MAXLINEAR, INC

Previous wording

In the three months ended March 31, 2025, net revenue was $95.9 million, which was derived in part from sales of RF receivers and RF receiver SoC and connectivity solutions into broadband operator voice and data modems and gateways and connectivity adapters, global analog and digital RF receiver products, radio and modem solutions into wireless carrier access and backhaul infrastructure platforms, high-speed optical interconnect solutions sold into optical modules for data-center, metro and long-haul networks, and high-performance interface and power management solutions into a broad range of communications, industrial, automotive and multi-market applications. We have experienced slower than expected recovery in sales across all of our end markets. This is primarily driven by excess inventory in the channels as well as slower demand in regions such as China. Geopolitical tensions and changing trade policies, including escalating tariffs between the United States and China, and other countries, continue to influence the semiconductor industry as well as the global economy. We continue to develop and innovate with new products for new solutions in advanced semiconductor process nodes such as 16nm and 5nm and beyond, while addressing opportunities capturing and processing high quality broadband communications and high-speed optical interconnect signals.

Current wording

In the six months ended June 30, 2025, net revenue was $204.7 million, which was derived in part from sales of RF receivers and RF receiver SOC and connectivity solutions into broadband operator voice and data modems and gateways and connectivity adapters, global analog and digital RF receiver products, radio and modem solutions into wireless carrier access and backhaul infrastructure platforms, high-speed optical interconnect solutions sold into optical modules for data-center, metro and long-haul networks, and high-performance interface and power management solutions into a broad range of communications, industrial, automotive and multi-market applications. We are currently experiencing a recovery in sales demand across our broadband and connectivity end markets following a period of decreased demand resulting from excess inventory in the channels as well as slower demand in regions such as China. Geopolitical tensions and changing trade policies, including escalating tariffs between the United States and China, and other countries, continue to influence the semiconductor industry as well as the global economy. While tariffs do not directly apply to our products, we are monitoring the impacts of current or impending tariffs on our customers and supply chain and making adjustments as needed. The magnitude of the impact of escalating tariffs and geopolitical tensions is currently unknown, but such factors could hamper continued recovery of total revenues and diminish our efforts to return to meaningful growth in total revenues. We continue to develop and innovate with new products for new solutions in advanced semiconductor process nodes such as 16nm and 5nm and beyond, while addressing opportunities capturing and processing high quality broadband communications and high-speed optical interconnect signals.

Previous wording

Products shipped to Asia accounted for 78% and 59% of net revenue during the three months ended March 31, 2025 and 2024, respectively, including 49% from products shipped to Hong Kong and 11% from products shipped to Vietnam during the three months ended March 31, 2025 and 28% from products shipped to Hong Kong during the three months ended March 31, 2024. Although a large percentage of our products is shipped to Asia, we believe that a significant number of the systems designed by these customers and incorporating our semiconductor products are then sold outside Asia. For example, revenue generated from sales of our products during the three months ended March 31, 2025 and 2024 related principally to sales to Asian ODMs and contract manufacturers delivering products into European and North American markets. To date, all of our sales have been denominated in United States dollars.

Current wording

Products shipped to Asia accounted for 79% and 68% of net revenue during the six months ended June 30, 2025 and 2024, respectively, including 49% from products shipped to Hong Kong and 10% from products shipped to Vietnam during the six months ended June 30, 2025 and 31% from products shipped to Hong Kong during six months ended June 30, 2024. Although a large percentage of our products is shipped to Asia, we believe that a significant number of the systems designed by these customers and incorporating our semiconductor products are then sold outside Asia. For example, revenue generated from sales of our products during the six months ended June 30, 2025 and 2024 related principally to sales to Asian ODMs and contract manufacturers delivering products into European and North American markets. To date, all of our sales have been denominated in United States dollars.

Previous wording

A significant portion of our net revenue has historically been generated by a limited number of customers through sales of our products. Sales of products to customers comprise both direct sales to customers and indirect sales through distributors. In the three months ended March 31, 2025, two customers accounted for 28% of our net revenue, and our ten largest customers collectively accounted for 66% of our net revenue. For certain customers, we sell multiple products into disparate end user applications such as PON outdoor units, or PON ODUs, Wi-Fi routers, broadband gateways, and cable modems.

