MACOM Technology Solutions Holdings Inc

Previous wording

This Item 2, “Management's Discussion and Analysis of Financial Condition and Results of Operations” and other sections of this Quarterly Report on Form 10-Q contain “forward-looking statements.” In addition, we may make other written and oral communications from time to time that contain such statements. Forward-looking statements include statements regarding our business outlook, strategic plans and priorities, expectations, anticipated drivers of future revenue growth, our ability to develop new products, achieve market acceptance of those products and better address certain markets, expand our capabilities and extend our product offerings through the Linearizer Acquisition, the MESC Acquisition and the RF Business Acquisition, industry trends, our estimated annual effective tax rate, our plans for use of our cash and cash equivalents and short-term investments, interest rate and foreign currency risks, our ability to meet working capital requirements, estimates and objectives for future operations, our future results of operations and our financial position, including liquidity, and other matters that do not relate strictly to historical facts. Forward-looking statements generally may be identified by terms such as “anticipates,” “believes,” “could,” “continue,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “targets,” “will,” “would” or similar expressions or variations or the negatives of those terms. These statements are based on management's beliefs and assumptions as of the date of this Quarterly Report on Form 10-Q, based on information currently available to us. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks described in the section entitled “Risk Factors” in this Quarterly Report on Form 10-Q and the 2023 Annual Report on Form 10-K. We caution the reader to carefully consider such factors. Furthermore, such forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Current wording

This Item 2, “Management's Discussion and Analysis of Financial Condition and Results of Operations” and other sections of this Quarterly Report on Form 10-Q contain “forward-looking statements.” In addition, we may make other written and oral communications from time to time that contain such statements. Forward-looking statements include statements regarding our business outlook, strategic plans and priorities, expectations, anticipated drivers of future revenue growth, our ability to develop new products, achieve market acceptance of those products and better address certain markets, expand our capabilities and extend our product offerings, including through the Linearizer Acquisition, the MESC Acquisition and the RF Business Acquisition, industry trends, our estimated annual effective tax rate, our plans for use of our cash and cash equivalents and short-term investments, interest rate and foreign currency risks, our ability to meet working capital requirements, estimates and objectives for future operations, our future results of operations and our financial position, including liquidity, and other matters that do not relate strictly to historical facts. Forward-looking statements generally may be identified by terms such as “anticipates,” “believes,” “could,” “continue,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “targets,” “will,” “would” or similar expressions or variations or the negatives of those terms. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks described in the section entitled “Risk Factors” in this Quarterly Report on Form 10-Q and the 2023 Annual Report on Form 10-K. We caution the reader to carefully consider such factors. Furthermore, such forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Previous wording

We design and manufacture semiconductor products for the Industrial and Defense (“I&D”), Data Center and Telecommunications (“Telecom”) industries. Headquartered in Lowell, Massachusetts, with operational facilities throughout North America, Europe and Asia, we design, develop and manufacture differentiated semiconductor products for customers who demand high performance, quality and reliability. We have more than 70 years of application expertise, combined with expertise in analog and mixed signal circuit design, compound semiconductor fabrication (including GaAs, GaN, indium phosphide (“InP”) and specialized silicon), advanced packaging and back-end assembly and test. We offer a broad portfolio of thousands of standard and custom devices, which include integrated circuits (“IC”), multi-chip modules (“MCM”), diodes, amplifiers, switches and switch limiters, passive and active components and radio frequency (“RF”) and optical subsystems, which make up dozens of product lines that service over 6,000 end customers in our three primary markets. Our products are electronic components that our customers generally incorporate into larger electronic systems, such as wireless basestations, high-capacity optical networks, data center networks, radar, medical systems and test and measurement applications. Our primary end markets are: (1) I&D, which includes military and commercial radar, RF jammers, electronic countermeasures, communication data links, satellite communications and multi-market applications, which include industrial, medical, test and measurement and scientific applications; (2) Data Center, which includes intra-Data Center, Data Center Interconnect (“DCI”) applications, at 100G, 200G, 400G, 800G and higher speeds, enabled by our broad portfolio of analog ICs and photonic components for high speed optical module customers; and (3) Telecom, which includes carrier infrastructure such as long-haul/metro, 5G satellite communications and Fiber-to-the-X (“FTTx”)/passive optical network (“PON”), among others.

