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

Investing in our securities involves a high degree of risk and uncertainty, and you should carefully consider the trends, risks and uncertainties described below and other information in this Form 10-K and subsequent reports filed with or furnished to the SEC before making any investment decision with respect to our securities. The risk factors described below are not all of the risks we may face. Other risks not presently known to us or that we currently believe are immaterial may materially affect our business. If any of the following trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially and adversely affected, the trading price of our securities could decline, and you could lose all or part of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

Our manufacturing network includes multiple owned and third-party facilities, which may each produce one or more components necessary for the assembly of a single product. As a result of this interdependence, an operational disruption at a single facility may have a disproportionate impact on our ability to produce many of our products. In the event of such a disruption at any such facility,disruption, we may be unable to effectively source replacement components on acceptable terms from qualified third parties, in which case our ability to produce many of our products could be materially disrupted or delayed. Conversely, some of our facilities are single source facilities that only produce one of our end-products, and a disruption at any such facility would materially delay or cease production of the related product. In the event of any such operational disruption, we may experience difficulty in beginning production of replacement components or products at new facilities or transferring production to other existing facilities, any of which could result in a loss of future revenues and materially adversely affect our business and results of operations.

In addition, for certain manufacturing activities and for the supply of raw materials, we utilize third-party suppliers. Our agreements with these manufacturerssuppliers typically require us to commit to purchase goods or services based on forecasted product needs, which may be inaccurate, and, in some cases, require longer-term commitments. We are also dependent upon a limited number of highly specialized third-party suppliers for required components and materials for certain of our key technologies. Arranging for replacement manufacturers and suppliers can be time-consuming and costly, and the number of qualified alternative providers can be extremely limited. Our business operations, productivity and customer relations could be materially adversely affected if these contractual relationships were disrupted or terminated, the cost of such services increased significantly, the quality of the services provided deteriorated or our forecasted needs proved to be materially incorrect. Generally, our agreements with suppliers of raw materials impose no minimum or continuing supply obligations, and we obtain our raw materials and supplies from a large number of sources. ShortagesHowever, shortages could occur in various essential raw materials, and if we are unable to obtain adequate supplies of raw materials in a timely manner, the costs of our raw materials increase significantly, their quality deteriorates or they give rise to compatibility or performance issues in our products, our results of operations could be materially adversely affected.

Our manufacturing efficiency is contingent upon the operations of these interdependent processes and will continue to be an important factor in our future profitability, and there can be no assurance that we will be able to maintain our manufacturing efficiency, increase our manufacturing efficiency to the same extent as our competitors,competitors when facing an increased demand, or be successful in our manufacturing rationalization plans. For example, public health crises may cause disruption to our domestic and international operations. Any associated worker absenteeism, quarantines and restrictions on certain of our employees’ ability to perform their jobs, office and factory closures or restrictions, labor shortages, disruptions to ports and other shipping infrastructure, border closures and/or other travel or health-related restrictions could, depending on the magnitude of such effects on our manufacturing activities (or activities of our suppliers, third-party distributors or sub-contractors), cause disruption and delay to our supply chain, manufacturing and product shipments. Such disruption and delays could materially adversely affect our business, results of operations and financial condition.

In addition, if we are unable to utilize our manufacturing facilities, testing facilities and external manufacturers at expected or minimum purchase obligation levels, or if production capacity increases while revenue does not, the fixed costs and other operating expenses associated with these facilities and arrangements will not be fully absorbed, resulting in higher average unit costs and lower gross profits, which could have a material adverse effect on our results of operations. Further, if we need to rapidly increase our business and manufacturing capacity to meet increases in demand or expedited shipment schedules, this could strain our manufacturing and supply chain operations,operations and negatively impact our working capital. Moreover, if we are unable to accurately forecast demand for our products, we may purchase more or fewer parts than necessary or incur costs for canceling, postponing or expediting delivery of parts. If we purchase or commit to purchase inventory in anticipation of customer demand that does not materialize, or such inventory is rendered obsolete by the rapid pace of technological change, or if customers reduce, delay or cancel orders, we may incur excess or obsolete inventory charges.

We may be unable to implement certain business strategies and restructuring initiatives and any issue with the pursuit of such strategies and initiatives could materially adversely affect our business and results of operations.

We may from time to time determine to implement business strategies and restructuring initiatives in order to remain competitive.initiatives. Because our strategies and restructuring activities may involve changes to many aspects of our business, including the location of our production facilities and personnel and the potential exit of certain product lines and businesses, our ability to successfully doexecute sothese activities depends on a number of factors, many of which are outside of our control. If we are not able to effectively manage or efficiently implement these strategies and/or restructuring initiatives for reasons within or outside of our control, then our business operations could be materially adversely affected.

In addition, implementation of a business strategy may lead to the disruption of our existing business operations. For example, in light of our goal to achieve net zero emissions by 2040, we may take actions to pursue our goal of generating net-zero emissions that may result in material expenditures that could impact our financial condition or results of operations and/or could disrupt our existing operations. Similarly, the contingent risks associated with transferring our existing operations to an acquirer, as is the case with several transition services being provided in connection with some of our prior divestitures, could materially impact our financial condition or results of operations and/or could disrupt our existing operations, especially if the acquirer is unable to meet its commitments under any transition services agreements or if the acquirer encounters financial difficulty. Furthermore, any adjustments we make to our increasedmanufacturing investmentcapacity, whether in manufacturingresponse capacityto customer demand or based on business strategy (includingsuch increasedas increasing investment in capacity for SiC-basednew products and technology), while concurrentlyor divesting other non-strategic operations,operations), may adversely impact our existing operations,operations or our customer relationships, require additional management time and effort to implement successfully, andand, in the case of capacity expansion, lead to higher than anticipated capital expenditures. There are inherent execution risks in expanding or right-sizing production capacity, whether at one of our own factories or at a third-party factory that we utilize, all of which could increase our costs and negatively impact our operating results.

The failure to successfully and timely realize the anticipated benefits of these transactions or strategies could have a material adverse effect on our profitability, financial condition or results of operations. In addition, even if we fully execute and implement these activities, there may be other unforeseeable and unintended consequences that could materially adversely impact our profitability and business, including unintended employee attrition or harm to our competitive position. To the extent that we do not achieve the profitability enhancement or other anticipated benefits ofour strategy or restructuring initiatives,initiatives do not enhance our profitability or yield other anticipated benefits, our results of operations may be materially adversely affected.