Current wording

A significant portion of our net revenue has historically been generated by a limited number of customers through sales of our products. Sales of products to customers comprise both direct sales to customers and indirect sales through distributors. In the three months ended June 30, 2025, two customers accounted for 32% of our net revenue, and our ten largest customers collectively accounted for 73% of our net revenue, of which distributor customers accounted for 22% of our net revenue. In the six months ended June 30, 2025, two customers accounted for 31% of our net revenue, and our ten largest customers collectively accounted for 67% of our net revenue, of which distributor customers accounted for 26% of our net revenue. For certain customers, we sell multiple products into disparate end user applications such as PON outdoor units, or PON ODUs, Wi-Fi routers, broadband gateways, and cable modems.

Previous wording

Our business depends on winning competitive bid selection processes, known as design wins, to develop integrated circuits for use in our customers’ products. These selection processes are typically lengthy, and as a result, our sales cycles will vary based on the specific market served, whether the design win is with an existing or a new customer and whether our product being designed in our customer’s device is a first generation or subsequent generation product. Our customers’ products can be complex and, if our engagement results in a design win, can require significant time to move into volume production. Because the sales cycle for our products is long, we can incur significant design and development expenditures in circumstances where we do not ultimately recognize any revenue. We do not have any long-term purchase commitments with any of our customers, all of whom purchase our products on a purchase order basis. Once one of our products is incorporated into a customer’s design, however, we believe that our product is likely to remain a component of the customer’s product for its life cycle because of the time and expense associated with redesigning the product or substituting an alternative chip. Product life cycles in our target markets will vary by application. For example, in the broadband data modem and gateway sectors, a design can have a product life cycle of 24 to 60 months. In the industrial and wired and wireless infrastructure markets, a design can have a product life cycle of 24 to 84 months and beyond.

Current wording

Our business depends on winning competitive bid selection processes, known as design wins, to develop integrated circuits for use in our customers’ products. These selection processes are typically lengthy, and as a result, our sales cycles will vary based on the specific market served, whether the design win is with an existing or a new customer and whether our product being designed in our customer’s device is a first generation or subsequent generation product. Our customers’ products can be complex and, if our engagement results in a design win, can require significant time to move into volume production. Because the sales cycle for our products is long, we can incur significant design and development expenditures in circumstances where we do not ultimately recognize any revenue. We do not have any long-term purchase commitments with any of our customers, all of whom purchase our products on a purchase order basis. Once one of our products is incorporated into a customer’s design, however, we believe that our product is likely to remain a component of the customer’s product for its life cycle because of the time and expense associated with redesigning the product or substituting an alternative chip. Product life cycles in our target markets will vary by application. For example, in the broadband data modem and gateway sectors, a design-in can have a product life cycle of 24 to 60 months. In the industrial and wired and wireless infrastructure markets, a design-in can have a product life cycle of 24 to 84 months and beyond.

Previous wording

In the three months ended March 31, 2025, we incurred $7.9 million in restructuring costs which included $6.3 million in charges under contracts associated with CAD tool licenses which we ceased using during the quarter and $1.6 million in severance costs and related expenses in connection with a workforce reduction.

Current wording

In the six months ended June 30, 2025, we incurred $13.5 million in restructuring costs which included $6.4 million in charges under contracts associated with CAD tool licenses, which we ceased using during the period, and $6.2 million in severance costs and related expenses and $0.9 million from exiting facilities in connection with a workforce reduction.

Previous wording

We expect to complete the workforce reduction in the second quarter of 2025 and estimate that we will incur an additional $4.0 million to $6.0 million in restructuring costs. Estimated restructuring costs remaining to be incurred for the restructuring plan pertain to severance and related costs to be incurred upon completion of notice to employees and exiting of additional leased office space, and are anticipated to be incurred in the second quarter of 2025. The estimate of costs that we expect to incur, and the timing thereof, are subject to a number of assumptions and actual results may differ. We may also incur other charges or cash expenditures not currently contemplated due to events that may occur as a result of, or associated with, the restructuring plan.

