SEMTECH CORP

Previous wording

Most of our sales to customers are made on the basis of individual customer purchase orders and many customers include cancellation provisions in their purchase orders. We rely on orders received and shipped within the same quarter for a meaningful portion of our sales. Net sales made through independent distributors during the first quarters of fiscal years 2026 and 2025 were 71% and 73%, respectively, of net sales and the remainder were made directly to customers.

Current wording

Most of our sales to customers are made on the basis of individual customer purchase orders and many customers include cancellation provisions in their purchase orders. We rely on orders received and shipped within the same quarter for a meaningful portion of our sales. Net sales made through independent distributors during the second quarters of fiscal years 2026 and 2025 were 74% and 74%, respectively, of net sales and the remainder were made directly to customers.

Previous wording

We are a global business with customers and suppliers around the world. A significant amount of our third-party subcontractors and suppliers, including third-party foundries that supply silicon wafers, are located outside the United States, including China, Japan, Taiwan and Vietnam. A significant amount of our assembly and test operations are conducted by third-party contractors located outside the United States, including China, Malaysia, Taiwan and Vietnam. Net sales outside the United States constituted 82% and 79% during the first quarters of fiscal years 2026 and 2025, respectively. Approximately 63% and 64% of our net sales during the first quarters of fiscal years 2026 and 2025, respectively, were to customers located in the Asia-Pacific region. We are subject to export restrictions and trade regulations, which have limited our ability to sell to certain customers in certain regions. In addition, changes in tariffs or the imposition of retaliatory tariffs may impact our net sales, gross profit, and gross margin if we are unable to pass higher costs on to our customers.

Current wording

We are a global business with customers and suppliers around the world. A significant amount of our third-party subcontractors and suppliers, including third-party foundries that supply silicon wafers, are located outside the United States, including China, Israel, Japan, Taiwan and Vietnam. A significant amount of our assembly and test operations are conducted by third-party contractors located outside the United States, including China, Malaysia, Taiwan and Vietnam. Net sales outside the United States constituted 81% and 80% during the second quarters of fiscal years 2026 and 2025, respectively. Approximately 65% and 65% of our net sales during the second quarters of fiscal years 2026 and 2025, respectively, were to customers located in the Asia-Pacific region. We are subject to export restrictions and trade regulations, which have limited our ability to sell to certain customers in certain regions. In addition, changes in tariffs or the imposition of retaliatory tariffs may impact our net sales, gross profit, and gross margin if we are unable to pass higher costs on to our customers.

Previous wording

Comparison of the Three Months Ended April 27, 2025 and April 28, 2024

Current wording

Comparisons of the Three and Six Months Ended July 27, 2025 and July 28, 2024

Previous wording

Net sales in the first quarter of fiscal year 2026 were $251.1 million, an increase of 21.8% compared to $206.1 million in the first quarter of fiscal year 2025, which was primarily driven by higher net sales from our industrial and infrastructure end markets due to stronger demand and increased sales volume. Net sales from our industrial end market increased $27.2 million in the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025, primarily driven by an approximately $17.4 million increase in LoRa-enabled sales in industrial applications and approximately $15.2 million increase in IoT Hardware sales, partially offset by an approximately $4.4 million decrease in other wireless and sensing products sales. Net sales from our infrastructure end market increased $16.9 million in the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025, primarily driven by an approximately $30.4 million increase in data center sales, partially offset by an approximately $14.0 million decrease in telecommunications sales. Net sales from our high-end consumer end market increased $0.9 million in the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025, primarily driven by an increase in proximity sensing product sales.

Current wording

Net sales in the second quarter of fiscal year 2026 were $257.6 million, an increase of 19.6% compared to $215.4 million in the second quarter of fiscal year 2025, which was primarily driven by higher net sales from our infrastructure and industrial end markets due to stronger demand and increased sales volume. Net sales from our infrastructure end market increased $20.4 million in the second quarter of fiscal year 2026 compared to the second quarter of fiscal year 2025, primarily driven by an approximately $25.0 million increase in data center sales, partially offset by an approximately $5.9 million decrease in telecommunications sales. Net sales from our industrial end market increased $17.7 million in the second quarter of fiscal year 2026 compared to the second quarter of fiscal year 2025, primarily driven by an approximately $8.2 million increase in LoRa-enabled sales in industrial applications and approximately $12.5 million increase in IoT Hardware sales, partially offset by an approximately $2.3 million decrease in other wireless and sensing products sales. Net sales from our high-end consumer end market increased $4.1 million in the second quarter of fiscal year 2026 compared to the second quarter of fiscal year 2025, primarily driven by an approximately $3.8 million increase in consumer TVS product sales.

