SYNAPTICS Inc

Previous wording

This Quarterly Report on Form 10-Q for the quarter ended September 27, 2025 (this “Report”) contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business, can be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements may include words such as “expect,” “anticipate,” “intend,” “believe,” “estimate,” “plan,” “target,” “strategy,” “continue,” “may,” "commit," “will,” “should,” variations of such words, or other words and terms of similar meaning. All forward-looking statements reflect our best judgment and are based on several factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Such factors include, but are not limited to the following: macroeconomic uncertainties in the U.S. and globally, including those caused by trade tensions and tariffs, resulting in supply chain disruptions, inflation, and market volatility, which may adversely affect our products and those of our customers and suppliers and result in reduced customer demand, component availability constraints, cost increases (both to us and our customers), supply chain disruption, and stock price volatility; risks related to our continued dependence on our solutions for the Core IoT and Enterprise and Automotive product applications market for a substantial portion of our revenue; risks related to the volatility of our net revenue from our solutions for Core IoT and Enterprise and Automotive product applications, including competition from new or established IoT and wireless service companies or from those with greater resources; our dependence on and/or loss of one or more large customers for a substantial portion of our revenue, and the loss of commitments from, contracts with, or a significant reduction in orders from, one or more of our major customers could have a material adverse effect on our revenue and operating results; our exposure to industry downturns and cyclicality in our target markets; the risk that our new product solutions for existing or new markets will not be successful; our ability to successfully execute on our strategy to develop integrated solutions including audio, touch and vision interfaces with embedded processing and wireless connectively for customer adoption; risks related to our expectations regarding technology and strategic investments and the anticipated timing or benefits thereof; historical and continued decreases in our average selling prices due to our product sales mix and decreased revenue from our mobile product applications; our ability to attract and retain…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Additional factors include risks related to the success and timing of new product solutions for existing or new markets; our ability to successfully execute on our strategy to develop integrated solutions including audio, touch, and vision interfaces with embedded processing and wireless connectivity for customer adoption; risks related to our expectations regarding technology and strategic investments and the anticipated timing or benefits thereof; historical and continued decreases in our average selling prices due to changes in our product sales mix and decreased revenue from our mobile product applications; our ability to attract and retain key talent necessary to drive our strategic initiatives, including our Edge AI strategies, in a highly competitive industry; our ability to execute on our cost reduction initiatives and to achieve anticipated synergies and expense reductions; our ability to maintain and build relationships with our customers; our dependence on and/or interruption or loss of, a limited number of suppliers and subcontractors, including suppliers’ manufacturing capacity constraints, the ability of these third parties to maintain satisfactory manufacturing yields and delivery schedules; the risk that our indemnification obligations for third-party claims could result in substantial costs; risks and uncertainty related to regional instabilities and hostilities, economic volatility, and regulatory changes, any of which could disrupt our supply chain, elevate our costs, and undermine the competitiveness of our offerings, requiring operational adjustments, such as reductions in force, or otherwise adversely affecting our financial condition and operating results; changes in export restrictions and laws affecting the Company’s trade and investments; and the other risks as identified in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” sections of our Annual Report on Form 10-K for the fiscal year ended June 28, 2025, and other risks as identified from time to time in our SEC reports. Forward-looking statements are based on information available to us on the date hereof, and we do not have, and expressly disclaim, any obligation to publicly release any updates or any changes in our expectations, or any change in events, conditions, or circumstances on which any forward-looking statement is based, except as required by law. Our actual results and the timing of certain events could differ materially from the forward-looking statements. These forward-looking statements do not reflect the potential impact of any mergers, acquisitions, or other business combinations that have not been completed as of the date of this filing.

Previous wording

Net revenue in the first quarter of fiscal 2026 was $292.5 million and was 13.5% higher than net revenue in the first quarter of fiscal 2025. This was primarily due to an increase in net revenue in our Core IoT product line, which increased 73.8% compared to the same period a year ago, primarily driven by an increase in units sold and an increase in average selling prices due to our product sales mix, inclusive of the contribution from the Broadcom transaction. Net revenue from our Enterprise and Automotive product line for the first quarter of fiscal 2026 compared to the same period a year ago remained flat and net revenue from our Mobile product category decreased by 18.4% primarily driven by a decrease in revenue from the licensing of certain of our IP.

