EXTREME NETWORKS INC

Previous 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.

Current wording

This Quarterly Report on Form 10-Q for the third quarter ended March 31, 2026 (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

Enterprises across every industry are going through unprecedented changes, such as digital transformation initiatives, migrating their workloads to cloud-based environments, modernizing applications, finding new ways to leverage generative, multimodal and agentic AI technology, and adapting to a distributed workforce. To accomplish this, they are adopting new Information Technology (“IT”) delivery models and applications that require fundamental network alterations and enhancements spanning from the access edge to the data center. As networks become more complex and more distributed in nature, we believe IT teams in every industry will need more control and better insights than ever before to deliver secure, distributed connectivity and comprehensive centralized visibility. Networking is mission critical and touches all elements of how services are delivered to customers, employees, students, and patients. Managing networks from a single platform that integrates AI networking and security is critical to help reduce complexity and minimize the time it takes to complete tasks. A new category has emerged in the industry to address challenges related to managing the breadth and depth of complexities related to network administration, deployment and on-going management termed AI for networking. This new category is defined by innovation in generative, multimodal and agentic AI technology.

Current wording

Enterprises across every industry are going through unprecedented changes, such as digital transformation initiatives, migrating their workloads to cloud-based environments, modernizing applications, finding new ways to leverage generative, multimodal and agentic AI technology, and adapting to a distributed workforce. To accomplish this, they are adopting new Information Technology (“IT”) delivery models and applications that require fundamental network alterations and enhancements spanning from the access edge to the data center. As networks become more complex and more distributed in nature, we believe IT teams in every industry will need more control and better insights than ever before to deliver secure, distributed connectivity and comprehensive centralized visibility. Networking is mission critical and touches all elements of how services are delivered to customers, employees, students, and patients. Managing networks from a single platform that integrates AI networking and security is critical to help reduce complexity and minimize the time it takes to complete tasks. A new category has emerged in the industry to address challenges related to managing the breadth and depth of complexities related to network administration, deployment and ongoing management termed AI for networking. This new category is defined by innovation in generative, multimodal and agentic AI technology.

Previous wording

Universal switches (7720/5720/5520/5420/5320/4220/4120) support fabric or traditional networking with a choice of cloud or on-premises (air-gapped or cloud connected) management.

Current wording

Universal switches (8000 Series / 7000 Series / 5000 Series / 4000 Series / Industrial and other) support fabric or traditional networking with a choice of cloud or on-premises (air-gapped or cloud connected) management.

Previous wording

Universal Wi-Fi 6/6E APs (300/400, 4000 and 5000 series)support campus or distributed deployments with a choice of cloud or on-premises (air-gapped or cloud connected) management.

Current wording

Universal Wi-Fi 6 / 6E / 7 APs (300 / 400, 4000 and 5000 series)support campus or distributed deployments with a choice of cloud or on-premises (air-gapped or cloud connected) management.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

Total gross margin of 61.7% of net revenues compared to 61.7% of net revenues in the third quarter of fiscal 2025.

Previous wording

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

Current wording

During the first nine months of fiscal 2026, we reported the following results:

Previous wording

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

Current wording

Cash flows provided by operating activities of $50.3 million compared to $70.1 million in the nine months ended March 31, 2025.

Previous wording

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

Current wording

Cash and cash equivalents of $210.1 million as of March 31, 2026 compared to $231.7 million as of June 30, 2025.

Previous 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.

Current wording

Subscription and support revenues increased $11.1 million or 10.4% for the three months ended March 31, 2026 as compared to the corresponding period in fiscal 2025. Subscription and support revenues increased $33.4 million or 10.4% for the nine months ended March 31, 2026 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, including Platform ONE.

Previous 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.

Current wording

Subscription and support gross profit increased $21.3 million or 9.5% for the nine months ended March 31, 2026 as compared to the corresponding period in fiscal 2025. The increase in subscription and support gross profit was primarily due to higher subscription revenues of $33.4 million related to increased adoption of the Company’s Platform ONE subscription, partially offset by $8.4 million of higher subscription hosting costs and $3.1 of personnel costs related to the fulfillment of support contracts.

Previous wording

Research and development expenses increased by $5.9 million or 5.4% for the six 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 $3.4 million increase in personnel costs due to higher compensation and benefits costs, a $2.0 million increase in engineering project costs, and a $1.6 million increase in information technology, equipment costs and depreciation costs, offset by a $1.1 million decrease in facilities and occupancy related costs.

