EXTREME NETWORKS INC

Previous wording

This Quarterly Report on Form 10-Q for the first quarter ended September 30, 2025 (this “Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including in particular, our expectations regarding market demands, customer requirements and the general economic environment, future results of operations, and other statements that include words such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and similar expressions. These forward-looking statements involve risks and uncertainties. We caution investors that actual results may differ materially from those projected in the forward-looking statements as a result of certain risk factors identified in the section entitled “Risk Factors” in this Report, our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and other filings we have made with the Securities and Exchange Commission. These risk factors include, but are not limited to: adverse general economic conditions; fluctuations in demand for our products and services; a highly competitive business environment for network switching equipment; our effectiveness in controlling expenses; the possibility that we might experience delays in the development or introduction of new technology and products; customer response to our new technology and products; fluctuations in the global economy, including as a result of political, social, economic, and regulatory factors, currency fluctuations, and tariff and trade policies; geopolitical tensions and conflicts; risks related to pending or future litigation and a dependency on third parties for certain components and for the manufacturing of our products.

Current wording

This Quarterly Report on Form 10-Q for the second quarter ended December 31, 2025 (this “Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including in particular, our expectations regarding market demands, customer requirements and the general economic environment, future results of operations, and other statements that include words such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and similar expressions. These forward-looking statements involve risks and uncertainties. We caution investors that actual results may differ materially from those projected in the forward-looking statements as a result of certain risk factors identified in the section entitled “Risk Factors” in this Report, our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and other filings we have made with the Securities and Exchange Commission. These risk factors include, but are not limited to: adverse general economic conditions; fluctuations in demand for our products and services; a highly competitive business environment for network switching equipment; our effectiveness in controlling expenses; the possibility that we might experience delays in the development or introduction of new technology and products; customer response to our new technology and products; fluctuations in the global economy, including as a result of political, social, economic, and regulatory factors, currency fluctuations, and tariff and trade policies; geopolitical tensions and conflicts; risks related to pending or future litigation and dependency on third parties for certain components and for the manufacturing of our products.

Previous wording

ExtremeCloud Universal ZTNAis the first network security offering to integrate network, application, and device security within a single solution. By combining Cloud Network Access Control (“NAC”) and Zero Trust Network Authentication (“ZTNA”) into a single, easy-to-use SaaS offering, we help customers ensure unified observability, frictionless user experiences and a consistent security policy for applications and devices as well as support secure hybrid work use cases for customers. As the virtual private network (“VPN”) market transitions to ZTNA, the proliferation of individual applications, each with their own policy and dashboard, is adding complexity and expense for enterprise customers. We expect the broadening of our security offering to drive significant traction for our business with growth opportunities.

Current wording

ExtremeCloud Universal ZTNAis the first network security offering to integrate network, application, and device security within a single solution. By combining Cloud Network Access Control (“NAC”) and Zero Trust Network Access (“ZTNA”) into a single, easy-to-use SaaS offering, we help customers ensure unified observability, frictionless user experiences and a consistent security policy for applications and devices as well as support secure hybrid work use cases for customers. As the virtual private network (“VPN”) market transitions to ZTNA, the proliferation of individual applications, each with their own policy and dashboard, is adding complexity and expense for enterprise customers. We expect the broadening of our security offering to drive significant traction for our business with growth opportunities.

Previous wording

During the first quarter of fiscal 2026, we achieved the following results:

Current wording

During the second quarter of fiscal 2026, we achieved the following results:

Previous wording

Total gross margin of 60.6% of net revenues compared to 63.0% of net revenues in the first quarter of fiscal 2025.

Current wording

Total gross margin of 61.4% of net revenues compared to 62.7% of net revenues in the second quarter of fiscal 2025.

Previous wording

Operating income of $11.3 million compared to operating loss of $4.7 million in the first quarter of fiscal 2025.

Current wording

Operating income of $13.0 million compared to operating income of $12.7 million in the second quarter of fiscal 2025.

Previous wording

During the first three months of fiscal 2026, we reflected the following results:

Current wording

During the first six months of fiscal 2026, we reflected the following results:

Previous wording

Cash flows used in operating activities of $14.0 million compared to cash flows provided by operating activities of $18.6 million in the three months ended September 30, 2024.

Current wording

Cash flows provided by operating activities of $36.1 million compared to $40.1 million in the six months ended December 31, 2024.

Previous wording

Cash and cash equivalents of $209.0 million as of September 30, 2025 compared to $231.7 million as of June 30, 2025.

