available, we may also experience delays in product development or shipment which could, in turn, result in reputational harm or the temporary or permanent loss of customers, and as a result could adversely affect our business and results of operations.

We market and sell our products directly and through third-party distributors. In the past, certain of our products have been, and there is a risk that our products may continue to be, diverted from our authorized distribution channels and sold on the “gray market” in ways that are not in accordance with our established agreements, controls, policies and procedures. Purchasers that acquire our products via the gray market or through other unauthorized channels may resell or otherwise use our products for purposes for which they were not intended or that may be contrary to our ethical, legal and regulatory obligations. Organizations may also purchase counterfeit or substandard products, including products that have been altered, mishandled or damaged, or purchase used products presented as new, each of which could result in damage to property or persons and adversely affect our reputation and customer satisfaction. In addition, governments and regulatory bodies may inquire into our processes to mitigate risks related to product diversion. For example, during 2024, we participated in an inquiry from the U.S. Senate Permanent Subcommittee on Investigations related to the unauthorized misuse of U.S. chips in Russian weapon systems. As new challenges and information arise, our processes and policies will evolve, and we may be required to incur additional costs to continue to enhance our compliance efforts, which may include costs associated with distributor audits or responding to inquiries from governments and regulatory bodies. These situations could have a material adverse effect on our reputation and business and operating results.

•changes in our effective tax rates, adverse tax decisions or new or revised tax legislation in the United States, Ireland or worldwideworldwide, including changes related to the One Big Beautiful Bill Act;

•the effects of issued, threatened or retaliatory government sanctions, trade barrierssanctions or economic restrictions; changes in law, regulations or other restrictions, including executive orders; and changes in import and export regulations, including restrictions on exports to certain companies or to third parties that do business with such companies, export classifications, ortariffs, duties andor tariffs,trade barriers, including with respect to China;

•political changes in the United States, including those related to the incomingcurrent U.S. administration and executive offices of the U.S. government, a decline in the U.S. government defense budget, changes in spending or budgetary priorities, a prolonged U.S. government shutdown or delays in contract awards;

In addition, the semiconductor market has historically been cyclical and subject to significant economic upturns and downturns. Our business and certain of the end markets we serve are also subject to rapid technological changes and material fluctuations in demand based on end-user preferences. There can be no assurance that products stocked in our inventory will not be rendered obsolete before we ship them or that we will be able to design, develop and produce products in a timely fashion to accommodate changing customer demand.

Our continued success depends to a significant extent upon the recruitment, retention and effective succession of our key personnel, including our leadership team, management and technical personnel, particularly our experienced engineers. The competition for these employees is intense and the labor market is tight.tight, which may be exacerbated by changes to U.S. immigration policies. The loss of key personnel or the inability to attract, timely hire and retain key employees with critical technical skills to achieve our strategy, including as a result of changes to immigration policies, and the increased uncertainty surrounding such policies in light of the incoming administration’s expected immigration agenda, could cause business disruptions, increased expenses to comply with such policies and address any disruptions and could have a material adverse effect on our business. We do not maintain any key person life insurance policy on any of our officers or other employees. The loss of members of our leadership team, and failure to successfully execute succession plans for our leadership team, could also harm our business and results of operations.

We believe that a critical contributor to our success to date has been our corporate culture, which we have built to foster innovation, teamwork and employee satisfaction. As we grow, including from the integration of employees and businesses acquired in connection with previous or future acquisitions, we may find it difficult to maintain important aspects of our corporate culture, which could negatively affect our ability to retain and recruit personnel who are essential to our future success.

We typically do not have sales contracts with our customers that include long-term product purchase commitments. In certain markets where end-user demand may be particularly volatile and difficult to predict, some customers place orders that require us to manufacture product and have it available for shipment, even though the customer is unwilling to make a binding commitment to purchase all, or even any, of the product. In other instances, we manufacture productproducts based on non-binding forecasts of customer demands, which may fluctuate significantly on a quarterly or annual basis and at times may prove to be inaccurate. Additionally, our U.S. government contracts and subcontracts may be funded in increments over a number of government budget periods and typically can be terminated by the government for its convenience. As a result,result of these and other factors, we mayoften incur inventory and manufacturing costs in advance of anticipated sales, and we are subject to the risk of lower-than-expected orders or cancellations of orders, leading to a sharp reduction ofin sales and backlog. Further, if orders or forecasts for products that meet a customer’s unique requirements are canceled or unrealized, we may be left with an inventory of unsaleable products, causing potential inventory write-offs, and hindering our ability to recover our costs. The foregoing risks may be exacerbated in times of macroeconomic uncertainty, including as a result of tariffs, elevated inflation, high interest rates, bank failures and slower economic growth or recession. Incorrect forecasts, or reductions, cancellations or delays in orders for our products, could adversely affect our operating results.

Our semiconductor products are complex and we may be subject to warranty, indemnity or product liability claims, which could result in significant costs and damage to our reputation and adversely affect customer relationships, the market acceptance of our products and our operating results.

Semiconductor products are highly complex and may contain defects that affect their quality or performance. Failures in our products and services or in the products of our customers could result in damage to our reputation for reliability and increase our legal or financial exposure to third parties. Certain of our products and services, including those that may incorporate, or are based upon, software or AI technology, could also contain security vulnerabilities, defects, bugs and errors, which could also result in significant data losses, security breaches and theft of intellectual property. We generally warrant that our products will meet their published specifications, and that we will repair or replace defective products, for one year from the date title passes from us to the customer. We invest significant resources in the testing of our products; however, if any of our products contain security vulnerabilities, defects, bugs or errors, we may be required to incur additional development and remediation costs pursuant to warranty and indemnification provisions in our customer contracts and purchase orders. These problems may divert our technical and other resources from other product development efforts and could result in claims against us by our customers or others, including liability for costs and expenses associated with product defects, including recalls, which may adversely impact our reputation and operating results. We may also be subject to customer intellectual property indemnity claims. Our customers have on occasion been sued, and may be sued in the future, by third parties alleging infringement of intellectual property rights, or damages resulting from use of our products. Those customers may seek indemnification from us under the terms and conditions of our sales contracts with them. In certain cases, our potential indemnification liability may be significant.

