Ubiquiti Inc.

Previous wording

We sell our products and solutions globally to enterprises and service providers primarily through our extensive network of distributors and through direct sales through our webstores. Sales to distributors accounted for 55% of our revenues during the six months ended December 31, 2024. Direct sales accounted for 45% of our revenue during the six months ended December 31, 2024.

Current wording

We sell our products and solutions globally to enterprises and service providers primarily through our extensive network of distributors and through direct sales through our webstores. Sales to distributors accounted for 55% of our revenues during the nine months ended March 31, 2025. Direct sales accounted for 45% of our revenue during the nine months ended March 31, 2025.

Previous wording

Our gross profit has been, and may in the future be, influenced by several factors including changes in product mix, target end markets for our products, channel inventory levels, tariffs, pricing due to competitive pressure, production costs and global demand for electronic components. Although we procure and sell our products mostly in U.S. dollars, our contract manufacturers incur many costs, including labor costs, in other currencies. To the extent that the exchange rates move unfavorably for our contract manufacturers, they may try to pass these additional costs on to us, which could have a material impact on our future average selling prices and unit costs. In February 2025, the Office of the United States Customs and Border Protection, Department of Homeland Security announced an incremental 10% tariff for products imported into the U.S. from China. This will result in the products that are imported into the U.S. from China after the effective date having additional tariffs imposed on them between 10% and 35%. These tariffs have affected our operating results and margins. For so long as such tariffs are in effect, we expect it will continue to affect our operating results and margins. As a result, our historical and current gross profit margins may not be indicative of our gross profit margins for future periods. Refer to “Part II—Item 1A. Risk Factors—Risks Related to Our International Operations—Our business may be negatively affected by political events and foreign policy responses” for additional information.

Current wording

Our gross profit has been, and may in the future be, influenced by several factors including changes in product mix, target end markets for our products, channel inventory levels, tariffs and trade disputes, pricing due to competitive pressure, production costs and global demand for electronic components. Although we procure and sell our products mostly in U.S. dollars, our contract manufacturers incur many costs, including labor costs, in other currencies. To the extent that the exchange rates move unfavorably for our contract manufacturers, they may try to pass these additional costs on to us, which could have a material impact on our future average selling prices and unit costs. Recently, the U.S. government has issued several executive orders imposing significant tariffs on imports from China, and tariffs on most imports from other counties, including Vietnam. The U.S government has made numerous changes to the tariff rates including temporary pauses with a reduction in rates and product exclusions. In addition, the U.S. government may in the future propose and implement additional changes to international trade agreements and tariffs. These actions have increased the cost of importing products containing certain raw materials and have affected our operating results and margins. The magnitude and scope of the recent changes will significantly increase our product costs. For so long as such tariffs are in effect, we expect it will continue to affect our operating results and margins. As a result, our historical and current gross profit margins may not be indicative of our gross profit margins for future periods. Refer to “Part II—Item 1A. Risk Factors—Risks Related to Our International Operations—Our business may be negatively affected by geopolitical events and foreign policy responses” for additional information.

Previous wording

•Sales, general and administrative expenses include salary and benefit expenses, including share-based compensation, for employees and costs for contractors engaged in sales, marketing and general and administrative activities, as well as the costs associated with credit card processing fees, legal expenses, trade shows, marketing programs, promotional materials, bad debt expense, professional services, facilities, general liability insurance and travel. As our product portfolio and targeted markets expand, we may need to employ different sales models, such as building a traditional direct sales force. These sales models would likely increase our costs. Over time, we expect our sales, general and administrative expenses to increase in absolute dollars due to continued growth in headcount, expansion of our efforts to register and defend trademarks and patents and to support our business and operations.

