SEMTECH CORP

Previous wording

Semtech Corporation (together with its consolidated subsidiaries, the "Company," "we," "our" or "us") is a leading provider of high-performance semiconductor, Internet of Things ("IoT") systems and cloud connectivity service solutions and was incorporated in Delaware in 1960. We have three operating segments—Signal Integrity, Analog Mixed Signal and Wireless, and IoT Systems and Connectivity—that represent three separate reportable segments. See Part I, Item 1, Note 14, Segment Information, to our interim unaudited condensed consolidated financial statements for additional information on our reportable segments.

Current wording

Semtech Corporation (together with its consolidated subsidiaries, the "Company," "we," "our" or "us") is a leading provider of high-performance semiconductors powering data center networking, IoT connectivity and cellular infrastructure solutions and was incorporated in Delaware in 1960. We have three operating segments—Signal Integrity, Analog Mixed Signal and Wireless, and IoT Systems and Connectivity—that represent three separate reportable segments. See Part I, Item 1, Note 14, Segment Information, to our interim unaudited condensed consolidated financial statements for additional information on our reportable segments.

Previous wording

Signal Integrity. We design, develop, manufacture and market a portfolio of optical and copper data communications and video transport products used in a wide variety of infrastructure and industrial applications. Our comprehensive portfolio includes integrated circuits ("ICs") for data centers, enterprise networks, passive optical networks ("PON"), and wireless base station optical transceivers. Our high-speed interfaces range from 100Mbps to 1.6Tbps and support key industry standards such as Fibre Channel, InfiniBand, Ethernet, PON and synchronous optical networks. Our video products offer advanced solutions for next generation high-definition broadcast applications.

Current wording

Signal Integrity. We design, develop, manufacture and market a portfolio of optical and copper data communications and video transport products used in a wide variety of infrastructure and industrial applications. Our comprehensive portfolio includes integrated circuits ("ICs") and photonic products for data centers, enterprise networks, passive optical networks ("PON"), and wireless base station optical transceivers. Our high-speed interfaces range from 100Mbps to 1.6Tbps and support key industry standards such as Fibre Channel, InfiniBand, Ethernet, PON and synchronous optical networks. Our video products offer advanced solutions for next-generation high-definition broadcast applications. Our photonic products include gain chips, semiconductor optical amplifiers, distributed feedback lasers for optical transceivers used across data center interconnects and intra-data center interconnects.

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, 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, force sensing, and advanced user interface solutions for mobile, consumer, computing and automotive 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

As disclosed in Part I, Item 1A: Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended January 26, 2025, the Company’s business is subject to risks related to, among other factors, tariffs and other trade barriers put in the place by government authorities. The imposition of tariffs and other trade barriers by government authorities on imported goods, including raw materials and components essential to our manufacturing processes, could have significant adverse effects on our business, financial condition, and results of operations. Beginning in the first quarter of fiscal year 2026, the U.S. government imposed additional tariffs on goods imported into the U.S. from numerous countries ("U.S. Tariffs") and multiple countries and groups of countries imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. Various modifications and delays to the U.S. Tariffs have been announced and further changes are expected to be made in the future, which may include additional sector-based tariffs or other measures. The ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. Tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. The Company continues to monitor and analyze the impacts of these measures and actions that can be taken to moderate and/or minimize their effects.

Current wording

As disclosed in Part I, Item 1A: Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended January 25, 2026, the Company’s business is subject to risks related to, among other factors, tariffs and other trade barriers put in the place by government authorities. The imposition of tariffs and other trade barriers by government authorities on imported goods, including raw materials and components essential to our manufacturing processes, could have significant adverse effects on our business, financial condition, and results of operations. Beginning in the first quarter of fiscal year 2026, the U.S. government imposed additional tariffs on goods imported into the U.S. from numerous countries ("U.S. Tariffs") and multiple countries and groups of countries imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. In February 2026, the U.S. Supreme Court ruled that certain of those U.S. Tariffs imposed under the International Emergency Economic Powers Act were not authorized by statute, and the legal status, scope and implementation of certain U.S. Tariffs and related measures continue to evolve. Various modifications, suspensions and delays to the U.S. Tariffs have been announced and further changes are expected to be made in the future, which may include additional sector-based tariffs or other measures imposed under alternate legal authorities. The ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. Tariffs or other measures are announced or imposed, the extent to which existing tariffs remain in effect, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. The Company continues to monitor and analyze the impacts of these measures and actions that can be taken to moderate and/or minimize their effects.

