MKS INC

Previous wording

The Management’s Discussion and Analysis of Financial Condition and Results of Operations describes principal factors affecting the results of operations, financial condition, cash flows and liquidity, as well as our critical accounting policies and estimates that require significant judgment and thus have the most significant potential impact on our condensed consolidated financial statements, and is intended to better allow investors to view the Company from management’s perspective. This section focuses on material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be necessarily indicative of our future operating results or of our future financial condition. This section provides an analysis of our financial results for the three months ended March 31, 2026 compared to the three months ended December 31, 2025 and the three months ended March 31, 2025. As a result of rounding, there may be immaterial differences in amounts presented and certain calculations may not sum to the total number expressed in each category or tie to a corresponding schedule.

Current wording

The Management’s Discussion and Analysis of Financial Condition and Results of Operations describes principal factors affecting the results of operations, financial condition, cash flows and liquidity, as well as our critical accounting policies and estimates that require significant judgment and thus have the most significant potential impact on our condensed consolidated financial statements, and is intended to better allow investors to view the Company from management’s perspective. This section focuses on material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be necessarily indicative of our future operating results or of our future financial condition. This section provides an analysis of our financial results for the three months ended June 30, 2026 compared to the three months ended March 31, 2026, and the six months ended June 30, 2026 compared to the six months ended June 30, 2025. As a result of rounding, there may be immaterial differences in amounts presented and certain calculations may not sum to the total number expressed in each category or tie to a corresponding schedule.

Previous wording

For the three months ended March 31, 2026, net revenues in our semiconductor market increased by $31 million, or 7%, compared to the prior quarter due to higher sales of our semiconductor capital equipment at VSD serving deposition and etch applications as well as NAND memory production upgrades.

Current wording

For the three months ended June 30, 2026, net revenues in our semiconductor market increased by $88 million, or 19%, compared to the prior quarter, primarily due to higher sales of our semiconductor capital equipment serving deposition and etch applications as well as NAND memory production upgrades and increased service revenues, all at VSD.

Previous wording

For the three months ended March 31, 2026, net revenues in our semiconductor market increased by $53 million, or 13%, compared to the same period in the prior year. This increase was mainly due to higher sales of our semiconductor capital equipment serving deposition and etch applications and service revenues at VSD, as well as higher sales in our lithography, metrology and inspection products at PSD.

Current wording

For the six months ended June 30, 2026, net revenues in our semiconductor market increased by $173 million, or 20%, compared to the same period in the prior year. This increase was mainly due to higher sales of our semiconductor capital equipment serving deposition and etch applications and service revenues at VSD, as well as higher sales of our lithography, metrology and inspection products at PSD.

Previous wording

We are a foundational solutions provider for the electronics and packaging market. Our portfolio includes photonics components, laser drilling systems, electronics chemistries and plating equipment that are critical for the manufacturing of printed circuit boards (“PCB”) and package substrates, and critical to wafer level packaging (“WLP”) applications. Similar to the semiconductor industry, the PCB, package substrate and WLP industries demand smaller features, greater density, and better performance. In addition, the electronics and packaging market also includes sales of our vacuum and photonics solutions for display manufacturing applications. We characterize our complementary offering of laser systems and chemistry solutions as Optimize the Interconnect®, to reflect the unique technology enablement we provide at the Interconnect level within PCBs, package substrates and WLPs.

Current wording

We are a foundational solutions provider for the electronics and packaging market. Our portfolio includes photonics components, laser drilling systems, electronics chemistries and plating equipment that are critical for the manufacturing of printed circuit boards (“PCB”) and package substrates, and critical to wafer level packaging (“WLP”) applications. Similar to the semiconductor industry, the PCB, package substrate and WLP industries demand smaller features, greater density, and better performance. In addition, the electronics and packaging market also includes sales of our vacuum and photonics solutions for display manufacturing applications. We characterize our complementary offering of laser systems and chemistry solutions as Optimize the Interconnect®, to reflect the unique technology enablement we provide at the Interconnect level within PCBs, package substrates and WLPs. We are currently seeing increased investments driven by AI applications.

