SEMTECH CORP
For the period ended Oct 26, 2025. Filed Nov 25, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Oct 26, 2025 · Filed Nov 25, 2025
SMTC$103.21+12.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-07-27; filed 2025-08-26.
0000088941-25-000160
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-10-26; filed 2025-11-25.
0000088941-25-000166
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 120 previous paragraphs and 133 current paragraphs.
74 unchanged; 44 reworded; 14 added; 1 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Recent Developments
Current report
Financing
Current report
On October 10, 2025, the Company issued and sold $402.5 million in aggregate principal amount of 0% Convertible Senior Notes due 2030 (the "2030 Notes") in a private placement. The 2030 Notes were issued pursuant to an indenture, dated October 10, 2025, by and among the Company, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee (the "2030 Indenture"). The 2030 Notes are jointly and severally and fully and unconditionally guaranteed by each of the Company's current and future direct and indirect wholly-owned domestic subsidiaries that guarantee its borrowings under its Credit Agreement (defined below). The 2030 Notes do not bear any interest and will mature on October 15, 2030, unless earlier converted, redeemed or repurchased. See Note 8, Long-Term Debt to our interim unaudited condensed consolidated financial statements for additional information regarding the 2030 Notes.
Current report
On October 7, 2025, the Company entered into separate, privately-negotiated exchange agreements (the "2025 Exchange of 2027 Notes") with certain holders of our 1.625% Convertible Senior Notes due 2027 (the "2027 Notes"). Pursuant to the 2025 Exchange of 2027 Notes, on October 14, 2025, the Company used approximately $220.6 million of the net proceeds from the 2030 Notes, together with the issuance of 3,036,192 shares of the Company's common stock as consideration for the exchange of approximately $219.0 million aggregate principal amount of the 2027 Notes and accrued interest. The Company accounted for these exchange transactions as an induced conversion. In the three and nine months ended October 26, 2025, in connection with the exchange transactions, the Company recognized an induced conversion expense of $17.6 million recorded in "Interest expense" on the Statements of Operations and an increase to "Additional paid-in capital" of $14.3 million on the Balance Sheets, which included $3.3 million from the write-off of deferred financing costs.
Current report
In connection with the 2025 Exchange of 2027 Notes, the Company also terminated the Convertible Note Hedges and Warrants corresponding to the number of 2027 Notes exchanged. The Company received approximately $24.5 million in connection with the termination, which was recorded as an increase to additional paid-in capital on the Balance Sheets.
Current report
On October 7, 2025, the Company entered into separate, privately-negotiated exchange agreements (the "2025 Exchange of 2028 Notes") with holders of our 4.00% Convertible Senior Notes due 2028 (the "2028 Notes"). Pursuant to the 2025 Exchange of 2028 Notes, on October 14, 2025, the Company used approximately $63.1 million of the net proceeds from the 2030 Notes, together with the issuance of 2,217,394 shares of the Company's common stock as consideration for the exchange of the remaining $62.0 million aggregate principal amount of the 2028 Notes and accrued interest. The Company accounted for these exchange transactions as an induced conversion. In the three and nine months ended October 26, 2025, in connection with the exchange transactions, the Company recognized an induced conversion expense of $3.6 million recorded in "Interest expense" on the Statements of Operations and an increase to "Additional paid-in capital" of $2.2 million on the Balance Sheets, which included $1.3 million from the write-off of deferred financing costs.
Current report
Hardware sales, partially offset by an approximately $1.5 million decrease in managed connectivity sales.
Current report
On October 7, 2025, the Company entered into the 2025 Exchange of 2027 Notes with certain holders of the 2027 Notes. Pursuant to the 2025 Exchange of 2027 Notes, on October 14, 2025, the Company used approximately $220.6 million of the net proceeds from the 2030 Notes (discussed below), together with the issuance of 3,036,192 shares of the Company's common stock as consideration for the exchange of approximately $219.0 million aggregate principal amount of the 2027 Notes and accrued interest. The Company accounted for these exchange transactions as an induced conversion. In the three and nine months ended October 26, 2025, in connection with the exchange transactions, the Company recognized an induced conversion expense of $17.6 million recorded in "Interest expense" on the Statements of Operations and an increase to "Additional paid-in capital" of $14.3 million on the Balance Sheets, which included $3.3 million from the write-off of deferred financing costs.
