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

WeThe areindustries ain supplierwhich towe operate, including the global semiconductor andindustry, display and related industries, whichhave historically have been cyclical and are subject to volatility in customer demand. Factors that impact demandDemand for our products and services includeis impacted by technology inflections and advances in fabrication processes, new and emerging technologies and market drivers, such as demand for high-bandwidth memory and other forms of advanced packaging and technologies related to artificial intelligence and data center computing, production capacity relative to demand for semiconductor chips and electronic devices, end-user demand, the timing of customers’ investment in new or expanded fabrication plants, customers’ capacity utilization, production volumes, access to affordable capital, business and consumer buying patterns and general economic and political conditions. Artificial intelligence (AI) and technologies related to AI are a significant demand driver for the industries we serve. AI is evolving rapidly and isthe expected timing and amount of investments related to AI can change significantly. As a relatively new demand driver for semiconductors and semiconductor equipment, andresult, it is difficult to accurately forecast suchdemand demand.for our products related to AI. Changes in demand can affect the timing and amounts of customer investments in technology and manufacturing equipment and can significantly impact our operating results. The amount and mix of our customers’ capital equipment spending between different products and technologies can also significantly impact our operating results.

To meet rapidly changing demand, we must accurately forecast demand and effectively manage our resources, investments, production capacity, supply chain, workforce, inventory,inventory and other components of our business. We may incur unexpected or additional costs to align our business operations with changes in demand. If we do not effectively manage these challenges, our business performance and operating results may be adversely impacted. Even with effective allocation of resources and management of costs, our gross and operating margins, cash flows and earnings may be adversely impacted during periods of changing demand.

UncertainOur business and the industries in which we operate can be impacted by uncertain or adverse economic and business conditions, including uncertainties and volatility in the financial markets, national debt, fiscal or monetary concerns, inflation and changes in interest rates, bank failures, tariffs and trade policies and economic recession,recession. could materially and adversely impact our operating results. Markets for our semiconductor and display equipment and services depend largely on business and consumer spending and demand for semiconductor chips and electronic devices. Uncertain or adverse economic and businessThese conditions could result in decreases in business and consumer spending and demand. Decreases in spending and demand have caused, and may in the future cause, our customers to push out,delay, cancel or refrain from purchasing our equipment or services, which could negatively impact demand for our products and services, reduce our backlog,backlog and increase our inventory,inventory. Customers may also scale back operations, exit businesses, merge with other manufacturers, or file for bankruptcy, which can reduce our revenue and materiallyresult andin additional inventory or bad debt expense. Other equipment manufacturers may also consolidate or form strategic alliances, which could adversely impactaffect our operatingability results.to compete.

Uncertain economic and industryThese conditions and supply chain challenges make it more difficult to accurately forecast operating results,and financial results and make business decisions, and identifyinvestment and prioritize the risks that may affect our businesses, sources and uses of cash, financial condition and results of operations. If we do not appropriately manage our business operations it could have a material and adverse impact on our business performance and financial condition.decisions. We may be required to implement additional cost reduction efforts, including restructuring activities, which may adversely impact our ability to capitalize on opportunities. Even during periods of economic uncertainty or lower demand, we must continue to invest in research and development and maintain a global business infrastructure to compete effectively and support our customers,customers. whichThe canconsequences of these conditions could have aan negativeadverse impacteffect on our operatingbusiness, results.financial condition and results of operations.

We maintain anOur investment portfolio that is subject to general credit, liquidity, market and interest rate risks.risks, The risks to our investment portfoliowhich may be exacerbated if financial market conditions deteriorate due toby rising inflation, rising interest rates, bank failures or economic recession and the value and liquidity of the investmentour portfolio and returns on pension assets could be negatively impacted and lead to impairment charges. We also maintain cash balances in various bank accounts globally toand fund normal operations. Ifif any of these financial institutions become insolvent, it could limit our ability to access our cash in the affected accounts, which couldand affect our ability to manage our operations.

We have product development, engineering, manufacturing, sales and other operations distributed throughout many countries, and some of our business activities are concentrated in certain geographic areas. In fiscal 2024,2025, approximately 86%89% of our net revenue was to customers in regions outside the United States. As a result of the global nature of our operations, we are subject to a number of factors that could have an adverse impact on our businessbusiness, performancefinancial condition and results of operationsoperations. mayThese befactors adverselyinclude affectedglobal bypolitical aand numbersocial conditions, such as policies or regulations within countries, including in China, the United States and countries in Europe and Asia, that favor domestic companies over non-domestic companies, including efforts to promote the development and growth of factors,local including:competitors to us, or regarding national, commercial or security issues. Other factors include geopolitical turmoil, acts of war or social unrest; our ability to maintain appropriate business processes, procedures and internal controls in our geographically diverse operations; delays or restrictions

A majority of our products and services are delivered to customers in jurisdictions outside of the United States, including China, Taiwan, KoreaTaiwan and Japan.Korea. We also purchase a significant portion of equipment and supplies from suppliers outside of the United States. There is inherent risk, based on the complex relationships among the United States and the countries in which we conduct our business, that political, diplomatic,diplomatic and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that affect the semiconductor industry. The United States and other countries have imposed and may continue to impose new trade restrictions and export regulations, have levied tariffs and taxes on certain goods,goods and could significantly increase or impose new tariffs on a broad array of goods. Trade restrictions and export regulations, or increasesincreased inor new tariffs and additional taxes, including any retaliatory measures, can negatively impact end-user demand and customer investment in semiconductor equipment, increase our supply chain complexity and our manufacturing costs, decrease margins, reduce the competitiveness of our products, or restrict our ability to sell products, provide services or purchase necessary equipment and supplies, any or all of which could have a material and adverse effect on our business, results of operations, or financial condition.

For example, certain international sales depend on our ability to obtain export licenses, and our inability to obtain such licenses has limited and could further limit our markets and negatively impact our business. Over the past several years, the U.S. government announced additional export regulations for U.S. semiconductor technology sold in China, including wafer fabrication equipment and related parts and services, with disparate impact on companies in different jurisdictions, which have limited the market for certain of our products and services, adversely impacted our revenues,revenues and increased our exposure to foreign and Chinese domestic competition. The U.S. Department of Commerce has promulgated regulations expandingexpanded export license requirements for U.S. companies that sell certain products or provide certain services to entities in China whose actions or functions are intended to support military end uses, eliminated certain export license exceptions that applied tofor exports of certain items to China, added certain Chinese companies to its “Entity List,” making those companies subject to additional licensing requirements, and expanded licensing requirements for exports to China of items for use in the development or production of integrated circuits and certain technologies. These regulations require us to obtain additional export licenses to supply certain of our products or provide services to certain customers in China. Obtaining export licenses may be difficult and time-consuming, and there is no assurance we will be issued licenses on a timely basis or at all. Our inability to obtain such licenses could limit our sales in China, may cause us to be displaced by foreign and Chinese domestic companies and adversely affect our results of operations. The implementation and interpretation of these complex rules and other regulatory actions taken by the U.S. government are uncertain and evolving and may make it more challenging for us to manage our operations and forecast our operating results. The U.S. and other governments may promulgate new or additional export licensing or other requirements that have the effect of further limiting our ability to provide certain products and services to customers outside the U.S., including China. The U.S. government may also revise or expand existing requirements or issue guidance clarifying the scope and application of these requirements, which could change the impact of these rules on our business and manufacturing operations. The U.S. government may also continue to add customers to its “Entity ListList,” or promulgate additional restrictions, or take measures that could disrupt our product shipments or the provision of services to certain customers. These and other potential future regulatory changes could materially and adversely affect our business, results of operations or financial condition.

As a global business with customers, suppliers and operations in many countries around the world, from time to time we may receive inquiries from government authorities about transactions between us and certain foreign entities. For example, since 2022, we have received multiple subpoenas from government authorities requesting information relating to certain China customer shipments and export controls compliance, including from the U.S. Department of Justice, the U.S. Commerce Department Bureau of Industry and Security,Security and the U.S. Securities and Exchange Commission. We are cooperating fully with the U.S. government in these matters. We have continued to receive related subpoenas, as well as requests for information, and may in the future receive additional related subpoenas and requests for information from such or other government authorities. Any such inquiries are subject to uncertainties, and we cannot predict the outcome of these inquiries, or any other governmental inquires or proceedings that may occur. Any violation or alleged violation of law or regulations could result in significant legal costs or in legal proceedings in which we or our employees could be subjected to fines and penalties and could result in restrictions on our business and damage to our global brand and reputation, and could have a material and adverse impact on our business operations, financial condition and results of operations.

