FORMFACTOR INC

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Securities Exchange Act of 1934 and the Securities Act of 1933, which are subject to known and unknown risks and uncertainties. The forward-looking statements include statements concerning, among other things, our business strategy (including the influence of anticipated trends and developments in our business and the markets in which we operate), financial and operating results, revenues, gross margins, liquidity, operating expenses, effective tax rate and deferred tax assets, products, projected costs and capital expenditure requirements, research and development programs, sales and marketing initiatives, competition and impact of accounting standards. In some cases, you can identify these statements by forward-looking words, such as “may,” “likely,” “will,” “could,” “forecast,” “should,” “expect,” “estimate,” “plan,” “intend,” “anticipate,” “target,” “believe,” “potential,” “continue,” the negative or plural of these words and other comparable terminology.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Securities Exchange Act of 1934 and the Securities Act of 1933, which are subject to known and unknown risks and uncertainties. The forward-looking statements include statements concerning, among other things, our business strategy (including the influence of anticipated trends and developments in our business and the markets in which we operate), financial and operating results, revenues, gross margins, liquidity, operating expenses, effective tax rate and deferred tax assets, products, our production plans, including the expected production ramp timing and benefits of the Farmers Branch site projected costs and capital expenditure requirements, research and development programs, sales and marketing initiatives, competition and impact of accounting standards. In some cases, you can identify these statements by forward-looking words, such as “may,” “likely,” “will,” “could,” “forecast,” “should,” “expect,” “estimate,” “plan,” “intend,” “anticipate,” “target,” “believe,” “potential,” “continue,” the negative or plural of these words and other comparable terminology.

Previous wording

The forward-looking statements are only predictions based on our current expectations and our projections about future events. All forward-looking statements included in this Quarterly Report on Form 10-Q are based upon information available to us as of the filing date of this Quarterly Report on Form 10-Q. You should not place undue reliance on these forward-looking statements. We have no obligation to update any of these statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements, including risks related to general market trends, the benefits of acquisitions and investments, including our capital expenditures, our restructuring plans, our credit facilities, our supply chain, our tax burden, uncertainties related to public health-related crises, the interpretation and impacts of changes in export controls, tariffs and other trade barriers, military conflicts, political volatility, legislative changes and similar factors, our ability to execute our business strategy including any plans of expansion, and other risks discussed in the section titled “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 27, 2025 and in this Quarterly Report on Form 10-Q. You should carefully consider the numerous risks and uncertainties described under these sections.

Current wording

The forward-looking statements are only predictions based on our current expectations and our projections about future events. All forward-looking statements included in this Quarterly Report on Form 10-Q are based upon information available to us as of the filing date of this Quarterly Report on Form 10-Q. You should not place undue reliance on these forward-looking statements. We have no obligation to update any of these statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements, including risks related to general market trends, the benefits and certainty of acquisitions and investments, including our capital expenditures, our restructuring plans, including our production plans, our credit facilities, our supply chain, our tax burden, uncertainties related to public health-related crises, the interpretation and impacts of changes in export controls, tariffs and other trade barriers, military conflicts, political volatility, legislative changes and similar factors, our ability to execute our business strategy including any plans of expansion, and other risks discussed in the section titled “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 27, 2025 and in this Quarterly Report on Form 10-Q. You should carefully consider the numerous risks and uncertainties described under these sections.

Previous wording

FormFactor, Inc., headquartered in Livermore, California, is a leading provider of essential test and measurement technologies along the full semiconductor product lifecycle — from characterization, modeling, reliability, and design de-bug, to qualification and production test. We provide a broad range of high-performance probe cards, analytical probes, probe stations, thermal systems, and cryogenic systems to both semiconductor companies and scientific institutions. Our products provide electrical and optical information from a variety of semiconductor and electro-optical devices and integrated circuits from early research, through development, to high-volume production. Customers use our products and services to optimize device performance and advance yield knowledge.

Current wording

FormFactor, Inc., headquartered in Livermore, California, is a leading provider of essential test and measurement technologies along the full semiconductor product lifecycle — from characterization, modeling, reliability, and design de-bug, to qualification and production test. We provide a broad range of high-performance probe cards, analytical probes, probe stations, thermal systems, and cryogenic systems to both semiconductor companies and scientific institutions. Our products provide electrical and optical information from a variety of semiconductor and electro-optical devices and integrated circuits from early research, through development, to high-volume production. Customers use our products and services to optimize device performance and advance yield learning.