Current report
In connection with the 2025 Exchange of 2027 Notes, the Company also terminated the Convertible Note Hedges and the Warrants corresponding to the number of 2027 Notes exchanged. The Company received approximately $24.5 million in connection with the termination, which was recorded as an increase to additional paid-in capital on the Balance Sheets.
Current report
On October 7, 2025, the Company entered into the 2025 Exchange of 2028 Notes with holders of the 2028 Notes. Pursuant to the 2025 Exchange of 2028 Notes, on October 14, 2025, the Company used approximately $63.1 million of the net proceeds from the 2030 Notes (discussed below), together with the issuance of 2,217,394 shares of the Company's common stock as consideration for the exchange of the remaining $62.0 million aggregate principal amount of the 2028 Notes and accrued interest. The Company accounted for these exchange transactions as an induced conversion. In the three and nine months ended October 26, 2025, in connection with the exchange transactions, the Company recognized an induced conversion expense of $3.6 million recorded in "Interest expense" on the Statements of Operations and an increase to "Additional paid-in capital" of $2.2 million on the Balance Sheets, which included $1.3 million from the write-off of deferred financing costs.
Current report
Convertible Senior Notes Due 2030
Current report
On October 10, 2025, the Company issued and sold $402.5 million in aggregate principal amount of 2030 Notes in a private placement. The 2030 Notes were issued pursuant to an indenture, dated October 10, 2025, by and among the Company, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2030 Notes are jointly and severally and fully and unconditionally guaranteed by each of the Company's current and future direct and indirect wholly-owned domestic subsidiaries that guarantee its borrowings under its Credit Agreement. The 2030 Notes do not bear any interest and will mature on October 15, 2030, unless earlier converted, redeemed or repurchased. As of October 26, 2025, $402.5 million of the 2030 Notes remained outstanding.
Current report
Capital expenditures were $7.4 million for the first nine months of fiscal year 2026 compared to $5.2 million for the first nine months of fiscal year 2025.
Current report
In the first nine months of fiscal year 2026, we collected proceeds of $402.5 million from and made prepayments of $281.0 million on our convertible senior notes, as discussed above. No such proceeds were collected or no such prepayments were made in the first nine months of fiscal year 2025.
Removed paragraphs (1)
Previous report
Capital expenditures were $4.5 million for the first six months of fiscal year 2026 compared to $4.7 million for the first six months of fiscal year 2025.
Reworded paragraphs (44)
Previous wording
Analog Mixed Signal and Wireless. We design, develop, manufacture and market high-performance protection devices, which are often referred to as transient voltage suppressors ("TVS") and specialized sensing products. TVS devices provide protection for electronic systems where voltage spikes (called transients), such as electrostatic discharge, electrical over stress or secondary lightning surge energy, can permanently damage sensitive ICs. Our portfolio of protection solutions include filter and termination devices that are integrated with the TVS device. Our products provide robust protection while preserving signal integrity in high-speed communications, networking and video interfaces. These products also operate at very low voltage. Our protection products can be found in a broad range of applications including smart phones, LCD and organic light-emitting diode TVs and displays, set-top boxes, monitors and displays, tablets, computers, notebooks, base stations, routers, automobile and industrial systems. Our unique sensing technology enables proximity sensing and advanced user interface solutions for our mobile and consumer products. We also design, develop, manufacture and market a portfolio of specialized radio frequency products used in a wide variety of industrial, medical and communications applications. Our wireless products, which include our LoRa® devices and wireless radio frequency technology ("LoRa Technology"), feature industry leading and longest-range industrial, scientific and medical radio, enabling a lower total cost of ownership and increased reliability. These features make these products particularly suitable for machine-to-machine and IoT applications. We also design, develop, and market power product devices that control, alter, regulate, and condition the power within electronic systems focused on the LoRa and IoT infrastructure segment. The highest volume product types within this category are switching voltage regulators, combination switching and linear regulators, smart regulators, isolated switches, and wireless charging. Our video products offer advanced solutions for highly differentiated audio video-over-IP technology for professional audio video applications.
