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

An investmentInvestment in our common stock involves risks.risks, Youwhich you should consider these risks carefully, as well as the other information contained in this Annual Report. These disclosures reflect our beliefs and opinions regarding factors that could materially and adversely affect us in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. If any of these risks occurs or increases in scope or severity, our business, financial condition and results of operations could be harmedmaterially materially.harmed. In that event, the trading price of our common stock might decline, and you might lose all or part of your investment. You should also refer to the other information contained in this Annual Report, including our consolidated financial statements and the related notes. Additional risks and uncertainties not presently known to us or not believed by us to be material may also negatively impact us.

Our net sales, gross margin, and profitability depend significantly on general economic conditions and the demand for products in the markets in which our customers compete. Weaknesses in the global economy and financial markets, including as a result of a recession and/or changes in government trade policies, such as the imposition of export restrictions and tariffs, may lead to lower demand for products that incorporate our solutions, particularly in the automotive and industrial markets. In particular, since we have significant sales in China, our business development plans, results of operations and financial condition may be materially and adversely affected by significant political, social and economic developments in China. Additionally, an overall decline in end-user demand can affect our customers’ demand for our products and increase the likelihood of customers canceling or deferring existing orders. Our net sales, financial condition and results of operations could be negatively affected by such actions.

Volatile and/or uncertain economic conditions, as well as inflationary pressures,pressures that remain above historical levels, can adversely impact sales, gross margin and profitability and make it difficult for us to accurately forecast and plan our future business activities. In addition, uncertainty surrounding international trade policy and regulations as well as trade disputes and protectionist measures could also have an adverse effect on consumer confidence and spending. To the extent expected favorable economic conditions do not materialize or take longer to materialize than expected, we have faced and may continue to face an oversupply of our products and have excess inventory,inventory. whichThis could result in charges for excess and obsolete inventory, or in the case of excess inventory held by our customers, reduce the number of products purchased by our customers as they digest inventory, which we have experienced over the last several quarters.inventory. Conversely, if we underestimate customer demand, we may fail to meet customer needs, which could impair our customer relationships. In addition, any disruption in the credit markets, including as a result of a recession, could impede our access to capital, which could be further adversely affected if we are unable to obtain or maintain favorable credit ratings. If we have limited access to additional financing sources, we may be required to defer capital expenditures or seek other sources of liquidity, which may not be available to us on acceptable terms or at all. Similarly, if our suppliers or customers face challenges in obtaining credit or other financial difficulties, they may be unable to provide the materials we need to manufacture or purchase our products. All of these factors related to global economic conditions, which areconditions beyond our control,control could adversely impact our business, financial condition, results of operations and liquidity.

We participate in intensely competitive end markets in the global semiconductor industry. Our competitive landscape includes rapid technological change in product design and manufacturing, continuous declines in ASPs, and customers who make purchase decisions based on a mix of factors ofthat varyingvary importance,by which varies from customer-to-customercustomer and fromby market-to-market.market. Our ability to compete in this environment depends on many factors, including our ability to identify emerging markets and technology trends in an accurate and timely manner, introduce new and innovative products, implement new manufacturing and IC development technologies at a sustainable pace, maintain the performance and quality of our products, and manufacture our products in a cost-effective manner. For example, semiconductor IC suppliers must meet increasingly stringent quality standards of certain OEMs and customers, particularly for automotive applications. While we strive to meet these requirements, we, as well as our third-party OSAT or wafer vendors, may experience problems in achieving acceptable quality results in the manufacture of our products, particularly in connection with production of new products or adoption of a new manufacturing process. Our failure to achieve acceptable quality levels in such instances could adversely affect our competitive position and business results.

Often, we compete against larger companies that possess substantial financial, technical, development, engineering, manufacturing, including wafer fabrication capabilities, and marketing resources. Varying combinations of these resources provide advantages to these competitors, such as the rapid implementation of artificial intelligenceAI strategies for developing products and service offerings, which may enable them to influence industry trends and the pace at which they adapt to those trends. As the industry rapidly adopts and embeds AI across development, manufacturing and service workflows, our competitors may shorten product cycles and accelerate feature delivery. Any failure to keep pace with these trends.AI-enabled capabilities could harm our competitive position and revenue. A strong competitive response from one or more of our competitors to our marketplace efforts, or a shift in customer preferences to competitors’ products, could result in increasedmore rapid pricing pressure to lower our prices more rapidly than anticipated, increased sales and marketing expense, and/or market share loss. In addition, certain countries, such as China,countries have begun implementingimplemented initiatives to build domestic semiconductor supply chains, including government incentives to local competitors and tools that may restrict foreign suppliers, which could place us at a competitive disadvantage or cause our customers to seek domestic alternatives to our products. Our supply chain strategies for competing in such countries may be unsuccessful innot fully eliminatingeliminate the competitive disadvantages that we face. To the extent our profitability is negatively impacted by competitive pressures and reduced pricing,pressures, our business, financial condition, results of operations and growth prospects may be materiallyadversely affected. Further, international trade policy and adverselyregulations, affected.trade disputes, protectionist measures, and tariffs, could make our OEM and other end customers’ products less attractive relative to those of competitors, that may not be subject to such tariffs, potentially reducing demand for our solutions.

We currently rely on a limited number of third-party wafer fabrication facilities for the fabrication of semiconductor wafers used in the manufacture of our IC products, primarily United Microelectronics Corporation (“UMC”), Polar Semiconductor, LLC (“PSL”),Polar, Tower Semiconductor Ltd. (“Tower”) and Taiwan Semiconductor Manufacturing Company (“TSMC”), and we purchase a number of key manufacturing materials and components used in the manufacture of our products from single or limited sources. We depend on these foundries and other sources to meet our production needs. These foundries have limited production capacities with little ability to quickly expand capacity. From time to time, we have encountered shortages and delays in obtaining wafers and other components and materials as well as export restrictions on certain components and materials, and we may encounter additional shortages, delays and restrictions in the future. For example, inrecent December 2024, China imposedforeign export restrictions from China on certain minerals,rare-earth elements, metals and magnets, including antimony, which certain of our wafer foundry partners use in the manufacture of our IC products, and beginning in April 2025 China announced additional restrictions on the export of rare-earth metalssamarium, used in some of our applications and in end-user products thathave contain our products which could disruptdisrupted our ability to reliably source materials, and constrained global supply could restrict our ability to manufacture certain products. Such restrictions may make it difficult or impossible for us to compete with other semiconductor manufacturers that are able to obtain sufficient quantities of such materials forfrom our products, upend supply chainsChina or driveother down the demand for our products.sources. Additionally, two of our third-party wafer fabrication facilities are located in Taiwan, a location where earthquakes are commonplace, and geopolitical changes in China-Taiwan relations could disrupt their operations. If we cannot supply our products due to a lack of components, are unable to source materials, such as antimonysamarium or other rare-earth metals, from other suppliers, to redesign products with other components in a timely manner, or OEMs or our other customers are unable to access the materials they need to produce the end products that our applications are used inin, our business will be significantly harmed. We do not have long-term contracts with some of our suppliers and third-party manufacturers. As a result, any such supplier or third-party manufacturer can discontinue supplying components or materials to us at any time and without penalty. Moreover, we depend on the quality of the wafers and other components and materials that they supply to us, over which we have limited control. Our suppliers’ abilities to meet our requirements could be impaired or interrupted by factors beyond their control, such as global market conditions, changes in tariffs or other trade regulations, climate change, natural disasters or other disruptions. Our suppliers may also face their own operational challenges, such as labor shortages or raw material cost increases, which could be passed on to us or disrupt their ability to supply us with necessary materials. If any one or more of our suppliers is unable or unwilling to deliver us products and we are unable to identify alternative sources of supplysuppliers for such materials or components on a timely basis, our operations may be adversely affected. In addition, evenEven if we identify any such alternative sources of supply,suppliers, we could experience delays in testing, evaluating and validating materials or products of potentialsuch alternative suppliers or products we obtain through outsourcing. Qualifying new contract manufacturers, and specificallyincluding semiconductor foundries, is time-consuming and might result in unforeseen manufacturing and operations problems. Furthermore,Further, financial or other difficulties faced by our suppliers, or significant changes in demand for the components or materials they use in the products they supply to us, could limit the availability of those products, components or materials to us. We are also subject to potential delays in theour suppliers' development by our suppliers of key components, which may affect our ability to introduce new products. Any of these problems or delays could damage our relationships with our customers, adversely affect our reputation and adversely affect ourreputation, business, financial condition, results of operations and our ability to grow our business.

We make significant decisions, including determining the levels of business that we will seek and accept, production schedules, levels of reliance on outsourced contract manufacturing, personnel needs and other resource requirements, based on our estimates of customer requirements. The short-term nature of themany customer commitments by many of our customers and the possibility of rapid changes in demand for their products reduce our ability to accurately estimate future requirements of our customers. On occasion, our customers may require rapid increases in production, and we may not have sufficient capacity at any given time to meet our customers’ demands. Conversely, downturns in the semiconductor industry are causing, and may in the future cause,cause our customers to significantly reduce the number of products ordered from us as they digest excess inventory. These risks are compounded by our customers’ own supply chain challenges; if our customers are unable to source other critical components from different suppliers, they may delay or cancel their product builds, which in turn reduces their demand for our products. Because many of our sales, research and development and manufacturing expenses are relatively fixed, a reduction in customer demand has resulted, and may continue to result, in a decrease in our gross margins and operating income.