A relatively limited number of customers account for a substantial portion of our business. Our customer base is geographically concentrated, particularly in China, Taiwan, Korea and Japan. As a result, the actions of even a single customer orhave exposed and can further expose our business and operating results to greater volatility. Our customer base is geographically concentrated, particularly in China, Taiwan and Korea, and export regulations that apply to customers in certain countries, such as those in China, have exposed and can further expose our business and operating results to greater volatility. The geographic concentration of our customer base could shift over time as a result of changes in technology and competitive landscape, as well as government policy and incentives to develop regional semiconductor industries. The mix and type of customers,customers and sales to any single customer, including as a result of changes in government policy, have varied and may vary significantly fromover quarter to quarter and from year to year, and have had,time and may continue to have,have a significant impact on our operating results. Our products are configured to customer specifications, and changing, rescheduling or canceling orders may result in significant, non-recoverable costs. If customers do not place orders, or they substantially reduce, delay or cancel orders (including as a result of uncertain or adverse economic conditions, our inability to fulfill orders due to export regulations, shortage of parts, transportation capacity/interruptions or any other reason),orders, we may not be able to replace the business, which may have a material and adverse impact on our results of operations and financial condition. The concentration of our customer base increases our risks related to the financial condition of our customers, and the deterioration in financial condition of a single customer or the failure of a single customer to perform its obligations could have a material and adverse effect on our results of operations and cash flow. To the extent our customers experience liquidity constraints, we may incur bad debt expense, which may have a significant impact on our results of operations. Major customers may seek pricing, payment, intellectual property-related, or other commercial terms that are less favorable to us, which may have a negative impact on our business, cash flow, revenue and gross margins.

Our business depends on our timely supply of products and services to meet the changing requirements of our customers, which depends in part on the timely delivery of parts, materials and services from suppliers and contract manufacturers. IncreasesVolatility in demand for our products and worldwide demand for semiconductor chips and electronic devices can impact our suppliers’ ability to meet our demand requirements,requirements and havehas in the past resulted in, and may from time to time result in,in a shortage of parts, materials and services needed to manufacture our products. SuchThese shortages, as well as delays in and unpredictability of shipments due to transportation interruptions, havemay adversely impacted, and may continue to adversely impact,impact our manufacturing operations and our ability to meet customer demand. Volatility of demand for equipment can also increase our and our suppliers’ capital, technical, operational and other risks, and may cause some suppliers to exit businesses, or scale back or cease operations, which could impact our ability to meet customer demand. Supply chain constraints may increase costs of logistics and parts for our products and may cause us to pass on increased costs to our customers, which may lead to reduced demand for our products and materially and adversely impact our operating results.products. Supply chain disruptions have in the past caused, and may from time to time cause, delays in our equipment production and delivery schedules, which can lead to our business performance becoming significantly dependent on quarter-end production and delivery schedules, and could have an adverse impact on our operating and financial results.

•political instability, social unrest, terrorism, acts of war or other geopolitical turmoil, such as the conflict in the Middle East,turmoil in locations where we or our customers or suppliers have manufacturing, research, engineering or other operations;

•volatility in the availability and cost of parts, commodities, energy and shipping related to our products, including increased costs due to rising inflation or interest rates or other market conditionsconditions, as well as uncertainties arising from the imposition of tariffs and any retaliatory measures;

•limited availability of critical materials and minerals, including due to Chinese government restrictions on the export of certain rare earth minerals implemented in 2025, which could be expanded in the future, and limited feasible alternatives to materials subject to existing or proposed regulations to limit their use (such as hydrofluorocarbons and per- and polyfluoroalkyl substances), which are found in parts, components, process chemicals and other materials supplied to us or used in the manufacturing or operations of our products; and

If a supplier fails to meet our requirements concerning quality, cost, intellectual property protection, socially-responsible and sustainable business practices,protection or other performance factors, or does not meet regulatory requirements applicable to our supply chain, we may transfer our business to alternative sources.sources, Transferring business to alternative supplierswhich could result in manufacturing delays, additional costs or other difficulties, and may impair our ability to protect, enforce and extract the full value of our intellectual property rights,rights and the intellectual property rights of our customers and other third parties. These outcomes could have a material and adverse impact on our business and competitive position and subject us to legal proceedings and claims. If we are unable to meet our customers’ demand for a prolonged period due to our inability to obtain certain parts or components from suppliers on a timely basis or at all, our business, results of operations and customer relationships could be adversely impacted.

If we need to rapidly increase our business and manufacturing capacity to meet increases in demand or expedited shipment schedules, this may strain our manufacturing and supply chain operations,operations and negatively impact our working capital. If we are unable to accurately forecast demand for our products, we may purchase more or fewer parts than necessary or incur costs for canceling, postponing or expediting delivery of parts. If we purchase or commit to purchase inventory in anticipation of customer demand that does not materialize, or suchthe inventory is rendered obsolete by the rapid pace of technological change, or if customers reduce, delay or cancel orders, we may incur excess or obsolete inventory charges.

We are exposed to various factors that impact the industries in which we operate.operate, including factors specific to the semiconductor industry.

We provide equipment, services and software to the semiconductor, display,semiconductor and related industries. Our customers include manufacturers of semiconductor wafers and chips, liquid crystal and organic light-emitting diode (OLED) displays,chips and other electronic devices. Our customers’ products are used in a wide variety of products such as personal computing devices, mobile phones, artificial intelligence (AI) and data center servers, automobiles, connected devices, industrial applications and consumer electronics. Each of our segments is subject to variable industry conditions, as demand for equipment and services can change depending on supply and demand for chips, display technologieschips and other electronic devices, as well as other factors, such as global economic, political and market conditions, and the nature and timing of technological advances in fabrication processes.

Our strategic priorities include developing products that help solve customers’ challenges at technology inflections;inflections, growing our service business, and expanding our served market opportunities in the semiconductor and display industries; and growing our service business.industry. Our long-term growth strategy requires continued development of new materials engineering capabilities, including products and platforms that enable expansion into new and adjacent markets. Our significant investments in research, development and engineering (RD&E) are intended to enable us to deliver new products and technologies before the emergence of strong demand, allowing customers to incorporate these products into their manufacturing plans during early-stage technology selection. We collaborate closely with our global customers to design systems and processes to meet their technical and production requirements.

We operate in threetwo reportable segments: Semiconductor Systems,Systems and Applied Global Services® (AGS),. As of October 26, 2025, management no longer considers Display a significant operating segment for separate reporting purposes. The financial results of our other operating segments that do not meet the requirements for a reportable segment, including our Display operating segment, are included in Corporate and Display.Other. Prior-year Corporate and Other balances have been recast to include Display financial results. A summary of financial information for each reportable segment is found in Note 1415 of Notes to Consolidated Financial Statements. A discussion of factors that could affect our operations is set forth under “Risk Factors” in Part I, Item 1A, which is incorporated herein by reference.

Our results are driven primarily by customer spending on capital equipment and services to support key technology transitions or to increase production volume in response to worldwide demand for semiconductors and displays.semiconductors.

The Semiconductor Systems segment is comprised primarily of capital equipment used to fabricate semiconductor chips. Spending by semiconductor customers, which include companies that operate in the foundry, logic, memory, and other semiconductor chip markets, is driven by demand for products such as smartphones, mobile devices, personal computers,computers (PC), servers for artificial intelligence (AI) and data centers, automobiles, clean energy, storage, and other products, and the nature and timing of technological advances in fabrication processes. The growth of data and emerging end-market drivers such as AI, the internet of things, 5G networks, electricrobotics and autonomoussmart vehicles and augmented and virtual reality are also creating the next wave of growth for the industry. As a result, products within the Semiconductor Systems segment are subject to significant changes in customer requirements, including transitions to smaller dimensions, increasingly complex chip architectures, new materials and an increasing number of applications. Spending can also depend on customer facility readiness and timeline for installation of capital equipment at customer sites. Development efforts are focused on solving customers’ key technical challenges in patterning, transistor, interconnect, process control, and packaging performance.

The AGS segment provides services, spares and factory automation software to customer fabrication plants globally to help customers optimize performance of our large, global installed base of semiconductor, displaysemiconductor and other equipment. The AGS segment also includes 200 millimeter (200mm) and other equipment, which is shipped to many customers globally that serve the non-leading-edge end markets. Effective the first quarter of fiscal 2026, our 200mm equipment business will be moved to our Semiconductor Systems segment. Demand for AGS’ service and spares is driven by our large and growing installed base of manufacturing systems, and customers’ needs to shorten ramp times, improve system performance, and optimize factory output and operating costs. Industry conditions that affect AGS’ sales of spares and services are primarily characterized by changes in semiconductor manufacturers’ wafer starts and utilization rates, growth of the installed base of equipment and growing service intensity of newer tools. Our strategy is to continue to shift the AGS’ service and spares business to a subscription agreement model, improving customer factory performance and optimizing operating costs, and providing us a more predictable revenue stream.

