Ubiquiti Inc.

Previous wording

Supply Constraints and Risks – We have experienced significant supply constraints in the past, especially during the COVID-19 pandemic. Our efforts to mitigate these supply constraints have included, for example, increasing our inventory build in an attempt to secure supply and meet customer demand, paying higher component and shipping costs to secure supply and modifying our product designs to leverage alternate suppliers. Although these mitigation efforts are intended to optimize our access to the components required to meet customer demand for our products, we have limited visibility into future sales, which makes it difficult to forecast our future results of operations. These mitigation efforts have caused our inventory and vendor deposit balances to increase in the past, and they may cause such increases in the future. These mitigation efforts therefore significantly increase the risks of future material excess, obsolete inventory and related losses. We believe that we have taken the right actions to mitigate these supply constraints; however, we recognize the associated risks.

Current wording

Supply Constraints and Risks – We have experienced in the past, particularly from 2020 to 2023, and may experience in the future, periodic volatility in the supply of components used to manufacture our products. This has resulted in supply constraints and corresponding increases in component delivery lead times and costs to obtain components, and resulted in delays in product production. Our efforts to mitigate these supply constraints have included, for example, increasing our inventory build in an attempt to secure supply and meet customer demand, paying higher component and shipping costs to secure supply and modifying our product designs to leverage alternate suppliers. Although these mitigation efforts are intended to optimize our access to the components required to meet customer demand for our products, we have limited visibility into future sales, which makes it difficult to forecast our future results of operations. These mitigation efforts have caused our inventory and vendor deposit balances to increase in the past, and they may cause such increases in the future. These mitigation efforts therefore significantly increase the risks of future material excess, obsolete inventory and related losses. We believe that we have taken the right actions to mitigate these supply constraints; however, we recognize the associated risks.

Previous wording

We operate our business as one reportable and operating segment. Further information regarding Segments can be found in Note 13, "Segment Information, Revenues by Geography and Significant Customers," to our Consolidated Financial Statements. Our revenues are derived principally from the sale of networking hardware. Because we have historically included implied post-contract customer support (“PCS”) free of charge in many of our arrangements, we attribute a portion of our systems revenues to this implied PCS.

Current wording

We operate our business as one reportable and operating segment. Further information regarding Segments can be found in Note 13, "Segment Information, Revenues by Geography and Significant Customers," to our Consolidated Financial Statements. Our revenues are derived principally from the sale of networking hardware. Because we have historically included implied post-contract customer support (“PCS”) free of charge in many of our arrangements, we attribute a portion of our revenues to this implied PCS.

Previous wording

We sell our products and solutions globally to enterprises and service providers primarily through our extensive network of distributors, and, to a lesser extent, through sales through our webstores. Sales to distributors accounted for 62% and 64% of our revenues during the years ended June 30, 2024 and 2023, respectively. Webstore sales accounted for 38% and 36% of our revenues during the years ended June 30, 2024 and 2023, respectively.

Current wording

We sell our products and solutions globally to enterprises and service providers primarily through our extensive network of distributors, and, to a lesser extent, through sales through our webstores. Sales to distributors accounted for 56% and 62% of our revenues during the years ended June 30, 2025 and 2024, respectively. Webstore sales accounted for 44% and 38% of our revenues during the years ended June 30, 2025 and 2024, respectively.

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 June 2018, the Office of the United States Trade Representative announced new proposed tariffs for certain products imported into the U.S. from China. The vast majority of our products that are imported into the U.S. from China are currently subject to tariffs that range between 7.5% and 25%. 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 I — 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 have increased and 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 I — 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

We record amounts billed for shipping and handling costs as revenues. We classify shipping and handling costs incurred by us as cost of revenue. Deposits payments received from distributors in advance of recognition of revenues are included in current liabilities of our balance sheet and are recognized as revenues when all the criteria for recognition of revenues are met.

Current wording

We record amounts billed for shipping and handling costs as revenues. We act as principal as we are responsible for providing shipping services in exchange for a fee charged to the buyer and hence recognize revenue in the gross amount of consideration received from the customer. We classify shipping and handling costs incurred by us as cost of revenue. Deposits payments received from distributors in advance of recognition of revenues are included in current liabilities of our balance sheet and are recognized as revenues when all the criteria for recognition of revenues are met.