Current wording

Net revenue in the second quarter of fiscal 2026 was $302.5 million and was 13.2% higher than net revenue compared to the same period a year ago. This was primarily due to an increase in net revenue in our Core IoT product applications, which increased 52.5% compared to the same period a year ago, primarily driven by an increase in units sold and an increase in average selling prices due to our product sales mix, inclusive of the contribution from the Broadcom transaction.

Previous wording

Gross margin for the three months ended September 2025 and September 2024 was 42.6% and 46.9%, respectively. The decrease in gross margin was primarily due to a decrease in revenue from the licensing of certain of our IP and an increase in amortization of acquired intangible assets primarily from the developed technologies we acquired from Broadcom during fiscal 2025.

Current wording

Gross margin for the three months ended December 2025 and December 2024 was 43.5% and 45.7%, respectively. The decrease in gross margin was primarily due to an increase in amortization of acquired intangible assets primarily from the developed technologies we acquired from Broadcom during fiscal 2025, partially offset by an increase in revenue from the licensing of certain of our IP.

Previous wording

As of September 2025, our cash and cash equivalents of $459.9 million increased by $7.4 million compared to cash, cash equivalents and short-term investments of $452.5 million as of June 2025. During the three months ended September 2025, we generated $30.2 million of cash from operating activities, and we returned $7.2 million to stockholders through the repurchase of common stock under our stock repurchase program.

Current wording

As of December 2025, our aggregate cash and cash equivalents and short-term investments of $437.4 million decreased by $15.1 million compared to June 2025. During the three months ended December 2025, we generated $29.8 million of cash from operating activities, and we returned $36.4 million to stockholders through the repurchase of common stock under our stock repurchase program.

Previous wording

As a majority of our sales and manufacturing occurs outside of the U.S., we are exposed to and impacted by global macroeconomic factors, U.S. and foreign government policies and foreign exchange fluctuations. We continue to monitor changes in international trade policies, particularly increased tariffs and other barriers or restrictions between the United States and other countries, including China. Our current operations suggest limited tariff exposure given our current import and export practices. However, some of our customers and suppliers may be impacted by evolving tariff regimes depending on their own supply chain strategies and sourcing locations. We continue to monitor for any potential customer and supplier impacts, ranging from supply chain realignments to changes in end demand. While the broader implications of these activities remain uncertain, based on our current lead times and order activity, we are not seeing unusual activity that would suggest material pull-in or push-out of orders due to tariffs that would be likely to impact our near-term financial performance. We will continue to assess the short- and long-term effects of these international trade policies and restrictions on our financial and operational performance.

Current wording

As a majority of our sales and manufacturing occurs outside of the U.S., we are exposed to and impacted by global macroeconomic factors, U.S. and foreign government policies and foreign exchange fluctuations. We continue to monitor changes in international trade policies, particularly increased tariffs and other barriers or restrictions between the United States and other countries, including China. Our current operations suggest limited direct tariff exposure given our current import and export practices. However, some of our customers and suppliers may be impacted by evolving tariff regimes depending on their own supply chain strategies and sourcing locations. We continue to monitor for any potential customer and supplier impacts, ranging from supply chain realignments to changes in end demand. While the broader implications of these activities remain uncertain, based on our current lead times and order activity, we are not seeing unusual activity that would suggest material changes in the timing of orders from our customers due to tariffs that would be likely to impact our near-term financial performance. We will continue to assess the short- and long-term effects of these international trade policies and restrictions on our financial and operational performance.

Previous wording

Net revenue was $292.5 million for the three months ended September 2025, compared with $257.7 million for the three months ended September 2024, an increase of $34.8 million, or 13.5%. Of this net revenue, $147.7 million, or 50.5%, was from Enterprise and Automotive product applications, $41.2 million, or 14.1%, was from Mobile product applications, and $103.6 million, or 35.4%, was from Core IoT product applications. Revenue increased in most of our product applications for the three months ended September 2025 compared with the three months ended September 2024. Net revenue from Core IoT product applications increased due to an increase in units sold (which increased 64.1%) and an increase in average selling prices (which increased 5.9%) due to our product sales mix compared to the same period a year ago, inclusive of the contribution from the Broadcom transaction. Net revenue from Enterprise and Automotive product applications slightly increased as a result of an increase in units sold (which increased 9.0%), partially offset by a decrease in average selling prices (which decreased 8.2%) due to our product sales mix compared to the same period a year ago. Net revenue from Mobile product applications decreased due to a decrease in average selling prices (which decreased 15.2%) and a decrease of $10.5 million in revenue from license of certain of our IP, partially offset by an increase in units sold (which increased 21.4%).