Current wording

Cash and cash equivalents of $219.8 million as of December 31, 2025 compared to $231.7 million as of June 30, 2025.

Previous wording

Product revenues increased $31.8 million or 19.6% for the three months ended September 30, 2025 as compared to the corresponding period in fiscal 2025. The increase in product revenues was primarily due to strong demand for our products, which contributed to higher bookings and higher shipments than the corresponding period in fiscal 2025.

Current wording

Product revenues increased $25.5 million or 14.8% for the three months ended December 31, 2025 as compared to the corresponding period in fiscal 2025. Product revenues increased $57.3 million or 17.1% for the six months ended December 31, 2025 as compared to the corresponding period in fiscal 2025. The increase in product revenues was primarily due to strong demand for our products, which contributed to higher bookings and higher shipments than the corresponding period in fiscal 2025.

Previous wording

Subscription and support revenues increased $9.3 million or 8.7% for the three months ended September 30, 2025 as compared to the corresponding period in fiscal 2025. The increase in subscription and support revenues was driven by increased adoption of our cloud network management solutions and continued growth in our subscription business.

Current wording

Subscription and support revenues increased $13.1 million or 12.2% for the three months ended December 31, 2025 as compared to the corresponding period in fiscal 2025. Subscription and support revenues increased $22.4 million or 10.4% for the six months ended December 31, 2025 as compared to the corresponding period in fiscal 2025. The increase in subscription and support revenues was driven by increased adoption of our cloud network management solutions and continued growth in our subscription business.

Previous wording

Product gross profit increased $15.0 million or 16.2% for the three months ended September 30, 2025 as compared to the corresponding period in fiscal 2025. The increase in product gross profit was primarily due to higher product revenues, partially offset by higher standard costs for products and increased distribution costs.

Current wording

Product gross profit increased $11.1 million or 11.1% for the three months ended December 31, 2025 as compared to the corresponding period in fiscal 2025. Product gross profit increased $26.1 million or 13.6% for the six months ended December 31, 2025 as compared to the corresponding period in fiscal 2025. The increase in product gross profit was primarily due to higher product revenues, partially offset by increased distribution costs and unfavorable purchase price variance related to increased costs for memory components.

Previous wording

Subscription and support gross profit increased $3.5 million or 4.6% for the three months ended September 30, 2025 as compared to the corresponding period in fiscal 2025. The increase in subscription and support gross profit was primarily due to higher subscription revenues, partially offset by higher professional services costs and higher subscription hosting costs.

Current wording

Subscription and support gross profit increased $8.8 million or 11.7% for the three months ended December 31, 2025 as compared to the corresponding period in fiscal 2025. Subscription and support gross profit increased $12.3 million or 8.1% for the six months ended December 31, 2025 as compared to the corresponding period in fiscal 2025. The increase in subscription and support gross profit was primarily due to higher subscription revenues, partially offset by higher subscription hosting costs and professional services costs.

Previous wording

Research and development expenses increased by $3.3 million or 6.1% for the three months ended September 30, 2025 as compared to the corresponding period in fiscal 2025. The increase in research and development expenses was primarily due to a $2.1 million increase in personnel costs due to higher headcount and higher compensation and benefits costs, a $1.0 million increase in engineering project costs, and $0.8 million increase in information technology, equipment and depreciation costs, offset by a $0.6 million decrease in facilities and occupancy related costs.

Current wording

Research and development expenses increased by $2.6 million or 4.8% for the three months ended December 31, 2025 as compared to the corresponding period in fiscal 2025. The increase in research and development expenses was primarily due to a $1.3 million increase in personnel costs due to higher compensation and benefits costs, a $1.1 million increase in engineering project costs, and a $0.9 million increase in information technology, equipment and depreciation costs, offset by a $0.7 million decrease in facilities and occupancy related costs.

Previous wording

Sales and marketing expenses increased by $7.5 million or 9.3% for the three months ended September 30, 2025 as compared to the corresponding period in fiscal 2025. The increase in sales and marketing expenses was primarily due to a $4.6 million increase in personnel costs due to higher salaries and benefits costs, a $2.0 million increase in sales and marketing costs primarily related to higher sales commissions and higher travel costs, and a $1.0 million increase in other expenses primarily related to information technology and equipment costs and professional fees.