Previous wording

For the three months ended March 31, 2026, net revenues in our electronics and packaging market increased by $18 million, or 6%, compared to the prior quarter primarily due to higher sales of flexible PCB via drilling systems at PSD and chemistry at MSD, partially offset by lower sales of chemistry equipment at MSD.

Current wording

For the three months ended June 30, 2026, net revenues in our electronics and packaging market increased by $60 million, or 19%, compared to the prior quarter primarily due to higher sales of chemistry and chemistry equipment at MSD as well as higher sales of flexible PCB via drilling systems at PSD.

Previous wording

For the three months ended March 31, 2026, net revenues in our electronics and packaging market increased by $68 million, or 27%, compared to the same period in the prior year. This increase was primarily due to higher chemistry sales at MSD as well as higher sales of flexible PCB via drilling systems at PSD.

Current wording

For the six months ended June 30, 2026, net revenues in our electronics and packaging market increased by $184 million, or 35%, compared to the same period in the prior year. This increase was primarily due to higher sales of chemistry at MSD and higher sales of flexible PCB via drilling systems at PSD.

Previous wording

Industrial encompasses a wide range of diverse applications, including chemistries for functional coatings, surface finishing and wear resistance in the automobile industry, vacuum solutions for synthetic diamond manufacturing and photonics for solar manufacturing. Other applications include vacuum and photonics solutions for light emitting diode and laser diode manufacturing.

Current wording

Industrial encompasses a wide range of diverse applications, including chemistries for functional coatings, surface finishing and wear resistance in the automobile industry, vacuum solutions for synthetic diamond manufacturing and photonics for solar manufacturing and datacom applications. Other applications include vacuum and photonics solutions for light emitting diode and laser diode manufacturing.

Previous wording

For the three months ended March 31, 2026, net revenues in our specialty industrial market increased by $21 million, or 8%, compared to the same period in the prior year. This increase was primarily due to higher sales in datacom applications, as well as higher research and defense sales.

Current wording

For the six months ended June 30, 2026, net revenues in our specialty industrial market increased by $59 million, or 11%, compared to the same period in the prior year. This increase was primarily due to higher sales in datacom applications and defense applications at PSD.

Previous wording

A significant portion of our net revenues is from sales to customers in international markets. For the three months ended March 31, 2026 and 2025, international net revenues accounted for approximately 82% and 81% respectively, of our total net revenues. We report geographical net revenues based on the shipped-to location of the end customer. A significant portion of our international net revenues was from customers in China, South Korea, Singapore, Malaysia, Japan and Taiwan. We expect international net revenues will continue to account for a significant percentage of total net revenues for the foreseeable future.

Current wording

A significant portion of our net revenues is from sales to customers in international markets. For the six months ended June 30, 2026 and 2025, international net revenues accounted for approximately 82% and 81% respectively, of our total net revenues. We report geographical net revenues based on the shipped-to location of the end customer. A significant portion of our international net revenues was from customers in China, South Korea, Malaysia, Taiwan, Singapore and Japan. We expect international net revenues will continue to account for a significant percentage of total net revenues for the foreseeable future.

Previous wording

Long-lived assets located outside of the United States accounted for approximately 70% of our total long-lived assets as of both March 31, 2026 and December 31, 2025. Long-lived assets include property, plant and equipment, net, right-of-use assets and certain other assets.

Current wording

Long-lived assets located outside of the United States accounted for approximately 69% and 70% of our total long-lived assets as of June 30, 2026 and December 31, 2025, respectively. Long-lived assets include property, plant and equipment, net, right-of-use assets and certain other assets.