Previous wording

Net sales in the first quarter of fiscal year 2026, as compared to the first quarter of fiscal year 2025, benefited from stronger demand and increased sales volumes in all the reportable segments. Net sales from Analog Mixed Signal and Wireless increased $15.3 million in the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025, primarily driven by an approximately $17.5 million increase in LoRa-enabled product sales and an approximately $1.7 million increase in total TVS product sales, partially offset by an approximately $4.4 million decrease in other wireless and sensing product sales. Net sales from Signal Integrity increased $15.2 million in the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025, primarily driven by an approximately $30.4 million increase in data center sales, partially offset by an approximately $14.0 million decrease in telecommunications sales. Net sales from IoT Systems and Connectivity increased $14.5 million in the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025, primarily driven by an increase in IoT Hardware sales.

Current wording

Net sales in the second quarter of fiscal year 2026, as compared to the second quarter of fiscal year 2025, benefited from stronger demand and increased sales volumes in all the reportable segments. Net sales from Signal Integrity increased $17.3 million in the second quarter of fiscal year 2026 compared to the second quarter of fiscal year 2025, primarily driven by an approximately $25.0 million increase in data center sales, partially offset by an approximately $5.9 million decrease in telecommunications sales and approximately $1.4 million decrease in broadcast sales. Net sales from Analog Mixed Signal and Wireless increased $12.7 million in the second quarter of fiscal year 2026 compared to the second quarter of fiscal year 2025, primarily driven by an approximately $8.1 million increase in LoRa-enabled product sales and an approximately $5.7 million increase in total TVS product sales, partially offset by an approximately $2.3 million decrease in other wireless and sensing product sales. Net sales from IoT Systems and Connectivity increased $12.2 million in the second quarter of fiscal year 2026 compared to the second quarter of fiscal year 2025, primarily driven by an approximately $12.5 million increase in IoT Hardware sales.

Previous wording

In the first quarter of fiscal year 2026, gross profit increased $31.7 million to $131.3 million from $99.6 million in the first quarter of fiscal year 2025. This increase was primarily driven by a $15.7 million increase from Analog Mixed Signal and Wireless, which experienced higher sales led by LoRa-enabled products due to stronger demand, a $13.4 million increase from Signal Integrity, which experienced higher sales led by data center sales due to stronger demand, partially offset by lower telecommunications sales, and a $2.8 million increase from IoT Systems and Connectivity, primarily driven by higher IoT Hardware sales due to stronger demand.

Current wording

In the second quarter of fiscal year 2026, gross profit increased $28.6 million to $134.1 million from $105.5 million in the second quarter of fiscal year 2025. This increase was primarily driven by a $11.1 million increase from Signal Integrity, which experienced higher sales led by data center sales due to stronger demand, partially offset by lower telecommunications sales, a $9.2 million increase from Analog Mixed Signal and Wireless, which experienced higher sales led by LoRa-enabled products due to stronger demand, and a $7.9 million increase from IoT Systems and Connectivity, primarily driven by higher IoT Hardware sales due to stronger demand.

Previous wording

Our gross margin was 52.3% in the first quarter of fiscal year 2026, compared to 48.3% in the first quarter of fiscal year 2025. Gross margin for our Signal Integrity segment was 65.5% in the first quarter of fiscal year 2026, compared to 59.6% in the first quarter of fiscal year 2025, primarily due to higher volume and favorable product mix. Gross margin for our Analog Mixed Signal and Wireless segment was 62.3% in the first quarter of fiscal year 2026, compared to 54.0% in the first quarter of fiscal year 2025, primarily due to higher volume and favorable product mix. Gross margin for our IoT Systems and Connectivity segment was 34.4% in the first quarter of fiscal year 2026, compared to 37.4% in the first quarter of fiscal year 2025, primarily due to unfavorable product mix.