The Corporate and Other category includes revenues and costs of product soldnot fromincluded otherin products,our reportable segments, as well as certain operating expenses that are not allocated to our reportable segments and are managed separately at the corporate level. These operating expenses include costs for certain management, finance, legal, human resource,resources, and RD&E functions performed at the corporate level; and unabsorbed information technology and occupancy. In addition, we do not allocate to our reportable segments severance,charges associated with restructuring actions, such as employee severance costs and asset impairment and any associated charges related to restructuring actions,charges, unless thesethe restructuring actions pertain to a specific reportable segment. Effective in the first quarter of fiscal 2024, management began including share-based compensation expense in the evaluation of reportable segments' performance. Prior-year numbers have been recast to conform to the current-year presentation.

The United States government has implemented export regulations for U.S. semiconductor technology sold or provided to customers in China, which have limited our ability to provide certain products and services to customers in China, over the past several years. The U.S. government continues to issue new export licensing requirements, and additional updates and other requirements that have had the effect of further limiting our ability to provide certain products and services to customers outside the U.S., including in China. Also, the United States has announced changes to its trade policy, including increased tariffs on imports. These actions have caused substantial uncertainty and have resulted in retaliatory measures, including new tariffs on U.S. goods imposed by China and other countries. Some of these actions have been followed by announcements of limited exemptions and temporary pauses. For a description of these risks, see the risk factorfactors entitled “Business and Industry Risks - Global trade issues and changes in and uncertainties with respect to trade policies and export regulations, including import and export license requirements, trade sanctions, tariffs and international trade disputes, have adversely impacted and could further adversely impact our business and operations, and reduce the competitiveness of our products and services relative to local and global competitors” and “Business and Industry Risks - We are exposed to risks and uncertainty related to changes in trade policies, and increased tariffs and trade disputes ” in Part I, Item 1A, “Risk Factors.”

The following table presents certain significant measurements for the periods indicatedpresented:

Net revenue in fiscal 20242025 increased as compared to the prior year. Gross margin increased primarily driven by lowerhigher material,net freight, logistics, and manufacturing costs,revenue, favorable changes in customer and product mix and lower depreciation expense as a result of changes in certain assets’ useful lives effective as of the beginning of fiscal 2024, partially offset bymix, an increase in laboraverage selling prices, and lower material and manufacturing costs.

Semiconductor Systems net revenue increased in fiscal 20242025 as compared to the prior year as customers continued to make strategic investments in new capacity and new technology transitions. Foundry and logic customers’ spending decreasedin fiscal 2025 increased driven primarily by lowerhigher customer investments in leading-edge manufacturing technologies, partially offset by increased customer investments in non-leading edge manufacturing technologies. Memory customers’ spending in fiscal 20242025 was higher due to increased customer investments in DRAMNAND technologyfabrication transitions.equipment upgrades. Investments by semiconductor equipment customers are expected to remain strong with growth in the adoption of high-bandwidth memory and other forms of advanced packaging, continued demand for AI and data center computing, and for non-leading edge nodes. The Semiconductor Systems segment continued to represent the largest contributor of net revenue.

Our AGS net revenue in fiscal 20242025 increased compared to the prior year primarily due to anhigher increasecustomer inspending net revenue associated withon long-term service agreements and customer spending on spares, partially offset by lower customer spending on 200mm equipment. Demand for services is expected to grow as our installed base of systems and chambers increases and customers renew long-term service agreements.

Over the longer term, we believe secular drivers such as AI, data center computing,AI, edge AI and the internet of things, 5Grobotics networks,and electric and autonomous vehicles andwill augmentedcontinue and virtual reality willto create the next wave of growth for semiconductors and expand our served market opportunities. We believe device refresh cycles, such as those for PCs and smartphones, will also contribute to the next wave of growth.

The year-over-year change in RD&E expenses was primarily due to additional headcount to support our ongoing investments in product development initiatives,initiatives and higher depreciation expenses, consistent with our growth strategy, offset by lower depreciation expense as a result of changes in certain assets’ useful lives effective as of the beginning of fiscal 2024.strategy. We continued to prioritize existing RD&E investments in technical capabilities and critical RD&E programs in current and new markets, with a focus on the development of new unit process systems and integrated materials solutions. Areas of investment in Semiconductor Systems include etch, deposition, metrology and inspection, patterning, packaging and other technologies to improve chip performance, power, area, cost and time-to-market. In Display, RD&E investments were focused on expanding our market opportunity with new display technologies.markets.

Marketing and selling expenses for fiscal 20242025 increased primarily due to additionalhigher headcount.employee related expenses.

General and administrative expenses in fiscal 20242025 increaseddecreased primarily due to thelower increasesspending in share-based compensation expense andon professional fees.services, partially offset by an impairment of goodwill of $41 million recognized during the fourth quarter of fiscal 2025.

Interest expense incurred was primarily associated with issued senior unsecured notes. Interest expense in fiscal 20242025 increased slightly as a result of the issuance of senior unsecured notes in June 2024.

Interest and other income (expense), net in fiscal 20242025 increased primarily driven by higher net gain on equity investments, partially offset by lower interest income duedriven toby higherlower cash balances and lowera impairmentdecrease onin equitymarket investment,interest partially offset by higher net loss on equity investment.rates.

Segment Operating Income (Loss)

Operating income (loss) by segment for the periods presented were as follows:

Semiconductor Systems’ operating margin for fiscal 20242025 increased compared to the same period in the prior year primarily driven by lowerhigher material,net freight, logistics and manufacturing costs,revenue, favorable changes in customer and product mixmix, lower material and lowermanufacturing depreciationcosts, expenseand asan a result of changesincrease in certainaverage assets’selling useful lives effective as of the beginning of fiscal 2024,prices, partially offset by increased RD&E expenses.

Targeted Improvements to Incomethe TaxAccounting Disclosures.for Internal-Use Software. In DecemberSeptember 2023,2025, the Financial Accounting Standards Board (FASB) issued an accounting standard update to improve income tax disclosures (Topic 740). The standard prescribes specific categories forincrease the componentsoperability of the effectiverecognition taxguidance rateconsidering reconciliation,different requires disclosuremethods of incomesoftware taxes paiddevelopment by jurisdiction,replacing the current stage-based capitalization model with a principles-based approach. Under the new guidance, costs are capitalized once management authorizes and modifiescommits otherto incomefunding tax-relatedthe disclosures.software project, it is probable that the project will be completed and the software will be used to perform the function intended. This authoritative guidance will be effective for us beginning with our interim and annual reporting for fiscal year 2026,2029, with early adoption permitted. We are evaluating the effect of this guidance on our consolidated financial statements and related disclosures.

ImprovementsDisaggregation toof ReportableIncome SegmentStatements Disclosures.Expenses. In November 2023,2024, the FASB issued an accounting standard update to improve reportableincome segmentstatement disclosure requirements, primarily through enhancedexpenses disclosures about(Subtopic significant segment expenses (Topic 280220-40). The standard requires more detailed information related to the types of expenses, including (among other items) the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each interim and annual disclosureincome ofstatement’s significantexpense segmentcaption, expensesas that are regularly provided to the chief operating decision-maker (CODM) and included within the reported measure of a segment’s profit or loss, requires interim disclosures about a reportable segment’s profit or loss and assets that are currently required annually, requires disclosure of the position and title of the CODM, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss and contains other disclosure requirements.applicable. This authoritative guidance can be applied prospectively or retrospectively and will be effective for us in fiscal 20252028 for annual periods and in the first quarter of fiscal 20262029 for interim periods, with early adoption permitted. We are evaluating the effect of this guidance on our consolidated financial statements and related disclosures.

Our cash, cash equivalents and investments consistconsisted of the following:

A summary of cash provided by (used in) operating, investing, and financing activities iswas as follows:

Cash from operating activities for fiscal 20242025 was $8.7$8.0 billion, which reflects net income adjusted for the effect of non-cash charges and changes in working capital components. Significant non-cash charges included depreciation, amortization, gain or loss on investments or asset sale, share-based compensation andcompensation, deferred income taxes.taxes and restructuring charges. Cash provided by operating activities in fiscal 20242025 remainedwas relatively flatlower primarily due to lower collections of customer receivable balances, partially offset by lowerhigher payments tofor vendorsincome taxes and higher net income.inventory.