The semiconductor industry requires substantial investment in research and development in order to develop and bring to market enhanced technologies and products. The development of new products is complex and time-consuming, often requiring significant capital investment and lead time for development and testing. We cannot assure you that we will have sufficient resources to maintain the level of investment in research and development required to remain competitive. In addition, the lengthy development cycle for certain of our products could limit our ability to adapt quickly to changes affecting the product markets and requirements of our customers and end-users, and we may be unable to develop innovative responses to our customers’ and end-users’ evolving needs on the timelines they require or at all. There can be no assurance that we will win competitive bid selection processes, known as "design wins," for new products. In addition, design wins do not guarantee that we will make customer sales or generate sufficient revenue to recover design and development investments, realize a return on the capital expended or achieve expected gross margins, as expenditures for technology and product development are generally made before the commercial viability for such developments can be assured. To the extent that we underinvest in our research and development efforts, fail to recognize the need for innovation with respect to our products, or our investments and capital expenditures in research and development do not lead to sales of new products, we may be unable to bring to market technologies and products attractive to customers,customers and so our business, financial condition and results of operations may be materially adversely affected. Further, products that are commercially viable may not have an immediate impact on our revenue or contribute to our operating results in a meaningful way until at least a few years after they are introduced into the market. Developing and selling new products or expanding sales to new customers, including government entities, may subject us to additional regulations and legal obligations. Our failure to comply with such requirements could increase our operational risks and reduce our competitiveness.

The semiconductor industry is characterized by rapidly evolving technologies, innovation, short product life cycles, evolving regulatory and industry standards and certifications, changing customer needs, wide fluctuations in supply and demand and frequent new product introductions. Products are often replaced by more technologically advanced substitutes and, as demand for older technology falls, the price at which such products can be sold drops. If we cannot advance our process technologies or improve our production efficiencies to a degree sufficient to maintain required margins, we will no longernot be able to make a profit from the sale of older products. In certain limited cases, we may not be able to cease production of older products, either due to contractual obligations or for customer relationship reasons and, as a result, may be required to bear a loss on such products for a sustained period of time. If reductions in our production costs fail to keep pace with reductions in market prices for products we sell, our business and results of operations could be materially adversely affected. If our new product development efforts fail to align with the needs of our customers, our business and results of operations could be materially adversely affected.

If we are unable to compete effectively, our competitive position could be weakened relative to our peers, which would have a material adverse effect on our business and results of operations. Our future success depends on many factors, including the development of new technologies and effective commercialization and customer acceptance of our products, and our ability to increase our position in current markets, expand into adjacent and new markets, and optimize operational performance. Products or technologies developed by competitors may render our products or technologies obsolete or noncompetitive. We also may be unable to market and sell our products if they are not competitive on the basis of price, quality, technical performance, features, system compatibility, ease of use, customized design, innovation, availability, delivery timing and reliability. If we fail to compete effectively on developing strategic relationships with customers and customer sales and technical support, our sales and revenue may be materially adversely affected. Competitive pressures may limit our ability to raise prices, and any inability to maintain revenue or raise prices to offset increases in costs could have a significant adverse effect on our gross margin. Our gross margins varymay fluctuate across time periods and operating segments and could experience volatility or downward pressure due to a variety of factors. Reduced sales and lower gross margins would materially adversely affect our business and results of operations.

The semiconductor industry has experienced, and may continue to experience, significant consolidation among companies and vertical integration among customers. Larger competitors resulting from consolidations may have certain advantages over us, and we may be at a competitive disadvantage if we fail to identify attractive opportunities to acquire companies to expand our business. Consolidation among competitors and integration among customers could erode our market share, impair our capacity to compete and require us to restructure our operations, any of which could have a material adverse effect on our business.

In addition, some of our competitors may receive governmental subsidies or other incentives that give them a competitive advantage over us. For example, the United States and the European Union have enacted legislation to provide funding and incentives for semiconductor research, development, and manufacturing in their respective regions. If we are unable to access such funding or incentives, or if any awards or incentives we do receive are reduced, terminated or clawed back, or if our competitors receive more funding or incentives than we do, we may be at a disadvantage in developing and producing new or improved products or technologies, which could adversely affect our market share, revenue and profitability.

A significant portion of our sales are made to customers within the automotive industry and the industrial sectorsector, and the demand for our products depends in part on the market conditions in these end-markets. Sales into the automotive and industrial end-markets represented approximately 55%51% and 25%28% of our revenue, respectively, for the year ended December 31, 2024.2025. The automotive industry is cyclical and the industrial sector tends to thrive during a time of economic expansion,expansion. and, asAs a result, our customers in each end-market are sensitive to changes in general economic conditions, inflationary pressure, increaseschanges in interest rates, disruptive innovation and end-market preferences, any of which can adversely affect sales of our products and, correspondingly, our results of operations. Changes in demand in these end-markets (such as fluctuations in demand for EVs), or changes that have the potential to disrupt sales activities to customers in these end-markets, can significantly impact our operating results. Additionally, the quantity and price of our products sold to customers in each end-market could decline despite continued growth in such end-markets. Lower sales to customers in either end-market may have a material adverse effect on our business and results of operations.

Further, to the extent we have long-term supply agreements with our customers inthat multiple end-markets which includesinclude fixed pricing, we could be subject to fluctuating manufacturing costs that could negatively impact our profitability. Additionally, under our long-term supply agreements, we could incur certain obligations if we are not able to fulfill our commitments. Furthermore, certain customers, from time to time, have sought and may seek to amend or cancel the delivery or other terms of their long-term supply agreements with us. When any such contractual amendments are made, the timing, pricing or amount of products delivered under such long-term supply agreements may be modified in circumstances where we believe it advances the long-term customer relationship. Such an event could have an impact on our results of operations.