Current wording

Our gross margin was 52.1% in the second quarter of fiscal year 2026, compared to 49.0% in the second quarter of fiscal year 2025. Gross margin for our Signal Integrity segment was 62.4% in the second quarter of fiscal year 2026, compared to 61.9% in the second quarter of fiscal year 2025, primarily due to favorable product mix. Gross margin for our Analog Mixed Signal and Wireless segment was 59.3% in the second quarter of fiscal year 2026, compared to 57.2% in the second quarter of fiscal year 2025, primarily due to higher volume and favorable product mix. Gross margin for our IoT Systems and Connectivity segment was 39.5% in the second quarter of fiscal year 2026, compared to 35.4% in the second quarter of fiscal year 2025, primarily due to higher volume.

Previous wording

Product development and engineering expenses increased $5.9 million in the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025 primarily as a result of a $4.5 million net increase in staffing-related costs from higher supplemental compensation and a $0.9 million increase in new product introduction expenses. The levels of product development and engineering expenses reported in a fiscal period can be significantly impacted, and therefore experience period over period volatility, by the number of new product tape-outs and by the timing of recoveries from engineering services, which are typically recorded as a reduction to product development and engineering expense.

Current wording

The levels of product development and engineering expenses reported in a fiscal period can be significantly impacted, and therefore experience period over period volatility, by the number of new product tape-outs and by the timing of recoveries from engineering services, which are typically recorded as a reduction to product development and engineering expense.

Previous wording

Selling, general and administrative expenses decreased $5.8 million in the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025 primarily as a result of an $8.1 million net decrease in staffing-related costs driven by lower share-based compensation caused by the impact of the lower closing stock price as of period-end on the cash-settled awards, offset by a $1.9 million increase in consulting expenses and a $0.7 million increase in travel.

Current wording

Selling, general and administrative expenses decreased $3.1 million in the first six months of fiscal year 2026 compared to the first six months of fiscal year 2025 primarily as a result of a $5.5 million net decrease in staffing-related costs driven by lower share-based compensation caused by remeasurement of the cash-settled awards liability, a $1.0 million decrease in transaction and integration expenses, partially offset by a $2.8 million increase in consulting expenses.

Previous wording

Intangible amortization was $0.1 million and $0.3 million for the first quarters of fiscal years 2026 and 2025, respectively. The amortization of acquired technology intangible assets is reflected in cost of sales.

Current wording

Intangible amortization was $0.1 million and $0.3 million for the second quarters of fiscal years 2026 and 2025, respectively, and $0.3 million and $0.6 million for the first six months of fiscal years 2026 and 2025, respectively. The amortization of acquired technology intangible assets is reflected in cost of sales.

Previous wording

Restructuring expenses decreased by $1.1 million in the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025 due to the structural reorganization actions primarily in the prior year period to reduce our workforce as a result of cost-saving measures and internal resource alignment including from the realization of synergies of the Sierra Wireless Acquisition.

Current wording

Restructuring expenses decreased by $0.1 million in the second quarter of fiscal year 2026 compared to the second quarter of fiscal year 2025, and by $1.1 million for the first six months of fiscal year 2026 compared to the same period in fiscal year 2025 primarily due to structural reorganization actions in the prior year periods to reduce our workforce as a result of cost-saving measures and internal resource alignment including from the realization of synergies of the Sierra Wireless Acquisition.

Previous wording

Interest expense, including amortization and a write-off of deferred financing costs, was $6.6 million and $23.2 million for the first quarters of fiscal years 2026 and 2025, respectively. The decrease was primarily due to interest savings as a result of approximately $188.1 million of 2028 Notes extinguished in exchange for common stock, and debt repayment of $215.0 million on the Revolving Credit Facility and $441.4 million on the Term Loans (as defined below) in the second and fourth quarters of fiscal year 2025, respectively.

Current wording

Interest expense, including amortization and a write-off of deferred financing costs, decreased by $23.3 million to $5.2 million from $28.6 million for the second quarter of fiscal year 2026 compared to the same period in fiscal year 2025, and decreased by $40.0 million to $11.8 million from $51.8 million for the first six months of fiscal year 2026 compared to the same period in fiscal year 2025. The decreases in both periods were primarily due to interest savings as a result of approximately $188.1 million of 2028 Notes extinguished in exchange for common stock in the second quarter of fiscal year 2025, and debt repayment of $215.0 million on the Revolving Credit Facility (as defined below) and $476.4 million on the Term Loans (as defined below) from the fourth quarter of fiscal year 2025 through the second quarter of fiscal year 2026.

