MONOLITHIC POWER SYSTEMS INC

(Unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Monolithic Power Systems, Inc., a Delaware corporation, and its wholly owned subsidiaries (the “Company” or “MPS”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted in accordance with these accounting principles, rules and regulations. All intercompany accounts and transactions have been eliminated. The information in this report should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Annual Report on Form10-K for the year ended* December 31, 2024*, filed with the SEC on* March 3, 2025.*

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. The financial statements contained in this Quarterly Report on Form10-Q arenot necessarily indicative of the results that* maybe expected for the year ending December 31,*2025 or for any other future periods.

Summary of Significant Accounting Policies

There have beenno changes to the Company’s significant accounting policies during thethree andsix months ended* June 30, 2025* from those described in the Company’s audited consolidated financial statements included in the Annual Report on Form10-K for the year ended* December 31, 2024*.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions used in these condensed consolidated financial statements primarily include those related to income tax valuation allowances, inventory valuation and stock-based compensation. Actual results could differ from these estimates and assumptions, and any such differences* may*be material to the Company’s condensed consolidated financial statements.

New Accounting PronouncementsNot Yet Adopted as of June 30, 2025****

In* December 2023,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2023-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures*, which aims to improve an entity’s income tax disclosures around its effective rate reconciliation, income taxes paid, disaggregation of income before income taxes and income tax expense. The guidance is effective for annual periods beginning* January 1,*2025. The standard should be applied prospectively but retrospective application is permitted. Adoption of this new guidance will result in expanded disclosures in the Notes to Consolidated Financial Statements.

In* November 2024,the FASB issued ASU2024*-03,* Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses*, which aims to provide more detailed information about the types of expenses in commonly presented expense captions. The guidance will be effective for annual periods beginning* January 1, 2027and interim periods beginning January 1, 2028.*The standard can be applied prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the impact of adoption on its Consolidated Financial Statements.

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2. REVENUE RECOGNITION

Revenue from Product Sales

The Company generates revenue primarily from product sales, which include assembled and tested integrated circuits (“ICs”), power modules as well as dies in wafer form. The remaining revenue, which primarily consists of royalty revenue from licensing arrangements and revenue from wafer testing services performed forthird parties, wasnot significant in any of the periods presented. See Note7 for the disaggregation of the Company’s revenue by geographic region.

The Company sells its products to end customers primarily throughthird-party distributors and value-added resellers. For each of thethree andsix months ended* June 30, 2025*,83% of the Company’s total sales were made through distribution arrangements. For each of thethree andsix months ended* June 30, 2024*,89% of the Company’s total sales were made through distribution arrangements. These distribution arrangements contain enforceable rights and obligations specific to those distributors andnot the end customers. Purchase orders, which are generally governed by sales agreements or the Company’s standard terms of sale, set the final terms for unit price, quantity, shipping and payment agreed between the Company and the customer. The Company considers purchase orders to be the contracts with customers. The unit price stated on purchase orders is considered to be the observable, stand-alone selling price for customer sales arrangements.

The Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised goods or services to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company excludes taxes assessed by government authorities, such as sales taxes, from revenue.

Product sales consist of a single performance obligation that the Company satisfies at a point in time. The Company recognizes product revenue from distributors and direct end customers when the following events have occurred: (a) the Company has transferred physical possession of the products, (b) the Company has a present right to payment, (c) the customer has legal title to the products, and (d) the customer bears significant risks and rewards of ownership of the products. In accordance with the shipping terms specified in the contracts, these criteria are generally met when the products are shipped from the Company’s facilities (such as the “Ex Works” shipping term) or delivered to the customers’ locations (such as the “Delivered Duty Paid” shipping term).

Under certain consignment agreements, the Company recognizes revenue when customers consume products from the consigned inventory locations, at which time control transfers to the customers and the Company issues invoices.