In addition,Further, we base operating decisions,decisions and enter into purchase commitments,commitments on the basis of anticipated net sales trends, which arecan highlybe unpredictable. Changes in forecasts or theorder timing ofor ordersunreliable forecasts from customers expose us to risks of inventory shortages or excess inventory. Some of our purchase commitments are not cancellable, and in some cases we are required to recognize a charge representing the amount of material or capital equipment purchased or ordered, which exceeds our actual requirements. For example, we have noncancellable purchase commitments with vendors and “take-or-pay” agreements with certain of our third-party wafer fabrication partners,partners under which we are required to purchase a minimum number of wafers per year or face financial penalties. These types of commitments and agreements have reduced and may continue to reduce,reduce our ability to adjust our inventory to address declining market demands. OverIn the past severalprior quarters, we and other semiconductor companies have experienced a downturndownturns in market demand, which has caused us to record substantive charges for excess and obsolete inventories and beforced forcedus to incur other inventory-related charges. If net sales in future periods fall substantially below our expectations, or if we fail to accurately forecast changes in demand mix, we could again be required to record substantial charges for obsolete or excess inventories or noncancellable purchase commitments. Moreover,Further, during a market upturn we may not be able to purchase sufficient supplies or components to meet increasing product demand, which could prevent us from taking advantage of opportunities and maximizing our net sales. OurAny failure to adjust our supply chain volume, secure sufficient supply from our third-party vendors, including our semiconductor wafer suppliers, or estimate our customers’customer demand could have a material adverse effect on our net sales, business, financial condition and results of operations.

The semiconductor industry, including the analog segment in which we compete, is highly cyclical and is prone to significant downturns from time to time. Cyclical downturns can result from a variety of market forces, which can result in significant declines in analog semiconductor demand. We are currently experiencing a downturn and may experience downturns in the future. Downturns have been characterized by diminished product demand, production overcapacity, high inventory levels and accelerated erosion of ASPs. Recent downturns in the semiconductor industry had been attributed to a variety of factors, including weakness in demand and pricing for semiconductors across applications, ongoing trade disputes among the United States and China, and excess inventory. To the extent that current levels of investment in AI-related infrastructure, products or end-market demand reflect expectations that are not ultimately realized, or if customer spending related to AI moderates, is delayed, or declines faster than anticipated, the semiconductor industry could experience an accelerated or more pronounced downturn. Downturns directly impact our business, and any prolonged or significant future downturns in the semiconductor industry could have a material adverse effect on our business, financial condition and results of operations. Conversely, significant upturns can cause us to be unable to satisfy demand in a timely and cost-efficient manner and could result in increased competition for access to third-party foundry and assembly capacity. In the event of such an upturn, we may not be able to expand our workforce and operations in a sufficiently timely manner, procure adequate resources and raw materials, including semiconductor wafers from our third-party wafer manufacturing partners, and other critical components, such as memory components, at reasonable costs, or locate suitable third-party suppliers or other third-party subcontractors to respond effectively to changes in demand for our existing or new products, and our business, financial condition and results of operations could be materially and adversely affected.

Substantial portions of our sales are made to automotive industry suppliers. Downturns or disruptions in the automotive market or industry have harmedharmed, and in the future could significantly harm, our financial results.

Our customers that supply various systems and components to automotive OEMs accounted for 70.6%, 73.8%, 72.4%, and 66.4%72.4% of our total net sales in fiscal years 2026, 2025, 2024, and 2023,2024, respectively. This concentration of sales exposes us to the risks associated with the automotive market and automotive industry. For example, our anticipated future growth is highly dependent on the increased adoption of automotive technologiestechnologies, including ADAS and HEV and EVxEV powertrain vehicles, which traditionally have had increased sensor and power product content. A downturn in the automotive market or prolonged disruption could delay automakers’ plans to introduce new vehicles with these features, which would negatively impact the demand for our products and the ability to grow our business. Disruptions in the automotive industry due to changes in tariffs or other trade regulations could have a material adverse effect on our business, financial condition and results of operations.business. For example, in March 2025, the United States Government released a proclamation adjusting tariffs on automobiles and automobile parts into the United States. Such tariffs, as well as any potential retaliatory tariffs, could substantially disrupt the automotive market or industry and in turn have a material adverse effect on our business. Furthermore,Such tariffs could make our OEM and other end customers’ products less attractive relative to products offered by their competitors,competitors' products, which may not be subject to similar tariffs. Some OEM and end customers in our industry have already implemented short-term price adjustments to offset such tariffs and transitioned their production and supply chain to locations outside of China.

We have acquired other companies as part of our growth strategy, and we continue to consider future acquisitions of or strategic investments in other companies, or their technologies or products, to improve our market position, broaden our technological capabilities, and expand our product offerings. Acquiring companies or technologies involves a number of risks, including, but not limited to: the potential disruption of our ongoing business; the increased costs incurred to finance acquisitions and the allocation of capital to fund acquisitions being diverted from other operational priorities, such as research and development; unexpected costs or incurring unknown liabilities; the diversion of management resources from other strategic and operational issues; difficulty in developing, manufacturing and marketing the products of a newly acquired company within the anticipated costs and timeframe; the inability to retain key employees of the acquired businesses; difficulties relating to integrating the operations and personnel of the acquired businesses; adverse effects on our existing customer relationships or the existing customer relationships of acquired businesses; the potential incompatibility of the acquired business or their customers; issues not discovered during our due diligence that could impact our assumptions concerning the status of and prospects for the products and technologies of the acquired business; and acquired intangible assets, including goodwill, becoming impaired as a result of technological advancements or worse-than-expected performance of the acquired business. If we are unable to successfully address any of these risks, our business could be harmed.

DecreasesOur gross margins may be adversely affected by decreases in average selling prices of our products andproducts, increases in input costs mayand reduceshifts ourin grossproduct, margins.customer or channel mix.

The market for our products is generally characterized by declining ASPs, resulting from factors such as increased competition, overcapacity, the amount of inventory held by our customers, the introduction of new products and increased unit volumes. Further, our overall gross margins have fluctuated period to period as a result of shifts in product mix, customer mix and channel mix, as gross margins on individual products typically fluctuate over the product’s life cycle. We have in the past experienced, and in the future may experience, substantial period-to-period fluctuations in operating results due to decliningthese ASPs.factors. ASPs may decrease in the future in response to the introduction of new products by us or our competitors, or due to other factors, includingsuch as customer pricing pressures. In order toTo sustain profitable operations, we must continually reduce costs for our existing products and alsorapidly develop and introduce new products with enhanced features on a timely basis that can be sold initially at higher ASPs. Failure to do so could cause our net sales and gross margins to decline, which would negatively affect our financial condition and results of operations and could significantly harm our business.

We may be unable to reduce the cost of our products sufficiently to enable us to compete with others. Our cost reduction efforts may not allow us to keep pace with competitive pricing pressures given the increased cost of certain materials, such as semiconductor waferswafers, memory chips and otherraw materials like gold and copper, the increased cost of which adversely affects our gross margins. Additionally, when a product is in high demand, we may have to source a portion of materials from higher-cost providers, which may decrease our overall gross margin. Further, tariffs on imported raw materials,materials and components essential to our manufacturing processes could adverselylead affectto higher production costs that we may be unable to pass on to customers, thereby negatively affecting our gross margins. We maintain an infrastructure of facilities and human resources in several locations around the world and, as a result, have limited ability to reduce our operating costs. Accordingly, in order to remain competitive, we must continually reduce the cost of manufacturing our products through design and engineering changes. We cannot assure you that we will be successful in redesigning our products and bringing redesigned productsthem to the market in a timely manner, or that any redesign will result in sufficient cost reductions to allow us to reduce the price of our products to remain competitive or maintain or improve our gross margins. If a product does not meet our gross margin targets, we may be forced to stop design or production of the product, regardless of where it is in the development or sales stage. To the extent we are unable tocannot reduce theour product prices of our products and remain competitive,competitive or are forced to discontinue development or sales of low margin products, our net sales will likely decline, resulting in further pressure on our gross margins, which could have a material adverse effect on our business, financial condition andcondition, results of operations and our ability to grow our business.

The manufacture of our products, including the fabrication of semiconductor wafers, and the assembly and testing of our products, are complex and sensitive to many factors, including levels of contaminants in the manufacturing environment, difficulties in the wafer fabrication process or other issues that can cause a substantial portion of the components on a wafer to be nonfunctional. These problems may be difficult to detect at an early stage of the manufacturing process and often are time-consuming and expensive to correct. FromOn time to time,occasion, we have experienced problems in achieving acceptable yields at our third-party wafer fabrication partners, resulting in delays in the availability of components. Moreover, an increase in the rejection rate of products during the quality control process before, during or after manufacture and/or shipping of such products, results in lower yields and margins. In addition,Further, changes in manufacturing processes required due to changes in product specifications, changing customer needs and the introduction of new product lines have historically significantlymaterially reduced our manufacturing yields, resulting incausing low or negative margins on thosesuch products. Poor manufacturing yields over a prolonged period of time could adversely affect our ability to deliver our products on a timely basis and harm our customer relationships, which could materiallyhave anda adverselymaterial affectadverse effect on our business, financial condition and results of operations.