We have agreements with various financial institutions to sell accounts receivable and discount promissory notes from selected customers. We sell our accounts receivable generally without recourse. From time to time, we also discount letters of credit issued by customers through various financial institutions. The discounting of letters of credit depends on many factors, including the willingness of financial institutions to discount the letters of credit and the cost of such arrangements. We sold $0.4$501 billionmillion and $0.7$444 billionmillion of accounts receivable during fiscal 20242025 and 2023,2024, respectively. We did not discount letters of credit issued by customers in fiscal 20242025 and 2023.2024. There was no discounting of promissory notes in each of fiscal 20242025 and 2023.2024.

Days sales outstanding of our accounts receivable at the end of fiscal 20242025 and 20232024 was 6869 days and 7068 days, respectively. Days sales outstanding varies due to the timing of shipments and payment terms. The decreaseslight increase in days sales outstanding was primarily due to favorableunfavorable revenue linearity.

We used $2.3$2.8 billion and $1.5$2.3 billion of cash in investing activities in fiscal 20242025 and 2023,2024, respectively. Capital expenditures in fiscal 20242025 and 20232024 were $1.2$2.3 billion and $1.1$1.2 billion, respectively. Capital expenditures were primarily for investments in real property acquisitions and improvements, demonstration and testing equipment, manufacturing and network equipment. Purchases of investments, net of proceeds from sales and maturities of investments, for 20242025 and 20232024 waswere $526 million and $1.1 billion and $404 million,billion, respectively. Net proceeds from asset sale were $33 million, and net cash paid for acquisitionsacquisition was $29 million in fiscal 2023 was $25 million.2025. Investing activities also included investments in technology to allow us to access new market opportunities or emerging technologies.

We used $4.5$6.0 billion of cash in financing activities in fiscal 2024,2025, consisting primarily of repurchases of common stock of $3.8$4.9 billion, cash dividends to stockholders of $1.2$1.4 billion, repayment of $700 million senior notes and tax withholding payments for vested equity awards of $291 million, and net payments of principal on financing leases of $102$248 million, partially offset by net proceeds received from the issuance of senior unsecured notes of $694$991 million and proceeds received from common stock issuances under our employee stock purchase plan of $243$261 million.

We used $3.0$4.5 billion of cash in financing activities in fiscal 2023,2024, consisting primarily of repurchases of common stock of $2.2$3.8 billion, cash dividends to stockholders of $975$1.2 millionbillion and tax withholding payments for vested equity awards of $179$291 million, and net payments of principal on financing leases of $102 million, partially offset by net proceeds received from the issuance of senior unsecured notes of $694 million and proceeds received from common stock issuances ofunder $227our millionemployee andstock netpurchase proceeds from issuancesplan of commercial paper of $91$243 million.

In March 2023,2025, our Board of Directors approved a common stock repurchase program authorizing $10.0 billion in repurchases, which supplemented the previouslyprevious existing $6.0$10.0 billion authorization approved in March 2022.2023. At October 27,26, 2024,2025, approximately $8.9$14.0 billion remained available for future stock repurchases under the repurchase program.

During each of fiscal 20242025 and 20232024, we paid four quarterly cash dividends, totaling $1.2$1.4 billion and $975$1.2 million,billion, respectively. We currently anticipate that cash dividends will continue to be paid on a quarterly basis, although the declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination by the Board of Directors that cash dividends are in the best interests of our stockholders.

We have credit facilities for unsecured borrowings in various currencies of up to $1.6an billion,aggregate amount of which$4.1 $1.5billion. billionThese iscredit comprisedfacilities consist of a $2.0 billion five-year committed revolving credit agreement with a group of banks (RevolvingFive-Year Credit Agreement), a $2.0 billion 364-day committed revolving credit agreement with a group of banks.banks (364-Day Credit Agreement), and revolving credit facilities with Japanese banks pursuant to which we may borrow up to approximately $53 million in aggregate at any time. The RevolvingFive-Year Credit Agreement is scheduled to expire in February 2026,2030, unless extended as permitted under the Revolvingterms Creditof Agreement.the agreement. The Revolving364-Day Credit Agreement is scheduled to expire in September 2026, provided, however, if any loans are outstanding on the maturity date, we may convert all or part of such loans to term loans that will mature in September 2027, subject to payment of a fee by us and other customary conditions. The Five-Year Credit Agreement and the 364-Day Credit Agreement each includes financial and other covenants with which we were in compliance as of October 27,26, 2024.2025. No amounts were outstanding under theany Revolvingof Creditthese Agreementcredit facilities as of October 27,26, 20242025 and October 29,27, 2023.2024. See Note 9, Borrowing Facilities and Debt, of the Notes to the Consolidated Financial Statements for further discussion related to our Revolving Credit Agreement and other credit facilities.

We have a short-term commercial paper program under which we may from time to time issue unsecured commercial paper notes of up to a total of $4.0 billion. We increased the amount of commercial paper notes we may issue to $4.0 billion in the fourth quarter of fiscal 2025, subsequent to increasing the amount from $1.5 billion.billion to $2.0 billion in the third quarter of fiscal 2025. The proceeds from the issuances of commercial paper are used for general corporate purposes. At October 27,26, 2024,2025, we had $100 million of commercial paper notes outstanding. The commercial paper program is backstopped by the Revolving Credit Agreement and borrowings under the Revolving Credit Agreement reduce the amount of commercial paper notes we can issue.

In JuneSeptember 2024,2025, we issued $700$550 million in aggregate principal amount of 4.800%4.000% senior unsecured notes due 20292031 and $450 million in aggregate principal amount of 4.600% senior unsecured notes due 2036, in a registered public offering. In October 2025, we used a portion of the net proceeds from the offering to repay the outstanding $700 million in aggregate principal amount of our 3.900% senior unsecured notes due October 1, 2025. The remaining net proceeds from the issuance of the senior unsecured notes are intended for general corporate purposes.

We had senior unsecured notes in the aggregate principal amount of $6.2$6.5 billion outstanding as of October 27,26, 2024.2025. See Note 9 of the Notes to the Consolidated Financial Statements for additional discussion of existing debt. We may seek to refinance our existing debt and may incur additional indebtedness depending on our capital requirementsrequirements, general corporate purposes and the availability of financing.

On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (Tax Act). The Tax Act requires a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries. The transition tax expense ishas payablebeen paid in installments over eight years, with eight percent due in each of the first five years starting with fiscal 2018.2018, Asand as of October 27,26, 2024,2025, we had $459one millionremaining payment of total$255 payments remaining,million, payable in installmentsFebruary inof the next two years.2026.

On August 9, 2022, the U.S. government enacted the U.S. CHIPS and Science Act (“CHIPS Act”). The CHIPS Act creates a 25% investment tax credit for certain investments in domestic semiconductor manufacturing. The credit is provided for qualifying property, which is placed in service after December 31, 2022, for which construction begins before January 1, 2027, and is treated as a government grant.grant recognized against property, plant and equipment and a reduction of income taxes payable. We recognize this investment tax credit when there is reasonable assurance that we will qualify for the credit and the benefit will be received. InvestmentsAs relatedof toOctober the26, 25% investment tax credit reduced2025, our current income taxes payable was reduced by $170$233 millionmillion, asand future income taxes payable will be reduced by $548 million, both of Octoberwhich 27,are 2024.due to the investment tax credit.

As of October 27,26, 2024,2025, we had $6.2$6.5 billion in aggregate principal amount of senior unsecured notes with varying maturities, of which $700 million is due within 12 months and the remaining notes are due beyond 12 months. Future interest payments associated with these unsecured notes were $2.8$2.9 billion, of which $239$246 million is due within 12 months and the remaining interest payments are due beyond 12 months. See Note 9, Borrowing Facilities and Debt, of the Notes to the Consolidated Financial Statements for further discussion related to our borrowing facilities and debt obligations.