Further, we sell to customers in industries such as automotive (including autonomous vehicles), aerospace, defensedefense, healthcare and healthcare,industrial, where failure of the systems in which our products are integrated could cause damage to property or persons. We may be subject to product liability claims if our products, or the integration of our products, cause system failures. Any product liability claim, whether or not determined in our favor, could result in significant expense, divert the efforts of our technical and management personnel, and harm our business. In addition, if any of our products contain defects, or have reliability, quality or compatibility problems not capable of being resolved, our reputation may be damaged, which could make it more difficult for us to sell our products to customers and which could also adversely affect our operating results.

An element of our business strategy involves expansion through the acquisitions of businesses, assets, products or technologies that allow us to complement our existing product offerings, diversify our product portfolio, expand our market coverage, increase our engineering workforce, expand our technical skill sets or enhance our technological capabilities. We may not be able to identify businesses that have the technology or resources we need and, if we find such businesses, we may not be able to invest in, purchase or license the technology or resources on commercially favorable terms or at all. Acquisitions, investments and technology licenses are challenging to complete for a number of reasons, including difficulties in identifying potential targets, the cost of potential transactions, competition among prospective buyers and licensees, the need for regulatory approvals, and difficulties related to integration efforts. In addition, investments in companies are subject to a risk of a partial or total loss of our investment. Both in the United States and abroad, governmental regulation of acquisitions, including antitrust and other regulatory reviews and approvals, has become more complex, increasing the costs and risks of undertaking, and may prevent us from consummating, significant acquisitions. In order to finance a potential transaction, we may need to raise additional funds by issuing securities or borrowing money. We may not be able to obtain financing on favorable terms, and the sale of our stock may result in the dilution of our existing shareholders or the issuance of securities with rights that are superior to the rights of our common shareholders.

We rely on information technology systems throughout our company to keep financial records and customer data, process orders, manage inventory, coordinate shipments to customers, maintain confidential and proprietary information, assist in semiconductor engineering and other technical activities and operate other critical functions such as internet connectivity, network communications and email. In addition, we provide our confidential and proprietary information to our strategic partners in certain cases, who may maintain such information on their information technology systems. While in the past we have experienced cybersecurity attacks and incidents, we believe that they have not had a material impact on our business. Our security measures or those of our third-party service providers or strategic partners may not detect or prevent security breaches, cyberattacks, defects, bugs or errors. Further, geopolitical tensions and conflicts have escalated the volume and sophistication of cyberattacks. Because the tactics and techniques used by threat actors to obtain unauthorized access to or sabotage systems change frequently and, in some cases, are not recognized until they are launched or even later, we may be unable to anticipate these techniques or to implement adequate preventative measures in advance, and security breaches may remain undetected for an extended period of time. Our use of AI may also increase vulnerability to cybersecurity risks, including through unauthorized use or misuse of AI tools and bad inputs or logic or the introduction of malicious code incorporated into AI generated code. AI and machine learning also may be used for certain cybersecurity attacks, improving or expanding the existing capabilities of threat actors in manners we cannot predict at this time, resulting in greater risks of security incidents and breaches. We and our third-party service providers or strategic partners are susceptible to security breaches of information technology systems or certain products and other incidents such as unauthorized access, supply-chain attacks, exfiltration or destruction of data, disruption of service, viruses or other malicious code, illegal break-ins or hacking, sabotage, phishing attempts and other forms of social engineering, malware, ransomware and other forms of cyber extortion and similar events. These threats may come from cybercriminals, cyberterrorists and hacktivists, nation-state and nation-state-supported actors (including advanced persistent threat intrusions) and computer hackers. They also may result from the malicious or accidental acts of our employees, contractors or third-party providers. In the event of unauthorized access to, or a security breach of, our systems or those of our third-party service providers or strategic partners, our operations may be disrupted and our proprietary information or that of our employees, contractors, partners, customers, suppliers or other third parties may be misappropriated. In the event of a cybersecurity attack or incident, we could be exposed to potential liability, litigation, and regulatory action, as well as the loss of existing or potential customers, damage to our reputation and other financial loss. In addition, the cost and operational consequences of responding to breaches and implementing remediation measures could be significant. Furthermore, the continuing and evolving threat of cyberattacks has resulted in increased regulatory focus and we may be required to invest significant additional resources to comply with evolving cybersecurity regulations. For example, the SEC adopted rules requiring the disclosure of cybersecurity incidents that we determine to be “material,” to be made within four business days of such determination, which can be complex, requiring a number of assumptions based on several factors. It is possible that the SEC may not agree with our determinations, which could result in fines, civil litigation or damage to our reputation.

Our information technology systems and those of our third-party service providers and strategic partners may also be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, telecommunication failures, user errors, catastrophes or other unforeseen events. A prolonged disruption in the information technology systems that involve our internal communications or our interactions with customers or suppliers,suppliers could result in the loss of sales and customers and significant incremental costs, which could adversely affect our business.

We are increasingly incorporatingincorporate AI capabilities into the development of technologies andacross our technologies, business operations and into ouroperations, products and services.services to enhance performance and drive smarter, more efficient solutions. The development and deployment of AI involves significant competitive, legal, regulatory and other risks. The implementation of AI is costly, requires a significant amount of data and there can be no assurance that AI will enhance our products or services or be beneficial to our business, including our efficiency or profitability. In addition, we face significant competition from other companies that are incorporating AI into their products and technologies. These other companies may incorporate AI in products or technologies that are similar to, or that customers perceive as superior to, our technologies or are more cost-effective to develop and deploy. AI technology is complex and rapidly evolving, and if we are unable to innovate quickly enough to keep pace with these rapid technological developments, our business could be harmed.