We operate in a highly dynamic industry, and our future operating results could be subject to significant fluctuations, particularly on a quarterly basis. Our quarterly net sales and operating results have fluctuated significantly in the past and may continue to vary from quarter to quarter due to a number of factors, many of which are not within our control. In addition, investor expectations regarding emerging technology trends, including AI and data centers, and our positioning relative to those trends, may contribute to heightened volatility in our stock price, whether or not such expectations are ultimately realized. Although some of our customers provide us with non-binding forecasts of their future requirements for our products, a significant percentage of our net sales in each fiscal quarter is dependent on sales that are booked and shipped during that fiscal quarter, and are typically attributable to a large number of orders from diverse customers and markets. As a result, accurately forecasting our operating results in any fiscal quarter is difficult. If our operating results do not meet the expectations of securities analysts and investors, our stock price may decline. Additional factors that can contribute to fluctuations in our operating results include the timing of customer qualification of our products and commencement of volume sales by our customers of systems that include our products, product rates of return or price concessions in excess of those expected or forecasted, as well as the other risk factors identified in this section of our Annual Report.

We may experience a delay in generating or recognizing revenues for a number ofvarious reasons. Open orders at the beginningstart of each quarter are typically lower than expected net sales for that quarter and are generally cancellable or reschedulable with minimal notice. Accordingly,Thus, we depend on obtaining orders during each quarter for shipment in that quarter to achieve our net sales objectives, and failure to fulfill such orders by the end of a quarter may adversely affect our operating results. Furthermore,Further, our customer agreements typically provide that the customer may delay scheduled delivery dates and cancel orders within specified timeframes without significant penalty. Because we base our operating expenses on anticipated revenue trends and a high percentage of our expenses are fixed in the short term, any delay in generating or recognizing forecasted net sales or changes in levels of our customers’ forecasted demand could materially and adversely impact our business, financial condition and results of operations. Due to our limited ability to reduce expenses, in the event our revenues decline or our net sales do not meet our expectations, it is likely that in some future quarters our operating results will decrease from the previous quarter or fall below the expectations of securities analysts and investors. As a result of these factors, our operating results may vary significantly from quarter to quarter. Accordingly, we believe that period-to-period comparisons of our results of operations should not solely be relied upon as indications of future performance. Any shortfall in net sales or net income compared to a previous quarter or to levels expected by the investment community could cause a decline in the trading price of our stock.

We rely heavily on the manufacturing operations ofat the AMPI Facility,AMPI, which operates as our primary internal assembly and testing facility. We depend on the AMPI Facility for our sensor and power products, and if this facility suspends operations, our ability to assemble and test our products could be materially impaired. Furthermore,Further, any disruption in operations at the AMPI Facility could adversely affect our ability to meet customer demand in a timely manner, or at all, which would lead to a reduction in our net sales and may adversely affect our reputation and customer relationships, potentially resulting in longer-term harm to our business. In addition, an earthquake, fire, flood or other natural or man-made disaster, as well as a pandemic, epidemic or other outbreak of infectious disease, strikes, political or civil unrest, energy shortages, or any number of other factors beyond our control could also disable the facility, causing catastrophic losses. Although we supplement the assembly capabilities at the AMPI Facility with other external or independent assembly subcontractors throughout Asia, if our manufacturing operations at the AMPI Facility are disrupted, it could take additional time and cost,cost for us to resume manufacturing at another location, which could materially harm our manufacturing efficiency and capacity, delay production and shipments and result in costly expenditures to repair or replace this facility. We have established or invested in alternative manufacturing facilities and may in the future be required to establish or invest in additional alternative manufacturing facilities. Such attempts to establish or invest in alternative manufacturing facilities, could increase our costs, reduce our profitability, and limit our ability to maintain competitive prices for our products. Only a few alternative manufacturing facilities have the capability to assemble and test our most advanced and complex products, and if we are forced to engage such alternative manufacturing facilities, we may encounter difficulties and incur additional costs. Thus, we cannot guarantee that we will be able to manage the risks and challenges associated with our dependence on AMPI, and any failure to do so could have a material adverse effect on our business, financial condition and results of operations.

We sell our products worldwide through multiple sales channels, including through our direct sales force, distributors and independent sales representatives, which resell our products to numerous end customers. A significant portion of our net sales are made to distributors, which were approximately 50.7%,55.0%, 52.9%50.7% and 39.3%52.9% of our net sales in fiscal years 2025,2026, 20242025 and 2023, respectively, excluding our former distribution relationship with Sanken in Japan, which represented approximately 16.5% of our net sales in fiscal year 2023.2024. Sales to our largest, non-affiliated distributor accounted for 9.3%,9.4%, 10.2%9.3% and 10.8%10.2% of our net sales in fiscal years 2025,2026, 20242025 and 2023,2024, respectively. The impairment or termination of our relationships with our distributors, or the failure of these parties to diligently sell our products, could materially and adversely affect our ability to generate revenue and profits. Additionally, if our distributors are unable to accurately forecast end customer demand for our products, we may purchase more or fewer parts than necessary or incur costs for canceling, postponing or expediting delivery of parts. Our purchases or commitments to purchase inventory are based on, among other things, our distributors’ forecasts of end customer demand. We have experienced, and may in the future experience, situations where such demand does not materialize as forecasted, where inventory is rendered obsolete by the rapid pace of technological change, or where customers reduce, delay, or cancel orders. Some of these factors have resulted in, and may in the future result in, excess or obsolete inventory charges. Conversely, if we need to rapidly increase our business and manufacturing capacity to meet increases in our distributors’ forecasted demand, this could strain our manufacturing and supply chain operations and negatively impact our working capital. Because our distributors control the relationships with end customers, if our relationship with any distributor ends, we could also lose our relationships with their customers. In addition, because our distributors do not sell our products exclusively, they may focus their sales efforts and resources on other products that produce better margins or greater commissions for them or are incorporated into a broader strategic relationship with one of their other suppliers. Because we do not control the sales representatives and other employees of our distributors, we cannot guarantee that our sales processes, regulatory compliance and other priorities will be consistently communicated and executed. Further, we may not have staff in one or more of the locations covered by our distributors, which makes it particularly difficult for us to monitor their performance. Despite ourOur efforts to mitigate risks associated with noncompliance by our distributors,distributors may not be successful, and there remains a risk that theyour distributors will not comply with regulatory requirements or our requirements and policies. Actions by our distributors' sales representatives and other employees of our distributors could result in flat or declining sales in a given geographic area, reputational harm to us or our products, or legal liability, any of which could have a materialan adverse effect on our business, financial condition and results of operations. In addition to the risk of losing customers,Additionally, the operation of local laws and our agreements with our distributors could make it difficult for us to replace a distributor we feel is underperforming.

Events beyond our control impacting us, our key suppliers orsuppliers, our manufacturing partners or other third-party suppliers of components, materials or subassemblies incorporated into the same end products as our devices could have an adverse effect on our business, financial condition, results of operations and cash flows.

Our ability to make, transport and sell products in coordination with our suppliers, customers (including OEMs), distributors and third-party manufacturers or other subcontractors is critical to our success. Damage or disruption to either our or our key suppliers or manufacturing partners’ supply, manufacturing or distribution capabilities resulting from energy shortages, weather, freight carrier availability, climate change, natural disaster, disease, fire, explosion, cyber-attacks, terrorism, pandemics, epidemics or other outbreaks of infectious disease, war, strikes, civil unrest, repairs or enhancements at facilities manufacturing or distributing our products or other reasons could impair our ability to manufacture, sell, and deliver products on a timely basis or at all. Climate change may also increase the frequency or intensity of certain of these risks, as well as contribute to various chronic changes (such as sea-level rise or changes to meteorological and hydrological patterns) that may result in similar risks. In addition to general economic conditions, impacts of other macroeconomic events, such as valuation concerns related to AI Technologies, continued inflation and labor market concerns, public health crises, geopolitical tensions or conflicts and risks, and uncertainties in global financial markets, could materially adversely impact our operations or those of our suppliers, third party distributors and sub-contractors.

Other companies in our industry may be affected differently by natural disastersdisasters, climate change or other disruptions depending on the location and concentration of their suppliers, operations and customers. In addition, many of our competitors are larger companies with more substantial financial and other resources and, as a result, may be better able to plan for, withstand or otherwise mitigate the effects of any such disruption. While we may take steps to plan for or address the occurrence of any such event, we cannot guarantee that we will be successful. Our failure to take adequate steps to reduce the likelihood or mitigate the potential impact of such events, or to effectively manage such events if they occur, particularly when a wafer or packaging component is sourced from a limited number of locations or suppliers, could adversely affect our business, financial condition, results of operations and cash flows and/or require additional resources to restore our supply chain.

Our customers seek new products with more features and functionality at a lower cost, and our success relies heavily on our ability to continue to develop and market to our customers new and innovative products and improvements of existing products, including those that may incorporate, or are based or developed using, software or artificialAI intelligenceTechnologies. technologies. In order toTo respond to new and evolving customer demands, achieve strong market share and keep pace with new technological, processing and other developments, we must continually introduce new and innovative products into the market. Although we strive to respond to customer preferences and industry expectations in the development of our products, we may not be successful in developing, introducing or commercializing any new or enhanced products on a timely basis or at all. Further, if initial sales volumes for new or enhanced products do not reach anticipated levels within the time periods we expect, we may be required to engage in additional marketing efforts to promote such products and the costs of developing and commercializing such products may be higher than we predict. Moreover, new and enhanced products may not perform as expected. We may encounter lower manufacturing yields and longer delivery schedules in commencing volume production of new products that we introduce, which could increase costs and disrupt supply of such products.

A fundamental shift in technologies, particularly one that impacts magnetic or power ICs, the regulatory climate or demand patterns and preferences in our existing product markets or the product markets of our customers or end-users could make our current products obsolete or more expensive relative to alternatives, prevent or delay the introduction of new products or enhancements to our existing products or render our products irrelevant to our customers’ needs. If our new product development efforts fail to align with the needs of our customers,customers' needs, including due to circumstances outside of our control, such as a fundamental shift in the product markets of our customers and end users or regulatory changes, our business, financial condition and results of operations could be materially and adversely affected.

