COHERENT CORP.

Previous wording

Coherent Corp. (“Coherent”, the “Company,” “we,” “us” or “our”) is a vertically integrated manufacturing company that develops, manufactures and markets lasers, transceivers, and other optical and optoelectronic devices, modules, and systems, as well as engineered materials, for use in communications, industrial, instrumentation and electronics applications. We generate nearly all of our revenues, earnings, and cash flows from developing, manufacturing, and marketing a wide range of products and services for our end markets. Coherent has broad technical expertise and a deep technology stack in areas of importance to our products, including materials growth and fabrication of specialty materials, semiconductor lasers, passive optics including isolators, transceivers, transport equipment, high power lasers for semiconductor capital equipment, display manufacturing, precision manufacturing, and scientific research. Many of our products include custom integrated software that we develop internally, leveraging our deep domain expertise. Headquartered in Saxonburg, Pennsylvania, Coherent has research and development, manufacturing, sales, service, and distribution facilities worldwide.

Current wording

Coherent Corp. (“Coherent”, the “Company,” “we,” “us” or “our”) is a vertically integrated manufacturing company that develops, manufactures and markets lasers, transceivers, and other optical and optoelectronic devices, modules, and systems, as well as engineered materials, for use in datacenter & communications, as well as industrial applications, including precision manufacturing, energy, semiconductor & display capital equipment, and instrumentation. We generate nearly all of our revenues, earnings, and cash flows from developing, manufacturing, and marketing a wide range of products and services for our end markets. Coherent has broad technical expertise and a deep technology stack in areas of importance to our products, including materials growth and fabrication of specialty materials, lasers including semiconductor and high power lasers, passive optics including isolators, transceivers, transport equipment, high power lasers for semiconductor capital equipment, display manufacturing, precision manufacturing, consumer electronics, life sciences applications and scientific research. Many of our products include custom integrated software that we develop internally, leveraging our deep domain expertise. Headquartered in Saxonburg, Pennsylvania, Coherent has research and development, manufacturing, sales, service, and distribution facilities worldwide.

Previous wording

Coherent is a global leader in photonic technology, which is foundational to the performance and scalability of AI datacenters and critical to many important industrial applications. We are at the center of a significant expansion in optical networking infrastructure, driven by the rapid growth of AI and the increasing need for bandwidth and energy efficiency. We continue to experience strong demand in our Datacenter and Communications markets. The increasing investments by hyperscale and other cloud providers in AI datacenter infrastructures have significantly boosted demand for our datacenter transceivers. Elevated demand for our new ZR/ZR+ transceivers and sustained growth in traditional telecom transport products drove higher shipment volumes for our telecom and other communications solutions. We are investing in manufacturing capacity for the Datacenter and Communications markets, including expanding our indium phosphide capacity in Sherman, Texas, to address our increased customer demand and industry-wide shortage. In our Industrial markets, we are experiencing strong demand in semiconductor capital equipment.

Current wording

Coherent is a global leader in photonic technology. Our broad photonic technology platform is foundational to the performance and scalability of AI datacenters. AI runs on compute, but it scales on optical connectivity. Coherent is at the center of an extraordinary expansion in optical networking infrastructure, driven by the rapid growth of AI, the transition from copper to optical connectivity, and the increasing need for bandwidth and energy efficiency across increasingly large and complex datacenter architectures. Demand in the datacenter and communications markets remain strong, driven by continued investment in artificial intelligence infrastructure and increasing demand for higher-speed, higher-capacity optical connectivity. Within datacenters, the transition to next-generation optical transceivers and the increasing use of optical connectivity across scale-out, scale-up and emerging chip-to-chip architectures are supporting continued market growth, as optical technologies increasingly address bandwidth and connectivity requirements historically served by copper. In communications markets, demand is benefiting from the expansion of high-capacity connections between geographically distributed AI datacenters, driving increased adoption of optical components, modules and systems designed to improve utilization of existing fiber infrastructure and support higher-capacity networks. Customer commitments and longer-term agreements continue to provide visibility into sustained demand across these markets. We are investing in manufacturing capacity for the Datacenter and Communications markets, including expanding our indium phosphide capacity in Sherman, Texas, and Sweden to address our increased customer demand and industry-wide shortage. In our Industrial markets, we are experiencing strong demand in semiconductor capital equipment.