We have product development, engineering, manufacturing, sales and other operations distributed throughoutin many countries, and some of our business activities are concentrated in certain geographic areas.regions. In the three-month period ended AprilJuly 26, 2026, approximately 88%85% of our revenue was from customers in regions outside the United States. AsDue a result ofto the global nature of our operations, we are subject to a number of factors that could have an adverseadversely impact on our business, financial condition and results of operations. These factors include global political and social conditions, such as policies or regulations within countries, including in China, the United States and countries in Europe and Asia, that favor domestic companies over non-domestic companies, including efforts toor promote the development and growth of local competitors to us, or regarding national, commercial or security issues. Other factors include geopolitical turmoil, acts of war or social unrest; our ability to maintain appropriate business processes, procedures and internal controls in our geographically diverse operations; delays or restrictions on personnel travel and in shipping materials or products; our ability to develop relationships with local customers, suppliers and

delays or restrictions on personnel travel and in shipping materials or products; our ability to develop relationships with local customers, suppliers and governments; performance of our geographically diverse third-party providers; impacts of regional or global health epidemics, natural disasters and extreme and chronic weather events; fluctuations in interest rates and currency exchange rates; as well asand other factors discussed in this Risk Factors section. Ongoing conflict in the Middle East can exacerbate the foregoing factors and lead to regional instability and uncertain global economic conditions,uncertainty, including global or regional inflation, economic recession, challenges in purchasing materials used by us or by our customers in the manufacture of semiconductor chips, and disruptions to our supply chain and logistics. Any of these factors may have an adverseadversely impact on our business and manufacturing operations or demand for our products and services, and our performance and results of operations may be adversely affected.

As a global business with customers, suppliers and operations in many countries around the world, from time to time we may receive inquiries from government authorities about transactions between us and certain foreign entities. For example, we have previously received subpoenas from government authorities requesting information relating to export controls compliance. On February 11, 2026, we entered into a settlement agreement with the U.S. Commerce Department Bureau of Industry and Security (BIS) to resolve its inquiry relating to certain China customer shipments and export controls compliance and agreed to pay BIS $253 million, which we paid in full during our second quarter of fiscal 2026, as well as conduct certain internal audits and maintain export compliance training and reporting mechanisms. Our failure to comply with the terms of the settlement agreement could result in significant penalties, including the loss of the suspension of the denial order which would prohibit us from exporting certain of our products outside of the United States. Any inquiries we may receive are subject to uncertainties,

agreement could result in significant penalties, including the loss of the suspension of the denial order which would prohibit us from exporting certain of our products outside of the United States. Any inquiries we may receive are subject to uncertainties, and we cannot predict the outcome of any governmental inquiries or proceedings that may occur. Any violation or alleged violation of law or regulations could result in significant legal costs or in legal proceedings in which we or our employees could be subjected to fines and penalties and could result in restrictions on our business and damage to our global brand and reputation, and could have a material and adverse impact on our business operations, financial condition and results of operations.

Our ability to meet customer demand for our products and services depends in part on the timely delivery of parts, materials and services from our suppliers and contract manufacturers. Volatility in demand for our products and worldwide demand for semiconductor chips and electronic devices has in the past,caused, and may in the future, result incause, shortages or delays in shipments of parts, materials and services needed to manufacture our products. Supply chain constraints and disruptions have in the past, and may in the future, increase costs of logistics and parts for our products and cause delays in our equipmentproduction and delivery schedules. These challenges may result in significant interruptions to our manufacturing operations, delays in our product or service deliveries and installments, increased costs, customer order cancellations or reduced demand for our products. Factors that may lead to

•global trade issues and changes in and uncertainties with respect toregarding trade and export regulations, trade policies and sanctions, tariffs, international trade disputes, particularly those relating to exports of certain technologies to China, where a significant portion of our supply chain is located, and any retaliatory measures, that adversely impact us or our direct or sub-tier suppliers;

•political instability, social unrest, terrorism, acts of war or other geopolitical turmoil in locations where we orwe, our customers or suppliers have operationsoperate;

•the failurefailures or inabilityinaccuracies toin accurately forecastforecasting demand and obtainobtaining quality parts on a cost-effective basis;

•volatility in the availability and cost of parts, commodities, energy and shipping related to our products, including increased costs due to rising inflation or interest rates or other market conditions, as well asand uncertainties arising from the imposition of tariffs and any retaliatory measures;

•a worldwide shortage of semiconductor components asresulting afrom result of sharp increases inincreased demand for semiconductor products in general;

•limited availability of critical materials and minerals, including due to any Chinese government restrictions on the export of rare earth minerals, and limited feasible alternatives to materials subject to existing or proposed regulations to limit their use (such as hydrofluorocarbons and per- and polyfluoroalkyl substances), which are found in parts, components, process chemicals and other materials supplied to us or used in theour manufacturing or operations of our products; and

•impacts of natural disasters, extreme and chronic weather events, regional or global health epidemics, or other events beyond our control.

If a supplier fails to meet our requirements concerning quality, cost, intellectual property protection or other performance factors, or does not meet applicable regulatory requirements applicable to our supply chain,requirements, we may transferchange our business to alternative sources,suppliers, which could result in manufacturing delays, additional costs or other difficulties, and impair our ability to protect, enforce and extract the full value of our intellectual property rights and the intellectual property rights of our customers and other third parties.

If we need to rapidly increase our business and manufacturing capacity to meet increases in demand or expedited shipment schedules, this may strain our manufacturing and supply chain operations and negatively impact our working capital. If we are unable to accurately forecast demand for our products, we may purchase more or fewer parts than necessary or incur costs for canceling, postponing or expediting delivery of parts.deliveries. If we purchase or commit to purchase inventory in anticipation of customer demand that does not materialize, or the inventory is rendered obsolete by the rapid pace of technological change, or if customers reduce, delay or cancel orders, we may incur excess or obsolete inventory charges. Additionally, if anticipated levels of demand are not realized, we may incur fixed costs from underutilized production capacity and our gross margin may be adversely impacted.

•growth rates in the semiconductor industry and variability in semiconductor manufacturers’ capital expenditures, including allocation of capital to market segments we do not serve, such as lithography, or where our products have lower relative market presence is relatively lower;

•fragmentation of semiconductor markets, including markets too small to support new fabrication plants or that require less technologically advanced productstechnologies;

•the importance of specialty markets (such as internet of things, communications, automotive, power and sensors) that use process technologies that have awith low barrierbarriers to entry;

•theefforts focusto on reducingreduce energy usage and improvingimprove the environmental impact and sustainability associated withof manufacturing operations, and the availability of adequate and reliable energy sources of energy; and

•complete our new Equipment and Process Innovation and Commercialization Center and other major infrastructure projects on schedule and on budget, and realize thetheir anticipated benefits of those projects;

•focus onexecute product development and sales and marketing strategies that address customers’ high value problems and strengthen customer relationships;

From time to time, we enter into agreements with government entities for grants, tax benefits and other incentives, other funding related to our investment, research and development and production activities or for sale of our products to government entities or government-funded programs. These agreements typically include terms that are not common in similar agreements with non-governmental entities, including representations and warranties, covenants and certifications, and record-keeping, accounting, audit, intellectual property rights-sharing, information handling, supply chain management, headcount, security, disclosure and other requirements. These agreements may also require us to achieve or maintain certain levels of investment, capital spending and performance milestones. Compliance with these requirements may addincrease operational complexity to our operations and increase our costs, and a failure to comply could result in cancellation of agreements or transactions, investigations, civil and criminal penalties, forfeiture of profits, reduction, termination or clawback of any funding, suspension or debarment from doing business with the government, or other penalties, any of which could have a material and adverse effect on our business, financial condition and results of operations.

We are a supplier to the global display industry, which has experienced considerable volatility in capital equipment investment levels, due in part to the limited number of display manufacturers, the concentrated nature of end-use applications, production capacity relative to end-use demand, the speed of adopting new technologies and panel manufacturer profitability. Industry growth depends primarily on consumer demand for increasingly larger and more advanced TVs, and on demand for advanced smartphones and mobile device displays, which demand is highly sensitive to cost and improvements in technologies and features. Demand for and the profitability of our display products and services is impacted by the foregoingthese industry factors, as well as the introduction of and rate of transition to new types of display technologies, our ability to anticipate and adapt to technology transitions and inflections, and the expansion of display manufacturing facilities in China. If we do not successfully develop and commercialize products to meet demand for new and emerging display technologies, or if industry demand for display fabrication equipment and technologies does not grow, our business and our operating results may be adversely impacted.

As part of our growth strategy, we seek to expand into related or new markets and industries, through our existing and new products, or through products developed with third parties or obtained through acquisitions. Our ability to successfully expand into new and related markets and industries may be adversely affected by a number ofvarious factors, including:

We mayhave investinvested and expect to continue investing significant resources towards expanding into related or new markets and industries, and there can be no assurance that our products and services will achieve market acceptance or be profitable. DemandAdditionally, demand for our products and services depends on the success of the markets and industries we seek to expand into,into. If our efforts to expand into new and related markets and industries are not successful, including due to the failure of any of those markets and industries could have an adverse effect onindustries, our business, financial condition and results of operations.operations could be adversely affected.