A portion of our sales occurs through global and regional distributors that are not under our control. We rely on distributors to grow and develop their customer base and anticipate customer needs, and any lack of or underperformance in such actions by our distributors may adversely affect our results of operations. These independent distributors also generally represent product lines offered by several companies and are not subject to any minimum sales requirements or obligation to market our products to their customers. In turn,Accordingly, distributors could reduce their sales efforts for our products or choose to terminate their representation of us. In addition, in the event a distributor were to face financial difficulty, experience significant operational disruptions or terminate its operations, our revenuerevenue, cash flow, and results of operations may be adversely affected. Furthermore, if a significant distributor terminates its operations or were to mergemerges with another distributor, we may be more reliant and dependent on the distribution network of our remaining distributors. Additionally, we rely on our distributors to provide accurate and timely sales reports in order for us to be able to generate financial reports that accurately represent distributor sales of our products during any given period. Any inaccuracies or untimely reports could adversely affect our ability to produce accurate and timely financial reports and recognize revenue.

Changes in, and the regulatory implementation of, tariffs or other government trade policies or politicalgeopolitical conditions could reduce demand for our products, limit our ability to sell our products to certain customers or our ability to comply with applicable laws and regulations, which may materially adversely affect our business and results of operations.

The imposition of or increase in tariffs, export controls and other trade restrictions as a result of international trade disputes or changes in trade policies or political conditions may adversely affect our sales and profitability. ForIn example, a significant trade disruption, additional tariffs, trade protection measures, export or import regulations or other restrictions imposed related to our business andaddition, the relatedglobal geopolitical uncertainty betweenor theescalation Unitedof States,geopolitical China,tensions Canada, Mexico and otherinvolving countries where we or our suppliers operate or any retaliatory actions from such governments could have a material adverse effect on our business and results of operations.

More specifically, our assembly and test operations facility located in Leshan, China, which is owned by Leshan-Phoenix Semiconductor Company Limited, a joint venture company in which we own 80% of the outstanding equity interests, may be subjected to increased costs or additional trade restrictions stemming from the geopolitical tension between the United States and China. The U.S. Department of Commerce could in the futuremay add additional Chinese companies to its restricted entity list or unverified list orand regulatory bodies of either country may take other actions that could expand licensing requirements or otherwise impact the market for our products and our revenue. These rules may require us to apply for and obtain additional export licenses to supply certain of our products to customers in China, and there is no assurance that we will be issued licenses that we apply for on a timely basis or at all. Additional tariffs, export controls or other trade restrictions between the two countries could materially adversely affect our results of operations.

Our power technologies useddesigned for AI use may not capture market share as expected, and issues related to the responsible use of AI may adversely affect our business.

Our extensive range of power technologies are used to help power AI and related data centers and we expect this part of our business to grow. The emergence of big data and new tools such as machine learning and AI that capitalize on the availability of large data sets is leading semiconductor manufacturers to pursue new products and approaches, and there is an intense competition to capture marketa share inof this emerging market. We may not be able to develop and offer the technology solutions that our AI-focused customers demand in a timely manner or effectively, which could have a materially adverse effect on our business. Our failure to commercialize new technologies that can power AI and data centers in a timely manner or at all could result in a loss of market share, unanticipated costs,costs and inventory obsolescence, which could adversely affect our financial results. In addition, if AI-related technologies fail to achieve the effectiveness or adoption levels currently anticipated, including due to insufficient available power or other utilities, or if our customers delay or scale back their AI deployments, demand for our AI-related products and solutions and returns on associated investments could be materially lower than we currently expect.

As with many new emerging technologies, AI presents risks and challenges and increasinghas prompted legal, social and ethical concerns relating to its responsible use that could affect theits adoption of AI.adoption. Third-party misuse of AI applications, models, or solutions, or ineffective or inadequate AI development or deployment practices by our customers could cause harm to individuals or society and impair the public’s acceptance of AI, which would in turn adversely affect our business. Further, because AI has become the focus of significant societal and regulatory debate, including concerns about safety, bias, misuse and environmental impact, our association with AI infrastructure could expose us to reputational harm, stakeholder criticism or increased regulatory scrutiny, even if we do not control the design or use of AI systems that incorporate our products. In addition, compliance with evolving government regulations worldwide related to AI may increase the costs related to the development of AI products and solutions and limit global adoption, which may also adversely impact demand for our AI-related products and solutions.

Manufacturing semiconductors is a highly complex and precise process, requiring production in a tightly controlled, clean environment. Minute impurities in our manufacturing materials, contaminants in the manufacturing environment, manufacturing equipment failures, and other defects can cause our products to be non-compliant with customer requirements or otherwise nonfunctional. We face an inherent business risk of exposure to warranty and product liability claims in the event thatif our products fail to perform as expected or suchtheir failure of our products results, or is alleged to result, in bodily injury or property damage (or both). In addition, if any of our designed products are or are alleged to be defective, we may be required to participate in their recall. As suppliers become more integrally involved in electrical design, OEMs are increasingly expecting them to warrant their products and are looking to them for contributions when faced with product liability claims or recalls. A successful warranty or product liability claim against us in excess of our available insurance coverage, if any, and established reserves, or a requirement that we participate in a product recall, could have material adverse effects on our business, results of operations and financial condition. Additionally, in the event thatif our products fail to perform as expected or suchtheir failure of our products results in a recall, our reputation may be damaged, which could make it more difficult for us to sell our products to existing and prospective customers and could materially adversely affect our business, reputation, results of operations and financial condition. Even if our products meet standard specifications, our customers may attempt to use our products in applications for which our products were not designed or in customer products that were not designed or manufactured properly, resulting in product failures and creating customer satisfaction issues, which may harm our reputation.

We have sizeable sales and operations in the Asia/Pacific region and Europe,Europe andand, although a majority of our revenue is denominated in U.S. dollars, a significant amount of this business is transacted in currency other than U.S. dollars. In addition, while a significant percentageportion of our cash is generated outside the United States, manycost of our liabilities, including our outstanding indebtedness,revenue and certainoperating other cash payments, such as share repurchases,expenses are payable in theforeign United States in U.S. dollars.currencies. As a result, currency fluctuations and changes in foreign exchange regulations can have a material adverse effect on our liquidity and financial condition.

In addition, repatriation of funds held outside the United States could have adverse tax consequences and could be subject to delay due to required local country approvals or local obligations. Foreign exchange regulations may also limit our ability to convert or repatriate foreign currency. AsIf awe result of havinghave a lower amount of cash and cash equivalents in the United States, our financial flexibility may be reduced, which could have a material adverse effect on our ability to make interest and principal payments due under our various debt obligations. Restrictions on repatriation or the inability to use cash held abroad to fund our operations in the United States may have a material adverse effect on our liquidity and financial condition.