Previous wording

In the three and nine months ended March 31, 2026, these activities resulted in net charges of $4 million and net recoveries of $2 million, respectively. The current quarter charges are primarily for site closure and move costs and employee termination costs and the current year-to-date recoveries are primarily for adjustments to employee termination costs partially offset by site move costs. In fiscal 2025, these activities resulted in charges of $53 million, primarily for impairment losses associated with the sale of our Newton Aycliffe business, impairment of right-of-use (“ROU”) assets, employee termination costs, site move costs and accelerated depreciation. In fiscal 2024, these activities resulted in $119 million of charges primarily for employee termination costs, and the write-off of property and equipment, net of $65 million from reimbursement arrangements. See Note 10. Restructuring Plans for further information.

Current wording

For the three months ended September 30, 2026, these activities resulted in net charges of $4 million, primarily for asset write-offs, site closure costs and adjustments to employee termination costs. In fiscal 2026, these activities resulted in net charges of $1 million, primarily for site closure costs partially offset by adjustments to employee termination costs. In fiscal 2025, these activities resulted in charges of $53 million, primarily for impairment losses associated with the sale of our Newton Aycliffe business, impairment of right-of-use (“ROU”) assets, employee termination costs, site closure costs and accelerated depreciation. In fiscal 2024, these activities resulted in $27 million of charges primarily for acceleration of depreciation, write-off of property and equipment, and site closure costs. See Note 10. Restructuring Plans for further information.

Previous wording

Commencing in the quarter ended March 31, 2025, and as part of the ongoing strategic review of the Company’s business, the Company’s management approved the 2025 Plan to take a number of restructuring actions, including site consolidations, facilities moves and closures, workforce reductions, contract terminations, and certain other associated cost reductions. The 2023 Plan and the 2025 Plan are collectively referred to as the“Restructuring Plans.”

Current wording

Commencing in the quarter ended March 31, 2025, and as part of the Company’s ongoing strategic review of its business, management approved the 2025 Plan to take a number of restructuring actions, including site consolidations, facilities moves and closures, workforce reductions, contract terminations, and certain other associated cost reductions. The 2023 Plan and the 2025 Plan are collectively referred to as the“Restructuring Plans.”

Previous wording

In the three and nine months ended March 31, 2026, these activities resulted in $31 million and $59 million, respectively, of charges primarily related to write-off of property and equipment, employee termination and site closure costs. In fiscal 2025, these activities resulted in $107 million of charges primarily for the write-off of property and equipment and ROU assets, employee and contract termination costs. We expect the restructuring actions to be substantially completed by the end of fiscal 2026. However, the actual timing and costs associated with these restructuring actions may differ from our current expectations and estimates and such differences may be material. See Note 10. Restructuring Plans for further information.

Current wording

For the three months ended September 30, 2026, these activities resulted in net restructuring charges of $4 million, primarily for adjustments to employee termination costs and site closure costs. In fiscal 2026, these activities resulted in $62 million of net charges primarily related to write-off of property and equipment, employee termination and site closure costs. In fiscal 2025, these activities resulted in $107 million of net charges primarily for the write-off of property and equipment and ROU assets, employee and contract termination costs. See Note 10. Restructuring Plans for further information.

Previous wording

On September 2, 2025, we completed the sale of our aerospace and defense business, which is part of our Industrial segment, for approximately $400 million and recorded a gain of $115 million to Gain on sale of business in our Condensed Consolidated Statements of Earnings (Loss) for the first quarter of fiscal 2026.

Current wording

On September 2, 2025, we completed the sale of our aerospace and defense business, which was part of our Industrial segment, for approximately $400 million and recorded a gain of $115 million to Gain on sale of business in our Condensed Consolidated Statements of Earnings (Loss) in the first quarter of fiscal 2026.

Previous wording

On January 30, 2026, the Company completed the sale of its product division based in Munich, Germany and recorded a gain of $9 million within Gain on sale of business in the Condensed Consolidated Statements of Earnings (Loss) for the third quarter of fiscal 2026. The total loss associated with the sale was $96 million, substantially all of which was recognized through impairment charges within Impairment of assets held-for-sale in the Condensed Consolidated Statements of Earnings (Loss), including $81 million in the fourth quarter of fiscal 2025, $13 million in the first quarter of fiscal 2026 and $11 million in the second quarter of fiscal 2026.