AItechnologies. technologySeveral mayjurisdictions alsowhere givewe riseoperate toare significantconsidering legalor have proposed or enacted legislation and regulatorypolicies liability. Governments around the world have adopted, and may continue to adopt, laws and regulations related toregulating AI, including the European Union’s AI Act, and severallack U.S.of governmentconsistency agenciesamong havedifferent increasedregulatory investigationsregimes may increase our regulatory and compliance burdens. Investigations and enforcement efforts related to the use of AI technology, whichtechnology could increase our compliance costs and limitrestrict our ability to use AI in the development of our products and services. WhileAs the incominguse administration has signaled thatof AI policyin willour beproducts, atechnologies priority,or theour scopebusiness operations changes, we may become subject to new rules, regulations and impactindustry ofstandards, anywhich suchmay policiesexacerbate cannotthese yet be determined.risks. In addition, the use of AI in the development of our products and services, in our business operations or by our customers in end products that incorporate our products, could cause loss of intellectual property, or subject us to risks related to intellectual property infringement or misappropriation, data privacy or cybersecurity. AI algorithms or training methodologies may also be flawed, and datasets may contain irrelevant, insufficient or biased information. Further, AI technology has many applications, and our products could be used in applications that are not in accordance with our controls, policies and procedures. Any failure or perceived failure by us to comply with any legal or regulatory requirement could subject us to legal liabilities, damage our reputation or otherwise adversely affect our business.

Our future success depends, in part, on our ability to protect our intellectual property. We primarily rely on patent, mask work, copyright, trademark and trade secret laws, as well as nondisclosure agreements, information security practices and other methods, to protect our proprietary information, technologies and processes. Despite our efforts to protect our intellectual property, it is possible that competitors or other unauthorized parties may obtain or disclose our confidential information, reverse engineer or copy our technologies, products or processes, make unlicensed copies or engage in unapproved distributions of our technology for unauthorized uses, or otherwise misappropriate our intellectual property. Moreover, the laws of foreign countries in which we design, manufacture, market and sell our products may afford little or no effective protection of our intellectual property.

There can be no assurance that the claims allowed in our issued patents will be sufficiently broad to protect our technology. In addition, any of our existing or future patents may be challenged, invalidated or circumvented. As such, any rights granted under these patents may not prevent others from exploiting our proprietary technology. We may not be able to obtain foreign patents or pending applications corresponding to our U.S. patents and applications. Even if patents are granted, we may not be able to effectively enforce our rights. If our patents and mask works do not adequately protect our technology, or if our registrations expire prior to end of life of our products, our competitors may be able to offer products similar to ours. Our competitors may also be able to develop similar technology independently or design around our patents.

In particular, there are numerous U.S. federal, state, and local laws and regulations and foreign laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal data. Such laws and regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions. For example, the GDPR and PIPL include operational requirements for companies that receive or process personal data of residents of the European Union or China, as applicable, that are broader and more stringent than those in many other jurisdictions around the world. The GDPR includes significant penalties for non-compliance, and China’s PIPL imposes additional operational requirements relating to processing personal information and provides comprehensive penalty and enforcement mechanisms. In the United States, California enacted the CCPA that requires covered companies to provide additional disclosures and data rights to data subjects, including employees. The California Privacy Rights Act expands the CCPA and establishes the California Privacy Protection Agency to enforce Californians’ privacy rights under the CCPA. Since the CCPA was enacted, several other states, including VirginiaOregon and Colorado,Texas, have enacted or are in the process of enacting comprehensive privacy schemes.

From time to time, we are involved in various legal, administrative and regulatory proceedings, claims, demands and investigations relating to our business, including inquiries from and discussions with government entities regarding the compliance of our contracting and sales practices with laws and regulations, which may result in claims, fines or penalties with respect to commercial, trade, product liability, intellectual property, AI, cybersecurity, privacy, data protection, antitrust, breach of contract, employment, class action, whistleblower, mergers and acquisitions and other matters. We could also be subject to litigation or arbitration disputes arising under our contractual obligations, customer indemnity, warranty or product liability claims, or other matters that could lead to significant costs and expenses as we defend those claims or pay damage awards.

Environmental,Expectations, requirements and attention to environmental, social and governance matters may have an adverse effect on our business, financial condition and results of operations, and damage our brand and reputation.

There is an increasing focus from regulators, investors, customers, employees and potential talent, as well as other stakeholders, concerning ESG matters, including climate change and sustainability, human rights, support for local communities, Board of Directors’ and employeeworkforce diversity, human capital management, employee health and safety practices, product quality, workerworkers’ rights, supply chain management and corporate governance and transparency.transparency, continue to receive significant attention from a wide range of stakeholders, including regulators, investors, customers, employees and potential talent. If our ESG practices fail to meet our or the evolving and sometimes differing expectations of investors, customers, employees or other stakeholders, our reputation, brand and employee retention may be negatively impacted, and our customers and suppliers may be unwilling tonot continue to do business with us. CurrentCertain current and prospective investors arecontinue increasinglyto utilizingutilize ESG data to inform their decisions,strategies, including investment and voting decisions, using a multitude of evolving scorescoring and rating frameworks. Further, certain customers utilize ESG data to inform their purchasing decisions. Additionally, public interest and legislative and regulatory pressure related to companies’ ESG practices, including those related to sourcing practices, carbon emissions and human rights protections,practices continue to grow.evolve. This willmay require us to align our programs to such expectations and disclose anspecific increasingqualitative amountand ofquantitative information and data to illustratedemonstrate our position and progress and to support our customerscustomers’ toregulatory comply with regulations and other requirements.compliance. If we do not adapt our strategy or executionexecute quickly enough to meet evolvingchanging regulatory requirements or the expectations of our investors, customers, employees, regulators or other stakeholders, or if our ESG disclosures, including data input, processing and reporting, are incomplete or inaccurate, our business, financial condition, results of operations, brand and reputation could be adversely affected.

Our industry is subject to EHS requirements and laws, particularly those that control and restrict the sourcing, use, transportation, emission, discharge, storage and disposal of certain substances and materials and those that help promote the health and safety of our employees and the communities in which we operate. For certain facilities, we are required to obtain environmental permits from governmental authorities for our operations, which may limit or restrict our operations. In addition, our operations may be interrupted or restricted by the phase-out or ban of certain substances, materials or processes, which may impact the sourcing, supply and pricing of materials used in manufacturing our products. For example, several jurisdictions have sought or may seek to restrict the use of per- and polyfluoroalkyl substances (PFAS), which may be found in process chemicals, parts, components and other materials used in semiconductor manufacturing and have limited technically and commercially feasible alternatives. Any such restriction in our ability to access supplies may adversely affect our results of operations. Further, public attention to environmental and social responsibility remains high, and our customers routinely include stringent environmental and other standards in their contracts with us. It is expected that there will be changes to EHS laws or regulations by the incoming administration, but the impacts of any such changes on us are not currently known. Changes in EHS laws or regulations, uncertainties about those laws or regulations, or customer requirements may require us to invest in equipment, make manufacturing process or material changes or re-assess current and planned expenditures and initiatives, any of which could adversely affect our business, financial condition and results of operations.

