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

We realize a substantial portion of our revenue from communications equipment customers.customers, including cloud service providers and data center operators. This market is highly competitive, particularly in the area of price. Should any of our larger customers in this market fail to effectively compete with their competitors, they could reduce their orders to us or experience liquidity difficulties, either of which could have the effect of substantially reducing our revenue and net income. In addition, recent customer finished goods inventory adjustments reduced demand for our services from this end market, negatively impacting our revenue during fiscal 2024. There can be no assurance when this adjustment will be complete or that we will not experience declines in demand in this or in other end markets in the future.

•conditions in the global economy as a whole and in the industries we serve, which have been significantly impacted by supply chain disruptions, inflationary pressures andpressures, higher interest rates and, more recently, significant changes in U.S. and international trade policies;

•fluctuations in component prices, component shortages and extended component lead times caused by high demand and supply chain constraints and disruptions caused by natural disasters, geopolitical conditions and events, such as the war in Ukraine andUkraine, conflict in the Middle East,East naturaland disasterstensions between the U.S. and China, or otherwise;

•changes in trade and tax laws that may result in us or our customers being subject to increased taxes, duties and tariffstariffs, and import and export restrictions, which could increase our costs and/or reduce our customers’ willingness to use our services in countries in which we are currently manufacturing their products;

A key part of our strategy of providing end-to-end manufacturing solutions is to grow our CPS businesses, which supplies printed circuit boards,PCBs, backplane and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts, memory, RF, optical and microelectronic solutions, and data storage solutions and design, engineering, logistics and repair services and our SCI defense and aerospace products. A decrease in orders for these components, products and services can have a disproportionately adverse impact on our profitability since these components, products and services generally yield higher margins than our core IMS business. In addition, in order to grow this portion of our business profitably, we must continue to make substantial investments in the development of our product development capabilities, research and development activities, test and tooling equipment and skilled personnel, all of which reduce our operating results in the short term. The success of our CPS businesses also depends on our ability to increase sales of our proprietary products, convince our customers to purchase our components rather than those of third parties for use in the manufacture of their products, and expand the number of our customers who contract for our design, engineering, logistics and repair services. We may face challenges in achieving commercially viable yields and difficulties in manufacturing components in the quantities and to the specifications and quality standards required by our customers, as well as in qualifying our components for use in our customers’ designs. Our proprietary products and design, engineering, logistics and repair services must compete with products and services offered by established vendors which focus solely on development of similar technologies or the provision of similar services. Any of these factors could reduce the revenue and margins of our CPS businesses, which in turn would have an adverse and potentially disproportionate effect on our overall revenue and profitability.

Current U.S. trade policy could increase the cost of using both our onshore and offshore manufacturing services for our U.S. customers, leading them to reduce their orders to us.us; unrecovered tariffs would reduce our gross margins.

We are subject to a number of laws and regulations relating to the export of U.S. technology, anti-corruption and the award, administration and performance of U.S. government contracts and subcontracts. In particular, our activities must comply with the restrictions relating to the export of controlled technology and sales to denied or sanctioned parties contained in the International Traffic in Arms Regulations, the U.S. Export Administration Regulations and sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department. The U.S. Commerce Department has released rules that in some cases significantly restrict the export of U.S. technology to or from China. These laws could negatively impact our operations in China by making it more difficult to import components containing U.S. technology into China and to export finished products containing such components out of China. Any failure to comply with export control laws could result in significant fines or penalties. We must also comply with regulations relating to the award, administration and performance of U.S. government contracts and subcontracts with respect to our defense business, including regulations that govern price negotiations, cost accounting standards, procurement practices, termination at the election of the government and many other aspects of performance under government contracts and subcontracts. These laws and regulations are complex, require extensive compliance efforts and expenditures in the form of additional systems and personnel, and, in some cases, require us to ensure that our suppliers adhere to such regulations. Furthermore, our compliance with such regulations is subject to audit or investigation by governmental authorities. From time to time, we receive formal and informal inquiries from government agencies and regulators regarding our compliance. For example, in 2023 we responded to several Civil Investigative Demands from the U.S. Department of Justice relating to certain contracts, projects, proposals, and business activities of our SCI subsidiarysubsidiary, and in 2024 a qui tam lawsuit filed by a former SCI employee was recently unsealed relating to these matters. Should we be found to have violated one or more government contracting laws or regulations, we could become subject to civil damages (which in some cases could be trebled) or criminal penalties and administrative sanctions, including appointment of government monitors, termination of our government contracts and, ultimately, debarment from doing further business with the U.S. government. Any of such results would increase our expenses, reduce our revenue and damage our reputation as both a commercial and government supplier.

We are subject to various federal, state, local and foreign environmental laws and regulations, including those governing the use, generation, storage, discharge and disposal of hazardous substances and waste in the ordinary course of our manufacturing operations. If we violate environmental laws or if we own or operate, or owned or operated in the past, a site at which we or a predecessor company caused contamination, we may be held liable for damages and the costs of remedial actions. For example, in April 2023, a court issued a ruling finding us and other defendants liable for certain investigation and remediation costs relating to a site owned by a predecessor company in Southern California at which a disposal was alleged to have occurred, which claim has since been settled subject to court approval.settled. Although we estimate and regularly reassess our potential liability with respect to violations or alleged violations and accrue for such liability, our accruals may not be sufficient. Any increase in existing reserves or establishment of new reserves for environmental liability would reduce our net income. Our failure or inability to comply with applicable environmental laws and regulations could also limit our ability to expand facilities or could require us to acquire costly equipment or to incur other significant expenses to comply with these laws and regulations.

We prepare our consolidated financial statements in conformity with GAAP. The preparation of our financial statements in accordance with GAAP requires that we make estimates and assumptions that affect the recorded amounts of assets, liabilities and net income during the reporting period. A change in the facts and circumstances surrounding those estimates could result in a change to our estimates and could impact our future operating results. GAAP is subject to interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC and various bodies formed to interpret and create accounting policies. A change in those policies can have a significant effect on our reported results and may affect our reporting of transactions which are completed before a change is announced. For example, in fiscal 2019, we implemented the new revenue recognition standard, which is complex and requires significant management judgment. Although we believe the judgments we applied in implementation of the new revenue recognition standard are appropriate, there can be no assurance that we will not be required to change our judgments relating to implementation of such standard in the future, whether as a result of new guidance or otherwise. A significant change in our accounting judgments could have a significant impact on our reported revenue, gross profit, assets and liabilities. In general, changes to accounting rules or challenges to our interpretation or application of the rules by regulators may have a material adverse effect on our reported financial results or on the way we conduct business.

Our system of internal and disclosure controls and procedures was designed to provide reasonable assurance of achieving its objectives. However, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been or will be detected. As a result, there can be no assurance that our system of internal and disclosure controls and procedures will be successful in preventing all errors, theft and fraud, or in informing management of all material information in a timely manner. For example, as disclosed in Item 9A of this annual report on Form 10-K, we have identified several material weaknesses relating to the control environment at one of our divisions and a material weakness in our internal controls over accounting for certain payments received for inventory.

Finally, corporate governance, public disclosure and compliance practices continue to evolve based upon continuing legislative action, SEC rulemaking and policy positions taken by large institutional stockholders and proxy advisors. As a result, the number of rules, regulations and standards applicable to us may become more burdensome to comply with, could increase scrutiny of our practices and policies by these or other groups and increase our legal and financial compliance costs and the amount of time management must devote to governance and compliance activities. For example, the SEC has recently adopted rules requiring that issuers provide significantly increased disclosures concerning cybersecurity risk management, strategy, governance and incident reporting and adopt more stringent executive compensation clawback policies and several agencies and governments, including the SEC, the EU and California have enacted legislation or adopted rules that will require large companies to provide significant disclosures concerning their greenhouse gas emissions and financial risks relating to climate change. Increasing regulatory burdens and corporate governance requirements impose both internal and external costs on us, require significant management attention and oversight and could make it more difficult for us to attract and retain qualified members of our Board of Directors and qualified executive officers.

