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

The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change, price erosion, product obsolescence, evolving standards, short product lifecycles and significant fluctuations in supply and demand. The industry has historically experienced significant fluctuations in demand and product obsolescence, resulting in product overcapacity, high inventory levels and accelerated erosion of average selling prices (“ASPs”). For instance, the capital spending on Data Center infrastructure to support artificial intelligence (“AI”) applications is rapidly expanding, which is increasing demand for our products. If capital spending on Data Center infrastructure slows down, demand for our products may decline. Downturns in thisour industry may be prolonged, and downturns in many sectors of the electronic systems industry have in the past contributed to extended periods of weak demand for semiconductor products. We have experienced decreases in our revenue, profitability, cash flows and stock price during such downturns in the past, and may be similarly harmed by future downturns, particularly if we are unable to effectively respond to reduced demand in a particular market.

Maintaining or growing our revenue will depend, among other things, on our ability to timely develop products for existing and new markets that meet customers’ performance, reliability and price expectations. In addition, the ASPs of our products may decrease over timetime, and we must introduce new products that can be manufactured at lower costs or that command higher prices based on superior performance to offset price erosion. If we are not able to introduce products that ship in volume, our revenue will likely not grow and may decline significantly and rapidly. The development of products in our industry is a highly complex process, and we have in the past, and may in the future, experience delays and failures in completing the development and introduction of new products. Our ability to successfully develop products depends on a number of factors, including accurate prediction of market requirements, changes in technology and evolving standards; the availability of qualified product designers and process technologies needed to solve design challenges in a cost-effective, reliable manner; our ability to design products that meet customers’ requirements; our ability to successfully design and manufacture products at competitive prices and volumes; our customers’ acceptance of our product designs; the acceptance of our customers’ products by the market and the lifecycle of such products; the strength of and ability to protect our intellectual property rights; our ability to obtain, on commercially reasonable terms, licenses to necessary third partythird-party intellectual property rights; and our ability to maintain and increase our level of product content in our customers’ systems.

In the fiscal year ended SeptemberOctober 27,3, 2024,2025, no direct customercustomers individually accounted for 10% or more of our revenue and sales to our top 10 direct and distribution customers accounted for an aggregate of 55.8%56.7% of our revenue. While the composition of our top 10 customers varies from year to year, we expect that sales to a limited number of customers will continue to account for a significant percentage of our revenue for the foreseeable future. The purchasing arrangements with our customers are typically conducted on a purchase order basis that does not require our customers to purchase any minimum amount of our products over a period of time. As a result, it is possible that any of our major customers could terminate their purchasing arrangements with us with little or no warning and without penalty, or significantly reduce or delay the amount of our products that they order, purchase products from our competitors or develop their own products internally. The loss of, or a reduction in, orders from any major customer may cause a material decline in revenue and adversely affect our results of operations.

We rely on our information technology (“IT”) systems and services for the effective operation of our business and for the secure maintenance and storage of confidential data relating to our business. In the ordinary course of our business, we and our third-party service providers collect, maintain and transmit sensitive data on our networks and systems, including Company and third-party intellectual property and proprietary or confidential business information (such as research data and personal information). These systems and services are both internally managed and outsourced, and, in many cases, we rely upon third partythird-party service providers. Any failure of these internal or third partythird-party systems and services to operate effectively could disrupt our operations and have a material adverse effect on our business, financial condition and/or results of operations. Our operations are heavily dependent uponon the functioning of our IT infrastructure to carry out our business processes and our ability to protect our IT infrastructure against damage from business continuity events that could have a significant disruptive effect. Although our internal ITinformation security team has adopted administrative, technical and physical safeguards and actively takes steps to protect our informationinformation, data and operational systems, unauthorized persons or disloyal insiders may be able to penetrate our security controls, and develop and deploy viruses, worms and other malicious software programs that compromise and/or exfiltrate our confidential information or that of third parties and cause a disruption or failure of our information and/or operational technology systems. In addition, we have in the past and may in the future be subject to attacks in which third parties attempt to obtain personal information and or infiltrate our systems to obtain proprietary or confidential information, disrupt operations by deploying malicious code, viruses or malware (such as ransomware). Cyberattacks are increasing in number and sophistication, are often well-financed, in some cases supported by state actors, and are designed to not only attack, but also to evade detection. Since the techniques used by cyber attackers change frequently and are often not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. In addition to other factors, our position within the supply chain to the U.S. Government may increase our risk of being targeted by malicious actors. Similarly, attackers could implant malicious code into software that we may purchase, and this supply chain vulnerability could disrupt our operations, compromise our data or lead to other cyber harms. Recent global developments have created an environment in which malicious actors may have increased opportunity and motivation for breaching or compromising our systems.

As of SeptemberOctober 27,3, 2024,2025, we had approximately $74.8$63.8 million in money market funds and $435.1$673.8 million in short-term investments, respectively. The debt security investments consisted of commercial paper, corporate bonds and U.S. Treasury securities. We currently do not use derivative financial instruments to adjust our investment portfolio risk or income profile. These investments, as well as any cash deposited in bank accounts, are subject to general credit, liquidity, market and interest rate risks. We regularly maintain cash balances that are not insured or are in excess of the FDIC’s insurance limit. If the global financial markets continue to experience volatility or deteriorate, our investment portfolio and cash balances may be impacted and some or all of our investments may become illiquid or otherwise experience loss which could adversely impact our financial results and position.

Sales to customers located outside the U.S. accounted for 55.1%56.3% of our revenue for the fiscal year ended SeptemberOctober 27,3, 2024.2025. Sales to customers located in China and the Asia Pacific region typically account for a large portion of our overall sales to customers located outside the U.S. For example, fiscal year 20242025 sales to customers in China and the Asia Pacific region accounted for 24.4%28.4% and 12.2%11.5% of total fiscal year 20242025 sales, respectively. We expect that revenue from international sales generally, and sales to China and the Asia Pacific region specifically, will continue to be a material part of our total revenue. Therefore, any financial crisis, trade war or dispute, domestic semiconductor supply chain initiatives, health crisis or other major event causing business disruption in international jurisdictions generally, and China and the Asia Pacific region in particular, could negatively affect our future revenues and results of operations. For example, in October 2022 and 2023, the BIS introduced restrictions related to semiconductor manufacturing, supercomputer and advanced computing items and end-uses, which restrict or prohibit the ability to sell, ship and support certain equipment and services to China. Such actions in the future, as well as China’s continuously evolving policies, laws and regulations, including those related to antitrust, cybersecurity, data protection and data privacy, the environment, indigenous innovation (including actions in furtherance of China’s stated policy of reducing its dependence on foreign semiconductor manufacturers) and intellectual property rights and enforcement and protection of those rights, could increase the cost of doing business in China, foster the emergence of additional Chinese-based competitors and/or decrease the demand for our products in China, which could have a material adverse effect on our business and results of operations. Additionally, other factors affecting the Chinese economy, such as government-imposed lockdowns in response to a pandemic, inflation, geopolitical conflict, or otherwise, could limit the demand in China for electronic devices containing our products, which could have a material adverse effect on our business and results of operations.