Previous wording

We generated net income of $76.6 million in the first six months of fiscal 2026, compared to $15.5 million in the first six months of fiscal 2025. The increase in net income was primarily attributable to higher revenues, including record quarterly revenue in both the first and second quarters of fiscal 2026, and improved gross margins. These favorable factors were partially offset by higher restructuring charges associated with initiatives to better align our cost structure and support gross margin improvement.

Current wording

We generated net income of $150.4 million in the first nine months of fiscal 2026, compared to $31.1 million in the first nine months of fiscal 2025. The increase in net income was primarily attributable to higher revenues, with each quarter of fiscal 2026 achieving record quarterly revenue and surpassing the prior quarter's performance, as well as improved gross margins. These favorable factors were partially offset by higher restructuring charges associated with initiatives to better align our cost structure and support gross margin improvement.

Previous wording

As of June 27, 2026, we received approximately $0.8 million in IEEPA refunds. We anticipate refunds of approximately $7.0 million to $9.0 million in the third quarter of fiscal 2026.

Current wording

As of September 26, 2026, we received approximately $9.9 million in IEEPA refunds. While the majority of our anticipated IEEPA refunds have been received, we expect to receive an additional $1.8 million during the fourth quarter of fiscal 2026.

Previous wording

Factory Expansion — In June 2025, we purchased a manufacturing site in Farmers Branch, Texas. We expect to begin production at this site late in the fourth quarter of fiscal 2026, with a ramp to initial target production levels over the course of fiscal 2027. The facility expands our manufacturing footprint and is expected to support incremental production capacity and a more favorable cost structure overall, once ramped to initial target production levels.

Current wording

Factory Expansion — In June 2025, we purchased a manufacturing site in Farmers Branch, Texas. We commenced production at this site late in the third quarter of fiscal 2026, with the first customer shipment occurring in the fourth quarter of fiscal 2026. We expect production to continue ramping throughout fiscal 2027. The facility expands our manufacturing footprint and is expected to support incremental production capacity and a more favorable cost structure overall, once ramped to initial target production levels.

Previous wording

Management’s Discussion and Analysis and Note 2, Summary of Significant Accounting Policies, to the Consolidated Financial Statements in our 2025 Annual Report on Form 10-K describe the significant accounting estimates and significant accounting policies used in preparation of the Consolidated Financial Statements. Actual results in these areas could differ from management’s estimates. During the six months ended June 27, 2026, there were no significant changes in our significant accounting policies or estimates from those reported in our Annual Report on Form 10-K for the year ended December 27, 2025.

Current wording

Management’s Discussion and Analysis and Note 2, Summary of Significant Accounting Policies, to the Consolidated Financial Statements in our 2025 Annual Report on Form 10-K describe the significant accounting estimates and significant accounting policies used in preparation of the Consolidated Financial Statements. Actual results in these areas could differ from management’s estimates. During the nine months ended September 26, 2026, there were no significant changes in our significant accounting policies or estimates from those reported in our Annual Report on Form 10-K for the year ended December 27, 2025.

Previous wording

Foundry & Logic —The increase in Foundry & Logic product revenues for the three and six months ended June 27, 2026, compared to the three and six months ended June 28, 2025, was driven by stronger probe-card demand for networking and high-performance compute microprocessor designs.

Current wording

Foundry & Logic —The increase in Foundry & Logic product revenues for the three and nine months ended September 26, 2026, compared to the three and nine months ended September 27, 2025, was driven by stronger probe-card demand for networking and server CPU designs.

Previous wording

DRAM —The increase in DRAM product revenues for the three and six months ended June 27, 2026, compared to the three and six months ended June 28, 2025, was primarily driven by increased demand for high-bandwidth memory (“HBM”) designs utilized in generative artificial intelligence applications, with additional contributions from higher demand for other non-HBM DRAM designs. Revenue growth from HBM products accounted for approximately 75% and 69% of the year-over-year increase in DRAM product revenues for the three- and six-month periods, respectively.