Previous wording

For the three months ended March 31, 2026, net product revenues increased $47 million compared to the prior quarter primarily due to higher sales of our semiconductor capital equipment at VSD serving deposition and etch applications and higher NAND memory production upgrades, and higher sales of flexible PCB via drilling systems at PSD.

Current wording

For the three months ended June 30, 2026, net product revenues increased $150 million compared to the prior quarter primarily due to higher sales of our semiconductor capital equipment serving deposition and etch applications as well as higher NAND memory production upgrades at VSD, higher sales of chemistry at MSD and higher sales of flexible PCB via drilling systems at PSD.

Previous wording

For the three months ended March 31, 2026, net product revenues increased $135 million compared to the same period in the prior year, primarily as a result of higher sales related to chemistry at MSD, semiconductor capital equipment serving deposition and etch applications at VSD, and datacom applications at PSD.

Current wording

For the six months ended June 30, 2026, net product revenues increased $390 million compared to the same period in the prior year, primarily as a result of higher sales of chemistry at MSD, semiconductor capital equipment serving deposition and etch applications at VSD, and flexible PCB via drilling systems and datacom applications at PSD.

Previous wording

Net service revenues consisted mainly of fees for services related to the maintenance and repair of our products, sales of spare parts, and installation and training. For the three months ended March 31, 2026, net service revenues decreased $2 million compared to the prior quarter mainly as a result of lower repair demand in our semiconductor and specialty industrial markets at VSD.

Current wording

Net service revenues consisted mainly of fees for services related to the maintenance and repair of our products, sales of spare parts, and installation and training. For the three months ended June 30, 2026, net service revenues increased $20 million compared to the prior quarter mainly as a result of higher repair demand in our semiconductor market at VSD.

Previous wording

For the three months ended March 31, 2026, net service revenues increased $7 million compared to the same period in the prior year, primarily due to higher repair demand in our semiconductor market at VSD.

Current wording

For the six months ended June 30, 2026, net service revenues increased $26 million compared to the same period in the prior year, primarily due to higher repair demand in our semiconductor market at VSD.

Previous wording

For the three months ended March 31, 2026, net revenues from VSD increased $25 million compared to the prior quarter mainly due to increased sales in semiconductor capital equipment serving deposition and etch applications as well as NAND memory production upgrades. For the three months ended March 31, 2026, net revenues from VSD increased $39 million compared to the same period in the prior year, mainly due to higher sales of our semiconductor capital equipment serving deposition and etch applications and higher service revenues.

Current wording

For the three months ended June 30, 2026, net revenues from VSD increased $82 million compared to the prior quarter mainly due to increased sales of semiconductor capital equipment serving deposition and etch applications as well as NAND memory production upgrades and higher service revenues. For the six months ended June 30, 2026, net revenues from VSD increased $140 million compared to the same period in the prior year, mainly due to higher sales of our semiconductor capital equipment serving deposition and etch applications and higher service revenues.

Previous wording

For the three months ended March 31, 2026, net revenues from PSD increased $29 million compared to the prior quarter mainly due to higher sales of flexible PCB via drilling systems in our electronics and packaging market and higher sales in datacom applications within our specialty industrial market. For the three months ended March 31, 2026, net revenues from PSD increased $40 million compared to the same period in the prior year, mainly due to higher sales in datacom applications in our specialty industrial market, higher sales of flexible PCB via drilling systems in our electronics and packaging market as well as higher sales of our lithography, metrology and inspection products in our semiconductor market.

Current wording

For the three months ended June 30, 2026, net revenues from PSD increased $38 million compared to the prior quarter mainly due to higher sales of flexible PCB via drilling systems in our electronics and packaging market, lithography, metrology and inspection products in our semiconductor market and datacom applications in our specialty industrial market. For the six months ended June 30, 2026, net revenues from PSD increased $136 million compared to the same period in the prior year, mainly due to higher sales of flexible PCB via drilling systems in our electronics and packaging market, datacom applications in our specialty industrial market, as well as lithography, metrology and inspection products in our semiconductor market.