Variable Consideration

The Company accounts for price adjustments and stock rotation rights as variable consideration that reduces the transaction price and recognizes that reduction in the same period the associated revenue is recognized. Certain U.S.-based distributors have price adjustment rights when they sell the Company’s products to their customers at a price that is lower than the distribution price invoiced by the Company. When the Company receives claims from the distributors that products have been sold to the end customers at the lower prices, the Company issues the distributors credit memos for the price adjustments. The Company estimates the price adjustments using the expected value method based on an analysis of historical claims, at both the distributor and product level, as well as an assessment of any known trends of product sales mix. Other U.S. distributors and non-U.S. distributors donot have price adjustment rights. The Company records a credit against accounts receivable for the estimated price adjustments with a corresponding reduction to revenue.

Certain distributors have limited stock rotation rights that permit the return of a small percentage of the previoussix months’ purchases in accordance with the contract terms. The Company estimates the stock rotation returns using the expected value method based on an analysis of historical returns, and the current level of inventory in the distribution channel. The Company records a liability for the stock rotation reserve, with a corresponding reduction to revenue. In addition, the Company recognizes an asset for product returns which represents the right to recover products from the customers related to stock rotations, with a corresponding reduction to cost of revenue.

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Contract Balances

Accounts Receivable:

The Company records a receivable when it has an unconditional right to receive consideration after the performance obligations are satisfied. The Company’s accounts receivable are short-term, with standard payment terms generally ranging from30 to90 days. The Company doesnot require its customers to provide collateral to support accounts receivable. The Company assesses collectability by reviewing accounts receivable on a customer-by-customer basis. To manage credit risk, management performs ongoing credit evaluations of the customers’ financial condition, monitors payment performance, and assesses current economic conditions, as well as reasonable and supportable forecasts of future economic conditions, that* mayaffect collectability of the outstanding receivables. For certain customers, the Company requires standby letters of credit or advance payments prior to shipments of goods. The Company didnot* recognize any write-offs of accounts receivable or record any allowance for credit losses for the periods presented.

Contract Liabilities:

For customers without credit terms, the Company requires cash paymentstwo weeks before the products are scheduled to be shipped to the customers. The Company records these payments received in advance of performance as customer prepayments within other accrued liabilities. As of* June 30, 2025* and* December 31, 2024*, customer prepayments totaled $7.2 million and $6.9 million, respectively. All of the customer prepayment balance as of* December 31, 2024* has been fulfilled by the Company during thesix months ended* June 30, 2025*.

Practical Expedients

The Company has elected the practical expedient to expense sales commissions as incurred because the amortization period would have beenone year or less.

The Company’s standard payment terms generally require customers to pay 30 to 90 days after the Company satisfies the performance obligations. For those customers who are required to pay in advance, the Company satisfies the performance obligations generally within a quarter. For these reasons, the Company has electednot to determine whether contracts with customers contain significant financing components.

The Company’s unsatisfied performance obligations primarily include products held in consignment arrangements and customer purchase orders for products that the Company hasnot yet shipped. Because the Company expects to fulfill these performance obligations withinone year, the Company has electednot to disclose the amount of these remaining performance obligations.

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3. STOCK-BASED COMPENSATION

2014 Equity Incentive Plan

In* April 2013,the Board of Directors adopted the Company’s2014* Equity Incentive Plan (the*“2014* Plan”), which the Company’s stockholders approved in* June 2013.In October 2014,the Board of Directors approved certain amendments to the2014* Plan. The amended2014 Plan became effective on* November 13, 2014and provided for the issuance of up to 5.5 million shares. In April 2020,the Board of Directors further amended and restated the amended2014* Plan (the “Amended and Restated2014 Plan”), which the Company’s stockholders approved in* June 2020.The Amended and Restated2014* Plan became effective on* June 11, 2020and provides for the issuance of up to 10.5 million shares. The Amended and Restated2014* Plan will cease being available for new awards on* June 11, 2030.As of June 30, 2025*,3.6 million shares remained available for future issuance under the Amended and Restated2014 Plan.

Stock-Based Compensation Expense

The Company recognized stock-based compensation expense as follows (in thousands):

Restricted Stock Units (“RSUs”)

The Company’s RSUs include time-based RSUs, RSUs with performance conditions (“PSUs”), RSUs with market conditions (“MSUs”), and RSUs with both market and performance conditions (“MPSUs”). Vesting of awards with performance conditions or market conditions is subject to the achievement of pre-determined performance or market goals and the approval of such achievement by the Compensation Committee of the Board of Directors (the “Compensation Committee”). All awards include service conditions which require continued employment with or service to the Company.