Previous wording

During the first quarter of fiscal year 2026, we did not record any investment impairments and credit loss reserves. During the first quarter of fiscal year 2025, investment impairments and credit loss reserves, net totaled a loss of $1.1 million due to an other-than-temporary impairment on one of our non-marketable equity investments.

Current wording

During the second quarter and first six months of fiscal year 2026 and second quarter of fiscal year 2025, we did not record any investment impairments and credit loss reserves. During the first six months of 2025, investment impairments and credit loss reserves, net totaled a loss of $1.1 million primarily due to an other-than-temporary impairment on one of our non-marketable equity investments.

Previous wording

We recorded income tax expense of $8.7 million in the first quarter of fiscal year 2026, compared to income tax expense of $3.0 million in the first quarter of fiscal year 2025. The change in our tax provision for the three months ended April 27, 2025, compared to the three months ended April 28, 2024 was primarily due to a regional mix of income and changes in valuation allowance. The effective tax rates in the first quarters of fiscal years 2026 and 2025 differ from the statutory federal income tax rate of 21% primarily due to a regional mix of income, changes in valuation allowance, impact of global intangible low-taxed income ("GILTI") and research and development ("R&D") credits. The Tax Cuts and Jobs Act ("Tax Act") requires R&D costs incurred for tax years beginning after December 31, 2021 to be capitalized and amortized ratably over five or fifteen years for tax purposes, depending on where the research activities are conducted. We have elected to treat GILTI as a period cost and the additional capitalization of R&D costs within GILTI increases our provision for income taxes.

Current wording

We recorded income tax expense of $4.8 million in the second quarter of fiscal year 2026, compared to income tax expense of $4.2 million in the second quarter of fiscal year 2025. The change in our tax provision for the three months ended July 27, 2025, compared to the three months ended July 28, 2024 was primarily due to a regional mix of income and changes in valuation allowance. The effective tax rates in the second quarters of fiscal years 2026 and 2025 differ from the statutory federal income tax rate of 21% primarily due to regional mix of income, changes in valuation allowance, impact of global intangible low-taxed income ("GILTI") and research and development ("R&D") credits. The Tax Cuts and Jobs Act ("TCJA") requires R&D costs incurred for tax years beginning after December 31, 2021 to be capitalized and amortized ratably over five or fifteen years for tax purposes, depending on where the research activities are conducted. We have elected to treat GILTI as a period cost and the additional capitalization of R&D costs within GILTI increases our provision for income taxes. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the TCJA. The OBBBA permanently changes the limitation on the deduction of business interest expense, as well as makes permanent the immediate deduction for domestic R&D expenses. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. This legislation may be subject to further clarification and the issuance of interpretive guidance; however, we do not expect a material impact to the financial statements at this time.

Previous wording

For further information on the effective tax rate and the Tax Act's impact, see Note 9, Income Taxes, to our interim unaudited condensed consolidated financial statements.

Current wording

For further information on the effective tax rate and the TCJA's and OBBBA's impacts, see Note 9, Income Taxes, to our interim unaudited condensed consolidated financial statements.

Previous wording

We believe that our cash on hand, expected cash generation from future operations and available borrowing capacity under the Revolving Credit Facility are sufficient to meet liquidity requirements for at least the next 12 months, including funds needed for our material cash requirements. As of April 27, 2025, we had $156.5 million in cash and cash equivalents and $452.1 million of available undrawn borrowing capacity on our Revolving Credit Facility, subject to net leverage limitations and customary conditions precedent, including the accuracy of representations and warranties and the absence of defaults. Over the longer-term, we expect to fund our business using cash flows from operating activities.

Current wording

We believe that our cash on hand, expected cash generation from future operations and available borrowing capacity under the Revolving Credit Facility are sufficient to meet liquidity requirements for at least the next 12 months, including funds needed for our material cash requirements. As of July 27, 2025, we had $168.6 million in cash and cash equivalents and $451.6 million of available undrawn borrowing capacity on our Revolving Credit Facility, subject to net leverage limitations and customary conditions precedent, including the accuracy of representations and warranties and the absence of defaults. Over the longer-term, we expect to fund our business using cash flows from operating activities.