Current wording

We design and manufacture semiconductor products for the Industrial and Defense (“I&D”), Data Center and Telecommunications (“Telecom”) industries. Headquartered in Lowell, Massachusetts, with operational facilities throughout North America, Europe and Asia, we design, develop and manufacture differentiated semiconductor products for customers who demand high performance, quality and reliability. We have more than 70 years of application expertise, combined with expertise in analog and mixed signal circuit design, compound semiconductor fabrication (including GaAs, GaN, indium phosphide (InP) and specialized silicon), advanced packaging and back-end assembly and test. We offer a broad portfolio of thousands of standard and custom devices, which include integrated circuits (IC), multi-chip modules (MCM), diodes, amplifiers, switches and switch limiters, passive and active components and radio frequency (RF) and optical subsystems, which make up dozens of product lines that service over 6,000 end customers in our three primary markets. Our products are electronic components that our customers generally incorporate into larger electronic systems, such as wireless basestations, high-capacity optical networks, data center networks, radar, medical systems and test and measurement applications. Our primary end markets are: (1) I&D, which includes military and commercial radar, RF jammers, electronic countermeasures, communication data links, satellite communications and various wired and wireless multi-market applications, which include industrial, medical, test and measurement and scientific applications; (2) Data Center, which includes intra-Data Center, Data Center Interconnect (DCI) applications, at 100G, 200G, 400G, 800G and higher speeds, enabled by our broad portfolio of analog ICs and photonic components for high speed connectivity customers; and (3) Telecom, which includes carrier infrastructure such as long-haul/metro, 5G and 6G infrastructure, satellite communications and Fiber-to-the-X (FTTx)/passive optical network (“PON”), among others.

Previous wording

Comparison of the Three and Six Months Ended March 29, 2024 to the Three and Six Months Ended March 31, 2023

Current wording

Comparison of the Three and Nine Months Ended June 28, 2024 to the Three and Nine Months Ended June 30, 2023

Previous wording

Revenue. Our revenue increased by $11.8 million, or 7.0%, to $181.2 million for the three months ended March 29, 2024, from $169.4 million for the three months ended March 31, 2023, and our revenue decreased by $11.1 million, or 3.2%, to $338.4 million for the six months ended March 29, 2024, from $349.5 million for the six months ended March 31, 2023. The increase in revenue in the three months ended March 29, 2024 and the decrease in revenue in the six months ended March 29, 2024 is described by end market in the following paragraphs.

Current wording

Revenue. Our revenue increased by $42.0 million, or 28.3%, to $190.5 million for the three months ended June 28, 2024, from $148.5 million for the three months ended June 30, 2023, and our revenue increased by $30.8 million, or 6.2%, to $528.9 million for the nine months ended June 28, 2024, from $498.0 million for the nine months ended June 30, 2023. The increase in revenue in the three and nine months ended June 28, 2024 is described by end market in the following paragraphs.

Previous wording

In the three months ended March 29, 2024, our I&D market revenue increased by $13.7 million, or 17.7%, compared to the three months ended March 31, 2023. In the six months ended March 29, 2024, our I&D market revenue increased by $13.5 million, or 8.8%, compared to the six months ended March 31, 2023. The increase in the three and six months ended March 29, 2024 was primarily driven by revenue from recent acquisitions, partially offset by lower sales of legacy products for industrial markets and timing of defense program shipments.

Current wording

In the three months ended June 28, 2024, our I&D market revenue increased by $7.4 million, or 8.8%, compared to the three months ended June 30, 2023. In the nine months ended June 28, 2024, our I&D market revenue increased by $20.9 million, or 8.8%, compared to the nine months ended June 30, 2023. The increase in the three and nine months ended June 28, 2024 was primarily driven by revenue from recent acquisitions, partially offset by lower sales of legacy products for industrial markets and timing of defense program shipments.

Previous wording

In the three months ended March 29, 2024, our Data Center market revenue increased by $4.8 million, or 12.6%, compared to the three months ended March 31, 2023. In the six months ended March 29, 2024, our Data Center market revenue increased by $12.8 million, or 16.1%, compared to the six months ended March 31, 2023. The increase in the three and six months ended March 29, 2024 was primarily driven by an increase in sales of 400G and 800G high-performance analog Data Center products, partially offset by a decrease in sales of our legacy connectivity products.

Current wording

In the three months ended June 28, 2024, our Data Center market revenue increased by $22.4 million, or 83.9%, compared to the three months ended June 30, 2023. In the nine months ended June 28, 2024, our Data Center market revenue increased by $35.2 million, or 33.1%, compared to the nine months ended June 30, 2023. The increase in the three and nine months ended June 28, 2024 was primarily driven by an increase in sales of 400G and 800G high-performance analog Data Center products, partially offset by a decrease in sales of our legacy connectivity products.