Our liquidity is dependent on a number of factors, including profitability, business volume, inventory levels, the extension of trade credit by our suppliers, the degree of alignment of payment terms from our suppliers with payment terms granted to our customers, the amount we invest in our facilities and equipment, the timing of acquisitions and divestitures, the schedule for repayment of our outstanding indebtedness, the timing of stock repurchases, the amount available to borrow under theour Fifthcredit Amended and Restated Credit Agreement, dated as of September 27, 2022, as amended (the “Credit Agreement”),facilities, and the amount of accounts receivable eligible and accepted for sale under our factoring programs. In the event we need or desire additional liquidity beyond the sources described above to maintain or expand our business levels, make acquisitions or repurchase stock, there can be no assurance that such additional liquidity will be available on acceptable terms or at all. The sale of receivables under our factoring programs is subject to the approval of the banks or customers involved and there can be no assurance that we will be able to sell the maximum amount of receivables permitted by these programs when desired. In addition, because the interest rate we pay for borrowings under theour Creditcredit Agreementfacilities and the interest rate used to calculate the purchase price for receivables under our factoring programs are variable,variable. the currently highWhen interest rates resultingare fromhigh, actions taken by the Federal Reserve to reduce inflationthis both increases the amount of interest expense we pay, which reduces net income, and also reduces the amount of proceeds we receive from purchasers under our receivables factoring program, which reduces operating cash flow.

Our Creditcredit Agreementfacilities containscontain covenants that may adversely impact our business; the failure to comply with such covenants or the occurrence of an event of default could cause us to be unable to borrow additional funds and cause our outstanding debt to become immediately payable.

Our Creditcredit Agreementfacilities containscontain a maximum leverage and minimum interest coverage ratio and a number of restrictive covenants, including restrictions on incurring additional debt, making investments and other restricted payments, selling assets and paying dividends, subject to certain exceptions, with which we must comply. Collectively, these covenants could constrain our ability to grow our business through acquisition or engage in other strategic transactions. Such facilityfacilities also containscontain customary events of default. Finally, such facilityfacilities includesinclude covenants requiring, among other things, that we timely file quarterly and annual financial statements with the SEC, comply with all laws, pay all taxes and maintain casualty insurance. If we are not able to comply with these covenants or if an event of default were to occur and not be cured or waived by our lenders, all of our outstanding debt would become immediately due and payable and the incurrence of additional debt under our Creditcredit Agreementfacilities would not be allowed, either of which would have a material adverse effect on our liquidity and ability to continue to conduct our business.

We are or may become subject to income, sales, value-added, goods and services, withholding and other taxes in the United States and various foreign jurisdictions. Significant judgment is required in determining our worldwide provision for taxes and, in the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Our effective income tax rates and liability for other taxes could increase as a result of changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in enacted tax laws, the effectiveness of our cash and tax management strategies, our ability to negotiate advance pricing agreements with foreign tax authorities, compliance with local trade laws and other factors. International initiatives require multinational enterprises, like ours, to report profitability on a country-by-country basis, which could increase scrutiny by foreign tax authorities. In addition, our tax determinations are regularly subject to audit by tax authorities. For example, we are currently undergoing audits of our tax returns for certain recent tax years in a number of jurisdictions, including the United States. In connection with one such audit, on November 17, 2023, we received a Revenue Agent’s Report (“RAR”) from the Internal Revenue Service (the “IRS”), which asserted an underpayment of tax of approximately $8 million for fiscal 2009. The proposed underpayment results from the IRS’s proposed disallowance of a $503 million worthless stock deduction previously taken by us. We disagree with the IRS’s position as asserted in the RAR and are vigorously contesting this matter through the applicable IRS administrative and judicial procedures, as appropriate. However, an adverse result in this matter or additional developments in these or future audits would adversely affect our tax provisions, including through the disallowance or reduction of deferred tax assets or the assessment of back taxes, interest and penalties, any of which could result in a material increase to our income tax expense and therefore a material decrease in our net income and could have a material adverse impact on our condensed consolidated financial statements. Further, as of September 28,27, 2024,2025, we have cumulative net operating loss carryforwards (“NOLs”) for state and foreign tax purposes of $255$200 million and $446$481 million, respectively, and none for federal. The state NOLs beginbegan expiring in fiscal 2025, and expire at various dates through September 26, 2043. Certain foreign NOLs beginbegan expiring in fiscal 2025. WhenAs our NOLs expire, our state income tax rates will increase, which will reduce our net income.

We carry various forms of business and liability insurance in types and amounts we believe are reasonable and customary for similarly situated companies in our industry. However, our insurance program does not generally cover losses due to failure to comply with typical customer warranties for workmanship, product and medical device liability, intellectual property infringement, product recall claims, or environmental contamination. In particular, our insurance coverage with respect to damages to or closure of our facilities, or damages to our customers’ products caused by cyberattacks, outages and certain natural disasters, such as earthquakes, epidemics and pandemics (such as the COVID-19 pandemic),pandemics, is limited and is subject to policy deductibles, coverage limits, and exclusions, and as a result, may not be sufficient to cover all of our losses. For example, our policies have very limited coverage for damages due to earthquakes or losses caused by business disruptions. In addition, such coverage may not continue to be available at commercially reasonable rates and terms. Our policies generally have deductibles and/or limits or may be limited to certain lines or business or customer engagements that reduce the amount of our potential recoveries from insurance. As a result, not all of our potential business losses are covered under our insurance policies. Should we sustain a significant uncovered loss, our net income will be reduced. Additionally, if one or more counterparties to our insurance coverage were to fail, we would bear the entire amount of an otherwise insured loss.

Our activities, including manufacturing, administration and information technology management, can be adversely affected by natural disasters such as major earthquakes, hurricanes, floods, tsunamis, tornadoes, fires and epidemics or pandemics, such as the COVID-19 pandemic.pandemics. Climate change may cause certain of these events to become more severe and therefore more damaging. In the event of a major natural disaster affecting one or more of our facilities, our operations and management information systems, which control our worldwide procurement, inventory management, shipping and billing activities, could be significantly disrupted. Such events could delay or prevent product manufacturing for an extended period of time. Any extended inability to continue our operations at affected facilities following such an event could reduce our revenue. Further, geopolitical conditions and events like the war in Ukraine andUkraine, conflict in the Middle East and tensions between the U.S. and China may also impact our operations by affecting our supply chain or impacting our plants located in the region of instability.

The stock market in recent years has experienced significant price and volume fluctuations that have affected our stock price. These fluctuations have often been unrelated to our operating performance. Factors that can cause such fluctuations include announcements by our customers, suppliers, competitors or other events affecting companies in the electronics industry, such as component shortages, changes in trade and tax policies, currency fluctuations, the impact of natural disasters and global events, such as the COVID-19 pandemic, geopolitical tensions, such as the war in Ukraineconditions and conflictevents, in the Middle East,and general market fluctuations and macroeconomic conditions, including concernsinflation, about inflationrecession and recession,slowing global economic growth, any of which may cause the market price of our common stock to fluctuate widely.