We depend on growth in the end markets that use our products. Any slowdown in thesuch growthgrowth, including as a result of thesevolatility endin marketsdemand for emerging technologies or changes in government incentives, could adversely affect our financial results.

The loss of one or more significant end customers could have a material adverse effect on our business and results of operations.

The loss of or a significant reduction in business with one or more significant end customers, particularly in the automotive market, could have a material adverse effect on our net sales and, in turn, on our overall business, financial condition and results of operations.

As part of our growth strategy, we seek to expand our addressable markets by identifying and entering both new geographic markets and increasing the number and types of applications our products can be used in. For example, we are increasing investment in and pursuing opportunities in applications such as AI, medical devices and robotics, and in geographic markets where we have not historically had a strong presence. Our future success depends in part on our ability to successfully identify these opportunities, make the necessary investments to pursue them, overcome marketing and technological challenges, and ultimately generate and expand revenue and achieve appropriate margins from these efforts. Our ability to generate significant revenue from new markets and product applications for our products will depend on various factors, including: the development and growth rate of these markets; the ability of our technologies and product solutions to address the specific needs, price and performance requirements of customers and end users in these markets; our ability to provide solutions that offer advantages in terms of performance, quality, reliability, and value-added features compared with alternative solutions and competitive offerings; the ability to adapt to market conditions, distribution channels, and customer relationships that may be unfamiliar to us; the timely and efficient completion of product development, manufacturing, assembly, and test processes suitable for these markets; and the effectiveness of our marketing, sales, and support efforts in these new areas. Many potential customers in these markets may have well-established relationships with competitive suppliers. Our ongoing success will require us to offer compelling alternatives at competitive costs. The markets for certain of these products may develop slower than anticipated, or not at all, or could utilize competing technologies. If we are unable to adapt rapidly to such conditions, or if we fail to timely introduce new products or penetrate these markets successfully, our investments may not generate expected returns, our sales growth could be impeded, and our business, financial condition, and results of operations could be adversely affected.

We focus on winning competitive bid selection processes, called “design wins,” to develop products for use in our customers’ products. Our future sales are highly dependent on our continued success at winning design mandates. These lengthy selection processes may require us to incur significant expenditures and dedicate valued engineering resources to the development of new products without any assurance that we will achieve design wins. If we incur such expenditures and fail to be selected in the bid selection process, our operating results may be adversely affected. Further, because of the significant costs associated with qualifying new suppliers, customers are likely to use the same or an enhanced versionversions of semiconductor products from existing suppliers across a number of similar and successor products for a lengthy period of time. As a result, if we fail to secure an initial design win for any of our products to a customer,wins, we may lose the opportunity to make future sales of those products to that customer. Failure to achieve initial design wins may also weaken our position in future competitive selection processes because we may not be perceived as an industry leader.

The U.S. or foreign governments may take or threaten to take administrative, legislative or regulatory action that could materially interfere with our ability to sell products in certain countries and/or to certain customers, particularly in China.customers. For example, the United States and China have imposed export restrictions related to certain semiconductorssemiconductors, and a number of tariffs and other restrictions on items imported or exported between the United States and China and may propose or threaten to impose additional tariffs in the future. While a recent U.S. Supreme Court decision limited the President’s authority to impose certain broad-based tariffs under the International Emergency Economic Powers Act (IEEPA), the risk of tariffs and other trade restrictions remains, as this ruling does not affect other legal authorities, such as those permitting tariffs on national security grounds. We cannot predict what actions may ultimately be taken with respect to export restrictions, tariffs or trade relations between the United States and China or other countries, what products may be subject to such actions, or what actions may be taken by the other countries in retaliation. The institution of export restrictions and trade tariffs both globally and between the United States and China specifically carries the risk of negatively impacting China’s overall economic condition, which could have negative repercussions for our business since Greater China accounted for the highest percentage of the Company’s total net sales in any one country in fiscal year 2025.

In addition,Further, since we manufacture our products outside the United States, new or increased tariffs on certain goods imported into the United States, if adopted,adopted or reinstated, could have a disproportionate impact on our business and make our products more expensive and less competitive in domestic markets. Furthermore,The U.S. Department of Commerce is conducting an ongoing investigation into whether imports of semiconductors, semiconductor manufacturing equipment and their derivative products threaten to impair U.S. national security. Following completion of the investigation, the President may decide to impose additional tariffs on these or other products under Section 232 of the Trade Expansion Act of 1962 or other legal authorities, the scope, timing and magnitude of which are highly uncertain and not within our control. Further, changes in U.S. trade policy could trigger retaliatory actions by affected countries, which could impose restrictions on our ability to do business in or with affected countries or prohibit, reduce or discourage purchases of our products by foreign customers, leading to increased costs of components contained in our products, increased costs of manufacturing our products, and higher prices for our products in foreign markets. For example, there are risks that theforeign Chinese governmentgovernments may require the use of local supplierssuppliers, in place of non-Chinese suppliers like us, compel companies that do business in China to partner withmandate local companiespartnerships, to conduct business andor provide incentives tofavoring government-backeddomestic localsuppliers customersin totheir buyrespective from local suppliers.markets. Moreover, changes in tariffs and trade restrictions can be announced with little or no advance notice. The adoption and expansion of tariffs or other trade restrictions, increasing trade tensions, or other changes in governmental policies related to taxes, tariffs, trade agreements or policies, are difficult to predict, which makes attendant risks difficult to anticipate and mitigate. Furthermore,Further, changes in U.S. foreign policy or trade agreements may impact our supply chain, manufacturing and distribution of our products, as suppliers face increased costs and logistical challenges, which could result in delays in product delivery and increased inventory costs. Changes in, and responses to, U.S. trade policy could reduce the competitiveness of our products and cause our sales to decline, which could materially and adversely impact our business, financial condition and results of operations.

Warranty claims, customer quality claims, product liability claims and product recalls could harm our business, results of operations and financial condition.

We face an inherent business risk of exposure to warranty and product liability claims if products fail to perform as expected or any such failure is alleged to result in bodily injury, death, and/or property damage. In addition,Further, if any of our designed products are alleged to be defective, we may be required to participate in their recalls. In addition, our customers, particularly automotive and industrial OEMs and their tier-one suppliers, increasingly assert quality-related claims against us seeking recovery of costs incurred as a result of actual or alleged non-conformance of our products. Customers frequently seek to recover these claimed amounts through charge-backs, set-offs against amounts otherwise owed to us, or contractual indemnification, cost-sharing or quality-incentive provisions. The amounts sought in connection with such claims may substantially exceed the purchase price of the affected products, and resolution of such claims often requires investigation, the outcome of which is inherently uncertain and may be costly. Some OEMs expect suppliers to warrant their products for longer periods of time and are increasingly looking to them for contribution when faced with product liability claims or recalls. For example, some of our products are used in automotive safety systems, the failure of which could lead to injury or death. We carry various commercial liability policies, including umbrella/excess policies which provide some protection against product liability exposure. However, a successful warranty or product liability claim against us in excess of our available insurance coverage and established reserves, or a requirement that we participate in a product recall, could have adverse effects on our business results. Further, inIn the future, it is possible that we will not be able to obtain insurance coverage in the amounts and for the risks we seek at policy costs and terms we desire. Additionally,Further, if our products fail to perform as expected or sucha failure of our products results in a recall,recall or in significant customer quality claims, our reputation may be damaged, we may lose existing or future design wins and customers may reduce their allocation of business to us, which could make it more difficult for us to sell our products to existing and prospective customers and could materially and adversely affect our business, results of operations and financial condition.

For fiscal years 2025,2026, 20242025 and 2023,2024, approximately 87.2%,89.7%, 85.8%87.2% and 86.6%,85.8%, respectively, of our net sales were to customers outside of the United States. In addition, a substantial majority of our products are assembled and tested at facilities outside of the United States. Our principal assembly and test facility is located in the Philippines at our AMPI Facility.AMPI. We also rely on several other wafer fabrication manufacturing partners located throughout Asia. Any conflict or uncertainty in this region, including public health or safety concernsconcerns, climate change or natural disasters, could have a material adverse effect on our business, financial condition and results of operations. Moreover,Further, conducting business outside the United States subjects us to a number of additionalnumerous risks and challenges, including:

compliance with a wide variety of domestic and foreign laws, regulations and policies (including those of municipalities or provinces where we have operations) and unexpected changes in those laws and regulatory requirements, including uncertainties regarding taxes, social insurance contributions and other payroll taxes and fees to governmental entities, climate-related disclosures, tariffs, quotas, export controls, export licenses and other trade barriers or restrictions, and climate-related laws and regulationsrestrictions;

potential political, legal and economic instability, armed conflict, and civil unrest in the countries in which we and our customers, suppliers and contract manufacturers are located, such as macroeconomic weakness related to trade and political disputes between the United States and China, tensions across the Taiwan Strait, the current conflict between Russia and Ukraine and the ongoing conflict involving the United States, Israel, Iran and other nations in the Middle East;

These factors, individually or in combination, could impair our ability to effectively operate one or more of our foreign facilities or deliver our products, result in unexpected and material expenses, or cause an unexpected decline in the demand for our products in certain countries or regions. Our failure to manage the risks and challenges associated with our international business and operations could have a material adverse effect on our business. For example, the military conflict between Israel and Hamas and the potential for regional expansion; any deterioration in the relations between Taiwan and China, and other factors affecting military, political or economic conditions in Taiwan or elsewhere in Asia; and the continuing military conflict between Ukraine and Russia, as well as the financial and trade-related restrictions associated with Russia and Belarus and economic sanctions on certain individuals and entities in Russia and Belarus, could adversely impact the global supply chain, disrupt our operations and/or our customers’ operations, negatively impact the demand for our products in our primary end markets or lead to an increase in cyberattacks and espionage.