Current wording

Sales and marketing expenses increased by $9.4 million or 11.8% for the three months ended December 31, 2025 as compared to the corresponding period in fiscal 2025. The increase in sales and marketing expenses was primarily due to a $4.0 million increase in sales and marketing costs primarily related to higher sales commissions, a $3.6 million increase in personnel costs due to higher headcount and higher salaries and benefits costs and a $1.8 million increase in other expenses primarily related to information technology and equipment costs and professional fees.

Previous wording

General and administrative expenses decreased by $7.4 million or 20.3% for the three months ended September 30, 2025 as compared to the corresponding period in fiscal 2025. The decrease in general and administrative expenses was primarily driven by a $8.8 million decrease in legal costs related to litigation matters, and a $0.6 million decrease in professional services, partially offset by a $2.0 million increase in personnel costs due to higher salaries, benefits and share-based compensation costs.

Current wording

General and administrative expenses increased by $8.5 million or 32.7% for the three months ended December 31, 2025 as compared to the corresponding period in fiscal 2025. The increase in general and administrative expenses was primarily due to a $3.8 million increase in professional fees, a $2.4 million increase in personnel costs due to higher headcount and higher salaries and benefits costs, a $2.4 million increase in system transition costs, partially offset by a $0.1 million decrease in legal costs related to litigation matters.

Previous wording

For the three months ended September 30, 2025, we recorded restructuring charges of $0.4 million which primarily consisted of additions to severance and benefits costs and professional services fees as well as reversals of previously established accruals related to unused severance benefits associated with the reduction-in-force actions related to the “Q2 2024 Plan”, and “Q3 2024 Plan”, each as described in Note 13, Restructuring and Related Charges, in the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report.

Current wording

For the three and six months ended December 31, 2025, we recorded restructuring charges of $0.2 million and $0.5 million, respectively, which primarily consisted of asset disposal costs and reversals of previously established accruals related to unused severance benefits associated with the reduction-in-force actions related to the “Q2 2024 Plan”, and “2023 Plan”, each as described in Note 13, Restructuring and Related Charges, in the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report.

Previous wording

For the three months ended September 30, 2024, we recorded restructuring and related charges of $1.3 million, which primarily consisted of additional severance and benefits costs and professional services fees associated with the reduction-in-force actions related to the “Q2 2024 Plan”, and “Q3 2024 Plan”, each as described in Note 13, Restructuring and Related Charges, in the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report.

Current wording

For the three and six months ended December 31, 2024, we recorded restructuring and related charges of $1.0 million and $2.3 million, respectively, which primarily consisted of additional severance and benefits costs and professional services fees associated with the reduction-in-force actions related to the “Q2 2024 Plan”, and “Q3 2024 Plan”, each as described in Note 13, Restructuring and Related Charges, in the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report.

Previous wording

During the three months ended September 30, 2025 and 2024, we recorded $0.5 million of operating expenses for each period related to the amortization of intangible assets.

Current wording

During the three months ended December 31, 2025 and 2024, we recorded $0.4 million and $0.5 million of operating expenses, respectively, related to the amortization of intangible assets.

Previous wording

During the three months ended September 30, 2025 and 2024, we recorded $1.2 million and $0.8 million, respectively, in interest income. The increase in interest income was primarily related to the higher interest earned on our cash accounts due to higher cash and cash equivalents balances held during the first quarter in fiscal 2026.

Current wording

During the three months ended December 31, 2025 and 2024, we recorded $1.1 million and $0.8 million, respectively, in interest income. The increase in interest income was primarily related to the higher interest earned on our cash accounts due to higher interest rates as well as higher cash and cash equivalents balances held during the second quarter in fiscal 2026.

Previous wording

During the three months ended September 30, 2025 and 2024, we recorded $3.7 million and $4.4 million, respectively, in interest expense related to the debt obligations held under our Amended Credit Agreement. The decrease in interest expense was primarily due to lower average rates under the Amended Credit Agreement.

Current wording

During the three months ended December 31, 2025 and 2024, we recorded $3.4 million and $4.2 million, respectively, in interest expense related to the debt obligations held under our Amended Credit Agreement. The decrease in interest expense was primarily due to lower average rates under the Amended Credit Agreement.

Previous wording

During the three months ended September 30, 2025 and 2024, we recorded other expense, net of $0.5 million and $0.7 million, respectively. The other expense, net for each period primarily related to the foreign exchange impact from the revaluation of certain assets and liabilities denominated in foreign currencies into U.S. Dollars.