We may from time to time be subject to claims that we may be infringing the IP rights of others. If necessary or desirable, we may seek licenses under such IP rights. However, we cannot assure you that we will obtain such licenses or that the terms of any offered licenses will be acceptable to us. The failure to obtain a license from a third party for IP that we use could cause us to incur substantial liabilities or to suspend the manufacture or shipment of products or our use of processes requiring such technologies. Further, we may be subject to IP litigation, which could cause us to incur significant expense, materially adversely affect sales of the challenged product or technologies and divert the efforts of our technical and management personnel, whether or not such litigation is resolved in our favor. In the event of an adverse outcome or pursuant to the terms of a settlement of any such litigation, we may be required to: pay substantial damages or settlement costs; indemnify customers or distributors; cease the manufacture, use, sale or importation of infringing products; expend significant resources to develop or acquire non-infringing technologies; discontinue the use of certain processes; or obtain licenses, which may not be available on reasonable terms, to continue the use, development and/or sale of the allegedly infringing technologies.

If we fail to, or are unable toto, adequately protect the IP we have developed or licensed, our competitive position, business and results of operations could be materially and adversely affected.

Infringement or misappropriation of our IP could result in lost market and revenue opportunities, and if we are unable to enforce and protect our IPIP, it could have an adverse impact on our competitive position and business. Further, our assertion of IP rights often results in the other party seeking to assert alleged IP rights of its own against us, which may materially and adversely impact our business. An unfavorable ruling in these sorts of matters could include money damages or an injunction prohibiting us from manufacturing or selling one or more products, which could in turn negatively affect our business, results of operations or cash flows.

In addition, some of our products and technologies are not covered by any patents or pending patent applications. We seek to protect our proprietary technologies, including technologies that may not be patented or patentable, in part by confidentiality agreements and, if applicable, inventors’ rights agreements with our collaborators, advisors, employees and consultants. We cannot assure you that these agreements will not be breached, that we will have adequate remedies for any breach or that persons or institutions will not assert rights to IP arising out of our research. ShouldIf we befail to, or are unable toto, adequately protect our IP, competitors may develop products or technologies that duplicate our products or technologies, benefit financially from innovations for which we bore the costs of development and undercut the sales and marketing of our products, all of which could have a material adverse effect on our business and results of operations.

Trends, Risks and Uncertainties Related to TechnologyCybersecurity and Data Privacy

We routinely collect and store sensitive data, including confidential and other proprietary information about our business and our employees, customers, suppliers and business partners. The secure processing, maintenance and transmission of this information is important to our operations and business strategy. We have experienced and expect to continue to experience disruptions, failures or breaches of our information technology environment, such as those caused by computer viruses, illegal hacking, criminal fraud or impersonation, acts of vandalism or terrorism or employee error. Our cybersecurity measures and/or those of our third-party service providers and/or customers may not detect or prevent such security breaches. Although we are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business as of the yeardate endedof Decemberthis 31, 2024,report, we continue to devote resources to reduce the risk of or alleviate cybersecurity breaches and vulnerabilitiesvulnerabilities, and those costs could be significant. Although we maintain a cybersecurity program to manage cybersecurity risks, our efforts may not be successful and could result in interruptions and delays that may materially impede our sales, manufacturing operations, distribution or other critical functions. Any compromise of our information security could result in the misappropriation or unauthorized publication of our confidential business or proprietary information or that of other parties with which we do business, an interruption in our operations, the unauthorized transfer of cash or other of our assets, the unauthorized release of customer or employee data or a violation of privacy or other laws. In addition, computer programmers and hackers also may be able to develop and deploy viruses, worms and other malicious software programs that attack our products, or that otherwise exploit any security vulnerabilities, and any such attack, if successful, could expose us to liability to customer claims. Further, AI and quantum computing capabilities mayare beincreasingly being used to identify vulnerabilities and craft increasingly sophisticated cybersecurity attacks. Any of the foregoing could irreparably damage our reputation and business, which could have a material adverse effect on our results of operations. We maintain cyber risk insurance, although an insufficiency or unavailability of insurance coverage could adversely affect our cash flows and overall profitability. Furthermore, our efforts to comply with evolving laws and regulations related to cybersecurity may be costly and any failure to comply could result in investigations, proceedings, investor lawsuits and reputational damage.

Our extensive reliance on, and investments in,on information technology systems, including reliance on third-party service providers, could have a materially adverse impact on our business.business, and our substantial investments in such information technology systems could result in significant potential risks and failures.

Some of these systems are managed or provided by third-party service providers, including certain cloud platform providers. Failure by these third-party service providers to meet their contractual, regulatory and other obligations to us, or our failure to adequately monitor their performance, could result in our inability to achieve expected efficiencies and result in additional costs to correct errors made by such service providers. Depending on the function involved and despite the availability of contractual remedies against these providers, such errors can also lead to business disruption, systems performance degradation, processing inefficiencies or other systems disruptions, the loss or theft of or damage to intellectual property or sensitive data through security breaches or otherwise, incorrect or adverse effects on financial reporting, litigation, claims, legal or regulatory proceedings, inquiries or investigations, fines or penalties, remediation costs, damage to our reputation or have a negative impact on employee morale, all of which can materially adversely affect our business.

In addition, we are currently making, and expect towill continue to make, substantial investments in our information technology systems, infrastructure and personnel, including a new enterprise resource planning system implemented in the third quarter of 2025, in certain cases with the assistance of strategic partners and other third-party service providers. These investments involve replacing existing systems, some of which are older, legacy systems that are less flexible and efficient, with successor systems; outsourcing certain technology and business processes to third-party service providers; makingdeploying changesenhanced toend-to-end existingdigital systemsprocesses (which may include the use of AI); maintaining or enhancing legacy systems that are not currently being replaced; designing or cost effectively acquiring new systems with new functionality; or testing the use and incorporation of AI, including generative AI. These efforts could result in significant potential risks, including failure of the systems to operate as designed, unexpected impacts on related systems or processes, potential loss or corruption of data, failures in security processes and internal controls, cost overruns, implementation delays or errors, disruption of operations, and the potential inability to meet business and reporting requirements. Any system implementation and transition difficulty may result in operational challenges, security failures, reputational harm, and increased costs that could adversely affect our business operations, our relationships with our customers, and results of operations.