Exports to certain manufacturers of technology relating to our products are subject, or could be subject in the future, to export controls imposed by the U.S. government and administered by the U.S. Departments of State and Commerce. In certain instances, these regulations may require pre-shipment authorization from the administering department. For products subject to the Export Administration Regulations, administered by the Department of Commerce’s Bureau of Industry and Security, the requirement for a license is dependent on the type and end use of the product, the final destination, the identity of the end user and whether a license exception might apply. In recent years, the Bureau of Industry and Security has announced export control regulations applicable to the sale of U.S. semiconductor technology in China (collectively, the “BIS Regulations”). The BIS Regulations place limitations on the ability of companies to export certain semiconductor chips, as well as chipmaking equipment, by requiring companies to obtain licenses to export such products and equipment into China or other designated countries. Certain of our competitors may be exempt from the BIS Regulations by virtue of being non-U.S. manufacturers. Any expansion of the scope of the BIS Regulations, including an increase in the number of companies subject to such regulations or the addition of one or more of our significant customers, could have a material impact on our net sales. We have evaluated and selectively pursued export licenses and authorizations, but there can be no assurances that we will obtain such licenses or authorizations on a timely or cost-effective basis or at all. Products developed and manufactured in our foreign locations are subject to export controls of the applicable foreign nation. Obtaining export licenses can be difficult, costly and time-consuming, and we may not always be successful in obtaining necessary export licenses. Our failure to obtain required import or export approval for our products or limitations on our ability to manufacture or sell our products imposed by these laws may harm our international and domestic revenues. Noncompliance with these laws could have negative consequences, including government investigations, penalties and reputational harm. The absence of comparable restrictions on competitors in other countries may adversely affect our competitive position. Failure to obtain export licenses for technology relating to our products or having one or more of our customers be restricted from receiving exports from us could significantly reduce our net sales and materially and adversely affect our business, financial condition and results of operations.

We have operations and assets in the U.S. as well as foreign jurisdictions and prepare our consolidated financial statements in U.S. dollars, but a portion of our earnings and expenditures are denominated in other currencies. Therefore, we must translate our foreign assets, liabilities, revenue and expenses into U.S. dollars at applicable exchange rates. Consequently, fluctuations in the value of foreign currencies relative to the U.S. dollar may negatively affect the value of these items in our financial statements. In addition, since many of our sales in foreign jurisdictions are denominated in U.S. dollars, a decrease in the value of foreign currencies relative to the U.S. dollar may effectively increase the price of our products in the currency of the jurisdiction in which the sale took place and may result in our products becoming too expensive for non-U.S. customers who do not conduct their business in U.S. dollars. Furthermore,Further, currency exchange rates can be volatile, and such currency fluctuations may make it difficult for us to predict our results of operations. It is possible that government policy changes and uncertainty about such changes could increase currency exchange rate fluctuations. If we fail to manage our foreign currency exposure adequately, we may suffer losses in the value of our net foreign currency investment, and our business, financial condition, results of operations and cash flows may be negatively affected.

If our capital resources are insufficient to satisfy our liquidity requirements, we may seek to sell additional equity securities or debt securities or obtain debt financing. The sale of additional equity securities or convertible debt securities would result in additional dilution to our stockholders. Additional debt would result in increased expenses and could result in covenants that would restrict our operations and our ability to incur additional debt or engage in other capital-raising activities. Interest rates have remained elevated over the last year and may remain elevated or rise, making the cost of incurring new debt obligations more expensive to the Company. There is no assurance that financing, if required, will be available in amounts or on terms acceptable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow and support our business and respond to business opportunities and challenges could be significantly limited.

As of March 28,27, 2025,2026, we had $345.0$285.0 million in aggregate principal amount of debt outstanding under our 20252026 Refinanced Loans (as defined herein), no debt outstanding under our revolving credit facility and $256.0 million of additional borrowings available thereunder. To service this indebtedness, and any additional indebtedness or other long-term obligations we may incur in the future, we need to generate sufficient levels of cash from our operating activities. Our ability to generate cash is subject, in part, to our ability to successfully execute our business strategy, as well as general economic, financial, competitive, regulatory and other factors beyond our control. We cannot assure you that our business will be able to generate sufficient levels of cash from operations or that future borrowingsborrowing or other financingsfinancing will be available to us in an amount sufficient to enable us to service our indebtedness and fund our other liquidity needs. To the extent we are required to use cash from operations or the proceeds of any future financing to service our indebtedness instead of funding working capital, capital expenditures or other general corporate purposes, we will be less able to plan for, or react to, changes in our business, industry and in the economy generally. This will place us at a competitive disadvantage compared to our competitors that have less indebtedness.

In addition, the agreements2023 governing the Senior SecuredRevolving Credit FacilitiesAgreement (as defined herein) contain,contains, and any agreements evidencing or governing other future indebtedness may also contain, certain covenants that limit our and our restricted subsidiaries’ ability to engage in certain transactions that may be in our long-term best interests. Subject to certain limited exceptions, these covenants include limitations on additional indebtedness, liens, various fundamental changes, dividends and distributions, investments (including acquisitions), transactions with affiliates, asset sales, prepayment of junior financing, changes in business and other limitations customary in senior secured credit facilities. InFurther, addition,we the Company isare required to maintain a Total Net Leverage Ratio (as defined in the 2023 Revolving Credit Agreement) of no more than 4.00 to 1.00 at the end of each fiscal quarter, which may, subject to certain limitations, be increased to 4.50 to 1.00 for fourany fiscalquarter quartersin subsequent to the Company completingwhich an acquisition in excess of $500,000.$500.0 million is conducted and for the three subsequent quarters. Our ability to comply with these covenants may be affected by events and factors beyond our control. If we were to breach one or more covenants, the administrative agent with the consent of, or at the request of, the holders of more than 50% in principal amounts of the loans and commitments, may terminate the commitments and accelerate the maturity of the loans and enforce certain other remedies. The occurrence of any of these events could have a material adverse effect on our business, financial condition and results of operations.

In addition, we may be able to incur significant additional indebtedness in the future. While the agreements2023 governing our Senior SecuredRevolving Credit FacilitiesAgreement generally restrictrestricts our and our restricted subsidiaries’ ability to incur additional indebtedness, these restrictions are subject to important and significant exceptions and limitations. Also, these agreements generally do not prohibit us from incurring obligations that do not constitute indebtedness as defined therein. To the extent that we incur additional indebtedness or such other obligations, the risks associated with our indebtedness described above could increase.

Our success depends upon the continued services of our executive officers, managers and skilled personnel, including our development engineers. From time to time, including over the past year, we have experienced changes in our executive management team and other key personnel, which is disruptive to our business. Generally, our employees, including executive management are not bound by obligations that require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time. Moreover, our employees, including executive managementmanagement, are generally not subject to non-competition agreements. Given these limitations, we may not be able to continue to attract, retain and motivate the qualified personnel necessary for our business. In addition, we recruit from a limited pool of engineers with expertise in analog mixed-signal semiconductor design, and the competition for such personnel can be intense. As we expand into markets that we have not traditionally served, our future growth and success will depend on hiring key employees with expertise in these industries. Our future performance depends on the continued services and continuing contributions of our executive management to execute our business plan and to identify and pursue new opportunities and product innovations. The loss of one or more of our executive officers or other key personnel or our inability to locate suitable or qualified replacements could be significantly detrimental to our operations or product development efforts and could have a material adverse effect on our business, financial condition and results of operations. InWe addition, wealso must attract and retain highly qualified personnel, including certain foreign nationals who are not U.S. citizens or permanent residents, many of whom are highly skilled and constitute an important part of our U.S. workforce, particularly in the areas of engineering and product development. Our ability to hire and retain these employees and their ability to remain and work in the U.S. are impacted by laws, regulationsregulations, and policies as well as bypolicies, procedures and enforcement practices of various government agencies. Changes in immigration laws, regulations, policies or procedures may adversely affect our ability to hire or retain such workers, increase our operating expenses and negatively impact our ability to deliver our products and services, any of which would adversely affect our business, financial condition and results of operations.

We are headquartered in Manchester, New Hampshire and have a global footprint with 2927 locations across four continents. Our portfolio includes more than 1,500 products, and we ship approximately 1.52.1 billion units annually to more than 10,00015,000 customers worldwide. During fiscal years 20252026 and 2024,2025, we generated $725.0$890.1 million and $1,049.4$725.0 million in total net sales, respectively, with $14.7 million and $72.8 million in net loss, and $152.9 million in net income, respectively.

We continue our efforts to leverage our fixed costs and operating margin improvements. Efficiencies may be achieved through cost structure improvements, streamlining of manufacturing and support processes, and further utilization of excessexisting capacity. These manufacturing efficiencies may allow us to leverage higher volumes when demand increases across most of our applications, which would increase the absorption of our fixed costs. Although these initiatives can result in gross margin and operating income improvements, we cannot ensure that these trends will occur or continue over the long-term.

To fund the First Closing, we entered into an underwriting agreement (the “Underwriting Agreement”) with Barclays Capital Inc. and Morgan Stanley & Co. LLC, as representatives of the several underwriters (the “Underwriters”), on July 24, 2024, pursuant to which we agreed to sell 25,000,000 shares of our common stock,stock to the Underwriters at a price of $23.16 per share. Under the terms of the Underwriting Agreement, we granted the Underwriters a 30-day option to purchase up to an additional 3,750,000 shares of our common stock at the same purchase price, which option was exercised in full prior to the closing of the Equity Offering.