Current wording

We may also incur other charges or cash expenditures not currently contemplated due to events that may occur as a result of, or associated with, our restructuring plans.

Previous wording

States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, related disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. We continually evaluate our estimates and judgments, the most critical of which are those related to business combinations, revenue recognition, inventory valuation, production masks, goodwill and other intangible assets valuation, and income taxes. We base our estimates and judgments on historical experience and other factors that we believe to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known.

Current wording

Management’s discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements which are prepared in accordance with accounting principles that are generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, related disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. We continually evaluate our estimates and judgments, the most critical of which are those related to business combinations, revenue recognition, inventory valuation, production masks, goodwill and other intangible assets valuation, and income taxes. We base our estimates and judgments on historical experience and other factors that we believe to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known.

Previous wording

For a summary of our critical accounting policies and estimates, refer to Management’s Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2024, which we filed with the Securities and Exchange Commission, or SEC, on January 29, 2025, or our Annual Report. There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2025.

Current wording

For a summary of our critical accounting policies and estimates, refer to Management’s Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2024, which we filed with the Securities and Exchange Commission, or SEC, on January 29, 2025, or our Annual Report. There have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 2025.

Previous wording

Research and Development. Research and development, or R&D, expense includes personnel-related expenses, including salaries and benefits and stock-based compensation, new product engineering mask costs, prototype integrated circuit packaging and test costs, computer-aided design software license costs, intellectual property license costs, reference design development costs, development testing and evaluation costs, depreciation expense, and allocated occupancy costs, partially offset by income from joint R&D projects and/or governmental R&D grants, if any. Research and development activities include the design of new products, refinement of existing products and design of test methodologies to ensure compliance with required specifications. All research and development costs are expensed as incurred.

Current wording

Research and Development. Research and development, or R&D, expense includes personnel-related expenses, including salaries and benefits and stock-based compensation, new product engineering mask costs, prototype integrated circuit packaging and test costs, computer-aided design software license costs, intellectual property license costs, reference design development costs, development testing and evaluation costs, depreciation expense, and allocated occupancy costs, partially offset by income from joint R&D projects and/or governmental R&D grants, if any. Research and development activities include the design of new products, refinement of existing products and design of test methodologies to ensure compliance with required specifications. All research and development costs are expensed as incurred. Income from joint R&D projects and governmental R&D grants are reflected as a credit to research and development expense when such income has been earned and any contingencies associated with retaining such income have been resolved.

Previous wording

Interest and Other Income (Expense), Net. Interest and other income (expense), net includes interest income, interest expense and other income (expense). Interest income consists of interest earned on our cash, cash equivalents and restricted cash balances. Interest expense consists of interest accrued on debt and amortization of discounts on debt and other liabilities. Other income (expense) generally consists of income (expense) generated from non-operating transactions, net gains (losses) from sales or impairment of investments and/or income or losses from investments, if any, including unrealized holding gains (losses) from certain investments required to be marked to market value, if any.

Current wording

Interest and Other Income (Expense), Net. Interest and other income (expense), net includes interest income, interest expense and other income (expense). Interest income consists of interest earned on our cash, cash equivalents and restricted cash balances. Interest expense consists of interest accrued on debt and amortization of discounts on debt and other liabilities. Other income (expense) generally consists of income (expense) generated from non-operating transactions.

Previous wording

Income Tax Provision (Benefit). We make certain estimates and judgments in determining income taxes for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expenses for tax and financial statement purposes and the realizability of assets in future years.

Current wording

Income Tax Benefit. We make certain estimates and judgments in determining income taxes for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expenses for tax and financial statement purposes and the realizability of assets in future years.

Previous wording

Net revenue increased $0.7 million to $95.9 million for the three months ended March 31, 2025, as compared to $95.3 million for the three months ended March 31, 2024, due in part to recovery in our broadband and connectivity markets. The increase in broadband net revenue of $7.8 million was driven by increases in the volume of broadband SOC shipments in this category. The increase in connectivity net revenue of $10.5 million was driven by improvements in Wi-Fi and ethernet product shipments. The decrease in net infrastructure revenues of $6.0 million was driven by a decrease in IP licensing revenues in this category, while the volume of shipments of wireless backhaul and high speed interconnect products increased. The decrease in industrial and multi-market net revenue of $11.6 million was driven by decreased volume of shipments of high-performance analog products. Price changes did not have a material impact to revenues period over period.