Previous wording

In recent periods, macroeconomic factors such as market volatility, inflationary pressures, elevated interest rates, geopolitical tensions and recessionary concerns have caused uncertainty in end customer demand, which resulted in elevated channel inventories. We believe that we can continue to take appropriate actions to align our inventory levels with anticipated customer demand profiles.

Current wording

In recent periods, macroeconomic factors such as market volatility, inflationary pressures, elevated interest rates, geopolitical tensions, recessionary concerns and changes in trade policy have caused uncertainty in end customer demand, which resulted in elevated channel inventories. We believe that we can continue to take appropriate actions to align our inventory levels with anticipated customer demand profiles.

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 third quarters of fiscal years 2026 and 2025 were 76% and 72%, 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 first quarters of fiscal years 2027 and 2026 were 80% and 71%, 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 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.

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 86% and 82% during the first quarters of fiscal years 2027 and 2026, respectively. Approximately 72% and 63% of our net sales during the first quarters of fiscal years 2027 and 2026, 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 Nine Months Ended October 26, 2025 and October 27, 2024

Current wording

Comparisons of the Three Months Ended April 26, 2026 and April 27, 2025

Previous 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.

Current wording

Net sales in the first quarter of fiscal year 2027 were $291.0 million, an increase of 15.9% compared to $251.1 million in the first quarter of fiscal year 2026, 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 $25.9 million in the first quarter of fiscal year 2027 compared to the first quarter of fiscal year 2026, primarily driven by an approximately $20.0 million increase in data center sales and approximately $5.1 million increase in telecommunications sales. Net sales from our industrial end market increased $11.1 million in the first quarter of fiscal year 2027 compared to the first quarter of fiscal year 2026, primarily driven by an approximately $5.6 million increase in LoRa-enabled sales in industrial applications, approximately $3.3 million increase in broadcast sales and approximately $2.6 million increase in IoT Hardware sales. Net sales from our high-end consumer end market increased $2.9 million in the first quarter of fiscal year 2027 compared to the first quarter of fiscal year 2026, primarily driven by an approximately $5.9 million increase in consumer TVS product sales, partially offset by an approximately $2.9 million decrease in proximity sensing product sales.

Previous 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

Current wording

Net sales in the first quarter of fiscal year 2027, as compared to the first quarter of fiscal year 2026, benefited from stronger demand and increased sales volumes in all the reportable segments. Net sales from Signal Integrity increased $28.5 million in the first quarter of fiscal year 2027 compared to the first quarter of fiscal year 2026, primarily driven by an approximately $20.0 million increase in data center sales, approximately $5.1 million increase in telecommunications sales and approximately $3.3 million increase in broadcast sales. Net sales from Analog Mixed Signal and Wireless increased $10.1 million in the first quarter of fiscal year 2027 compared to the first quarter of fiscal year 2026, primarily driven by an approximately $6.6 million increase in total TVS product sales and approximately $5.7 million increase in LoRa-enabled product sales, partially offset by an approximately $2.9 million decrease in proximity sensing product sales. Net sales from IoT Systems and Connectivity increased $1.3 million in the first quarter of fiscal year 2027 compared to the first quarter of fiscal year 2026, primarily driven by an approximately $2.6 million increase in IoT Hardware sales, partially offset by an approximately $1.5 million decrease in managed connectivity sales.

Previous 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.

Current wording

In the first quarter of fiscal year 2027, gross profit increased $20.2 million to $151.5 million from $131.3 million in the first quarter of fiscal year 2026. This increase was primarily driven by an approximately $15.8 million increase from Signal Integrity, which experienced higher sales led by data center sales due to stronger demand, an approximately $2.7 million increase from Analog Mixed Signal and Wireless, which experienced higher sales led by TVS product sales and LoRa-enabled product sales due to stronger demand, and an approximately $1.6 million increase from IoT Systems and Connectivity, primarily driven by higher IoT Hardware sales.

