POWER INTEGRATIONS INC

Previous wording

The following discussion and analysis has been prepared as an aid to understanding our financial condition and results of operations. It should be read in conjunction with the condensed consolidated financial statements and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q, and with the consolidated financial statements and management’s discussion and analysis of our financial condition and results of operations in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 7, 2025. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year endedDecember 31, 2024*, and in Part II, Item 1A - “Risk Factors” and elsewhere in this report. See also “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this report.*

Current wording

The following discussion and analysis has been prepared as an aid to understanding our financial condition and results of operations. It should be read in conjunction with the condensed consolidated financial statements and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q, and with the consolidated financial statements and management’s discussion and analysis of our financial condition and results of operations in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 7, 2025. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, and in Part II, Item 1A - “Risk Factors” and elsewhere in this report. See also “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this report.

Previous wording

Our net revenues were $115.9 million and $106.2 million in the three months ended June 30, 2025 and 2024, respectively, and $221.4 million and $197.9 million in the six months ended June 30, 2025 and 2024, respectively. The increase in net revenues for the three-month period was primarily due to higher sales in the industrial end-market. For the

Current wording

Our net revenues were $118.9 million and $115.8 million in the three months ended September 30, 2025 and 2024, respectively, and $340.3 million and $313.7 million in the nine months ended September 30, 2025 and 2024, respectively. The increases in net revenues for the three- and nine-month periods were primarily due to higher sales in the industrial end-market.

Previous wording

Our top ten customers, including distributors that resell to OEMs and merchant power supply manufacturers, accounted for approximately 81% of our net revenues for each of the three and six months ended June 30, 2025 and approximately 80% and 78%, respectively, in the corresponding periods of 2024. International sales accounted for approximately 98% and 99% of our net revenues for the three and six months ended June 30, 2025, respectively, and 99% and 98%, respectively, in the corresponding periods of 2024.

Current wording

Our top ten customers, including distributors that resell to OEMs and merchant power supply manufacturers, accounted for approximately 81% of our net revenues for each of the three and nine months ended September 30, 2025 and approximately 78% for both of the corresponding periods of 2024. International sales accounted for approximately 98% and 99% of our net revenues for the three and nine months ended September 30, 2025, respectively, and 98% for both of the corresponding periods of 2024.

Previous wording

Our gross margin was 55% and 53% for the three months ended June 30, 2025 and 2024, respectively, and 55% and 53% for the six months ended June 30, 2025 and 2024, respectively. The increase in gross margin was primarily due to favorable end-market mix—reflecting a greater amount of revenues coming from higher-margin end-markets—and the favorable impact of the dollar/yen exchange rate on our wafer costs.

Current wording

Our gross margin was 55% for both the three months ended September 30, 2025 and the corresponding period in 2024. Our gross margin was 55% and 53% for the nine months ended September 30, 2025 and 2024, respectively. The increase in gross margin for the nine-month period was primarily due to favorable end-market mix—reflecting a greater amount of revenues coming from higher-margin end-markets.

Previous wording

Total operating expenses were $65.3 million and $54.6 million for the three months ended June 30, 2025 and 2024, respectively, and $116.8 million and $101.9 million for the six months ended June 30, 2025 and 2024, respectively. The increase in operating expenses for the three- and six-month periods was primarily due to an expense related to an employee litigation matter (refer to Note 13, Legal Proceedings and Contingencies, in our Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q), increased employee-related expenses driven byheadcount growth and higher costs associated with employee health insurance and other benefits, as well ashigher expenses for professional and legal services. These increases were partially offset by decreased product-development expenses and a credit recognized in the six months ended June 30, 2025 related to the recovery of bad debt.

Current wording

Additionally, for the three- and nine-month period, we incurred expenses related to an employee litigation matter (refer to Note 13,Legal Proceedings and Contingencies, in our Notes to Unaudited Condensed Consolidated Financial Statements for details).