Current wording

•Sales, general and administrative expenses include salary and benefit expenses, including share-based compensation, for employees and costs for contractors engaged in sales, marketing and general and administrative activities, credit card processing fees, legal expenses, trade shows, marketing programs, promotional materials, bad debt expense, professional services, facilities, general liability insurance and travel. As our product portfolio and targeted markets expand, we may need to employ different sales models, such as building a traditional direct sales force. These sales models would likely increase our costs. Over time, we expect our sales, general and administrative expenses to increase in absolute dollars due to continued growth in headcount, expansion of our efforts to register and defend trademarks and patents and to support our business and operations.

Previous wording

Comparison of Three and Six Months Ended December 31, 2024 and 2023

Current wording

Comparison of Three and Nine Months Ended March 31, 2025 and 2024

Previous wording

The increase in revenues for the three months and six months ended December 31, 2024, as compared to the same periods in the prior year, was driven by an increase in revenue from both our Enterprise Technology platform and our Service Provider Technology platform.

Current wording

The increase in revenues for the nine months ended March 31, 2025, as compared to the same period in the prior year, was driven by an increase in revenue from both our Enterprise Technology platform and our Service Provider Technology platform.

Previous wording

Enterprise Technology revenue increased $126.7 million, or 32%, from $391.5 million in the three months ended December 31, 2023 to $518.2 million in the three months ended December 31, 2024. Enterprise Technology revenue increased $216.8 million, or 28%, from $771.6 million in the six months ended December 31, 2023 to $988.4 million in the six months ended December 31, 2024.

Current wording

Enterprise Technology revenue increased $171.4 million, or 41%, from $414.3 million in the three months ended March 31, 2024 to $585.7 million in the three months ended March 31, 2025. Enterprise Technology revenue increased $388.2 million, or 33%, from

Previous wording

The increase in Enterprise Technology revenue during the three months and six months ended December 31, 2024, as compared to the same periods in the prior year, was due to an increase in revenue from our Enterprise Technology platform across all regions except South America.

Current wording

The increase in Enterprise Technology revenue during the nine months ended March 31, 2025, as compared to the same period in the prior year, was due to an increase in revenue from our Enterprise Technology platform across all regions except South America.

Previous wording

The increase in Service Provider Technology in the three months and six months ended December 31, 2024, as compared to the same periods in the prior year, was due to an increase in revenues in the North America and South America regions.

Current wording

The decrease in Service Provider Technology in the three months ended March 31, 2025, as compared to the same period in the prior year, was due to a decrease in revenues in all regions except EMEA. The increase in Service Provider Technology in the nine months ended March 31, 2025, as compared to the same period in the prior year, was due to an increase in revenues in the EMEA and South America regions offset by a decline in revenues in the North America and Asia Pacific regions.

Previous wording

We have determined the geographical distribution of our product revenues based on our customers’ ship-to destinations. A majority of our sales are to distributors who either sell to resellers or directly to end customers, who may be located in different countries than the initial ship-to destination. The following are our revenues by geography for the three and six months ended December 31, 2024 and 2023 (in thousands, except percentages):

Current wording

We have determined the geographical distribution of our product revenues based on our customers’ ship-to destinations. A majority of our sales are to distributors who either sell to resellers or directly to end customers, who may be located in different countries than the initial ship-to destination. The following are our revenues by geography for the three and nine months ended March 31, 2025 and 2024 (in thousands, except percentages):

Previous wording

(1) Revenue for the United States was $296.1 million and $210.4 million for the three months ended December 31, 2024 and 2023, respectively. Revenue for the United States was $544.8 million and $419.6 million for the six months ended December 31, 2024 and 2023, respectively.

Current wording

(1) Revenue for the United States was $298.5 million and $226.2 million for the three months ended March 31, 2025 and 2024, respectively. Revenue for the United States was $843.3 million and $645.8 million for the nine months ended March 31, 2025 and 2024, respectively.

Previous wording

Revenues in North America increased by $95.8 million, or 42%, from $225.9 million in the three months ended December 31, 2023 to $321.6 million in the three months ended December 31, 2024 and increased by $142.2 million, or 32%, from $450.6 million in the six months ended December 31, 2023 to $592.9 million in the six months ended December 31, 2024.