We are increasingly incorporating AI capabilities into the development of technologies, our business operations and our products and services. AI technology is complex and rapidly evolving and may subject us to significant competitive, legal, regulatory, operational and other risks. TheAI implementation of AI can be costly, and there is no guarantee that our use of AI will enhance our technologies,technologies benefit ouror business operations, or produce products and services that are preferred by our customers. Our competitors may be more successful in their AI strategy and develop superior products and services with the aid ofusing AI technology. Additionally, AI algorithms or training methodologies may be flawed, and datasets may contain irrelevant, insufficient or biased information, which can cause errors in outputs. This may give rise to legal liability, damage our reputation, and materially harm our business. The use of AI in the development ofdeveloping our products and services could also cause loss of intellectual property, as well asand subject us to risks related to intellectual property infringement or misappropriation, data privacy and cybersecurity. We also utilize third-party providers of AI capabilities, and our ability to implement AI successfully in our business operations relies on our continued access to third-party providers and safeguards implemented by them. Our use of new and emerging AI capabilities, such as AI agents, may cause unanticipated effects, which may include the disruption of our business processes and procedures or the loss of intellectual property or critical data. Additionally, AI technology may also create ethical issues, which could impair market adoption of such technology and impair demand for our products and services. Furthermore, the United States and other countries may adopt laws and regulations related to AI. These laws and regulations could causeincrease us to incur greaterour compliance costs and limit the use of AI in the development of our products and services. Any failure or perceived failure by us to comply with these regulatory requirements could subject us to legal liabilities, damage our reputation, or otherwise have a material and adverse impact on our business.

Our success depends on the protection of our technology using patents, trade secrets, copyrights and other intellectual property rights. Infringement or misappropriation of our intellectual property rights, such as the manufacture or sale of equipment or spare parts that use our technology without authorization, could result in uncompensated lost market and revenue opportunities. Detecting and preventing misuse of our intellectual property is difficult and costly, and we cannot be certain that our protective measures will be successful. Our ability to enforce our intellectual property rights is subject to litigation risks and uncertainty as to the protection and enforceability of those rights in some countries. Enforcement efforts may be subject to claims that our rights are invalid or unenforceable and may result in counterclaims against us, which could have a negative impact on our business. If we are unable to enforce and protect intellectual property rights, or if they are circumvented, rendered obsolete, invalidated by the rapid pace of technological change, or stolen or misappropriated by employees or third parties, it could have an adverse impact on our competitive position and business. Changes in intellectual property laws or their interpretation may impact our ability to protect and assert our intellectual property rights, increase costs and uncertainties in the prosecution of patent applications or related enforcement actions and diminish the value and competitive advantage conferred by our intellectual property assets.

From time to time third parties have asserted, and may continue to assert, intellectual property claims against us and our products. Claims that our products infringe the rights of others, whether or not meritorious, can be expensive and time-consumingconsuming to defend and resolve, and may divert the efforts and attention of management and personnel. The inability to obtain rights to use third-party intellectual property on commercially reasonable terms could have an adverse impact on our business. We may face claims based on the theft or unauthorized use or disclosure of third-party trade secrets and other confidential business information. Any of these incidents and claims could severely harm our business and reputation, result in significant expenses, harm our competitive position, and prevent us from selling certain products, all of which could have a material and adverse impact on our business and results of operations.

In the conduct of our business, we use information technology (IT) and operational technology (OT) systems, including systems owned and maintained by us or our third-party providers, to monitor and control our operations, and collect, transmit, store and otherwise process data, including confidential information and intellectual property belonging to us or our customers or other business partners, and personal information of individuals. These technologies are subject to disruptions, outages, failures and cybersecurity breaches or incidents arising from a variety of factors, and we and our third-party providers expect to continue to experience such incidents. Cybersecurity incidents may include physical attacks on computer systems or network infrastructure; employee or contractor error, misuse or unauthorized access; attempts to gain unauthorized access to systems or data; as well as sophisticated cyberattacks or advanced persistent threats, any of which may impact us directly or through our third-party providers and global supply chain. Threat actors may seek to manipulate our employees, suppliers, third-party providers or customers to gain access to our, our customers’ or business partners’ data. Cybersecurity attacks are increasing and attackers are increasingly organized and well-financed, or at times supported by state actors. Geopolitical tensions or conflicts may further increase cybersecurity risk. Threat actors’ techniques evolve rapidly and may increasingly incorporate new technologies, including AI and quantum computing. The emergence and maturation of AI capabilities, including ones involving large language models, may enable new or more effective methods of cyberattacks, including deepfake impersonation, phishing, social engineering or the automated detection and exploitation of previously unknown vulnerabilities. Vulnerabilities, technical errors and other risks may be introduced through the use of AI by us, our customers, suppliers and other business partners and third-party providers, or through the use of third-party hardware and software. Advances in quantum computing could undermine current encryption standards and allow threat actors to bypass security measures. Although we are not aware of any cybersecurity incidents impacting our IT or OT systems that have had a material impact on us to date, we continue to devote significant resources to network security, data encryption and other measures to protect our systems and data from unauthorized access or misuse, and we may be required to expend greater resources in the future. We may be unable to anticipate, prevent or remediate future incidents, and in some instances, we may be unaware of incidents or their scope, particularly as attackers may evade controls or remove forensic evidence.evidence and as automated attacks may operate at a speed and scale that compresses the time available to detect, contain and respond to them. Cybersecurity incidents may result in delays in our product development and delivery; disruptions to our manufacturing, communications and reporting of financial results; theft or misappropriation of intellectual property or critical data belonging to us or our customers; corruption, loss of, or inability to access (e.g., through ransomware or denial of service) confidential information and critical data; reputational damage; private claims, demands, litigation and regulatory inquiries, enforcement actions or other proceedings; diminution in the value of our investment in research, development and engineering; and increased costs associated with cybersecurity detection, prevention and remediation. We are subject to changing laws, regulations and contractual and other obligations concerning privacy, cybersecurity and data protection, including restrictions on cross-border data transfers and data localization as well as increasingly rigorous contractual provisions demanded by our customers and third-party providers. Compliance with these obligations may require significant expenditures, and any actual or alleged failure to comply could result in inquiries, enforcement actions and other proceedings by regulators or other third parties.

•inability to capitalize on characteristics of new markets that may bediffer significantly different from our existing markets and where competitors may have stronger market positions and customer relationships;

•challenges associated within managing new, more diverse and more widespread operations, projects and people;

•the risk of litigation, government enforcement actions or claims associated with a proposed or completed transaction;

We may seek to divest businesses that no longer fit with our strategic plan. Divestitures involve additional risks and uncertainties, such as our ability to sell these businesses on acceptable terms and in a timely manner or at all, disruption to other parts of the businesses and distraction of management, diversion of internal resources away from strategic acquisitions or other strategic projects or initiatives, loss of key employees or customers, loss of access by retained business units to critical intellectual property or other assets transferred with the divested business, exposure to unanticipated liabilities or ongoing obligations to support the businesses following these divestitures and other adverse financial impacts.

Our success depends in large part on our ability to attract, retain and motivate qualified employees and leaders with the necessary expertise and capabilities, representing diverse backgrounds and experiences. Achieving this objective may be difficult due to many factors, including fluctuations in global economic and industry conditions, management or organizational changes, ongoing competition for talent, the availability of qualified employees, theimmigration abilityand towork obtainauthorization necessary authorizations for workers to provide services outside their home countries,requirements, challenges in hiring and integrating workers in different countries, the attractiveness of our compensation and benefit programs, our career growth and development opportunities and our employment policies. If we are unable to attract, retain and motivate qualified employees and leaders, we may be unable to fully capitalize on current and new market opportunities, which could

employment policies. If we are unable to attract, retain and motivate qualified employees and leaders, we may be unable to fully capitalize on current and new market opportunities, which could adversely impact our business and results of operations. The loss of knowledgeable and experienced employees may result in unexpected costs, reduced productivity or difficulties with respect to internal processes and controls.

As of AprilJuly 26, 2026, we had $6.5 billion of senior unsecured notes outstanding and, pursuant to their terms, we may be required to offer to repurchase the notes at a price equal to 101% of the principal amount, plus accrued and unpaid interest, if we experience a change of control and a contemporaneous downgrade of the notes below investment grade. We also have revolving credit facilities that allow us to borrow up to approximately $4.1$4.0 billion. While no amounts were outstanding under these credit facilities as of AprilJuly 26, 2026, we may borrow amounts in the future under these facilities or enter into new financing arrangements. Our ability to satisfy our debt obligations is dependent upon the results of our business operations and subject to other risks discussed in this section. If we fail to satisfy our debt obligations, or comply with financial and other debt covenants, we may be in default and any borrowings may become immediately due and payable, and such default may constitute a default under our other obligations. There can be no assurance that we would have sufficient financial resources or be able to arrange financing to repay any borrowings at such time. Significant changes in our credit rating, disruptions in the global financial markets, or incurrence of new or refinancing of existing indebtedness at higher interest rates could have a materialmaterially and adverseadversely impact on our access to and cost of capital for future financings and our financial condition.