Previous wording

Comparison of the three and six months ended June 30, 2025 and 2024

Current wording

Comparison of the three and nine months ended September 30, 2025 and 2024

Previous wording

*Net revenues.*Net revenues consist of revenues from product sales, which are calculated net of returns and allowances. Net revenues for the three and six months ended June 30, 2025 were $115.9 million and $221.4 million, respectively, and $106.2 million and $197.9 million, respectively, in the corresponding periods of 2024. The increase in net revenues for the three-month period was due primarily to higher sales in the industrial end-market. For the six-month period, the increase in net revenues was due to higher sales in all four end-market categories, most significantly the industrial end-market.

Current wording

*Net revenues.*Net revenues consist of revenues from product sales, which are calculated net of returns and allowances. Net revenues for the three and nine months ended September 30, 2025 were $118.9 million and $340.3 million, respectively, and $115.8 million and $313.7 million, respectively, in the corresponding periods of 2024. The increases in net revenues for the three- and nine-month periods were due primarily to higher sales in the industrial end-market.

Previous wording

Our revenue mix by end market for the three and six months ended June 30, 2025 and 2024 was as follows:

Current wording

Our revenue mix by end market for the three and nine months ended September 30, 2025 and 2024 was as follows:

Previous wording

International sales, consisting of sales outside of the United States of America based on “bill to” customer locations, were $114.0 million and $218.2 million in the three and six months ended June 30, 2025, respectively, and $104.6 million and $194.6 million, respectively, in the corresponding periods of 2024. Although power converters using our products are distributed to end markets worldwide, most are manufactured in Asia. As a result, sales to this region represented approximately 84% of our net revenues in both the three and six months ended June 30, 2025 and approximately 85% and 83%, respectively, in the corresponding period of 2024. We expect international sales, and sales to the Asia region in particular, to continue to account for a large portion of our net revenues in the future.

Current wording

International sales, consisting of sales outside of the United States of America based on “bill to” customer locations, were $117.1 million and $335.3 million in the three and nine months ended September 30, 2025, respectively, and $114.1 million and $308.7 million, respectively, in the corresponding periods of 2024. Although power converters using our products are distributed to end markets worldwide, most are manufactured in Asia. As a result, sales to this region represented approximately 83% and 84% of our net revenues in the three and nine months ended September 30, 2025, respectively, and approximately 85% and 84%, respectively, in the corresponding periods of 2024. We expect international sales, and sales to the Asia region in particular, to continue to account for a large portion of our net revenues in the future.

Previous wording

Sales to distributors accounted for approximately 70% and 71% of our net revenues in the three and six months ended June 30, 2025, respectively, and approximately 69% and 71%, respectively, in the corresponding periods of 2024. Direct sales to OEMs and merchant power supply manufacturers accounted for the remainder.

Current wording

Sales to distributors accounted for approximately 69% and 70% of our net revenues in the three and nine months ended September 30, 2025, respectively, and approximately 70% in both of the corresponding periods of 2024. Direct sales to OEMs and merchant power supply manufacturers accounted for the remainder.

Previous wording

*Gross profit.*Gross profit is net revenues less cost of revenues. Our cost of revenues consists primarily of the purchase of wafers from our contracted foundries, the assembly, packaging and testing of our products by sub-contractors, product testing performed in our own facility, overhead associated with the management of our supply chain and the amortization of acquired intangible assets. Gross margin is gross profit divided by net revenues. The following table compares gross profit and gross margin for the three and six months ended June 30, 2025 and 2024:

Current wording

*Gross profit.*Gross profit is net revenues less cost of revenues. Our cost of revenues consists primarily of the purchase of wafers from our contracted foundries, the assembly, packaging and testing of our products by sub-contractors, product testing performed in our own facility, overhead associated with the management of our supply chain and the amortization of acquired intangible assets. Gross margin is gross profit divided by net revenues. The following table compares gross profit and gross margin for the three and nine months ended September 30, 2025 and 2024:

Previous wording

The increase in gross margin was primarily due to favorable end-market mix—reflecting a greater amount of revenues coming from higher-margin end-markets—and the favorable impact of the dollar/yen exchange rate on our wafer costs.

Current wording

The increase in gross margin in the nine-month period was primarily due to favorable end-market mix—reflecting a greater amount of revenues coming from higher-margin end-markets.