Current wording

Research and development expenses increased by $3.5 million or 6.3% for the three months ended March 31, 2026 as compared to the corresponding period in fiscal 2025. The increase in research and development expenses was primarily due to a $1.5 million increase in personnel costs due to higher compensation and benefits costs, a $1.0 million increase in information technology and equipment costs, and a $1.0 million increase in other expenses primarily consisting of engineering project costs and depreciation costs.

Previous 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.

Current wording

Research and development expenses increased by $9.5 million or 5.7% for the nine months ended March 31, 2026 as compared to the corresponding period in fiscal 2025. The increase in research and development expenses was primarily due to a $4.9 million increase in personnel costs due to higher compensation and benefits costs, a $2.6 million increase in engineering project costs, and a $2.0 million increase in information technology and equipment costs.

Previous wording

Sales and marketing expenses increased by $17.0 million or 10.5% for the six 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 $8.2 million increase in personnel costs due to higher headcount and higher salaries and benefits costs, a $6.0 million increase in sales and marketing costs primarily related to higher sales commissions and higher travel costs, a $1.7 million increase in information technology and equipment costs, and a $1.1 million increase in other expenses primarily related to professional fees.

Current wording

Sales and marketing expenses increased by $9.2 million or 11.5% for the three months ended March 31, 2026 as compared to the corresponding period in fiscal 2025. The increase in sales and marketing expenses was primarily due to a $4.9 million increase in personnel costs due to higher compensation and benefits costs, a $2.0 million increase in sales commissions, a $1.5 million increase in information technology and equipment costs, and a $0.8 million increase in other expenses primarily related to professional fees and travel costs.

Previous 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.

Current wording

General and administrative expenses increased by $1.2 million or 1.3% for the nine months ended March 31, 2026 as compared to the corresponding period in fiscal 2025. The increase in general and administrative expenses was primarily due to a $5.9 million increase in personnel costs due to higher salaries and benefits costs, a $2.9 million increase in amortization expense related to cloud computing implementation costs, and a $2.0 million increase in system transition costs, partially offset by a $9.6 million decrease in legal costs related to litigation matters, net of insurance recoveries.

Previous 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.

Current wording

For the nine months ended March 31, 2026, we recorded restructuring charges of $0.5 million, which primarily consisted of severance and benefit costs and asset disposal costs related to the restructuring plans executed in prior years, as described in Note 13, Restructuring and Related Charges (Benefits), in the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report.

Previous 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.

Current wording

For the three and nine months ended March 31, 2025, we recorded a restructuring benefit of $0.4 million and restructuring charges of $1.9 million, respectively, 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 (Benefits), in Notes to Condensed Consolidated Financial Statements included elsewhere in this Report.

Previous wording

During the six months ended December 31, 2025 and 2024, we recorded $0.9 million and $1.0 million of operating expenses, respectively, related to the amortization of intangible assets.

Current wording

During the nine months ended March 31, 2026 and 2025, we recorded $1.3 million and $1.5 million of operating expenses, respectively, related to the amortization of intangible assets.

Previous wording

During the six months ended December 31, 2025 and 2024, we recorded $2.3 million and $1.7 million, respectively, in interest income. The increase in interest income was primarily related to the higher interest earned on our cash accounts due to interest rates as well as higher cash and cash equivalents balances held during the first half of fiscal 2026.

Current wording

During the nine months ended March 31, 2026 and 2025, we recorded $3.3 million and $2.7 million, respectively, in interest income. The increase in interest income was primarily related to the higher interest earned on our cash accounts due to interest rates as well as higher cash and cash equivalents balances held during fiscal 2026.

Previous 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.

Current wording

During the three months ended March 31, 2026 and 2025, we recorded $3.2 million and $3.8 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 interest rates under the Amended Credit Agreement.

Previous wording

During the six months ended December 31, 2025 and 2024, we recorded $7.0 million and $8.6 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 nine months ended March 31, 2026 and 2025, we recorded $10.3 million and $12.4 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 interest rates under the Amended Credit Agreement.

Previous 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.

Current wording

During the three months ended March 31, 2026 and 2025, we recorded other expense, net of $0.3 million and $0.4 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.

Previous wording

During the six months ended December 31, 2025 and 2024, we recorded other expense, net of $0.8 million and less than $0.1 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 nine months ended March 31, 2026 and 2025, we recorded other expense, net of $1.1 million and $0.4 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.