Previous wording

In the three months ended March 29, 2024, our Telecom market revenue decreased by $6.7 million, or 12.4%, compared to the three months ended March 31, 2023. In the six months ended March 29, 2024, our Telecom market revenue decreased by $37.5 million, or 32.5%, compared to the six months ended March 31, 2023. The decrease for the three and six months ended March 29, 2024 was primarily driven by a decrease in sales of RF and microwave products for broadband access and a decrease in sales of carrier-based optical semiconductor products, partially offset by incremental revenue from recent acquisitions.

Current wording

In the three months ended June 28, 2024, our Telecom market revenue increased by $12.2 million, or 31.9%, compared to the three months ended June 30, 2023. In the nine months ended June 28, 2024, our Telecom market revenue decreased by $25.3 million, or 16.4%, compared to the nine months ended June 30, 2023. The increase in the three months ended June 28, 2024 was primarily driven by incremental revenue from recent acquisitions, partially offset by a decrease in sales in broadband access, PON and other telecom markets. The decrease in the nine months ended June 28, 2024 was primarily driven by a decrease in sales in broadband access, PON, carrier-based optical semiconductor products and other telecom markets, partially offset by incremental revenue from recent acquisitions.

Previous wording

Gross profit. Gross margin was 52.5% and 60.6% for the three months ended March 29, 2024 and March 31, 2023, respectively, and 53.9% and 61.0% for the six months ended March 29, 2024 and March 31, 2023. Gross profit was $95.2 million and $102.7 million for the three months ended March 29, 2024 and March 31, 2023, respectively, and $182.5 million and $213.0 million for the six months ended March 29, 2024 and March 31, 2023. Gross profit decreased for the three months ended March 29, 2024 as compared to the three months ended March 31, 2023 primarily as a result of increased employee headcount associated with acquisitions, product mix and under absorbed production costs, partially offset by higher sales primarily driven by the RF Business Acquisition. Gross profit decreased for the six months ended March 29, 2024 as compared to the six months ended March 31, 2023 primarily as a result of lower sales, product mix, increased employee headcount associated with acquisitions, higher intangible asset amortization and depreciation expense.

Current wording

Gross profit. Gross margin was 53.2% and 58.0% for the three months ended June 28, 2024 and June 30, 2023, respectively, and 53.7% and 60.1% for the nine months ended June 28, 2024 and June 30, 2023. Gross profit was $101.4 million and $86.1 million for the three months ended June 28, 2024 and June 30, 2023, respectively, and $283.9 million and $299.2 million for the nine months ended June 28, 2024 and June 30, 2023, respectively. Gross profit increased for the three months ended June 28, 2024 as compared to the three months ended June 30, 2023 primarily as a result of higher sales primarily driven by the RF Business Acquisition, partially offset by increases in employee-related costs, headcount from acquisitions, product mix and higher intangible asset amortization. Gross profit decreased for the nine months ended June 28, 2024 as compared to the nine months ended June 30, 2023 primarily as a result of product mix, increased employee-related costs, primarily driven by headcount from acquisitions, higher intangible asset amortization and depreciation expense, partially offset by higher revenue.

Previous wording

Research and development. Research and development expense increased by $10.1 million, or 28.4%, to $45.6 million, or 25.2% of our revenue, for the three months ended March 29, 2024, compared to $35.5 million, or 21.0% of our revenue, for the three months ended March 31, 2023. Research and development expense increased by $10.7 million, 14.3%, to $85.0 million, or 25.1% of our revenue, for the six months ended March 29, 2024, compared to $74.4 million, or 21.3% of our revenue, for the six months ended March 31, 2023. Research and development expense increased in the three months ended March 29, 2024 primarily as a result of increases in employee-related costs, driven by higher headcount due to acquisitions, and share-based compensation expense. Research and development expense increased in the six months ended March 29, 2024 primarily as a result of increased employee headcount due to acquisitions.

Current wording

Research and development. Research and development expense increased by $10.9 million, or 29.6%, to $47.5 million, or 25.0% of our revenue, for the three months ended June 28, 2024, compared to $36.7 million, or 24.7% of our revenue, for the three months ended June 30, 2023. Research and development expense increased by $21.5 million, 19.4%, to $132.6 million, or 25.1% of our revenue, for the nine months ended June 28, 2024, compared to $111.0 million, or 22.3% of our revenue, for the nine months ended June 30, 2023. Research and development expense increased in the three and nine months ended June 28, 2024 primarily as a result of increases in employee-related costs, driven by higher headcount associated with acquisitions, higher intangible asset amortization and share-based compensation expense.