Current wording

On January 30, 2026, the Company completed the sale of its product division based in Munich, Germany. The loss associated with the sale was $96 million, with a substantial portion of this loss recognized through impairment charges within Impairment of assets held-for-sale in the Condensed Consolidated Statement of Earnings (Loss), including $81 million in the fourth quarter of fiscal 2025, $13 million in the first quarter of fiscal 2026 and $11 million in the second quarter of fiscal 2026. This was partially offset by a gain of $115 million recorded within Gain on sale of business in the Condensed Consolidated Statements of Earnings in the third quarter of fiscal 2026.

Previous wording

In early 2025, the United States implemented significant new tariffs and export restrictions affecting a broad range of countries, commodities and industries. These actions have prompted retaliatory measures from certain foreign governments, including the imposition of tariffs and export controls. On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (“EEPA”) were not authorized by the statute. The Company is the importer of record for certain raw materials and products that were previously subject to such tariffs under IEEPA. Significant uncertainty remains regarding how and when any amounts may be recovered. We are evaluating the ruling and potential actions available to us. Because the process, timing, and amount of any recovery are uncertain, we have not recorded any potential benefit from a refund at this time.

Current wording

In early 2025, the United States implemented significant new tariffs and export restrictions affecting a broad range of countries, commodities and industries. These actions have prompted retaliatory measures from certain foreign governments, including the imposition of tariffs and export controls. On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) were not authorized by the statute. The Company is the importer of record for certain raw materials and products that were previously subject to such tariffs under IEEPA. During the fourth quarter of fiscal 2026, following the orders of the U.S. Court of International Trade directing U.S. Customs and Border Protection to refund such duties, the Company concluded that recovery of a portion of previously paid tariffs was probable. As a result, the Company recorded the receipt of tariff refunds received and recognized a net receivable for additional refunds expected to be recovered. The amounts recorded were not material to the Company. The receivable at September 30, 2026 represents the Company’s estimate of recoverable tariffs associated with eligible import entries based on information available as of September 30, 2026, including shipment‑level data and applicable court rulings guidance. The timing of collection remains subject to U.S. Customs and Border Protection’s administrative processes, and actual amounts ultimately received may differ from estimates as refund claims are reviewed and validated.

Previous wording

The following tables set forth select items from our Condensed Consolidated Statements of Earnings (Loss) for the three and nine months ended March 31, 2026 and 2025 ($ in millions, except per share data)(1):

Current wording

The following tables set forth select items from our Condensed Consolidated Statements of Earnings for the three months ended September 30, 2026 and 2025 ($ in millions, except per share data)(1):

Previous wording

Research and development. Research and development (“R&D”) expenses for the three months ended March 31, 2026 were $186 million, or 10% of revenues, compared to $151 million, or 10% of revenues, for the same period last fiscal year. R&D expenses for the nine months ended March 31, 2026 were $507 million, or 10% of revenues, compared to $426 million, or 10% of revenues, for the same period last fiscal year. The increases in R&D expenses were primarily related to continued investment in our product portfolios, particularly in our Datacenter & Communications segment. We continue to prioritize R&D investments in projects with the highest expected return-on-investment, supporting our long-term growth strategy.

Current wording

Research and development. Research and development (“R&D”) expenses for the three months ended September 30, 2026 were $237 million, or 10% of revenues, compared to $155 million, or 10% of revenues, for the same period last fiscal year. The increase in R&D expenses was primarily driven by continued investment in our product portfolios, particularly within our Datacenter & Communications segment. These investments were primarily in Transceivers and PhotonLink, as well as optical circuit switches (OCS) and Multi-rail solutions, which support our long-term growth strategy.

Previous wording

Selling, general and administrative. Selling, general and administrative (“SG&A”) expenses for the three months ended March 31, 2026 were $268 million, or 15% of revenues, compared to $231 million, or 15% of revenues, for the same period last fiscal year. SG&A expenses for the nine months ended March 31, 2026 were $778 million, or 15% of revenues, compared to $681 million, or 16% of revenues, for the same period last fiscal year. Although flat for the three months ended March 31, 2026 and slightly decreased for the nine months ended March 31, 2026 as a percentage of revenue, the increases in SG&A expenses in both periods were primarily driven by higher legal, integration and divestiture-related consulting costs, higher facility exit costs and higher share-based compensation expense, partially offset by efficiencies achieved from cost reduction initiatives.