Previous wording

For the three months ended March 31, 2026, net revenues from MSD decreased $9 million compared to the prior quarter mainly due to a decrease in electronic equipment sales and lower sales for industrial applications, partially offset by increased chemistry sales in our electronics and packaging market. For the three months ended March 31, 2026, revenues from MSD increased $63 million compared to the same period in the prior year, mainly due to higher electronic chemistry sales in our electronics and packaging market as well as higher sales for industrial applications.

Current wording

For the three months ended June 30, 2026, net revenues from MSD increased $50 million compared to the prior quarter mainly due to higher sales of chemistry and chemistry equipment in our electronics and packaging market. For the six months ended June 30, 2026, net revenues from MSD increased $140 million compared to the same period in the prior year, mainly due to higher sales of chemistry in our electronics and packaging market.

Previous wording

Gross profit as a percentage of net product revenues decreased by 0.5 percentage points for the three months ended March 31, 2026 compared to the same period in the prior year, primarily due to unfavorable product mix and higher duty and tariff costs, partially offset by higher revenue volumes and lower excess and obsolete inventory charges.

Current wording

Gross profit as a percentage of net product revenues increased by 0.7 percentage points for the six months ended June 30, 2026 compared to the same period in the prior year, primarily due to higher revenue volumes and lower excess and obsolete inventory charges, partially offset by unfavorable product mix.

Previous wording

Gross profit as a percentage of net services revenues increased by 3.7 percentage points for the three months ended March 31, 2026 compared to the prior quarter, primarily due to favorable labor and overhead absorption and lower excess and obsolete inventory charges, partially offset by unfavorable product mix.

Current wording

Gross profit as a percentage of net services revenues decreased by 4.2 percentage points for the three months ended June 30, 2026 compared to the prior quarter, primarily due to unfavorable product mix and unfavorable labor and overhead absorption, partially offset by higher revenue volumes.

Previous wording

Gross profit as a percentage of net services revenues increased by 1.4 percentage points for the three months ended March 31, 2026 compared to the same period in the prior year, primarily due to favorable labor and overhead absorption and lower excess and obsolete inventory charges offset by unfavorable product mix.

Current wording

Gross profit as a percentage of net services revenues decreased by 1.8 percentage points for the six months ended June 30, 2026 compared to the same period in the prior year, primarily due to unfavorable product mix, partially offset by lower excess and obsolete inventory charges.

Previous wording

Gross profit as a percentage of net revenues for VSD increased for the three months ended March 31, 2026 compared to the prior quarter, primarily due to higher revenue volumes and favorable factory utilization, partially offset by unfavorable product mix and higher excess and obsolete inventory charges. Gross profit as a percentage of net revenues for VSD decreased for the three months ended March 31, 2026 compared to the same period in the prior year, primarily due to unfavorable product mix and higher duty and tariff costs, partially offset by higher revenue volumes and favorable factory utilization as well as lower excess and obsolete inventory charges.

Current wording

Gross profit as a percentage of net revenues for VSD increased for the three months ended June 30, 2026 compared to the prior quarter, primarily due to higher revenue volumes, lower excess and obsolete inventory charges and lower tariff and duty costs, partially offset by unfavorable factory utilization and product mix. Gross profit as a percentage of net revenues for VSD decreased for the six months ended June 30, 2026 compared to the same period in the prior year, primarily due to unfavorable product mix, partially offset by higher revenue volumes and favorable factory utilization as well as lower excess and obsolete inventory charges.

Previous wording

Gross profit as a percentage of net revenues for PSD increased for the three months ended March 31, 2026 compared to the prior quarter, primarily due to higher revenue volumes and favorable factory utilization. Gross profit as a percentage of net revenues for PSD increased for the three months ended March 31, 2026 compared to the same period in the prior year, primarily due to higher revenue volumes, favorable factory utilization and lower excess and obsolete inventory charges, partially offset by higher duty and tariff costs.