This report on annualAnnual reportReport on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including any statements regarding trends in future revenue or results of operations, gross margin, operating margin, expenses, earnings or losses from operations, or cash flow; any statements of the plans, strategies and objectives of management for future operations and the anticipated benefits of such plans, strategies and objectives; any statements regarding future economic conditions or performance; any statements regarding litigation or pending investigations, claims or disputes; any statements regarding the timing of closing of, future cash outlays for, and benefits of acquisitions and other strategic transactions, including our IndianIndia joint venture and our acquisition of ZT Group Int’l, Inc. (“ZT Systems”); any statements regarding expected restructuring costs and benefits; any statements concerning the adequacy of our current liquidity and the availability of additional sources of liquidity; any statements regarding the potential impact of any future outbreaks, including outbreaks caused by new variants of COVID-19pandemics on our business, results of operations and financial condition; any statements regarding the potential impact of supply chain shortages and inflation on our business; any statements regarding the future impact of tariffs andtariffs, export controls and evolving trade policies on our business; any statements relating to future tax rates and tax policies and our expectations concerning developments in the audit by the IRS of certain tax returns filed by us, including the potential impact of the IRS revenue agent’s report received by us in November 2023; any statements relating to the expected impact of accounting pronouncements not yet adopted; any statements regarding future repurchases of our common stock; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Generally, the words “anticipate,” “believe,” “plan,” “expect,” “future,” “intend,” “may,” “will,” “should,” “estimate,” “predict,” “potential,” “continue” and similar expressions identify forward-looking statements. Our forward-looking statements are based on current expectations, forecasts and assumptions and are subject to risks and uncertainties, including those contained in Part I, Item 1A of this report. As a result, actual results could vary materially from those suggested by the forward-looking statements. We undertake no obligation to publicly disclose any revisions to these forward-looking statements to reflect events or circumstances occurring subsequent to filing this report with the Securities and Exchange Commission (the “SEC”). Investors and others should note that Sanmina announces material financial information to our investors using our investor relations website (http://ir.sanmina.com/investor-relations/overview/default.aspx), SEC filings, press releases, public conference calls and webcasts. We use these channels to communicate with our investors and the public about Sanmina, its products and services and other issues. It is possible that the information we post on our investor relations website could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in Sanmina to review the information we post on our investor relations website. The contents of our investor relations website are not incorporated by reference into this annualAnnual reportReport on Form 10-K or in any other report or document we file with the SEC.

1) Integrated Manufacturing Solutions (“IMS”). OurIMS IMSis a single operating segment consistsconsisting of printed circuit board (“PCB”) assembly and test, high-level assembly and test and direct-order-fulfillment.

2) Components, Products and Services (“CPS”). Components include advanced printed circuit boards,PCBs, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts. Products include optical, radio frequency (“RF”) and microelectronic design and manufacturing services from our Advanced Microsystems Technologies division; multi-chip package memory solutions from our Viking Technology division; high-performance storage platforms for hyperscale and enterprise solutions from our Viking Enterprise Solutions division; defense and aerospace product,products, design, manufacturing, repair and refurbishment services from our SCI TechnologyTechnology, Inc. (“SCI”) subsidiary; and cloud-based smart manufacturing execution software from our 42Q division. Services include design, engineering, and logistics and repair.

Our only reportable segment for financial reporting purposes is IMS, which represented approximately 80% of our total revenue in 2024.2025. Our CPS business consists of multiple operating segments which do not individually meet the quantitative thresholds for being presented as reportable segments. Therefore, financial information for these operating segments is combined and presented in a single category entitledcalled “CPS”.

A core component of our business strategy is to establishsecure and retain long-term customer partnerships with companies.leading companies in growth industries, capitalizing on our global/regional footprint and unique value proposition in advanced electronics manufacturing. We provide tailored solutions by leveraging our technical capabilities in design, technology, assembly, integration, and after-sales services, aligning them with facilities globally. Historically, we have had substantial recurring sales to existing customers. Sales to our ten largest customers typically represent approximately 50% of our net sales in any given year.sales.

We typically enter into long-term supply agreements with our major OEM customers. These agreements generally have terms ranging from three to five years and cover the manufacture of a range of products. Under these agreements, awe customer typically purchases its requirements for specificmanufacture products to customers’ unique specification leveraging our global factory footprint in particularlocations geographicchosen areasby fromour us.customers. However, these agreements generally do not obligate the customer to purchase minimum quantities of products. In addition, some customer contracts contain cost reduction objectives, which can have the effect of reducing revenue from such customers.

We generate about 80% of our net sales from products manufactured in our foreign operations. The concentration of foreign operations has resulted primarily from a desire on the part of many of our customers to manufacture in lower-cost locations in regions such as Asia, Latin AmericaAmerica, Asia and Eastern Europe and we plan to expand our presence as appropriate to meet the needs of our customers. We also intend to continue to invest in factory automation, process improvements, robotics and artificial intelligence, keeping up with the trends in technology to further enhance our efficiency output.

We believe our end-to-end manufacturing solutions combined with our global supply chain management expertise differentiatesdifferentiate us from our competitors and enablesenable us to better serve the needs of OEMs.OEM customers. However, our business faces many challenges. For example, we compete with a number of companies in each of our key end markets. This includes companies that are much larger than we are and smaller companies that focus on a particular niche product, service or end market. Although we believe we are well-positioned in each of our key end markets and offer many advantages compared to our competitors, competition remains intense and profitably growing our revenues hasare beenoften challenging.constrained by intense competition. Additionally, we are impacted by macroeconomic challenges such as tariffs, inflation, supply chain constraints, foreign currency fluctuations, high interest rates, market volatility,volatility and recession concerns, tariffs and other factorsconcerns that have been and could be in the future exacerbated by geopolitical conflictsenvironment such as the wartensions inbetween Ukraine,the U.S. and other nations, conflict in the Middle East and results of the U.S. presidential election. Although supply chain constraints have been easing, we expect headwinds to our revenue growth that will continuewar in 2025 due to customers absorbing their finished goods inventory in some of our end markets.Ukraine.

Management'sManagement’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). We review the accounting policies used in reporting our financial results on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and related disclosure of contingent liabilities. On an ongoing basis, we evaluate the processprocesses used to develop estimates related to accounts receivable, inventories, income taxes, environmental matters, litigation and other contingencies, as well as estimates related to costs expected to be incurred to satisfy performance obligations under long-term contracts and variable consideration related to such contracts. We base our estimates on historical experience and on various other assumptions that we believe are reasonable for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. We have considered information available to us as of the date of issuance of these financial statements and are not aware of any specific events or circumstances that would require an update to our estimates or judgments, or a revision to the carrying value of our assets or liabilities. Our estimates may change as new events occur and additional information becomes available. Our actual results may differ materially from these estimates.

Revenue Recognition.Recognition— We recognize revenue for the majority of our contracts on an over time basis. This is primarily due to the fact that we do not have an alternative use for the end products we manufacture for our customers and have an enforceable right to payment, including a reasonable profit, for work in progress upon a customer'scustomer’s cancellation of a contract for convenience. In certain circumstances, we recognize over time because our customer simultaneously receives and consumes the benefits provided by our services or, our customer controls the end product as we perform manufacturing services (continuous transfer of control). For these contracts, revenue is recognized on an over time basis using the cost-to-cost method (ratio of costs incurred to date to total estimated costs at completion) which we believe best depicts the transfer of control to the customer.

Changes in our estimates of transaction price and/or costs to complete may result in a favorable or unfavorable impact to revenue and operating income. The impact of changes in estimates on revenue and operating income resulting from application of the cost-to-cost method for recognizing revenue was as follows:

Inventories— We state inventories at the lower of cost (based on standard cost, which approximates first-in, first-out method) and net realizable value. Cost includes raw materials, labor and manufacturing overhead. We regularly evaluate the carrying value of our inventories and make provisions to reduce excess and obsolete inventories to their estimated net realizable values. The ultimate realization of inventory carrying amounts is affected by changes in customer demand for inventory that customers are not contractually obligated to purchase and inventory held for specific customers who are experiencing financial difficulties. Inventory write-downs are recorded based on forecasted demand, past experience with specific customers, the ability to redistribute inventory to other programs or return inventories to our suppliers, and whether customers are contractually obligated and have the ability to pay for the related inventory. Certain payments received from customers for inventories that have not been shipped to customers or otherwise disposed of are netted against inventory.