Previous wording

*Research and development expenses.*Research and development (“R&D”) expenses consist primarily of employee-related expenses including salaries and stock-based compensation, as well as expensed material and facility costs associated with the development of new processes and products. We also record R&D expenses for prototype wafers related to new products until the products are released to production. The following table compares R&D expenses for the three and six months ended June 30, 2025 and 2024:

Current wording

*Research and development expenses.*Research and development (“R&D”) expenses consist primarily of employee-related expenses including salaries and stock-based compensation, as well as expensed material and facility costs associated with the development of new processes and products. We also record R&D expenses for prototype wafers related to new products until the products are released to production. The following table compares R&D expenses for the three and nine months ended September 30, 2025 and 2024:

Previous wording

R&D expenses for the three-months ended June 30, 2025 were flat compared to the corresponding period of 2024. R&D expenses increased for the six months ended June 30, 2025 as compared to the corresponding period of 2024 primarily due to higher employee-related expenses including employee health insurance and other benefits, as well as increased equipment-related expenses, partially offset by lower stock-based compensation expense and decreased product-development expenses.

Current wording

R&D expenses increased for the three and nine months ended September 30, 2025 as compared to the corresponding periods of 2024. The increases for the three- and nine-month periods were primarily due to higher salaries and related expenses as well as increased outside engineering services. The increase for the nine-month period was partially offsetby lower stock-based compensation expense.

Previous wording

*Sales and marketing expenses.*Sales and marketing (“S&M”) expenses consist primarily of employee-related expenses, including salaries and stock-based compensation, and commissions to sales representatives, as well as facilities expenses, including expenses associated with our regional sales and support offices. The following table below compares S&M expenses for the three and six months ended June 30, 2025 and 2024:

Current wording

*Sales and marketing expenses.*Sales and marketing (“S&M”) expenses consist primarily of employee-related expenses, including salaries and stock-based compensation, and commissions to sales representatives, as well as facilities expenses, including expenses associated with our regional sales and support offices. The following table below compares S&M expenses for the three and nine months ended September 30, 2025 and 2024:

Previous wording

S&M expenses increased forthe three and six months ended June 30, 2025 as compared to the corresponding periods of 2024, primarily due to increased employee-related expenses and increased travel and tradeshow-related expenses. Increases were partially offset by lower stock-based compensation expense.

Current wording

S&M expenses increased forthe three and nine months ended September 30, 2025 as compared to the corresponding periods of 2024. The increases for the three- and nine-month periods were primarily due to increased employee-related expenses. The increase for the nine-month period was partially offset by lower stock-based compensation expense.

Previous wording

*General and administrative expenses.*General and administrative (“G&A”) expenses consist primarily of employee-related expenses, including salaries and stock-based compensation expenses for administration, finance, human resources and general management, as well as consulting, professional services, legal and auditing expenses. The following table below compares G&A expenses for the three and six months ended June 30, 2025 and 2024:

Current wording

*General and administrative expenses.*General and administrative (“G&A”) expenses consist primarily of employee-related expenses, including salaries and stock-based compensation expenses for administration, finance, human resources and general management, as well as consulting, professional services, legal and auditing expenses. The following table below compares G&A expenses for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Other operating expenses. Other operating expenses were $9.2 million in the three and six months ended June 30, 2025. This amount consisted of a $9.2 million expense stemming from an employee litigation matter (refer to Note 13, Legal Proceedings and Contingencies, in our Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q).

Current wording

Other operating expenses. Other operating expenses were $14.3 million and $23.4 million in the three and nine months ended September 30, 2025, respectively. For the three- and nine-month periods we recognized expenses of $0.7 million and $9.9 million, respectively, stemming from an employee litigation matter (refer to Note 13,Legal Proceedings and Contingencies, in our Notes to Unaudited Condensed Consolidated Financial Statements for details). In addition, for the three-month period, we recognized stock-based compensation expense of $13.6 million as a result of an award modification associated with the retirement of our former chief executive officer (refer to Note 6,Stock-Based Compensation, in our Notes to Unaudited Condensed Consolidated Financial Statements for details).

Previous wording

Other income. Other income consists primarily of interest income earned on cash and cash equivalents, marketable securities and other investments, and the impact of foreign exchange gains or losses. The table below compares other income for the three and six months ended June 30, 2025 and 2024:

Current wording

Other income. Other income consists primarily of interest income earned on cash and cash equivalents, marketable securities and other investments, and the impact of foreign exchange gains or losses. The table below compares other income for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Other income decreased for the three and six months ended June 30, 2025 as compared to the corresponding periods of 2024 primarily due to lower interest income and losses on foreign currency exchange.