A summary of RSU activity is presented in the table below (in thousands, except per-share amounts):

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The intrinsic value related to vested RSUs was $11.5 million and $25.5 million for thethree months ended* June 30, 2025and2024*, respectively. The intrinsic value related to vested RSUs was $42.6 million and $428.6 million for thesix months ended* June 30, 2025and2024*, respectively. As of* June 30, 2025*, the total intrinsic value of all outstanding RSUs was $1.4 billion, based on the closing stock price of $731.38. As of* June 30, 2025*, unamortized compensation expense related to all outstanding RSUs was $314.3 million with a weighted-average remaining recognition period of approximatelytwo years.

Time-Based RSUs:

For thesix months ended* June 30, 2025*, the Compensation Committee granted 32,000 RSUs with service conditions to non-executive employees and non-employee directors. The RSUs generally vest over four years for employees andone year for directors, subject to continued service with the Company.

2025 PSUs:

In* February 2025,the Compensation Committee granted 50,000 PSUs to the executive officers, which represent the target number of shares that can be earned based on the degree of achievement oftwo* sets of independent performance goals (“2025 Executive PSUs”). For thefirst goal, the executive officers can earn up to 300% of the target number of the2025 Executive PSUs based on the achievement of the Company’sthree-year (2025 through2027) average revenue growth rate in excess of the analog industry’sthree-year average revenue growth rate as published by the Semiconductor Industry Association (the “SIA”). For thesecond goal, the executive officers can earn up to 200% of the target number of the2025 Executive PSUs based on the achievement of the Company’sthree-year (2025 through2027) total stockholder return percentile ranking relative to the constituent entities in the Philadelphia Semiconductor Sector Index (the “PHLX Index”). For both goals, a percentage of the2025 Executive PSUs will fully vest on* December 31, 2027,depending on the degree to which the pre-determined goals are met during the performance period. Assuming the achievement of the highest level of the performance goals, the total stock-based compensation cost for the2025* Executive PSUs will be $138.5 million.

In* February 2025,the Compensation Committee granted 11,000 PSUs to certain non-executive employees, which represent the target number of shares that can be earned based on the degree of achievement of the Company’s2026* revenue goals for certain regions or product line divisions, or based on the degree of achievement of the Company’stwo-year (2025 and2026) average revenue growth rate compared against the analog industry’stwo-year average revenue growth rate as published by the SIA (“2025 Non-Executive PSUs”). The maximum number of shares that an employee can earn is either 200% or 300% of the target number of the2025 Non-Executive PSUs, depending on the job classification of the employee.50% of the2025 Non-Executive PSUs will vest in thefirst quarter of2027 depending on the degree to which the pre-determined goals are met during the performance period. The remaining2025 Non-Executive PSUs will vest over the followingtwo years on a quarterly or annual basis. Assuming the achievement of the highest level of performance goals, the total stock-based compensation cost for the2025 Non-Executive PSUs will be $16.6 million.

The2025 Executive PSUs and the2025 Non-Executive PSUs contain a purchase price feature, which requires the employees to pay the Company $30 per share upon vesting of the shares. The*$30* purchase price requirement is deemed satisfied and waived if the Company’s stock price on the last trading day of the performance period is*$30* higher than the grant date stock price of $656.29. The Company determined the grant date fair value of the2025 Executive PSUs and the2025 Non-Executive PSUs using a Monte Carlo simulation model with the following assumptions: stock price of $656.29, simulation term ofthree years, expected volatility of 54.42%, risk-free interest rate of 4.20%, and expected dividend yield of 0.95%. The Monte Carlo simulation model for the2025 Executive PSUs further utilized correlation coefficients of peer companies of 0.46 to 0.76. The correlation coefficients were based on peer companies in the PHLX Index as an aggregate benchmark for determining the market-based total stockholder return component. There isno illiquidity discount because the awards donot contain any post-vesting sales restrictions.