The semiconductor industry continues to be subject to increasing environmental regulations, particularly those that control and restrict the use, transportation, emission, discharge, storage and disposal of certain chemicals, elements and materials used or produced in the semiconductor manufacturing process. For example, a number of domestic and foreign jurisdictions regulate, or may seek to regulate, the use of a class of chemicals known as per- and polyfluoroalkyl substances (“PFAS”), which are currently used in our products or the manufacture of some of our products, which may negatively impact our supply chain due to the potentially decreased availability, or non-availability, of PFAS-containing products or suitable alternatives. In addition, our operations and those of our suppliers are further governed by regulations focused on conflict minerals and restrictions on other materials, as well as laws or regulations governing the operation of our facilities, sale and distribution of our products, and real property.

•changes in United States and international environmental or health and safety laws, regulations or policies, including,especially butthose notimplemented limitedwith to,immediate future laws or regulations imposed in response to climate change concerns and conflict mineralseffect;

We incur costs associated with complying with evolving environmental, health and safety laws and regulations and related disclosure obligations such as the Corporate Sustainability Reporting Directive.obligations. Failure to comply with these laws or regulations could subject us to significant costs and liabilities. To the extent that we face unforeseen environmental or health and safety compliance costs or remediation expenses or liabilities that are not covered by indemnities or insurance, we may bear the full effect of such costs, expenses and liabilities, which could materially adversely affect our results of operations and financial condition.

We conductoperate operations worldwideglobally through our foreign subsidiaries and are, therefore, subject to complex income tax and transfer pricing regulations in the United States and foreign jurisdictions. Changes to, or interpretations of, tax legislation or regulations and our operating structure, strategy or investment decisions could significantly increase our effective tax raterate, or affectimpact our tax obligations and ultimately reduce our cash flow from operating activities. In addition, other factors or events, such as changes to our operating structure, strategy and investment decisions, could also increase our future effective tax rate or affect our tax obligations and ultimately reduce our cash flow from operating activities.

Changes in tax laws from internationalInternational and domestic initiatives, such as the OrganizationOrganisation for Economic Co-operation and Development's base erosion and profit shifting project and potential U.S. tax reforms, could adversely affect our future reported results of operations or the way we conduct our business. Most of our income is taxable in the United States with a significant portion qualifying for preferential treatment as foreign-derived intangible income (“FDII”). Beginning in 2026, the effective rate for FDII increases from 13% to 16%. Additionally, if U.S. rates increase and/or the FDII deduction is eliminated or reduced, our provision for income taxes, results of operations, and cash flows could be adversely (potentially materially) affected. Furthermore, ifIf our customers move manufacturing operations to the United States, our FDII deduction may be reduced.

These types of initiatives and changes, ifas they are adopted or enacted, may increase tax uncertainty and may adversely affect our provision for income taxes, which could have a material impact on our results of operations and financial condition.

ManyThe expectations of our stakeholders with respect to corporate social and environmental matters are not uniform and can change rapidly. Some investors also expect companiesus to disclose corporate social and environmental policies, practices and metrics under voluntary disclosure standards and frameworks.frameworks while others are critical of or oppose such initiatives. We periodically communicate our strategies, goals and targets related to our corporate social and environmental policies and programs. These strategies, goals and targets, and their underlying assumptions and projections, reflect our current plans and aspirations, but we may be unable to achieve them. It is also possible that our investors might not be satisfied with our policies, programs, goals, performance and related disclosures, or the speed of their adoption, implementation and measurable success, or that we have adopted such policies, programs and commitments at all.

Furthermore, in lightpursuit of our goal to achieve net zero emissions by 2040, or in response to future customer or investor expectations and regulatory requirements, we may take certain actions to pursue our goal of generating net-zero emissions or to alter our processes that may result in material expenditures that could impact our financial condition or results of operations and/or disrupt our existing operations.

As of December 31, 2024,2025, we had $3,379.9$3,004.9 million of outstanding principal relating to our indebtedness. We may need to incur additional indebtedness in the future to repay or refinance other outstanding debt, to make acquisitions or for other purposes, and if we incur additional debt, the related risks that we now face could intensify. As of December 31, 2024,2025, we had approximately $1.1$1.5 billion available for future borrowings under the Revolving Credit Facility. The degree to which we are leveraged could have important consequences tofor our potentialbusiness and current investors,operations, including impacting our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, and general corporate purposes.

Our ability to generate sufficient cash flow from operating activities to make required payments on our debt obligations will depend on our future financial performance, which will be affected by a range of economic, competitive, and business factors, many of which are outside of our control. If we do not generate sufficient cash to satisfy our debt obligations as they come due, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling additional assets, reducing or delaying capital investments, or seeking to raise additional capital. We cannot assure you that any refinancing would be possible, that any assets could be sold, or, if sold, of the timing of the sales and the amount of proceeds realized from those sales, or that additional financing could be obtained on acceptable terms, if at all, or would be permitted under the terms of our various debt instruments then in effect.

Furthermore, we cannot assure you that, if we were required to repurchase any of our debt securities upon a change of control or other specified event, our assets or cash flow would be sufficient to fully repay borrowings under our outstanding debt instruments or that we would be able to refinance or restructure the payments on those debt securities. If we are unable to repay, refinance or restructure our indebtedness under our collateralized debt, the holders of such debt could proceed against the collateral securing that indebtedness, which could materially negatively impact our results of operations and financial condition. A default under our committed credit facilities, including our Credit Agreement, could also limit our ability to make further borrowings under those facilities, which could materially adversely affect our business and results of operations. In addition, to the extent we are not able to borrow or refinance debt obligations, we may have to issue additional shares of our common stock or instruments convertible into common stock, which would have a dilutive effect to the stockholders immediately prior to such issuance.

Borrowings under certain of our facilities from time to time, including under our Credit Agreement, are at variable rates of interest and as a result expose us to interest rate risk. Interest rates increased throughout 2022 and 2023. While interest rates have stabilized during 2024,2025, if interest rates increase or remain at elevated levels, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. We may not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk. To the extent the risk materializes and is not fully mitigated, the resulting increase in interest expense could have a material adverse effect on our results of operations. Further, significant changes in our credit rating, disruptions in the global financial markets, including bank failures, or incurrence of new or refinancing of existing indebtedness at higher interest rates could have a material and adverse effect on our access to and cost of capital for future financings, and financial condition.