Our business depends on certain information systems, including enterprise resource planning, product research and development, financial reporting, information technology network management and telecommunications, which may be maintained by us or third-party vendors. Failures of these systems could disrupt our operations, impede our ability to timely and accurately process and report financial results, and adversely impact our business, financial condition and results of operations.

We periodically implement new or enhanced information systems, which requires significant personnel, training and financial resources, and entails risksoperational to our business operations.risks. If the implementation or improvement of information systems is delayed or unsuccessful, we may not realize anticipated productivity improvements or cost efficiencies and may experience service interruptions and operational difficulties, which could result in quality issues, reputational harm, lost market and revenue opportunities and otherwise adversely affect our business, financial condition and results of operations.

We have a significant amount of goodwill and other acquired intangible assets related to acquisitions. Goodwill and purchased intangible assets with indefinite useful lives are not amortized but are reviewed for impairment annually during the fourth quarter of each fiscal year and more frequently when events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The review compares the fair value for each of our reporting units to its associated carrying value, including goodwill. Factors that could lead to impairment of goodwill and intangible assets include adverse industry or economic trends, reduced estimates of future cash flows, declines in the market price of our commonstock stock,price, changes in our strategies or product portfolio and restructuring activities. Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on historical experience and projections of future operating performance. We have recorded charges to earnings, and may in the future be required to record charges to earnings, when impairments of goodwill or intangible assets have been determined to exist.

Our ability to continue to pay quarterly dividends and to repurchase our shares is subject to capital availability and periodic determinations by our Board of Directors that cash dividends and share repurchases are in the best interest of our stockholders and are in compliance with applicable laws and agreements. Future dividends and share repurchases may be affected by, among other factors, our cash flow; potential future capital requirements for investments, acquisitions, infrastructure projects and research and development; changes in applicable tax, corporate, or other laws; contractual restrictions, such as financial or operating covenants in our debt arrangements; and changes to our business model. Our dividend payments and share repurchases may change from time to time, and we cannot provide assurance that we will continue to declare dividends or repurchase shares in any particular amounts or at all. A reduction or suspension in our dividend payments or share repurchases could haveadversely a negative effect on the price ofaffect our commonstock stock.price.

We are subject to the laws of the United States and multiple foreign jurisdictions and the rules and regulations of various governing bodies, including those related to financial and other disclosures, accounting standards, securities, corporate governance, public procurement and public funding, intellectual property, tax, trade (including import, export and customs regulations), antitrust, cybersecurity, environment, health and safety, employment, immigration and travel regulations, human rights, privacy, data protection and localization and anti-corruption. Changing, inconsistent or conflicting laws, rules and regulations, and ambiguities in their interpretation and application create uncertainty and challenges, and compliance may be onerous and expensive, divert management time and attention and otherwise adversely impact our business operations. Violations of these laws, rules and regulations could result in fines, criminal penalties, restrictions on our business, and damage to our reputation, and could have an adverse impact on our business operations, financial condition and results of operations.

Implementation and reporting on our sustainability strategies and targets could result in additionalincrease costs, and our inability to achieve them could have an adverse impact on our reputation and performance.

We periodically communicate our strategies and targets related to sustainability matters. These strategies and targets, and their underlying assumptions, reflect our current plans and aspirations, and we may be unable to achieve them. Our sustainability efforts may require significant expenditures and for uschanges to alter our manufacturing, operations or equipment designs and processes. We may face changing expectations and requirements from customers, shareholders and regulators, including increasing customer demand for sustainable products. We are or may become subject to new laws and regulations, such as the State of California’s climate change disclosure rules, the European Union’s Corporate Sustainability Reporting Directive and International Sustainability Standards Board standards. Standards and processes for measuring and reporting greenhouse gas emissions and other sustainability metrics may change over time and may result in inconsistent data, increase our costs, result in significant revisions to our strategies and targets or impact our ability to achieve them. Any failure or perceived failure to timely comply with or meet our sustainability requirements, expectations or targets, or a failure to realize the anticipated benefits of plannedsustainability-related investments and technology innovations related to sustainability,innovations, could adversely impact demand for our products, subject us to significant costs and liabilities and reputational risks, and in turn adversely affect our business, financial condition and results of operations.

The Semiconductor Systems segment is comprised primarily of capital equipment used to fabricate semiconductor chips. Spending by semiconductor customers, which include companies that operate in the foundry, logic, memory, and other semiconductor chip markets, is driven by demand for products such as smartphones, mobile devices, personal computers (PC), servers for artificial intelligence (AI) and data centers, automobiles, clean energy, storage, and other products, and the nature and timing of technological advances in fabrication processes. The growth of data and emerging end-market drivers such as AI, the internet of things, robotics and smart vehicles are also creating the next wave of growth for the industry. As a result, products within the Semiconductor Systems segment are subject to significant changes in customer requirements, including transitions to smaller dimensions, increasingly complex chip architectures, new materials and an increasing number of applications. Spending can also depend on customer facility readiness and timeline for installation of capital equipment at customer sites. Development efforts are focused on solving customers’ key technical challenges in patterning, transistor, interconnect, process control, and packaging performance.

Fiscal 2026 and 2025 each contain 52 weeks and the first sixnine months of fiscal 2026 and 2025 each contained 2639 weeks.

Revenue by segment for the periods presented werewas as follows:

Revenue for Semiconductor Systems by market for the periods presented werewas as follows:

Revenue in the three and sixnine months ended AprilJuly 26, 2026 increased compared to the same periods in the prior year. Gross margin in the three and sixnine months ended AprilJuly 26, 2026 increased compared to the same periods in the prior year primarily driven by higher revenue andrevenue, increases in average selling prices.prices, and lower material and manufacturing costs. The increase in gross margin in the three months ended July 26, 2026 was also driven by favorable changes in product mix.

The Semiconductor Systems segment continuedremained to represent theour largest revenue contributor offor revenue. Semiconductor Systemswhich revenue increased for the three and sixnine months ended AprilJuly 26, 20262026, compared to the same periods in the prior year. FoundryThe increase in foundry and logic customers’ spending increased for the three and nine months ended AprilJuly 26, 2026 comparedreflected to the same period in the prior year primarily driven by increasedstronger demand for leading-edge manufacturing technologies. Foundry and logic customers’ spending decreased forFor the sixnine months ended AprilJuly 26, 20262026, comparedthis toincrease thewas samepartially period in the prior year primarily drivenoffset by reducedlower customer demand for trailing edgetrailing-edge logic systems. Memory customers’ spending in the three and sixnine months ended AprilJuly 26, 2026 was higher compared to the same periods in the prior year primarily due to increased customer investments in DRAM technology transitions.

Our AGS revenue increased in the three and sixnine months ended AprilJuly 26, 2026 compared to the same periods in the prior year primarily due to higher long-term service agreement revenue and customer spending on spares.

RD&E expenses for the three and sixnine months ended AprilJuly 26, 2026 increased compared to the same periods in the prior year, primarily due to additional headcount to support our ongoing investments in product development initiatives and higher depreciation expenses, consistent with our growth strategy. We continued to prioritize RD&E investments in technical capabilities and critical RD&E programs in current and new markets.

Marketing and selling expenses for the three and sixnine months ended AprilJuly 26, 2026 increased compared to the same periods in the prior year primarily due to higher employee related expenses and higher corporate support costs.

G&A expenses for the three and sixnine months ended AprilJuly 26, 2026 decreased compared to the same periods in the prior year primarily due to lower corporate support costs.

In the first sixnine months of fiscal 2026, we recorded a charge of $253 million related to a settlement agreement which resolved a previously disclosed export controls compliance matter. See the information under the heading “Legal Matters” in Note 13 of the Notes to Consolidated Condensed Financial Statements for information regarding this matter and the settlement agreement.

In the first sixnine months of fiscal 2026, we recognized $12 million in restructuring charges, consisting primarily of severance and other employment termination benefits incurred in connection with the approved Fiscal 2025 Restructuring Plan.

Interest expense incurred was primarily associated with our senior unsecured notes. Interest expense in the sixnine months ended AprilJuly 26, 2026 increased compared to the same periodsperiod in the prior year, primarily due to our issuance of senior unsecured notes in September 2025.