Adverse global economic conditionsconditions, including as a result of evolving impacts from global tariffs, sanctions or other trade tensions, and our ability to effectively respond to rapidly changing rules and regulations, could have a negativenegatively impact on our business, results of operations and financial condition and liquidity.

A general slowdown in the global economy, including a recession, or in a particular region or industry, an increase in trade tensions with U.S. trading partners, inflation or a tightening of the credit markets could negatively impact our business, financial condition and liquidity. Adverse global economic conditions have, fromin timethe to time,past, caused or exacerbated significant slowdowns in the industries and markets in which we operate, which have adversely affectedimpacting our business and results of operations. Geopolitical issues (including, but not limited to China-Taiwan relations), macroeconomicMacroeconomic weakness and uncertainty may also make it more difficult for us to accurately forecast revenue,operating gross marginresults and expenses.raise or refinance debt. An escalation of trade tensions between the U.S.United States and Chinaits trading partners has resulted in trade restrictions and increased tariffstensions that may harm our ability to participate in Chinesesome markets or compete effectively withand Chinesecould companies.limit our ability to sell products in certain markets or source components from specific suppliers, potentially disrupting our supply chain and manufacturing capabilities. Sustained uncertainty about, or worsening of, current global economic conditions and further escalationtariffs and escalations of trade tensions between the U.S. and its trading partners and the decoupling of the global economies could result in a globalan economic slowdown and long-term changes to global trade. Such events may also (i) cause our customers and consumers to reduce, delay or forgo technology spending, (ii) result in customers sourcing products from other suppliers not subject to such restrictions or tariffs, (iii) intensify pricing pressures and (iv) lead to the insolvency or consolidation of key suppliers and customers and (iv) intensify pricing pressures.customers. Any or all of these factors could negatively affectimpact demand for our products and our business, financial condition and results of operations.

We operate leased semiconductor wafer processing and manufacturing facilities at our headquarters in Lowell, Massachusetts, and at our Ann Arbor, MichiganMichigan, RTP, North Carolina and Limeil-Brévannes, France sites. These facilities are also important internal design, assembly and test facilities. We maintain other internal assembly and test operation facilities as well, including leased sites in Hamilton, New Jersey, Morgan Hill, California, Nashua, New Hampshire, and Hsinchu, Taiwan. We also use multiple external foundries for outsourced semiconductor wafer supply, as well as multiple domestic and Asian assembly and test suppliers to assemble and test our products. A number of factors will affect the future success of these internal manufacturing facilities and outsourced supply and service arrangements, including the level of demand for our products; our ability to expand and contract our facilities and purchase commitments in a timely and cost-effective manner; our ability to generate revenue in amounts that cover the significant fixed costs of operating our facilities; our ability to qualify our facilities for new products and process technologies in a timely manner and avoid complications; the availability of raw materials; the availability and continued operation of key equipment; our manufacturing cycle times and yields; political and economic risks; the occurrence of natural disasters, pandemics, acts of terrorism, armed conflicts or unrest impacting our facilities and those of our outsourced suppliers; our ability to hire, train, manage and retain qualified production personnel; our compliance with applicable environmental and other laws and regulations; our ability to avoid prolonged periods of downtime or high levels of scrap in our and our suppliers’ facilities for any reason; and our ability to negotiate renewals to our existing lease agreements on favorable terms and without disruption to our wafer processing and manufacturing and internal assembly and test operations at our sites where such activities take place. The effectiveness of our supply chain could be adversely affected by such issues and harm our results of operations. In August 2022, the U.S. enacted the Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (the “CHIPS Act”), which provides certain financial incentives to the semiconductor industry, primarily for manufacturing activities within the U.S., which may potentially be available to us and our competitors;

The semiconductor industry requires substantial investment in technology as well as R&D in order to bring to market new and enhanced technologies and products. Our R&D expenses were $182.2$244.5 million for the fiscal year ended SeptemberOctober 27,3, 2024.2025. In each of the last three fiscal years, we invested in R&D as part of our strategy toward the development of innovative products and solutions to help support our growth and profitability. We cannot assure you if, or when, the products and solutions where we have focused our R&D expenditures will become commercially successful. In addition, we may not have sufficient resources to maintain the level of investment in R&D required to remain competitive or succeed in our strategy. Our efforts to develop new and improved process technologies for use in our products require substantial expenditures that may generate an inadequate return on investment, if any, or may take longer than we anticipate to generate a return. For example, we have in the past and may continue to experience additional and new unexpected difficulties, expenses or delays in qualifying and completing certain of our development projects including our GaN-on-Silicon, certain Laser products and our Air Force Research Laboratory related process technology transfer. These development risks may be associated with internal MACOM capabilities and/or external factors, which may include, but not limited to, matters with one or more third partythird-party foundries, assembly and test suppliers, qualifying related products with our customers and marketing efforts, and we may not be successful in process or product qualification and/or manufacturing cost reductions. In addition, we may not realize the competitive advantage we anticipate from related investments and may not realize customer demand that meets our expectations, any of which could lead to higher than expected operating expense, lower than expected revenue and gross margin, associated charges or otherwise reduce the price of our common stock. We may not be successful in our R&D efforts or may not realize the competitive advantages, revenues or profits we anticipate from new products, any of which may lead to higher R&D expense, lower than expected revenues and gross margin and reduced profitability, or may otherwise harm our business or reduce the price of our common stock. Such results, or anticipated results, may cause us to reevaluate our investment in those areas of our business.