Current wording

Revenues in North America increased by $80.2 million, or 33%, from $242.5 million in the three months ended March 31, 2024 to $322.7 million in the three months ended March 31, 2025 and increased by $222.5 million, or 32%, from $693.2 million in the nine months ended March 31, 2024 to $915.6 million in the nine months ended March 31, 2025.

Previous wording

The increase in EMEA revenues during the three months and six months ended December 31, 2024, as compared to the same periods in the prior year, was due to increased revenue from our Enterprise Technology products, offset in part by decreased revenue from our Service Provider Technology products.

Current wording

The increase in North America revenues during the three months and nine months ended March 31, 2025, as compared to the same periods in the prior year, was due to increased revenue from our Enterprise Technology products offset in part by decreased revenue from our Service Provider Technology products.

Previous wording

The increase in North America revenues during the three months and six months ended December 31, 2024, as compared to the same periods in the prior year, was due to increased revenue from both our Enterprise Technology products and our Service Provider Technology products.

Current wording

The increase in EMEA revenues during the three months and nine months ended March 31, 2025, as compared to the same periods in the prior year, was due to increased revenue from both our Enterprise Technology products and our Service Provider Technology products.

Previous wording

Revenues in the Asia Pacific region increased by $9.8 million, or 29%, from $33.3 million in the three months ended December 31, 2023 to $43.1 million in the three months ended December 31, 2024 and increased by $14.7 million, or 21%, from $69.4 million in the six months ended December 31, 2023 to $84.0 million in the six months ended December 31, 2024.

Current wording

Revenues in the Asia Pacific region increased by $11.0 million, or 42%, from $26.5 million in the three months ended March 31, 2024 to $37.5 million in the three months ended March 31, 2025 and increased by $25.7 million, or 27%, from $95.8 million in the nine months ended March 31, 2024 to $121.5 million in the nine months ended March 31, 2025.

Previous wording

The increase in Asia Pacific revenues during the three months and six months ended December 31, 2024, as compared to the same periods in the prior year, was due to increased revenue from our Enterprise Technology products, offset in part by decreased revenue from our Service Provider Technology products.

Current wording

The increase in Asia Pacific revenues during the three months and nine months ended March 31, 2025, as compared to the same periods in the prior year, was due to increased revenue from our Enterprise Technology products, offset in part by decreased revenue from our Service Provider Technology products.

Previous wording

Revenues in South America decreased by $6.3 million, or 19%, from $32.9 million in the three months ended December 31, 2023 to $26.6 million in the three months ended December 31, 2024 and decreased by $2.8 million, or 5%, from $62.7 million in the six months ended December 31, 2023 to $59.8 million in the six months ended December 31, 2024.

Current wording

Revenues in South America decreased by $1.5 million, or 6%, from $23.4 million in the three months ended March 31, 2024 to $21.8 million in the three months ended March 31, 2025 and decreased by $4.4 million, or 5%, from $86.1 million in the nine months ended March 31, 2024 to $81.7 million in the nine months ended March 31, 2025.

Previous wording

The decrease in South America revenues during the three months and six months ended December 31, 2024, as compared to the same periods in the prior year, was due to a decrease in revenue from our Enterprise Technology products, offset in part by increased revenue from our Service Provider Technology products.

Current wording

The decrease in South America revenues during the three months ended March 31, 2025, as compared to the same period in the prior year, was due to a decrease in revenue from our Service Provider Technology products offset in part by increased revenue from our Enterprise Technology products. The decrease in South America revenues during the nine months ended March 31, 2025, as compared to the same period in the prior year, was due to a decrease in revenue from our Enterprise Technology products, offset in part by increased revenue from our Service Provider Technology products.