Previous wording

Selling, general and administrative. Selling, general and administrative expense increased by $2.9 million, or 9.4%, to $34.2 million, or 18.9% of our revenue, for the three months ended March 29, 2024, compared to $31.2 million, or 18.4% of our revenue, for the three months ended March 31, 2023. Selling, general and administrative expense increased by $6.9 million, or 10.7%, to $71.1 million, or 21.0% of our revenue, for the six months ended March 29, 2024, compared to $64.2 million, or

Current wording

Selling, general and administrative. Selling, general and administrative expense increased by $2.0 million, or 6.3%, to $34.2 million, or 17.9% of our revenue, for the three months ended June 28, 2024, compared to $32.2 million, or 21.6% of our revenue, for the three months ended June 30, 2023. Selling, general and administrative expense increased by $8.9 million, or 9.2%, to $105.2 million, or 19.9% of our revenue, for the nine months ended June 28, 2024, compared to $96.3 million, or 19.3% of our revenue, for the nine months ended June 30, 2023. Selling, general and administrative expense increased in the three months ended June 28, 2024 primarily due to an increase in employee-related costs, primarily driven by headcount from acquisitions and share-based compensation, partially offset by decreases in professional fees. Selling, general and administrative expense increased in the nine months ended June 28, 2024 primarily due to increases in employee-related costs, primarily driven by headcount from acquisitions, acquisition-related costs and share-based compensation, partially offset by lower intangible amortization.

Previous wording

Interest income. In the three months ended March 29, 2024, interest income was $5.4 million, compared to $5.1 million for the three months ended March 31, 2023. In the six months ended March 29, 2024, interest income was $10.9 million, compared to $8.7 million for the six months ended March 31, 2023. The increase for the three and six months ended March 29, 2024 is primarily due to the general increase in interest rates on our short-term investments.

Current wording

Interest income. In the three months ended June 28, 2024, interest income was $5.8 million, compared to $6.0 million for the three months ended June 30, 2023. In the nine months ended June 28, 2024, interest income was $16.7 million, compared to $14.8 million for the nine months ended June 30, 2023. The decrease for the three months ended June 28, 2024 is primarily due to the decrease in our short-term investments. The increase for the nine months ended is primarily due to the general increase in interest rates on our short-term investments.

Previous wording

Interest expense. In the three months ended March 29, 2024, interest expense was $1.3 million, compared to $3.4 million for the three months ended March 31, 2023. In the six months ended March 29, 2024, interest expense was $2.6 million, compared to $6.5 million for the six months ended March 31, 2023. The decrease for the three and six months ended March 29, 2024 is primarily due to the August 2023 payment of the total outstanding principal balance of the Term Loans.

Current wording

Interest expense. In the three months ended June 28, 2024, interest expense was $1.3 million, compared to $3.7 million for the three months ended June 30, 2023. In the nine months ended June 28, 2024, interest expense was $3.9 million, compared to $10.2 million for the nine months ended June 30, 2023. The decrease for the three and nine months ended June 28, 2024 is primarily due to the August 2023 payment of the total outstanding principal balance of the Term Loans.

Previous wording

The primary driver for the rate reduction for the three and six months ended March 29, 2024 as compared to the three and six months ended March 31, 2023 was the tax benefit relating to a partial deduction attributable to the inclusion of GILTI income.

Current wording

The primary driver for the rate reduction for the three and nine months ended June 28, 2024 as compared to the three and nine months ended June 30, 2023 is the tax benefit relating to a partial deduction attributable to the inclusion of GILTI income.

Previous wording

The difference between the U.S. federal statutory income tax rate of 21% and our effective income tax rate for the three and six months ended March 29, 2024 was primarily driven by favorable stock based compensation and R&D tax credits, partially offset by GILTI. The difference between the U.S. federal statutory income tax rate of 21% and our effective income tax rate for the three and six months ended March 31, 2023, was primarily driven by tax on GILTI, including the required capitalization of R&D expenses, non-deductible compensation and state income taxes partially offset by income taxed in foreign jurisdictions generally at lower tax rates, and R&D tax credits.