We generally procure inventory based on specific customer orders and forecasts. Customers generally have limited rights of modification (for example, rescheduling or cancellations) with respect to specific orders. Customer modifications of orders affecting inventory previously procured by us and our purchases of inventory beyond customer needs may result in excess and obsolete inventory. Although we may be able to use some excess inventory for other products we manufacture, a portion of this excess inventory may not be returnable to vendors or recoverable from customers. In certain instances, in accordance with agreed terms, we receive advances from customers to offset our working capital investment in raw materials. Write-offs or write-downs of inventory could be caused by:

Our raw materials inventories are generally acquired in anticipation of specific customer orders and pursuant to customer-specific design specifications. When we and our customers agree that the quantity of customer-specific inventory is in excess of anticipated demand, we may transferseek advance payments from our customers against such inventories. These advances are presented under deferred revenue and customer advances on the consolidated balance sheets. In the past, in some arrangements with some customers, we transferred control of thoseexcess inventories to our customers in exchange for a cash payment.payment, Thesewhich resulted in a derecognition of the inventory. Those transactions arewere reported as transfers of non-financial assets – i.e., reported on a net basis in the income statement.statement – and not included in revenue.

Consolidation— In accordance with ASCAccounting TopicStandards Codification 810, Consolidation (“ASC 810”), we consolidate entities in which we have a controlling financial interest. In fiscal 2023, we completed a joint venture transaction with Reliance Strategic Business Ventures Limited (“RSBVL”) to establish Sanmina SCI India Private Limited (“SIPL”), our existing Indian manufacturing entity, aseven a joint venture. As a result of the transaction, RSBVL holds 50.1% of the outstanding shares of SIPL andthough we only hold the remaining 49.9% of theits outstanding sharesshares. ofThis SIPL.is In connection with RSBVL’s investment, we entered into a management services contract pursuant to whichbecause we have the unilateral ability to make theall significant financial and operating decisions made infor the ordinary course of SIPL’s business.entity. We determined the voting interest model was applicable under ASC 810 and concluded that, despite not having a majority ownership interest,ownership, we have a controlling financial interestinterest, inwhich SIPLrequires throughus to consolidate the managemententity. services contract. Therefore, we have, by contract, the unilateral ability to control the significant decisions made in the ordinary course of SIPL’s business and, as such, we consolidate SIPL. However, weWe periodically assess whetherthis arrangement to determine if there is any changeschange in facts and circumstances have occurred that couldmight require us to deconsolidate SIPL.the entity.

Refer to Item 7. “Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our annualAnnual reportReport on Form 10-K for the fiscal year ended September 30,28, 20232024 filed with the SEC on November 16,27, 20232024 for discussion of our results of operations for the fiscal year ended September 30,28, 20232024 compared to the fiscal year ended OctoberSeptember 1,30, 2022.2023.

Net sales decreased from $8.9 billion for 2023 to $7.6 billion for 2024, a decrease of 15.3%. Net sales increased from $7.9$7.6 billion for 20222024 to $8.9$8.1 billion for 2023,2025, an increase of 12.8%.7.4%. Sales by end market were as follows:

Gross margin was 8.5%,8.8%, 8.5% and 8.3% and 7.9% in 2024,2025, 20232024 and 2022,2023, respectively. IMS gross margin decreasedincreased slightly to 7.7% in 2025 from 7.5% in 2024 from 7.7% in 2023.2024. CPS gross margin increased to 13.9% in 2025 from 12.8% in 2024 from 11.6% in 2023,2024, primarily due to significantimproved lossesoperating recognized on certain fixed-price customer contracts in 2023 compared to 2024, the effect of which wasefficiencies partially offset by unfavorable product mix.

Selling, general and administrative expenses were $266 million, $255$290 million and $245$266 million in 2024, 20232025 and 2022,2024, respectively. As a percentage of net sales, selling, general and administrative expenses were 3.5%, 2.9%3.6% and 3.1%3.5% for 2024, 20232025 and 2022,2024, respectively. The increase in absolute dollars in 20242025 from 20232024 was primarily attributable to higher employee compensation, largely due to higherincreased stock compensation expense from new equity grants,grants and variable compensation, as well as higher variableprofessional compensationfees and an increase in deferred compensation caused by strong stock market performance that increased theexpenditures marketsupporting valueIT of participant investment accounts, partially offset by lower professional fees.systems.

Research and development expenses were $29 million, $26$31 million and $21$29 million in 2024, 20232025 and 2022,2024, respectively. As a percentage of net sales, research and development expenses were 0.4% for 2024each of 2025 and 0.3% for 2023 and 2022.2024. The increase in absolute dollars in 20242025 from 20232024 was primarily due to higher expenses for design and engineering support for existing and new projects.

Other Income (Expense), Net

We recorded income tax expense of $80 million, $85$73 million and $62$80 million in 2024, 20232025 and 2022,2024, respectively. Our effective tax rate was 25%, 21%22% and 20%25% for 2024, 20232025 and 2022,2024, respectively. The tax rate was lower in 2023 and 20222025 primarily due to larger discrete items, including recognized tax benefits from the release of certain foreign tax reserves due to lapse of time and expiration of statutes of limitations.reserves.

As a result of an audit by the Internal Revenue Service (“IRS”) for fiscal 2008 through 2010, we received a Revenue Agent’s Report (“RAR”) on November 17, 2023 asserting an underpayment of tax of approximately $8 million for fiscal 2009. The asserted underpayment results from the IRS’s proposed disallowance of a $503 million worthless stock deduction in fiscal 2009. Such disallowance, if upheld, would reduce our available net operating loss carryforwards and result in additional tax and interest attributable to fiscal 2021 and later years, which could be material. We disagree with the IRS’s position as asserted in the RAR and are vigorously contesting this matter through the applicable IRS administrative and judicial procedures, as appropriate. We do not expect resolution of this matter within twelve months and cannot predict with any certainty the timing of suchthe resolution.resolution of this matter. Although the final resolution of this matter remains uncertain, we continue to believe that it is more likely than not our tax position will be sustained. However, an unfavorable resolution of this matter could have a material adverse impact on our consolidated financial statements.

The Organization for Economic Co-operation and Development (“OECD”), an international association of 38 countries including the United States, has proposed changes to numerous long-standing tax principles, namely, its Pillar Two framework, which imposes a global minimum corporate tax rate of 15%. Various countries have enacted or have announced plans to enact new tax laws to implement the global minimum tax and where enacted, the rules beginbegan to be effective for us in fiscal 2025. The Pillar Two rules are considered an alternative minimum tax and therefore deferred taxes would not be recognized or adjusted for the estimated effects of the future minimum tax. The adoption and effective dates of these rules may vary by country and could increase tax complexity and uncertainty and may adversely affect our provision for income taxes. WeThere dowas not expect anyno material impact from these tax law changes in fiscal 2025.

(1) Days salesin outstandingaccounts receivable (a measure of how quickly we collect our accounts receivable), or “DSO”, is calculated as the ratio of average accounts receivable, net, toat averagethe dailyend of the current quarter divided by net sales for the quarter.quarter multiplied by 90 days.

(2) Contract asset days (a measure of how quickly we transfer contract assets to accounts receivable) areis calculated as the ratio of average contract assets toat averagethe dailyend of the current quarter divided by net sales for the quarter.quarter multiplied by 90 days.

(43) Days in inventory on hand (a measure of how quickly we turn inventory into sales) is calculated as inventory at the ratioend of averagethe inventory for thecurrent quarter todivided average dailyby cost of sales for the quarter.quarter multiplied by 90 days.

(54) Accounts payable days (a measure of how quickly we pay our suppliers), or “DPO”, is calculated as the ratio of 365 days to accounts payable turns, in which accounts payable turns is calculated asat the ratioend of fourthe timescurrent ourquarter divided by cost of sales for the quarter tomultiplied averageby accounts90 payable.days.

(65)Cash cycleCustomer inventory advances days (a measure of how quicklylong wecustomer convertdeposits investments infor inventory toare cashheld) is calculated as dayscustomer inventory onadvances handat plusthe daysend of the current quarter divided by cost of sales outstandingfor minusthe accountsquarter payablemultiplied by 90 days.