Current wording

During the three months ended December 31, 2025 and 2024, we recorded other expense, net of $0.4 million and other income, net of $0.7 million, respectively. The other income (expense), net for each period primarily related to the foreign exchange impact from the revaluation of certain assets and liabilities denominated in foreign currencies into U.S. Dollars.

Previous wording

For the three months ended September 30, 2025 and 2024, we recorded income tax provision of $2.7 million and $1.5 million, respectively.

Current wording

For the three months ended December 31, 2025 and 2024, we recorded an income tax provision of $2.5 million and $2.6 million, respectively.

Previous wording

The income tax provisions for the three months ended September 30, 2025 and 2024 consisted of (1) taxes on the income of our foreign subsidiaries, (2) state taxes in jurisdictions where we have no remaining state net operating losses, (3) foreign withholding taxes, and (4) tax expense associated with the establishment of a U.S. deferred tax liability for amortizable goodwill resulting from the acquisition of Enterasys Networks, Inc., the WLAN business from Zebra Technologies Corporation, the Campus Fabric Business from Avaya LLC and the Data Center Business from Brocade Communications System.

Current wording

The income tax provisions for the three and six months ended December 31, 2025 and 2024 consisted of (1) taxes on the income of our foreign subsidiaries, (2) state taxes in jurisdictions where we have no remaining state net operating losses, (3) foreign withholding taxes, and (4) tax expense associated with the establishment of a U.S. deferred tax liability for amortizable goodwill resulting from the acquisition of Enterasys Networks, Inc., the WLAN business from Zebra Technologies Corporation, the Campus Fabric Business from Avaya LLC and the Data Center Business from Brocade Communications System.

Previous wording

As of September 30, 2025, our principal sources of liquidity consisted of cash and cash equivalents of $209.0 million, accounts receivable, net of $145.8 million, and available borrowings under our 2023 Revolving Facility of $110.8 million. Our principal uses of cash include the purchase of finished goods inventory from our contract manufacturers, payroll and other operating expenses related to the development and marketing of our products, purchases of property and equipment, repayments of debt and related interest and share repurchases. We believe that our $209.0 million of cash and cash equivalents at September 30, 2025, our cash flow from operations and the availability of borrowings from the 2023 Revolving Facility will be sufficient to fund our planned operations for at least the next 12 months and into the foreseeable future.

Current wording

As of December 31, 2025, our principal sources of liquidity consisted of cash and cash equivalents of $219.8 million, accounts receivable, net of $152.4 million, and available borrowings under our 2023 Revolving Facility of $135.8 million. Our principal uses of cash include the purchase of finished goods inventory from our contract manufacturers, payroll and other operating expenses related to the development and marketing of our products, purchases of property and equipment, repayments of debt and related interest and share repurchases. We believe that our $219.8 million of cash and cash equivalents at December 31, 2025, our cash flow from operations and the availability of borrowings from the 2023 Revolving Facility will be sufficient to fund our planned operations for at least the next 12 months and into the foreseeable future.

Previous wording

On February 18, 2025, we announced that our Board had authorized management to repurchase up to $200 million of shares of the Company's common stock over a three-year period, commencing July 1, 2025 (the “2025 Repurchase Program”). Under these repurchase programs, purchases may be made from time to time in the open market or pursuant to a 10b5-1 plan. The manner, timing and amount of any future purchases will be determined by our management based on their evaluation of market conditions, stock price, Extreme’s ongoing determination that it is the best use of available cash and other factors. The 2025 Repurchase Program does not obligate us to acquire any shares of our common stock, and it may be suspended or terminated at any time without prior notice and will be subject to regulatory considerations. During the three months ended September 30, 2025, we repurchased a total of 577,281 shares of our common stock on the open market at a total cost of $12.0 million with an average price of $20.79 per share. As of September 30, 2025, the Company had $188.0 million available under the 2025 Repurchase Program.

Current wording

On February 18, 2025, we announced that our Board had authorized management to repurchase up to $200 million of shares of the Company's common stock over a three-year period, commencing July 1, 2025 (the “2025 Repurchase Program”). Under these repurchase programs, purchases may be made from time to time in the open market or pursuant to a 10b5-1 plan. The manner, timing and amount of any future purchases will be determined by our management based on their evaluation of market conditions, stock price, Extreme’s ongoing determination that it is the best use of available cash and other factors. The 2025 Repurchase Program does not obligate us to acquire any shares of our common stock, and it may be suspended or terminated at any time without prior notice and will be subject to regulatory considerations. During the three months ended December 31, 2025, the Company did not repurchase any shares of its common stock. During the six months ended December 31, 2025, we repurchased a total of 577,281 shares of our common stock on the open market at a total cost of $12.0 million with an average price of $20.79 per share. As of December 31, 2025, the Company had $188.0 million available under the 2025 Repurchase Program.