Current wording

The difference between the U.S. federal statutory income tax rate of 21% and our effective income tax rate for the three and nine months ended June 28, 2024 was primarily driven by favorable stock based compensation and R&D tax credits, partially offset by GILTI. The difference between the U.S. federal statutory income tax rate of 21% and our effective income tax rate for the three and nine months ended June 30, 2023, was primarily driven by tax on GILTI, including the required capitalization of R&D expenses, non-deductible compensation and state income taxes partially offset by income taxed in foreign jurisdictions generally at lower tax rates, and R&D tax credits.

Previous wording

Our estimated annual effective tax rate for the year ending September 27, 2024 is expected to be approximately 22%, adjusted for discrete taxation matters arising during the interim periods.

Current wording

Our estimated annual effective tax rate for the year ending September 27, 2024 is expected to be approximately 20%, adjusted for discrete taxation matters arising during the interim periods.

Previous wording

Our cash flow from operating activities for the six months ended March 29, 2024 of $51.3 million consisted of a net income of $27.5 million plus adjustments of $54.4 million, to reconcile our net income to cash provided by operating activities, less cash used in operating assets and liabilities of $30.6 million. Adjustments to reconcile our net income to cash provided by operating activities primarily included depreciation and intangible amortization expense of $31.5 million and share-based compensation expense of $20.7 million. In addition, cash used in operating assets and liabilities was $30.6 million for the six months ended March 29, 2024, primarily driven by an increase in accounts receivables of $31.3 million, an increase in inventories of $12.3 million, partially offset by an increase of $19.2 million in accounts payable. The increases in accounts receivable and accounts payable were primarily a result of the integration of the RF Business during the three months ended March 29, 2024.

Current wording

Our cash flow from operating activities for the nine months ended June 28, 2024 of $100.3 million consisted of a net income of $47.4 million plus adjustments of $89.0 million, to reconcile our net income to cash provided by operating activities, less cash used in operating assets and liabilities of $36.1 million. Adjustments to reconcile our net income to cash provided by operating activities primarily included depreciation and intangible amortization expense of $49.4 million and share-based compensation expense of $34.1 million. In addition, cash used in operating assets and liabilities was $36.1 million for the nine months ended June 28, 2024, primarily driven by an increase in accounts receivables of $17.9 million, an increase in inventories of $25.1 million, a decrease of $6.1 million inaccrued and other liabilities, partially offset byan increase of $14.7 million in accounts payable. The increase in inventory is primarily due to timing of certain program shipments and inventory builds to support future revenue. The increases in accounts receivable and accounts payable were primarily a result of the integration of the RF Business during the nine months ended June 28, 2024.

Previous wording

Our cash flow from operating activities for the six months ended March 31, 2023 of $70.7 million consisted of a net income of $55.3 million plus adjustments of $63.3 million, to reconcile our net income to cash provided by operating activities less cash used in operating assets and liabilities of $47.8 million. Adjustments to reconcile our net income to cash provided by operating activities primarily included depreciation and intangible amortization expense of $25.4 million, share-based compensation expense of $20.5 million and deferred income tax expense of $20.2 million. In addition, cash used in operating assets and liabilities was $47.8 million for the six months ended March 31, 2023, primarily driven by a decrease of $17.5 million in accrued and other liabilities, an increase in accounts receivable of $18.3 million, and an increase in inventories of $8.2 million.

Current wording

Our cash flow from operating activities for the nine months ended June 30, 2023 of $116.6 million consisted of net income of $67.1 million plus adjustments of $89.3 million, to reconcile our net income to cash provided by operating activities less cash used in operating assets and liabilities of $39.9 million. Adjustments to reconcile our net income to cash provided by operating activities primarily included depreciation and intangible amortization expense of $38.4 million, share-based compensation expense of $28.8 million and deferred income tax expense of $27.4 million. In addition, cash used in operating assets and liabilities was $39.9 million for the nine months ended June 30, 2023, primarily driven by an increase in inventories of $12.2 million and a decrease of $16.6 million in accrued and other liabilities.