Current wording

DRAM —The increase in DRAM product revenues for the three months ended September 26, 2026, compared to the three months ended September 27, 2025, was primarily driven by increased demand for non-HBM DRAM designs, specifically DDR5. The increase in DRAM product revenues for the nine months ended September 26, 2026, compared to the nine months ended September 27, 2025, was driven by increased demand for high-bandwidth memory (“HBM”) designs utilized in generative artificial intelligence applications and higher demand for non-HBM DRAM designs, specifically DDR5.

Previous wording

Flash —The decrease in Flash product revenues for the three and six months ended June 27, 2026, compared to the three and six months ended June 28, 2025, was driven by decreased customer production activity and demand for our products. A portion of Flash product revenues during the period was associated with manufacturing activity at our Baldwin Park manufacturing facility, which was closed in connection with our 2026 Restructuring Plans. As a result of the facility closure and the expected growth of our other end markets, we expect Flash revenues to represent a smaller percentage of our overall revenue mix in future periods.

Current wording

Flash —The decrease in Flash product revenues for the three and nine months ended September 26, 2026, compared to the three and nine months ended September 27, 2025, was primarily driven by our strategic focus on other end markets and resulting reduced manufacturing activity for Flash products. A portion of Flash product revenues during the period was associated with manufacturing activity at our Baldwin Park manufacturing facility, which was closed in connection with our 2026 Restructuring Plans. As a result of this strategic focus and the expected growth of our other end markets, we expect Flash revenues to represent a smaller percentage of our overall revenue mix in future periods.

Previous wording

Systems —The increase in Systems market revenues for the three months ended June 27, 2026, compared to the three months ended June 28, 2025, was primarily driven by sales of Triton, our recently introduced high-volume co-packaged optics (“CPO”) testing solution. The increase in Systems market revenues for the six months ended June 27, 2026, compared to the six months ended June 28, 2025, was also primarily driven by sales of Triton, partially offset by lower revenue from legacy product offerings as manufacturing capacity and customer demand increasingly shifted toward the Triton platform.

Current wording

Systems —The increase in Systems market revenues for the three months ended September 26, 2026, compared to the three months ended September 27, 2025, was primarily driven by sales of Triton, our recently introduced high-volume photonics testing solution, with smaller increases in revenues from sales of cryogenic and thermal systems. The increase in Systems market revenues for the nine months ended September 26, 2026, compared to the nine months ended September 27, 2025, was also primarily driven by sales of Triton, with a smaller increase in revenues from sales of thermal subsystems, partially offset by lower revenues from legacy product offerings as manufacturing capacity and customer demand increasingly shifted toward the Triton platform.

Previous wording

Changes in revenues by geographic region for the three and six months ended June 27, 2026, compared to the three and six months ended June 28, 2025, were primarily attributable to changes in customer demand, product sales mix, and the timing of customer shipments and revenue recognition. Specifically, the changes in revenues by geographic region were attributable to the following:

Current wording

Changes in revenues by geographic region for the three and nine months ended September 26, 2026, compared to the three and nine months ended September 27, 2025, were primarily attributable to changes in customer demand, product sales mix, and the timing of customer shipments and revenue recognition. Specifically, the changes in revenues by geographic region were attributable to the following:

Previous wording

•Taiwan — Increased demand for our Foundry & Logic probe card products and increased demand for Triton, our recently introduced high-volume CPO testing platform within Systems, contributed to the increase in revenues.

Current wording

•Taiwan — Increased demand for our Foundry & Logic and DRAM probe card products and increased demand for Triton, our recently introduced high-volume photonics testing platform within Systems, contributed to the increase in revenues.

Previous wording

•South Korea — Increased demand for our DRAM probe card products, including those supporting HBM designs, contributed to the increase in revenues.

Current wording

•South Korea — Revenues for the three months ended September 26, 2026, were relatively consistent with the corresponding prior-year period, while stronger demand for certain DRAM probe card products, including those supporting HBM designs, earlier in the year contributed to higher revenues for the nine months ended September 26, 2026.

Previous wording

We have been executing on initiatives for gross margin improvements through operational effectiveness and financial discipline, including:

Current wording

We have been executing initiatives for gross margin improvements through operational effectiveness and financial discipline, including:

Previous wording

•Deploying our workforce and existing manufacturing footprint more effectively, which included the execution of our 2026 Restructuring Plans. During the three and six months ended June 27, 2026, cost of revenues included $4.3 million and $25.8 million of restructuring costs, respectively, in connection with the 2026 Restructuring Plans.