Interest and other income (expense), net in the three months ended July 26, 2026 decreased compared to the same period in the prior year, primarily driven by higher unrealized loss on equity investments. Interest and sixother income (expense), net in the nine months ended AprilJuly 26, 2026 increased compared to the same periodsperiod in the prior year, primarily driven by higher net unrealized gain on equity investments.

Our effective tax rates for the secondthird quarter of fiscal 2026 and 2025 were 13.012.7 percent and 8.030.6 percent, respectively. The effective tax rate for the secondthird quarter of fiscal 2026 was higherlower compared to the same period in the prior fiscal year, primarily due to athe reductionrecognition of unrecognizeda valuation allowance against deferred tax benefitsassets related to foreigncorporate operationsalternative asminimum atax result(CAMT) of the lapse of statutes of limitationscredits in fiscal 2025.

Our effective tax rates for the first sixnine months of fiscal 2026 and 2025 were 13.012.9 percent and 25.227.2 percent, respectively. The effective tax rate for the first sixnine months of fiscal 2026 was lower than the same period in the prior fiscal year, primarily due to a remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore, partiallyand offsetthe byrecognition of a reductionvaluation ofallowance unrecognizedagainst deferred tax benefitsassets related to foreignCAMT operations as a result of the lapse of statutes of limitationscredits in fiscal 2025.

Semiconductor Systems’ operating margin for the three months ended AprilJuly 26, 2026 increased compared to the same period in the prior year primarily driven by higher revenuerevenue, andfavorable changes in product mix, increases in average selling prices,prices and lower material and manufacturing costs, partially offset by increased RD&E expenses. Semiconductor Systems’ operating margin for the sixnine months ended AprilJuly 26, 2026 decreasedincreased compared to the same period in the prior year primarily driven by higher revenue, increases in average selling prices and lower material and manufacturing costs, partially offset by increased RD&E expenses and a legal settlement charge related to a previously disclosed export controls compliance matter, increased RD&E expenses, partially offset by higher revenue and increases in average selling prices.matter.

AGS’ operating margin for the three and sixnine months ended AprilJuly 26, 2026 increased compared to the same periods in the prior year primarily due to higher revenue from services and spares and favorable changes in customer and product mix.

AccountingEnvironmental forCredits Governmentand GrantsEnvironmental ReceivedCredit by Business Entities.Obligations. In DecemberMay 2025,2026, the Financial Accounting Standards Board (FASB) issued an accounting standard update establishing authoritative guidance onfor the accounting for governmentenvironmental grantscredits receivedand byenvironmental businesscredit entities,obligations. includingThe grantsstandard provides recognition, measurement, presentation and disclosure requirements for environmental credits and related toenvironmental ancredit asset and grants related to income.obligations. This authoritative guidance will be effective for us beginning with our interim and annual reporting for fiscal year 2030,2029, with early adoption permitted. The standard allows for adoption on a modified prospective, modified retrospective, or full retrospective basis. We are evaluating the effect of this guidance on our consolidated financial statements and related disclosures.

Improvements to Income Tax Disclosures. In December 2023, the FASB issued an accounting standard update to improve income tax disclosures (Topic 740). The standard prescribes specific categories for the components of the effective tax rate reconciliation, requires disclosure of income taxes paid by jurisdiction, and modifies other income tax-related disclosures. This authoritative guidance will be effective for us beginning with our annual reporting for fiscal year 2026.2026 We are evaluatingand the effectadoption ofis thisexpected guidanceto onexpand the disclosures in our notes to the consolidated financial statements and related disclosures.statements.

Cash from operating activities for the sixnine months ended AprilJuly 26, 2026 was $2.5$5.6 billion, which reflects net income adjusted for the effect of non-cash charges and changes in working capital components. Significant non-cash charges included depreciation, amortization, gain or loss on investments or asset sale,sales, share-based compensation, deferred income taxes and restructuring charges. Cash provided by operating activities remained relatively flatincreased in the first sixnine months of fiscal 2026 compared to the same period in the prior fiscal year primarily due to higher net income and lower payments for income taxestaxes, partially offset by a higher accounts receivable balance and higher vendor payments.

Our working capital was $13.6$14.7 billion as of AprilJuly 26, 2026 and $12.9 billion as of October 26, 2025.

Days sales outstanding of our accounts receivable at AprilJuly 26, 2026 and AprilJuly 27, 2025 were 7377 days and 7972 days, respectively. Days sales outstanding varies due to the timing of shipments and payment terms. The decreaseincrease in days sales outstanding was primarily driven by favorablehigher collectiondown performance.payment invoices for which revenue has not yet been recognized as of July 26, 2026 and lower accounts receivable factoring compared to the same period in the prior year.

We used $1.7$3.2 billion of cash in investing activities during the sixnine months ended AprilJuly 26, 2026. Capital expenditures totaled $1.3$2.0 billion and purchases of investments, net of proceeds from sales and maturities of investments, were $289$908 million and net cash paid for acquisitionacquisitions was $175$262 million, partially offset by net proceeds from asset sale of $6 million, during the sixnine months ended AprilJuly 26, 2026.

We used $1.7$2.6 billion of cash in financing activities during the sixnine months ended AprilJuly 26, 2026, consisting primarily of cash used for repurchases of common stock of $737$1.2 million,billion, cash dividends paid to stockholders totaling $730$1.2 million,billion, tax withholding payments for vested equity awards of $309$437 million and net payments on commercial paper notes of $100$1 million, partially offset by proceeds received from common stock issuances of $131 million under our employees’ stock purchase plan.

In March 2025, our Board of Directors approved a common stock repurchase program authorizing $10.0 billion in repurchases, which supplemented the previous $10.0 billion authorization approved in March 2023. As of AprilJuly 26, 2026, approximately $13.2$12.8 billion remained available for future stock repurchases under the repurchase program.

We have credit facilities for unsecured borrowings in various currencies of up to an aggregate amount of $4.1$4.0 billion. These credit facilities consist of a $2.0 billion five-year committed revolving credit agreement with a group of banks (Five-Year Credit Agreement), a $2.0 billion 364-day committed revolving credit agreement with a group of banks (364-Day Credit Agreement), and revolving credit facilities with Japanese banks pursuant to which we may borrow up to approximately $50$49 million in aggregate at any time. The Five-Year Credit Agreement is scheduled to expire in February 2030, unless extended as permitted under the terms of the agreement. The 364-Day Credit Agreement is scheduled to expire in September 2026, provided, however, if any loans are outstanding on the maturity date, we may convert all or part of such loans to term loans that will mature in September 2027, subject to payment of a fee by us and other customary conditions. The Five-Year Credit Agreement and the 364-Day Credit Agreement each include financial and other covenants with which we were in compliance as of AprilJuly 26, 2026. No amounts were outstanding under any of these credit facilities as of AprilJuly 26, 2026. See Note 9, Borrowing Facilities and Debt, of the Notes to the Consolidated Condensed Financial Statements for further discussion related to our Revolving Credit Agreement and other credit facilities.

We have a short-term commercial paper program under which we may issue unsecured commercial paper notes up to a total of $4.0 billion. The proceeds from the issuances of commercial paper are used for general corporate purposes. As of AprilJuly 26, 2026, we had no commercial paper notes outstanding.outstanding with an aggregate principal amount of $100 million.

We had senior unsecured notes in the aggregate principal amount of $6.5 billion outstanding as of AprilJuly 26, 2026. See Note 9 of the Notes to the Consolidated Condensed Financial Statements for additional discussion of existing debt.

On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (Tax Act). The Tax Act required a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries to be paid in installments beginning in fiscal 2018. The transition tax expense has been fully paid asin of April 26,fiscal 2026.

On August 9, 2022, the U.S. government enacted the U.S. CHIPS and Science Act (CHIPS Act). The CHIPS Act creates a 25% investment tax credit for certain investments in domestic semiconductor manufacturing. The credit is provided for qualifying property, which is placed in service after December 31, 2022, for which construction begins before January 1, 2027, and is treated as a government grant recognized against property, plant and equipment and a reduction of income taxes payable or an increase to taxes receivable for any credit expected to be refunded. We recognize this investment tax credit when there is reasonable assurance that we will qualify for the credit and the benefit will be received. As of AprilJuly 26, 2026, we have recorded $1.1$1.2 billion of investment tax credits, of which $63$41 million was recorded in other current assets and will offset fiscal 2026 income tax liabilities, and $1.0$1.2 billion was recorded in deferred income taxes and other assets and is expected to be refunded.