Previous wording

Our cash flow used in investing activities for the six months ended March 29, 2024 of $100.1 million consisted primarily of cash paid for acquisitions, net of cash acquired of $74.8 million for acquisitions, capital expenditures of $9.8 million and purchases of $230.6 million of short-term investments, offset by proceeds of $215.1 million for the sale and maturity of short-term investments. For additional information on the cash paid for our acquisitions, see Note 3 - Acquisitionsto our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Current wording

Our cash flow used in investing activities for the nine months ended June 28, 2024 of $148.6 million consisted primarily of cash paid for acquisitions, net of cash acquired of $72.6 million for acquisitions, capital expenditures of $17.3 million and purchases of $330.7 million of short-term investments, offset by proceeds of $274.1 million for the sale and maturity of short-term investments. For additional information on the consideration paid for our acquisitions, see Note 3 - Acquisitionsto our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

Previous wording

Our cash flow used in investing activities for the six months ended March 31, 2023 of $25.0 million consisted primarily of cash paid for the Linearizer Acquisition, net of cash acquired of $50.8 million, capital expenditures of $15.6 million and purchases of $228.2 million of short-term investments, offset by proceeds of $261.6 million for the sale and maturity of short-term investments and proceeds from the sale of equipment of$8.0 million.

Current wording

Our cash flow used in investing activities for the nine months ended June 30, 2023 of $87.4 million consisted primarily of $87.7 million for acquisitions, net of cash acquired, capital expenditures of $18.9 million and purchases of $352.9 million of short-term investments, offset by proceeds of $364.1 million for the sale and maturity of short-term investments and proceeds from the sale of equipment of$8.0 million. For additional information on the cash paid for our acquisitions, see Note 3 - Acquisitionsto our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

Previous wording

During the six months ended March 29, 2024, our cash used in financing activities of $10.4 million was primarily related to $12.5 million of common stock withheld associated with employee taxes on vested equity awards, partially offset by $2.8 million of proceeds from stock option exercises and employee stock purchases.

Current wording

During the nine months ended June 28, 2024, our cash used in financing activities of $8.4 million was primarily related to $13.9 million of common stock withheld associated with employee taxes on vested equity awards, partially offset by $6.5 million of proceeds from stock option exercises and employee stock purchases.

Previous wording

During the six months ended March 31, 2023, our cash used in financing activities of $29.5 million was primarily related to $31.3 million of common stock withheld associated with employee taxes on vested equity awards, partially offset by $2.3 million of proceeds from employee stock purchases.

Current wording

During the nine months ended June 30, 2023, our cash used in financing activities of $27.8 million was primarily related to $32.5 million of common stock withheld associated with employee taxes on vested equity awards, partially offset by $5.6 million of proceeds from employee stock purchases.

Previous wording

As of March 29, 2024, we held $115.0 million of cash and cash equivalents, primarily deposited with financial institutions, as well as $361.4 million of liquid short-term investments. The undistributed earnings of certain foreign subsidiaries are considered indefinitely reinvested for the periods presented and we do not intend to repatriate such earnings. We believe the decision to reinvest these earnings will not have a significant impact on our liquidity. As of March 29, 2024, cash held by our indefinitely reinvested foreign subsidiaries was $7.4 million, which, along with cash generated from foreign operations, is expected to be used in the support of international growth and working capital requirements as well as the repayment of certain intercompany loans.

Current wording

As of June 28, 2024, we held $117.3 million of cash and cash equivalents, primarily deposited with financial institutions, as well as $404.2 million of liquid short-term investments. The undistributed earnings of certain foreign subsidiaries are considered indefinitely reinvested for the periods presented and we do not intend to repatriate such earnings. We believe the decision to reinvest these earnings will not have a significant impact on our liquidity. As of June 28, 2024, cash held by our indefinitely reinvested foreign subsidiaries was $6.4 million, which, along with cash generated from foreign operations, is expected to be used in the support of international growth and working capital requirements as well as the repayment of certain intercompany loans.

Previous wording

We plan to use our remaining available cash and cash equivalents and short-term investments for general corporate purposes, including working capital, or for the acquisition of or investment in complementary technologies, design teams, products and businesses. We believe that our cash and cash equivalents, short-term investments and cash generated from operations will be sufficient to meet our working capital requirements for at least the next twelve months. We may need to raise additional capital from time to time through the issuance and sale of equity or debt securities, and there is no assurance that we will be able to do so on favorable terms or at all.

Current wording

We plan to use our remaining available cash and cash equivalents and short-term investments for general corporate purposes, including working capital, payment on the 2026 Convertible Notes, or for the acquisition of or investment in complementary technologies, design teams, products and businesses. We believe that our cash and cash equivalents, short-term investments and cash generated from operations will be sufficient to meet our working capital requirements for at least the next twelve months. We may need to raise additional capital from time to time through the issuance and sale of equity or debt securities, and there is no assurance that we will be able to do so on favorable terms or at all.