We purchase numerous raw materials, such as ceramic packages, precious metals, semiconductor wafers and ICs, from a limited number of external suppliers. We also currently use several external manufacturing suppliers for assembly and testing of our products, and in some cases for fully outsourced turnkey manufacturing of our products. We expect to increase our use of outsourced manufacturing in the future as a strategy. Any substantial disruption in the contract manufacturing services that we utilize as a result of a natural disaster, climate change, water shortages, political unrest, military conflicts, geopolitical turmoil, trade tensions, government orders, labor shortages, medical epidemics, economic instability, equipment failure or other cause, could materially harm our business, customer relationships and results of operations. Further, the use of external suppliers involves a number of risks, including the possibility of material disruptions in the supply of key components, the lack of control over delivery schedules, capacity constraints, manufacturing yields, quality and fabrication costs and misappropriation of our intellectual property. If these vendors’ processes vary in reliability or quality, they could negatively affect our products and, therefore, our customer relations and results of operations. We generally purchase raw materials on a purchase order basisbasis, and we do not have significant long-term supply commitments from our vendors. The long-term supply commitments we have may result in an obligation to purchase excess material, which may materially and negatively impact our operating results. In terms of relative bargaining power, many of our suppliers are larger than we are, with greater resources, and many of their other customers are larger and have greater resources than we do. These vendors may choose to supply others in preference to us in times of capacity constraint or otherwise, particularly where the other customers purchase in higher volume. Third-party supplier capacity constraints have in the past and may in the future prevent us from supplying customer demand that we otherwise could have fulfilled at attractive prices. If we have a firm commitment to supply our customers but are unable to do so we may be liable for resulting damages and expense incurred by our customers.

We sell products in markets that are characterized by rapid technological changes, evolving industry standards, frequent new product introductions and increasing levels of integration. Our ability to keep pace with these markets at times depends on our ability to obtain technology from third parties on commercially reasonable terms to allow our products to remain competitive. If licenses to such technology are not available on commercially reasonable terms and conditions or at all and we cannot otherwise acquire or integrate such technology, our products or our customers’ products could become unmarketable or obsolete, we could lose market share and our revenue and results of operations could materially decline. In addition, disputes with third partythird-party licensors over required payments, scope of licensed rights and compliance with contractual terms are common in our industry and we have in the past and may in the future be subjected to disputes over the terms of such licenses which could result in substantial unanticipated costs or delays in developing substitute technology to deliver competitive products, damaged customer and vendor relationships, indemnification liabilities and declining revenues and profitability. Such events could have an adverse effect on our financial condition and results of operations.

Our future results could be adversely affected by changes in interpretations of existing laws and regulations, or changes in laws and regulations, including, among others, changes in accounting standards, taxation requirements, competition laws, trade laws, import and export restrictions, privacy laws and environmental laws in the U.S. and other countries. The U.S. government has madeimplemented statementstariff and takenother certaintrade actionscontrol policies, and may take further actions, that have led to, and may lead to further, changes to U.S. and international export and import controls or trade policies, including tariffs affecting certain products exported by a number of U.S. trading partners, including China. In response, many of those trading partners, including China, have imposed or proposed new or higher tariffs on American products.products and export controls related to China’s rare earth metals. It is unknown whether and to what extent new tariffstariffs, (export control measures or other new laws or regulations) will be adopted, or the effect that any such actions would have on us or our industry and customers. Any unfavorable government policies on international trade, such as export and import controls, capital controls or tariffs, may affect the demand for our products and services, increase the cost of components, delay production, impact the competitive position of our products or prevent us from being able to sell products in certain countries. If any new export or import controls, tariffs, legislation or regulations are implemented or if existing trade agreements are renegotiated such changes could have an adverse effect on our business, financial condition and results of operations. In addition, proceedings to enforce, or the enforcement of, any laws, regulations and policies by the U.S. or other countries, and the resulting response to such actions, may have an adverse effect on our business, financial condition and results of operations.

Our effective tax rate is highly dependent upon the geographic composition of our worldwide earnings and tax regulations governing each region, each of which can change from period to period. We are subject to income taxes in both the U.S. and various foreign jurisdictions and significant judgment is required to determine our worldwide tax liabilities. Our effective tax rate as well as the actual tax ultimately payable could be adversely affected by changes in the amount of our earnings attributable to countries with differing statutory tax rates, changes in the valuation of our deferred tax assets, changes in tax laws (or the interpretation of those laws by regulators) or tax rates (particularly in the U.S. or Ireland), increases in non-deductible expenses, the availability of tax credits (including, but not limited to through the CHIPS Act), material audit assessments or repatriation of non-U.S. earnings, each of which could materially affect our profitability. For example, as of SeptemberOctober 27,3, 2024,2025, we had $265.1$240.9 million of gross federal net operating loss (“NOL”) carryforwards, which, for those generated prior to the effective date of the 2017U.S. Tax Cuts and Jobs Act (“Tax Act”),Act, will expire at various dates through 2036,2038, while those generated subsequent to the U.S. Tax Act have an indefinite carryforward with no expiration. However, our ability to use these federal NOL carryforwards and other deferred tax assets may be limited. Realization of our deferred tax assets is dependent upon us generating sufficient future taxable income. Deferred tax assets are reviewed and assessed on a periodic basis for future realizability. Future charges against our earnings could result in all or some portion of the deferred tax asset to not be realized. This could be caused by, among other things, deterioration in our operational performance, future impairment charges, adverse market conditions, geopolitical unrest, adverse changes in tax and other applicable laws or regulations and a variety of other factors. Any significant increase in our effective tax rates could materially reduce our net income in future periods and decrease the value of your investment in our common stock.

We are subject to a variety of international, federal, state and local governmental regulations directed at preventing or mitigating climate change and other environmental harms, as well as to the storage, discharge, handling, generation, disposal and labeling of toxic or other hazardous substances used to manufacture our products which could restrict our ability to expand our facilities or build new facilities, or require us to acquire additional expensive equipment, modify our manufacturing processes, or incur other substantial expenses which could harm our business, financial condition and results of operations. If we fail to comply with these regulations, substantial fines could be imposed on us and we could be required to suspend production, alter manufacturing processes, cease operations or remediate polluted land, air or groundwater, any of which could have a negative effect on our revenue, results of operations and business. Failure to comply with environmental regulations could subject us to civil or criminal sanctions and property damage or personal injury claims. We have incurred in the past and may in the future incur environmental liability based on the actions of prior owners, lessees or neighbors of sites we have leased or may lease in the future, third partythird-party commercial waste disposal sites we utilize or sites we become associated with due to acquisitions.