Current wording

Net revenue was $302.5 million for the three months ended December 2025, compared with $267.2 million for the three months ended December 2024, an increase of $35.3 million, or 13.2%. Of this net revenue, $161.1 million, or 53.3%, was from Enterprise and Automotive product applications, $48.2 million, or 15.9%, was from Mobile product applications, and $93.2 million, or 30.8%, was from Core IoT product applications. Revenue increased in all of our product applications for the three months ended December 2025 compared with the three months ended December 2024. Net revenue from Core IoT product applications increased due to an increase in units sold (which increased 32.0%), and an increase in average selling prices (which increased 9.6%) due to our product sales mix compared to the same period a year ago, inclusive of the contribution from the acquired business completed in fiscal 2025. Net revenue from Enterprise and Automotive product applications increased primarily due to higher license revenue from certain IP, partially offset by a decrease in units sold (which decreased 8.2%), and a decrease in average selling prices (which decreased 1.3%) due to our product sales mix compared to the same period a year ago. Excluding the impact of this license revenue, net revenue for the three months ended December 2025 from Enterprise and Automotive product applications would have declined year-over-year. Net revenue from Mobile product applications increased due to an increase in units sold (which increased 14.5%), partially offset by a decrease in average selling prices (which decreased 10.4%) due to our product sales mix compared to the same period a year ago.

Previous wording

Gross margin as a percentage of net revenue was 42.6%, with gross margin of $124.6 million, for the three months ended September 2025, compared with 46.9%, with gross margin of $120.9 million, for the three months ended September 2024. The net 430 basis point decrease in gross margin as a percentage of net revenue for the three months ended September 2025 was primarily due to the increase in amortization of acquisition-related intangibles on the intangible assets we acquired from Broadcom during fiscal 2025 and a decrease in revenue from license of certain of our IP.

Current wording

Gross margin as a percentage of net revenue was 43.5%, with gross margin of $131.7 million, for the three months ended December 2025, compared with 45.7%, with gross margin of $122.2 million, for the three months ended December 2024. The 220 basis point decrease in gross margin as a percentage of net revenue for the three months ended December 2025 was primarily due to the increase in amortization of acquisition-related intangible assets we acquired from Broadcom during fiscal 2025, partially offset by an increase in revenue from the licensing of certain of our IP.

Previous wording

Research and Development Expenses. Research and development expenses increased $13.1 million to $94.4 million for the three months ended September 2025, compared with $81.3 million for the three months ended September 2024. The increase in research and development expenses was driven by a $6.3 million increase in stock-based compensation charges primarily related to awards issued to the workforce we acquired from Broadcom during fiscal 2025, a $2.8 million increase in project specific costs, and $1.8 million increase in wages and related costs related to an increase in headcount primarily driven by the employees we acquired from Broadcom during fiscal 2025.

Current wording

Research and Development Expenses. Research and development expenses increased $11.8 million to $95.1 million for the three months ended December 2025, compared with $83.3 million for the three months ended December 2024. The increase in research and development expenses was driven by a $2.9 million increase in wages and related costs primarily related to an increase in headcount driven by the employees we acquired from Broadcom during fiscal 2025, a $5.9 million increase in stock-based compensation charges primarily related to awards issued to the workforce we acquired from Broadcom during fiscal 2025 and $1.2 million increase in software maintenance fees.

Previous wording

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses decreased $3.8 million to $46.2 million for the three months ended September 2025, compared with $50.0 million for the three months ended September 2024. The decrease in selling, general, and administrative expenses was primarily driven by a decrease of $4.5 million in professional service fees related to certain corporate projects that we incurred during the first quarter of fiscal 2025 with no corresponding corporate projects during the three months ended September 2025.