Current wording

Net revenue increased $16.8 million to $108.8 million for the three months ended June 30, 2025, as compared to $92.0 million for the three months ended June 30, 2024, due in part to increased demand in our broadband, connectivity, and infrastructure markets. The increase in broadband net revenue of $25.7 million was driven by increases in the volume of broadband SoC and cable data shipments in this category. The increase in connectivity net revenue of $7.5 million was driven by improvements in the volume of Wi-Fi, MoCA, and ethernet product shipments. The increase in infrastructure net revenue of $2.9 million was driven by increased volume of shipments of MoCA access and wireless backhaul products. The decrease in industrial and multi-market net revenue of $19.3 million was driven by decreased volume of shipments of high-performance analog and component products. Price changes did not have a material impact to revenues period over period.

Previous wording

Cost of net revenue decreased $3.9 million to $42.1 million for the three months ended March 31, 2025, as compared to $46.0 million for the three months ended March 31, 2024. The decrease was driven by a decrease in amortization of acquired intangible assets. Gross profit percentage improved for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, also due to a decrease in intangible asset amortization.

Current wording

Cost of net revenue increased $5.5 million to $47.3 million for the three months ended June 30, 2025, as compared to $41.8 million for the three months ended June 30, 2024. The increase was driven by an increase in the volume of sales as described above. Gross profit percentage improved for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, also due to a decrease in intangible asset amortization.

Previous wording

Research and development expense decreased $9.3 million to $55.5 million for the three months ended March 31, 2025, as compared to $64.8 million for the three months ended March 31, 2024. The decrease was driven by decreases in payroll and benefits expense of $6.3 million and CAD design tools expense of $2.5 million, plus the impact of an increase to income from joint R&D projects and government grants of $1.9 million offset against R&D expense, consulting expense of $1.3 million, bonuses of $0.8 million, and occupancy and other miscellaneous expenses of $0.8 million. These decreases were partially offset by an increase in stock based compensation of $4.2 million. The decrease in payroll and benefits, CAD design tool, consulting, bonuses, occupancy and other miscellaneous expenses are due to our prior workforce reductions and other cost reduction measures. The increase in income from joint R&D projects and government grants is due to new governmental R&D grants. The amount of income from research and development funded by others also varies from period to period depending on availability of such funding, including governmental grants. The increase in stock based compensation is due to incremental grants made to employees for retention purposes in the fourth quarter of 2024.

Current wording

Research and development expense decreased $9.3 million to $47.2 million for the three months ended June 30, 2025, as compared to $56.5 million for the three months ended June 30, 2024. The decrease was driven by decreases in payroll and benefits expense of $7.8 million, stock-based compensation of $2.5 million, CAD design tools expense of $2.4 million, consulting expense of $1.3 million, plus the impact of an increase to income from joint R&D projects and government grants of $1.0 million offset against R&D expense, and prototype, occupancy and other miscellaneous expenses of $0.3 million. These decreases were partially offset by an increase in bonuses of $5.9 million. The decrease in payroll and benefits, stock-based compensation, CAD design tools, consulting, prototype, occupancy and other miscellaneous expenses are due to our prior workforce reductions and other cost reduction measures. The increase in income from joint R&D projects and government grants is due to new governmental R&D grants. The amount of income from research and development funded by others also varies from period to period depending on availability of such funding, including governmental grants. The increase in bonuses is due to improved performance over the prior period.

Previous wording

We have reduced our research and development spending, including via workforce reductions, to meet evolving demand; however, we expect our research and development expenses to increase in future years as we develop products to drive future growth.

Current wording

We are reducing our research and development spending, including via our workforce reductions, to meet evolving demand; however, we expect our research and development expenses to increase in future years as we develop products to drive future growth.