For example, between JulyFebruary 5, 2025 and April 8, 2024 and August 7, 2024,2025, the market price of our common stock had a cumulative decline of approximately 18.8%.35.4%. Companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

Our largest stockholder controls a significant amount of our outstanding common stock. As of SeptemberOctober 27,3, 2024,2025, Susan Ocampo beneficially owned 17.8%12.5% of our common stock. As a result, thesethis stockholdersstockholder will be able to exert a significant degree of influence over our management and affairs and control over matters requiring stockholder approval, including the election of our directors and approval of significant corporate transactions. In addition, this concentration of ownership may delay or prevent a change in control of us and might affect the market price of our securities. In addition, the interests of this stockholder may not always coincide with your interests or the interests of other stockholders.

Risks Relating to our 2026 Convertible Notes

Servicing our debt, including our 2026 Convertible Notes and 2029 Convertible Notes, requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our indebtedness.

Our ability to make payments of the principal of, to pay interest on, or to refinance,of our 2026 Convertible Notes and our 2029 Convertible Notes (each as defined in Note 15 - Debt to the Consolidated Financial Statements included in this Annual Report), or to make cash payments in connection with any conversion of the 2026 Convertible Notes and the 2029 Convertible Notes depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not continue to generate cash flow from operations in the future sufficient to service the 2026 Convertible Notes, the 2029 Convertible Notes or other indebtedness and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring indebtedness or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance the 2026 Convertible Notes, the 2029 Convertible Notes or our other indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

Provisions in indenture governing the 2026 Convertible Notes and 2029 Convertible Notes may delay or prevent an otherwise beneficial business combination.

The terms of the 2026 Convertible Notes and 2029 Convertible Notes require us to repurchase the 2026 Convertible Notes in the event of a “fundamental change” as defined under the indenture governing the 2026 Convertible Notes and 2029 Convertible Notes. A fundamental change of our Company would trigger an option of the holders of the 2026 Convertible Notes and 2029 Convertible Notes to require us to repurchase the 2026 Convertible Notes. In addition, if a make-whole fundamental change occurs prior to the maturity date of the 2026 Convertible Notes and 2029 Convertible Notes, we will in some cases be required to increase the conversion rate for a holder that elects to convert its 2026 Convertible Notes and 2029 Convertible Notes. Furthermore, the indenture that governs the 2026 Convertible Notes and 2029 Convertible Notes prohibits us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the 2026 Convertible Notes and 2029 Convertible Notes. This may have the effect of delaying or preventing an acquisition of our Company that could be beneficial to investors.

The following section generally discusses our financial condition and results of operations for our fiscal year ended SeptemberOctober 27,3, 20242025 (“fiscal year 20242025”) compared to our fiscal year ended September 29,27, 20232024 (“fiscal year 20232024”). A discussion regarding our financial condition and results of operations for fiscal year 20232024 compared to our fiscal year ended September 30,29, 20222023 (“fiscal year 20222023”) can be found in Part II, Item 7 of our Annual Report on Form 10-K for fiscal year 2023,2024, filed with the Securities and Exchange Commission (the “SEC”) on November 13,12, 2023.2024.

We design and manufacture semiconductor products and solutions for I&D, Data Center and Telecom industries. Headquartered in Lowell, Massachusetts, we have more than 70 years of application expertise, with silicon, GaAs, GaN and InP fabrication, manufacturing, assembly and test, and operational facilities throughout North America, Europe and Asia. We design, develop and manufacture differentiated semiconductor products and solutions for customers who demand high performance, quality and reliability. We offer a broad portfolio of thousands of standard and custom devices, which include ICs, MCMs, diodes, amplifiers, switches and switch limiters, passive and active components and RF and optical subsystems, which make up dozens of product lines that service over 6,000 end customers in our three primary markets. Our semiconductor products are electronic components that our customers generally incorporate into larger electronic systems, such as wireless basestations, high-capacity optical networks, data center networks, radar, medical systemssystems, satellite networks and test and measurement applications. Our primary end markets are: (1) I&D, which includes military and commercial radar, RF jammers, electronic countermeasures, communication data links, satellitespace-related communicationselectronics and various wired and wireless multi-market applications, which include industrial, medical, test and measurement and scientific applications; (2) Data Center, which includes intra-Data Center, DCI applications, at 100G, 200G, 400G, 800G, 1.6T, 3.2T and higher speeds, enabled by our broad portfolio of analog ICs and photonic components for high speed connectivity customers; and (3) Telecom, which includes carrier infrastructure such as long-haul/metro, 5G and future generation6G infrastructure, satellite communicationsSATCOM and FTTx/PON, among others.

We have a 52 or 53-week fiscal year ending on the Friday closest to the last day of September. Fiscal yearsyear 2024,2025 2023included 53 weeks and 2022fiscal years 2024 and 2023 each consisted of 52 weeks. To offset the effect of holidays, for fiscal years in which there are 53 weeks, we typically include the extra week in the first quarter of our fiscal year. Our first quarter of fiscal year 2025, ended January 3, 2025, included 14 weeks.

We expect our revenue in the I&D market to be driven by the expanding product portfolio that we offer which services applications such as test and measurement, satellitespace-related communications,electronics, civil and military radar, industrial, automotive, scientific and medical applications, further supported by growth in applications for our multi-market catalog products.

We expect our revenue in the Telecom market to be driven by 5G deployments, with continued upgrades and expansion of communications equipment, satellite communicationsSATCOM networks and increasing adoption of our high-performance RF, millimeter wave, optical and photonic components.

We account for share-based compensation arrangements using the fair value method as described in Note 2 - Summary of Significant Accounting Policies to our Consolidated Financial Statements in this Annual Report. There are a significant number of estimates and assumptions required for the initial valuation as well as for the ongoing valuation of certain share-based compensation items. These estimates may vary significantlysignificantly, and the assumptions may not be accurate resulting in us having to make adjustments to historically recorded balances.

We are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our current tax exposure together and assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our Consolidated Balance Sheets. We then assess the likelihood that our deferred tax assets will be recovered from future taxable income within the relevant jurisdiction. To the extent we believe that recovery is not likely, we must establish a valuation allowance. We provide valuation allowances for certain deferred tax assets where it is more likely than not that any portion will not be realized.

The application of tax laws and regulations to calculate our tax liabilities is subject to legal and factual interpretation, judgment and uncertainty in a multitude of jurisdictions. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations, including the federal statute controlling tax and spending policies passed by the U.S. Congress on July 4, 2025 (the “July 4, 2025 Bill”), as well as court rulings. We recognize potential liabilities for anticipated tax audit issuesmatters in the United States and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes and interest will be due. We record an amount as an estimate of probable additional income tax liability at the largest amount that we feel is more likely than not, based upon the technical merits of the position, to be sustained upon audit by the relevant tax authority.

