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

The threat of terrorism or acts of war, risks and rumors of war, escalation and civil disturbances, including the prolonged tensions in the Middle East and the Ukraine/ Russia conflict, increases the uncertainty in our markets and could adversely affect our business. On October 7, 2023, an escalated armed conflict between Israel and the Hamas terrorist organization commenced, leading to a series of extended hostilities along Israel’s border with the Gaza Strip. Additionally,Though sincea ceasefire took effect on October 8,10, 2023,2025, thethere Iran-backedhave Hezbollahbeen militantsubsequent groupclaims hasof increasedbreaches itson hostilitiesboth against Israel over its northern region, including Haifa. The situation in Northern Israel and Southern Lebanon remains highly tense and volatile.sides.

Many multinational companies in the semiconductor industry have research, design and development centers situated in Israel,Israel. includingThe our Company, whichCompany has a manufacturing facility and a business office in Haifa.Haifa, and our capillaries are manufactured at this facility, in addition to our facility in China.

The semiconductor industry is volatile, with periods of rapid growth followed by industry-wide retrenchment. These periodic downturns and slowdowns have in the past adversely affected our business, financial conditioncondition, human resource allocation and operating results. Downturns have been characterized by, among other things, diminished product demand, excess production capacity, and accelerated erosion of selling prices. Historically these downturns have severely and negatively affected the industry’s demand for capital equipment, including assembly equipment and, to a lesser extent, tools. In any case, we believe the historical volatility of our business, both upward and downward, will persist. Consequently, our revenues may decline, and our results of operations and financial condition may be adversely affected.

We typically operate our business with limited visibility of future demand. We do not have long-term contracts with many of our customers. As a result, demand for our products in future periods is difficult to predict and we sometimes experience inventory shortages or excesses. We generally order supplies and otherwise plan our production based on internal forecasts for demand.demand, especially for supplies with a longer lead time. We have in the past failed, and may again in the future fail, to accurately forecast demand for our products. This has led to, and may in the future lead to, delays in product shipments or, alternatively, an increased risk of inventory obsolescence. As part of our supply chain management, we have increased our inventory levels in an effort to mitigate component shortages, which may increase the risk of inventory obsolescence. If we fail to accurately forecast demand for our products, our business, financial condition and operating results may be materially and adversely affected.

•canceledcancelled or deferred orders;

•retrenchment, severance, restructuring, and other costs of relocating our manufacturing or warehouse facilities;

Typically, our average selling prices have declined over time due to continuous price pressure from our customers, our competitors and general cost reductions within our industry’s supply chains. The Chinese government’s initiatives around self-sustainability in the semiconductor sector are propelling China to expand its domestic manufacturing capacity. With considerable incentives from the Chinese government, manufacturers based in China are able to lower selling prices, thereby increasing overall competition. This has resulted in a lowering of our average selling prices in China. We seek to offset this decline by continually reducing our cost structure by consolidating operations in lower cost areas, reducing other operating costs, by pursuing product strategies focused on product performance and customer service, and developing new products for which we are able to charge higher prices. These efforts may not enable us to fully offset price declines, and if they do not, our financial condition and operating results may be materially and adversely affected.

In each of our markets, we face competition and the threat of competition from established competitors and potential new entrants. In addition, established competitors may combine to form larger, better-capitalized companies.companies, or enter into strategic collaboration with major process partners. Some of our competitors have or may have significantly greater financial, engineering, manufacturing and marketing resources than we do. Some of these competitors are Asian and European companies that have had, and may continue to have, an advantage over us in supplying products to local customers who appear to prefer to purchase from local suppliers. Some of these competitors compete across many of our product lines, while others are primarily focused in a specific product area, all of which could result in lowering the barriers to entry. Some governments may have provided, and will continue to provide, financial assistance or other support to some of our competitors or to new entrants, to advance the nation's growth in the semiconductor equipment and packaging materials industries.

We also rely on non-U.S.non U.S. suppliers for materials and components used in our products, and substantially all of our manufacturing operations are located in countries other than the U.S. We currently manufacture our ball, wedge, APAMATM and APTURATM bonders in Singapore, our dicing blades, capillaries and bonding wedges in China, our Hybrid and Electronic Assembly solutions in the Netherlands, our dicing blades, capillaries and bonding wedges in China, our capillaries in Israel and China,Israel, and our advanced dispensing equipment in Taiwan. We also rely on independent foreign distribution channels for certain of our product lines. As a result, a major portion of our business is subject to the risks associated with international commerce, particularly Asia/Pacific region, such as:

• stringent and frequently changing trade compliance regulations;

• less protective foreign intellectual property laws, and the enforcement of patent and other intellectual property rights;

• longer payment cycles in foreign markets and potential default risks;

• foreign exchange restrictions and capital controls, monetary policies and regulatory requirements;

• restrictions or significant taxes on the repatriation of our assets, including cash;

• tariff and currency fluctuations;

• difficulties of staffing and managing dispersed international operations, including labor work stoppages and strikes in our factories or the factories of our suppliers;

• changes in our structure or tax incentive arrangements;

• possible disagreements with tax authorities;

• episodic events outside our control such as, for example, outbreaks of coronaviruses, influenza, monkeypox or other illnesses;

• natural disasters such as earthquakes, fires or floods, including as a result of climate change;

• war, risks and rumors of war and civil disturbances, including the prolonged tensions in the Middle East and the Ukraine/Russia conflict, or other events that may limit or disrupt manufacturing, markets and international trade;

• act of terrorism that impact our operations, customers or supply chain or that target U.S. interests or U.S. companies;

• seizure of our foreign assets, including cash;

• the imposition of sanctions of countries in which we do business;

• changing political conditions and rising geopolitical tensions; and

• legal systems which are less developed and may be less predictable than those in the U.S.