Current wording

Gross profit as a percentage of net revenues for PSD increased for the three months ended June 30, 2026 compared to the prior quarter, primarily due to lower tariff and duty costs and higher revenue volumes. Gross profit as a percentage of net revenues for PSD increased for the six months ended June 30, 2026 compared to the same period in the prior year, primarily due to higher revenue volumes, favorable factory utilization and lower excess and obsolete inventory charges, partially offset by unfavorable product mix.

Previous wording

Gross profit as a percentage of net revenues for MSD decreased for the three months ended March 31, 2026 compared to the prior quarter, primarily due to higher palladium prices, partially offset by higher revenue volumes. Gross profit as a percentage of net revenues for MSD decreased for the three months ended March 31, 2026 compared to the same period in the prior year, primarily due to higher palladium prices, partially offset by higher revenue volumes.

Current wording

Gross profit as a percentage of net revenues for MSD decreased for the three months ended June 30, 2026 compared to the prior quarter, primarily due to unfavorable product mix, partially offset by higher revenue volumes. Gross profit as a percentage of net revenues for MSD decreased for the six months ended June 30, 2026 compared to the same period in the prior year, primarily due to unfavorable product mix, partially offset by higher revenue volumes.

Previous wording

Research and development expenses for the three months ended March 31, 2026 increased $3 million compared to the prior quarter primarily due to $2 million in compensation-related costs. Research and development expenses increased $11 million for the three months ended March 31, 2026 compared to the same period in the prior year primarily due to $4 million in compensation-related costs, $3 million in project material costs and $2 million in software maintenance costs.

Current wording

Research and development expenses for the three months ended June 30, 2026 decreased $5 million compared to the prior quarter, primarily due to a $4 million reduction in project material costs and a $2 million increase in government assistance grants, partially offset by a $2 million increase in compensation related costs. Research and development expenses increased $12 million for the six months ended June 30, 2026 compared to the same period in the prior year, primarily due to increases of $8 million in compensation-related costs and $3 million in software maintenance costs.

Previous wording

We continue to make product advancements designed to meet our customers’ evolving needs. We have developed, and continue to develop, new products designed to address industry trends, such as the rising demand for more complex hardware architecture related to increasing investments in artificial intelligence, the shrinking of integrated circuit critical dimensions and technology inflections, and, in the flat panel display and solar markets, the transition to larger substrate sizes, which require more advanced processing and process control technology, the continuing drive toward more complex and accurate components and devices within the handset and tablet market, the growth in units and via counts in the high density interconnect PCB drilling market, and the transition from internal combustion to electric vehicles. In addition, we have developed, and continue to develop, products that support the migration to new classes of materials, ultra-thin layers, and 3D structures that are used in small geometry manufacturing. In our chemistry and equipment plating businesses, a majority of our research and development investment supports existing customers’ product improvement needs and their short-term research and development goals, which enables us to pioneer new high-value solutions while limiting commercial risk. Research and development expenses consist primarily of salaries and related expenses for personnel engaged in research and development, fees paid to consultants, material costs for prototypes and other expenses related to the design, development, testing and enhancement of our products.

Current wording

We continue to make product advancements designed to meet our customers’ evolving needs. We have developed, and continue to develop, new products designed to address industry trends, such as the rising demand for more complex hardware architecture related to increasing investments in artificial intelligence, the shrinking of integrated circuit critical dimensions and technology inflections, and, in the flat panel display and solar markets, the transition to larger substrate sizes, which require more advanced processing and process control technology, the continuing drive toward more complex and capable components and systems for AI datacenters and edge devices, the growth in units and via counts in the high density interconnect PCB drilling market, and the transition from internal combustion to electric vehicles. In addition, we have developed, and continue to develop, products that support the migration to new classes of materials, ultra-thin layers, and 3D structures that are used in small geometry manufacturing. In our chemistry and equipment plating businesses, a majority of our research and development investment supports existing customers’ product improvement needs and their short-term research and development goals, which enables us to pioneer new high-value solutions while limiting commercial risk. Research and development expenses consist primarily of salaries and related expenses for personnel engaged in research and development, fees paid to consultants, material costs for prototypes and other expenses related to the design, development, testing and enhancement of our products.