Current wording

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses decreased $1.7 million to $47.8 million for the three months ended December 2025, compared with $49.5 million for the three months ended December 2024. The decrease in selling, general, and administrative expenses was primarily driven by a decrease of $1.2 million in professional service fees related to certain corporate projects incurred during the second quarter of 2024, with no such projects during the three months ended December 2025.

Previous wording

Acquired Intangibles Amortization. Amortization of acquisition-related intangibles increased $0.9 million, or 23.7% for the three months ended September 2025 compared to the same period a year ago, which is primarily related to the amortization on customer relationship and favorable supply contract intangible assets we acquired from Broadcom during fiscal 2025.

Current wording

Acquired Intangibles Amortization. Amortization of acquisition-related intangibles primarily relates to customer relationships and favorable supply contract intangible assets we acquired in previous fiscal years and remained consistent during the three and six months ended December 2025 compared to the same period a year ago.

Previous wording

Restructuring Costs. Restructuring costs primarily reflect employee severance costs related to the restructuring of operations and to improve efficiencies in our operational activities. These headcount-related costs included personnel in research and development, and selling, general and administrative functions. See "Item 1. Condensed Consolidated Financial Statements (Unaudited) - Notes to Condensed Consolidated Financial Statements - Note 16. Restructuring Activities for additional information.

Current wording

Restructuring Costs. Restructuring costs primarily reflect employee severance costs related to the restructuring of our operations and to improving efficiencies in our operational activities. These headcount-related costs included personnel in research and development and selling, general and administrative functions. See "Item 1. Condensed Consolidated Financial Statements (Unaudited) - Notes to Condensed Consolidated Financial Statements - Note 16. Restructuring Activities for additional information.

Previous wording

Interest income (expense) and other, net. Interest income/(expense) and other, net, include interest income and expense, amortization of debt issuance costs and other miscellaneous income or charges.

Current wording

Interest income (expense) and other, net. Interest income/(expense) and other, net, include interest income and expense, unused commitment fees and amortization of issuance costs on our revolving credit facility, the 2031 Notes and 2029 Notes and other miscellaneous income or charges.

Previous wording

Interest and other income. Interest and other income includes interest income earned on our invested cash balances and other miscellaneous income. Interest and other income of $6.3 million decreased by $4.0 million for the three months ended September 2025, compared to the same period a year ago. The decrease was primarily driven by a decrease in interest income of $6.3 million due to the overall reduction in invested cash balances following the early repayment of the Term Loan Facility in November 2024 and the cash paid for the Broadcom acquisition in January 2025, partially offset by a $2.3 million increase in miscellaneous other income relating to a refund of amounts we paid previously to a third party.

Current wording

Interest and other income of $9.9 million decreased by $8.4 million for the six months ended December 2025, compared to the same period a year ago. The decrease was primarily driven by a decrease in interest income of $10.7 million due to the overall reduction in invested cash balances following the early repayment of our Term Loan Facility in the second quarter of fiscal 2025 and the cash paid for the Broadcom acquisition in the third quarter of fiscal 2025, partially offset by a $2.3 million increase in miscellaneous other income relating to a refund of amounts we paid previously to a third party.

Previous wording

Interest expense. Interest expense primarily includes interest expense on our debt, unused commitment fees on our revolving credit facility and amortization of debt issuance costs. Interest expense of $5.8 million for the three months ended September 2025, decreased by $10.4 million compared to the same period a year ago, which was primarily driven by the early repayment of the Term Loan Facility in November 2024. During the three months ended September 2024, the interest expense and amortization of debt issuance costs on the Term Loan facility was $11.7 million. The Term Loan Facility was repaid with the net proceeds received from the issuance of the 2031 Notes, which bear a significantly lower interest at a rate of 0.75%. See "Note 9. Debt" for additional information.

Current wording

Interest expense. Interest expense primarily includes interest expense on our debt, unused commitment fees on our revolving credit facility and amortization of debt issuance costs. Interest expense of $11.8 million for the six months ended December 2025, decreased by $16.7 million compared to the same period a year ago, which was primarily driven by the early repayment of the Term Loan Facility in November 2024. During the six months ended December 2024, the interest expense and amortization of debt issuance costs on the Term Loan facility was $19.4 million. The Term Loan Facility was repaid with the net proceeds received from the issuance of the 2031 Notes, which bear a significantly lower interest at a rate of 0.75%. See "Note 9. Debt" for additional information.