Previous wording

At our election, the initial term loan (the “Initial Term Loan”) under the 2023 Credit Agreement may be made as either a base rate loan or a Secured Overnight Financing Data Rate loan (“SOFR loan”). The applicable margin for base rate loans ranges from 1.00% to 1.75% per annum, and the applicable margin for SOFR loans ranges from 2.00% to 2.75%, in each case based on the Company’s Consolidated Leverage Ratio. All SOFR loans are subject to a floor of 0.00% per annum and spread adjustment of 0.10% per annum. We also agreed to pay other closing fees, arrangement fees, and administration fees.

Current wording

At our election, the initial term loan under the 2023 Credit Agreement may be made as either a base rate loan or a Secured Overnight Financing Rate loan (“SOFR loan”). The applicable margin for base rate loans ranges from 1.00% to 1.75% per annum, and the applicable margin for SOFR loans ranges from 2.00% to 2.75%, in each case based on the Company’s Consolidated Leverage Ratio. All SOFR loans are subject to a floor of 0.00% per annum and spread adjustment of 0.10% per annum. We also agreed to pay other closing fees, arrangement fees, and administration fees.

Previous wording

Net Cash Provided by (Used in) Operating Activities

Current wording

Net Cash Provided by Operating Activities

Previous wording

Cash flows used in operations in the three months ended September 30, 2025 were $14.0 million, including our net income of $5.6 million and non-cash expenses of $29.8 million for items such as amortization of intangible assets, share-based compensation, depreciation, reduction in carrying amount of right-of-use assets, deferred income taxes, provision for excess and obsolete inventory, provision for doubtful accounts and interest. Other uses of cash for the period included decreases in other accrued liabilities, accrued compensation and benefits, and operating lease liabilities, and increases in accounts receivable and other assets. This was partially offset by increases in deferred revenue and accounts payable and a decrease in inventory.

Current wording

Cash flows provided by operations in the six months ended December 31, 2025 were $36.1 million, including our net income of $13.5 million and non-cash expenses of $64.0 million for items such as amortization of intangible assets, amortization of cloud computing implementation costs, share-based compensation, depreciation, reduction in carrying amount of right-of-use assets, deferred income taxes, provision for excess and obsolete inventory, provision for credit losses and interest. Other sources of cash for the period included a decrease in inventories and increases in accounts payable, deferred revenue and accrued compensation and benefits. This was partially offset by increases in accounts receivable and other current and non-current assets as well as decreases in operating lease liabilities and other accrued liabilities.

Previous wording

Cash flows provided by operations in the three months ended September 30, 2024 were $18.6 million, including our net loss of $10.5 million and non-cash expenses of $27.8 million for items such as amortization of intangible assets, share-based compensation, depreciation, reduction in carrying amount of right-of-use assets, deferred income taxes, provision for excess and obsolete inventory and interest. Other sources of cash for the period included a decrease in prepaid expenses and other assets and increases in accounts payable, deferred revenue and accrued compensation and benefits. This was partially offset by increases in accounts receivable, inventories as well as decreases in operating lease liabilities and other liabilities.

Current wording

Cash flows provided by operations in the six months ended December 31, 2024 were $40.1 million, including our net loss of $3.1 million and non-cash expenses of $54.7 million for items such as amortization of intangible assets, share-based compensation, depreciation, reduction in carrying amount of right-of-use assets, deferred income taxes, provision for excess and obsolete inventory and interest. Other sources of cash for the period included a decrease in inventories and increases in accounts payable, deferred revenue and accrued compensation and benefits. This was partially offset by increases in accounts receivable and other assets as well as decreases in operating lease liabilities and other liabilities.

Previous wording

Cash flows used in investing activities in the three months ended September 30, 2025 were $6.9 million for the purchases of property and equipment and the capitalized software development costs.

Current wording

Cash flows used in investing activities in the six months ended December 31, 2025 were $13.9 million for the purchases of property and equipment and capitalized software development costs.

Previous wording

Cash flows used in investing activities in the three months ended September 30, 2024 were $6.9 million for the purchases of property and equipment.

Current wording

Cash flows used in investing activities in the six months ended December 31, 2024 were $12.3 million for the purchases of property and equipment and capitalized software development costs.