Our international operations also depend on favorable trade relations between the U.S. and those foreign countries in which our customers, subcontractors and materials suppliers have operations. AIn protectionist trade environment in either2025, the U.S. orimposed thoseadditional foreigntariffs on a number of countries. Impacted countries inhave whichimposed, we do business, such as a changeand in the currentfuture tariffmay structures,impose, exportretaliatory compliancetariffs, orand such actions could give rise to an escalation of other trade policies,measures mayby materiallythe andcountries adversely affect our abilitysubject to sellsuch ourtariffs. productsIn inaddition foreignto markets.tariffs, the U.S. has imposed export controls targeted at specific industries, including the semiconductor industry.

Our operations and business, and those of our customers and suppliers, can be disrupted by natural disasters, public health issues, interruptions of service from utilities, or other catastrophic events including as a result of climate change. In addition, global climate change can result in natural disasters occurring more frequently, with greater intensity and with less predictability. We also operate in seismic zones including Taiwan, which is located within a complex zone of convergence between the Philippines Sea Plate and Eurasian Plate. For example, in AprilJanuary 2024,2025, a magnitude 7.46.4 earthquake struck Tainan, Taiwan, resulting in significant injuries and death, leading to a temporary suspension of business and services. Although our advanced dispensing manufacturing operations in Taiwan were not affected, the earthquake resulted in the temporary suspension of other semiconductor factories and suppliers who operate in Taiwan. The long-term effects of climate change on the global economy and the semiconductor industry in particular are unclear but could be severe, and could exacerbate the other risk factors described herein. Catastrophic events could make it difficult or impossible to manufacture or deliver products to our customers, receive materials from our suppliers, or perform critical functions, whether on a timely basis or at all, which could adversely affect our revenue and operations. Some of the systems we maintain as part of our business recovery plans cannot guarantee us protection from such disruptions. Furthermore, even if our operations are unaffected or if we managed to recover our operations quickly, if our customers or suppliers cannot timely resume their own operations due to a catastrophic event, we may be unable to fulfil our customers’ orders, and may experience reduced or cancelled orders or other disruptions to our supply chain that may adversely affect our results of operations.

The U.S. and several other countries levy tariffs on certain goods and impose other trade restrictions that may impact our customers’ investment in manufacturing equipment, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase necessary equipment and supplies. In particular, trade tensions between the U.S. and China have been escalating since 2018, with U.S. tariffs on Chinese goods and retaliatory Chinese tariffs on U.S. goods, and there remains significant uncertainty about the future relationship between the U.S. and China. We cannot predict what further actions may ultimately be taken with respect to tariffs or trade relations between the U.S. and other countries, what products may be subject to such actions, or what actions may be taken by other countries in response. Further changes in trade policy, tariffs, additional taxes, restrictions on exports or other trade barriers, or restrictions on supplies, equipment, and raw materials, may limit our ability to produce products, increase our selling and/or manufacturing costs, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial condition.

Though nearly all of our manufacturing activities take place outside of the U.S., certain of our advanced packaging products are subject to the EAR because they are based on U.S. technology or contain more than a de minimis amount of controlled U.S. content. The EAR require licenses for, and sometimes prohibit, the export of certain products. The CCL sets forth the types of goods and services controlled by the EAR, including civilian science, technology, and engineering dual-usedual use items. For products listed on the CCL, a license may be required as a condition to export depending on the end destination, end use or end user and any applicable license exceptions.

In 2020, the U.S. Department of Commerce Bureau of Industry and Security (“BIS”) amended the EAR to expand controls on certain foreign products based on U.S. technology and sold to Huawei and certain other companies. In October 2022, the BIS amended the EAR again to extend those foreign controls to numerous companies on BIS’ so-calledso called Entity List. The 2020 and 2022 amendments impact some of our advanced packaging products, which are based on U.S. technology and are within the scope of the expanded EAR controls on Huawei and other Entity List companies. Therefore, these products cannot be sold to Huawei and other Entity List companies, and are subject to certain end-useend use restrictions. To date, these amendments to the EAR have not had a material direct impact on our business, financial condition or results of operations and we do not expect that they will, although they could have indirect impact, including increasing tensions in U.S. and Chinese trade relations, potentially leading to negative sentiments towards U.S.-basedU.S. based companies among Chinese consumers. Additionally, some end users may prefer to avoid the U.S. supply chain in its entirety to avoid the application of these regulations.

Additionally, the rules promulgated by the BIS are typically complex, and the BIS could revise or expand them in response to public comments. Likewise, the BIS may issue guidance clarifying the scope of the rules. Such revisions, expansions or guidance could change the impact of the rules for our business. Future changes in, and responses to, the various export regulations, tariffs, or other trade regulations between the U.S. and other countries may be unpredictable. Such further changes may limit our ability to produce products, increase our selling or manufacturing costs, decrease margins, reduce the competitiveness of our products and cause our sales to decline, and therefore could have a material adverse effect on our business, financial condition or results of operations.

The semiconductor manufacturing industry is highly concentrated, with a relatively small number of large semiconductor manufacturers and their subcontract assemblers and vertically integrated manufacturers of electronic systems purchasing a substantial portion of our semiconductor assembly equipment and packaging materials. Sales to a relatively small number of customers have historically accounted for a significant percentage of our net revenue. There was no customer with sales representing more than 10% of net revenue in fiscal 2024. Sales to our ten largest customers comprised 53.6%54.8% and 53.5%53.6% of our net revenue for fiscal 20242025 and fiscal 2023,2024, respectively.