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4. BALANCE SHEET COMPONENTS

Inventories

Inventories consist of the following (in thousands):

Other Current Assets

Other current assets consist of the following (in thousands):

Other Long-Term Assets

Other long-term assets consist of the following (in thousands):

Other Accrued Liabilities

Other accrued liabilities consist of the following (in thousands):

Other Long-Term Liabilities

Other long-term liabilities consist of the following (in thousands):

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5. LEASES

The Company has operating leases primarily for administrative, sales and marketing offices, manufacturing operations and R&D facilities, and employee housing units. These leases have remaining lease terms from less thanone year to 19 years. Some of these leases include options to renew the lease term for up tofive years or on a month-to-month basis. The Company doesnot have finance lease arrangements.

The following table summarizes the balances of operating lease ROU assets and liabilities (in thousands):

The following tables summarize certain information related to the leases (in thousands, except percentages and years):

As of* June 30, 2025*, the maturities of the lease liabilities were as follows (in thousands):

As of* June 30, 2025**,the Company hadno* operating leases that hadnot yet commenced.

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6. NET INCOME PER SHARE

Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share reflects the potential dilution from contingently issuable shares and calculated using the treasury stock method. Contingently issuable shares, including all types of equity awards, are considered outstanding shares of common stock and included in basic net income per share as of the date that all necessary conditions to earn the awards have been satisfied. Prior to the end of the contingency period, the number of contingently issuable shares included in diluted net income per share is based on the number of shares, if any, that would be issuable under the terms of the arrangement at the end of the reporting period.

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per-share amounts):

Anti-dilutive common stock equivalents werenot material for the periods presented.

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7. SEGMENT, SIGNIFICANT CUSTOMERS AND GEOGRAPHIC INFORMATION

The Company operates inone reportable segment that includes the design, development, marketing and sale of high-performance, semiconductor-based power electronics solutions for the storage and computing, automotive, enterprise data, communications, consumer, and industrial end markets. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for the purposes of allocating resources and evaluating financial performance. Specifically, the CODM uses net income that is reported on the Condensed Consolidated Statements of Operations and cash provided by operating activities reported in the Condensed Consolidated Statements of Cash Flows to decide whether and how much to reinvest profits into core business operations or to return to stockholders in the form of stock repurchases and dividends.

All significant segment expenses have been captured on the face of the Condensed Consolidated Statements of Operations.

The Company sells its products to end customers primarily throughthird-party distributors and value-added resellers. The following table summarizes those customers with sales equal to10% or more of the Company’s total revenue for the periods presented:

Represents less than10%*

The Company’s agreements with thesethird-party distributors were made in the ordinary course of business and* maybe terminated with or without cause by either party with advance notice. Although the Company mayexperience a short-term disruption in the distribution of its products and a short-term decline in revenue if its agreement with any of the distributors were terminated, the Company believes that such termination wouldnot* have a material adverse effect on its financial statements because it would be able to engage alternative distributors, resellers and other distribution channels to deliver its products to end customers within a short period following any termination of the agreement with a distributor.

The following table summarizes those customers with accounts receivable equal to10% or more of the Company’s total net accounts receivable:

Represents less than10%*

The Company derives a majority of its revenue from sales to customers located outside North America, with geographic revenue based on the customers’ ship-to locations. The following is a summary of revenue by geographic region (in thousands) for the periods presented:

The following is a summary of long-lived assets by geographic region (in thousands):

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8. COMMITMENTS AND CONTINGENCIES

Product Warranties and Rework

The Company generally provides either aone- ortwo-year warranty against defects in materials and workmanship and will repair products, provide replacements atno charge to customers or issue a refund. As they are considered assurance-type warranties, the Company doesnot account for them as separate performance obligations. Historically, the Company’s warranty obligations havenot been material. The Company* may*also incur rework costs associated with product-related claims. The Company accrues for warranty and rework costs upon evaluation of customer specific claims.

The changes in warranty reserves were as follows (in thousands) for the periods presented:

Changes in liability for pre-existing warranties result from changes in estimates for warranties issued in prior periods.

Purchase Commitments

The Company has outstanding purchase obligations with its suppliers and other parties for purchases of goods or services. The purchase obligations primarily consist of wafer and other inventory purchases, assembly and other manufacturing services, construction of manufacturing and R&D facilities, purchases of production and other equipment, and license arrangements.