Previous wording

Selling, general and administrative expense remained flat at $36.6 million. There were decreases in payroll and other benefits expense of $1.1 million, commission expense of $0.7 million, consulting, prototype and other miscellaneous expense of $0.6 million, and $0.4 million in bonuses. These decreases were offset by increases in professional fees of $1.5 million and stock-based compensation of $1.5 million. The decreases in payroll and other benefits and bonuses are attributable to our prior workforce reductions and other cost reduction measures. The decrease in commission expense is due to true up to actuals related to the prior quarter’s estimates of commissions earned by sales agents. The decreases in consulting, prototype and other miscellaneous expenses are due to the timing of project completion. The increase in professional fees is mainly due to higher legal fees related to the ongoing litigation from the termination of the merger with Silicon Motion. The increase in stock-based compensation expense is a result of incremental grants made to employees for retention purposes in the fourth quarter of 2024.

Current wording

Selling, general and administrative expense decreased $0.1 million to $70.0 million for the six months ended June 30, 2025, as compared to $70.1 million for the six months ended June 30, 2024. The decrease was due to decreases in payroll and other benefits expense of $3.2 million, commission expense of $1.0 million, and miscellaneous expenses of $1.1 million. These decreases were offset by increases in professional fees of $2.6 million and bonuses of $2.6 million. The decreases in payroll and other benefits and miscellaneous expenses are attributable to our prior workforce reductions and other cost reduction measures and timing of project completion. The decrease in commission expense is due to true up to actuals related to the prior quarter’s estimates of commissions earned by sales agents. The increase in professional fees is mainly due to higher legal fees related to the ongoing litigation from the termination of the merger with Silicon Motion. The increase in bonuses is due to improved performance over the prior period.

Previous wording

We have reduced our selling, general and administrative expenses, including via our workforce reductions; however, we expect selling, general and administrative expenses to increase in future years when we return to growing our sales and marketing organization to expand into existing and new markets.

Current wording

We are reducing our selling, general and administrative expenses, including via our workforce reductions; however, we expect selling, general and administrative expenses to increase in future years when we return to growing our sales and marketing organization to expand into existing and new markets.

Previous wording

Restructuring charges for the three months ended March 31, 2025 included $6.3 million charges under contracts associated with CAD tool licenses which we ceased using during the quarter and $1.6 million in severance and related charges related to a workforce reduction.

Current wording

Restructuring charges decreased $10.0 million to $13.5 million for the six months ended June 30, 2025, compared to $23.5 million for the six months ended June 30, 2024. Restructuring charges for the six months ended June 30, 2025 included $6.4 million in charges under contracts associated with CAD tool licenses which we ceased using, and $6.2 million in employee severance and related charges and $0.9 million in charges related to reduction of space leased for office facilities in connection with a workforce reduction.

Previous wording

Interest and other income (expense), net changed by $3.5 million from income of $0.5 million in the three months ended March 31, 2024 to an expense of $2.9 million for the three months ended March 31, 2025. The change was driven by currency exchange losses resulting in a decrease in other income (expense) of $2.7 million and a decrease in interest income of $1.0 million due to lower average balance of interest bearing cash balances and decreased interest rates.

Current wording

Interest and other income (expense), net changed by $5.6 million from expense of $0.5 million in the three months ended June 30, 2024 to expense of $6.1 million for the three months ended June 30, 2025. The change was driven by currency exchange losses resulting in a decrease in other income (expense) of $4.3 million and a decrease in interest income of $1.1 million due to lower average balance of interest-bearing cash balances and decreased interest rates.

Previous wording

The income tax provision for the three months ended March 31, 2025 was $0.7 million compared to an income tax benefit of $1.8 million for the three months ended March 31, 2024.

Current wording

The income tax benefit for the three months ended June 30, 2025 was $4.1 million compared to an income tax benefit of $2.1 million for the three months ended June 30, 2024.

Previous wording

The difference between our effective tax rate and the 21.0% U.S. federal statutory rate for the three months ended March 31, 2025 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items, and stock based compensation.

Current wording

The difference between our effective tax rate and the 21.0% U.S. federal statutory rate for the six months ended June 30, 2025 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items, and stock based compensation.