Current wording

•Deploying our workforce and existing manufacturing footprint more effectively, which included the execution of our 2026 Restructuring Plans. During the three and nine months ended September 26, 2026, cost of revenues included $2.8 million and $28.6 million of restructuring costs, respectively, in connection with the 2026 Restructuring Plans.

Previous wording

Systems —For the three and six months ended June 27, 2026, gross profit and gross margins increased compared to the three and six months ended June 28, 2025, primarily due to increased revenue from a favorable product mix on increased volumes, partially offset by an increase in manufacturing spending.

Current wording

Systems —For the three and nine months ended September 26, 2026, gross profit and gross margins increased compared to the corresponding periods in the prior year, primarily due to increased revenue, favorable product mix, and favorable impacts from IEEPA tariff refunds received during the third quarter of 2026, partially offset by an increase in manufacturing spending. The tariff refunds increased Systems gross profit by approximately $2.0 million and gross margin by approximately 3.4 and 1.5 percentage points for the three and nine months ended September 26, 2026, respectively.

Previous wording

Corporate and Other —Corporate and Other includes unallocated expenses relating to restructuring charges, net, stock-based compensation expense, and amortization of intangible assets and fixed asset fair value adjustments due to acquisitions, which are not used in evaluating the results of, or in allocating resources to, our reportable segments. The increase in Corporate and Other costs for the three and six months ended June 27, 2026, compared to the three and six months ended June 28, 2025, was primarily attributable to restructuring charges of $4.3 million and $25.8 million, respectively, incurred in connection with the 2026 Restructuring Plans.

Current wording

Corporate and Other —Corporate and Other includes unallocated expenses relating to restructuring charges, net, stock-based compensation expense, and amortization of intangible assets and fixed asset fair value adjustments due to acquisitions, which are not used in evaluating the results of, or in allocating resources to, our reportable segments. The increase in Corporate and Other costs for the three and nine months ended September 26, 2026, compared to the corresponding periods in the prior year, was primarily attributable to restructuring charges of $2.8 million and $28.6 million, respectively, incurred in connection with the 2026 Restructuring Plans.

Previous wording

Overall —Gross profit and gross margins fluctuate with revenue levels, product mix, selling prices, factory loading, and material costs. For the three and six months ended June 27, 2026, compared to the three and six months ended June 28, 2025, gross profit and gross margins increased due to increased revenue from a favorable product mix and higher factory utilization, which includes the impact of our gross margin initiatives described earlier, partially offset by the restructuring charges incurred in connection with the 2026 Restructuring Plans.

Current wording

Overall —Gross profit and gross margins fluctuate with revenue levels, product mix, selling prices, factory loading, material costs, and operational efficiencies. For the three and nine months ended September 26, 2026, compared to the corresponding periods in the prior year, gross profit and gross margins increased due to increased revenue, favorable product mix, higher factory utilization, and benefits from our gross margin improvement initiatives, including improved manufacturing yields, manufacturing spending innovation, and reduced cycle times, and favorable impacts from IEEPA tariff refunds received during the third quarter of 2026, partially offset by restructuring charges incurred in connection with the 2026 Restructuring Plans. The tariff refunds related to tariffs incurred in prior periods and are not expected to provide a similar benefit in future periods. The tariff refunds increased gross profit by approximately $8.6 million and $9.4 million and gross margin by approximately 3.1 and 1.2 percentage points for the three and nine months ended September 26, 2026, respectively.

Previous wording

Research and development expenses increased for the three months ended June 27, 2026, compared to the corresponding period in the prior year, primarily due to higher performance-based compensation, partially offset by lower project material costs, lower stock-based compensation expense, and lower general operating costs.

Current wording

Research and development expenses increased for the three months ended September 26, 2026, compared to the corresponding period in the prior year, primarily due to higher general operating costs, mainly reflecting lower grant reimbursements, and higher performance-based compensation, partially offset by lower project material costs and lower stock-based compensation expense.