Previous wording

Gross profit margin increased to 41% in the three months ended December 31, 2024, compared to 38% in the three months ended December 31, 2023 and increased to 42% in the six months ended December 31, 2024, compared to 39% in the six months ended December 31, 2023. The increase in gross profit margin for the three months ended December 31, 2024, as compared to the comparable prior year period, was primarily driven by favorable product mix, lower warehouse related expenses and excess and obsolete inventory charges, offset in part by higher shipping and tariff costs. The increase in gross profit margin for the six months ended December 31, 2024, as compared to the comparable prior year period, was primarily driven by favorable product mix, lower warehouse-related expenses, excess and obsolete inventory charges and tariff costs, offset in part by higher shipping costs.

Current wording

Gross profit margin increased to 45% in the three months ended March 31, 2025, compared to 35% in the three months ended March 31, 2024 and increased to 43% in the nine months ended March 31, 2025, compared to 38% in the nine months ended March 31, 2024. The increase in gross profit margin for the three months ended March 31, 2025, as compared to the comparable prior year period, was primarily driven by lower excess and obsolete inventory charges, favorable product mix and lower tariffs, offset in part by higher shipping costs. The increase in gross profit margin for the nine months ended March 31, 2025, as compared to the comparable prior year period, was primarily driven by favorable product mix and lower excess and obsolete inventory charges.

Previous wording

Research and development (“R&D”) expenses increased by $3.0 million, or 8%, from $36.9 million in the three months ended December 31, 2023 to $40.0 million in the three months ended December 31, 2024. As a percentage of revenues, R&D expenses decreased from 8% for the three months ended December 31, 2023 to 7% for the three months ended December 31, 2024.

Current wording

Research and development (“R&D”) expenses increased by $1.8 million, or 4%, from $42.5 million in the three months ended March 31, 2024 to $44.3 million in the three months ended March 31, 2025. As a percentage of revenues, R&D expenses decreased from 9% for the three months ended March 31, 2024 to 7% for the three months ended March 31, 2025.

Previous wording

R&D expenses increased by $4.8 million, or 7%, from $73.2 million in the six months ended December 31, 2023 to $78.0 million in the six months ended December 31, 2024. As a percentage of revenues, R&D expenses decreased from 8% for the six months ended December 31, 2023 to 7% for the six months ended December 31, 2024.

Current wording

R&D expenses increased by $6.5 million, or 6%, from $115.7 million in the nine months ended March 31, 2024 to $122.2 million in the nine months ended March 31, 2025. As a percentage of revenues, R&D expenses decreased from 8% for the nine months ended March 31, 2024 to 7% for the nine months ended March 31, 2025.

Previous wording

The increase in R&D expenses during the three months ended December 31, 2024, as compared to the comparable prior year period, was primarily driven by higher prototype-related expenses and employee-related expenses. The increase in R&D expenses during the six months ended December 31, 2024, as compared to the comparable prior year period, was primarily driven by higher employee-related expenses, assets written off, software costs, and prototype-related expenses.

Current wording

The increase in R&D expenses during the three months ended March 31, 2025, as compared to the comparable prior year period, was primarily driven by higher employee-related expenses and software expenses offset in part by lower prototype-related expenses. The increase in R&D expenses during the nine months ended March 31, 2025, as compared to the comparable prior year period, was primarily driven by higher employee-related expenses, assets written off and software expenses.

Previous wording

Sales, general and administrative (“SG&A”) expenses increased by $8.8 million, or 45%, from $19.6 million in the three months ended December 31, 2023 to $28.5 million in the three months ended December 31, 2024. As a percentage of revenues, SG&A expenses increased from 4% for the three months ended December 31, 2023 to 5%, for the three months ended December 31, 2024.

Current wording

Sales, general and administrative (“SG&A”) expenses increased by $4.4 million, or 21%, from $20.4 million in the three months ended March 31, 2024 to $24.8 million in the three months ended March 31, 2025. As a percentage of revenues, SG&A expenses remained consistent at 4% for both periods.