(2)Fiscal years 2025, 2024 and 2023 includes $0.1 million, $7.7 million and $9.1 million, respectively, of acquisition transaction costs.

(43)Fiscal yearsyear 2024,2025 2023includes a non-cash expense of $10.1 million, primarily related to establishing a valuation allowance on foreign NOLs, and 2022fiscal years 2024 and 2023 includes a non-cash benefit of $3.6 million, $12.1 million and $202.8$12.1 million, respectively, related to the partial release of our valuation allowance. See Note 20 - Income Taxes to the Consolidated Financial Statements included in this Annual Report for additional information.

Comparison of Fiscal Year Ended October 3, 2025 to Fiscal Year Ended September 27, 2024 to Fiscal Year Ended September 29, 2023

Revenue. In fiscal year 2024,2025, our revenue increased by $81.2$237.7 million, or 12.5%,32.6%, to $729.6$967.3 million from $648.4$729.6 million for fiscal year 2023.2024. Fiscal yearsyear 20242025 included 53 weeks and 2023fiscal eachyear 2024 consisted of 52 weeks. Our first quarter of fiscal year 2025, ended January 3, 2025, included 14 weeks.

In fiscal year 2024,2025, our I&D market revenue increased by $34.5$68.1 million, or 10.9%,19.4%, compared to fiscal year 2023.2024. The increase was primarily driven by revenue growth from recentdefense acquisitions,programs partiallyand offsetthe byfull loweryear salescontribution of legacy products for industrial markets.acquisitions.

In fiscal year 2024,2025, our Data Center market revenue increased by $50.9$95.0 million, or 34.6%,48.0%, compared to fiscal year 2023.2024. The increase was primarily driven by an increase in sales of 400Ghigh-performance analog and 800G high-performance analogcoherent Data Center products,products partiallyprimarily offsetsupporting byhigh aspeed decreasedata inrates salesfrom of100G ourup legacyto connectivity products.1.6T.

In fiscal year 2024,2025, our Telecom market revenue decreasedincreased by $4.2$74.6 million, or 2.3%,41.4%, compared to fiscal year 2023.2024. The decreaseincrease was primarily driven by aan decreaseincrease in sales inof products for 5G and SATCOM applications, broadband access, PON, carrier-based optical semiconductor productsaccess and otherthe telecomfull markets,year partiallycontribution offset by incremental revenue from recentof acquisitions.

WeCertain areas of our end markets continue to be negatively impacted by themacroeconomic currentand macroeconomicgeopolitical conditions, which we expect may result in weaker near-term demand for our products across all three of our primary markets. In addition, we could be negatively affected by any weakening of global economic conditions, including as a result of the evolving impacts from tariffs, export bans, sanctions or other trade tensions (including implementation of new tariffs or retaliatory trade measures).

Gross profit. In fiscal year 2024,2025, our gross profit increased by $8.0$135.2 million, or 2.1%,34.3%, compared to fiscal year 2023.2024. Gross margin of 54.0%54.7% in fiscal year 20242025 decreasedincreased 55070 basis points, compared to fiscal year 2023.2024. The increase in gross profit during 20242025 was primarily as a result of higher sales primarily driven by recent acquisitions,sales, partially offset by productincreases mix, increasedin employee-related costs, primarily driven by headcount from acquisitions, higher intangible asset amortizationcosts and depreciationshare-based expense.compensation.

Research and development. In fiscal year 2024,2025, research and development expense increased by $33.6$62.3 million, or 22.6%,34.2%, to $244.5 million, representing 25.3% of revenue, compared with $182.2 million, representing 25.0% of revenue, compared with $148.5 million, representing 22.9% of revenue, in fiscal year 2023.2024. Research and development expense increased during fiscal year 20242025 primarily asdue a result ofto increases in headcount and employee-related costs, drivenincluding byvariable higher headcount associated with acquisitions, higher intangible asset amortization andcompensation, share-based compensation expense.expense and development-related supply costs.

Selling, general and administrative. In fiscal year 2024,2025, selling, general and administrative expenses increased by $8.1$16.9 million, or 6.2%,12.3%, to $154.9 million, or 16.0% of revenue, compared with $137.9 million, or 18.9% of revenue, compared with $129.9 million, or 20.0% of revenue, for fiscal year 2023.2024. Selling, general and administrative expenses increased during fiscal year 20242025 primarily due to increasesan increase in employee-related costs, primarilyincluding drivenvariable by headcount from acquisitions,compensation and share-based compensation, partially offset by lowerdecreases professionalin feesacquisition-related transaction costs and intangible asset amortization.

Interest income. In fiscal year 2024,2025, interest income was $23.0$29.9 million, or 3.1%3.0% of our revenue, compared to $20.8$23.0 million of interest income, or 3.2%3.1% of our revenue, for fiscal year 2023.2024. The change in fiscal year 20242025 is primarily due to the generalan increase in interest rates on our short-term investments and dueassociated tointerest the increase in our short-term investments.income.

Interest expense. In fiscal year 2024,2025, interest expense was $5.1$5.5 million, or 0.7%0.6% of our revenue, compared to $12.4$5.1 million of interest expense, or 1.9%0.7% of our revenue, for fiscal year 2023.2024. The decreaseincrease in fiscal year 20242025 is primarily due to theincreases Augustin 2023interest paymentexpense on financing obligations and amortization of thedebt totalissuance outstandingcosts, principalpartially balanceoffset ofby thea Termdecrease Loansin interest expense on convertible notes (as defined insee Note 15 - Debt and Note 16- Financing Obligation to the Consolidated Financial Statements included in this Annual Report).

Income tax expense. In fiscal year 2024,2025, income tax expense was $14.7$25.2 million, or 2.0% of revenue,million compared to an expense of $23.6$14.7 million, or 3.7% of revenue,million for fiscal year 2023.2024. The decreaseincrease in the provision is primarily due to lower Income before taxes, the Foreign-derived intangible income deduction in the fiscal year ended September 27, 2024 plus a $3.6$10.1 million partial release of the valuation allowance, primarily relatingincrease to our domesticvaluation NOLallowance. andThis R&Dincrease taxprimarily creditrelates carryforwards,to releasedthe assessment that certain foreign NOLs were not recoverable, resulting in ouran fiscal fourth quarterallowance of 2024.$9.2 million, as well as refinements to the estimate of future California taxable income.