In addition, we use hazardous and other regulated materials that subject us to risks of liability for damages caused by potential or actual releases of such materials. Any failure to control suchthese materials adequately or to comply with existing or future EHS statutory or regulatory standards, requirements or contractual obligations could result in any of the following, each of which could have a material adverse effect on our business and operating results:

Under some of our government subcontracts, we are required to maintain secure facilities and to obtain security clearances for personnel involved in performance of the contract, which can be time consumingtime-consuming and costly. If we are unable to comply with these requirements, or if personnel critical to our performance of these contracts are unable to obtain or maintain their security clearances, we may be unable to perform these contracts or compete for other projects of this nature, which could adversely affect our revenue.

A number of factors may increase our future effective tax rate, including: new or revised tax laws or legislation or the interpretation of such laws or legislation by governmental authorities; increases in tax rates in various jurisdictions; variation in the mix of jurisdictions in which our profits are earned and taxed; deferred taxes arising from basis differences in investments in foreign subsidiaries; any adverse resolution of ongoing tax audits or adverse rulings from taxing authorities worldwide; changes in the valuation of our deferred tax assets and liabilities; adjustments to income taxes upon finalization of various tax returns; increases in expenses not deductible for tax purposes, including executive compensation subject to the limitations of Section 162(m) of the Internal Revenue Code and amortization of assets acquired in connection with strategic transactions; decreased availability of tax deductions for stock-based compensation awards worldwide; and changes in available tax credits. Any significant increase in our future effective tax rate could adversely impact our net income during future periods.

Tax legislation and regulation may require the collection of information not regularly produced by us, and therefore necessitate the use of estimates in our Consolidated Financial Statements and the exercise of significant judgment in accounting for its provisions, which may subject us to additional tax liability, tax examination and other risks. As regulations and guidance evolve with respect to tax legislation and regulation, and as more information is gathered and analyzed, our results may differ from previous estimates and may materially affect our Consolidated Financial Statements. Further, we are subject to, and are under tax examination and audit in various jurisdictions, including an IRS income tax audit for the fiscal years ended October 30, 2021, November 2, 2019 (fiscal 2019) and November 3, 2018; a pre-Acquisitionan IRS income tax audit for Maxim Integrated Products, Inc.’s (Maxim) fiscal years ended June 27, 2015 through August 26, 2021; and various U.S. state and local tax audits and international audits, including an Irish corporate tax audit for fiscal 2019.2021. Such jurisdictions may assess additional income tax against us. The final determination of tax audits or any administrative appeals relating thereto could be materially different from our income tax provisions and accruals. The ultimate result of any current or future audit could have a material adverse effect on our results of operations and cash flows in the period or periods for which that determination is made.

The following discussion includes results of operations and financial condition for the fiscal year ended November 1, 2025 (fiscal 2025) and the fiscal year ended November 2, 2024 (fiscal 2024) and year-over-year comparisons between fiscal 2025 and fiscal 2024. For discussion on results of operations and financial condition for fiscal 2024 and the fiscal year ended October 28, 2023 (fiscal 2023) and year-over-year comparisons between fiscal 2024 and fiscal 2023. For discussion on results of operations and financial condition for fiscal 2023 and the fiscal year ended October 29, 2022 (fiscal 2022) and year-over-year comparisons between fiscal 2023 and fiscal 2022,2023, please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for fiscal 20232024 filed with the Securities and Exchange Commission on November 21,26, 2023.2024. Our fiscal year is the 52-week or 53-week period ending on the Saturday closest to the last day in October. Fiscal 20242025 was a 53-week52-week fiscal period, while fiscal 20232024 was a 52-week53-week fiscal period. The additional week in fiscal 2024 iswas included in the first quarter ended February 3, 2024. Therefore, fiscal 20242025 includes anone additionalless week of operations as compared to fiscal 2023.2024.

The following table summarizes revenue by sales channel. We sell our products globally through a direct sales force, third-party distributors, independent sales representatives and via our website. Distributors are customers that buy products with the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment manufacturers (OEMs). Other customers include the U.S. government, government prime contractors and certain commercial customers for which revenue is recorded over time.

As indicated in the table above, the percentage of total revenue sold via each channel has remained relatively consistent in the periods presented,presented but can fluctuate from time to time based on end market revenue trends. As a percentage of total revenue, the decrease in the distributor channel is primarily due to the decrease in the percentage of revenue infrom our Industrial end market.

In all periods presented, the predominant regions comprising “Rest of North and South America” are CanadaMexico and MexicoCanada; the predominant regions comprising “Europe” are Germany, Sweden,the IsraelNetherlands, France and the NetherlandsIsrael; and the predominant regions comprising “Rest of Asia” are Taiwan, Malaysia, South KoreaKorea, Malaysia and Singapore.

Total revenue decreasedincreased in fiscal 20242025 as compared to fiscal 20232024 in allmost regions due to weakerbroad-based macroeconomicdemand conditionsincreases as discussed above under the heading Revenue Trends by End Market.

Gross margin percentage in fiscal 20242025 decreasedincreased by 690440 basis points compared to fiscal 2023,2024, primarily due to lowerhigher utilization of our factories due to decreasedincreased customer demand andas unfavorablewell productas mix.a decrease in amortization expense related to acquired intangible assets.

R&D expenses decreasedincreased in fiscal 20242025 as compared to fiscal 20232024, primarily as a result of lowerhigher R&D employee related variable compensation expenses and higher salary and benefit expenses, partially offset by the impact of an additional week of operations in fiscal 2024 as compared to fiscal 2023.2025.

SMG&A expenses decreasedincreased in fiscal 20242025 as compared to fiscal 2023,2024, primarily as a result of lower variable compensation expenses,higher SMG&A employee related variable compensation expenses and salary and benefit expenses and discretionary spending. The decrease wasexpenses, partially offset by an additional week of operations in fiscal 2024 as compared to fiscal 2023.2025.