We manufacture products primarily pursuant to purchase orders for current delivery or to forecast, rather than pursuant to long-term supply contracts. As a result, we must commit resources to the manufacture of products without binding purchase commitments from customers. The semiconductor industry is occasionally subject to double-booking and rapid changes in customer outlooks or unexpected build ups of inventory in the supply channel as a result of shifts in end market demand and macro-economic conditions. Accordingly, many of these purchase orders or forecasts may be revised or canceledcancelled without penalty. Even in cases where our standard terms and conditions of sale or other contractual arrangements do not permit a customer to cancel an order without penalty, we may from time to time accept cancellations to maintain customer relationships or because of industry practice, custom or other factors. The broad-based weakening in the global macroeconomic environment may result in lower than expected demand for our products, and our inability to sell products after we devote significant resources to them could have a material adverse effect on our levels of inventory, revenues and profitability.

The cancellation and wind downcessation of theour ProjectElectronics Assembly equipment business may adversely affect our business, results of operations and financial condition.

InAs connectionwe withwork towards the cancellation of a project with one of its customers (previously referred to as Project W) (the "Project"), on March 11, 2024, the Company committed to a plan to cease operational activities and commence wind down activities concerning various aspectscessation of the Project.EA Asequipment of September 28, 2024, the wind down activities have been substantially completed and as a result of these activities, the Company incurred certain charges during fiscal year 2024. The Company's estimates of the anticipated impact on its results of operations and the timing thereof are subject to a number of assumptions and actual amounts may differ materially from estimates. As we further wind down the Project,business, we may discover other facts that could require us to incur additional expenses and/or record additional charges that may be different from our initial expectations about the costs of the wind down.expectations. In addition, we may not be able to complete the wind down in all respects or on time, due to factors outside of our control. If actual amounts were to differ from our estimates, or if the full and complete wind down takes longer than expected, our results of operations and financial condition could be materially and adversely affected. Cancellations of significant orders or other similar projects by other customers in the future could also cause the Company to incur additional costs or expenses or lead to a reduction in future revenue, which could materially and adversely affect our results of operations.

Our future success depends on our ability to hire and retain qualified management, sales, finance, accounting and technical employees, including senior management. ExperiencedWe personneldepend withon the relevantcontinued services and necessaryperformance skill sets inof our industrykey arepersonnel, inincluding highour demandexecutive andofficers. competitionIf forone theiror talents is intense, especially in Asia, where mostmore of theour Company’sexecutive officers or other key personnelemployees are located. If we arewere unable or unwilling to continue in their present positions, we may not be able to attractreplace them easily or at all, and retain the managerial, marketing, finance, accounting and technical personnel we require, our business, financial condition and operating resultsbusiness may be materiallyseriously and adversely affected.harmed.

Effective succession planning is also important to our long-term success. Failure to ensure effective transfer of knowledge and smooth transitions involving senior management could hinder our strategic planning and execution. From time to time, senior management or other key employees may leave our Company, such as the recent departure of our president and chief executive officer on October 28, 2025, and the loss of any key employee could result in significant disruptions to our operations, including adversely affecting the timeliness of product releases, the successful implementation and completion of company initiatives, the effectiveness of our disclosure controls and procedures and our internal control over financial reporting, and the results of our operations. Changes in immigration policies may also impair our ability to recruit and hire technical and professional talent. In addition, hiring, training, and successfully integrating replacement critical personnel could be time consuming, may cause additional disruptions to our operations, and may be unsuccessful, which could negatively impact future revenues.

From time to time we send certain products and equipment to customers or potential customers for testing, evaluation or other purposes in advance of receiving any confirmation of purchase or purchase orders. Such equipmentequipment, especially our advanced packaging and advanced dispensing equipment, may be at the customer location for an extended period of time per the agreements with these customers and potential customers. The customer or potential customer may refuse to buy all or partial quantities of such product or equipment and return this back to us. As a result, we may incur charges to retrofit the machines or sell the machines as second hand at a lower price, and accordingly may have to record impairments on the returned inventory, all of which would adversely affect our operating results.

Proper waste disposal plays an important role in the operation of our manufacturing plants. Most of our facilities operate under permits that must be renewed periodically. A violation of those permits may lead to revocation of the permits, fines,imposition penaltiesof fines or penalties, or the incurrence of additional capital expenditure or other costs to comply with the permits, including the potential shutdown of operations.

Increasingly, various agencies and governmental bodiesbodies, especially in jurisdictions outside the U.S. where we continue to operate, have expressed interest in promulgating rules relating to climate change. For example, in March 2022, the SEC published a proposed rule that would require companies to provide significantly expanded climate-related disclosures in their Form 10-K, which may require us to incur significant additional costs to comply and impose increased oversight obligations on our management and Board of Directors. The cost of complying, or of failing to comply, with these and other regulatory requirements or contractual obligations could adversely affect our operating results, financial condition and ability to conduct our business.

In addition, changes in environmental laws and regulations (including any relating to climate change and greenhouse gas (“GHG”) emissions) could require us, or others in our value chain, to install additional equipment, alter operations to incorporate new technologies or processes and generally enhance audit, surveillance and compliance measures.

Certain investors, shareholder advocacy groups, other market participants, customers and other stakeholder groups have focused increasingly on companies' environmental, social and governance (“ESG”) initiatives, including those concerning climate change, greenhouse gas emissions, human rights, diversity and inclusion, and shareholder proxy access. This may result in increased costs, enhanced compliance or disclosure obligations and related costs, or other adverse impacts on our business, financial condition or results of operations.