Servicing the Outstanding Notes may require a significant amount of cash, and we may not have sufficient cash flow or the ability to raise the funds necessary to satisfy our obligations under such notes. Our ability to make cash payments in connection with conversions of the 0% Notes or the 0.50% Notes, repurchase any of the Outstanding Notes in the case of an applicable repurchase-triggering event under the respective indentures or repay such notes at maturity will depend on market conditions and our future performance, which is subject to economic, financial, competitive, and other factors beyond our control. There is also no assurance that we will be able to refinance the Outstanding Notes on favorable terms, or at all.

In certain circumstances, aan takeoveracquisition of our Company and similar triggering events could also trigger an option of the holders of the 0% Notes, the 0.50% Notes and the 3.875%Outstanding Notes to require us to repurchase such notes. This may have the effect of delaying or preventing a takeover of our Company that would otherwise be beneficial to the holders of the 0% Notes, the 0.50% Notes, the 3.875%Outstanding Notes and our common stock, which could materially decrease the value of such notes and of our common stock.

Although we have adopted a share repurchase program, we are not obligated to repurchase a specified number or dollar value of shares under our share repurchase program or at all. The amount, timing, and purchases under our share repurchase program, if any, are influenced by many factors and may fluctuate based on our operating results, cash flows, and priorities for the use of cash and because of changes in tax laws, and the market price of our common stock. In addition, we cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term shareholder value. Holders of our common stock should be aware that repurchases of our common stock under any repurchase plan then in effect are discretionary and may be suspended or discontinued at any time for any reason regardless of our financial position.

We may be unable to successfully make or integrate strategic acquisitions, joint venturesventures, collaborations or strategic investments, which could materially adversely affect our business, results of operations and financial condition.

We have made, and may continue to make, strategic acquisitions, investments and other alliances including the formation of joint ventures or collaborations that involve significant risks and uncertainties. Successful acquisitionsacquisitions, collaborations and alliances in our industry require, among other things, efficient integration and aligning of product offerings and manufacturing operations and coordination of sales and marketing and research and development efforts, often in markets or regions in which we have less experience. Risks related to successful integration of an acquisition include, but are not limited to: (1) the ability to integrate information technology and other systems; (2) issues not discovered in our due diligence; (3) customers responding by changing their existing business relationships with us or the acquired company; (4) diversion of management’s attention from our day to day operations; and (5) loss of key employees post-integration. In addition, we may incur unexpected costs or taxes resulting from the acquisition or integration of the newly acquired business. Missteps or delays in integrating our acquisitions, which could be caused by factors outside of our control, or our failure to realize the expected benefits of the acquisitions on the timeline we anticipate, could materially adversely affect our results of operations and financial condition.

Depending on the level of our ownership interest in and the extent to which we can exercise control over the acquired business, we may be required by U.S. generally accepted accounting principles ("GAAP") and SEC rules and regulations to consolidate newly acquired businesses into our consolidated financial statements. The acquired businesses may not have independent audited financial statements or statements prepared in accordance with GAAP, or the acquired businesses may have financial controls and systems that are not compatible with our financial controls and systems, any of which could materially impair our ability to properly integrate such businesses into our consolidated financial statements on a timely basis. Any revisions to, inaccuracies in or restatements of our consolidated financial statements due to accounting for our acquisitions could have a material adverse effect on our financial condition and results of operations.

You should read the following discussion in conjunction with our audited historical consolidated financial statements, including the notes thereto, which are included elsewhere in this Form 10-K. Management's Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties, and other factors and speak only as of the filing date. Actual results could differ materially because of the factors discussed in "Risk Factors" and elsewhere in this Form 10-K.

Our revenue for the year ended December 31, 20242025 was $7,082.3$5,995.4 million, representing a decrease of 14.2%15.3% from $8,253.0$7,082.3 million for the year ended December 31, 2023.2024. During 2024,2025, we reported net income attributable to onsemi of $1,572.8$121.0 million compared to $2,183.7$1,572.8 million in 2023.2024. Our operating income totaled $84.2 million during 2025 compared to $1,767.7 million during 2024 compared to $2,538.7 million during 2023.2024. Our gross margin decreased by approximately 1701,230 basis points to 33.1% in 2025 from 45.4% in 20242024. from 47.1% in 2023. The decrease in ourOur operating results waswere primarilysignificantly dueimpacted by restructuring, asset impairment and other charges resulting from our 2025 Manufacturing Realignment Program. See Note 7: ''Restructuring, Asset Impairments and Other, net'' for additional information. We also continued to experience decreased demand in our automotive and industrial end-markets resulting in lower sales volumes and the corresponding underutilization of our manufacturing facilities. See discussion under "Results of Operations" for the reasons for the fluctuations year-over-year.

The semiconductor industry has traditionally been highly cyclical, and has often experienced significant downturns in connection with, or in anticipation of, declines in general economic conditions. During 2024,2025, the semiconductor industry continued to experience a softening demand and uncertainty due to macroeconomic factors and the geopolitical environment. WeIn arethis monitoringenvironment, thewe economichave environmentfocused on operational excellence and relatedcash forecastsflow for indicators that would suggest the global economic slowdown could continue for an extended period.generation. Given the current conditions, we are actively managing and have taken corrective actions in our manufacturing capacity and spending to align with the forecasted demand. We intend to continue these actions during 2025; however, we believe the current volatility in general economic conditions is not expected to have a significant impact on our long-term strategic and growth initiatives.2026.

We continue to evaluateimplement cost-saving initiatives to be able to align our overall cost structure, capital investments and other expenditures with our expected revenue, spending and capacity levels to help offset softening demand,demand and increased manufacturing and operating costs. We have taken, and continue to take actions, including but not limited to, exiting product lines that do not enhance gross margin or satisfy strategic objectivesobjectives. andWe made meaningful progress in aligning internal manufacturing capacity and resources to external demand.

See Note 7: ''Restructuring, Asset Impairments and Other Charges,Other, net'' in the notes to our audited consolidated financial statements included elsewhere in this Form 10-K for information relating to our most recent cost-saving initiatives.