For fiscal year 2024,2025, our effective tax rate was 16.0%.(86.8)%. OurThe difference between our effective tax rate for fiscal year 2024,2025 as compared toand the U.S. federal income tax rate of 21%,21% is impactedwas primarily driven by incomenon-deductibility earned outsideof the U.S.loss (i.e.,on global intangible low taxed income), resulting in a 12.7% increase, offset primarily by research and development credits, resulting in a 9.4% decrease, Foreign-derived intangible income deduction, resulting in a 4.5% decrease and partial releaseextinguishment of our valuation allowance, resulting in a 4.0% decrease.debt. See Note 20 - Income Taxes to the Consolidated Financial Statements included in this Annual Report for additional information.

The following table summarizes our cash flow activities for the fiscal years ended SeptemberOctober 27,3, 20242025 and September 29,27, 2023,2024, respectively (in thousands):

Our cash flow from operating activities for fiscal year 20242025 was $162.6$235.4 million and consisted of a net incomeloss of $76.9$54.2 million, plus adjustments to reconcile our net incomeloss to cash provided by operating activities of $116.8$327.4 million, and cash used by operating assets and liabilities of $31.0$37.8 million. Adjustments to reconcile our net incomeloss to cash provided by operating activities of $116.8 million primarily included loss on extinguishment of debt of $193.1 million, depreciation and intangible amortization expense of $67.2$63.3 million, share-based compensation expense of $45.6$79.4 million and deferred income tax expense of $4.9 million, partially offset by $7.6 million in amortization on marketable securities.million. In addition, cash used by operating assets and liabilities was $31.0$37.8 million for fiscal year 2024,2025, primarily driven by an increase in inventory of $30.2$26.6 million, an increase in accounts receivable of $16.8 million and a decrease in accrued and other liabilities of $7.3$42.0 million, partially offset by an increase in accounts payable of $18.2$22.2 million and an increase in accrued and other liabilities of $11.8 million.

Our cash flow from operating activities for fiscal year 20232024 was $166.9$162.6 million and consisted of a net income of $91.6$76.9 million, plus adjustments to reconcile our net income to cash provided by operating activities of $103.1$116.8 million, and cash used by operating assets and liabilities of $27.8$31.0 million. Adjustments to reconcile our net income to cash provided by operating activities of $103.1$116.8 million primarily included depreciation and intangible amortization expense of $52.2$67.2 million, share-based compensation expense of $38.1$45.6 million and deferred income tax expense of $19.8$4.9 million, partially offset by $11.8$7.6 million in amortization on marketable securities. In addition, cash used by operating assets and liabilities was $27.8$31.0 million for fiscal year 2023,2024, primarily driven by an increase in inventory of $30.2 million, an increase in accounts receivable of $16.8 million, and a decrease in accrued and other liabilities of $21.3 million, an increase in inventory of $10.6 million, a decrease in accounts payable of $6.7$7.3 million, partially offset by a decrease in accounts receivablepayable of $12.3$18.2 million.

As of SeptemberOctober 27,3, 2024,2025, we held $146.8$112.1 million of cash and cash equivalents, primarily deposited with financial institutions as well as $435.1$673.8 million of liquid short-term investments. The undistributed earnings of certain foreign subsidiaries are considered indefinitely reinvested for the periods presented and we do not intend to repatriate such earnings. We believe the decision to reinvest these earnings will not have a significant impact on our liquidity. As of SeptemberOctober 27,3, 2024,2025, cash held by our indefinitely reinvested foreign subsidiaries was $6.5$5.2 million, which, along with cash generated from foreign operations, is expected to be used in the support of international growth and working capital requirements as well as the repayment of certain intercompany loans.

HoldersDuring the fiscal quarter ended October 3, 2025, our common stock price for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending October 3, 2025 was greater than $106.76 on each applicable trading day. Therefore, holders of theour 2026 Convertible Notes (as defined in Note 15 - Debt to the Consolidated Financial Statements included in this Annual Report) may convert their notes at their option at any time priorduring tothe subsequent first fiscal quarter ended January 2, 2026 in multiples of $1,000 principal amount. On or after December 15, 2025 until the close of business on the businesssecond scheduled trading day immediately preceding Decemberthe 15,maturity 2025date, holders may convert their notes in multiples of $1,000 principal amount, if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to $106.76 for the notes on each applicable trading day.amount. We made an irrevocable election to pay cash for the principal amount of notes to be converted. The aggregate principal balance of the 2026 Convertible Notes is $450.0$161.2 million. For additional information related to our Liquidity and Capital Resources, see Note 15 - Debt to our Consolidated Financial Statements included in this Annual Report.

We plan to use our remaining available cash and cash equivalents and short-term investments for general corporate purposes, including working capital, payment on the 2026 Convertible Notes and leases,2029 Convertible Notes, or for the acquisition of or investment in complementary technologies, design teams, products and businesses. We believe that our cash and cash equivalents, short-term investments and cash generated from operations will be sufficient to meet our working capital requirements for at least the next twelve months. We may need to raise additional capital from time to time through the issuance and sale of equity or debt securities, and there is no assurance that we will be able to do so on favorable terms or at all.

As of SeptemberOctober 27,3, 2024,2025, we had no off-balance sheet arrangements.

Our other significant contractual payment obligations consist of purchase agreements and other commitments. We have purchase commitments of $151.1$157.1 million primarily related to services and inventory supply arrangements of which approximately $138.7$145.1 million is non-cancelable. In addition, we have $23.9 million in fixedare payments associateddue withwithin aone poweryear. Some of these purchase agreementcommitments thatmay commencedbe in fiscal 2023 and has a remaining 13-year term. See Note 16- Financing Obligation for additional detail on the power purchase agreement. Lastly, we have a purchase commitment of $6.7 million related to amounts payable for software over a two year period.cancellable.

As of SeptemberOctober 27,3, 2024,2025, we estimated $1.9 million in asset retirement obligations primarily for the restoration of leased facilities upon the termination of the related leases. Although it is reasonably possible that our estimates could change materially in the next twelve months, we are presently unable to reliably estimate when any cash settlement of these obligations may occur.

Our business involves a high degree of risk. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2025 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. As of the date of this Quarterly Report on Form 10-Q, there have been no material changes in any of the risk factors described in our 2025 Annual Report on Form 10-K, except as discussed in Part II, “Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the fiscal quarterquarters ended January 2, 2026 and April 3, 2026, as filed with the SEC on February 5, 2026 and asMay noted7, below.2026, respectively.