Current wording

Selling, general and administrative. Selling, general and administrative (“SG&A”) expenses for the three months ended September 30, 2026 were $305 million, or 13% of revenues, compared to $252 million, or 16% of revenues, for the same period last fiscal year. The increase in SG&A expenses was primarily driven by higher share-based compensation expense, facility exit costs, integration and divestiture-related consulting costs, and information technology costs, partially offset by operating leverage from higher revenues.

Previous wording

Impairment of assets held-for-sale. Impairment of assets held-for-sale for the nine months ended March 31, 2026 was $20 million, and represented non-cash impairment charges to reduce our carrying value in entities that continue to meet the held-for-sale criteria at December 31, 2025 to their estimated fair value. See Note 7. Assets Held-for-Sale and Sale of Business for further information.

Current wording

Impairment of assets held-for-sale. Impairment of assets held-for-sale for the three months ended September 30, 2025 was $9 million and represented non-cash impairment charges to reduce our carrying value in entities that continue to meet the held-for-sale criteria at September 30, 2025 to their estimated fair values. See Note 7. Assets Held-for-Sale and Sale of Businesses for further information.

Previous wording

Gain on sale of business. Gain on sale of business for the three and nine months ended March 31, 2026 was $9 million and $124 million, respectively, and relates to the sales of our aerospace and defense and our Munich, Germany businesses. See Note 7. Assets Held-for-Sale and Sale of Business for further information.

Current wording

Gain on sale of business. Gain on sale of business for the three months ended September 30, 2025 was $115 million and represented the gain on the sale of our aerospace and defense business. See Note 7. Assets Held-for-Sale and Sale of Businesses for further information.

Previous wording

Interest and other, net. Interest and other, net expense for the three months ended March 31, 2026 was $16 million, compared to $62 million for the same period in the prior fiscal year, representing a decrease of $45 million. Included in Interest and other, net, were interest expense on borrowings, foreign currency gains and losses, amortization of debt issuance costs, equity gains and losses from unconsolidated investments, and interest and dividend income on cash balances. For the three months ended March 31, 2026, the decrease of $45 million in comparison to the same period last fiscal year was driven by $16 million lower foreign exchange net losses, $14 million gains on sales from an equity investment and $13 million lower interest expense. The $16 million lower foreign exchange net losses were primarily due to lower volatility of exchange rates during the three months ended March 31, 2026. The $13 million lower interest expense was primarily due to lower interest expense on our Term Loans resulting from lower balances and lower interest rates, partially offset by lower interest expense benefit from our interest rate cap. Interest and other, net expense for the nine months ended March 31, 2026 was $75 million, compared to $126 million for the same period in the prior fiscal year, a decrease of $52 million. Included in Interest and other, net, were interest expense on borrowings, foreign currency gains and losses, amortization of debt issuance costs, losses on debt extinguishment, equity gains and losses from unconsolidated investments, and interest and dividend income on cash balances. For the nine months ended March 31, 2026, the decrease of $52 million in comparison to the same period last fiscal year was driven by $39 million lower interest expense and $36 million gains on sale from an equity investment, partially offset by $10 million lower interest income, $6 million lower foreign exchange net gains and $5 million higher debt extinguishment and debt transaction fees. The $39 million lower interest expense was primarily due to lower interest expense on our Term Loans resulting from lower balances and lower interest rates partially offset by lower interest expense benefit from our interest rate cap and swap. The $10 million lower interest and dividend income was primarily due to decreases in interest rates earned on investments as well as the decrease in average cash and restricted cash balances. The $6 million lower foreign exchange net gains were primarily due to lower volatility of exchange rates during the nine months ended March 31, 2026.

Current wording

Interest and other, net. Interest and other, net expense for the three months ended September 30, 2026 was $19 million, compared to $42 million for the same period in the prior fiscal year, a decrease of $23 million. Included in Interest and other, net, were interest expense on borrowings, foreign currency gains and losses, amortization of debt issuance costs, and interest and dividend income on cash balances. For the three months ended September 30, 2026, the decrease of $23 million in comparison to the same period last fiscal year was driven by $13 million higher foreign exchange net gains and $12 million lower interest expense. The $13 million higher foreign exchange net gains were primarily due to higher volatility of exchange rates during the three months ended September 30, 2026. The $12 million lower interest expense was primarily due to lower interest expense on our Term Loans resulting from lower balances and lower interest rates, partially offset by lower interest expense benefit from our interest rate cap.