Revenue was $5,995.4 million and $7,082.3 million and $8,253.0 million for 20242025 and 2023,2024, respectively. The decrease from 20232024 to 20242025 of $1,170.7$1,086.9 million, or 14.2%,15.3%, was attributable primarily to lower sales volumes across all reportable segments, which are further explained below. We had one customer, a distributor, whose revenue accounted for approximately 11% and 10% of ourthe total revenue for the yearyears ended December 31, 2024.2025 Thereand was2024, norespectively, customerwith whosesales revenueacross exceededall 10%reportable of total revenue for the year ended December 31, 2023.segments.

Revenue from ISG decreased by $190.5$196.6 million, or approximately 14.5%,17.5%, during 20242025 compared to 2023,2024. whichThis was driven by a decreasedecreases in revenue from our Industrial and Consumer Solutions Division and Automotive Sensing Division of $107.8$177.9 million and $82.7$24.2 million, respectively, primarily due to the decrease in demandmillion in the automotive and industrial end-markets respectively, which was partially offset by increased revenue of $5.5 million in other end-markets.

Revenue by geographic location, based on sales billed from the respective country or regions,region, was as follows (dollars in millions):

Our business, financial condition and results of operations are subject to a number of trends, risks and uncertainties. We review and, where applicable, update our risk factors each quarter. There have been no material changes from the risk factors disclosed in Part I, Item 1A of the 2025 Form 10-K.10-K, other than the addition of the following risk factors:

This Quarterly Report on Form 10-Q includes "forward-looking statements," as that term is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, included or incorporated in this Form 10-Q could be deemed forward-looking statements, particularly statements about our plans, strategiesstrategies, prospects and prospectsour proposed acquisition of Synaptics under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations." Forward-looking statements are often characterized by the use of words such as "believes," "estimates," "expects," "projects," "may," "will," "intends," "plans," "anticipates," "should" or similar expressions, or by discussions of strategy, plans or intentions. All forward-looking statements in this Form 10-Q are made based on our current expectations, forecasts, estimates and assumptions and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements.

Important factors that could cause our actual results to differ materially from those anticipated in the forward-looking statements are described under Part I, Item 1A "Risk Factors" in the 2025 Form 10-K, under Part II, Item 1A. "Risk Factors" and elsewhere in this Form 10-Q and from time to time in our other SEC reports. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information, which speaks only as of the date made, except as may be required by law. Investing in our securities involves a high degree of risk and uncertainty, and you should carefully consider the trends, risks and uncertainties described in the aforementioned reports and subsequent reports filed with or furnished to the SEC before making any investment decision with respect to our securities. The risk factors described hereinin this Form 10-Q and in our 2025 Form 10-K are not all of the risks we may face. Other risks not presently known to us or that we currently believe are immaterial may materially affect our business. If any of the trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline and you could lose all or part of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

You should read the following discussion in conjunction with our audited historical consolidated financial statements, which are included in the 2025 Form 10-K, and our unaudited consolidated financial statements for the fiscal quarter ended AprilJuly 3, 2026, which are included elsewhere in this Form 10-Q. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on expectations and assumptions as of the date of this Form 10-Q and are subject to risks, uncertainties and other factors. Actual results could differ materially because of the factors discussed below or elsewhere in this Form 10-Q. See Part II, Item 1A. "Risk Factors" of this Form 10-Q and Part I, Item 1A. "Risk Factors" of the 2025 Form 10-K.

We offerdeliver intelligent power and intelligent sensing solutionstechnologies that driveenable electrification, energy efficiency, safety, and automation inacross automotive, industrial, and other end‑markets, including AI data center.center end-markets. Our intelligent power technologies enable electrified drivetrain and power management applications in the automotive industry and support efficient fast‑charging systems. Our intelligent sensing technologies enable advanced safety applications in automotive through industry‑leading performance and reliability.

During the first quarterhalf of 2026, the Company continued to engage in additional restructuring and cost reduction initiatives under its previously disclosed multi‑year manufacturing realignment program to better align manufacturing capacity and capabilities with anticipated long-term needs.

Additionally,We weexpect to incur total severance costs and related benefit expenses of $25.0 million related to the termination of approximately 650 employees. Of this, approximately $2.5 million and $22.7 million was recognized during the quarter and six months ended July 3, 2026, respectively. We also recorded non-cash impairment charges of $147.0$16.3 million and $163.3 million during the quarter and six months ended AprilJuly 3, 20262026, respectively, related to previous investments in manufacturing equipment at certain manufacturing facilities pursuant to held-for-sale accounting guidance. Other charges of $162.1$22.4 million and $184.5 million for the quarter and six months ended AprilJuly 3, 2026, related to contract termination costs and other facility exit activities during the quarter ended July 3, 2026 consisted primarily ofand accelerated depreciation of leasehold improvements and accelerated amortization of ROU assets that were abandoned in connection with the 2025 and 2026 Manufacturing Realignment Programs.Programs during the six months ended July 3, 2026. The total of the aforementioned costs was included within Restructuring, Asset Impairments and Other, Net in the Consolidated Statement of Operations. We also recorded $13.4 million of restructuring-related charges for the quarter ended July 3, 2026 within Cost of revenue in the Consolidated Statement of Operations.

During the quarter ended AprilJuly 3, 2026, we repurchased approximately 5.73.1 million shares of common stock for an aggregate purchase price of $348.6$334.7 million. During the six months ended July 3, 2026, we repurchased approximately 8.8 million shares of common stock for an aggregate purchase price of $683.3 million. For additional information, see Note 8: ''Earnings Per Share and Equity'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q.

Quarter Ended AprilJuly 3, 2026 compared to the Quarter Ended AprilJuly 4, 2025

Revenue was $1,513.3$1,603.5 million and $1,445.7$1,468.7 million for the quarters ended AprilJuly 3, 2026 and AprilJuly 4, 2025, respectively, representing an increase of $67.6$134.8 million, or approximately 5%,9%, year over year due to increased demand across all end-markets. We had one customer, a distributor, whose revenue accounted for approximately 12%14% and 10%12% of our total revenue for each of the quarters ended AprilJuly 3, 2026 and AprilJuly 4, 2025, respectively, across all reportable segments.