From time to time, we create and publish voluntary disclosures regarding ESG matters. Our sustainability report continues to outline our Company’s strategies, initiatives and performance of ESG topics identified through a materiality assessment to be most relevant to the operations and stakeholders of our Company. In fiscal 2023,2024, we performed an independent, limited external assurance of our direct (Scope 1) and purchased energy indirect (Scope 2) greenhouse gas emission data, as well as selected sustainability performance data that included paper usage, water consumption, and waste generated and disposed, under the operational control boundary of eightseven of our global operational sites, and published such limited external assurance in our sustainability report. However, the identification, assessment, and disclosure of such matters remains complex. Many of the statements in such voluntary disclosures are based on our expectations and assumptions, which may require substantial discretion and forecasts about costs and future circumstances.

Also, competitors may copy or misappropriate our trade secrets, products or designs either through lawful means of reverse engineering or through independent development. We remain vigilant and take note of similar products and solutions offered by our competitors and, based on reasonable efforts, investigate whether any of our competitors’ products or solutions is the outcome of unlawful reverse engineering. For example, we are currently investigating a potential unlawful reverse engineering incident and, where necessary, plan to pursue appropriate legal action against parties that may be involved in such unlawful reverse engineering.

Occasionally, third parties assert that we are, or may be, infringing on or misappropriating their intellectual property rights. Some of these assertions may not be legitimate. In these cases, we defend or in some instances dispel, and will continue to defend or dispel, against claims or negotiate licenses where we consider these actions appropriate. Intellectual property cases are uncertain, time-consuming and involve complex legallegal, technical and factual questions. If we become involved in this type of litigation, it could consume significant resources and divert our attention from our business.

We have experienced, and expect to continue to be subject to, cybersecurity threats and incidents, ranging from employee error or misuse, to individual attempts to gain unauthorized access to information systems, to sophisticated and targeted measures known as advanced persistent threats, none of which have been material to the Company to date. For example, in May 2024, the Company detected unauthorized access attempts into its network and servers and determined that the threat actor accessed and acquired some of its data, including source code, engineering information, business partner data and personally identifiable information. The Company believes that this cybersecurity incident has not had a material impact on the Company's operations, and the Company currently does not expect that this incident is reasonably likely to materially impact the Company's overall financial condition, results of operations or business outlook. Notwithstanding the foregoing,However, future attempts or breaches might,might become more pervasive and sophisticated, especially given that threat actors may leverage other means and technologies, including artificial intelligence, to circumvent controls and avoid detection. We devote significant resources to network security and other measures to protect our systems and data from unauthorized access or misuse. However, our cybersecurity risk management, process, protocols and tools, may not be fully implemented or may not completely protect the Company against future cybersecurity incidents. Depending on its nature and scope, cybersecurity incidents could result in business disruption; misappropriation, corruption or loss of confidential information and critical data (of the Company or that belonging to its third parties); reputational damage; litigation with third parties; diminution in the value of our investment in research, development and engineering; data privacy issues; and increased cybersecurity protection and remediation costs.

The Company performed its annual impairment test in the fourth quarter of fiscal 20242025 and elected to perform the quantitative impairment test as permitted by ASC 350.350 for another reporting unit within the "All Others" category and the qualitative impairment assessment for all of its remaining reporting units. Based on the quantitative assessmentand performedqualitative onassessments all its reporting units,performed, the Company concluded thatother than the impairment taken on one reporting unit within the APS reportable segment and one reporting unit within the "All Others" category in relation to the cessation of EA Equipment Business, no impairment on the Company's other recorded goodwill was required. The persistent macroeconomic headwinds could, in the future, require changes to assumptions utilized in the determination of the estimated fair values of the reporting units which could result in future goodwill impairment charges. Net sales and earnings growth rates could be negatively impacted by reductions or changes in demand for our products. The discount rate utilized in our valuation model could also be impacted by changes in the underlying interest rates and risk premiums included in the determination of the cost of capital. For further information on goodwill and other intangible assets, see "Note 43: Goodwill and Intangible Assets” in the notes to our consolidated financial statements in “Part II, Item 8.8 — Financial Statements and Supplementary Data”.

The Company accounts for equity-based compensation under the provisions of ASC No. 718, Compensation - Stock Compensation (“ASC 718”). ASC 718 requires the recognition of the fair value of the equity-based compensation in net income. Compensation expense associated with Relative TSR Performance Share Units is determined using a Monte-Carlo valuation model, and compensation expense associated with time-based and Growth Performance Share Units is determined based on the number of shares granted and the fair value on the date of grant. See "Note 11: Shareholders’ Equity and Employee Benefit Plans” in the notes to our consolidated financial statements in “Part II, Item 8 — Financial Statements and Supplementary Data” for a summary of the terms of these performance-based awards. The fair value of equity-based awards is amortized over the vesting period of the award and the Company elected to use the straight-line method for awards granted after the adoption of ASC 718.

See "Note 1: Basis of Presentation” in the notes to our consolidated financial statements in “Part II, Item 8 — Financial Statements and Supplementary Data” to our consolidated financial statements in Item 8 for a description of certain recent accounting pronouncements, including the expected dates of adoption and effects on our consolidated results of operations and financial condition.

The following table reflects the (loss) / income from operations for fiscal 20242025 and 20232024:

Our net revenues for fiscal 20242025 decreased as compared to our net revenues for fiscal 2023.2024. The decrease in net revenue is primarily due to lower volume in WedgeBall Bonding Equipment, Advanced SolutionsAPS and All Others, partially offset by the higher volumes in BallWedge Bonding Equipment and Advanced Solutions as further outlined in the tables presented immediately below.