Amortization expenses decreased in fiscal 20242025 as compared to fiscal 2023,2024, primarily as a result of a portion of our acquired intangible assets becoming fully amortized during fiscal 2023.amortized.

Special charges, net decreasedincreased in fiscal 20242025 as compared to fiscal 2023,2024, primarily due to decreasedincreased charges related to our Q4Global 2023Repositioning Plan.Actions. See Note 5, Special Charges, Net, of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for more information.

The year-over-year increasedecrease in nonoperating expense in fiscal 20242025 as compared to fiscal 20232024 was primarily the result of higher interest expenseincome relatedfrom tohigher ourcash, debtcash obligationsequivalents and lowershort-term netinvestments gainsbalances fromduring otherfiscal investments, partially offset by higher interest income.2025.

Our effective tax rates for fiscal 20242025 and fiscal 20232024 were below the U.S. statutory rate of 21% due to lower statutory tax rates applicable to our operations in the foreign jurisdictions in which we earn income. For fiscal 20242025 and fiscal 20232024 our pretax income was primarily generated in Ireland at a tax rate of 12.5%. Our effective tax rate for fiscal 20232025 was also impacted by a discretenet incomedeferred tax benefit recordedexpense of $81.7$153.8 million resultingrelated fromto the approval granted by the Joint Committee on Taxationremeasurement of our federalGlobal corporateIntangible incomeLow-Taxed Income related deferred tax reliefassets claimand whichliabilities reducedattributable to the amountpassage of transition tax owed under the TaxOne CutsBig andBeautiful JobsBill Act of 2017.Act.

See Note 12,10, Income Taxes, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for further discussion.

The decreaseincrease in net income in fiscal 20242025 as compared to fiscal 20232024 was a result of a $1,790.3$899.7 million decreaseincrease in operating income and a $40.3$35.1 million increasedecrease in nonoperating expense, partially offset by a $151.4$302.7 million decreaseincrease in provision for income taxes.

At November 2,1, 2024,2025, our principal source of liquidity was $2.4$3.7 billion of cash, cash equivalents and short-term investments, of which approximately $1.3$2.4 billion was held in the United States, with the balance held outside the United States in various foreign subsidiaries. We manage our worldwide cash requirements by, among other things, reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in the United States. We do not expect current regulatory restrictions or taxes on repatriation to have a material adverse effect on our overall liquidity, financial condition or results of operations. Our cash, cash equivalents and short-term investments consist of highly liquid investments, including money market funds and corporate and bank obligations. We maintain these balances with counterparties with high credit ratings,ratings and continually monitor the amount of credit exposure to any one issuer and diversify our investments in order to minimize our credit risk.

Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities. The decreaseincrease in cash provided by operating activities during fiscal 20242025 as compared to fiscal 20232024 was primarily a result of lowerhigher net income adjusted for noncash items partially offset byand changes in working capital.

Investing cash flows generally consist of capitalpurchases expendituresof property, plant and cashequipment, usedavailable-for-sale forinvestments acquisitions.and acquisitions of other businesses. The decreasechange in cash used for investing activities during fiscal 20242025 as compared to fiscal 20232024 was primarily the result of a decrease in cash used for capital expenditures, partially offset by the net impact of purchases and maturities of short-termavailable-for-sale investmentsinvestments, duringpartially fiscaloffset 2024.by a decrease in cash used for capital expenditures.

Financing cash flows generally consist of payments of dividends to shareholders, repurchases of common stock, issuance and repayment of debt and proceeds from the sale of shares of common stock pursuant to employee equity incentive plans. The decreaseincrease in cash used for financing activities during fiscal 20242025 as compared to fiscal 20232024 was primarily the result of lowerincreased common stock repurchases.repurchases and dividend payments to shareholders, partially offset by the net proceeds from our debt obligations.

(1)We use the average of the current year and prior year ending net accounts receivable and ending inventory balance in our calculation of days sales outstanding and days cost of sales in inventory, respectively. Cost of sales amounts used in the calculation of days cost of sales in inventory include accounting adjustments related to amortization of developed technology intangible assets acquired and depreciation related to the write-up of fixed assets to fair value as a result of the acquisition of Maxim.

The decreaseincrease in accounts receivable for fiscal 20242025 compared to fiscal 20232024 was primarily the result of variations in the timing of collections and billings and decreasedincreased revenue levels in the fourth quarter of fiscal 20242025 as compared to the fourth quarter of fiscal 2023.2024.

Inventory decreasedincreased in fiscal 20242025 as compared to fiscal 2023,2024, primarily as a result of our efforts to balance manufacturing production, demand and inventory levels. Our inventory levels are impacted by our need to support forecasted sales demand and variations between those forecasts and actual demand.

Current liabilities decreasedincreased to $3.0$3.2 billion at November 2,1, 20242025 from $3.2$3.0 billion recorded at the end of fiscal 2023,2024, primarily due to decreasesincreases in accrued liabilities and currentincome debt,taxes payable, partially offset by increasesa decrease in incomecurrent taxes payable.debt.

Our ThirdFourth Amended and Restated Revolving Credit Agreement, dated as of JuneApril 23,11, 2021,2025, with Bank of America N.A. as administrative agent and the other banks identified therein as lenders, which was subsequently amended on December 20, 2022 and July 24, 2023lenders (as amended, the Revolving Credit Agreement) provides for a five year unsecured revolving credit facility in an aggregate principal amount not to exceed $2.5$3.0 billion (subject to certain terms and conditions).

We may borrow under thisthe revolvingRevolving creditCredit facilityAgreement in the future and use the proceeds for repayment of existing indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes. The terms of the Revolving Credit Agreement impose restrictions on our ability to undertake certain transactions, to create certain liens on assets and to incur certain subsidiary indebtedness. In addition, the Revolving Credit Agreement contains aan consolidatedinterest leveragecoverage covenant which requires the ratio covenant of total consolidated funded debt to consolidated earnings before interest, taxes, depreciation,depreciation and amortization (EBITDA) ofto notconsolidated interest charges to be greater than 3.53.0 to 1.0. As of November 2,1, 2024,2025, we were in compliance with these covenants. See Note 13,11, Revolving Credit Facility, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for further information on our revolving credit facility.