We design, develop and manufacture differentiated semiconductor products and solutions for the Industrial and Defense (“I&D”), Data Center and Telecommunications (“Telecom”) industries for customers who demand high performance, quality and reliability. We are headquartered in Lowell, Massachusetts, with operational facilities throughout North America, Europe and Asia. We have more than 70 years of application expertise, combined with expertise in analog and mixed signal circuit design, compound semiconductor fabrication (including GaAs, GaN, indium phosphide (“InP”) and specialized silicon), advanced packaging and back-end assembly and test. We offer a broad portfolio of thousands of standard and custom devices, which include integrated circuits (“ICs”), multi-chip modules (“MCM”), diodes, amplifiers, switches and switch limiters, passive and active components and radio frequency (“RF”) and optical subsystems, which make up dozens of product lines that service over 6,000 end customers in our three primary markets. Our products are electronic components that our customers generally incorporate into larger electronic systems, such as wireless basestations, high-capacity optical networks, data center networks, radar, medical systems, satellite networks and test and measurement applications. Our primary end markets are: (1) I&D, which includes military and commercial radar, RF jammers, electronic countermeasures, communication data links, space-related electronics and various wired and wireless multi-market applications, which include industrial, medical, test and measurement and scientific applications; (2) Data Center, which includes intra-Data Center, Data Center Interconnect (“DCI”) applications, at 100G, 200G, 400G, 800G, 1.6T, 3.2T and higher speeds, enabled by our broad portfolio of analog ICs and photonic components for high speed connectivity customers; and (3) Telecom, which includes carrier infrastructure such as long-haul/metro, 5G and 6G infrastructure, satellite communications (“SATCOM”) and Fiber-to-the-X (“FTTx”)/passive optical network (“PON”), among others.

Comparison of the Three and SixNine Months Ended AprilJuly 3, 2026 to the Three and SixNine Months Ended AprilJuly 4, 2025

Revenue. Our revenue increased by $53.1$90.2 million, or 22.5%,35.8%, to $289.0$342.2 million for the three months ended AprilJuly 3, 2026, from $235.9$252.1 million for the three months ended AprilJuly 4, 2025, and our revenue increased by $106.6$196.7 million, or 23.5%,27.9%, to $560.6$902.8 million for the sixnine months ended AprilJuly 3, 2026, from $454.0$706.1 million for the sixnine months ended AprilJuly 4, 2025. The increase in revenue in the three and sixnine months ended AprilJuly 3, 2026 is described by end market in the following paragraphs.

In the three months ended AprilJuly 3, 2026, our I&D market revenue increased by $22.1$25.2 million, or 22.4%,23.3%, compared to the three months ended AprilJuly 4, 2025. In the sixnine months ended AprilJuly 3, 2026, our I&D market revenue increased by $42.4$67.6 million, or 21.7%,22.2%, compared to the sixnine months ended AprilJuly 4, 2025. The increase in the three and sixnine months ended AprilJuly 3, 2026 was primarily driven by revenue growth from defensedefense-related programs.

In the three months ended AprilJuly 3, 2026, our Data Center market revenue increased by $26.0$61.8 million, or 36.0%,81.5%, compared to the three months ended AprilJuly 4, 2025. In the sixnine months ended AprilJuly 3, 2026, our Data Center market revenue increased by $46.5$108.2 million, or 33.8%,50.7%, compared to the sixnine months ended AprilJuly 4, 2025. The increase in the three and sixnine months ended AprilJuly 3, 2026 was primarily driven by higher sales of high-performance analog, coherent and optical Data Center products primarily supporting high speed data rates from 100G up to 1.6T.

In the three months ended AprilJuly 3, 2026, our Telecom market revenue increased by $5.0$3.2 million, or 7.6%,4.7%, compared to the three months ended AprilJuly 4, 2025. In the sixnine months ended AprilJuly 3, 2026, our Telecom market revenue increased by $17.7$20.9 million, or 14.6%,11.1%, compared to the sixnine months ended AprilJuly 4, 2025. The increase in the three and sixnine months ended AprilJuly 3, 2026 was primarily driven by higher sales of products for PON,broadband access, metro long haul, broadband accesshaul and SATCOM applications.PON.

Gross profit. Gross margin was 56.9%58.3% and 55.2%55.3% for the three months ended AprilJuly 3, 2026 and AprilJuly 4, 2025, respectively, and 56.4%57.1% and 54.5%54.8% for the sixnine months ended AprilJuly 3, 2026 and AprilJuly 4, 2025, respectively. Gross profit increased by $34.3$60.1 million, or 26.3%,43.1%, to $164.4$199.6 million, or 56.9%58.3% of our revenue, for the three months ended AprilJuly 3, 2026, compared to $130.2$139.4 million, or 55.2%55.3% of our revenue, for the three months ended AprilJuly 4, 2025. Gross profit increased by $68.9$129.1 million, or 27.9%,33.4%, to $316.2$515.8 million, or 56.4%57.1% of our revenue, for the sixnine months ended AprilJuly 3, 2026, compared to $247.3$386.7 million, or 54.5%54.8% of our revenue, for the sixnine months ended AprilJuly 4, 2025. Gross profit increased for the three and sixnine months ended AprilJuly 3, 2026 as compared to the three and sixnine months ended AprilJuly 4, 2025 primarily as a result of increased sales, inclusive of sales of higher sales,margin products, partially offset by increases in employee-related costs, primarily due to additional headcount from the RTP Fab, higher maintenance expense and increases in production supplies.

Research and development. Research and development expense increased by $11.1$10.9 million, or 19.3%,17.2%, to $69.0$74.3 million, or 23.9%21.7% of our revenue, for the three months ended AprilJuly 3, 2026, compared to $57.8$63.4 million, or 24.5%25.1% of our revenue, for the three months ended AprilJuly 4, 2025. Research and development expense increased $17.2$28.2 million, or 14.6%,15.5%, to $135.4$209.7 million, or 24.2%23.2% of our revenue, for the sixnine months ended AprilJuly 3, 2026, compared to $118.2$181.6 million, or 26.0%25.7% of our revenue, for the sixnine months ended AprilJuly 4, 2025. Research and development expense increased in the three months ended AprilJuly 3, 2026 primarily due to increases in employee-related costs, including increases in headcount, higher R&D-related material costs and share-baseddevelopment compensationfoundry expense.costs. Research and development expense increased in the sixnine months ended AprilJuly 3, 2026 primarily due to employee-related costs, including increases in headcount, higher R&D-related material costs and depreciation expense.