Revenue from PSG increased by $91.5$130.8 million, or approximately 14%,19%, for the quarter ended AprilJuly 3, 2026 compared to the quarter ended AprilJuly 4, 2025 due to increased demand. This was driven by an increase in revenue of $53.1$44.5 million, $31.0$22.4 million,million and $7.4$63.9 million in the automotive, other,industrial and industrialother end-markets, respectively.

Revenue from AMG decreased by $26.0$10.2 million, or approximately 5%,2%, for the quarter ended AprilJuly 3, 2026 compared to the quarter ended AprilJuly 4, 20252025, attributable to lower demand in certain end-markets. This wasprimarily driven by a decrease in revenue of $16.3$11.5 million andwithin $14.7the millionindustrial inend-market due to lower demand, while the sales within the automotive and other end-markets,end-markets respectively,remained whichrelatively was partially offset by an increase of $5.0 million within the industrial end-market.consistent.

Revenue from ISG increased by $2.1$14.2 million, or approximately 1%,7%, for the quarter ended AprilJuly 3, 2026 compared to the quarter ended AprilJuly 4, 2025 due to increased demand. This was driven by an increase in revenue of $4.6$2.6 million, $5.6 million and $6.0 million in the automotive, industrial end-market, which was partially offset by a decrease in revenue of $1.4 million and $1.1 million in the automotive and other end-markets.

Gross profit increased by $289.3$64.4 million, or approximately 98%,12%, to $583.1$616.3 million for the quarter ended AprilJuly 3, 2026 compared to $293.8$551.9 million for the quarter ended AprilJuly 4, 2025 primarily due to theincreased absencerevenue ofacross $237.7all millionend-markets, ofimproved excessmanufacturing utilization and obsoletefavorable inventorymix chargeswithin andcertain abusiness $43.9segments millionOur write‑offgross ofmargin consumablesincreased andby manufacturing0.8 suppliespercentage recognizedpoints duringfrom 37.6% for the quarter ended AprilJuly 4, 2025,2025 whichto did38.4% notfor reoccurthe inquarter ended July 3, 2026. The increase was primarily driven by improved manufacturing utilization and favorable mix within certain business segments.

PSG gross profit increased by $77.2$49.5 million, primarily driven by higher revenue across all end‑markets and improved absorption resulting from higher manufacturing utilization. PSG gross margin increased by 8.11.9 percentage points to 27.2%27.8% from 19.1%,25.9%, primarily due to the absence of a $43.9 million write‑off of consumables and manufacturing supplies charges during the quarter ended April 4, 2025, as well as improved utilization and operating leverage on higher volumes during the quarter ended AprilJuly 3, 2026.

AMG gross profit decreasedincreased by $11.3$9.4 million, primarily driven by the decline in demand within the automotivemillion and other end-markets. AMG gross margin increased by 0.52.7 percentage points to 53.6%53.4% from 53.1%,50.7%, primarily due to a more favorable product mix, including a higher proportion of higher‑marginhigher-margin offerings,products, which partiallymore than offset the impact of lower overallindustrial volume.end-market revenue.

Research and development expenses were $144.3$140.8 million for the quarter ended AprilJuly 3, 2026, as compared to $164.1$143.8 million for the quarter ended AprilJuly 4, 2025, representing a decrease of $19.8$3.0 million, or approximately 12%.2%. The decrease was primarily attributable to a decrease in production material costs and other variable expenses.

Selling and marketing expenses were $63.0$63.3 million for the quarter ended AprilJuly 3, 2026, as compared to $68.3$63.3 million for the quarter ended AprilJuly 4, 2025, representing a decrease of $5.3 million, or approximately 8%. The decrease was primarily attributable to lower payroll‑related expenses and reduced commission costs.2025.

General and administrative expenses were $89.4$101.9 million for the quarter ended AprilJuly 3, 2026, as compared to $84.4$91.2 million for the quarter ended AprilJuly 4, 2025, representing an increase of $5.0$10.7 million, or approximately 6%.12%. The increase was primarily attributable to third-party acquisition costs for the proposed Synaptics Merger and higher payroll‑related expenses, including increased investments in corporate and operational support functions.expenses.

Amortization of intangible assets was $10.5 million for the quarter ended AprilJuly 3, 2026, as compared to $11.4$11.0 million for the quarter ended AprilJuly 4, 2025, representing a decrease of $0.9$0.5 million, or approximately 8%.5%.

Restructuring, asset impairments and other, net was $329.3$41.2 million for the quarter ended AprilJuly 3, 2026, as compared to $539.3$49.2 million for the quarter ended AprilJuly 4, 2025. Charges incurred for the quarter ended AprilJuly 3, 2026 relaterelated to restructuring actions during the period. See Note 5: ''Restructuring, Asset Impairments and Other, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information.

Interest expense decreased by $5.3$4.2 million to $12.7$13.7 million during the quarter ended AprilJuly 3, 2026, as compared to $18.0$17.9 million during the quarter ended AprilJuly 4, 2025, due to the repayment of the Revolving Credit Facility on December 31, 2025. Our average gross long-term debt for the quarter ended AprilJuly 3, 2026 was $3,004.9$3,754.9 million at a weighted-average interest rate of 1.7%,1.5%, as compared to $3,379.9 million at a weighted-average interest rate of 2.1% for the quarter ended AprilJuly 4, 2025.

Interest income decreased by $8.9$7.8 million, or approximately 33%,31%, to $17.7$17.4 million during the quarter ended AprilJuly 3, 2026 compared to $26.6$25.2 million during the quarter ended AprilJuly 4, 2025. The decrease was primarily attributable to lower interest rates earned on cash equivalents and short‑term investments, as well as lower average cash and investment balances during the period.investments.

During the quarter ended AprilJuly 3, 2026, other income was $3.8$8.6 million compared to other expenseincome of $4.1$1.5 million during the quarter ended AprilJuly 4, 2025.2025, primarily attributable to increased dividend income.

Income Tax BenefitProvision

We recorded an income tax benefitprovision of $11.7$43.4 million and $75.8$30.5 million for the quarters ended AprilJuly 3, 2026 and AprilJuly 4, 2025, respectively, representing effective tax rates of 26.2%16.0% and 13.5%,15.1%, respectively. The higher effective tax rate in 2026 was due to the impact of discrete benefits recognized during the quarter.