The Second Amendment also provided for a new $400.0 million tranche of term loans maturing in 2030 (the “Refinanced 2023 Term Loan Facility”), the proceeds of which were primarily used to (i) repurchase a portion of our common stock in connection with the Second Closing, (ii) refinance the 2023Company’s Term$250.0 Loanmillion Facilityterm (asloan definedmaturing in Note2030 13,entered “Debtinto andon OtherOctober Borrowings”31, to the audited consolidated financial statements),2023, (iii) pay fees and expenses in connection with the foregoing and (iv) for general corporate purposes. The Refinanced 2023 Term Loan Facility amortized at a rate of 1.00% per annum. The Refinanced 2023 Term Loan Facility bore interest, at our option, at a rate equal to (i) Term SOFR (as defined in the 2023 Revolving Credit Agreement, as amendedAgreement) in effect from time to time plus 2.25% or (ii) the highest of (x) the Federal funds rate, as published by the Federal Reserve Bank of New York, plus 0.50%, (y) the prime lending rate or (z) the one-month Term SOFR plus 1.0% in effect from time to time plus 1.25%. In conjunction with this refinancing, we recognized $3.6 million as a debt discount, which will be amortized to interest expense over the remaining term using the effective interest method.

On August 7, 2024, we completed the Second Closing under the Share Repurchase Agreement, repurchasing 10,017,315 shares of our common stock for aggregate cash consideration of $225.5 million, which was the Equity Offering price, less underwriting discounts and reimbursable transaction expenses. As described above, weWe used a portion of the proceeds from the Refinanced 2023 Term Loan Facility and existing cash on hand to complete the Second Closing. The shares repurchased in the Second Closing were retired.

On September 20, 2024, we, along with Sanken, PSL, and PS Investment Aggregator, L.P. (“Subscriber”), completed the transaction (the “PSL Closing”) contemplated by a Sale and Subscription Agreement that we, Sanken, PSL and Subscriber entered into on April 25, 2024 (the “PSL Agreement” and the transaction thereunder, the “PSL Transaction”). As contemplated by the PSL Agreement, Subscriber and certain of its affiliates agreed to make capital contributions to PSL of $175.0 million in exchange for an equity interest in PSL, and we agreed to discharge the PSL Promissory Notes (as defined in Note 21, “Related Party Transactions” to the audited consolidated financial statements) held by us for a value of $10.4 million in exchange for PSL equity interests. Following the PSL Closing, we owned approximately 10.2% of PSL. As a result of PSL's share issuance to Subscriber, we recognized a net loss of $2.8 million related to the difference between the selling price per share and its carrying amount per share and after a gain from the conversion of the PSL Promissory Notes. The loss is included in Other income (expense) income,, net in the consolidated statements of operations.

At the PSL Closing, we, Sanken and Subscriber entered into an amended and restated limited partnership agreement (the “Limited Partnership Agreement”) with Polar Semiconductor GP I, LLC. The Limited Partnership Agreement contains representations, warranties and covenants of the parties customary for a transaction of this type, the reimbursement of expenses and costs, and restrictions on transfers. Also as contemplated by the Limited Partnership Agreement and effective upon the PSL Closing, we, Sanken and Subscriber contributed our equity interests in PSL in exchange for limited partnership interests of a newly formed Delaware limited partnership that is the ultimate parent indirectly holding all of Polar’s issued and outstanding equity units (“PSL Parent”). Immediately following the PSL Closing and associated completion of the recapitalization and reorganization transactions contemplated by the Limited Partnership Agreement, the Company’s ownership of PSL Parent was approximately 10.2%.

On February 6, 2025 we entered into Amendment No. 3 (the “Third Amendment”) to the 2023 Revolving Credit Agreement. The Third Amendment providesprovided for a new $375.0 million tranche of term loans maturing in 2030 (the “2025 Refinanced Loans”), the proceeds of which were used, in relevant part, to (i) refinance all outstanding borrowings under the Refinanced 2023 Term Loan Facility, (ii) pay fees and expenses in connection with the foregoing and (iii) for general corporate purposes. The 2025 Refinanced Loans amortizeamortized at a rate of 0.00% per annum. The 2025 Refinanced Loans bearbore interest, at the Company’s option, at a rate equal to (i) Term SOFR (as defined in the 2023 Revolving Credit Agreement, as amendedAgreement) in effect from time to time plus 2.00% or (ii) the highest of (x) the Federal funds rate, as published by the Federal Reserve Bank of New York, plus 0.50%, (y) the prime lending rate or (z) the one-month Term SOFR plus 1.00% in effect from time to time plus 1.00%. The 2025 Refinanced Loans willwere scheduled to mature on October 31, 2030. In conjunction with this financing, we incurred $1.1 million in costs. Borrowings under the 2025 Refinanced Loans arewere collateralized by substantially all of our assets. A paymentPayments of $30.0 million, $25.0 million, $10.0 million and $25.0 million was applied to the outstanding balance of the 2025 Refinanced Loans on February 28, 2025 and2025, April 30, 2025, May 30, 2025 and July 31, 2025, respectively.

In January 2025, we enacted a global restructuring plan that included a rebalancingrepositioning ofto ourhigh-growth workforceand lower cost regions and consolidation of leased facilities in an effort to optimize our cost structure. In June 2025, we undertook additional facility consolidation and further workforce rebalancing as part of this plan. In connection with the restructuring plan,plans, we incurred costs related to severance, annual incentive program and other employee-related benefits, retention incentives, accelerated amortization of right-of-use for certain leases, as well as various professional service charges. The restructuring is expected to bewas substantially completed during fiscal year 2026.

Although inflation has moderated in recent periods, inflationInflation rates in the markets in which we operate have increasedremained elevated and may continue to rise as a result of cost increases attributable to a rise in global energy and commodity prices and global tariff policies. Inflation in recent quarters has led us to experience higher costs, including higher labor costs, wafer and other costs for materials from suppliers, and transportation and energy costs. Our suppliers have raised their prices and may continue to raise prices, and in the competitive markets in which we operate, we may not be able to make corresponding price increases to preserve our gross margins and profitability. If inflation rates continue to rise or remain elevated for a sustained period of time, they could have a material adverse effect on our business, financial condition, results of operations and liquidity. While we have attempted to offset increases in these costs through various productivity and cost reduction initiatives, as well as adjusting our selling prices and releasing new products with improved gross margins, our ability to increase our average selling prices depends on market conditions and competitive dynamics. Given the timing of our actions compared to the timing of these inflationary pressures, there may be periods during which we are unable to fully recover the increases in our costs.

Demand for our products is highly dependent on market conditions in the end markets in which our customers operate, which are generally subject to seasonality, cyclicality, tariffs and other pricing increases and competitive conditions. In addition, a substantial portion of our total net sales is derived from sales to customers that purchase large volumes of our products. These customers generally provide periodic forecasts of their requirements. However, these forecasts do not commit such customers to minimum purchases, and customers can revise these forecasts without penalty. In addition, as is customary in the semiconductor industry, customers are generally permitted to cancel orders for our products within a specified period. Cancellations of orders could result in the loss of anticipated sales without allowing us sufficient time to reduce our inventory and operating expenses. In addition, changes in forecasts or the timing of orders from customers expose us to the risks of inventory shortages or excess inventory. We are currently operating in an inflationary environment for our products as a result of a rise in global energy and commodity prices and global tariff policies, which also have the potential to reduce end market demand in certain markets. Over the past several quarters, we and other semiconductor companies have experienced aan downturnincrease in market demand, but historically such periods are often followed by periods of softening demand, primarily driven by softeninglower demand from customers across various markets and digestion of excess accumulated inventory. In addition, factors that cause a reduction in the demand from end users of our OEMs’ or other customers’ products, including as a result of increased prices resulting from a rise in global energy and commodity prices and global trade policies, tariffs or a recessionary environment in the markets in which we operate, may in the future continue to cause our direct customers to significantly reduce the number of products ordered from us.

Gross margin has been, and will continue to be, affected by a variety of factors, including the ASPs of our products, product mix in a given period, material costs, yields, manufacturing costs and efficiencies. We believe the primary driver of gross margin is the ASP negotiated between us and our customers relative to material costs and yields. Our pricing and margins depend on the volumes and the features of the products we produce and sell to our customers. As our products mature and unit volumes increase, we expect their ASPs to decline in the long term.long-term. We continually monitor and work to reduce the cost of our products and improve the potential value our solutions provide to our customers, as we target new design win opportunities and manage the product life cycles of our existing customer designs. We also maintain a close relationship with our suppliers and subcontractors to improve quality, increase yields and lower manufacturing costs. As a result, these declines often coincide with improvements in manufacturing yields and lower wafer, assembly, and testing costs, which offset some or all of the margin reduction that results from declining ASPs. However, we expect our gross margin to fluctuate on a quarterly basis as a result of changes in ASPs due to product mix, new product introductions, transitions into volume manufacturing and manufacturing costs. Gross margin generally decreases if production volumes are lower as a result of decreased demand as it did throughout fiscal year 2025,demand, which leads to a reduced absorption of our fixed manufacturing costs. Gross margin generally increases when the opposite occurs.