Previous wording

See "Item 1. Condensed Consolidated Financial Statements (Unaudited) - Notes to Condensed Consolidated Financial Statements - Note 13. Income Taxes for additional information.

Current wording

Benefit from Income Taxes. Income tax benefit was $2.7 million and $4.8 million for the three months and six months ended December 2025, respectively, compared with $27.8 million and $39.0 million for the three and six months ended December 2024, respectively. The decrease in income tax benefit was primarily due to the absence of several significant one-time tax benefits recognized in the prior-year period, including a $14.1 million deferred tax benefit from a “check-the-box election” for our Israel subsidiary to be treated as a U.S. disregarded entity for U.S. federal income tax purposes and an $8.9 million tax benefit related to our fiscal 2018 U.S. one-time deemed repatriation liability under the U.S. Tax Cuts and Jobs Act, or TCJA, following the U.S. Tax Court decision in Varian Medical Systems, Inc. v. Commissioner, both of which were recognized during the three months ended December 2024, as well as a $7.7 million deferred tax benefit related to inventory reserves transferred from foreign subsidiaries to the United States recognized during the six months ended December 2024. See "Item 1. Condensed Consolidated Financial Statements (Unaudited) - Notes to Condensed Consolidated Financial Statements - Note 13. Income Taxes for additional information.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The legislation includes a permanent extension and modification of certain provisions under the 2017 Tax Cuts and Jobs Act (“TCJA”). Key provisions effective beginning in the first quarter of fiscal 2026 include immediate expensing of domestic research and experimentation (R&E) expenditures, 100% bonus depreciation for qualified property, and a modification to the business interest expense limitation, among others. These provisions were evaluated and reflected in our income tax provision for the three months ended September 2025 and did not have a material impact on our effective tax rate or cash flows. We will continue to monitor forthcoming Treasury and IRS guidance and assess potential implications for future reporting periods.

Current wording

On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was signed into law. The legislation includes a permanent extension and modification of certain provisions under the 2017 TCJA. Provisions effective for Synaptics beginning June 29, 2025 were reflected in the Company’s income tax provision for the six months ended December 2025 and are not expected to have a material impact on the effective tax rate or cash flows. We will continue to monitor forthcoming U.S. Treasury and Internal Revenue Service guidance related to OBBBA and assess potential implications for future reporting periods.

Previous wording

The Organization for Economic Co-operation and Development, or OECD, introduced Pillar Two Model Rules for a global minimum tax of 15% applicable to large multinational corporations. Many countries in which we have business operations, including the United Kingdom, Hong Kong, Switzerland, and Japan, have implemented certain aspects of Pillar Two. The OECD and the implementing countries are expected to keep issuing more guidance and refining their laws. Based on the latest legislation and our current estimate, Pillar Two had no impact on our effective tax rate or cash flows for the first three months of fiscal 2026. We will continue to evaluate the potential impact of these tax law changes in future reporting periods as further guidance becomes available.

Current wording

The Organization for Economic Co-operation and Development, or OECD, introduced Pillar Two Model Rules for a global minimum tax of 15% applicable to large multinational corporations. Many countries in which we have business operations, including the United Kingdom, Hong Kong, Switzerland, and Japan, have implemented certain aspects of Pillar Two. The OECD and the implementing countries are expected to continue issuing more guidance and refining their laws. Based on the latest legislation and our current estimate, Pillar Two had no impact on our effective tax rate or cash flows for the first six months of fiscal 2026. We will continue to evaluate the potential impact of these developments as additional guidance is issued and further local enactments occur.

Previous wording

Our cash and cash equivalents were $459.9 million and $391.5 million as of September 2025 and June 2025, respectively.

Current wording

Our cash and cash equivalents were $437.4 million and $391.5 million as of December 2025 and June 2025, respectively.

Previous wording

We consider almost all of the earnings of our foreign subsidiaries as not indefinitely invested overseas and have made appropriate provisions for income or withholding taxes that may result from a future repatriation of those earnings. As of September 2025, $363.4 million of cash and cash equivalents was held by our foreign subsidiaries. If these funds are needed for our operations in the United States, we would be able to repatriate substantially all of these funds without a material impact on our provision for income taxes.