Previous wording

Income taxes. The Company’s year-to-date effective income tax rate at March 31, 2026 was 3% compared to 19% for the same period in the prior fiscal year. The variance from the U.S. statutory federal income tax rate of 21% was primarily driven by differences between U.S. and foreign tax rates, as well as discrete tax benefits related to changes in German tax law, releases of uncertain tax positions, and excess tax benefits associated with stock-based compensation.

Current wording

Income taxes. The Company’s year-to-date effective income tax rate at September 30, 2026 was a 6% benefit compared to a 4% benefit for the same period in the prior fiscal year. The variance from the U.S. statutory federal income tax rate of 21% was primarily driven by differences between U.S. and foreign tax rates and discrete tax benefits related to return to provision adjustments, excess tax benefits associated with stock-based compensation, and a change to the permanent reinvestment assertion in China.

Previous wording

Net loss attributable to noncontrolling interests. Net loss attributable to noncontrolling interests for the three and nine months ended March 31, 2026 was $10 million and $14 million, respectively, compared to $14 million and $17 million, respectively, in the same periods in the prior fiscal year. This amount represents the noncontrolling interest holders’ shares of losses of Silicon Carbide LLC. See Note 13. Noncontrolling Interests for further information.

Current wording

Net loss attributable to noncontrolling interests. Net loss attributable to noncontrolling interests for the three months ended September 30, 2026 was $3 million compared to $1 million in the same period in the prior fiscal year. This amount represents the noncontrolling interest holders’ shares of losses of Silicon Carbide LLC. See Note 13. Noncontrolling Interests for further information.

Previous wording

Revenues and segment profit for the Company’s reportable segments are discussed below. Our CODM evaluates each segment’s operations for decision-making and performance assessment based on segment revenue and segment profit, as our CODM believes segment profit is a more comprehensive profitability measure for each operating segment. Segment profit includes operating expenses directly managed by operating segments, including research and development, direct sales, marketing and administrative expenses. Segment profit does not include share-based compensation, acquisition or integration related costs, amortization and impairment of acquisition-related intangible assets, restructuring charges, impairment charges on assets held-for-sale, gain on sale of businesses and certain other charges. Additionally, we do not allocate Corporate strategic research and development, strategic marketing and sales expenses and shared general and administrative expenses, as these expenses are not directly attributable to our operating segments. Management believes segment profit to be a useful measure for investors, as it reflects the results of segment performance over which management has direct control and is used by management in its evaluation of segment performance. See Note 18. Segment Reporting for further information on the Company’s reportable segments and for the reconciliation of the Company’s segment profit to earnings (loss) before income taxes, which is incorporated herein by reference. Effective July 1, 2025, we report our financial results in the following two designated segments: (i) Datacenter & Communications and (ii) Industrial.

Current wording

Revenues and segment profit for the Company’s reportable segments are discussed below. Our CODM evaluates each segment’s operations for decision-making and performance assessment based on segment revenue and segment profit, as our CODM believes segment profit is a more comprehensive profitability measure for each operating segment. Segment profit includes operating expenses directly managed by operating segments, including research and development, direct sales, marketing and administrative expenses. Segment profit does not include share-based compensation, acquisition or integration related costs, amortization and impairment of acquisition-related intangible assets, restructuring charges, impairment charges on assets held-for-sale, gain on sale of businesses and certain other charges. Additionally, we do not allocate Corporate strategic research and development, strategic marketing and sales expenses and shared general and administrative expenses, as these expenses are not directly attributable to our operating segments. Management believes segment profit to be a useful measure for investors, as it reflects the results of segment performance over which management has direct control and is used by management in its evaluation of segment performance. See Note 18. Segment Reporting for further information on the Company’s reportable segments and for the reconciliation of the Company’s segment profit to earnings (loss) before income taxes, which is incorporated herein by reference.

Previous wording

Revenues for the three months ended March 31, 2026 increased 41% to $1,362 million, compared to $969 million for the same period in the prior fiscal year. Revenues for the nine months ended March 31, 2026 increased 34% to $3,660 million, compared to $2,737 million for the same period in the prior fiscal year. The increases in revenue of $393 million and $923 million during the three and nine months ended March 31, 2026, respectively, were primarily driven by growth in our Datacenter business reflecting continued strong AI datacenter demand as well as higher Communications business revenue due to increased demand for data center interconnect, scale across and traditional telecom applications.