Previous wording

As of April 27, 2025 and January 26, 2025, there was $2.9 million outstanding under the letters of credit under the Revolving Credit Facility.

Current wording

As of July 27, 2025 and January 26, 2025, there was $3.4 million and $2.9 million, respectively, outstanding under the letters of credit under the Revolving Credit Facility.

Previous wording

A meaningful portion of our capital resources, and the liquidity they represent, are held by our subsidiaries outside of the U.S. As of April 27, 2025, our foreign subsidiaries held $136.1 million of cash and cash equivalents, compared to $139.1 million at January 26, 2025. Our liquidity may be impacted by fluctuating exchange rates. For additional information on exchange rates, see Item 3–Quantitative and Qualitative Disclosures About Market Risk.

Current wording

A meaningful portion of our capital resources, and the liquidity they represent, are held by our subsidiaries outside of the U.S. As of July 27, 2025, our foreign subsidiaries held $151.0 million of cash and cash equivalents, compared to $139.1 million at January 26, 2025. Our liquidity may be impacted by fluctuating exchange rates. For additional information on exchange rates, see Item 3–Quantitative and Qualitative Disclosures About Market Risk.

Previous wording

In connection with the enactment of the Tax Act, all historic and current foreign earnings are taxed in the U.S. Depending on the jurisdiction, these foreign earnings are potentially subject to a withholding tax, if repatriated. As of April 27, 2025, our historical undistributed earnings prior to fiscal year 2023 of our foreign subsidiaries are intended to be permanently reinvested outside of the U.S. With the enactment of the Tax Act, which amended the Internal Revenue Code of 1986, all post-1986 previously unremitted earnings for which no U.S. deferred tax liability had been accrued were subject to U.S. tax. As a result of the U.S. taxation of these amounts, we have determined that none of the foreign earnings from fiscal year 2023 onward will be permanently reinvested outside of the U.S. If we needed to remit all or a portion of our historical undistributed earnings to the U.S. for investment in our domestic operations, any such remittance could result in increased tax liabilities and a higher effective tax rate. Determination of the amount of the unrecognized potential deferred tax liability on these unremitted earnings is not practicable.

Current wording

In connection with the enactment of the TCJA, all historic and current foreign earnings are taxed in the U.S. Depending on the jurisdiction, these foreign earnings are potentially subject to a withholding tax, if repatriated. As of July 27, 2025, our historical undistributed earnings prior to fiscal year 2023 of our foreign subsidiaries are intended to be permanently reinvested outside of the U.S. With the enactment of the TCJA, which amended the Internal Revenue Code of 1986, all post-1986 previously unremitted earnings for which no U.S. deferred tax liability had been accrued were subject to U.S. tax. As a result of the U.S. taxation of these amounts, we have determined that none of the foreign earnings from fiscal year 2023 onward will be permanently reinvested outside of the U.S. If we needed to remit all or a portion of our historical undistributed earnings to the U.S. for investment in our domestic operations, any such remittance could result in increased tax liabilities and a higher effective tax rate. Determination of the amount of the unrecognized potential deferred tax liability on these unremitted earnings is not practicable.

Previous wording

On April 24, 2025, we entered into the Fourth Amendment, in order to, among other things, increase the total available borrowing capacity under the revolving credit facility by $117.5 million, increasing the total facility size to $455.0 million. The increase partially replaces borrowing capacity that matured on November 7, 2024. Other than the foregoing, the material terms of the Credit Agreement remain unchanged.

Current wording

On April 24, 2025, we entered into the fourth amendment (the "Fourth Amendment") to the Credit Agreement, in order to, among other things, increase the total available borrowing capacity under the revolving credit facility under the Credit Agreement (the "Revolving Credit Facility") by $117.5 million, increasing the total facility size to $455.0 million. The increase partially replaces borrowing capacity that matured on November 7, 2024. Other than the foregoing, the material terms of the Credit Agreement remain unchanged.

Previous wording

As of April 27, 2025, the Company had $171.2 million outstanding under the Term Loans and no revolving loans outstanding under the Revolving Credit Facility, which had available undrawn borrowing capacity of $452.1 million, subject to net leverage limitations and customary conditions precedent, including the accuracy of representations and warranties and the absence of defaults.