Current wording
Analog Mixed Signal and Wireless. We design, develop, manufacture and market high-performance protection devices, which are often referred to as transient voltage suppressors ("TVS") and specialized sensing products. TVS devices provide protection for electronic systems where voltage spikes (called transients), such as electrostatic discharge, electrical over stress or secondary lightning surge energy, can permanently damage sensitive ICs. Our portfolio of protection solutions include filter and termination devices that are integrated with the TVS device. Our products provide robust protection while preserving signal integrity in high-speed communications, networking and video interfaces. These products also operate at very low voltage. Our protection products can be found in a broad range of applications including smart phones, LCD and organic light-emitting diode TVs and displays, set-top boxes, monitors and displays, tablets, computers, notebooks, base stations, routers, automobile and industrial systems. Our unique sensing technology enables proximity sensing and advanced user interface solutions for our mobile and consumer products. We also design, develop, manufacture and market a portfolio of specialized radio frequency products used in a wide variety of industrial, medical and communications applications. Our wireless products, which include our LoRa® devices and wireless radio frequency technology, feature industry leading and longest-range industrial, scientific and medical radio, enabling a lower total cost of ownership and increased reliability. These features make these products particularly suitable for machine-to-machine and IoT applications. We also design, develop, and market power product devices that control, alter, regulate, and condition the power within electronic systems focused on the LoRa and IoT infrastructure segment. The highest volume product types within this category are switching voltage regulators, combination switching and linear regulators, smart regulators, isolated switches, and wireless charging. Our video products offer advanced solutions for highly differentiated audio video-over-IP technology for professional audio video applications.
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 second quarters of fiscal years 2026 and 2025 were 74% and 74%, 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 third quarters of fiscal years 2026 and 2025 were 76% and 72%, 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, 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.
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 79% during the third quarters of fiscal years 2026 and 2025, respectively. Approximately 68% and 63% of our net sales during the third 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
Comparisons of the Three and Six Months Ended July 27, 2025 and July 28, 2024
Current wording
Comparisons of the Three and Nine Months Ended October 26, 2025 and October 27, 2024
Previous 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.
Current wording
Net sales in the third quarter of fiscal year 2026 were $267.0 million, an increase of 12.7% compared to $236.8 million in the third 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 $16.2 million in the third quarter of fiscal year 2026 compared to the third quarter of fiscal year 2025, primarily driven by an approximately $11.5 million increase in LoRa-enabled sales in industrial applications and approximately $7.3 million increase in IoT Hardware sales, partially offset by an approximately $1.5 million decrease in managed connectivity sales and approximately $1.1 million decrease in broadcast sales. Net sales from our infrastructure end market increased $12.1 million in the third quarter of fiscal year 2026 compared to the third quarter of fiscal year 2025, primarily driven by an approximately $13.1 million increase in data center sales, partially offset by an approximately $1.9 million decrease in telecommunications sales. Net sales from our high-end consumer end market increased $1.8 million in the third quarter of fiscal year 2026 compared to the third quarter of fiscal year 2025, primarily driven by an approximately $1.3 million increase in consumer TVS product sales.
Previous wording
Net sales for the first six months of fiscal year 2026 were $508.6 million, an increase of 20.7% compared to $421.5 million for the first six months 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 $44.9 million for the first six months of fiscal year 2026 versus the same prior year period, primarily driven by an approximately $27.7 million increase in IoT Hardware sales and approximately $25.7 million increase in LoRa-enabled sales in industrial applications, partially offset by an approximately $7.3 million decrease in other wireless and sensing products sales. Net sales from our infrastructure end market increased $37.3 million for the first six months of fiscal year 2026 versus the same prior year period, primarily driven by an approximately $55.4 million increase in data center sales, partially offset by an approximately $19.9 million decrease in telecommunications sales. Net sales from our high-end consumer end market increased $5.0 million during the first six months of fiscal year 2026 versus the same prior year period, primarily driven by a $3.2 million increase in consumer TVS product sales.
Current wording
Net sales for the first nine months of fiscal year 2026 were $775.6 million, an increase of 17.8% compared to $658.3 million for the first nine months 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 $61.1 million for the first nine months of fiscal year 2026 versus the same prior year period, primarily driven by an approximately $37.1 million increase in LoRa-enabled sales in industrial applications and approximately $35.0 million increase in IoT Hardware sales, partially offset by an approximately $8.1 million decrease in other wireless and sensing products sales and approximately $3.4 million decrease in broadcast sales. Net sales from our infrastructure end market increased $49.4 million for the first nine months of fiscal year 2026 versus the same prior year period, primarily driven by an approximately $68.5 million increase in data center sales, partially offset by an approximately $21.8 million decrease in telecommunications sales. Net sales from our high-end consumer end market increased $6.8 million during the first nine months of fiscal year 2026 versus the same prior year period, primarily driven by a $4.5 million increase in consumer TVS product sales and approximately $2.4 million increase in proximity sensing product sales.