Current wording

Other income decreased for the three and nine months ended September 30, 2025 as compared to the corresponding periods of 2024 primarily due to lower interest income.

Previous wording

Provision (benefit) for income taxes. Provision for income taxes represents federal, state and foreign taxes. The table below compares income-tax expense for the three and six months ended June 30, 2025 and 2024:

Current wording

Provision (benefit) for income taxes. Provision for income taxes represents federal, state and foreign taxes. The table below compares income-tax expense for the three and nine months ended September 30, 2025 and 2024:

Previous wording

payments. In the three months ended June 30, 2024, our effective tax rate was favorably impacted by the recognition of excess tax benefits related to share-based payments. In the six months ended June 30, 2024, our effective tax rate was also favorably impacted by the recognition of excess tax benefits related to share-based payments andby discrete items associated with the release of unrecognized tax benefits. These benefits were partially offset by U.S. tax on foreign income, known as global intangible low-taxed income. The primary jurisdiction from which our foreign earnings are derived is the Cayman Islands, which is a non-taxing jurisdiction. Income earned in other foreign jurisdictions was not material. We have not been granted any incentivized tax rates and do not operate under any tax holidays in any jurisdiction.

Current wording

Our effective tax rates for the three and nine months ended September 30, 2025, was (3.0%) and 10.5%, respectively, and in the corresponding periods of 2024 was 0.3% and 1.5%, respectively. The effective tax rate in these periods was lower than the statutory federal income-tax rate of 21% due to the geographic distribution of our world-wide earnings in lower-tax jurisdictions and the impact of federal tax credits. In the three and nine months ended September 30, 2025, our effective tax rate was negatively impacted by the recognition of a tax deficiency or “shortfall” related to share-based payments. Additionally, in the three and nine months ended September 30, 2024, our effective tax rate was favorably impacted by the recognition of excess tax benefits related to share-based payments andby discrete items associated with the release of unrecognized tax benefits. These benefits were partially offset by U.S. tax on foreign income, known as Net Controlled Foreign Corporation Tested Income (“NCTI”). The primary jurisdiction from which our foreign earnings are derived is the Cayman Islands, which is a non-taxing jurisdiction. Income earned in other foreign jurisdictions was not material. We have not been granted any incentivized tax rates and do not operate under any tax holidays in any jurisdiction.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes provisions modifying the corporate income tax code, including the immediate expensing of domestic research and development expenditures for tax purposes, 100% bonus depreciation for qualified assets, and an increase in the statutory tax rate on foreign earnings from 10.5% to 12.6% (effective in the fiscal year 2026). We have elected to account Net Controlled Foreign Corporation Tested Income (“NCTI”), formerly known as Global Intangible Low-Taxed Income (“GILTI”), under the deferred method. The deferred tax amounts recorded are based on the evaluation of temporary differences that are expected to reverse as NCTI is incurred in future periods. As a result, we will remeasure its deferred tax balances related to NCTI for the changes in the tax rate and will record an adjustment to this balance in the fiscal third quarter. We expect these modifications to result in an increase in our effective tax rate but are still evaluating the magnitude of the impact.

Current wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes provisions modifying the corporate income tax code, including the immediate expensing of domestic research and development expenditures for tax purposes, 100% bonus depreciation for qualified assets, and an increase in the statutory tax rate on foreign earnings from 10.5% to 12.6% (effective in the fiscal year 2026). We have elected to account NCTI, formerly known as Global Intangible Low-Taxed Income, under the deferred method. The deferred tax amounts recorded are based on the evaluation of temporary differences that are expected to reverse as NCTI is incurred in future periods. As a result, we remeasured our estimated deferred tax balances related to NCTI for the changes in the tax rate and recorded an expense of $0.5 million during the third quarter of 2025.