Net cash provided by operating activities was $621 million, $340 million,million and $235 million and $331 million for 2024,2025, 20232024 and 2022,2023, respectively. Our working capital metrics tend to fluctuate from quarter-to-quarter based on factors such as the linearity of our shipments to customers and purchases from suppliers, customer and supplier mix, the extent to which we factor customer receivables and the negotiation of payment terms with customers and suppliers. These fluctuations can significantly affect our cash flows from operating activities.

During 2023,2024, we generated $527$447 million of cash from earnings, excluding non-cash items, and used $292$107 million of cash primarily because of a decrease in accounts payable of $418$112 million and an increase in accounts receivable of $89$104 million, partially offset by aan decreaseincrease in inventoriesdeferred revenue and customer advances of $210$89 million. The decrease in accounts payable was primarily attributable to lower inventory receipts and an unfavorable mix of supplier payment terms,terms resulting in DPO decreasing from 90 days in 2022 to 80 days in 2023. The decrease in inventories was primarily due toand lower business volume and our efforts to reduce inventory to more appropriate levels primarily by working with customers to ensure their demand forecasts are reasonable and incorporate appropriate lead times to secure materials.receipts. The increase in accounts receivable was primarily attributable to higher business volume and unfavorable customer payment terms mix. The change in deferred revenue and customer advances is driven by increased customer deposits against raw material inventory purchases.

Net cash used in investing activities was $108 million, $114 million,million and $192 million and $132 million for 2024, 2023 and 2022, respectively. In2025, 2024 and 2023, respectively. In 2025, we received $49 million from the liquidation of investments held in a former rabbi trust for our deferred compensation plan assets, purchased $15 million of long-term investments and used $111$147 million and $191 million, respectively, of cash for capital expenditures. In 2024, we used $111 million of cash for capital expenditures.

RevolvingExisting Credit Facility. The Fifth Amended and Restated Credit Agreement, dated as of September 27, 2022, as amended, (the “Existing Credit Agreement”), provides for an $800 million revolving credit facility and a $350 million secured term loan (the “Term Loan Due 2027”), together with an accordion feature by which we can obtain, subject to the satisfaction of specified conditions and commitment of the lenders, additional revolving commitments in an aggregate amount of up to $200 million. On June 6, 2025, we amended the Existing Credit Agreement to permit the ZT Acquisition. In connection with the closing of the ZT Acquisition, borrowings under the Credit Facilities (as defined below) were used to repay in full the amount remaining under the Term Loan Due 2027, and the Existing Credit Agreement was terminated.

As of September 28,27, 2024,2025, no borrowings and $14$9 million of letters of credit were outstanding under the Existing Credit Agreement, under which $786$791 million was available to borrow. There were no borrowings outstanding under the Existing Credit Agreement as of September 30,28, 2023.2024.

Adverse changes in the key end markets we targettarget, in particular the cloud infrastructure end market, could harm our business by reducing our sales.

A key part of our strategy of providing end-to-end manufacturing solutions is to grow our CPS businesses, which suppliessupply PCBs, backplane and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts, memory, RF, optical and microelectronic solutions, and data storage solutions and design, engineering, logistics and repair services and our SCI defense and aerospace products. A decrease in orders for these components, products and services can have a disproportionately adverse impact on our profitability since these components, products and services generally yield higher margins than our core IMS business. In addition, in order to grow this portion of our business profitably, we must continue to make substantial investments in the development of our product development capabilities, research and development activities, test and tooling equipment and skilled personnel, all of which reduce our operating results in the short term. The success of our CPS businesses also depends on our ability to increase sales of our proprietary products, convince our customers to purchase our components rather than those of third parties for use in the manufacture of their products, and expand the number of our customers who contract for our design, engineering, logistics and repair services. We may face challenges in achieving commercially viable yields and difficulties in manufacturing components in the quantities and to the specifications and quality standards required by our customers, as well as in qualifying our components for use in our customers’ designs. Our proprietary products and design, engineering, logistics and repair services must compete with products and services offered by established vendors which focus solely on development of similar technologies or the provision of similar services. Any of these factors could reduce the revenue and margins of our CPS businesses, which in turn would have an adverse and potentially disproportionate effect on our overall revenue and profitability.

We are subject to a number of laws and regulations relating to the export of U.S. technology, anti-corruption and the award, administration and performance of U.S. government contracts and subcontracts. In particular, our activities must comply with the restrictions relating to the export of controlled technology and sales to denied or sanctioned parties contained in the International Traffic in Arms Regulations, the U.S. Export Administration Regulations and sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department. The U.S. Commerce Department has released rules that in some cases significantly restrict the export of U.S. technology to or from China. These laws could negatively impact our operations in China by making it more difficult to import components containing U.S. technology into China and to export finished products containing such components out of China. Any failure to comply with export control laws could result in significant fines or penalties. We must also comply with regulations relating to the award, administration and performance of U.S. government contracts and subcontracts with respect to our defense business, including regulations that govern price negotiations, cost accounting standards, procurement practices, termination at the election of the government and many other aspects of performance under government contracts and subcontracts. These laws and regulations are complex, require extensive compliance efforts and expenditures in the form of additional systems and personnel, and, in some cases, require us to ensure that our suppliers adhere to such regulations. Furthermore, our compliance with such regulations is subject to audit or investigation by governmental authorities. From time to time, we receive formal and informal inquiries from government agencies and regulators regarding our compliance. For example, in 2023 we responded to several Civil Investigative Demands from the U.S. Department of Justice relating to certain contracts, projects, proposals, and business activities of our SCI subsidiary, and in 2024the third quarter of fiscal 2026 reached a settlement in principle of a qui tam lawsuit filed by a former SCI employee was unsealed relating to these matters. Should we be found to have violated one or more government contracting laws or regulations, we could become subject to civil damages (which in some cases could be trebled) or criminal penalties and administrative sanctions, including appointment of government monitors, termination of our government contracts and, ultimately, debarment from doing further business with the U.S. government. Any of such results would increase our expenses, reduce our revenue and damage our reputation as both a commercial and government supplier.

In addition, we may become involved in administrative proceedings, lawsuits or other proceedings if others allege that the products we manufacture for our customers or our own manufacturing processes and products infringe on their intellectual property rights. If successful, such claims could force our customers and us to stop importing or producing products or components of products that use the challenged intellectual property, to pay up to treble damages and to obtain a license to the relevant technology or to redesign those products or services so as not to use the infringed technology. The costs of defense and potential damages and/or impact on production of patent litigation could be significant and have a materially adverse impact on our financial results. In addition, although our customers typically indemnify us against claims that the products we manufacture for them infringe others’ intellectual property rights, there is no guarantyguarantee that these customers will have the financial resources to stand behind such indemnities should the need arise, nor is there any guarantee that any such indemnity could be fully enforced. We sometimes design products on a contract basis or jointly with our customers. In such situations, we may become subject to claims that products we design infringe third party intellectual property rights and may also be required to indemnify our customer against liability caused by such claims.

We are subject to a variety of domestic and foreign employment laws, including those related to safety, wages and overtime, meal and rest periods, discrimination, harassment, collective bargaining, whistleblowing, classification of employees, privacy and severance payments. We may be required to defend against allegations that we have violated such laws. Allegations that we have violated labor laws could lead to damages being awarded to employees or fines from or settlements with plaintiffs or federal, state or foreign regulatory authorities, the amounts of which could be substantial, and which would reduce our net income. For example, in the first quarter of fiscal 2022, we paid approximately $4 million in a judicially approved settlement in connection with a lawsuit against us alleging violations of California Labor Code provisions governing overtime, meal and rest periods, wages, wage statements and reimbursements of business expenses, and inwe fiscalare 2024,currently fourdefending several putative class actions were filed in California alleging similar violations.