Previous 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.
Current wording
Net sales in the third quarter of fiscal year 2026, as compared to the third 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 $14.2 million in the third quarter of fiscal year 2026 compared to the third quarter of fiscal year 2025, primarily driven by an approximately $11.8 million increase in LoRa-enabled product sales and approximately $2.5 million increase in total TVS product sales. Net sales from Signal Integrity increased $10.1 million in the third quarter of fiscal year 2026 compared to the third quarter of fiscal year 2025, primarily driven by an approximately $13.1 million increase in data center sales, partially offset by an approximately $1.9 million decrease in telecommunications sales and approximately $1.1 million decrease in broadcast sales. Net sales from IoT Systems and Connectivity increased $5.8 million in the third quarter of fiscal year 2026 compared to the third quarter of fiscal year 2025, primarily driven by an approximately $7.3 million increase in IoT
Previous wording
Net sales from Signal Integrity increased $32.5 million in the first six months of fiscal year 2026 versus the same period in the prior year, primarily driven by an approximately $55.4 million increase in data center sales, partially offset by an approximately $19.9 million decrease in telecommunications sales and approximately $2.3 million decrease in broadcast sales. Net sales from Analog Mixed Signal and Wireless increased $28.0 million in the first six months of fiscal year 2026 versus the same period in the prior year, primarily driven by an approximately $25.6 million increase in LoRa-enabled product sales, approximately $7.4 million increase in total TVS product sales, and approximately $1.9 million increase in proximity sensing product sales, partially offset by an approximately $7.3 million decrease in other wireless and sensing product sales. Net sales from IoT Systems and Connectivity increased $26.6 million in the first six months of fiscal year 2026 versus the same period in the prior year, primarily driven by an approximately $27.7 million increase in IoT Hardware sales.
Current wording
Net sales from Signal Integrity increased $42.7 million in the first nine months of fiscal year 2026 versus the same prior year period, primarily driven by an approximately $68.5 million increase in data center sales, partially offset by an approximately $21.8 million decrease in telecommunications sales and approximately $3.4 million decrease in broadcast sales. Net sales from Analog Mixed Signal and Wireless increased $42.2 million in the first nine months of fiscal year 2026 versus the same prior year period, primarily driven by an approximately $37.4 million increase in LoRa-enabled product sales and approximately $9.9 million increase in total TVS product sales, partially offset by an approximately $8.1 million decrease in other wireless and sensing product sales. Net sales from IoT Systems and Connectivity increased $32.5 million in the first nine months of fiscal year 2026 versus the same prior year period, primarily driven by an approximately $35.0 million increase in IoT Hardware sales, partially offset by an approximately $2.5 million decrease in managed connectivity sales.
Previous 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.
Current wording
In the third quarter of fiscal year 2026, gross profit increased $17.5 million to $138.5 million from $121.0 million in the third quarter of fiscal year 2025. This increase was primarily driven by an approximately $8.9 million increase from Analog Mixed Signal and Wireless, which experienced higher sales led by LoRa-enabled products due to stronger demand, an approximately $8.0 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 an approximately $1.5 million decrease from IoT Systems and Connectivity, primarily driven by higher overhead costs, partially offset by higher IoT Hardware sales due to stronger demand.
Previous 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.
Current wording
Our gross margin was 51.9% in the third quarter of fiscal year 2026, compared to 51.1% in the third quarter of fiscal year 2025. Gross margin for our Signal Integrity segment was 65.1% in the third quarter of fiscal year 2026, compared to 63.1% in the third quarter of fiscal year 2025, primarily due to favorable product mix. Gross margin for our Analog Mixed Signal and Wireless segment was 58.0% in the third quarter of fiscal year 2026, compared to 57.2% in the third quarter of fiscal year 2025, primarily due to favorable product mix. Gross margin for our IoT Systems and Connectivity segment was 36.6% in the third quarter of fiscal year 2026, compared to 41.0% in the third quarter of fiscal year 2025, primarily due to higher overhead costs.