Previous 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.

Current wording

Our gross margin was 52.0% in the first quarter of fiscal year 2027, compared to 52.3% in the first quarter of fiscal year 2026. Gross margin for our Signal Integrity segment was 62.7% in the first quarter of fiscal year 2027, compared to 65.5% in the first quarter of fiscal year 2026, primarily due to unfavorable product mix and higher overhead. Gross margin for our Analog Mixed Signal and Wireless segment was 58.7% in the first quarter of fiscal year 2027, compared to 62.3% in the first quarter of fiscal year 2026, primarily due to inventory allowance. Gross margin for our IoT Systems and Connectivity segment was 35.8% in the first quarter of fiscal year 2027, compared to 34.4% in the first quarter of fiscal year 2026, primarily due to inventory allowance recoveries, partially offset by unfavorable product mix.

Previous 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.

Current wording

Product development and engineering expenses increased $10.0 million in the first quarter of fiscal year 2027 compared to the first quarter of fiscal year 2026 primarily as a result of an $8.8 million net increase in staffing-related costs from higher salaries and share-based compensation and a $1.4 million increase from new product introduction expenses, partially offset by a $1.3 million increase in tax credits.

Previous 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.

Current wording

Intangible amortization was $0.3 million and $0.1 million for the first quarters of fiscal years 2027 and 2026, respectively. The amortization of acquired technology intangible assets is reflected in cost of sales.

Previous 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.

Current wording

Restructuring expenses were $1.2 million in the first quarters of fiscal year 2027 and 2026 from structural reorganization actions to reduce our workforce as a result of cost-saving measures and internal resource alignment.

Previous 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.

Current wording

Interest expense, including amortization and a write-off of deferred financing costs, decreased by $4.7 million to $1.9 million for the first quarter of fiscal year 2027, compared to $6.6 million for the first quarter of fiscal year 2026, primarily due to interest savings as a result of the full repayment of the Term Loans (as defined below) from the fourth quarter of fiscal year 2025 through the third quarter of fiscal year 2026.

Previous 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.

Current wording

We recorded income tax expense of $0.1 million in the first quarter of fiscal year 2027, compared to income tax expense of $8.7 million in the first quarter of fiscal year 2026. The change in our tax provision for the three months ended April 26, 2026, compared to the three months ended April 27, 2025 was primarily due to a regional mix of income, tax benefit of investment impairment losses and changes in valuation allowance. As a result of our recent performance, there is a reasonable possibility that a portion of our valuation allowance will no longer be needed in future periods. A release of the valuation allowance would likely result in a material tax benefit recognized in the quarter of the release.

Previous 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.

Current wording

The effective tax rates in the first quarters of fiscal years 2027 and 2026 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.

Previous 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.

Current wording

For further information on the effective tax rate and the TCJA's and OB3'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 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.

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 April 26, 2026, we had $163.3 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 October 26, 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.

Current wording

As of April 26, 2026 and January 25, 2026, there was $3.4 million 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 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.

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 April 26, 2026, our foreign subsidiaries held $152.5 million of cash and cash equivalents, compared to $182.7 million at January 25, 2026. 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

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.

Current wording

As of April 26, 2026, we 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 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.

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" on the Balance Sheets. 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 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 wording

On October 7, 2025, we 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, we 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 our common stock as consideration for the exchange of approximately $219.0 million aggregate principal amount of the 2027 Notes and accrued interest. We accounted for these exchange transactions as an induced conversion. In fiscal year 2026, in connection with the exchange transactions, we 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.

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 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.

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. As of April 26, 2026, as a result of certain exchange transactions, no amounts remain outstanding under the 2028 Notes.

Previous wording

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 wording

In fiscal year 2026, in connection with the exchange transactions, we 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.

Previous wording

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 wording

On October 10, 2025, we 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 April 26, 2026, $402.5 million of the 2030 Notes remained outstanding.