For fiscal 2024,2025, the increasedecrease in Ball Bonding Equipment net revenue as compared to fiscal 20232024 was primarily due to highera volumeslower volume of customer purchases relatedin to technology transitions and improving market conditions inthe general semiconductor and memory end markets.markets Thisas hasa resultedresult of relatively stable factory utilization levels in certain regions and a decrease in customer investments as a result of uncertainties in the reductionoverall inmacroeconomic semiconductor supply chain inventory levels and improved factory utilization levels.environment.

For fiscal 2024,2025, the lowerincrease in Wedge Bonding Equipment net revenue as compared to fiscal 20232024 was primarily due to lowera higher volume of customer purchases primarily in the general semiconductor marketand duepartially tooffset theby lower powercustomer discrete devices demand, as well aspurchases in the automotive and renewable energy market.markets.

For fiscal 2024,2025, the lowerincrease in Advanced Solutions net revenue as compared to fiscal 20232024 was primarily due to lowera higher volume of customer purchases primarilyin LED which is included in the industrial end market and higher customer purchases in the general semiconductor marketend and the cancellation of Project W.market.

For fiscal 2024,2025, the lowerdecrease in net revenue in the “All Others” category as compared to fiscal 20232024 was primarily due to a lower volume of customer purchases in the general semiconductor market and mini LED transfer solutions from softness in the advanced displayend market.

For fiscal 2024,2025, the lowerhigher WedgeBall Bonding Equipment gross profit margin as compared to fiscal 20232024 was primarily driven by lessa favorable product mix, including lower sales of higherlower margin products and a shift in customer mix, including higher sales to customers where we achieve lowerhigher average margins.

For fiscal 2024,2025, the lower AdvancedWedge SolutionsBonding Equipment gross profit margin as compared to fiscal 20232024 was primarily driven by the inventory write-down charges we incurred as a result of the cancellation of Project W and less favorable product mix, including lowerhigher sales of higherlower margin products.products and a shift in customer mix, including higher sales to customers where we achieve lower average margins.

For fiscal 2024,2025, the lower All Others gross profit margin as compared to fiscal 20232024 was primarily driven by the overallinventory lowerwrite-down volumes,charges incurred as a result of the provisioncessation of excess and obsolete materials, less favorable product mix, including lower sales of higher margin products and the reversalEA ofequipment previously accrued customer credit program in the prior year period.business.

For fiscal 2024,2025, the higher SG&A expenses as compared to fiscal 20232024 was primarily due to $4.8$7.8 million higher severance expenses and $3.1 million higher staff cost, $4.2 million higher sales representative commissions, $4.1 million severance expenses, $2.2 million higher miscellaneous expenses and $1.6 million higher professional services.costs. This was partially offset by $4.8$6.2 million net favorable variance in foreign exchange.exchange, $1.6 million lower professional services and $1.2 million lower miscellaneous expenses.

For fiscal 2024,2025, the higherlower R&D expenses as compared to fiscal 20232024 was primarily due to $8.4$4.5 million higher staff cost related to an increase in headcount and equity compensation, $4.1 million higherlower prototype materials and $1.1 million higher miscellaneous expenses.materials. This was partially offset by $6.9$2.8 million lowerhigher professionalstaff services.costs.

(Loss)/Income from Operations

ForThe fiscalchanges 2024, the higher Ball Bonding Equipmentin income/loss from operations asfor comparedthe torespective fiscalsegments 2023 was primarilyare due to the increasechanges in net revenue, gross profit margin and changes in operating expenses as explained underin “Netthe Revenue”,respective "Gross Profit" and “Operating Expenses”sections above.

For fiscal 2024,2025, the higherlower interest income as compared to fiscal 20232024 was primarily due to higherlower weighted average interest rates on cash, cash equivalents and short-term investments.

For fiscal 2024,2025, the decreaseincrease in provision for income taxes and effective tax rate as compared to fiscal 20232024 was primarily due to athe decreasetax effects of the cessation of the Company's EA equipment business, the reimbursement from the cancellation of Project W and the reversal of unrecognized tax benefit, all of which were recorded in overallfiscal profitability,2025, and the tax impact of the one-time charge for cancellation of Project W, and the tax benefit from the U.S. Tax Court opinion in Varian Medical Systems, Inc. v. Commissioner related to the U.S. Tax Cuts and Jobs Act of 2017 (“TCJA”) one-time transition tax, partiallyboth offsetof bywhich anwere increaserecorded in valuationfiscal allowance.2024.

Please refer to “Note 14: Income Taxes” in the notes to our consolidated financial statements in “Part II, Item 8 — Financial Statements and Supplementary Data” for additional information.

The following table reflects the total cash, cash equivalents and short-term investments as of October 4, 2025 and September 28, 2024 and September 30, 2023:

We expect our fiscal 20252026 capital expenditures to be between $13.0$8.0 million and $17.0$12.0 million. The actual amounts for fiscal 20252026 will vary depending on market conditions. Expenditures are anticipated to be primarily used for research and development projects, enhancements to our manufacturing operations, improvements to our information technology security, ongoing implementation of our enterprise resource planning system and leasehold improvements for our facilities. Our ability to make these expenditures will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing macroeconomic conditions, trade tensions, inflationary pressures, geopolitical tensions, including the ongoing Israel-Hamas war, tensions in the Middle East,East and the prolonged Ukraine/Russia conflict, and other factors, some of which are beyond our control.