Current wording

We consider almost all of the earnings of our foreign subsidiaries as not indefinitely invested overseas and have made appropriate provisions for income or withholding taxes that may result from a future repatriation of those earnings. As of December 2025, $278.6 million of cash and cash equivalents was held by our foreign subsidiaries. If these funds are needed for our operations in the United States, we would be able to repatriate substantially all of these funds without a material impact on our provision for income taxes.

Previous wording

Cash Flows from Operating Activities. Cash provided by operating activities during the three months ended September 2025 was $30.2 million compared with cash used by operating activities of $11.4 million during same period a year ago. For the three months ended September 2025, the primary operating activities were adjustments for non-cash charges of $77.6 million and net cash outflows of $26.8 million from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities relate to a decrease of $31.6 million in accrued liabilities primarily related to the payment of our annual bonus, a decrease of $7.0 million in accounts payable due to the timing of payments made to our vendors, partially offset by a decrease in accounts receivable of $10.8 million primarily related to the timing of collections and billings.

Current wording

Cash Flows from Operating Activities. Cash provided by operating activities during the six months ended December 2025 was $60.0 million compared with cash provided by operating activities of $11.4 million during same period a year ago. For the six months ended December 2025, the primary operating activities were adjustments for non-cash charges of $155.7 million and net cash outflows of $60.3 million from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities relate to a decrease of $35.7 million in accrued liabilities primarily related to the accrual and payment of our annual bonus, a decrease of $5.2 million in accounts payable due to the timing of payments made to our vendors and an increase of $18.4 million in net inventories in anticipation of increased demand in our wireless products in the second half of fiscal 2026.

Previous wording

During the three months ended September 2025 and September 2024, our days sales outstanding was 37 days and 47 days, respectively. Our annual inventory turns stayed consistent at four during the three months ended September 2025 and September 2024.

Current wording

During the three months ended December 2025 and December 2024, our days sales outstanding was 39 days and 49 days, respectively. Our annual inventory turns stayed consistent at approximately four during the three months ended December 2025 and December 2024.

Previous wording

Cash Flows from Investing Activities. Cash provided by investing activities during the three months ended September 2025 was $48.8 million compared to cash used by investing activities of $9.1 million during the same period a year ago. The increase primarily relates to $61.0 million in proceeds from maturities of short-term investments, which we invested in investment classified as cash equivalents.

Current wording

Cash Flows from Investing Activities. Cash provided by investing activities during the six months ended December 2025 was $37.2 million compared to cash used by investing activities of $14.6 million during the same period a year ago. The increase primarily relates to $61.0 million in proceeds from maturities of short-term investments which were not subsequently reinvested in short-term investments, partially offset by an increase in purchases of property and equipment driven by expansion in certain of our facilities from our Broadcom transaction in the third quarter of fiscal 2025.

Previous wording

Cash Flows from Financing Activities. Cash used by financing activities for the three months ended September 2025 and September 2024 was $10.4 million and $3.5 million, respectively. The increase was primarily driven by $7.2 million in repurchases of our common stock with no share repurchase activity during the same period a year ago.

Current wording

Cash Flows from Financing Activities. Cash used by financing activities for the six months ended December 2025 and December 2024 was $51.1 million and $278.2 million, respectively. The decrease was primarily driven by $583.5 million used to repay the remaining outstanding balance of our Term Loan Facility during the six months ended December 2024, partially offset by net cash proceeds from issuance of our 2031 Notes, net of payments for capped calls and debt issuance costs thereon of $385.2 million during the six months ended December 2024, as well as a decrease of $30.9 million in repurchases of our common stock.

Previous wording

As of September 2025, we had unconditional purchase commitments of $41.1 million, of which $27.2 million are for the remainder of fiscal 2026. We work continually with our suppliers and partners on the timing of payments and deliveries of purchase commitments, taking into account business conditions.

Current wording

As of December 2025, we had unconditional purchase commitments of $29.0 million, of which $15.1 million are for the remainder of fiscal 2026. We work continually with our suppliers and partners on the timing of payments and deliveries of purchase commitments, taking into account business conditions.

Previous wording

There have been no significant changes in our critical accounting estimates during the three months ended September 2025, compared with our critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended June 28, 2025.

Current wording

There have been no significant changes in our critical accounting estimates during the six months ended December 2025, compared with our critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended June 28, 2025.