Selling, general and administrative. Selling, general and administrative expense increased by $7.2$9.7 million, or 19.1%,25.4%, to $44.6$48.1 million, or 15.4%14.1% of our revenue, in the three months ended AprilJuly 3, 2026, compared to $37.4$38.4 million, or 15.9%15.2% of our revenue, for the three months ended AprilJuly 4, 2025. Selling, general and administrative expense increased by $10.0$19.7 million, or 13.0%,17.1%, to $86.6$134.8 million, or 15.5%14.9% of our revenue, in the sixnine months ended AprilJuly 3, 2026, compared to $76.7$115.1 million, or 16.9%16.3% of our revenue, for the sixnine months ended AprilJuly 4, 2025. Selling, general and administrative expense increased in the three months ended AprilJuly 3, 2026 primarily due to increases in employee-related costs, share-based compensation expense and professional service fees. Selling, general and administrative expense increased in the sixnine months ended AprilJuly 3, 2026 primarily due to increases in employee-related costs, share-based compensation expense, professional fees, software costs and variable selling costs.

Interest income. In the three months ended AprilJuly 3, 2026, interest income was $7.8$6.7 million, compared to $7.2$7.6 million for the three months ended AprilJuly 4, 2025. In the sixnine months ended AprilJuly 3, 2026, interest income was $15.7$22.4 million, compared to $14.2$21.8 million for the sixnine months ended AprilJuly 4, 2025. The decrease for the three months ended July 3, 2026 is primarily due to the decrease in our short-term investments balance. The increase for the three and sixnine months ended AprilJuly 3, 2026 is primarily due to the interest income earned from the higher cash and cash equivalents and short-term investments balance prior to the settlement of the 2026 Convertible Notes.

Our estimated annual effective tax rate for the fiscal year ending October 2, 2026 is expected to be approximately 17.3%,18.5%, which reflects the statutory rate adjusted for expected tax credits, primarily for R&D. This effective tax rate does not reflect the adjustment for any discrete tax matters arising during the year, such as the excess deduction related to share-based compensation. The actual effective income tax rate for the fiscal quarter ended AprilJuly 3, 2026 was reduced by excess tax benefits related to share-based compensation.

The effective income tax rate for the fiscal quarter ended AprilJuly 4, 2025 was impacted by the non-deductibility of the charge for extinguishment of debt as well as excess tax benefits related to share-based compensation.

Our cash flow from operating activities for the sixnine months ended AprilJuly 3, 2026 of $121.6$201.6 million consisted of net income of $95.1$195.8 million, whichadjusted includedfor non-cash charges of $80.5$95.3 million, primarily related to share-based compensation expense of $44.8$65.9 million and depreciation and intangible asset amortization expense of $31.0$46.7 millionmillion, andpartially offset by a net increase in working capital of $54.0$89.6 million. The net increase in working capital of $54.0$89.6 million was primarily driven by an increase in inventories of $14.4$43.8 million, an increase in accounts receivables of $11.0$30.5 million, an increase in prepaid expenses and other assets of $10.9$6.7 million and a decrease in accrued and other liabilities of $9.1$10.1 million.

Our cash flow from operating activities for the sixnine months ended AprilJuly 4, 2025 of $105.3$165.7 million consisted of a net loss of $135.9$99.3 million plus adjustments of $263.1$299.3 million, to reconcile our net loss to cash provided by operating activities, less cash used in operating assets and liabilities of $21.9$34.3 million. Adjustments to reconcile our net loss to cash provided by operating activities primarily included loss on extinguishment of debt of $193.1 million, share-based compensation expense of $44.3$61.6 million and depreciation and intangible amortization expense of $30.8$45.6 million. In addition, cash used in operating assets and liabilities was $21.9$34.3 million for the sixnine months ended AprilJuly 4, 2025, primarily driven by an increase in accounts receivables of $24.7$22.8 million,million and an increase in inventories of $15.0$20.6 million, partially offset by an increase in accounts payable of $14.8$16.5 million.

Our cash flow providedused byin investing activities for the sixnine months ended AprilJuly 3, 2026 of $73.5$16.4 million consisted primarily of proceeds of $176.1$208.2 million for the sale and maturity of short-term investments, offset by purchases of $70.5$110.8 million of short-term investments, purchases of long-term investments of $60.6 million, capital expenditures of $26.1$46.9 million and purchases of software licenses and licensed technology of $7.4$8.9 million.

Our cash flow used in investing activities for the sixnine months ended AprilJuly 4, 2025 of $167.1$246.1 million consisted primarily of purchases of $450.9 million of short-term investments, purchase of property under financing arrangement of $28.8 million, capital expenditures of $22.3 million, cash paid for acquisitions, net of cash acquired of $12.7 million, capital expenditures of $13.5 million and purchases of $320.5 million of short-term investments and other investing activities of $8.0$11.0 million, offset by proceeds of $187.6$279.6 million for the sale and maturity of short-term investments.

During the sixnine months ended AprilJuly 3, 2026, our cash used in financing activities of $208.7$207.5 million was primarily related to repayment of the 2026 Convertible Notes of $161.2 million and $51.5$55.6 million of common stock withheld associated with employee taxes on vested equity awards, partially offset by $5.2$11.5 million of proceeds from employee stock purchases.

During the sixnine months ended AprilJuly 4, 2025, our cash provided by financing activities of $26.3$58.8 million was primarily related to $86.6 million of proceeds from 2029convertible Convertiblenotes, Notes and $4.5$28.8 million of proceeds from financing arrangement and $10.2 million of proceeds from stock option exercises and employee stock purchases, partially offset by $41.3$42.7 million of common stock withheld associated with employee taxes on vested equity awards and $23.1$23.2 million of fees for the convertible note exchange and payments for debt issuance costs.

As of AprilJuly 3, 2026, we held $98.5$89.6 million of cash and cash equivalents, primarily deposited with financial institutions, as well as $566.3$573.4 million of liquid short-term investments. The undistributed earnings of certain foreign subsidiaries are considered indefinitely reinvested for the periods presented and we do not intend to repatriate such earnings. We believe the decision to reinvest these earnings will not have a significant impact on our liquidity. As of AprilJuly 3, 2026, cash held by our indefinitely reinvested foreign subsidiaries was $8.8$6.9 million, which, along with cash generated from foreign operations, is expected to be used in the support of international growth and working capital requirements as well as the repayment of certain intercompany loans.

As of AprilJuly 3, 2026, we had no off-balance sheet arrangements.