As of October 4, 2025 and September 28, 2024 and September 30, 2023,2024, approximately $302.6$414.3 million and $576.9$302.6 million of cash, cash equivalents, and short-term investments were held by the Company’s foreign subsidiaries, respectively, with a large portion of the cash amounts expected to be available for use in the U.S. without incurring additional U.S. income tax. The decrease is primarily due to the repatriation of cash held by the Company's foreign subsidiaries to the U.S.

The Company’s operations and capital requirements are funded primarily by cash on hand,hand and cash generated by foreign operating activities and cash from our existing Facility Agreements.activities. We believe these sources of cash and liquidity are sufficient to meet our additional liquidity needs for the foreseeable futurefuture, including repayment of any outstanding balances under our existing Facility Agreements, as well as payment of dividends, share repurchases and income taxes.

We believe that our existing cash, cash equivalents, short-term investments, existing Facility Agreements,investments and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements, notwithstanding the macroeconomic headwinds, for the next twelve months and beyond. Our liquidity is affected by many factors, some based on normal operations of our business and others related to macroeconomic conditions including inflationary pressures, industry-related uncertainties, and effects arising from the ongoing Israel-Hamastensions warin the Middle East and the prolonged Ukraine/Russia conflict, which we cannot predict. We also cannot predict economic conditions and industry downturns or the timing, strength or duration of recoveries. We intend to continue to use our cash for working capital needs and for general corporate purposes.

In this unprecedented macroeconomic environment, and as a result of the ongoing Israel-Hamastensions warin the Middle East and the prolonged Ukraine/Russia conflict or for other reasons, we may seek, as we believe appropriate, additional debt or equity financing which would provide capital for corporate purposes, working capital funding, additional liquidity needs or to fund future growth opportunities, including possible acquisitions. The timing and amount of potential capital requirements cannot be determined at this time and will depend on a number of factors, including our actual and projected demand for our products, semiconductor and semiconductor capital equipment industry conditions, competitive factors, the condition of financial markets and the global economic situation.

OnAdditionally, Augustas 15,announced 2017,on November 13, 2024, the Company's Board of Directors authorized a new share repurchase program (the "Program") to repurchase up to $100$300 million of the Company’sCompany's common stock on or before August 1, 2020. In 2018, 2019 and 2020, (the Board of Directors increased the share repurchase authorization under the"New Program to $200 million, $300 million and $400 million, respectively."). On MarchDecember 3,2, 2022, the Board of Directors increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025. On November 17, 2023,2024, the Company modifiedentered itsinto a new written trading plan under Rule 10b5-1 of the Exchange Act, dated as of May 7, 2022, to facilitate repurchases under the New Program. The modificationplan provided forpermits the purchase of up to approximately $169$300 million of the Company’s common stock from NovemberDecember 20,2, 20232024 through AugustDecember 1,2, 2025.2029. The New Program may be suspended or discontinued at any time and is funded using the Company’s available cash, cash equivalents and short-term investments. Under the New Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under the New Program depend on market conditions as well as corporate and regulatory considerations.

AsDuring the fiscal year ended October 4, 2025, the Company repurchased a total of Septemberapproximately 28,1,785.0 2024,thousand ourshares remainingof common stock repurchase authorization under the New Program wasat a cost of approximately $30.3$66.2 million.

All other operating segments that do not meet the quantitative threshold to be disclosed as a separate reportable segment have been grouped within an “All Others” category. This group is reflective of the results of the Company from the design, development, manufacture and sale of advanced dispense, electronics assembly, and die-attach systems and solutions.solutions and related aftermarket spares and services.

From time to time, our customers may request that we deliver our products to countries where they own or operate production facilities or to countries where they utilize third-party subcontractors or warehouses as part of their supply chain. For example, customers headquartered in the U.S. may require us to deliver our products to their back-end production facilities in China. Our customer base in the Asia/Pacific region has become more geographically concentrated over time as a result of general economic and industry conditions and trends. Approximately 92.8%95.6% and 86.3%92.1% of our net revenue for the three months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025, respectively, were for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region. Approximately 54.6%56.1% and 45.8%60.0% of our net revenue for the three months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025, respectively, were for shipments to customers headquartered in China.

Similarly, approximately 93.5%94.4% and 86.8%88.4% of our net revenue for the sixnine months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025, respectively, were for shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region. Approximately 56.6%56.4% and 47.3%51.3% of our net revenue for the sixnine months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025, respectively, were for shipments to customers headquartered in China.

To limit potential adverse cyclical, seasonal and macroeconomic effects on our financial position, we have continued our efforts to maintain a strong balance sheet. As of AprilJuly 4, 2026, our total cash, cash equivalents and short-term investments were $487.9$516.6 million, a $22.8$5.9 million decreaseincrease from the prior fiscal year end. We believe our ability to maintain a strong cash position will allow us to continue to invest in product development, pursue non-organic growth opportunities and return capital to investors through our share repurchase and dividend programs. Please see “Liquidity and Capital Resources” for more information.

As of the date of this report, our business and capillary manufacturing operations in Israel have not been impacted and no material damage or utilities interruptions have been noted at our Israeli facility. Furthermore, disruption to our workforce and operations have been immaterial. Given that any further escalation or other hostilities cannot be excluded, we continue to monitor the situation and refine our business contingency measures.

As the macroeconomic situation remains highly volatile and the geopolitical situation remains uncertain, there is uncertainty surrounding our business, our expectations regarding future demand or supply conditions, our near- and long-term liquidity and our financial condition. Consequentially, our operating results could deteriorate. However, we believe that the long-term semiconductor industry macroeconomics have not changed and we anticipate that the industry’s growth projections will normalize.