Current wording

Revenues for the three months ended September 30, 2026 increased 79% to $1,952 million, compared to $1,090 million for the same period in the prior fiscal year. The increase in revenue of $862 million during the three months ended September 30, 2026 was primarily driven by growth in our Datacenter business reflecting continued strong AI datacenter demand as well as higher Communications business volumes due to increased demand for data center interconnect, scale across and traditional telecom applications.

Previous wording

Segment profit for the three months ended March 31, 2026 increased 49% to $348 million, compared to $233 million for the same period last fiscal year. Segment profit for the nine months ended March 31, 2026 increased 39% to $923 million, compared to $665 million for the same period last fiscal year. The increases in segment profit for the three and nine months ended March 31, 2026 were primarily driven by higher revenues, partially offset by increased R&D investments to support expansion of our product portfolio.

Current wording

Segment profit for the three months ended September 30, 2026 increased 89% to $509 million, compared to segment profit of $269 million for the same period last fiscal year. The increase in segment profit for the three months ended September 30, 2026 was primarily driven by higher revenues, partially offset by increased R&D investments to support expansion of our product portfolio.

Previous wording

Net cash provided by operating activities was $10 million for the nine months ended March 31, 2026 compared to $503 million for the same period in the prior fiscal year. The decrease in cash flows provided by operating activities during the nine months ended March 31, 2026 compared to the same period in the prior fiscal year was primarily driven by a significant increase in inventories to support higher revenue levels, which resulted in increased working capital usage. This impact was partially offset by higher accounts payable and higher net earnings.

Current wording

Net cash used in operating activities was $93 million for the three months ended September 30, 2026 compared to net cash provided by operating activities of $46 million for the same period in the prior fiscal year. The increase in cash used in operating activities was primarily driven by a significant increase in inventory levels to support higher revenue growth, resulting in increased use of working capital. This was partially offset by higher accounts payable and higher net earnings.

Previous wording

Net cash used in investing activities was $891 million for the nine months ended March 31, 2026, compared to net cash used of $284 million for the same period in the prior fiscal year. The increase was primarily due to $825 million purchases of short-term investments and higher cash used to fund capital expenditures partially offset by $437 million cash received from the sale of businesses, net of fees, and cash received from the sale of an equity investment.

Current wording

Net cash used in investing activities was $201 million for the three months ended September 30, 2026, compared to net cash provided by investing activities of $297 million for the same period in the prior fiscal year. The increase in cash used was primarily due to $672 million higher cash used to fund capital expenditures partially offset by $625 million net purchases of short-term investments.

Previous wording

Net cash provided by financing activities was $1,476 million for the nine months ended March 31, 2026, compared to net cash used of $386 million for the same period in the prior fiscal year. The increase was primarily due to the $2 billion in proceeds from the issuance of Common Stock to NVIDIA, net of fees, partially offset by higher payments, net of borrowings, on existing debt obligations.

Current wording

Net cash provided by financing activities was $665 million for the three months ended September 30, 2026, compared to net cash used of $421 million for the same period in the prior fiscal year. The cash provided by financing activities during the first quarter of fiscal 2026 was primarily due to $773 million proceeds from borrowings of other credit facilities. The cash used in financing activities during the first fiscal quarter of 2026 was primarily due to payments, net of borrowings, on existing debt obligations.

Previous wording

On September 26, 2025, the Company entered into Amendment No. 4 and Amendment No. 5 to the Credit Agreement. Under Amendment No. 4, (i) the existing revolving credit commitments were refinanced and replaced with the 2025 Revolving Loans, including the 2025 Incremental Term A Loans, the proceeds of which were used, in part, to repay all outstanding principal, interest and fees of the Existing Term A Loans. As amended, the 2025 Revolving Loans and the 2025 Incremental Term A Loans each bear interest at an adjusted SOFR rate subject to a 0.00% floor plus a range of 1.25% to 2.25% based on the Company’s total net leverage ratio. The interest rate applicable to the 2025 Revolving Loans and the 2025 Incremental Term A Loans is initially a SOFR-based rate plus 1.50% as of March 31, 2026. The 2025 Revolving Loans and the 2025 Incremental Term A Loans mature on the earlier of September 26, 2030 or a “Springing Maturity Date,” which is a date that is 91 days prior to the stated maturity of either (i) the Company’s unsecured senior notes or (ii) the term B loans then outstanding if, on such 91st day, the applicable senior notes or term B loans remain outstanding and liquidity is less than (x) $250 million plus (y) the aggregate outstanding principal amount of such notes or term B loans, as applicable. Under Amendment No. 5, the outstanding New Term B-2 Loans were replaced with the New Term B-3 Loans having substantially similar terms as the New Term B-2 Loans, except with respect to the interest rate applicable to the New Term B-3 Loans and certain other provisions. As further amended, the New Term B-3 Loans bear interest at a SOFR-based rate (subject to a 0.50% floor) plus 1.75% as of March 31, 2026. The New Term B-3 Loans will mature on July 1, 2029.