The semiconductor industry has historically been highly cyclical and is characterized by increasingly rapid technological change, product obsolescence, competitive pricing pressures, evolving standards, short product life cycles in consumer and other rapidly changing markets and fluctuations in product supply and demand. New technology may result in sudden changes in system designs or platform changes that may render some of our products obsolete and require us to devote significant research and development resources to compete effectively. Periods of rapid growth and capacity expansion are occasionally followed by significant market corrections in which sales decline, inventories accumulate, and facilities go underutilized. Also, expectations and front-loaded investment related to AI and data centers may increase the magnitude and volatility of these cycles, making downturns more abrupt or recoveries more uneven. To the extent that current levels of investment in AI-related infrastructure, products or end-market demand reflect expectations that are not ultimately realized, or if customer spending related to AI or data centers moderates, is delayed, or declines more rapidly than anticipated, the semiconductor industry could experience an accelerated or more pronounced downturn. During periods of expansion, our margins generally improve as fixed costs are spread over higher manufacturing volumes and unit sales. In addition, we may build inventory to meet increasing market demand for our products during these times, which serves to absorb fixed costs further and increase our gross margins. During an expansion cycle, we may increase capital spending and hiring to add to our production capacity. During periods of slower growth or industry contractions, our sales, production and productivity and margins generally decline.

Our total net sales are primarily derived from product sales to direct customers and distributors. We sell products globally through our direct sales force, third-party and related party distributors and independent sales representatives. Sales are derived from products for different applications. Our core applications are focused on the automotive, industrial and other industries.

Income(Loss) (loss)income in earnings of equity investment is related to our equity investment in PSL (PSL Parent following its recapitalization in September 2024).

Other income (expense) income,, net includes unrealized (loss) gains on marketable securities from changes in the fair value of equity securities with readily determinable fair values. These investments are measured at fair value with unrealized gains and losses related to changes in the entity’s stock price. Upon the sale of the investments, realized gains and losses are recognized in other income (expense), net. Miscellaneous income and expense items unrelated to our core operations are also within other income (expense) income,, net.

We are subject to tax in the U.S. and various foreign jurisdictions. Our effective income tax rate fluctuates primarily because of: the change in the mix of our U.S. and foreign income; the impact of discrete transactions and law changes; state tax impacts and the difference between the amount of tax benefits generated by the foreign derived intangible income (“FDII”) deduction, including permanent impacts of 174capitalizing Capitalizationresearch (asand defineddevelopment below),expenses, and research credits, offset by the additional tax costs associated with global intangible low-tax income (“GILTI”), Subpart F income and non-deductible stock-based compensation charges.

Industrial and other net sales decreasedincreased primarily due to aan decreaseincrease in demand for our data center applications, industrial automation and robotics products, medical applications and ourclean energy applications, partially offset by a decrease in consumer products, broad-based industrial products and otherpersonal and industrial applications,transport in addition to distributor inventory reductions.products.

The decreaseincrease in MS was primarily due to aan declineincrease in fiscal year 2025 demand for our current and isolator products, as well as our magnetic speed sensors, TMR sensor solutions and magnetic position sensors, partially offset by an increase in sales of our TMR solutions.sensors. The declineincrease in PIC sales was primarily driven by a decrease in fiscal year 2025 demand for our motor products and high-performancehigh performance power products. For additional details on the factors driving the decrease in demand for fiscal year 2025, see discussion below under Net Sales by Geographic Location.

Cost of goods sold decreasedincreased in the fiscal year ended March 28,27, 20252026 compared to the fiscal year ended March 29,28, 2024.2025. The decreaseincrease in cost of goods sold was primarily due to ahigher reductionproduction volume in shippedsupport volume,of as well as a change inhigher product mix,sales partially offset by anand increase in amortizationmaterials ofand intangiblecommodity assets related to the acquisition of Crocus.costs.

Gross profit decreasedincreased in the fiscal year ended March 28,27, 20252026 compared to the fiscal year ended March 29,28, 20242025, primarily due to the decreaseincrease in net sales and a change in product mix as discussed above.mix.

Gross margin was 44.3%46.3% and 54.8%44.3% for the fiscal years ended March 28,27, 20252026 and March 29,28, 2024,2025, respectively. The decreaseincrease was primarily due to the declineincrease in net sales and a change in product mix, noted above.mix.

R&D expenses increased in the fiscal year ended March 28,27, 20252026 compared to the fiscal year ended March 29,28, 2024.2025. This increase was primarily due to an increase in R&D supplies, partially offset by a reduction from personnel costs, depreciationincluding andthe R&Dfunding taxof credits.the annual incentive program.

R&D expenses represented 23.1% of our total net sales for the fiscal year ended March 27, 2026, a decrease from 24.8% of our total net sales for the fiscal year ended March 28, 2025,2025. anThe increasedecrease fromas 16.8%a percentage of our total net sales for the fiscal year ended March 29, 2024. The increase was primarily due to the increase in R&D supplies in addition to the decline in net sales, partially offset by aan reductionincrease fromin personnelthe costs,funding outsideof servicethe costs,annual depreciationincentive and R&D tax credits.program.

InterestSG&A expenseexpenses increased in the fiscal year ended March 28,27, 20252026 compared to the fiscal year ended March 29,28, 2024.2025. TheThis increase was primarily due to higheran interestincrease paymentsin onpersonnel costs, including the Refinancedfunding 2023of Termthe Loanannual Facility,incentive whichprogram, increasedoutside ourservices totaland outstandinglegal debt balance.fees.

Interest incomeexpense decreased in the fiscal year ended March 28,27, 20252026 compared to the fiscal year ended March 29,28, 2024,2025. The decrease was primarily due to lowerthe cashvoluntary andpayments cashapplied equivalentto balances.the outstanding balance of our Term Loan Facility.

We recorded a foreign currency transaction loss in theboth fiscal yearyears ended March 27, 2026 and March 28, 2025,2025. comparedThe toforeign acurrency gaintransaction loss recorded in the fiscal year ended March 29,27, 2024.2026 was primarily due to the U.S. Dollar weakening against various currencies, including the Euro and the Philippine Peso. The foreign currency transaction loss recorded in the fiscal year ended March 28, 2025 was primarily due to realized and unrealized losses from our Philippine locations. The foreign currency transaction gain recorded in the fiscal year ended March 29, 2024 was related to a transaction between the U.S. and French subsidiaries.

Income(Loss) (loss)income in earnings of equity investment reflected loss of $9.4 million and income of $1.2 million and loss of $0.5 million in the fiscal years ended March 28,27, 20252026 and March 29,28, 2024,2025, respectively, representingrelated the earnings onto our 30%equity investment in PSL (and approximately 10.2% investment in PSL Parent following PSL’sits recapitalization in September 2024).

We recorded $1.4 million of gains related to earnings in our money market fund deposits, partially offset by other expense of $0.8 million in the fiscal year ended March 27, 2026. We recorded a net loss of $2.8 million as a result of the PSL Closing in the fiscal year ended March 28, 2025 related to the difference between the selling price per share and its carrying amount per share and after a gain from the conversion of PSL Promissory Notes that we held, partially offset by $1.6 million of gains related to earnings in our money market fund deposits. We recorded $11.8 million of gains related to sales of our investment in marketable securities and earnings in our money market fund deposits, partially offset by unrealized losses of $11.2 million related to our investment in marketable securities in the fiscal year ended March 29, 2024.

We operate on a 52- or 53-week fiscal year ending on the last Friday of March. Each fiscal quarter has 13 weeks, except in a 53-week year, when the fourth fiscal quarter has 14 weeks. All references to the three- and nine-monththree-month periods ended DecemberJune 26, 20252026 and DecemberJune 27, 20242025 relate to the 13- and 39-week13-week periods ended DecemberJune 26, 20252026 and DecemberJune 27, 2024,2025, respectively. All references to “2027,” “fiscal year 2027” or similar references relate to the 52-week period ending March 26, 2027. All references to “2026,” “fiscal year 2026” or similar references relate to the 52-week period endingended March 27, 2026. All references to “2025,” “fiscal year 2025” or similar references relate to the 52-week period ended March 28, 2025.

We are headquartered in Manchester, New Hampshire and have a global footprint across multiple continents. Our portfolio includes more than 1,500 products, and we ship overapproximately 1.52.1 billion units annually to more than 10,00015,000 customers worldwide. During the three- and nine-monththree-month periods ended DecemberJune 26, 2026 and June 27, 2025, we generated $229.2$259.2 million and $646.9$203.4 million in total net sales, respectively, with $8.4$15.9 million and $1.8$(13.2) million in net income,income (loss), respectively. During the three- and nine-month periods ended December 27, 2024, we generated $177.9 million and $532.2 million in total net sales, respectively, with $6.8 million and $58.0 million in net losses, respectively.

Although inflation has moderated in recent periods, inflationInflation rates in the markets in which we operate have increasedremained elevated and may continue to rise as a result of cost increases attributable to a rise in global energy and commodity prices and global tariff policies. Inflation in recent quarters has led us to experience higher costs, including higher labor costs, wafer and other costs for materials from suppliers, and transportation and energy costs. Our suppliers have raised their prices and may continue to raise prices, and in the competitive markets in which we operate, we may not be able to make corresponding price increases to preserve our gross margins and profitability. If inflation rates continue to rise or remain elevated for a sustained period of time, they could have a material adverse effect on our business, financial condition, results of operations and liquidity. While we have attempted to offset increases in these costs through various productivity and cost reduction initiatives, as well as adjusting our selling prices and releasing new products with improved gross margins, our ability to increase our average selling prices depends on market conditions and competitive dynamics. Given the timing of our actions compared to the timing of these inflationary pressures, there may be periods during which we are unable to fully recover the increases in our costs.