As discussed in Note 15: Segment Information, the segment-related information within Management's Discussion and Analysis of Financial Condition and Results of Operations for the three and sixnine months ended AprilJuly 4, 2026 now excludes a certain product line from the APS segment and reports it as part of “All Others”. This change in composition of the reportable segments has been retrospectively applied to the corresponding results for the three and sixnine months ended MarchJune 29,28, 2025.

The following tables reflect our income from operations for the three and sixnine months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025:

Our net revenue for the three and sixnine months ended AprilJuly 4, 2026 increased as compared to our net revenue for the three and sixnine months ended MarchJune 29,28, 2025. TheFor the three months ended July 4, 2026, the increase in net revenue iswas driven by higher volume across all of our reportable segments and the All Others category. For the nine months ended July 4, 2026, the increase in net revenue was primarily duedriven toby higher volume in Ball Bonding Equipment andEquipment, APS and Advanced Solutions, as well as in All Others, partially offset by the lower volume in Wedge Bonding Equipment, Advanced Solutions and All Others, as further outlined in the tables presented immediately below.Equipment.

The following tables reflect net revenue for the three and sixnine months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025:

For the three months ended AprilJuly 4, 2026, Ball Bonding Equipment net revenue increased by $93.9$150.1 million as compared to the prior year period. This increase was primarily due to an increase in sales volume of approximately $58.5$126.6 million in general semiconductor, $29.8$19.4 million in memory and $5.6$4.1 million in automotive and industrial end markets driven by customer technology transitions and improved demand conditions.

For the sixnine months ended AprilJuly 4, 2026, Ball Bonding Equipment net revenue increased by $144.5$294.6 million as compared to the prior year period. This increase was primarily due to an increase in sales volume of approximately $101.1$227.6 million in general semiconductor, $37.6$57.0 million in memory and $5.8$10.0 million in automotive and industrial end markets driven by customer technology transitions and improved demand conditions.

For the three months ended AprilJuly 4, 2026, Wedge Bonding Equipment net revenue decreasedincreased by $23.1$3.7 million, as compared to the prior year period. This decreaseincrease was primarily due to ahigher decreasecustomer purchases in sales volume of approximately $17.1 million inthe automotive and industrial due to lower Electric Vehicle (EV) capacity needs and $6.0 million in the general semiconductor end market.

For the sixnine months ended AprilJuly 4, 2026, Wedge Bonding Equipment net revenue decreased by $34.2$30.6 million, as compared to the prior year period. This decrease was primarily due to a decrease in sales volume of approximately $37.5$33.9 million in the automotive and industrial end marketsmarket due to lower EV capacity needs, partially offset by an approximately $3.2$3.3 million increase in sales volume due to higher customer purchases in the general semiconductor end market for power discrete products.

For the three months ended AprilJuly 4, 2026, Advanced Solutions net revenue increased by $6.8$18.6 million, as compared to the prior year period. This increase was primarily due to an increase in sales volume of approximately $6.2$21.6 million in general semiconductor driven by customer technology transitions.transitions, partially offset by an approximately $3.0 million decrease in customer purchase volumes in the automotive and industrial end market.

For the sixnine months ended AprilJuly 4, 2026, Advanced Solutions net revenue decreasedincreased by $4.1$14.5 million, as compared to the prior year period. This decreaseincrease was primarily due to an increase in sales volume of approximately $14.5$32.0 million in general semiconductor driven by customer technology transitions, partially offset by an approximately $17.5 million decrease in volume of customer purchases in the LED product line, which is reported within the automotive and industrial end market. This decrease was partially offset by an approximately $10.4 million increase in customer purchase volumes in the general semiconductor end market due to customer technology transitions.

For the three months ended AprilJuly 4, 2026, APS net revenue increased by $3.1$4.4 million, as compared to the prior year period. This increase was primarily duedriven toby an increase inhigher sales volume ofby an approximately $1.8$2.2 million in bonding tools and $1.7$1.9 million in spares and services.

For the sixnine months ended AprilJuly 4, 2026, APS net revenue increased by $10.6$15.0 million, as compared to the prior year period. This increase was primarily duedriven toby an increase inhigher sales volume ofby an approximately $9.1$11.0 million in spares and services and $1.8$5.2 million in bonding tools.tools, partially offset by an approximately $1.2 million decrease in customer purchase volumes in dicing blades.

For the sixthree months ended AprilJuly 4, 2026, net revenue from All Others decreasedincreased by $2.6$5.3 million, as compared to the prior year period. This decreaseincrease was primarily duedriven toby lowerhigher sales volumes in the memoryautomotive and industrial end market.

The following tables reflect gross profit margin as a percentage of net revenue by reportable segments for the three and sixnine months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025:

For the three and sixnine months ended AprilJuly 4, 2026, the decrease in Wedge Bonding Equipment gross profit margin as compared to the prior year period was primarily due to a less favorable productcustomer mix, including higher sales ofto customers where we achieve lower marginaverage products.margins.

For the three months ended AprilJuly 4, 2026, the decrease in Advanced Solutions gross profit margin as compared to the prior year period was primarily due to a less favorable product mix.

For the sixnine months ended AprilJuly 4, 2026, the decrease in Advanced Solutions gross profit margin as compared to the prior year period was primarily due to a less favorable product mix. In addition, the prior year period included revenue recognized from delivered products relating to the cancellation of the Project.