Previous wording

We are continuing to conduct a portfolio rationalization review, which has included identifying non-core assets in an effort to align our portfolio with our strategic vision and preferred margin profile. As part of the portfolio rationalization review, we are reviewing potential strategic alternatives for certain of our non-core assets. No decision has been made regarding any strategic alternative or any particular asset, and there is no assurance that the exploration of strategic alternatives will result in any transactions, nor any specified timeline.

Current wording

We are continuing to conduct a portfolio rationalization review, which has included identifying non-core assets in an effort to align our portfolio with our strategic vision and preferred margin profile. As part of the portfolio rationalization review, we are reviewing potential strategic alternatives for certain of our non-core assets, including the potential divestiture of our cellular module business. No decision has been made regarding any strategic alternative or any particular asset and there is no assurance that the exploration of strategic alternatives will result in any transactions, nor any specified timeline.

Previous wording

We currently have in effect a stock repurchase program that was initially approved by our Board of Directors in March 2008. On March 11, 2021, the Board of Directors approved the expansion of the stock repurchase program by an additional $350.0 million. Under the program, subject to the terms of the Credit Agreement, we may repurchase our common stock at any time or from time to time, without prior notice, subject to market conditions and other considerations. Our repurchases may be made through Rule 10b5-1 and/or Rule 10b-18 or other trading plans, open market purchases, privately negotiated transactions, block purchases or other transactions.

Current wording

We currently have in effect a stock repurchase program that was initially approved by our Board of Directors in March 2008. On March 11, 2021, the Board of Directors approved the expansion of the stock repurchase program by an additional $350.0 million. This program represents one of our principal efforts to return value to our stockholders. Under the program, subject to the terms of the Credit Agreement, we may repurchase our common stock at any time or from time to time, without prior notice, subject to market conditions and other considerations. Our repurchases may be made through Rule 10b5-1 and/or Rule 10b-18 or other trading plans, open market purchases, privately negotiated transactions, block purchases or other transactions.

Previous 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.

Current wording

We did not repurchase any shares of our common stock under the program in the first three months of fiscal year 2027 or in the first three months of fiscal year 2026. As of April 26, 2026, 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 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.

Current wording

Operating cash flows for the first three months of fiscal year 2027 compared to the first three months of fiscal year 2026 were favorably impacted by a 15.9% increase in net sales, and lower interest payments on debt, 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, 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 acquisitions, net of any cash received, capital expenditures, purchases and sales of investments, purchases of intangibles, and proceeds from or premiums paid for corporate-owned life insurance.

Previous 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.

Current wording

Purchases of intangibles were $5.3 million for the first three months of fiscal year 2027, compared to $0.5 million for the first three months of fiscal year 2026, which included capitalized development costs and software licenses.

Previous 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.

Current 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. No such payments were made in the first three months of fiscal year 2027.

Previous 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.

Current wording

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

Previous wording

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.

Current wording

In the first three months of fiscal year 2027, we collected proceeds of $50.0 million from and made prepayments of $50.0 million on our Revolving Credit Facility, as discussed above. No such proceeds were collected and no such prepayments were made in the first three months of fiscal year 2026.

Previous 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.

Current wording

In the first three months of fiscal year 2026, we made prepayments of $10.0 million on our Term Loans. No such prepayments were made in the first three months of fiscal year 2027 as the Term Loan balance was fully repaid in fiscal year 2026.

Previous wording

In the first nine months of fiscal year 2026, we paid $18.7 million for employee share-based compensation payroll taxes and received $1.5 million in proceeds from the exercise of stock options. In the first nine months of fiscal year 2025, we paid $7.3 million for employee share-based compensation payroll taxes and received $1.2 million in proceeds from the exercise of stock options.

Current wording

In the first three months of fiscal year 2027, we paid $26.6 million for employee share-based compensation payroll taxes and received $0.8 million in proceeds from the exercise of stock options. In the first three months of fiscal year 2026, we paid $8.9 million for employee share-based compensation payroll taxes.

Previous 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 nine months ended October 26, 2025, we revised certain assumptions within one of our critical accounting estimates to reflect developments during the first nine months of fiscal year 2026.

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 25, 2026. There have been no significant changes to our policies during the three months ended April 26, 2026.