Partly as a result of certain of our acquisitions, we have incurred additional liabilities associated with environmental contamination. These liabilities include ongoing investigation and remediation activities at a number of current and former sites. The time required to perform environmental remediation can be lengthy and there can be no assurance that the scope, and therefore cost, of these activities will not increase as a result of the discovery of new contamination or contamination on adjoining landowners’ properties or the adoption of more stringent regulatory standards covering sites at which we are currently performing remediation activities. Although we estimate and regularly reassess our potential liability with respect to violations or alleged violations, and with respect to investigation and remediation obligations, and accrue for such liability, our accruals may not be sufficient. Any increase in existing reserves or establishment of new reserves for environmental liability would reduce our net income. Our failure or inability to comply with applicable environmental laws and regulations could result in enforcement actions or private party lawsuits being brought against us, including actions and lawsuits alleging property damage and personal injury due to exposure to hazardous substances, and the issuance of fines or penalties. Our failure to comply could also limit our ability to expand facilities or could require us to acquire costly equipment or to incur other significant expenses to comply with these laws and regulations.

Finally, corporate governance, public disclosure and compliance practices continue to evolve based upon continuing legislative action, SEC rulemaking and policy positions taken by large institutional stockholders and proxy advisors. As a result, the number of rules, regulations and standards applicable to us may become more burdensome to comply with, could increase scrutiny of our practices and policies by these or other groups and increase our legal and financial compliance costs and the amount of time management must devote to governance and compliance activities. For example, the SEC has adopted rules requiring that issuers provide significantly increased disclosures concerning cybersecurity risk management, strategy, governance and incident reporting and adopt more stringent executive compensation clawback policies and several agencies and governments, including the SEC, the EU and California have enacted legislation or adopted rules that will require large companies to provide significant disclosures concerning their greenhouse gas emissions and financial risks relating to climate change.change and the EU is implementing regulations relating to packaging waste requiring extensive due diligence and reporting requirements on certain participants in supply chains shipping to the EU. Increasing regulatory burdens and corporate governance requirements impose both internal and external costs on us, require significant management attention and oversight and could make it more difficult for us to attract and retain qualified members of our Board of Directors and qualified executive officers.

As of MarchJune 28,27, 2026, approximately 40%30% of our cash was held in foreign jurisdictions. Some of these jurisdictions restrict the amount of cash that can be transferred to the U.S. or impose taxes and penalties on such transfers of cash. To the extent we have excess cash in foreign locations that could be used in, or is needed by, our U.S. operations, we may incur significant foreign taxes to repatriate these funds which would reduce the net amount ultimately available for such purposes.

From time to time, we may undertake strategic transactions that give us the opportunity to access new customers and new end markets, increase our proprietary product offerings, obtain new manufacturing and service capabilities and technologies, enter new geographic manufacturing locations, lower our manufacturing costs, increase our margins or further develop existing customer relationships. For example, in October 2025, we acquired the data center infrastructure manufacturing business of ZT Systems from Advanced Micro Devices, Inc., and in October 2022, we entered into a joint venture with a wholly owned subsidiary of Reliance Strategic Business Ventures Limited (“RSBVL”).Limited.

Separately, we may also choose to divest plants, businesses or productsproduct lines in the future. Divestitures reduce revenue and, potentially, margins and can involve the risk of retained liabilities from the operations divested, including environmental liabilities.

We are or may become subject to income, sales, value-added, goods and services, withholding and other taxes in the United States and various foreign jurisdictions. Significant judgment is required in determining our worldwide provision for taxes and, in the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Our effective income tax rates and liability for other taxes could increase as a result of changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in enacted tax laws, the effectiveness of our cash and tax management strategies, our ability to negotiate advance pricing agreements with foreign tax authorities, compliance with local trade laws and other factors. International initiatives require multinational enterprises, like ours, to report profitability on a country-by-country basis, which could increase scrutiny by foreign tax authorities. In addition, our tax determinations are regularly subject to audit by tax authorities. For example, we are currently undergoing audits of our tax returns for certain recent tax years in a number of jurisdictions,jurisdictions includingand thehave Unitedrecently States. In connection with one such audit, on November 17, 2023, we receivedsettled a Revenue Agent’s Report (“RAR”) from the Internal Revenue Service (the “IRS”), which asserted anproposed underpayment of tax of approximately $8 million for fiscal 2009. The proposed underpayment results from the IRS’s proposed disallowance of a $503 million worthless stock deduction previously taken by us. We disagree with the IRS’sIRS. position as asserted in the RAR and are vigorously contesting this matter through the applicable IRS administrative and judicial procedures, as appropriate. However, an adverse result in this matter or additionalAdverse developments in theseopen or future audits wouldcould adversely affect our tax provisions, including through the disallowance or reduction of deferred tax assets or the assessment of back taxes, interest and penalties, any of which could result in a material increase to our income tax expense and therefore a material decrease in our net income and could have a material adverse impact on our consolidated financial statements. Further, as of September 27, 2025, we have cumulative net operating loss carryforwards (“NOLs”) for state and foreign tax purposes of $200 million and $481 million, respectively, and none for federal. The state NOLs began expiring in fiscal 2025, and expire at various dates through September 26, 2043. Certain foreign NOLs began expiring in fiscal 2025. As our NOLs expire, our state income tax rates will increase, which will reduce our net income.

Our success depends upon the continued service of our key personnel, particularly our highly skilled sales and operations executives, managers and engineers with many years of experience in the EMS industry. Such individuals can be difficult to identify, recruit and retain and are heavily recruited by our competitors. As our key employees choose to retire or terminate their employment with us, we will be required to replace them with new employees with the required experience, which hascan becomebe challenging in the U.S. due to the strong employment market.challenging. Should we be unable to recruit new employees to fill key positions with us, our operations and growth prospects could be negatively impacted.

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934.1934 as amended (the “Exchange Act”). These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including any statements regarding trends in future revenue or results of operations, gross margin, operating margin, expenses, earnings or losses from operations, or cash flow; plans, strategies and objectives of management for future operations and the anticipated benefits of such plans, strategies and objectives; future economic conditions or performance; any statements regarding litigation or pending investigations, claims or disputes; future cash outlays for, and benefits of acquisitions and other strategic transactions, including our Indian joint venture and acquisition of ZT Group Int’l, Inc. (“ZT Systems”); expected restructuring costs and benefits; the adequacy of our current liquidity and the availability of additional sources of liquidity; the potential impact of any future pandemics on our business, results of operations and financial condition; the potential impact of supply chain shortages and inflation on our business; the future impact of tariffs, export controls and evolving trade policies on our business; future tax rates and tax policies and our expectations concerning developments in the audit by the Internal Revenue Service (“IRS”) of certain tax returns filed by us, including the potential impact of the IRS revenue agent’s report received by us in November 2023; the expected impact of accounting pronouncements not yet adopted; future repurchases of our common stock; our expectations or beliefs; and assumptions underlying any of the foregoing. Generally, the words “anticipate,” “believe,” “plan,” “expect,” “future,” “intend,” “may,” “will,” “should,” “estimate,” “predict,” “potential,” “continue” and similar expressions identify forward-looking statements. Our forward-looking statements are based on current expectations, forecasts and assumptions and are subject to risks and uncertainties, including those contained in Part II, Item 1A of this report. As a result, actual results could vary materially from those suggested by the forward-looking statements. We undertake no obligation to publicly disclose any revisions to these forward-looking statements to reflect events or circumstances occurring subsequent to filing this report with the Securities and Exchange Commission (the “SEC”). Investors and others should note that Sanmina announces material financial information to our investors using our investor relations website (http://ir.sanmina.com/investor-relations/overview/default.aspx), SEC filings, press releases, public conference calls and webcasts. We use these channels to communicate with our investors and the public about Sanmina, its products and services and other issues. It is possible that the information we post on our investor relations website could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in Sanmina to review the information we post on our investor relations website. The contents of our investor relations website are not incorporated by reference into this quarterly report on Form 10-Q or in any other report or document we file with the SEC.