Previous wording

For the six months ended June 27, 2026, research and development expenses increased compared to the corresponding prior-year period, primarily due to higher performance-based compensation and $1.3 million of restructuring charges incurred in connection with the 2026 Restructuring Plans. These increases were partially offset by lower project material costs, lower general operating costs, and lower stock-based compensation expense.

Current wording

For the nine months ended September 26, 2026, research and development expenses increased compared to the corresponding prior-year period, primarily due to higher performance-based compensation, higher restructuring charges, including $1.3 million incurred in connection with the 2026 Restructuring Plans, and higher general operating costs. These increases were partially offset by lower project material costs and lower stock-based compensation expense.

Previous wording

Selling, general and administrative expenses increased for the three months ended June 27, 2026, compared to the corresponding period in the prior year, primarily due to higher employee compensation costs resulting from increased performance-based compensation, higher commission expense driven by increased revenue levels, and higher general operating costs.

Current wording

Selling, general and administrative expenses increased for the three months ended September 26, 2026, compared to the corresponding period in the prior year, primarily due to higher employee compensation costs resulting from increased performance-based compensation.

Previous wording

For the six months ended June 27, 2026, selling, general and administrative expenses increased compared to the corresponding prior-year period, primarily due to higher employee compensation costs resulting from increased performance-based compensation and higher commission expense driven by increased revenue levels, partially offset by lower restructuring charges and lower stock-based compensation expense.

Current wording

For the nine months ended September 26, 2026, selling, general and administrative expenses increased compared to the corresponding prior-year period, primarily due to higher employee compensation costs resulting from increased performance-based compensation and higher commission expense associated with increased revenue levels, partially offset by lower restructuring charges and lower stock-based compensation expense.

Previous wording

Stock-based compensation expense was lower for the six months ended June 27, 2026, primarily due to the reversal of previously recognized equity compensation expense resulting from the departure of our former Chief Financial Officer in the first quarter of fiscal 2026.

Current wording

Stock-based compensation expense was lower for the nine months ended September 26, 2026, primarily due to the reversal of previously recognized equity compensation expense resulting from the departure of our former Chief Financial Officer in the first quarter of fiscal 2026.

Previous wording

Factory start-up costs are costs associated with our newly purchased manufacturing site in Farmers Branch, Texas. The start-up costs consist of consulting costs, employee compensation costs, utilities, taxes and licenses, facility maintenance, and other expenses being incurred while the site is being brought to its intended use. These costs are expected to continue throughout the build-out, and will move to cost of revenues as the production ramps begin. Production ramps are expected to begin at this site late in the fourth quarter of fiscal 2026.

Current wording

Factory start-up costs are costs associated with our newly purchased manufacturing site in Farmers Branch, Texas. The start-up costs consist of employee compensation costs, consulting costs, utilities, taxes and licenses, facility maintenance, and other expenses being incurred while the site is being brought to its intended use. These costs are expected to continue throughout the build-out, and will move to cost of revenues as the production ramps begin. We commenced production at this site late in the third quarter of fiscal 2026 with production to continue to ramp throughout fiscal 2027.

Previous wording

Interest income is earned on our cash, cash equivalents, restricted cash, and marketable securities. Interest income increased for the three months ended June 27, 2026, compared to the corresponding period in the prior year, primarily due to higher average invested balances and interest income recognized on tariff refunds, partially offset by lower yields. Interest income decreased for the six months ended June 27, 2026, compared to the corresponding period in the prior year, primarily due to lower yields on invested balances.

Current wording

Interest income is earned on our cash, cash equivalents, restricted cash, and marketable securities. Interest income increased for the three and nine months ended September 26, 2026, compared to the corresponding period in the prior year, primarily due to higher average invested balances and interest income recognized on tariff refunds, partially offset by lower yields.

Previous wording

Interest expense primarily includes interest on our term loan, interest rate swap derivative contracts, commitment fee on our revolving credit facility, term loan issuance costs amortization charges, and our revolving credit facility issuance costs amortization charges. The interest expense for the three and six months ended June 27, 2026 increased compared with the corresponding period in the prior year due to our entry into the revolving credit facility in the third quarter of fiscal 2025.

Current wording

Interest expense primarily includes interest on our term loan, interest rate swap derivative contracts, commitment fee on our revolving credit facility, term loan issuance costs amortization charges, and our revolving credit facility issuance costs amortization charges. The interest expense for the three and nine months ended September 26, 2026 increased compared with the corresponding period in the prior year due to our entry into the revolving credit facility in the third quarter of fiscal 2025.