Previous 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.

Current wording

For the three months ended March 31, 2026 and 2025, we recorded an income tax provision of $4.2 million and $3.7 million, respectively.

Previous wording

For the six months ended December 31, 2025 and 2024, we recorded an income tax provision of $5.3 million and $4.1 million, respectively.

Current wording

For the nine months ended March 31, 2026 and 2025, we recorded an income tax provision of $9.5 million and $7.8 million, respectively.

Previous 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.

Current wording

The income tax provisions for the three and nine months ended March 31, 2026 and 2025 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 Systems.

Previous 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.

Current wording

As of March 31, 2026, our principal sources of liquidity consisted of cash and cash equivalents of $210.1 million, accounts receivable, net of $162.7 million, and available borrowings under our 2023 Revolving Facility of $105.8 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 $210.1 million of cash and cash equivalents as of March 31, 2026, 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 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.

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 this repurchase program, 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 its 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.

Previous wording

On August 14, 2024, we entered into an Amendment Number One to the 2023 Credit Agreement the (the 2023 Credit Agreement as amended by that certain Amendment Number One, “Amended Credit Agreement”). Under the Amended Credit Agreement, we modified the definition of the consolidated EBITDA for the purposes of evaluating compliance with financial covenants under the Amended Credit Agreement. The amended definition of consolidated EBITDA modifies the amount and type of add-backs that are allowable to better align with our operations and activities.

Current wording

On August 14, 2024, we entered into an Amendment Number One to the 2023 Credit Agreement (the 2023 Credit Agreement as amended by that certain Amendment Number One, “Amended Credit Agreement”). Under the Amended Credit Agreement, we modified the definition of the consolidated EBITDA for the purposes of evaluating compliance with financial covenants under the Amended Credit Agreement. The amended definition of consolidated EBITDA modifies the amount and type of add-backs that are allowable to better align with our operations and activities.

Previous 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.

Current wording

Cash flows provided by operations in the nine months ended March 31, 2026 were $50.3 million, including net income of $24.1 million and non-cash expenses of $99.3 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, and deferred revenue. This was partially offset by increases in accounts receivable and prepaid and other assets as well as decreases in operating lease liabilities, accrued compensation and benefits and other liabilities.

Previous 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.

Current wording

Cash flows provided by operations in the nine months ended March 31, 2025 were $70.1 million, including net income of $0.3 million and non-cash expenses of $86.0 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 deferred revenue and accrued compensation and benefits. This was partially offset by increases in accounts receivable and prepaid expenses and other assets as well as decreases in accounts payable, operating lease liabilities and other liabilities.

Previous 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.

Current wording

Cash flows used in investing activities in the nine months ended March 31, 2026 were $20.4 million for the purchases of property and equipment and capitalized software development costs.

Previous 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.

Current wording

Cash flows used in investing activities in the nine months ended March 31, 2025 were $18.1 million for the purchases of property and equipment and capitalized software development costs.

Previous 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.

Current wording

Cash flows used in financing activities in the nine months ended March 31, 2026 were $50.8 million primarily due to share repurchases of $62.0 million under the 2025 Repurchase Program, payments of $7.6 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 $11.3 million.

Previous 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.

Current wording

Cash flows used in financing activities in the nine months ended March 31, 2025 were $23.1 million primarily due to share repurchases of $13.0 million, payments of $1.9 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 debt repayments of $7.5 million.

Previous 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.

Current wording

Foreign currency effect on cash and cash equivalents increased in the nine months ended March 31, 2026, 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 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.

Current wording

Our debt obligations relate to amounts owed under our Amended Credit Agreement. As of March 31, 2026, we had $198.8 million of debt outstanding, which is payable in quarterly installments through our fiscal year 2028. We are subject to interest on our debt obligations and an 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 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.

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 March 31, 2026, we had non-cancelable commitments to purchase $101.6 million of inventory, including commitments for semiconductor components. These obligations reflect our ongoing effort to secure component supply and reduce supply chain risk given continued constraints in the global semiconductor market. 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 December 31, 2025, we had contractual commitments of $12.9 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 March 31, 2026, we had contractual commitments of $10.8 million that are due through 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 December 31, 2025, the value of our obligations under operating leases was $47.9 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 March 31, 2026, the value of our obligations under operating leases was $44.5 million.