Previous wording

SG&A expenses increased by $14.0 million, or 36%, from $38.9 million in the six months ended December 31, 2023 to $52.9 million in the six months ended December 31, 2024. As a percentage of revenues, SG&A expenses increased from 4% for the six months ended December 31, 2023 to 5%, for the six months ended December 31, 2024.

Current wording

SG&A expenses increased by $18.3 million, or 31%, from $59.3 million in the nine months ended March 31, 2024 to $77.6 million in the nine months ended March 31, 2025. As a percentage of revenues, SG&A expenses remained consistent at 4% for both periods.

Previous wording

The increase in SG&A for the three months ended December 31, 2024, as compared to the comparable prior year period, was primarily due to higher bad debt expenses relating to a customer default and higher fees associated with webstore credit card processing. The increase in SG&A for the six months ended December 31, 2024, as compared to the comparable prior year period, was primarily due to higher bad debt expenses relating to a customer default, higher fees associated with webstore credit card processing, professional fees, marketing expenses and payroll expenses driven primarily by increase in number of employees.

Current wording

The increase in SG&A for the three months ended March 31, 2025, as compared to the comparable prior year period, was primarily due to an increase in webstore sales and their corresponding credit card processing fees, marketing expenses, and employee-related expenses. The increase in SG&A for the nine months ended March 31, 2025, as compared to the comparable prior year period, was primarily due to an increase in webstore sales and their corresponding credit card processing fees, higher bad debt expenses relating to a customer default, professional fees, marketing expenses and payroll expenses driven primarily by an increase in number of employees.

Previous wording

Interest expense and other, net ("I&O") expenses decreased $6.8 million, or 37% from $18.3 million in the three months ended December 31, 2023 to $11.4 million in the three months ended December 31, 2024. As a percentage of revenue, I&O decreased from 4% for the three months ended December 31, 2023 to 2% for the three months ended December 31, 2024.

Current wording

Interest expense and other, net ("I&O") expenses decreased $13.5 million, or 71% from $18.9 million in the three months ended March 31, 2024 to $5.4 million in the three months ended March 31, 2025. As a percentage of revenue, I&O decreased from 4% for the three months ended March 31, 2024 to 1% for the three months ended March 31, 2025.

Previous wording

I&O expenses decreased $17.5 million, or 44% from $39.5 million in the six months ended December 31, 2023 to $22.0 million in the six months ended December 31, 2024. As a percentage of revenue, I&O decreased from 4% for the six months ended December 31,

Current wording

I&O expenses decreased $30.9 million, or 53% from $58.4 million in the nine months ended March 31, 2024 to $27.4 million in the nine months ended March 31, 2025. As a percentage of revenue, I&O decreased from 4% for the nine months ended March 31, 2024 to 2% for the nine months ended March 31, 2025.

Previous wording

The decrease in I&O expenses during both the three and six months ended December 31, 2024, as compared to the comparable prior year periods, was primarily due to lower interest expense driven by a decrease in borrowings and lower interest rates, partly offset by higher foreign exchange losses.

Current wording

The decrease in I&O expenses during the three months ended March 31, 2025, as compared to the comparable prior year period, was primarily due to lower interest expense driven by a decrease in borrowings and lower interest rates, and foreign exchange gains in the three months ended March 31, 2025 compared to foreign exchange losses in the comparable prior year period. The decrease in I&O expenses during the nine months ended March 31, 2025, as compared to the comparable prior year period, was primarily due to lower interest expense driven by a decrease in borrowings and lower interest rates.

Previous wording

Our provision for income taxes increased $9.9 million, or 48%, from $20.7 million for the three months ended December 31, 2023 to $30.6 million for the three months ended December 31, 2024. Our effective tax rate decreased to 18.3% for the three months ended December 31, 2024 as compared to 20.2% for the three months ended December 31, 2023.