In* May 2022,the Company entered into a long-term supply agreement in order to secure manufacturing production capacity for silicon wafers over afour*-year period. As of* June 30, 2025*, the Company had remaining prepayments under this agreement of $60.0 million reported in other current assets on the Condensed Consolidated Balance Sheets.

Total estimated future unconditional purchase commitments to all suppliers and other parties, net of the*$60.0* million prepayment, as of* June 30, 2025* were as follows (in thousands):

Litigation

The Company is a party to actions and proceedings in the ordinary course of business, including challenges to the enforceability or validity of its intellectual property, claims that the Company’s products infringe on the intellectual property rights of others, and employment matters. The Company is also subject to litigation initiated by its stockholders. These proceedings often involve complex questions of fact and law and* mayrequire the expenditure of significant funds and the diversion of other resources to prosecute and defend. The Company defends itself vigorously against any such claims. Based on current information, the Company doesnot* believe that a material loss from known matters is probable as of* June 30, 2025*.

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9. CASH, CASH EQUIVALENTS, INVESTMENTS AND RESTRICTED CASH

The following is a summary of the Company’s cash, cash equivalents and debt investments (in thousands):

The following table summarizes the contractual maturities of the short-term and long-term available-for-sale investments as of* June 30, 2025* (in thousands):

Gross realized gains and losses recognized on the sales of available-for-sale investments werenot material for the periods presented.

The following tables summarize the unrealized gain and loss positions related to the available-for-sale investments (in thousands):

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The following tables present information about the available-for-sale investments that had been in a continuous unrealized loss position for less than12 months and for greater than12 months (in thousands):

An impairment exists when the fair value of an investment is less than its amortized cost basis. As of* June 30, 2025* and* December 31, 2024*, the Company didnot consider the impairment of its investments to be a result of credit losses. The Company typically invests in highly rated securities, with the primary objective of minimizing the potential risk of principal loss. The Company’s investment policy generally requires securities to be investment grade and limits the amount of credit exposure to anyone issuer. When evaluating a debt security for impairment, management reviews factors such as the Company’s intent to sell, or whether it will more likely thannot be required to sell, the security before recovery of its amortized cost basis, the extent to which the fair value of the security is less than its cost, the financial condition of the issuer and the credit quality of the investment.

Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the Condensed Consolidated Balance Sheets to the amounts reported on the Condensed Consolidated Statements of Cash Flows (in thousands):

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10. FAIR VALUE MEASUREMENTS

Fair Value Hierarchy

The Company has estimated the fair value of its financial assets by applying the following hierarchy, which prioritizes the inputs used to measure fair value intothree levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Financial Assets Measured at Fair Value on a Recurring Basis

The following tables detail the fair value of the Company’s financial assets measured on a recurring basis (in thousands):

Redemptions and changes in the fair value of the auction-rate securities classified as Level3 assets werenot material for the periods presented.

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11. DEFERRED COMPENSATION PLAN

The following table summarizes the deferred compensation plan balances on the Condensed Consolidated Balance Sheets (in thousands):

12. OTHER INCOME, NET

The components of other income, net, were as follows (in thousands) for the periods presented:

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13. INCOME TAXES

The income tax provision or benefit for interim periods is generally determined using an estimate of the Company’s annual effective tax rate and adjusted for discrete items, if any, in the relevant period. Each quarter the estimate of the annual effective tax rate is updated, and if the Company’s estimated tax rate changes, a cumulative adjustment is made.

The income tax expense for thethree months ended* June 30, 2025* was $43.3 million, or 24.4% of pre-tax income. The income tax expense for thesix months ended* June 30, 2025* was $83.4 million, or 23.8% of pre-tax income. The effective tax rates were higher than the federal statutory rate of 21% primarily due to the U.S. impact of foreign earnings and non-deductible stock-based compensation. The higher effective tax rates relative to the federal statutory rate were partially offset by income generated by the Company’s subsidiaries in lower tax jurisdictions, foreign tax credits, and U.S. R&D credits.

The income tax expense for thethree months ended* June 30, 2024* was $23.7 million, or 19.1% of pre-tax income. The income tax expense for thesix months ended* June 30, 2024* was $36.2 million, or 15.8% of pre-tax income. The effective tax rates were lower than the federal statutory rate of 21% primarily due to lower statutory tax rates at certain foreign subsidiaries of the Company, and excess tax benefits from stock-based compensation. The lower effective tax rates relative to the federal statutory rate were partially offset by the inclusion of the global intangible low-taxed income (“GILTI”) tax.