Current wording

As of July 27, 2025, the Company had $146.2 million outstanding under the Term Loans and no revolving loans outstanding under the Revolving Credit Facility, which had available undrawn borrowing capacity of $451.6 million, subject to net leverage limitations and customary conditions precedent, including the accuracy of representations and warranties and the absence of defaults.

Previous wording

The 2028 Notes are not currently redeemable by the Company. The 2028 Notes may be converted at the option of the holders at the times and under the circumstances and at the conversion rate described in Note 8, Long-Term Debt, to our interim unaudited condensed consolidated financial statements. As of April 27, 2025, one of the conditions allowing holders of the 2028 Notes to convert had been met. The trading price of our common stock remained above 130% of the applicable $20.37 conversion price for at least 20 trading days during the 30 consecutive trading-day period ending on, and including, October 25, 2024 (the last trading day of the quarter ended April 27, 2025), resulting in the right of the holders of the 2028 Notes to convert their 2028 Notes beginning April 28, 2025 through July 25, 2025 (the last trading day of the quarter ending July 27, 2025). Should the holders of the 2028 Notes elect to convert some or all of the outstanding 2028 Notes, the Company intends to draw on its Revolving Credit Facility to settle the obligation.

Current wording

The 2028 Notes are not currently redeemable by the Company. The 2028 Notes may be converted at the option of the holders at the times and under the circumstances and at the conversion rate described in Note 8, Long-Term Debt, to our interim unaudited condensed consolidated financial statements. As of July 27, 2025, one of the conditions allowing holders of the 2028 Notes to convert had been met. The trading price of our common stock remained above 130% of the applicable $20.37 conversion price for at least 20 trading days during the 30 consecutive trading-day period ending on, and including, July 25, 2025 (the last trading day of the quarter ended July 27, 2025), resulting in the right of the holders of the 2028 Notes to convert the 2028 Notes beginning July 28, 2025 through October 24, 2025 (the last trading day of the fiscal quarter ending October 26, 2025). Should the holders of the 2028 Notes elect to convert some or all of the outstanding 2028 Notes, the Company intends to draw on its Revolving Credit Facility to settle the obligation.

Previous wording

On July 11, 2024 and July 15, 2024, we entered into separate, privately negotiated exchange agreements (the "Exchange Agreements") with certain holders of the 2028 Notes. Pursuant to the Exchange Agreements, certain holders of the 2028 Notes exchanged with us approximately $188.1 million in aggregate principal amount of 2028 Notes held by them for an aggregate of

Current wording

On July 11, 2024 and July 15, 2024, we entered into separate, privately negotiated exchange agreements (the "Exchange Agreements") with certain holders of the 2028 Notes. Pursuant to the Exchange Agreements, certain holders of the 2028 Notes exchanged with us approximately $188.1 million in aggregate principal amount of 2028 Notes held by them for an aggregate of 10,378,431 shares of our common stock, which number of shares was determined over an averaging period that commenced on July 12, 2024.

Previous wording

We did not repurchase any shares of our common stock under the program in the first three months of fiscal year 2026 or in the first three months of fiscal year 2025. As of April 27, 2025, the remaining authorization under the program was $209.4 million. To the extent we repurchase any shares of our common stock under the program in the future, we expect to fund such repurchases from cash on hand and borrowings on our Revolving Credit Facility. We have no obligation to repurchase any shares under the program and may suspend or discontinue it at any time.

Current wording

We did not repurchase any shares of our common stock under the program in the first six months of fiscal year 2026 or in the first six months of fiscal year 2025. As of July 27, 2025, the remaining authorization under the program was $209.4 million. To the extent we repurchase any shares of our common stock under the program in the future, we expect to fund such repurchases from cash on hand and borrowings on our Revolving Credit Facility. We have no obligation to repurchase any shares under the program and may suspend or discontinue it at any time.

Previous wording

Operating cash flows for the first three months of fiscal year 2026 compared to the first three months of fiscal year 2025 were favorably impacted by a 21.8% increase in net sales, significantly lower interest payments on debt, lower restructuring payments related to employee termination benefits, and a decrease in income tax payments, and were unfavorably impacted by an increase in annual bonus payments, and an incremental increase in inventory spend.