Previous wording

Provision for income taxes reflects the tax provision on our operations in foreign and U.S. jurisdictions, offset by tax benefits from tax credits and the foreign-derived deduction eligible income (“FDDEI”) deduction. Our effective tax rate may vary from period to period based on changes in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to U.S. federal, state or foreign tax laws, changes in the benefit or expense related to stock-based compensation expense, future expansion into areas with varying country, state, and local income tax rates, and deductibility of certain costs and expenses by jurisdiction. The decrease in our effective tax rate for the three and six months ended June 27, 2026 compared to the corresponding period in the prior year was primarily driven by increased tax benefits associated with higher U.S. taxable income, including a larger FDDEI deduction, together with increased discrete tax benefits from stock-based compensation.

Current wording

Provision for income taxes reflects the tax provision on our operations in foreign and U.S. jurisdictions, offset by tax benefits from tax credits and the foreign-derived deduction eligible income (“FDDEI”) deduction. Our effective tax rate may vary from period to period based on changes in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to U.S. federal, state or foreign tax laws, changes in the benefit or expense related to stock-based compensation, future expansion into areas with varying country, state, and local income tax rates, and the deductibility of certain costs and expenses by jurisdiction. The decrease in our effective tax rate for the three and nine months ended September 26, 2026, compared to the corresponding periods in the prior year was primarily driven by changes in estimated taxable income by jurisdiction in the prior year and the prior-year impact of implementing tax law changes under the One Big Beautiful Bill Act, which did not recur in the current year.

Previous wording

Our working capital increased to $505.3 million at June 27, 2026, compared to $433.2 million at December 27, 2025.

Current wording

Our working capital increased to $527.3 million at September 26, 2026, compared to $433.2 million at December 27, 2025.

Previous wording

Cash and cash equivalents primarily consist of deposits held at banks and money market funds. Marketable securities primarily consist of U.S. treasuries, corporate bonds, U.S. agency securities, and commercial paper. We typically invest in highly rated securities with low probabilities of default. Our investment policy requires investments to be rated single A or better, and limits the types of acceptable investments, issuer concentration and duration of the investment.

Current wording

Cash and cash equivalents primarily consist of deposits held at banks and money market funds. Marketable securities primarily consist of corporate bonds, U.S. treasuries, U.S. agency securities, and commercial paper. We typically invest in highly rated securities with low probabilities of default. Our investment policy requires investments to be rated single A or better, and limits the types of acceptable investments, issuer concentration and duration of the investment.

Previous wording

Our cash, cash equivalents and marketable securities totaled approximately $345.6 million at June 27, 2026, compared to $275.2 million at December 27, 2025. We have the full amount available under our $150 million revolving credit facility as of June 27, 2026. Based on our historical results of operations, we expect that our cash, cash equivalents, and marketable securities on hand, the cash we expect to generate from operations, and the available capacity under our revolving credit facility, will be sufficient to fund our short-term and long-term liquidity requirements primarily arising from: research and development, capital expenditures, including the Farmers Branch expansion, working capital, outstanding commitments, and other liquidity requirements associated with existing operations. However, we cannot be certain that our cash, cash equivalents, and marketable securities on hand, and cash generated from operations, will be available in the future to fund all of our capital and operating requirements. In addition, any future strategic investments and significant acquisitions may require additional cash and capital resources. To the extent necessary, we may consider entering into short and long-term debt obligations, raising cash through a stock issuance, or obtaining new financing facilities, which may not be available on terms favorable to us. If we are unable to obtain sufficient cash or capital to meet our needs on a timely basis and on favorable terms, our business and operations could be materially and adversely affected.