In* January 2025,*the Organization for Economic Co-operation and Development (“OECD”) released new Administrative Guidance on the application of the Global Anti-Base Erosion (“GLoBE”) Model Rules. The Company will continue to evaluate the impact of this release and of other future guidance on the Company’s future global tax provision.

In* December 2023,the Bermuda Corporate Income Tax Act of2023* (the “Bermuda CIT Act”) was enacted and signed into law. The Bermuda CIT Act includes a15% corporate income tax applicable to Bermuda businesses that are multinational enterprises with annual revenue of*€750M* or more beginning in2025. As the Company didnot realize material taxable income in Bermuda in thethree andsix months ended* June 30, 2025,no material changes to income tax expense related to the Bermuda CIT Act have been recorded as of June 30, 2025.*

14. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table summarizes the changes in accumulated other comprehensive loss (in thousands):

The amount reclassified from accumulated other comprehensive income for the period presented was recorded in other income, net, on the Condensed Consolidated Statements of Operations.

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15. STOCKHOLDERS’ EQUITY

Cash Dividend Program

The Company has a dividend program approved by its Board of Directors, pursuant to which the Company intends to pay quarterly cash dividends on its common stock. The Board of Directors declared the following cash dividends (in thousands, except per-share amounts) for the periods presented:

As of* June 30, 2025* and* December 31, 2024*, accrued cash dividends totaled $74.7 million and $59.8 million, respectively.

The declaration of any future cash dividends is at the discretion of the Board of Directors and will depend on, among other things, the Company’s financial condition, results of operations, capital requirements, business conditions, and other factors that the Board of Directors* may*deem relevant, as well as a determination that cash dividends are in the best interests of the Company’s stockholders.

The Company anticipates that cash used for future dividend payments will come from its domestic cash, cash generated from ongoing U.S. operations, and cash repatriated from certain foreign subsidiaries. The Company also anticipates that earnings from other foreign subsidiaries will continue to be indefinitely reinvested.

Cash Dividend Equivalent Rights

The Company’s RSUs contain rights to receive cash dividend equivalents, which entitle employees who hold RSUs to the same dividend value per share as holders of common stock. The dividend equivalents are accumulated and paid to the employees when the underlying RSUs vest. Dividend equivalents accumulated on the underlying RSUs are forfeited if the underlying RSUs donot vest. As of* June 30, 2025* and* December 31, 2024**,* accrued dividend equivalents totaled $7.6 million and $5.8 million, respectively.

Stock Repurchase Programs

In* October 2023,the Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $640.0 million of its common stock, which was fully utilized as of December 31, 2024.In February 2025,the Board of Directors approved another stock repurchase program authorizing the Company to repurchase up to $500.0 million of its common stock through February 2028.Shares are retired upon repurchase. The Company repurchased 3,900 shares of its common stock for an aggregate purchase price of $2.6 million during thethree* months ended* June 30, 2025*. No repurchases were made during thethree months ended* March 31, 2025.The Company repurchased 6,300 and 12,400 shares of its common stock for an aggregate purchase price of $4.5 million and $8.6 million during thethree* andsix months ended* June 30, 2024*, respectively.

Stock repurchased under the program* maybe made through open market repurchases, privately negotiated transactions or other structures in accordance with applicable state and federal securities laws, at times and in amounts as management deems appropriate. The timing and the number of any repurchased common stock will be determined by the Company’s management based on its evaluation of market conditions, legal requirements, share price, and other factors. The repurchase program doesnot* obligate the Company to purchase any particular number of shares, and* may*be suspended, modified, or discontinued at any time without prior notice.

16. SUBSEQUENT EVENT

The budget reconciliation bill H.R.1 was enacted on* July 4, 2025.It includes significant provisions, such as the permanent extension of certain expiring provisions of the2017* Tax Cuts and Jobs Act and modifications to the existing tax framework. The legislation has multiple effective dates, with certain provisions effective in2025 and others implemented through2027. The Company is currently assessing the impact on its consolidated financial statements.

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