Our end customers continually develop new products in existing and new application areas, and we work closely with most of our significant original equipment manufacturer (“OEMs”) customers in most of our target markets to understand their product roadmaps and strategies. For new products, the time from design initiation and manufacturing until we generate sales can be lengthy, typically between two and four years. As a result, our future sales are highly dependent on our continued success at winning design mandates from our customers. Further, becausedespite current inflationary and pricing conditions, we expect the average sales prices (“ASPs”) of our products to decline over time, and we consider design wins to be critical to our future success as they help mitigate declines in ASPs. We anticipate being increasingly dependent on revenue from newer design wins for our newer products. The selection process is typically lengthy and may require us to incur significant design and development expenditures in pursuit of a design win, with no assurance that our solutions will be selected. As a result, the loss of any key design win or any significant delay in the ramp-up of volume production of a customer’s products into which our product is designed could adversely affect our business. In addition, volume production is contingent upon the successful introduction and market acceptance of our customers’ end products, which may be affected by several factors beyond our control.

Demand for our products is highly dependent on market conditions in the end markets in which our customers operate, which are generally subject to seasonality, cyclicality, tariffs and other pricing increases and competitive conditions. In addition, a substantial portion of our total net sales is derived from sales to customers that purchase large volumes of our products. These customers generally provide periodic forecasts of their requirements. However, these forecasts do not commit such customers to minimum purchases, and customers can revise these forecasts without penalty. In addition, as is customary in the semiconductor industry, customers are generally permitted to cancel orders for our products within a specified period. Cancellations of orders could result in the loss of anticipated sales without allowing us sufficient time to reduce our inventory and operating expenses. In addition, changes in forecasts or the timing of orders from customers expose us to the risks of inventory shortages or excess inventory. These risks may be compounded by broader geopolitical and supply chain disruptions affecting the electronics supply chain, even when our own supply, manufacturing and distribution capabilities are unaffected. Because our products are incorporated into our customers’ end products alongside components and materials supplied by numerous third parties over whom we have no control, a shortage, trade restriction, geopolitical disruption or other event affecting any other critical component or input could cause our customers to delay, reduce, reschedule or cancel orders for our products, and we have observed that the effects of such disruptions may lag the underlying event by one or more quarters. We are currently operating in an inflationary environment for our products as a result of a rise in global energy and commodity prices and global tariff policies, which also have the potential to reduce end market demand in certain markets. WeOver believethe thatpast weseveral are emerging from an extended period in whichquarters, we and other semiconductor companies have experienced aan downturnincrease in market demand, but historically such periods are often followed by periods of softening demand, primarily driven by reducedlower demand from customers across various markets and digestion of excess accumulated inventory. In addition, factors that cause a reduction in demand from the end users of our OEMs’ or other customers’ products, including as a result of increased prices resulting from a rise in global energy and commodity prices and global trade policies, tariffs or a recessionary environment in the markets in which we operate, may in the future continue to cause our direct customers to significantly reduce the number of products ordered from us.

Gross margin has been, and will continue to be, affected by a variety of factors, including the ASPs of our products, product mix in a given period, material costs, yields, manufacturing costs and efficiencies. We believe the primary driver of gross margin is the ASP negotiated between us and our customers relative to material costs and yields. Our pricing and margins depend on the volumes and the features of the products we produce and sell to our customers. As our products mature and unit volumes increase, we expect their ASPs to decline in the long term.long-term. We continually monitor and work to reduce the cost of our products and improve the potential value our solutions provide to our customers, as we target new design win opportunities and manage the product life cycles of our existing customer designs. We also maintain a close relationship with our suppliers and subcontractors to improve quality, increase yields and lower manufacturing costs. As a result, these declines often coincide with improvements in manufacturing yields and lower wafer, assembly, and testing costs, which offset some or all of the margin reduction that results from declining ASPs. However, we expect our gross margin to fluctuate on a quarterly basis as a result of changes in ASPs due to product mix, new product introductions, transitions into volume manufacturing and manufacturing costs. Gross margin generally decreases if production volumes are lower as a result of decreased demand as it did throughout fiscal year 2025,demand, which leads to a reduced absorption of our fixed manufacturing costs. Gross margin generally increases when the opposite occurs.

The semiconductor industry has historically been highly cyclical and is characterized by increasingly rapid technological change, product obsolescence, competitive pricing pressures, evolving standards, short product life cycles in consumer and other rapidly changing markets and fluctuations in product supply and demand. New technology may result in sudden changes in system designs or platform changes that may render some of our products obsolete and require us to devote significant research and development resources to compete effectively. Periods of rapid growth and capacity expansion are occasionally followed by significant market corrections in which sales decline, inventories accumulate, and facilities go underutilized. Furthermore, emerging secular growth drivers and concentrated infrastructure investments, such as those supporting advanced computing, AI and data centers, and electrification, may alter the historical amplitude or duration of these industry cycles. During periods of expansion, our margins generally improve as fixed costs are spread over higher manufacturing volumes and unit sales. In addition, we may build inventory to meet increasing market demand for our products during these times, which serves to absorb fixed costs further and increase our gross margins. During an expansion cycle, we may increase capital spending and hiring to add to our production capacity. During periods of slower growth or industry contractions, our sales, production and productivity and margins generally decline.

Three-Month Period Ended DecemberJune 26, 20252026 Compared to Three-Month Period Ended DecemberJune 27, 20242025

The following table summarizes our results of operations and our results of operations as a percentage of total net sales for the three-month periods ended DecemberJune 26, 20252026 and DecemberJune 27, 2024.2025.

Automotive net sales increased in the three-month period ended DecemberJune 26, 20252026 compared to the three-month period ended DecemberJune 27, 2024,2025, primarily due to growth in e-Mobilitysafety, productscomfort and internalconvenience combustionapplications engineand products.advanced driver assistance systems (“ADAS”) and components for electrified and hybrid vehicles (“xEV”), (collectively, “Focus Auto”).

Industrial and Other net sales increased in the three-month period ended DecemberJune 26, 20252026 compared to the three-month period ended DecemberJune 27, 2024,2025, primarily due to increases in demand for data center applications and industrial automation and robotics products, partially offset by a decrease in broad-based industrial products and personal and industrial transport products.

The increase in PIC sales was primarily driven by an increase in demand for our motor and high performance power products. The increase in MS sales was primarily due to an increase in demand for our current and isolatorsensor products, as well as our magnetic speed and position sensors.sensors both of which includes our tunneling magnetoresistance (“TMR”) sensor solutions.

Cost of goods sold increased in the three-month period ended DecemberJune 26, 20252026 compared to the three-month period ended DecemberJune 27, 2024,2025, primarily due to higher production volume in support of higher product sales.

Cost of goods sold as a percentage of our total net sales was 53.3%51.5% and 54.3%55.1% for the three-month periods ended DecemberJune 26, 20252026 and DecemberJune 27, 2024,2025, respectively. The decrease was primarily due to the increase in net sales.

Gross profit increased in the three-month period ended DecemberJune 26, 20252026 compared to the three-month period ended DecemberJune 27, 2024,2025, primarily due to the increase in net salessales, operating leverage and apricing change in product mix.actions.

Gross margin was 46.7%48.5% and 45.7%44.9% for the three-month periods ended DecemberJune 26, 20252026 and DecemberJune 27, 2024,2025, respectively. The increase was primarily due to the increase in net sales and a change in product mix.

Research and development (“R&D”) expenses increased in the three-month period ended DecemberJune 26, 20252026 compared to the three-month period ended DecemberJune 27, 2024,2025, primarily due to the increase in R&D personnel costs, including the projected funding of the annual incentive program.costs.

R&D expenses as a percentage of our total net sales was 23.1%21.3% and 24.4%22.9% for the three-month periods ended DecemberJune 26, 20252026 and DecemberJune 27, 2024,2025, respectively. The decrease as a percentage of total net sales was primarily due to the increase in net sales, partially offset by the increase in thepersonnel projected funding of the annual incentive program.costs.

Selling, general and administrative (“SG&A”) expenses increaseddecreased in the three-month period ended DecemberJune 26, 20252026 compared to the three-month period ended DecemberJune 27, 2024,2025, primarily due to a decrease in outside services, partially offset by an increase in personnel costs, including the projected funding of the annual incentive program.costs.

SG&A expenses as a percentage of our total net sales was 19.5%17.3% and 21.3%23.4% in the three-month periods ended DecemberJune 26, 20252026 and DecemberJune 27, 2024,2025, respectively. The decrease as a percentage of total net sales was primarily due to the increase in net sales, partiallyin offsetaddition byto ana increasedecrease in theoutside projected funding of the annual incentive program.services.

Interest expense decreased in the three-month period ended DecemberJune 26, 20252026 compared to the three-month period ended DecemberJune 27, 2024.2025. The decrease iswas due to the voluntary payments applied to the outstanding balance of our Term Loan Facility, in addition to the 2025impact Refinancedfrom Loans.refinancing in January 2026.

Interest income decreasedincreased in the three-month period ended DecemberJune 26, 20252026 compared to the three-month period ended DecemberJune 27, 2024,2025, primarily due to lowerhigher cash and cash equivalents balances.balances in interest-bearing accounts.

The foreign currency loss recorded in the three-month periodperiods ended DecemberJune 26, 2026 and June 27, 2025 was primarily due to the U.S. Dollar impactweakening on transactions inagainst the Philippines. The foreign currency loss recorded in the three-month period ended December 27, 2024 was primarily due to realized and unrealized losses from our Philippine location.Peso.

We recorded a net loss of $3.6 million and $0.8 million for the three-month periods ended June 26, 2026 and June 27, 2025, respectively, related to our equity investment in Polar Semiconductor, LLC (“PSL”) in the three-month period ended December 26, 2025.LLC.