As of November 2,1, 2024,2025, we had approximately $7.0$8.1 billion of carrying value outstanding on our senior notes. The difference in the carrying value of the debt and the principal is due to the unamortized discount and issuance fees and other adjustments on these instruments. The indentures governing certain of our debt instruments contain covenants that may limit our ability to: incur, create, assume or guarantee any debt or borrowed money secured by a lien upon a principal property; enter into sale and lease-back transactions with respect to a principal property; and consolidate with or merge into, or transfer or lease all or substantially all of our assets to, any other party. As of November 2,1, 2024,2025, we were compliant with these covenants. See Note 14,12, Debt of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for further information on our outstanding debt.

As of November 2,1, 2024,2025, $1.7our Board of Directors had authorized us to repurchase $26.7 billion of our common stock under our common stock repurchase program and $9.7 billion remained available for repurchaserepurchases under the current authorized program. The repurchasedRepurchased shares are held as authorized but unissued shares of common stock. Unless terminated earlier by resolution of our Board of Directors, the repurchase program will expire when the full dollar amount of the authorization has been used to repurchase shares under the program. Future repurchases of common stock will be dependent upon our financial position, results of operations, outlook, liquidity and other factors we deem relevant.

Net additions to property, plant and equipment were $730.5$533.6 million in fiscal 2024 as we invested to enhance our global resiliency and continue to diversify our global manufacturing footprint.2025. We expect capital expenditures for fiscal 20252026 to be between approximately 4% and 6% of fiscal 20252026 revenue. These capital expenditures will be funded with a combination of cash on hand and cash expected to be generated from future operations, together with existing and anticipated available short- and long-term financing.

As of November 2,1, 2024,2025, our total liabilities associated with uncertain tax positions was $185.8$199.7 million, which are included in non-current income taxes payable in our Consolidated Balance Sheets contained in Part II, Item 8 of this Annual Report on Form 10-K. Due to the complexity associated with our tax uncertainties, we cannot make a reasonably reliable estimate of the period in which we expect to settle the non-current liabilities associated with these uncertain tax positions. Therefore, we have not included these uncertain tax positions in the above contractual obligations table.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) and are adopted by us as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards will not have a material impact on our future financial condition and results of operations. See Note 2s, New Accounting Pronouncements, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for a description of recently issued and adopted accounting pronouncements, including the dates of adoption and impact on our financial condition and results of operations.

Recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the providing entity expects to be entitled in exchange for those goods or services. We recognize revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration that we expect to receive in exchange for those products or services. We recognize revenue when all of the following criteria are met: (1) we have entered into a binding agreement, (2) the performance obligations have been identified, (3) the transaction price to the customer has been determined, (4) the transaction price has been allocated to the performance obligations in the contract, and (5) the performance obligations have been satisfied. The majority of our shipping terms permit us to recognize revenue at point of shipment or delivery. Certain shipping terms require the goods to be through customs or be received by the customer before title passes. In those instances, we defer the revenue recognized until title and control of the promised goods have passed to the customer. Shipping costs are charged to selling, marketing, general and administrative expense as incurred. Sales taxes are excluded from revenue.

Performance Obligations: Substantially all of our contracts with customers contain a single performance obligation, the sale of mixed-signal integrated circuit (IC) products. Such sales represent a single performance obligation because the sale is one type of good or includes multiple goods that are neither capable of being distinct nor separable from the other promises in the contract. This performance obligation is satisfied when control of the product is transferred to the customer, which occurs upon shipment or delivery. Unsatisfied performance obligations primarily represent contracts for products with future delivery dates and with an original expected duration of one year or less. We generally warrant that our products will meet their published specifications, and that we will repair or replace defective products, for one year from the date title passes from us to the customer. Specific accruals are recorded for known product warranty issues.

GoodwillWe isevaluate subjectgoodwill tofor impairment testsannually, annuallyas orwell moreas frequently ifwhenever events or changes in circumstances suggest that the carrying value of goodwill may not be recoverable, utilizing either the qualitative or quantitative method. We testhave goodwilldetermined for impairment atthat the business operates as a single operating segment and has a single reporting unit level,for whichthe wepurpose determinedof isgoodwill consistentimpairment withtesting. ourWe identifiedtest operating segments,goodwill on an annual basis on the first day of the fourth quarter (on or about August 4th3, 2025 in fiscal 2025) or more frequently if we believe indicators of impairment exist or we reorganize our operating segments or reporting units.business.

–the amount by which the fair valuesvalue of eachour reporting unit exceeded theirits carrying valuesvalue as of the date of the most recent quantitative impairment analysis, which indicated there would need to be substantial negative developments in the markets in which theseour reporting unitsunit operateoperates in order for there to be potential impairment;

–the carrying valuesvalue of theseour reporting unitsunit as of the assessment date compared to theirthe previously calculated fair valuesvalue as of the date of the most recent quantitative impairment analysis;

–changes in the value of major U.S. stock indices that could suggest declines in overall market stability that could impact the valuation of our reporting unitsunit;

–changes in our market capitalization and overall enterprise valuation to determine if there were any significant decreases that could be an indication that the valuation of our reporting unitsunit had significantly decreased; and

–whether there had been any significant increases to the weighted-average cost of capital rates for each reporting unit,used, which could materially lower our prior valuation conclusions under a discounted cash flow approach.

If we elect not to use this option, or we determine that it is more likely than not that the fair value of a reporting unit is less than its net book value, then we perform the quantitative goodwill impairment test. The quantitative goodwill impairment test requires an entity to compare the fair value of a reporting unit with its carrying amount. If fair value is determined to be less than carrying value, an impairment loss is recognized for the amount of the carrying value that exceeds the amount of the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Additionally, we consider income tax effects from any tax deductible goodwill on the carrying amount of theour reporting unit when measuring the goodwill impairment loss, if applicable. We determine the fair value of our reporting unitsunit using a weighting of the income and market approaches. Under the income approach, we use a discounted cash flow methodology which requires management to make significant estimates and assumptions related to forecasted revenues, gross profit margins, operating income margins, working capital cash flow, perpetual growth rates, and long-term discount rates, among others. For the market approach, we use the guideline public company method. Under this method we utilize information from comparable publicly traded companies with similar operating and investment characteristics as the reporting units,unit, to create valuation multiples that are applied to the operating performance of the reporting unit being tested, in order to obtain theirthe respective fair values.value. In order to assess the reasonableness of the calculated reporting unit fair values,value, we reconcile the aggregate fair valuesvalue of our reporting unitsunit determined, as described above, to our total company market capitalization, allowing for a reasonable control premium.