Previous wording

Selling, general and administrative expenses increased $5 million for the three months ended March 31, 2026 compared to the prior quarter, primarily due to an increase of $11 million, mainly related to stock compensation, partially offset by decreases of $3 million in consulting fees and $2 million in legal costs.

Current wording

Selling, general and administrative expenses increased $10 million for the three months ended June 30, 2026 compared to the prior quarter, primarily due to increases of $6 million in compensation related costs and $1 million in software maintenance costs.

Previous wording

Selling, general and administrative expenses increased $5 million for the three months ended March 31, 2026 compared to the same period in the prior year, primarily due to an increase of $5 million in variable incentive compensation, partially offset by lower headcount costs resulting from the global cost saving initiative implemented during the first quarter of 2025.

Current wording

Selling, general and administrative expenses increased $28 million for the six months ended June 30, 2026 compared to the same period in the prior year, primarily due to increases of $23 million in compensation related costs and $2 million in sales commissions.

Previous wording

Restructuring and other charges during the three months ended March 31, 2026 related primarily to severance costs incurred as a result of a reorganization of certain business units within PSD implemented during the first quarter of 2026. Restructuring and other charges during the three months ended December 31, 2025 related primarily to third party costs supporting certain strategic initiatives. Restructuring and other charges during the three months ended March 31, 2025 related to severance costs incurred as a result of a cost saving initiative implemented in the first quarter of 2025, primarily in the general metal finishing business within MSD.

Current wording

Restructuring and other charges during the three and six months ended June 30, 2026 and the three months ended March 31, 2026 related primarily to severance costs incurred as a result of a reorganization of certain business units within PSD, which was implemented in the first quarter of 2026, and the planned closing of a PSD facility in Europe, which was initiated during the first quarter of 2026. The facility closing is expected to be completed in early 2027. Restructuring and other charges during the six months ended June 30, 2025 related primarily to severance costs incurred as a result of a global cost saving initiative implemented during the first quarter of 2025, mainly in the general metal finishing business within MSD.

Previous wording

During the three months ended March 31, 2026, we recorded a charge related to the resolution of a legal matter.

Current wording

During the three months ended March 31, 2026 and the six months ended June 30, 2026, we recorded a charge related to the resolution of a legal matter.

Previous wording

During the three months ended March 31, 2026, we recorded fees and expenses related to the Sixth Amendment to Credit Agreement, dated as of February 4, 2026, by and among us as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender party thereto (the “Sixth Amendment”) as well as a fee from a foreign exchange option contract related to the 2034 Notes (as defined below). During the three months ended March 31, 2025, we recorded fees and expenses related to the Fifth Amendment to Credit Agreement, dated as of January 24, 2025, by and among us as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender party thereto (the “Fifth Amendment”).

Current wording

During the three months ended March 31, 2026 and the six months ended June 30, 2026, we recorded fees and expenses related to the Sixth Amendment to Credit Agreement, dated as of February 4, 2026, by and among us as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender party thereto (the “Sixth Amendment”) as well as a fee from a foreign exchange option contract related to the 2034 Notes (as defined below). During the six months ended June 30, 2025, we recorded fees and expenses related to the Fifth Amendment to Credit Agreement, dated as of January 24, 2025, by and among us as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender party thereto (the “Fifth Amendment”).

Previous wording

Amortization of intangible assets for the three months ended March 31, 2026 increased $1 million compared to the prior quarter and $3 million compared to the same period in the prior year primarily due to the impact of foreign exchange rates on intangible assets at foreign locations.