Previous wording
In the first six months of fiscal year 2026, gross profit increased $60.3 million to $265.4 million from $205.1 million in the first six months of fiscal year 2025. This increase was primarily due to a $24.9 million increase from Analog Mixed Signal, which experienced higher sales due to stronger demand, a $24.5 million increase from Signal Integrity, which experienced higher sales due to stronger demand, and a $10.8 million increase from IoT Systems and Connectivity, which experienced higher sales due to stronger demand.
Current wording
In the first nine months of fiscal year 2026, gross profit increased $77.8 million to $403.9 million from $326.0 million in the first nine months of fiscal year 2025. This increase was primarily due to an approximately $33.8 million increase from Analog Mixed Signal, an approximately $32.5 million increase from Signal Integrity, and an approximately $9.3 million increase from IoT Systems and Connectivity, all of which experienced higher sales due to stronger demand.
Previous wording
Our gross margin was 52.2% in the first six months of fiscal year 2026, compared to 48.7% inthe first six months of fiscal year 2025. Gross margin from Signal Integrity was 63.9% inthe first six months of fiscal year 2026, compared to 60.8% inthe first six months of fiscal year 2025, primarily due to favorable product mix. Gross margin from Analog Mixed Signal and Wireless was 60.8% inthe first six months of fiscal year 2026, compared to 55.7% inthe first six months of fiscal year 2025, primarily due to higher volume and favorable product mix. Gross margin from IoT Systems and Connectivity was 37.0% in the first six months of fiscal year 2026, compared to 36.4% in the first six months of fiscal year 2025, primarily due to higher volume.
Current wording
Our gross margin was 52.1% in the first nine months of fiscal year 2026, compared to 49.5% inthe first nine months of fiscal year 2025. Gross margin from Signal Integrity was 64.3% inthe first nine months of fiscal year 2026, compared to 61.6% inthe first nine months of fiscal year 2025, primarily due to favorable product mix. Gross margin from Analog Mixed Signal and Wireless was 59.8% inthe first nine months of fiscal year 2026, compared to 56.2% inthe first nine months of fiscal year 2025, primarily due to favorable product mix. Gross margin from IoT Systems and Connectivity was 36.9% in the first nine months of fiscal year 2026, compared to 38.0% in the first nine months of fiscal year 2025, primarily due to higher overhead costs.
Previous wording
Product development and engineering expenses increased $8.1 million in the second quarter of fiscal year 2026 compared to the second quarter of fiscal year 2025 primarily as a result of a $6.7 million net increase in staffing-related costs, including higher supplemental compensation, and a $2.3 million increase from new product introduction expenses, partially offset by a $0.9 million decrease in depreciation.
Current wording
Product development and engineering expenses increased $6.8 million in the third quarter of fiscal year 2026 compared to the third quarter of fiscal year 2025 primarily as a result of a $4.1 million increase from new product introduction expenses, a $1.3 million net increase in staffing-related costs from higher salaries, and a $0.8 million increase in facilities expenses.
Previous wording
Product development and engineering expenses increased $14.0 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 $11.2 million net increase in staffing-related costs, including higher supplemental compensation, and an increase of $2.1 million from new product introduction expenses.
Current wording
Product development and engineering expenses increased $20.9 million in the first nine months of fiscal year 2026 compared to the first nine months of fiscal year 2025 primarily as a result of a $12.4 million net increase in staffing-related costs, including higher salaries and supplemental compensation, a $6.2 million increase from new product introduction expenses, and a $2.0 million increase in facilities expenses.
Previous wording
Selling, general and administrative expenses increased $2.7 million in the second quarter of fiscal year 2026 compared to the second quarter of fiscal year 2025 primarily as a result of a $2.5 million net increase in staffing-related costs from higher supplemental compensation and a $0.7 million increase in consulting expenses, partially offset by a $0.6 million decrease in depreciation.
Current wording
Selling, general and administrative expenses decreased $2.7 million in the third quarter of fiscal year 2026 compared to the third quarter of fiscal year 2025 primarily as a result of a $4.5 million net decrease in staffing-related costs from lower supplemental compensation and share-based compensation, partially offset by a $1.5 million increase in consulting expenses, and a $0.8 million increase in bad debt expense.
Previous 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.