During fiscal 20242025, we used a combination of the quantitative and qualitative methods of assessing goodwill. During fiscal 2023,2024, we elected to useused the qualitative method of assessing goodwill for all of our reporting units.goodwill. In all periods presented, we concluded the reporting units’unit fair values exceeded their carrying amounts as of the assessment dates and no risk of impairment existed.

We account for uncertain tax positions by first determining if it is “more likely than not” that a tax position will be sustained by the appropriate taxing authorities prior to recording any benefit in the financial statements. An uncertain income tax position is not recognized if it has less than a 50% likelihood of being sustained. For those tax positions where it is more likely than not that a tax position will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. We classify interest and penalties related to uncertain tax positions within the provision for income taxes line of the Consolidated Statements of Income. We reevaluate these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in known facts or circumstances, changes in tax law, effectively settled issues under audit, and new guidance on legislative interpretations. A change in these factors could result in the recognition of an increase or decrease to our income tax provision, which could materially impact our consolidated financial position and results of operations.

See Note 12,10, Income Taxes, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for further discussion.

We are subject to a number of risks that could adversely affect our business, results of operations, financial condition and future prospects, including those identified in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended November 1, 2025, which was filed with the Securities and Exchange Commission on November 25, 2025.2025 (the 2025 Form 10-K). Except for the risk factor set forth below, there have been no material changes from the factors disclosed in the 2025 Form 10-K.

The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in the forward-looking statements: economic, political, legal and regulatory uncertainty or conflicts; recently announced and future tariffs and other trade restrictions; changes in export classifications, import and export regulations or duties and tariffs; changes in demand for semiconductor products; performance of independent distributors; manufacturing delays, product and raw materials availability and supply chain disruptions; products may be diverted from our authorized distribution channels; our development of technologies and research and development investments; our ability to compete successfully in the markets in which we operate; our future liquidity, capital needs and capital expenditures; our ability to recruit and retain key personnel; risks related to acquisitions or other strategic transactions; unanticipated difficulties or expenditures relating to integrating acquired businesses; security breaches or other cyber incidents; risks related to the use of artificial intelligence in our business operations, products and services; adverse results in litigation; the outcome of any regulatory actions, including governmental inquiries, investigations or enforcement proceedings in the event of noncompliance or alleged noncompliance with laws or regulations; reputational damage; changes in our estimates of our expected tax rates based on current tax law; risks related to our indebtedness; the discretion of our Board of Directors to declare dividends and our ability to pay dividends in the future; factors impacting our ability to repurchase shares; and uncertainty as to the long-term value of our common stock. Additional factors that could cause actual results to differ materially from those described in these forward-looking statements include the risk factors included in Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q for the period ended August 1, 2026 and Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for fiscal 2025. Forward-looking statements represent management’s current expectations and are inherently uncertain. We undertake no obligation to revise or update any forward-looking statements, including to reflect events or circumstances occurring after the date of the filing of this report, except to the extent required by law.

Revenue increased 37%40% and 34%36% in the three- and six-monthnine-month periods ended MayAugust 2,1, 2026 as compared to the same periods of the prior fiscal yearyear, as a result of areflecting broad-based increase in demand foracross ourend products,markets. notablyWithin withinIndustrial, all Industrialsub-markets grew,

sub-markets with the highest growth coming from our test equipment and aerospace and defense sub-markets.representing Revenuethe alsohighest increasedgrowth. inThe strongest growth within Communications came from the data center portionsub-market, ofdriven the Communications end market related toby artificial intelligence-drivenintelligence-related infrastructure investments.

As indicated in the tables above, the percentage of total revenue sold via each channel has remained relatively consistent in the periods presented, but can fluctuate from time to time based on end market revenue trends. As a percentage of total revenue, the increase in the distributor channel is primarily due to the increase in the percentage of revenue from our Industrial end market.

Gross margin percentage increased by 630520 and 600580 basis points in the three- and six-monthnine-month periods ended MayAugust 2,1, 2026 as compared to the same periods of the prior fiscal year, primarily due to higher utilization of our manufacturing fixed costs as a result of increased customer demand and favorable mix of products sold into our end markets.

R&D expenses increased in the three- and six-monthnine-month periods ended MayAugust 2,1, 2026, as compared to the same periods of the prior fiscal year, primarily as a result of higher R&D employee-related variable compensation expenses and higher salary and benefit expenses. R&D expenses declined as a percentage of revenue, primarily reflecting higher revenue levels and improved operating leverage. We expect to continue the development of innovative technologies and processes for new products, which we view as critical to our future growth. We believe that a continued commitment to R&D is essential to maintain product leadership with our existing products as well as to provide innovative new product offerings.

SMG&A expenses increased in the three- and six-monthnine-month periods ended MayAugust 2,1, 2026, as compared to the same periods of the prior fiscal year, primarily as a result of higher SMG&A employee-related variable compensation expenses andexpenses, higher salary and benefit expenses.expenses and acquisition related transaction costs in the third quarter of fiscal 2026. SMG&A expenses declined as a percentage of revenue, primarily reflecting higher revenue levels and improved operating leverage.

Special charges, net decreased in the three- and six-monthnine-month periods ended MayAugust 2,1, 2026, as compared to the same periods of the prior fiscal year, primarily due to decreaseda charges$24.4 relatedmillion togain ourrecorded Globalon Repositioningthe Actions.sale of a subsidiary in Penang, Malaysia in the third quarter of fiscal 2026. The decrease in the six-monthnine-month period was partially offset by a $15.6 million impairment charge recorded in the first quarter of fiscal 2026 related to the asset group in our leased facilities in San Jose, California.

Net income increased in the three-month period ended MayAugust 2,1, 2026, as compared to the same period of the prior fiscal year, as the result of a $701.7$794.9 million increase in operating income,income partially offset byand a $92.3$39.1 million increasedecrease in provision for income taxes.taxes as noted above in Provision for Income Taxes.