Current wording

Operating cash flows for the first six months of fiscal year 2026 compared to the first six months of fiscal year 2025 were favorably impacted by a 20.7% increase in net sales, significantly lower interest payments on debt, lower restructuring payments related to employee termination benefits, and a decrease in income tax payments, and were unfavorably impacted by an increase in annual bonus payments and an incremental increase in inventory spend.

Previous wording

Net cash provided by or used in investing activities is primarily driven by capital expenditures, proceeds from sales of property, purchases and sales of investments, purchases of intangibles, and proceeds from or premiums paid for corporate-owned life insurance.

Current wording

Net cash provided by or used in investing activities is primarily driven by capital expenditures, purchases and sales of investments, purchases of intangibles, and proceeds from or premiums paid for corporate-owned life insurance.

Previous wording

In the first three months of fiscal year 2026, we sold investments for proceeds of $0.5 million compared to $2.7 million for the first three months of fiscal year 2025.

Current wording

In the first six months of fiscal year 2026, we sold investments for proceeds of $0.5 million compared to $2.7 million for the first six months of fiscal year 2025. In the first six months of fiscal year 2025, we paid $0.4 million for strategic investments in companies that are enabling the LoRa and LoRaWAN®-based ecosystem. No similar investments were made in the first six months of fiscal year 2026.

Previous wording

Purchases of intangibles were $0.5 million for the first three months of fiscal year 2026, compared to $1.3 million for the first three months of fiscal year 2025, which included capitalized development costs and software licenses.

Current wording

Purchases of intangibles were $2.8 million for the first six months of fiscal year 2026, compared to $5.0 million for the first six months of fiscal year 2025, which included capitalized development costs and software licenses.

Previous wording

In the first three months of fiscal year 2026, we paid $3.4 million in premiums into our corporate-owned life insurance policy in order to provide substantive coverage for our deferred compensation liability. In the first three months of fiscal year 2025, we received $1.8 million of proceeds from corporate-owned life insurance, which were used to pay deferred compensation distributions.

Current wording

In the first six months of fiscal year 2026, we paid $3.4 million in premiums into our corporate-owned life insurance policy in order to provide substantive coverage for our deferred compensation liability. In the first six months of fiscal year 2025, we received $4.8 million of proceeds from corporate-owned life insurance, which were used to pay deferred compensation distributions.

Previous wording

Net cash provided by or used in financing activities is primarily attributable to payments on our Revolving Credit Facility, payments related to deferred financing costs, payments related to employee share-based compensation payroll taxes and proceeds from the exercise of stock options.

Current wording

Net cash provided by or used in financing activities is primarily attributable to payments on our Term Loans, payments related to deferred financing costs, payments related to employee share-based compensation payroll taxes and proceeds from the exercise of stock options.

Previous wording

In the first three months of fiscal year 2026, we made a prepayment of $10.0 million on our Term Loans. No such prepayments were made in the first three months of fiscal year 2025.

Current wording

In the first six months of fiscal year 2026, we made prepayments of $35.0 million on our Term Loans. No such prepayments were made in the first six months of fiscal year 2025.

Previous wording

In the first three months of fiscal year 2026, we paid $0.5 million for deferred financing costs, compared to $0.8 million for the first three months of fiscal year 2025.

Current wording

In the first six months of fiscal year 2026, we paid $0.6 million for deferred financing costs, compared to $0.8 million for the first six months of fiscal year 2025.

Previous wording

In the first three months of fiscal year 2026, we paid $8.9 million for employee share-based compensation payroll taxes, compared to payments of $2.4 million for employee share-based compensation payroll taxes in the first three months of fiscal year 2025.

Current wording

In the first six months of fiscal year 2026, we paid $12.2 million for employee share-based compensation payroll taxes and received $0.5 million in proceeds from the exercise of stock options. In the first six months of fiscal year 2025, we paid $4.2 million for employee share-based compensation payroll taxes and received $0.6 million in proceeds from the exercise of stock options.

Previous wording

Our critical accounting estimates are disclosed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 26, 2025. There have been no significant changes to our policies during the three months ended April 27, 2025.

Current wording

Our critical accounting policies and estimates are disclosed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 26, 2025. While, there have been no significant changes to our policies during the three and six months ended July 27, 2025, we revised certain assumptions within one of our critical accounting estimates to reflect developments during the second quarter of fiscal year 2026.