Previous wording

The difference between our effective tax rate and the 21.0% U.S. federal statutory rate for the three months ended March 31, 2024 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items including tax credits, stock based compensation, and tax shortfalls related to stock-based compensation.

Current wording

The difference between our effective tax rate and the 21.0% U.S. federal statutory rate for the six months ended June 30, 2024 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items, stock based compensation, tax shortfalls related to stock-based compensation, and release of uncertain tax positions under ASC 740-10.

Previous wording

Our subsidiary in Singapore operates under certain tax incentives in Singapore, which are effective through March 2027. Under these incentives, qualifying income derived from certain sales of our integrated circuits is taxed at a concessionary rate over the incentive period. We also receive a reduced withholding tax rate on certain intercompany royalty payments made by our Singapore subsidiary during the incentive period. During the quarter ended December 31, 2024, we recorded a full valuation allowance against our Singapore deferred tax assets. Due to this Singapore valuation allowance position, no income tax provision was recorded for the three months ended March 31, 2025. We recorded income taxes in the three months ended March 31, 2024 at the incentive rate. The incentives are conditional upon our meeting certain minimum employment and investment thresholds within Singapore over time, and we may be required to return certain tax benefits in the event we do not achieve compliance related to that incentive period. We currently believe that we will be able to satisfy these conditions without material risk.

Current wording

Our subsidiary in Singapore operates under certain tax incentives in Singapore, which are effective through March 2027. Under these incentives, qualifying income derived from certain sales of our integrated circuits is taxed at a concessionary rate over the incentive period. We also receive a reduced withholding tax rate on certain intercompany royalty payments made by our Singapore subsidiary during the incentive period. During the quarter ended December 31, 2024, we recorded a full valuation allowance against our Singapore deferred tax assets. Due to this Singapore valuation allowance position, no income tax provision was recorded in Singapore for the six months ended June 30, 2025. We recorded income taxes in the six months ended June 30, 2024 at the incentive rate. The incentives are conditional upon our meeting certain minimum employment and investment thresholds within Singapore over time, and we may be required to return certain tax benefits in the event we do not achieve compliance related to that incentive period. We currently believe that we will be able to satisfy these conditions without material risk.

Previous wording

As of March 31, 2025, we had cash and cash equivalents of $102.8 million, restricted cash of $1.3 million and net accounts receivable of $98.9 million. Additionally, as of March 31, 2025, our working capital, which we define as current assets less current liabilities, was $123.5 million. Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. Collateral is generally not required for customer receivables. We limit our exposure to credit loss by placing our cash with high credit quality financial institutions. At times, such deposits may be in excess of insured limits. We have not experienced any losses on our deposits of cash and cash equivalents.

Current wording

As of June 30, 2025, we had cash and cash equivalents of $108.6 million, restricted cash of $1.6 million and net accounts receivable of $105.8 million. Additionally, as of June 30, 2025, our working capital, which we define as current assets less current liabilities, was $116.7 million. Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. Collateral is generally not required for customer receivables. We limit our exposure to credit loss by placing our cash with high credit quality financial institutions. At times, such deposits may be in excess of insured limits. We have not experienced any losses on our deposits of cash and cash equivalents.

Previous wording

From time to time, we may also use cash to pay down outstanding debt and/or make investments. As of March 31, 2025, $125.0 million of principal was outstanding under a senior secured term B loan facility or the “Initial Term Loan under the June 23, 2021 Credit Agreement.” The Company also has available, subject to the terms and conditions of the agreement, a senior secured revolving credit facility, in an aggregate principal amount of up to $100.0 million which remained undrawn as of

Current wording

From time to time, we may also use cash to pay down outstanding debt and/or make investments. As of June 30, 2025, $125.0 million of principal was outstanding under a senior secured term B loan facility or the “Initial Term Loan under the June 23, 2021 Credit Agreement.” The Company also has available, subject to the terms and conditions of the agreement, a senior secured revolving credit facility, in an aggregate principal amount of up to $100.0 million which remained undrawn as of June 30, 2025. The proceeds of the revolving facility may be used to finance the working capital needs and other general corporate purposes of the Company and its subsidiaries.