Current wording

Our provision for income taxes increased $24.9 million, or 155%, from $16.1 million for the three months ended March 31, 2024 to $41.0 million for the three months ended March 31, 2025. Our effective tax rate increased to 18.5% for the three months ended March 31, 2025 as compared to 17.4% for the three months ended March 31, 2024.

Previous wording

Our provision for income taxes increased $21.2 million, or 53%, from $40.1 million for the six months ended December 31, 2023 to $61.2 million for the six months ended December 31, 2024. Our effective tax rate decreased from 19.1% for the six months ended December 31, 2023 to 18.8% for the six months ended December 31, 2024.

Current wording

Our provision for income taxes increased $46.1 million, or 82%, from $56.1 million for the nine months ended March 31, 2024 to $102.2 million for the nine months ended March 31, 2025. Our effective tax rate increased from 18.6% for the nine months ended March 31, 2024 to 18.7% for the nine months ended March 31, 2025.

Previous wording

The change in effective tax rates for the three and six months ended December 31, 2024, as compared to the same periods in the prior year, was primarily driven by a change in the mix of income earned in various tax jurisdictions as well as a U.S. state adjustment recorded in the three months ended December 31, 2023.

Current wording

The change in effective tax rates for the three and nine months ended March 31, 2025, as compared to the same periods in the prior year, was primarily driven by a change in the mix of income earned in various tax jurisdictions as well as a one-time benefit for U.S. state income taxes recorded in the three months ended March 31, 2024.

Previous wording

Our principal source of liquidity are cash and cash equivalents, cash generated by operations, the availability of additional funds under the Facilities and short-term investments. We had cash and cash equivalents of $133.1 million and $126.3 million as of December 31, 2024 and June 30, 2024, respectively.

Current wording

Our principal source of liquidity are cash and cash equivalents, cash generated by operations, the availability of additional funds under the Facilities and short-term investments. We had cash and cash equivalents of $151.0 million and $126.3 million as of March 31, 2025 and June 30, 2024, respectively.

Previous wording

Net cash provided by operating activities during the six months ended December 31, 2024 consisted primarily of net income of $264.8 million, the benefit of decreasing vendor deposits of $42.9 million and non-cash adjustments of $30.1 million, further augmented by other changes in operating assets and liabilities that resulted in net cash inflows of $48.4 million. This net change in operating assets and liabilities consisted primarily of a $149.3 million increase in net accounts payable and accrued liabilities and $9.0 million increase in deferred revenue, partially offset by a $78.6 million increase in inventory, a $16.7 million decrease in taxes payable, a $10.3 million increase in prepaid expenses and other assets and a $4.3 million increase in accounts receivable.

Current wording

Net cash provided by operating activities during the nine months ended March 31, 2025 consisted primarily of net income of $445.2 million, the benefit of decreasing vendor deposits of $51.5 million and non-cash adjustments of $44.2 million, partially offset by other changes in operating assets and liabilities that resulted in net cash outflows of $31.3 million. This net change in operating assets and liabilities consisted primarily of a $135.4 million increase in inventory, $58.6 million increase in accounts receivable, a $23.3 million decrease in taxes payable, and a $15.6 million increase in prepaid expenses and other assets, partially offset by a $181.2 million increase in net accounts payable and accrued liabilities and $20.4 million increase in deferred revenue.

Previous wording

Net cash provided by operating activities during the six months ended December 31, 2023 consisted primarily of net income of $169.9 million, a $50.1 million decrease in inventory, partially offset by changes in operating assets and liabilities that resulted in net cash outflows of $48.6 million. This net change consisted primarily of a $53.6 million decrease in net accounts payable and accrued liabilities, 29.3 million decrease in taxes payable, and a $17.0 million increase in vendor deposits.