Current wording

Our cash, cash equivalents and marketable securities totaled approximately $395.4 million at September 26, 2026, compared to $275.2 million at December 27, 2025. We have the full amount available under our $150 million revolving credit facility as of September 26, 2026. Based on our historical results of operations, we expect that our cash, cash equivalents, and marketable securities on hand, the cash we expect to generate from operations, and the available capacity under our revolving credit facility, will be sufficient to fund our short-term and long-term liquidity requirements primarily arising from: research and development, capital expenditures, including the Farmers Branch expansion, working capital, outstanding commitments, and other liquidity requirements associated with existing operations. However, we cannot be certain that our cash, cash equivalents, and marketable securities on hand, and cash generated from operations, will be available in the future to fund all of our capital and operating requirements. In addition, any future strategic investments and significant acquisitions may require additional cash and capital resources. To the extent necessary, we may consider entering into short and long-term debt obligations, raising cash through a stock issuance, or obtaining new financing facilities, which may not be available on terms favorable to us. If we are unable to obtain sufficient cash or capital to meet our needs on a timely basis and on favorable terms, our business and operations could be materially and adversely affected.

Previous wording

Net cash provided by operating activities consists of net income for the period, adjusted for certain non-cash items and changes in certain operating assets and liabilities. Net cash provided by operating activities for the six months ended June 27, 2026 was attributable to net income of $76.6 million and net non-cash expenses of $56.1 million, partially offset by the increase in net working capital of $25.9 million. The cash used in net working capital was primarily driven by increased accounts receivable, net, of $30.7 million and increased inventories of $19.6 million, partially offset by increased accounts payable of $14.5 million, increased accrued liabilities of $5.2 million, and increased deferred revenue of $3.4 million. The non-cash expenses mainly consisted of depreciation and amortization, stock-based compensation, non-cash restructuring, and the provision for excess and obsolete inventories.

Current wording

Net cash provided by operating activities consists of net income for the period, adjusted for certain non-cash items and changes in certain operating assets and liabilities. Net cash provided by operating activities for the nine months ended September 26, 2026 was attributable to net income of $150.4 million and net non-cash expenses of $77.5 million, partially offset by the increase in net working capital of $16.8 million. The cash used in net working capital was primarily driven by increased inventories of $30.2 million, increased accounts receivable, net, of $27.5 million, and decreased operating lease liabilities of $5.9 million, partially offset by increased deferred revenue of $15.9 million, increased other liabilities of $11.2 million, increased accrued liabilities of $9.5 million, and increased accounts payable of $9.3 million. The non-cash expenses mainly consisted of depreciation and amortization, stock-based compensation, non-cash restructuring, and the provision for excess and obsolete inventories.

Previous wording

Net cash used in investing activities for the six months ended June 27, 2026 primarily related to $64.5 million in net purchases of marketable securities and $24.8 million of property, plant and equipment purchases.

Current wording

Net cash used in investing activities for the nine months ended September 26, 2026 primarily related to $87.2 million in net purchases of marketable securities and $64.4 million of property, plant and equipment purchases.

Previous wording

Net cash used in financing activities for the six months ended June 27, 2026 primarily related to $16.0 million used to pay tax withholdings for net share settlements of employee stock awards, partially offset by $5.8 million received from issuances of common stock under our employee stock purchase plan.

Current wording

Net cash used in financing activities for the nine months ended September 26, 2026 primarily related to $35.6 million used to pay tax withholdings for net share settlements of employee stock awards, partially offset by $11.1 million received from issuances of common stock under our employee stock purchase plan.

Previous wording

On June 22, 2020, we entered into an $18.0 million 15-year credit facility loan agreement (the “Building Term Loan”). The proceeds of the Building Term Loan were used to purchase a building adjacent to our leased facilities in Livermore, California. On May 19, 2023, we amended the Building Term Loan, replacing the benchmark reference rate London Interbank Offered Rate (“LIBOR”) with the term SOFR, with no change to the amount or timing of contractual cash flows.

Current wording

On June 22, 2020, we entered into an $18.0 million 15-year credit facility loan agreement (the “Building Term Loan”). The proceeds of the Building Term Loan were used to purchase a building adjacent to our leased facilities in Livermore, California.

Previous wording

The Building Term Loan bears interest at a rate equal to the applicable SOFR rate plus 1.86% per annum. Interest payments are payable in monthly installments over a fifteen-year period. The interest rate at June 27, 2026, before consideration of interest rate swap discussed in the next paragraph, was 5.48%. As of June 27, 2026, the balance outstanding pursuant to the Building Term Loan was $11.7 million.