For the three and six months ended AprilJuly 4, 2026, the decreaseincrease in APS gross profit margin as compared to the prior year period was primarily duedriven toby a less favorable product mix from spares and services and less favorable pricing from bonding tools.services.

For the three and six months ended AprilJuly 4, 2026, the increase in gross profit margin for the “All Others” category as compared to the prior year period was primarily due to sales of previously impaired inventory as a result of the cessation of the EA equipment business. In addition, the prior year period included inventory write-down charges incurred as a result of the cessation of the EA equipment business.

The following tables reflect operating expenses for the three and sixnine months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025:

For the sixthree months ended AprilJuly 4, 2026, the lowerhigher SG&A expenses as compared to the prior year period was primarily due to $7.1 million lower severance costs. This was partially offset by $3.7 million higher salesstaff representativecost commissions.related to an increase in incentive compensation.

For the sixthree months ended AprilJuly 4, 2026, the higher R&D expenses as compared to the prior year period were primarily due to a $2.5$5.5 million consortiumhigher participationstaff feecost related to an increase in incentive compensation and $2.0$2.9 million higher spending on prototype materials. This was partially offset by $1.0 million in lower professional services.

For the sixnine months ended MarchJune 29,28, 2025, the gain relating to cessation of business was primarily due to the $71.1 million reimbursement for certain costs and expenses from the cancellation of the Project, a $3.2 million gain on the disposal of a subsidiary and a $1.7 million gain from the supplier settlement.

For the three and sixnine months ended MarchJune 29,28, 2025, we incurred $39.8 million in impairment charges on long-lived assets, intangible assets and goodwill related to the cessation of the EA equipment business.

Income/(Loss) from Operations

The following tables reflect income / (loss) from operations by reportable segments for the three and sixnine months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025.

For the three and sixnine months ended AprilJuly 4, 2026, the change in Ball Bonding Equipment income / (loss) from operations as compared to the prior year period was primarily due to the increase in revenue and consistent gross margin as explained under “Net Revenue” and "Gross Profit Margin" above, partially offset by an increase in operating expenses related to higher staff cost and higher sales representative commissions as explained under "Operating Expenses" above.

For the three and six months ended AprilJuly 4, 2026, the change in Wedge Bonding Equipment income / (loss) from operations as compared to the prior year period was primarily due to the decreaseincrease in revenueoperating andexpenses grossrelated marginto higher staff cost as explained under “Net"Operating Revenue” and "Gross Profit MarginExpenses" above.

For the three months ended AprilJuly 4, 2026, the change in Advanced Solutions income / (loss) from operations as compared to the prior year period was primarily due to the increase in revenue as explained under “Net Revenue” above, partially offset by an increase in operating expenses related to higher staff cost and prototype materials from R&D expenses as explained under "Operating Expenses" above.

For the sixnine months ended AprilJuly 4, 2026, the change in Advanced Solutions income / (loss) from operations as compared to the prior year period was primarily due to the decrease in revenuegross margin as explained under "NetGross RevenueProfit Margin" above and the reimbursement from the cancellation of the Project in the prior year period, as explained under “Operating Expenses” above.

For the three and sixnine months ended AprilJuly 4, 2026, the change in APSAftermarket Product & Services income / (loss) from operations as compared to the prior year period was primarily due to the increase in revenue as explained under “Net Revenue”, above, partially offset by lower gross margin and slightly higher operating expenses from higher staff cost as explained under "Gross Profit Margin" and "Operating Expenses" above.

For the three and sixnine months ended AprilJuly 4, 2026, the change in All Others income / (loss) from operations as compared to the prior year period was primarily due to the increase in revenue as explained under “Net Revenue” above, and inventory write-down and impairment charges incurred as a result of the cessation of the EA equipment business in the prior year period as explained under "Gross Profit Margin" and "Operating Expenses" above.

The following tables reflect interest income and interest expense for the three and sixnine months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025:

For the three and sixnine months ended AprilJuly 4, 2026, interest income decreased as compared to the prior year period primarily due to a lower weighted interest rate on cash, cash equivalents and short-term investments, and lower short-term investments balances.

The following table reflects the provision for income taxes and the effective tax rate for the three and sixnine months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025:

For the three and sixnine months ended AprilJuly 4, 2026, as compared to the same period ended MarchJune 29,28, 2025, the changeincrease in provision for income taxes andwas primarily due to higher profitability in fiscal 2026. The changes in effective tax rate were primarily due to the tax effects of the reimbursement from the cancellation of the Project and the cessation of the Company's EA equipment business, which were recorded as discrete items during fiscal 2025, partially offset by an increase in profitability in fiscal 2026.

For the three and six months ended AprilJuly 4, 2026, the effective tax rate is lowerhigher than the U.S. federal statutory tax rate primarily due to change in valuation allowances, taxes on undistributed earnings, and non-deductible expenses, partially offset by tax credits and earnings of foreign subsidiaries subject to tax at different rates than the U.S., partially offset by nondeductible expenses, deemed income, and taxes on undistributed foreign earnings.U.S..

The following table reflects total cash, cash equivalents, and short-term investments as of AprilJuly 4, 2026 and October 4, 2025:

The following table reflects a summary of the Consolidated Condensed Statements of Cash Flow information for the sixnine months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025:

SixNine months ended AprilJuly 4, 2026

The increase in accounts and other receivable in the sixnine months ended AprilJuly 4, 2026 was mainly due to higher sales for the period. The increase in inventories was due to the higher material purchases. The increase in accounts payable, accrued expenses and other liabilities was due to higher material purchases and higher accrued employee compensationcompensation. The decrease in prepaid expenses and other current assets was mainly due to the reduction in supplier prepayments.