Previous wording

Our cash and cash equivalents are impacted by the timing of when we pay expenses as reflected in the change in our outstanding accounts payable and accrued expenses. Cash used to fund operating expenses in our consolidated statements of cash flows excludes the impact of non-cash items such as, but not limited to, amortization and depreciation of acquired intangible assets and leased right-of-use assets and property and equipment, stock-based compensation, and any impairment of assets. Cash used to fund capital purchases and acquisitions of businesses and investments are included in investing activities in our consolidated statements of cash flows. Cash paid to satisfy minimum tax withholdings on behalf of employees for restricted stock units and cash proceeds from issuance of common stock and debt and cash used to pay down outstanding debt, if any, are included in financing activities in our consolidated statements of cash flows.

Current wording

Our cash and cash equivalents are impacted by the timing of when we pay expenses as reflected in the change in our outstanding accounts payable and accrued expenses. Cash used to fund operating expenses in our consolidated statements of cash flows excludes the impact of non-cash items such as, but not limited to, amortization and depreciation of acquired intangible assets and leased right-of-use assets and property and equipment, stock-based compensation, and any impairment of assets. Cash used to fund capital purchases and acquisitions of businesses and investments are included in investing activities in our consolidated statements of cash flows. Cash paid to satisfy minimum tax withholdings on behalf of employees for restricted stock units, cash proceeds from issuance of common stock and debt, and cash used to pay down outstanding debt, if any, are included in financing activities in our consolidated statements of cash flows.

Previous wording

Our planned capital expenditures as of March 31, 2025 were not material. Our consolidated balance sheet at March 31, 2025 included $4.3 million in other long-term liabilities for uncertain tax positions, some of which may result in cash payment and $15.0 million received from other parties for jointly funded research and development projects which will be recognized into income when the contingencies associated with the repayment conditions have been resolved. The future payments related to uncertain tax positions recorded as other long-term liabilities have not been presented in the table above due to the uncertainty of the amounts and timing of cash settlement with the taxing authorities.

Current wording

Our planned capital expenditures as of June 30, 2025 were not material. Our consolidated balance sheet at June 30, 2025 included $4.1 million in other long-term liabilities for uncertain tax positions, some of which may result in cash payment and $15.0 million received from other parties for jointly funded research and development projects which will be recognized into income when the contingencies associated with the repayment conditions have been resolved. The future payments related to uncertain tax positions recorded as other long-term liabilities have not been presented in the table above due to the uncertainty of the amounts and timing of cash settlement with the taxing authorities.

Previous wording

We believe that our $102.8 million of cash and cash equivalents at March 31, 2025 will be sufficient to fund our projected operating requirements for at least the next twelve months. As of March 31, 2025, our indebtedness totaled $125.0 million, which consists of outstanding principal under the Initial Term Loan under the June 23, 2021 Credit Agreement. The June 23, 2021 Credit Agreement also provides the Company with the Revolving Facility in an aggregate principal amount of up to $100.0 million, which remained undrawn as of March 31, 2025. The June 23, 2021 Credit Agreement was amended on June 29, 2023 to implement a benchmark replacement of SOFR for LIBOR. The Initial Term Loan under the June 23, 2021 Credit Agreement has a seven-year term expiring in June 2028 and subsequent to the benchmark replacement amendment, bears interest, at the Company’s option, at a per annum rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50%, (y) the prime rate then in effect and (z) an adjusted SOFR rate determined on the basis of a one-month interest period plus 1.00%, in each case, plus an applicable margin of 1.25% or (ii) an adjusted SOFR rate, subject to a floor of 0.50%, plus an applicable margin of 2.25%. Loans under the Revolving Facility initially bear interest, at a per annum rate equal to either (i) a base rate (as calculated above) plus an applicable margin of 0.00%, or (ii) an adjusted SOFR rate (as calculated above) plus an applicable margin of 1.00%. Following delivery of financial statements for the Company’s fiscal quarter ending June 30, 2021, the applicable margin for loans under the Revolving Facility will range from 0.00% to 0.75% in the case of base rate loans and 1.00% to 1.75% in the case of SOFR rate loans, in each case, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter. The Company is required to pay commitment fees ranging from 0.175% to 0.25% per annum on the daily undrawn commitments under the Revolving Facility, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter. Commencing on September 30, 2021, the Initial Term Loan under the June 23, 2021 Credit Agreement amortizes in equal quarterly installments equal to 0.25% of the original principal amount, with the balance payable at maturity on June 23, 2028.