Current wording
Selling, general and administrative expenses decreased $5.8 million in the first nine months of fiscal year 2026 compared to the first nine months of fiscal year 2025 primarily as a result of a $10.0 million net decrease in staffing-related costs driven by lower share-based compensation caused by remeasurement of the cash-settled awards liability, partially offset by a $4.3 million increase in consulting expenses.
Previous 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.
Current wording
Intangible amortization was $0.1 million and $0.1 million for the third quarters of fiscal years 2026 and 2025, respectively, and $0.4 million and $0.7 million for the first nine 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 $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.
Current wording
Restructuring expenses increased by $0.1 million in the third quarter of fiscal year 2026 compared to the third quarter of fiscal year 2025, and decreased by $1.1 million for the first nine 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
Goodwill impairment was $42.0 million for the second quarter and first six months of fiscal year 2026 primarily due to reduced earnings forecasts associated with the IoT Connected Services reporting unit, included in the IoT Systems and Connectivity operating segment. There was no goodwill impairment at any of the Company's other reporting units. There was no goodwill impairment recorded in the same periods of fiscal year 2025.
Current wording
Goodwill impairment was $42.0 million for the first nine months of fiscal year 2026 primarily due to reduced earnings forecasts associated with the IoT Connected Services reporting unit, included in the IoT Systems and Connectivity operating segment, compared to no goodwill impairment recorded in the first nine months of fiscal year 2025. There was no goodwill impairment at any of the Company's other reporting units in the first nine months of fiscal year 2026. There was no goodwill impairment recorded in the third quarters of fiscal years 2026 and 2025.
Previous 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.
Current wording
Interest expense, including amortization and a write-off of deferred financing costs, decreased by $33.8 million to $38.8 million from $72.6 million for the first nine months of fiscal year 2026 compared to the same period in fiscal year 2025, 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 the full repayment of the Revolving Credit Facility (as defined below) and Term Loans (as defined below) from the fourth quarter of fiscal year 2025 through the third quarter of fiscal year 2026, partially offset by the induced conversion expense of $21.2 million in connection with the 2025 Exchange of 2027 Notes and 2025 Exchange of 2028 Notes.
Previous 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.
Current wording
During the third quarter and first nine months of fiscal year 2026 and third quarter of fiscal year 2025, we did not record any investment impairments and credit loss reserves. During the first nine months of 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.
Previous 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.
Current wording
We recorded income tax expense of $7.3 million in the third quarter of fiscal year 2026, compared to income tax expense of $4.0 million in the third quarter of fiscal year 2025. The change in our tax provision for the three months ended October 26, 2025, compared to the three months ended October 27, 2024 was primarily due to a regional mix of income and changes in valuation allowance. The effective tax rates in the third 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. The OBBBA did not have a material impact on our income tax provision for the three and nine months ended October 26, 2025. This legislation may be subject to further clarification and the issuance of interpretive guidance; however, we do not expect a material impact to our effective tax rate for fiscal year 2026 at this time.
Previous wording
In the first six months of fiscal year 2026, we recorded income tax expense of $13.4 million, compared to income tax expense of $7.2 million in the first six months of fiscal year 2025. The change in our tax provision for the six months ended July 27, 2025, compared to the six months ended July 28, 2024 was primarily due to a regional mix of income, changes in valuation allowance, non-deductibility of goodwill impairment, impact of GILTI and R&D credits. The effective tax rates in the first six months 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, non-deductibility of goodwill impairment, impact of GILTI and R&D credits.
Current wording
In the first nine months of fiscal year 2026, we recorded income tax expense of $20.8 million, compared to income tax expense of $11.2 million in the first nine months of fiscal year 2025. The change in our tax provision for the nine months ended October 26, 2025, compared to the nine months ended October 27, 2024 was primarily due to a regional mix of income, changes in valuation allowance, non-deductibility of goodwill impairment, impact of GILTI and R&D credits. The effective tax rates in the first nine months 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, non-deductibility of goodwill impairment, impact of GILTI and R&D credits.
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 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.
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 October 26, 2025, we had $164.7 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
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.
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 October 26, 2025, our foreign subsidiaries held $123.3 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
On September 26, 2022 (the "Third Restatement Effective Date"), we entered into a third amended and restated credit agreement (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement") with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, swing line lender and letter of credit issuer.
Current wording
On September 26, 2022, we entered into a third amendment and restatement credit agreement (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement") with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, swing line lender and letter of credit issuer.