Current wording

On September 26, 2025, the Company entered into Amendment No. 4 and Amendment No. 5 to the Credit Agreement. Under Amendment No. 4, (i) the existing revolving credit commitments were refinanced and replaced with new senior secured revolving credit commitments, (ii) $350 million of senior secured incremental revolving credit commitments were added, increasing the total availability under the 2025 Revolving Loans to $700 million and (iii) the 2025 Incremental Term A Loans were added, the proceeds of which were used, in part, to repay all outstanding principal, interest and fees of the Existing Term A Loans. As amended, the 2025 Revolving Loans and the 2025 Incremental Term A Loans each bear interest at an adjusted SOFR rate subject to a 0.00% floor plus a range of 1.25% to 2.25% based on the Company’s total net leverage ratio. The interest rate applicable to the 2025 Revolving Loans and the 2025 Incremental Term A Loans is initially a SOFR-based rate plus 1.25% as of September 30, 2026. The 2025 Revolving Loans and the 2025 Incremental Term A Loans mature on the earlier of September 26, 2030 or a “Springing Maturity Date,” which is a date that is 91 days prior to the stated maturity of either (i) the Company’s unsecured senior notes or (ii) the term B loans then outstanding if, on such 91st day, the applicable senior notes or term B loans remain outstanding and liquidity is less than (x) $250 million plus (y) the aggregate outstanding principal amount of such notes or term B loans, as applicable. Under Amendment No. 5, the outstanding New Term B-2 Loans were replaced with the New Term B-3 Loans having substantially similar terms as the New Term B-2 Loans, except with respect to the interest rate applicable to the New Term B-3 Loans and certain other provisions. As further amended, the New Term B-3 Loans bear interest at a SOFR-based rate (subject to a 0.50% floor) plus 1.75% as of September 30, 2026. The New Term B-3 Loans will mature on July 1, 2029.

Previous wording

In relation to the Term Facilities, the Company incurred expense of $32 million and $111 million, respectively, for the three and nine months ended March 31, 2026, which is included in Interest expense in the Condensed Consolidated Statements of Earnings (Loss). On July 1, 2023, our interest rate cap became effective, which reduced interest expense by $3 million and $14 million, respectively, during the three and nine months ended March 31, 2026.

Current wording

In relation to the Term Facilities, the Company incurred expense of $30 million for the three months ended September 30, 2026, which is included in Interest expense in the Condensed Consolidated Statements of Earnings. Our interest rate cap reduced interest expense by $1 million during the three months ended September 30, 2026.

Previous wording

The Company believes existing cash, cash flow from operations, and available borrowing capacity from its Senior Credit Facilities will be sufficient to fund its needs for working capital, capital expenditures, repayment of scheduled long-term borrowings and lease obligations, investments in R&D, and internal and external growth objectives at least through the next twelve months.

Current wording

The Company believes existing cash, cash flow from operations, and available borrowing capacity from its credit facilities will be sufficient to fund its needs for working capital, capital expenditures, repayment of scheduled long-term borrowings and lease obligations, investments in R&D, and internal and external growth objectives at least through the next twelve months.

Previous wording

Our cash and cash equivalent balances are generated and held in numerous locations throughout the world, including amounts held outside the United States. As of March 31, 2026, the Company held approxim ately $808 million of cash, cash equivalents and restricted cash outside of the United States. Generally, cash balances held outside the United States could be repatriated to the United States.

Current wording

Our cash and cash equivalent balances are generated and held in numerous locations throughout the world, including amounts held outside the United States. As of September 30, 2026, the Company held approxim ately $944 million of cash, cash equivalents and restricted cash outside of the United States. Generally, cash balances held outside the United States could be repatriated to the United States.

Previous wording

At March 31, 2026, we had $633 million of restricted cash, which includes $630 million at Silicon Carbide LLC that is restricted for use by only that subsidiary.

Current wording

At September 30, 2026, we had $583 million of restricted cash, which includes $581 million at Silicon Carbide LLC that is restricted for use by only that subsidiary.