Current wording

Amortization of intangible assets for the three months ended June 30, 2026 decreased $1 million compared to the prior quarter and for the six months ended June 30, 2026 increased $3 million compared to the same period in the prior year, primarily due to the impact of foreign exchange rates on intangible assets at foreign locations.

Previous wording

Interest expense, net decreased by $4 million for the three months ended March 31, 2026 compared to the prior quarter, primarily due to the Sixth Amendment, which resulted in a reduction in interest rates under our Term Loan Facility and the 2034 Notes Offering (each as defined below), the proceeds of which we used, together with cash on hand, to prepay approximately $1.3 billion of our USD Tranche B (as defined below). We also made a voluntary prepayment of $100 million on our USD Tranche B during the three months ended December 31, 2025.

Current wording

Interest expense, net decreased by $7 million for the three months ended June 30, 2026 compared to the prior quarter, primarily due to the Sixth Amendment, which resulted in a reduction in interest rates under our Term Loan Facility and the 2034 Notes Offering (each as defined below), the proceeds of which we used, together with cash on hand, to prepay approximately $1.3 billion of our USD Tranche B (as defined below). We also made a voluntary prepayment of $100 million on our USD Tranche B during the three months ended June 30, 2026.

Previous wording

Interest expense, net decreased by $7 million for the three months ended March 31, 2026 compared to the same period in the prior year primarily as a result of the Sixth Amendment and the 2034 Notes Offering as described above, as well as voluntary prepayments on the USD Tranche B in the amount of $400 million throughout 2025.

Current wording

Interest expense, net, decreased by $22 million for the six months ended June 30, 2026, compared to the same period in the prior year, primarily as a result of the Sixth Amendment and the 2034 Notes Offering as described above, as well as various quarterly voluntary prepayments on the USD Tranche B in the amount of $400 million and $200 million in 2025 and 2026, respectively.

Previous wording

For the three months ended December 31, 2025, we recorded a loss on extinguishment of debt as a result of acceleration of deferred financing and original issue discount costs in connection with a voluntary prepayment on our USD Tranche B loan in October 2025.

Current wording

For the three months ended June 30, 2026, we recorded a loss on extinguishment of debt as a result of the acceleration of deferred financing and original issue discounts associated with our loans under the Term Loan Facility in connection with a voluntary prepayment.

Previous wording

For the three months ended March 31, 2026, in connection with the Sixth Amendment and voluntary prepayment on our USD Tranche B loan in February 2026, we recorded a loss on extinguishment of debt as a result of the acceleration of deferred financing and original issue discounts associated with our loans under the Term Loan Facility.

Current wording

For the three months ended March 31, 2026 and six months ended June 30, 2026, in connection with the Sixth Amendment and voluntary prepayment on our USD Tranche B loan in February 2026, we recorded a loss on extinguishment of debt as a result of the acceleration of deferred financing and original issue discounts associated with our loans under the Term Loan Facility.

Previous wording

Other (income) expense, net for the three months ended March 31, 2026, three months ended December 31, 2025 and three months ended March 31, 2025 consisted primarily of net foreign exchange and fair value gains and losses.

Current wording

Other (income) expense, net for the three and six months ended June 30, 2026, three months ended March 31, 2026 and six months ended June 30, 2025 consisted primarily of net foreign exchange and fair value gains and losses.

Previous wording

Our effective tax rates for the three months ended March 31, 2026, three months ended December 31, 2025, and three months ended March 31, 2025 were 17.7%, (20.8%), and 12.3%, respectively. Our effective tax rates for the three months ended March 31, 2026 and March 31, 2025 were lower than the U.S. statutory tax rate, mainly due to the U.S. deduction for Foreign-Derived Deduction Eligible Income and research and development tax credits, partially offset by foreign withholding taxes and a waiver of deductions related to U.S. base erosion payments. Our effective tax rate for the three months ended December 31, 2025 was lower than the U.S. statutory tax rate, mainly due to the U.S. deduction for Foreign-Derived Deduction Eligible Income, research and development tax credits, and valuation allowance release partially offset by foreign withholding taxes and a waiver of deductions related to U.S. base erosion payments.