Previous wording
After effectiveness of the Fourth Amendment, the borrowing capacity on the Revolving Credit Facility is $455.0 million, which is scheduled to mature on January 12, 2028 (subject to, in certain circumstances, an earlier springing maturity), and the term loans thereunder (the "Term Loans") are scheduled to mature on January 12, 2028 (subject to, in certain circumstances, an earlier springing maturity).
Current wording
After effectiveness of the Fourth Amendment, the borrowing capacity on the Revolving Credit Facility is $455.0 million, which is scheduled to mature on January 12, 2028 (subject to, in certain circumstances, an earlier springing maturity), and the term loans thereunder (the "Term Loans") were scheduled to mature on January 12, 2028 (subject to, in certain circumstances, an earlier springing maturity).
Previous 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.
Current wording
As of October 26, 2025, the Company had no amounts 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
We have entered into interest rate swap agreements to hedge the variability of interest payments on debt outstanding under the Term Loans. See Note 16, Derivatives and Hedging Activities, to our interim unaudited condensed consolidated financial statements for additional information.
Current wording
We had entered into interest rate swap agreements to hedge the variability of interest payments on debt outstanding under the Term Loans. As of October 26, 2025, there were no interest rate swap agreements outstanding. See Note 16, Derivatives and Hedging Activities, to our interim unaudited condensed consolidated financial statements for additional information.
Previous wording
On October 12, 2022 and October 21, 2022, we issued and sold $300.0 million and $19.5 million, respectively, in aggregate principal amount of 1.625% Convertible Senior Notes due 2027 (the "2027 Notes") in a private placement. The 2027 Notes were issued pursuant to an indenture dated October 12, 2022, by and among us, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2027 Notes bear interest at a rate of 1.625% per year, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2023. The 2027 Notes will mature on November 1, 2027, unless earlier converted, redeemed or repurchased. The 2027 Notes are not currently redeemable and, as of July 27, 2025, none of the conditions allowing holders of the 2027 Notes to convert had been met. The 2027 Notes were initially issued pursuant to an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act.
Current wording
On October 12, 2022 and October 21, 2022, we issued and sold $300.0 million and $19.5 million, respectively, in aggregate principal amount of the 2027 Notes in a private placement. The 2027 Notes were issued pursuant to an indenture dated October 12, 2022, by and among us, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2027 Notes bear interest at a rate of 1.625% per year, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2023. The 2027 Notes will mature on November 1, 2027, unless earlier converted, redeemed or repurchased. The 2027 Notes are not currently redeemable and, as of October 26, 2025, one of the conditions allowing holders of the 2027 Notes to convert had been met. The trading price of our common stock remained above 130% of the applicable conversion price for at least 20 trading days during the 30 consecutive trading-day period ending on, and including, October 24, 2025 (the last trading day of the quarter ended October 26, 2025), resulting in the right of the holders of the 2027 Notes to convert their 2027 Notes beginning October 27, 2025 through January 23, 2026 (the last trading day of the quarter ending January 25, 2026). Should the holders of the 2027 Notes elect to convert some or all of the outstanding 2027 Notes, the Company intends to draw on its Revolving Credit Facility to settle the obligation. The 2027 Notes were initially issued pursuant to an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act.
Previous wording
We used approximately $72.6 million of the net proceeds from the 2027 Notes to pay for the cost of the Convertible Note Hedge Transactions, after such cost was partially offset by approximately $42.9 million of proceeds to us from the sale of Warrants in connection with the issuance of the 2027 Notes, all as defined and described in Note 8, Long-Term Debt to our interim unaudited condensed consolidated financial statements. The Convertible Note Hedge Transactions and Warrants transactions are indexed to, and potentially settled in, our common stock and the net cost of $29.7 million has been recorded as a reduction to additional paid-in capital in the consolidated statement of stockholders' equity (deficit). We used the remaining net proceeds to fund a portion of the consideration in the Sierra Wireless Acquisition and to pay related fees and expenses. For additional information on the 2027 Notes, Convertible Note Hedge Transactions and the Warrants, see Note 8, Long-Term Debt to our interim unaudited condensed consolidated financial statements.