Current wording

Net cash provided by operating activities during the nine months ended March 31, 2024 consisted primarily of net income of $246.2 million, a $181.7 million decrease in inventory, non-cash adjustments of $59.9 million partially offset by other changes in operating assets and liabilities that resulted in net cash outflows of $177.7 million. This net change in operating assets and liabilities consisted primarily of a $86.0 million decrease in net accounts payable and accrued liabilities, a $28.5 million decrease in taxes payable, and a $41.7 million increase in vendor deposits.

Previous wording

We used $4.6 million of cash in investing activities during the six months ended December 31, 2024. Our investing activities consisted primarily of $4.6 million of capital expenditures.

Current wording

We used $7.4 million of cash in investing activities during the nine months ended March 31, 2025. Our investing activities consisted primarily of $7.4 million of capital expenditures.

Previous wording

We used $6.9 million of cash in investing activities during the six months ended December 31, 2023. Our investing activities consisted primarily of $6.9 million of capital expenditures.

Current wording

We used $10.1 million of cash in investing activities during the nine months ended March 31, 2024. Our investing activities consisted primarily of $10.1 million of capital expenditures.

Previous wording

We used $374.8 million of cash in financing activities during the six months ended December 31, 2024. During the six months ended December 31, 2024, we repaid $301.9 million under the Company's credit Facilities and used $72.6 million related to dividends paid on our common stock.

Current wording

We used $477.6 million of cash in financing activities during the nine months ended March 31, 2025. During the nine months ended March 31, 2025, we repaid $368.1 million under the Company's Facilities and used $108.9 million related to dividends paid on our common stock.

Previous wording

We used $156.6 million of cash in financing activities during the six months ended December 31, 2023. During the six months ended December 31, 2023, we repaid $83.8 million under the Company’s credit Facilities and used $72.5 million related to dividends paid on our common stock.

Current wording

We used $312.3 million of cash in financing activities during the nine months ended March 31, 2024. During the nine months ended March 31, 2024, we repaid $203.1 million under the Company’s Facilities and used $108.8 million related to dividends paid on our common stock.

Previous wording

We believe our existing cash and cash equivalents, in addition to the ability to draw cash under the Revolving Facility, if needed, will be sufficient to meet our near-term working capital requirements, dividends, and capital expenditure needs for the next twelve months, as well as long-term liquidity requirements in the event that the cash from operations is not adequate to meet our cash needs. However, this estimate is based on a number of assumptions that may prove to be wrong and we could exhaust our available cash and cash equivalents earlier than presently anticipated or need to rely more heavily on the Facilities or other sources of liquidity to continue to meet our needs. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, the timing and extent of spending to support development efforts, the timing of new product introductions, market acceptance of our products, management of inventory and vendor deposits, the availability of additional funds under the Facilities and overall economic conditions. Inflation and the current geopolitical environment have caused and may continue to cause significant volatility in financial markets and the domestic and global economy. This volatility can contribute to potential payment delays or defaults in our accounts receivable, affect asset valuations resulting in impairment charges, and affect the availability of financing credit as well as other segments of the credit markets. For a further discussion of the uncertainties and business risks, refer to "Part II-Item 1A. Risk Factors – Risks Related to Our Business and Industry – Our contract manufacturers, logistics centers and certain administrative and research and development operations, as well as our customers and suppliers, are located in areas likely to be subject to natural disasters, public health problems, military conflicts and geopolitical tensions, which could adversely affect our business, results of operations and financial condition" and "Part II-Item 1A. Risk Factors – Risks Related to Our Business and Industry – General global economic downturns and macroeconomic trends, including inflation or slowed economic growth, may negatively affect our customers and their ability to purchase our products. A downturn or such other trends may decrease our revenues and increase our costs and may increase credit risk with our customers and impact our ability to collect account receivable and recognize revenue," for additional information. We expect to continue to maintain financing flexibility in the current market conditions. However, due to the rapidly evolving global situation, it is not possible to predict whether unanticipated consequences of global economic downturns and macroeconomic trends are reasonably likely to materially affect our liquidity and capital resources in the future.