Previous wording

Cash flows used in financing activities in the three months ended September 30, 2025 were $1.7 million primarily due to share repurchases of $12.0 million under the 2025 Repurchase Program, payments of $11.0 million for taxes paid on vested and released stock awards net of proceeds from the issuance of shares of our common stock under our Employee Stock Purchase Plan (“ESPP”) and exercise of stock options, and debt repayments of $3.8 million, partially offset by a $25.0 million borrowing against the 2023 Revolving Facility.

Current wording

Cash flows used in financing activities in the six months ended December 31, 2025 were $34.0 million primarily due to share repurchases of $12.0 million under the 2025 Repurchase Program, payments of $14.5 million for taxes paid on vested and released stock awards net of proceeds from the issuance of shares of our common stock under our Employee Stock Purchase Plan (“ESPP”) and exercise of stock options and debt repayments of $7.5 million.

Previous wording

Cash flows used in financing activities in the three months ended September 30, 2024 were $9.1 million primarily due to payment of $5.9 million for taxes paid on vested and released stock awards net of proceeds from the issuance of shares of our common stock under our ESPP and exercise of stock options, a payment of $0.7 million for debt financing costs related to the Amended Credit Agreement, and a debt repayment of $2.5 million.

Current wording

Cash flows used in financing activities in the six months ended December 31, 2024 were $14.0 million primarily due to payments of $8.3 million for taxes paid on vested and released stock awards net of proceeds from the issuance of shares of our common stock under our ESPP and exercise of stock options, a payment of $0.7 million for debt financing costs related to the Amended Credit Agreement, and debt repayments of $5.0 million.

Previous wording

Foreign currency effect on cash and cash equivalents increased in the three months ended September 30, 2025, primarily due to changes in foreign currency exchange rates between the U.S. Dollar and particularly the Indian Rupee, the UK Pound and the Euro.

Current wording

Foreign currency effect on cash and cash equivalents decreased in the six months ended December 31, 2025, primarily due to changes in foreign currency exchange rates between the U.S. Dollar and particularly the Indian Rupee, the UK Pound and the Euro.

Previous wording

Our debt obligations relate to amounts owed under our Amended Credit Agreement. As of September 30, 2025, we had $199.4 million of debt outstanding, which is payable on quarterly installments through our fiscal year 2028. We are subject to interest on our debt obligations and unused commitment fee. See Note 7, Debt, in the Notes to Condensed Consolidated Financial Statements in this Report for additional information regarding our debt obligations.

Current wording

Our debt obligations relate to amounts owed under our Amended Credit Agreement. As of December 31, 2025, we had $172.5 million of debt outstanding, which is payable on quarterly installments through our fiscal year 2028. We are subject to interest on our debt obligations and unused commitment fee. See Note 7, Debt, in the Notes to Condensed Consolidated Financial Statements in this Report for additional information regarding our debt obligations.

Previous wording

Our unconditional purchase obligations represent the purchase of long lead-time component inventory that our contract manufacturers procure in accordance with our forecast. We expect to honor the inventory purchase commitments within the next 12 months. As of September 30, 2025, we had non-cancelable commitments to purchase $48.8 million of inventory. See Note 8, Commitments and Contingencies, in the Notes to Condensed Consolidated Financial Statements for additional information regarding our purchase obligations.

Current wording

Our unconditional purchase obligations represent the purchase of long lead-time component inventory that our contract manufacturers procure in accordance with our forecast. We expect to honor the inventory purchase commitments within the next 12 months. As of December 31, 2025, we had non-cancelable commitments to purchase $52.2 million of inventory. See Note 8, Commitments and Contingencies, in the Notes to Condensed Consolidated Financial Statements for additional information regarding our purchase obligations.

Previous wording

We have contractual commitments to our suppliers which represent commitments for future services. As of September 30, 2025, we had contractual commitments of $15.1 million that are due through our fiscal year 2027.

Current wording

We have contractual commitments to our suppliers which represent commitments for future services. As of December 31, 2025, we had contractual commitments of $12.9 million that are due through our fiscal year 2027.

Previous wording

We lease facilities under operating lease arrangements at various locations that expire at various dates through our fiscal year 2033. As of September 30, 2025, the value of our obligations under operating leases was $50.1 million.

Current wording

We lease facilities under operating lease arrangements at various locations that expire at various dates through our fiscal year 2033. As of December 31, 2025, the value of our obligations under operating leases was $47.9 million.