Sanmina Corporation and its subsidiaries (“Sanmina”, the “Company”, “we” or “us”) operate on a 5252- or 53 week53-week year ending on the Saturday nearest September 30. Fiscal 2025 was a 52-week year and fiscal 2026 will be a 53-week year, with the extra week in the fourth fiscal quarter. All references to years relate to fiscal years unless otherwise noted.

We are a leading global provider of integrated manufacturing solutions, components, products and repair, warranty service, logistics and after-market services. Our revenue is generated from sales of our products and services primarily to original equipment manufacturers (“OEMs”) that serve the industrial and energy, medical, defense and aerospace, automotive and transportation, communications networks and cloud and artificial intelligence (“AI”) infrastructure industries.

2.Components, Products and Services (“CPS”). Components include advanced PCBs, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts. Products include optical, radio frequency (“RF”) and microelectronic design and manufacturing services from the Company’s Advanced Microsystems Technologies division; multi-chip package memory solutions from the Company’s Viking Technology division; high-performance storage platforms for hyperscale and enterprise solutions from the Company’s Viking Enterprise Solutions division; defense and aerospace products, design, manufacturing, repair and refurbishment services from the Company’s SCI Technology, Inc. (“SCI”) subsidiary; and cloud-based smart manufacturing execution software from the Company’s 42Q division. Services include design, engineering, and logistics and repair.

Our only reportable segment for financial reporting purposes is IMS, which represented approximately 90% of our total revenue for the sixnine months ended MarchJune 28,27, 2026. Our CPS business consists of multiple operating segments which do not individually meet the quantitative thresholds for being presented as reportable segments. Therefore, financial information for these operating segments is combined and presented in a single category entitled “CPS”.

Sales to our ten largest customers represent approximately 70%67% of net sales. Net sales from these customers are derived from multiple segments. Two customers represented 10% or more of our net sales for the three and six months ended March 28, 2026. One customer represented 10% or more of our net sales for the three months ended MarchJune 29,27, 20252026 and nonetwo customers represented 10% or more of our net sales for the sixnine months ended MarchJune 29,27, 2026. No customer represented 10% or more of our net sales for the three and nine months ended June 28, 2025.

One customer represented 10% or more of our gross accounts receivable as of MarchJune 28,27, 2026. Two customers represented 10% or more of our gross accounts receivable as of September 27, 2025.

On October 27, 2025 (the “Closing Date”), we completed the acquisition of ZT Systems (“ZT Acquisition”) for a purchase consideration of $1.62 billion, consisting of cash of $1.356 billion, net of $295 million cash acquired, and 1,151,052 shares of our common stock valued at $155 million, which we released out of treasury stock. The Sellerseller is also entitled to up to $450 million in contingent cash consideration upon the achievement of certain gross profit and revenue metrics during the three-year period following the Closing Date. Additionally, we recognized $170$183 million fair value of contingent cash consideration liability as of MarchJune 28,27, 2026. As part of the ZT Acquisition, AMD has entered into a strategic relationship with us as a U.S.-based new product introduction (“NPI”) manufacturing partner of choice to accelerate quality and time-to-deployment of AMD AI rack and cluster-scale systems for cloud customers.

We believe our end-to-end manufacturing solutions combined with our global supply chain management expertise differentiate us from our competitors and enable us to better serve the needs of OEM customers. However, our business faces many challenges. For example, we compete with a number of companies in each of our key end markets. This includes companies that are much larger than we are and smaller companies that focus on a particular niche product, service or end market. Although we believe we are well-positioned in each of our key end markets and offer many advantages compared to our competitors, profitably growing revenues are often constrained by intense competition. Additionally, we are impacted by macroeconomic challenges such as tariffs, inflation, supply chain constraints,constraints including component shortages or price increases, foreign currency fluctuations, high interest rates, market volatility and recession concerns that have been and could be in the future exacerbated by geopolitical environment such as the conflict in the Middle East and related supply disruptions, tensions between the U.S. and other nations and the war in Ukraine. Further, uncertainties around U.S. tariffs, retaliatory tariffs from other countries, and import/export restrictions may impact customer decisions to use our services in certain manufacturing locations and increase the complexity and cost of our supply chain. Although our customers are generally liable for tariffs and price increases we pay for components and finished products, our gross margins could be impacted if we are unable to fully recover these costs. The timing of tariff or component price increase recoveries from customers could adversely affect our operating cash flow in a given period.

Net sales increased 102%70% in the three months ended MarchJune 28,27, 2026 compared to the three months ended MarchJune 29,28, 2025, and 80.5%76.8% in the sixnine months ended MarchJune 28,27, 2026 compared to the sixnine months ended MarchJune 29,28, 2025, primarily in the cloud infrastructure end market, driven by the ZT acquisition,Acquisition, new program wins and program ramp-ups in our communications networks and medical end market.

Gross margin decreasedincreased to 8.8%10.5% from 8.9% for the three months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025. Gross margin decreasedincreased to 8.3%9.0% from 8.6%8.7% for the sixnine months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025. IMS gross margin increased to 8.5%10.2% from 7.7%7.5% for the three months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025. IMS gross margin increased to 8.6%9.1% from 7.8%7.7% for the sixnine months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025. The increase in gross margin is driven by the ZT acquisition.Acquisition and product mix. CPS gross margin decreased to 11.6%12.8% from 13.9%14.7% for the three months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025. CPS gross margin decreased to 12.2%12.4% from 13.2%13.7% for the sixnine months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025. The changedecrease in gross margin is primarily due to customermanufacturing mix.inefficiencies.

Selling, general and administrative expenses for the three months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025 were $114$109 million and $76$70 million, respectively. As a percentage of net sales, selling, general and administrative expenses were 2.8%3.2% and 3.8%3.4% for the three months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively. Selling, general and administrative expenses for the nine months ended June 27, 2026 and June 28, 2025 were $338 million and $217 million, respectively. As a percentage of net sales, selling, general and administrative expenses were 3.2% and 3.6% for the nine months ended June 27, 2026 and June 28, 2025, respectively. The increaseincreases in absolute dollars waswere primarily due to costs related to the ZT acquisitionAcquisition and stockprofessional compensation expense from new equity grants and variable compensation.fees.

Research and development expenses were $8 million and $7$8 million for the three months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively. As a percentage of net sales, research and development expenses were 0.2% and 0.4% for three months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively. Research and development expenses were $17$25 million and $14$22 million for sixnine months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively. As a percentage of net sales, research and development expenses were 0.2% and 0.4% for sixnine months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively. Research and development expenses remainremained consistent as a percentage of revenues for both the reporting periods.

Acquisition, integration and others were $73$21 million and $116$137 million for the three and sixnine months ended MarchJune 28,27, 2026 respectively, and were related to the ZT Acquisition. Acquisition, integration and others for the three months ended MarchJune 28,27, 2026 primarily consist of a fair value adjustment of $59$13 million for contingent consideration and acquisition, integration and others for the sixnine months ended MarchJune 28,27, 2026 primarily consists of a fair value adjustment of $59$72 million for contingent consideration and professional service fees of $45$53 million.

Interest expense was $32 million and $5 million for the three months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively and $57$89 million and $10$15 million for the sixnine months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively. The increase in interest expense for both periods is primarily due to interest incurred on the new term loans with higher aggregate borrowing amount of $2.2 billion compared to $0.3 billion for the three and sixnine months ended MarchJune 29,28, 2025.

Provision for income taxes for the three months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025 was $33$66 million (25%35% of income before taxes) and $18$19 million (20% of income before taxes), respectively. Provision for income taxes for the nine months ended June 27, 2026 and June 28, 2025 was $110 million (29% of income before taxes) and $52 million (19% of income before taxes), respectively. The effective tax raterates waswere higher for the three and nine months ended MarchJune 28,27, 2026 primarily due to change in the jurisdictional mix of earnings and non-deductible acquisition related charges.charges and the closure and settlement of the fiscal 2008 through 2010 IRS audit.