Current wording

The Building Term Loan bears interest at a rate equal to the applicable SOFR rate plus 1.86% per annum. Interest payments are payable in monthly installments over a fifteen-year period. The interest rate at September 26, 2026, before consideration of interest rate swap discussed in the next paragraph, was 5.55%. As of September 26, 2026, the balance outstanding pursuant to the Building Term Loan was $11.4 million.

Previous wording

On March 17, 2020, we entered into an interest rate swap agreement to hedge the interest payment on the Building Term Loan for the notional amount of $18.0 million, and an amortization period that matches the debt. As future levels of LIBOR over the life of the loan were uncertain, we entered into this interest-rate swap agreement to hedge the exposure in interest rate risks associated with movement in LIBOR rates. This agreement was amended on May 19, 2023 to replace the benchmark reference rate LIBOR with SOFR to match the Building Term Loan agreement (as amended). After the amendment, the interest rate swap continues to convert our floating-rate interest into a fixed-rate at 2.75%. As of June 27, 2026, the notional amount of the loan that is subject to this interest rate swap is $11.7 million.

Current wording

On March 17, 2020, we entered into an interest rate swap agreement to hedge the interest payment on the Building Term Loan for the notional amount of $18.0 million, and an amortization period that matches the debt. As future levels of LIBOR over the life of the loan were uncertain, we entered into this interest-rate swap agreement to hedge the exposure in interest rate risks associated with movement in LIBOR rates. This agreement was amended on May 19, 2023 to replace the benchmark reference rate LIBOR with SOFR to match the Building Term Loan agreement (as amended). After the amendment, the interest rate swap continues to convert our floating-rate interest into a fixed-rate at 2.75%. As of September 26, 2026, the notional amount of the loan that is subject to this interest rate swap is $11.4 million.

Previous wording

On April 24, 2025, our Board of Directors authorized a new two-year program to repurchase up to $75.0 million of outstanding common stock to offset potential dilution from issuance of common stock under our stock-based compensation programs. This share repurchase program will expire on April 24, 2027. During fiscal 2025, we repurchased and retired 135,000 shares of common stock for $4.1 million. During the six months ended June 27, 2026, we did not repurchase shares of common stock under this program as we prioritized capital investments associated with the ramp of our Farmers Branch manufacturing facility. As of June 27, 2026, $70.9 million remained available for future repurchases.

Current wording

On April 24, 2025, our Board of Directors authorized a new two-year program to repurchase up to $75.0 million of outstanding common stock to offset potential dilution from issuance of common stock under our stock-based compensation programs. This share repurchase program will expire on April 24, 2027. During fiscal 2025, we repurchased and retired 135,000 shares of common stock for $4.1 million. During the nine months ended September 26, 2026, we did not repurchase shares of common stock under this program as we prioritized capital investments associated with the ramp of our Farmers Branch manufacturing facility. As of September 26, 2026, $70.9 million remained available for future repurchases.

Previous wording

(1)Represents our minimum interest payment commitments at 5.48% per annum, excluding the interest rate swap described in Debt, above.

Current wording

(1)Represents our minimum interest payment commitments at 5.55% per annum, excluding the interest rate swap described in Debt, above.

Previous wording

The table above excludes our gross liability for unrecognized tax benefits and our deferred grant. The gross liability for unrecognized tax benefits was $55.5 million as of June 27, 2026. The timing of any payments which could result from these unrecognized tax benefits will depend upon a number of factors and, accordingly, the timing of payment cannot be estimated. The deferred grant was $18.0 million as of June 27, 2026, and consists of cash received from a California Competes Grant awarded from the California Governor's Office of Business and Economic Development. The timing of any potential repayments is dependent upon a number of factors, including the number of employees and capital investments within California over the 5-year term. Accordingly, the timing of any repayment cannot be estimated.

Current wording

The table above excludes our gross liability for unrecognized tax benefits and our deferred grant. The gross liability for unrecognized tax benefits was $55.4 million as of September 26, 2026. The timing of any payments which could result from these unrecognized tax benefits will depend upon a number of factors and, accordingly, the timing of payment cannot be estimated. The deferred grant was $18.0 million as of September 26, 2026, and consists of cash received from a California Competes Grant awarded from the California Governor's Office of Business and Economic Development. The timing of any potential repayments is dependent upon a number of factors, including the number of employees and capital investments within California over the 5-year term. Accordingly, the timing of any repayment cannot be estimated.