Current wording

We believe that our $108.6 million of cash and cash equivalents at June 30, 2025 will be sufficient to fund our projected operating requirements for at least the next twelve months. As of June 30, 2025, our indebtedness totaled $125.0 million, which consists of outstanding principal under the Initial Term Loan under the June 23, 2021 Credit Agreement. The June 23, 2021 Credit Agreement also provides the Company with the Revolving Facility in an aggregate principal amount of up to $100.0 million, which remained undrawn as of June 30, 2025. The June 23, 2021 Credit Agreement was amended on June 29, 2023 to implement a benchmark replacement of SOFR for LIBOR. The Initial Term Loan under the June 23, 2021 Credit Agreement has a seven-year term expiring in June 2028 and subsequent to the benchmark replacement amendment, bears interest, at the Company’s option, at a per annum rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50%, (y) the prime rate then in effect and (z) an adjusted SOFR rate determined on the basis of a one-month interest period plus 1.00%, in each case, plus an applicable margin of 1.25% or (ii) an adjusted SOFR rate, subject to a floor of 0.50%, plus an applicable margin of 2.25%. Loans under the Revolving Facility initially bear interest, at a per annum rate equal to either (i) a base rate (as calculated above) plus an applicable margin of 0.00%, or (ii) an adjusted SOFR rate (as calculated above) plus an applicable margin of 1.00%. Following delivery of financial statements for the Company’s fiscal quarter ending June 30, 2021, the applicable margin for loans under the Revolving Facility ranges from 0.00% to 0.75% in the case of base rate loans and 1.00% to 1.75% in the case of SOFR rate loans, in each case, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter. The Company is required to pay commitment fees ranging from 0.175% to 0.25% per annum on the daily undrawn commitments under the Revolving Facility, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter. Commencing on September 30, 2021, the Initial Term Loan under the June 23, 2021 Credit Agreement amortizes in equal quarterly installments equal to 0.25% of the original principal amount, with the balance payable at maturity on June 23, 2028.

Previous wording

Net cash used in operating activities was $11.4 million for the three months ended March 31, 2025, compared to net cash provided by operating activities of $16.0 million three months ended March 31, 2024. The decline in operating cash flows was driven by changes in our working capital, which increased $52.6 million, in particular, in the first quarter of 2025, we collected accounts receivable of $55.1 million, which was partially offset by payments against our price protection liability of $3.5 million and severance and other payments from workforce reductions of $2.4 million.

Current wording

Net cash used in operating activities was $0.9 million for the six months ended June 30, 2025, compared to net cash provided by operating activities of $13.3 million six months ended June 30, 2024. The decline in operating cash flows was driven by changes in our working capital, which decreased $45.9 million, which included payments against our price protection liability of $6.1 million and severance and other payments from workforce reductions of $6.5 million.

Previous wording

Our use of cash in investing activities decreased by $6.7 million. Net cash used in investing activities was $2.0 million for the three months ended March 31, 2025 and consisted of purchases of property and equipment.

Current wording

Our use of cash in investing activities decreased by $5.1 million. Net cash used in investing activities was $9.4 million for the six months ended June 30, 2025 and consisted of purchases of property and equipment of $3.2 million, and purchases of intangible assets of $6.2 million.

Previous wording

Net cash used in investing activities was $8.7 million for the three months ended March 31, 2024 and consisted of purchases of property and equipment of $8.3 million, and purchases of intangible assets of $0.4 million.

Current wording

Net cash used in investing activities was $14.5 million for the six months ended June 30, 2024 and consisted of purchases of property and equipment of $11.4 million, and purchases of intangible assets of $3.1 million.