Cash and cash equivalents were $1.6$1.8 billion as of MarchJune 28,27, 2026 and $926 million as of September 27, 2025. Restricted cash and cash equivalents as of MarchJune 28,27, 2026 were $50$42 million. Our cash levels vary during any given quarter depending on the timing of collections from customers and payments to suppliers, borrowings under our credit facilities, sales of accounts receivable under numerous programs we utilize, repurchases of common stock and other factors. Our working capital was $3.2$3.4 billion and $2.0 billion as of MarchJune 28,27, 2026 and September 27, 2025, respectively.

Net cash provided by operating activities was $577$702 million for the sixnine months ended MarchJune 28,27, 2026. Our working capital metrics tend to fluctuate from quarter to quarter based on factors such as the linearity of our shipments to customers and purchases from suppliers, customer and supplier mix, the extent to which we factor customer receivables and the negotiation of payment terms with customers and suppliers. These fluctuations can significantly affect our cash flows from operating activities.

During the sixnine months ended MarchJune 28,27, 2026, we generated $437$658 million of cash from earnings, excluding non-cash items, and $141$44 million of cash due primarily due to decreasesdecrease in accounts receivables,receivable, inventories,deferred revenue and customer advances, and accrued liabilities and other.other, offset by increase in prepaid expenses and other assets. The decrease in accounts receivable, inventories,deferred revenue and customer advances, and accrued liabilities was due to timing of customer payments and settlements,settlements. The increase in prepaid expenses and inventoryother sell-through.assets was due primarily to increase in income tax receivables and advance deposits made in the ordinary course of business, partially offset by amortization of the existing prepayments.

Net cash used in investing activities was $1.5$1.3 billion for the sixnine months ended MarchJune 28,27, 2026. During the sixnine months ended MarchJune 28,27, 2026, we used $1.4$1.1 billion for the ZT Acquisition, used $144$244 million of cash for capital expenditures and received $9 million from the sale of certain equity investments.

Net cash provided by financing activities was $1.6 billion for the sixnine months ended MarchJune 28,27, 2026. During the sixnine months ended MarchJune 28,27, 2026, we borrowed $2.2 billion for the ZT Acquisition and incurred $29 million of debt issuance costs, used $239 million of cash to repurchase common stock, withheld $56$60 million payments to tax authorities for stock-based compensation activity and repaid $302 million of borrowings.

As of MarchJune 28,27, 2026, there were $2.2 billion loans outstanding under the New Credit Facility. Additionally, $9$12 million ofin letters of credit were outstanding. Under the New Credit Facility, we have $600 million available to borrow under Term Loan A and $1.5 billion available to borrow under the revolving credit facility.

The New Credit Facility requires us to comply with certain financial covenants, namely (i) a minimum consolidated cash interest coverage ratio of not less than 3.00 to 1.00 and (ii) a maximum consolidated total net leverage ratio of not greater than 4.00 to 1.00, in each case, measured at the end of each fiscal quarter on the basis of a trailing 12-month look-back period. In addition, the New Credit Facility requires us to comply with customary affirmative and negative covenants which limit our ability and the ability of our subsidiaries to, among other things, incur debt, grant liens, make investments, make certain restricted payments, prepay subordinated indebtedness and sell assets, subject to certain exceptions and baskets. The New Credit Facility also includes covenants that require us to file quarterly and annual financial statements with the SEC on a timely basis. As of MarchJune 28,27, 2026, we were in compliance with all these covenants. See Note 5, “Debt” of the notes to the Condensed Consolidated Financial Statements contained in this report for details.

During the sixnine months ended MarchJune 28,27, 2026, we repurchased 1.6 million shares of our common stock for $239 million under stock repurchase programs authorized by our Board of Directors. Subsequent toDuring the endthree ofmonths theended secondJune quarter of27, 2026, our Board of Directors authorized the repurchase of up to $600 million of our common stock in the open market or in negotiated private transactions. These programs have no expiration dates and the timing of repurchases will depend upon capital needs to support the growth of our business, market conditions and other factors. Although stock repurchases are intended to increase stockholder value, they also reduce our liquidity. As of MarchJune 28,27, 2026, thean amountaggregate of $600 million remained available under these programs is immaterial.programs.

We are party to a Receivables Purchase Agreement, as amended (the “RPA”), with certain third-party banking institutions for the sale of trade receivables generated from sales to certain customers. The amount available under the RPA is uncommitted and, as such, is available at the discretion of our third-party banking institutions. Under the New Credit Facility, the percentage of our total trade receivables that can be sold and outstanding at any time is 50%. Therefore, as of MarchJune 28,27, 2026, a maximum of $1.3$1.1 billion of sold receivables could be outstanding at any point in time under this program, as amended, as required by our Credit Agreement. Trade receivables sold pursuant to the RPA are serviced by us.

We enter into forward interest rate swap agreements with independent counterparties to partially hedge the variability in cash flows due to changes in the Secured Overnight Financing Rate benchmark interest rate associated with anticipated variable rate borrowings. In addition, we enteredenter into a total return swap contract to manage the equity market risks associated with our deferred compensation plan liabilities. See Note 4, “Financial Instruments” of the notes to the Condensed Consolidated Financial Statements contained in this report for details.

In the ordinary course of business, we are or may become party to legal proceedings, claims and other contingencies, including environmental, regulatory, warranty and employee matters and examinations by government agencies. As of MarchJune 28,27, 2026, we had accrued liabilities of $38$48 million related to such matters. Additionally, we recognized a $170$183 million contingent cash consideration liability arising from the ZT Systems acquisition which is classified as other long-term liabilities in the condensed consolidated balance sheets. The estimated range of undiscounted payment in respect of the contingent consideration ranges from no payout to $450 million. We cannot accurately predict the outcome of these matters or the amount or timing of cash flows that may be required to defend ourselves or to settle such matters or that these reserves will be sufficient to fully satisfy our contingent liabilities.

As of MarchJune 28,27, 2026, we had a liability of $52$45 million for uncertain tax positions. Our estimate of liabilities for uncertain tax positions is based on a number of subjective assessments, including the likelihood of a tax obligation being assessed, the amount of taxes (including interest and penalties) that would ultimately be payable, and our ability to settle any such obligations on favorable terms. Therefore, the amount of future cash flows associated with uncertain tax positions may be significantly higher or lower than our recorded liability and we are unable to reliably estimate when cash settlement may occur.

We generated $577$702 million of cash from operations for the sixnine months ended MarchJune 28,27, 2026. Our primary sources of liquidity as of MarchJune 28,27, 2026 consisted of (1) cash and cash equivalents of $1.6$1.8 billion (an aggregate of $259$248 million of our cash is held by Sanmina SCI India Private Limited (“SIPL”) and Sanmina SCI Technology India Private Limited, our existing Indian manufacturing entity,entities, which is designated to fund itstheir operations use); (2) our New Credit Facility, under which $1.5 billion, net of outstanding borrowings and letters of credit, and $600 million of the termTerm loanLoan A were available; (3) our foreign short-term borrowing facilities of $71 million, all of which was available; (4) proceeds from the sale of accounts receivable under our receivables sales programs and (5) cash generated from operations.

As of MarchJune 28,27, 2026, 58%67% of our cash balance was held in the United States. Should we choose or need to remit cash to the United States from our foreign locations, we may incur tax obligations which would reduce the amount of cash ultimately available to the United States. We believe that cash held in the United States, together with liquidity available under our Credit Agreement and cash from foreign subsidiaries that could be remitted to the United States without tax consequences, will be sufficient to meet our United States liquidity needs for at least the next twelve months.

Information regarding our contractual obligations was provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the fiscal year ended September 27, 2025. There were no material changes in our contractual obligations as of MarchJune 28,27, 2026.

As of MarchJune 28,27, 2026, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures, or capital resources that isare material to investors.