Current wording
We used approximately $72.6 million of the net proceeds from the 2027 Notes to pay for the cost of the Convertible Note Hedges, after such cost was partially offset by approximately $42.9 million of proceeds to us from the sale of Warrants in connection with the issuance of the 2027 Notes, all as defined and described in Note 8, Long-Term Debt to our interim unaudited condensed consolidated financial statements. The Convertible Note Hedges and Warrants transactions are indexed to, and potentially settled in, our common stock and the net cost of $29.7 million has been recorded as a reduction to additional paid-in capital in the consolidated statement of stockholders' equity (deficit). We used the remaining net proceeds to fund a portion of the consideration in the Sierra Wireless Acquisition and to pay related fees and expenses. For additional information on the 2027 Notes, Convertible Note Hedges and the Warrants, see Note 8, Long-Term Debt to our interim unaudited condensed consolidated financial statements.
Previous wording
On October 26, 2023, we issued and sold $250.0 million in aggregate principal amount of 2028 Notes in a private placement. The 2028 Notes were issued pursuant to an indenture, dated October 26, 2023, by and among the Company, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2028 Notes bear interest at a rate of 4.00% per year, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2024. The 2028 Notes will mature on November 1, 2028, unless earlier converted, redeemed or repurchased. As of July 27, 2025, approximately $62.0 million of the 2028 Notes remained outstanding. The 2028 Notes were offered and sold only to eligible purchasers who are both "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act and "accredited investors" within the meaning of Rule 501(a) under the Securities Act, in reliance on Section 4(a)(2) under the Securities Act.
Current wording
On October 26, 2023, we issued and sold $250.0 million in aggregate principal amount of 2028 Notes in a private placement. The 2028 Notes were issued pursuant to an indenture, dated October 26, 2023, by and among the Company, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2028 Notes bore interest at a rate of 4.00% per year, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2024. The 2028 Notes were scheduled to mature on November 1, 2028, unless earlier converted, redeemed or repurchased. The 2028 Notes were offered and sold only to eligible purchasers who are both "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act and "accredited investors" within the meaning of Rule 501(a) under the Securities Act, in reliance on Section 4(a)(2) under the Securities Act.
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 10,378,431 shares of our common stock, which number of shares was determined over an averaging period that commenced on July 12, 2024.
Current wording
On July 11, 2024 and July 15, 2024, we entered into separate, privately negotiated exchange agreements (the "2024 Exchange of 2028 Notes") with certain holders of the 2028 Notes. Pursuant to the 2024 Exchange of 2028 Notes, 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 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.
Current wording
We did not repurchase any shares of our common stock under the program in the first nine months of fiscal year 2026 or in the first nine months of fiscal year 2025. As of October 26, 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 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.
Current wording
Operating cash flows for the first nine months of fiscal year 2026 compared to the first nine months of fiscal year 2025 were favorably impacted by a 17.8% increase in net sales, significantly lower interest payments on debt, and lower restructuring payments related to employee termination benefits, and were unfavorably impacted by an increase in annual bonus payments and an incremental increase in inventory spend.
Previous 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.
Current wording
In the first nine months of fiscal year 2026, we sold investments for proceeds of $1.9 million compared to $2.7 million for the first nine months of fiscal year 2025. In the first nine 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 nine months of fiscal year 2026.
Previous 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.
Current wording
Purchases of intangibles were $5.4 million for the first nine months of fiscal year 2026, compared to $5.9 million for the first nine months of fiscal year 2025, which included capitalized development costs and software licenses.
Previous 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.
Current wording
In the first nine 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 nine 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 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.
Current wording
Net cash provided by or used in financing activities is primarily attributable to payments on our Term Loans, proceeds from and payments of convertible senior notes, repurchase of warrants, proceeds from unwind of bond hedge, purchase of capped calls, 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 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.
Current wording
In the first nine months of fiscal year 2026, we made prepayments of $181.2 million on our Term Loans. No such prepayments were made in the first nine months of fiscal year 2025.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Interest expense, including amortization and a write-off of deferred financing costs, increased by $6.2 million to $27.0 million from $20.8 million for the third quarter of fiscal year 2026 compared to the same period in fiscal year 2025, primarily due to the induced conversion expense of $21.2 million in connection with the 2025 Exchange of 2027 Notes and 2025 Exchange of 2028 Notes, partially offset by 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 the full repayment of the Revolving Credit Facility (as defined below) and Term Loans (as defined below) from the fourth quarter of fiscal year 2025 through the third quarter of fiscal year 2026.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.