Current wording

Our effective tax rates for the six months ended June 30, 2026 and June 30, 2025 were 17.8% and 13.0%, respectively. Our effective tax rate for the six months ended June 30, 2026 was lower than the U.S. statutory tax rate, mainly due to the U.S. deduction for FDDEI and research and development tax credits, partially offset by foreign withholding taxes and a waiver of deductions related to U.S. base erosion payments. Our effective tax rate for the six months ended June 30, 2025 was lower than the U.S. statutory tax rate mainly due to the U.S. deduction for foreign-derived intangible income and research and development tax credits, partially offset by foreign withholding taxes and a waiver of deductions related to U.S. base erosion payments.

Previous wording

The Organisation for Economic Co-operation and Development (“OECD”) and participating OECD member countries have issued rules introducing a 15% global minimum corporate tax rate for large multinational enterprise groups, also known as “Pillar Two.” These rules were amended in January 2026 by the OECD “Side-by-Side package” in particular to address the coexistence of U.S. minimum tax regimes and ensure that U.S. based multinational groups are not subject to both primary and secondary top-up taxes under Pillar Two. The adoption and effective dates of Pillar Two and any additional rules vary by country. However, we do not expect Pillar Two to have a material impact on our 2026 financial results. We will continue to monitor and evaluate the impact of any developing legislation.

Current wording

The Organisation for Economic Co-operation and Development (“OECD”) and participating OECD member countries have issued rules introducing a 15% global minimum corporate tax rate for large multinational enterprise groups, also known as “Pillar Two.” These rules were amended in January 2026 by the OECD “Side-by-Side package” in particular to address the coexistence of U.S. minimum tax regimes and ensure that U.S. based multinational groups are not subject to both primary and secondary top-up taxes under Pillar Two. The adoption and effective dates of Pillar Two and any additional rules vary by country. However, Pillar Two has not had a material impact on our financial results for the six months ended June 30, 2026, and we do not expect Pillar Two to have a material impact on our financial results for the year ending December 31, 2026. We will continue to monitor and evaluate the impact of any developing legislation.

Previous wording

Cash and cash equivalents at March 31, 2026 and December 31, 2025 totaled $569 million and $675 million, respectively. The primary driver of our current and anticipated future cash flows is, and we expect will continue to be, cash generated from operations, consisting primarily of our net income, excluding non-cash charges and changes in operating assets and liabilities.

Current wording

Cash and cash equivalents at June 30, 2026 and December 31, 2025 totaled $611 million and $675 million, respectively. The primary driver of our current and anticipated future cash flows is, and we expect will continue to be, cash generated from operations, consisting primarily of our net income, excluding non-cash charges and changes in operating assets and liabilities.

Previous wording

Our total cash and cash equivalents at March 31, 2026 consisted of $126 million held in the United States and $443 million held by our foreign subsidiaries. We believe that our current cash and cash equivalents and available borrowing capacity, together with the cash anticipated to be generated from our operations, will be sufficient to satisfy our estimated working capital needs, planned capital expenditure requirements, payments of debt, potential settlement of convertible debt conversions and any future cash dividends declared by our Board of Directors or share repurchases through at least the next 12 months and the foreseeable future.

Current wording

Our total cash and cash equivalents at June 30, 2026 consisted of $128 million held in the United States and $483 million held by our foreign subsidiaries. We believe that our current cash and cash equivalents, and available borrowing capacity, together with the cash anticipated to be generated from our operations, will be sufficient to satisfy our estimated working capital needs, planned capital expenditure requirements, payments of debt, potential settlement of convertible debt conversions and any future cash dividends declared by our Board of Directors or share repurchases through at least the next 12 months and the foreseeable future.