Previous wording

As of June 30, 2025, we had $268.7 million in cash, cash equivalents and short-term marketable securities, a decrease of $31.3 million from $300.0 million as of December 31, 2024. As of June 30, 2025, we had working capital, defined as current assets less current liabilities, of $417.9 million, a decrease of approximately $40.8 million from $458.7 million as of December 31, 2024.

Current wording

As of September 30, 2025, we had $241.9 million in cash, cash equivalents and short-term marketable securities, a decrease of $58.1 million from $300.0 million as of December 31, 2024. As of September 30, 2025, we had working capital, defined as current assets less current liabilities, of $385.0 million, a decrease of approximately $73.7 million from $458.7 million as of December 31, 2024.

Previous wording

Our operating activities generated $55.5 million of cash in the six months ended June 30, 2025. Net income for this period was $10.2 million; we also incurred non-cash stock-based compensation expense, depreciation and an increase in deferred tax assets of $18.8 million, $14.2 million and $0.9 million, respectively. Sources of cash included a $10.0 million increase in taxes payable and accrued liabilities and a $6.4 million decrease in prepaid expenses and other assets. These sources of cash were partially offset by a $2.8 million increase in inventories.

Current wording

Our operating activities generated $85.3 million of cash in the nine months ended September 30, 2025. Net income for this period was $8.8 million; we also incurred non-cash stock-based compensation expense, depreciation, accretion of discount on marketable securities and an increase in deferred tax assets of $40.0 million, $20.8 million, $0.8 million and $0.9 million, respectively. Sources of cash included a $9.2 million increase in taxes payable and accrued liabilities, a $6.0 million increase in accounts payable, a $5.2 million decrease in prepaid expenses and other assets and a $1.0 million decrease in inventories. These sources of cash were partially offset by $4.0 million increase in accounts receivable.

Previous wording

Operating activities generated $33.5 million of cash in the six months ended June 30, 2024. Net income for this period was $8.8 million; we also incurred depreciation, non-cash stock-based compensation expense, increase in deferred tax assets, accretion of discount on marketable securities, and amortization of intangibles of $17.1 million, $17.4 million, $3.5 million, $0.9 million and $0.9 million, respectively. Sources of cash primarily included a $2.1 million decrease in prepaid expenses and other assets. These sources of cash were partially offset by a $6.7 million increase in inventories due to lower demand and a $2.0 million increase in accounts receivable due to timing of customer payments.

Current wording

Operating activities generated $66.5 million of cash in the nine months ended September 30, 2024. Net income for this period was $23.1 million; we also incurred non-cash stock-based compensation expense, depreciation, increase in deferred tax assets, accretion of discount on marketable securities, and amortization of intangibles of $25.8 million, $25.6 million, $8.7 million, $1.3 million and $1.1 million, respectively. Sources of cash included a $5.6 million decrease in prepaid expenses and other assets and an increase of $1.9 million in accounts payable. These sources of cash were partially offset by a $4.5 million increase in inventories and a $1.5 million increase in accounts receivable due to timing of customer payments.

Previous wording

Our investing activities in the six months ended June 30, 2025, generated $37.1 million of cash, primarily consisting of $48.8 million from sales and maturities of marketable securities, net of purchases, offset by $11.7 million for purchases of property and equipment—primarily production-related machinery and equipment.

Current wording

Our investing activities in the nine months ended September 30, 2025, generated $40.7 million of cash, primarily consisting of $57.9 million from sales and maturities of marketable securities, net of purchases, offset by $17.3 million for purchases of property and equipment—primarily production-related machinery and equipment.

Previous wording

Our investing activities in the six months ended June 30, 2024 resulted in$0.9 million net use of cash, primarily consisting of $8.5 million used for purchases of property and equipment (primarily production-related machinery and equipment), partially offset by $7.6 million from sales and maturities of marketable securities, net of purchases.

Current wording

Our investing activities in the nine months ended September 30, 2024 resulted in$17.5 million net use of cash, primarily consisting of $14.2 million used for purchases of property and equipment (primarily production-related machinery and equipment) and $9.5 million for the Odyssey acquisition, partially offset by $6.2 million of proceeds from sales and maturities of marketable securities, net of purchases.