Net income increased in the six-monthnine-month period ended MayAugust 2,1, 2026, as compared to the same period of the prior fiscal year, as the result of a $1,207.4$2.0 millionbillion increase in operating income, partially offset by a $163.1$124.0 million increase in provision for income taxes.

At MayAugust 2,1, 2026, our principal source of liquidity was $3.4$2.3 billion of cash, cash equivalents and short-term investments, of which approximately $2.2$1.0 billion was held in the United States, and the balance of which was held outside the United States in various foreign subsidiaries. We manage our worldwide cash requirements by, among other things, reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in the United States. We do not expect current regulatory restrictions or taxes on repatriation to have a material adverse effect on our overall liquidity, financial condition or results of operations. Our cash, cash equivalents and short-term investments consist of highly liquid investments, including money market funds and corporate and bank obligations. We maintain these balances with counterparties with high credit ratings, and continually monitor the amount of credit exposure to any one issuer and diversify our investments in order to minimize our credit risk.

The following changes contributed to the net change in cash and cash equivalents in the six-monthnine-month period ended MayAugust 2,1, 2026 as compared to the same period in fiscal 2025.

Cash provided by operating activities is net income adjusted for certain non-cash items and changes in operating assets and liabilities. The increase in cash provided by operating activities during the six-monthnine-month period ended MayAugust 2,1, 2026, as compared to the same period of the prior fiscal year, was mainly the result of higher net income adjusted for non-cash items.

Investing cash flows generally consist of purchases and sales of property, plant and equipment,equipment; purchases, sales and maturities of available-for-sale investments; and acquisitions of other businesses. The change in investing cash flows during the six-monthnine-month period ended MayAugust 2,1, 2026, as compared to the same period of the prior fiscal year, was primarily the result of athe decreaseacquisition of Empower Semiconductor, Inc. during the third quarter of fiscal 2026, partially offset by the net change in maturities of our available-for-sale investments.investment The change in investing cash flows also included the sale of property, plant and equipment during fiscal 2025.portfolio.

Financing cash flows generally consist of payments of dividends to stockholders, repurchases of common stock, issuances and repayments of debt and proceeds from the sale of shares of common stock pursuant to employee equity incentive plans. The change in cash used for financing activities during the six-monthnine-month period ended MayAugust 2,1, 2026, as compared to the same

period of the prior fiscal year, was primarily the result of lower net proceeds from our debt obligations and higher common stock repurchases partially offset by debt repayments during fiscal 2025.repurchases.

Current liabilities increased to $4.5$5.7 billion at MayAugust 2,1, 2026 as compared to $3.2 billion at the end of fiscal 2025 primarily due to the reclassification of $0.9$1.3 billion of debt due inwithin Decemberone 2026year to current liabilities as well as an increase in commercial paper notes and accrued liabilities, partially offset by a decrease in income taxes payable.

As of MayAugust 2,1, 2026, our debt obligations consisted of the following:

The indentures governing our outstanding notes contain covenants that may limit our ability to: incur, create, assume or guarantee any debt for borrowed money secured by a lien upon a principal property; enter into sale and lease-back transactions with respect to a principal property; and consolidate with or merge into, or transfer or lease all or substantially all of our assets to, any other party. As of MayAugust 2,1, 2026, we were in compliance with these covenants.

Under our commercial paper program, we may issue short-term, unsecured commercial paper notes in amounts up to a maximum aggregate face amount of $3.0 billion outstanding at any time, with maturities of up to 397 days from the date of issuance. As of MayAugust 2,1, 2026, we had $0.6$1.0 billion of outstanding borrowings under the commercial paper program recorded in the Condensed Consolidated Balance Sheet. We intend to use the net proceeds of the commercial paper program for general corporate purposes, including without limitation, repayment of indebtedness, stock repurchases, acquisitions, capital expenditures and working capital.

Revolving Credit FacilityAgreements

Our Fourth Amended and Restated Revolving Credit Agreement,Agreement datedentered asinto ofin April 11,2025 2025,and our 364-Day Revolving Credit Agreement entered into in July 2026, each with Bank of America N.A. as administrative agent and the other banks identified therein as lenderslenders, (the Revolving Credit Agreement) providesprovide for a five-year and a 364-day unsecured revolving credit facilityfacility, respectively, in an aggregate principal amount not to exceed $3.0$6.0 billionbillion, (subject to certain terms and conditions).conditions.

We may borrow under the Revolving Credit AgreementAgreements in the future and use the proceeds for repayment of existing indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes. The terms of the Revolving Credit AgreementAgreements impose restrictions on our ability to undertake certain transactions, to create certain liens on assets and to incur certain subsidiary indebtedness. In addition, the Revolving Credit AgreementAgreements contains ancontain interest coverage covenantcovenants which requires the ratio of consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) to consolidated interest charges to be greater than 3.0 to 1.0. As of MayAugust 2,1, 2026, we were in compliance with these covenants.

As of MayAugust 2,1, 2026, our Board of Directors had authorized us to repurchase an aggregate of $26.7 billion of our common stock under our common stock repurchase program and $8.5$7.4 billion remained available for repurchases under the current authorized program. Repurchased shares are held as authorized but unissued shares of common stock. Unless terminated earlier by resolution of our Board of Directors, the repurchase program will expire when the full dollar amount of the authorization has been used to repurchase shares under the program. Future repurchases of common stock will be dependent upon our financial position, results of operations, outlook, liquidity and other factors we deem relevant.

Net additions to property, plant and equipment were $247.0$392.7 million in the first sixnine months of fiscal 2026. We expect capital expenditures for fiscal 2026 to be between approximately 4% and 6% of fiscal 2026 revenue. These capital expenditures will be funded with a combination of cash on hand and cash expected to be generated from future operations, together with existing and anticipated available short- and long-term financing.

On MayAugust 19,18, 2026, our Board of Directors declared a cash dividend of $1.10 per outstanding share of common stock. The dividend will be paid on JuneSeptember 16,15, 2026 to all shareholders of record at the close of business on JuneSeptember 2,1, 2026 and is expected to total approximately $535.8$533.0 million. We currently expect quarterly dividends to continue in future periods, although they remain subject to determination and declaration by our Board of Directors. The payment of future dividends, if any, will be based on several factors, including our financial performance, outlook and liquidity.