Current wording

We believe our existing cash and cash equivalents, in addition to the ability to draw cash under the Revolving Facility, if needed, will be sufficient to meet our near-term working capital requirements, dividends, and capital expenditure needs for the next twelve months. We believe that we have sufficient track record of managing working capital that we will be able to establish a new credit facility in the next twelve months which meets our long-term liquidity requirements in the event that the cash from operations is not adequate to meet our cash needs. However, this estimate is based on a number of assumptions that may prove to be wrong and we could exhaust our available cash and cash equivalents earlier than presently anticipated or need to rely more heavily on the Facilities or other sources of liquidity to continue to meet our needs. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, the timing and extent of spending to support development efforts, the timing of new product introductions, market acceptance of our products, management of inventory and vendor deposits, the availability of additional funds under the Facilities and overall economic conditions. Inflation and the current geopolitical environment have caused and may continue to cause significant volatility in financial markets and the domestic and global economy. This volatility can contribute to potential payment delays or defaults in our accounts receivable, affect asset valuations resulting in impairment charges, and affect the availability of financing credit as well as other segments of the credit markets. For a further discussion of the uncertainties and business risks, refer to "Part II-Item 1A. Risk Factors – Risks Related to Our Business and Industry – Our contract manufacturers, logistics centers and certain administrative and research and development operations, as well as our customers and suppliers, are located in areas likely to be subject to natural disasters, public health problems, military conflicts and geopolitical tensions, which could adversely affect our business, results of operations and financial condition" and "Part II-Item 1A. Risk Factors – Risks Related to Our Business and Industry – General global economic downturns and macroeconomic trends, including inflation or slowed economic growth, may negatively affect our customers and their ability to purchase our products. A downturn or such other trends may decrease our revenues and increase our costs and may increase credit risk with our customers and impact our ability to collect account receivable and recognize revenue," for additional information. We expect to continue to maintain financing flexibility in the current market conditions. However, due to the rapidly evolving global situation, it is not possible to predict whether unanticipated consequences of global economic downturns and macroeconomic tren…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We subcontract with third parties to manufacture our products and supply key components. As of December 31, 2024, we had $1,150.2 million of purchase commitments with these third parties. If we cancel all or part of the orders, we may still be liable to the contract manufacturers for the cost of the components purchased by the subcontractors to manufacture our products. There have been no significant liabilities for current or anticipated cancellations recorded as of December 31, 2024. Our consolidated financial position and results of operations could be negatively impacted if we were required to compensate these third parties. In addition, we may be subject to additional purchase obligations to our contract manufacturers for supply agreements and components ordered by them based on manufacturing forecasts we provide them each month.

Current wording

We subcontract with third parties to manufacture our products and supply key components. As of March 31, 2025, we had $1,264.5 million of purchase commitments with these third parties. If we cancel all or part of the orders, we may still be liable to the contract manufacturers for the cost of the components purchased by the subcontractors to manufacture our products. There have been no significant liabilities for current or anticipated cancellations recorded as of March 31, 2025. Our consolidated financial position and results of operations could be negatively impacted if we were required to compensate these third parties. In addition, we may be subject to additional purchase obligations to our contract manufacturers for supply agreements and components ordered by them based on manufacturing forecasts we provide them each month.

Previous wording

We have an obligation of $28.1 million as of December 31, 2024, related to the mandatory transition tax on accumulated foreign earnings from the 2017 Tax Cuts and Jobs Act. We expect to make a payment to fully settle this obligation in the first quarter of fiscal 2026. This obligation is included within Income tax payable on our consolidated balance sheets.

Current wording

We had an obligation of $28.1 million as of March 31, 2025, related to the mandatory transition tax on accumulated foreign earnings from the 2017 Tax Cuts and Jobs Act. We expect to make a payment to fully settle this obligation in the first quarter of fiscal 2026. This obligation is included within Income tax payable on our consolidated balance sheets.