Previous wording

Our financing activities in the six months ended June 30, 2025 resulted in a $76.6 million net use of cash, consisting of $55.7 million for the repurchase of our common stock and $23.8 million for the payment of dividends to stockholders, partially offset by proceeds of $2.8 million from the issuance of shares through our employee stock purchase plan.

Current wording

Our financing activities in the nine months ended September 30, 2025 resulted in a $128.3 million net use of cash, consisting of $98.1 million for the repurchase of our common stock and $35.6 million for the payment of dividends to stockholders, partially offset by proceeds of $5.3 million from the issuance of shares through our employee stock purchase plan.

Previous wording

Our financing activities in the six months ended June 30, 2024 resulted in a $46.0 million net use of cash, consisting of $26.0 million for the repurchase of our common stock and $22.7 million for the payment of dividends to stockholders, partially offset by proceeds of $2.7 million from the issuance of shares through our employee stock purchase plan.

Current wording

Our financing activities in the nine months ended September 30, 2024 resulted in a $54.4 million net use of cash, consisting of $34.1 million for the payment of dividends to stockholders and $26.0 million for the repurchase of our common stock, partially offset by proceeds of $5.7 million from the issuance of shares through our employee stock purchase plan.

Previous wording

In October 2024, our board of directors raised the cash dividend with the declaration of five cash dividends of $0.21 per share to be paid at the end of the fourth quarter in 2024 (in lieu of the previously declared dividend of $0.20 per share announced in October 2023) and at the end of each quarter in 2025. Dividend payouts of $12.0 million and $11.8 million occurred on March 31, 2025 and June 30, 2025, respectively. The declaration of any future cash dividend is at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that cash dividends are in the best interest of our stockholders.

Current wording

Dividend payouts of $12.0 million, $11.8 million, and $11.8 million occurred on March 31, 2025, June 30, 2025 and September 30, 2025, respectively. The declaration of any future cash dividend is at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that cash dividends are in the best interest of our stockholders.

Previous wording

Over the years, our board of directors has authorized the use of funds to repurchase shares of our common stock. As of December 31, 2024, we had $48.1 million available under a stock-repurchase program announced in November 2024. After this authorization was exhausted in April 2025, our board of directors authorized the use of an additional $50.0 million for the repurchase of our common stock, with repurchases to be executed according to pre-defined price/volume guidelines in compliance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. In the three months ended June 30, 2025, we purchased approximately 0.7 million of our shares for $32.6 million. In the six months ended June 30, 2025, we repurchased approximately 1.1 million of our shares for $55.7 million. As of June 30, 2025, $42.4 million remained on our repurchase authorization. The program has no expiration date. Authorization of future repurchase programs is at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors.

Current wording

Over the years, our board of directors has authorized the use of funds to repurchase shares of our common stock. As of December 31, 2024, we had $48.1 million available under a stock-repurchase program announced in November 2024. After this authorization was exhausted in April 2025, our board of directors authorized the use of an additional $50.0 million for the repurchase of our common stock, with repurchases to be executed according to pre-defined price/volume guidelines in compliance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. In the three months ended September 30, 2025, we repurchased 0.9 million of our shares for $42.4 million. In the nine months ended September 30, 2025, we repurchased 2.0 million of our shares for $98.1 million, exhausting our repurchase authorization. Authorization of future repurchase programs is at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors.

Previous wording

If our operating results deteriorate in future periods, either as a result of a decrease in customer demand or pricing pressures from our customers or our competitors, or for other reasons, our ability to generate positive cash flow from operations may be jeopardized. In that case, we may be forced to use our cash, cash equivalents and short-term investments, use our current financing or seek additional financing from third parties to fund our operations. We believe that cash

Current wording

If our operating results deteriorate in future periods, either as a result of a decrease in customer demand or pricing pressures from our customers or our competitors, or for other reasons, our ability to generate positive cash flow from operations may be jeopardized. In that case, we may be forced to use our cash, cash equivalents and short-term investments, use our current financing or seek additional financing from third parties to fund our operations. We believe that cash generated from operations, together with existing sources of liquidity, will satisfy our projected working capital and other cash requirements for at least the next 12 months. Our uses of cash beyond the next 12 months will depend on many factors, including the general economic environment in which we operate and our ability to generate cash flow from operations, which are uncertain but include funding our operations and additional capital expenditures.