Previous wording

Our inventories are comprised of finished goods and raw materials. Inventories are stated at the lower of actual cost, computed using the first-in, first-out method, or net realizable value (NRV). NRV is based upon an estimated average selling price reduced by the estimated costs of disposal. The determination of NRV involves numerous judgments including estimating average selling prices based upon recent sales. Should actual market conditions differ from our estimates, future results of operations could be materially affected. We reduce the value of our inventory for estimated obsolescence or lack of marketability by the difference between the cost of the affected inventory and the NRV. Write-downs are not reversed until the related inventory has been subsequently sold or scrapped.

Current wording

Our inventories are comprised of finished goods and raw materials. Inventories are stated at the lower of actual cost, computed using the first-in, first-out method, and net realizable value (NRV). NRV is based upon an estimated average selling price reduced by the estimated costs of disposal. The determination of NRV involves certain judgments including estimating average selling prices based on recent sales. Should actual market conditions differ from our estimates, future results of operations could be materially affected. We reduce the value of our inventory for estimated obsolescence or lack of marketability by the difference between the cost of the affected inventory and the NRV. Write-downs are not reversed until the related inventory has been subsequently sold or scrapped.

Previous wording

We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in the consolidated statement of operations and comprehensive income. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet.

Current wording

We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in the consolidated statement of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet.

Previous wording

Total revenues decreased $12.0 million, or 0.6%, from $1,940.5 million in fiscal 2023 to $1,928.5 million in fiscal 2024. The decrease in revenue was driven by a decrease in revenue from both our Enterprise Technology platform and our Service Provider Technology platform. During fiscal year ended June 30, 2024, we experienced an increase in direct sales through our webstores compared to fiscal 2023 and a corresponding decline in sales through distributors.

Current wording

Total revenues increased $645.1 million, or 33.4%, from $1,928.5 million in fiscal 2024 to $2,573.5 million in fiscal 2025. The increase in revenue was driven by an increase in revenue from both our Enterprise Technology platform and, to a lesser extent, our Service Provider Technology platform. We experienced an increase in both direct sales through our webstores as well as sales through distributors during fiscal year ended June 30, 2025 as compared to fiscal 2024.

Previous wording

Enterprise Technology revenues decreased $3.8 million, or 0.2%, from $1,621.4 million in fiscal 2023 to $1,617.7 million in fiscal 2024, primarily due to decline in revenue from our Enterprise Technology platform in the Europe, the Middle East, and Africa (“EMEA”) and Asia Pacific regions.

Current wording

Enterprise Technology revenues increased $636.6 million, or 39.4%, from $1,617.7 million in fiscal 2024 to $2,254.3 million in fiscal 2025, primarily due to increase in revenue from our Enterprise Technology platform in all regions except South America.

Previous wording

Service Provider Technology revenues decreased $8.3 million, or 2.6%, from $319.1 million in fiscal 2023 to $310.8 million in fiscal 2024, primarily due to decline in revenue in our Service Provider Technology platform in South America and Asia Pacific regions.

Current wording

Service Provider Technology revenues increased $8.5 million, or 2.7%, from $310.8 million in fiscal 2024 to $319.3 million in fiscal 2025, primarily due to increase in revenue in our Service Provider Technology platform in the Europe, the Middle East and Africa region, partially offset by declines in all other regions.

Previous wording

(1)Revenue for the United States was $881.0 and $855.3 in fiscal 2024 and fiscal 2023, respectively.

Current wording

(1)Revenue for the United States was $1,193.3 and $881.0 in fiscal 2025 and fiscal 2024, respectively.

Previous wording

Revenues in North America increased $24.2 million, or 2.6%, from $922.2 million in fiscal 2023 to $946.4 million in fiscal 2024. The year-over-year increase was due to increased revenue from both our Enterprise Technology products and Service Provider Technology products.

Current wording

Revenues in North America increased $349.1 million, or 36.9%, from $946.4 million in fiscal 2024 to $1,295.5 million in fiscal 2025. The year-over-year increase 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 the Asia Pacific region decreased $20.6 million, or 13.9%, from $148.5 million in fiscal 2023 to $127.9 million in fiscal 2024. The year-over-year decrease was due to a decline in revenues from both our Enterprise Technology products and Service Provider Technology products.

Current wording

Revenues in South America decreased $4.2 million, or 3.7%, from $114.0 million in fiscal 2024 to $109.8 million in fiscal 2025. The year-over-year decrease was due to decreased revenue from both our Enterprise Technology products and Service Provider Technology products.

Previous wording

Gross profit margin decreased to 38.4% in fiscal 2024 from 39.2% in fiscal 2023. The decline in gross profit margin for fiscal 2024 as compared to fiscal 2023 was primarily driven by incremental excess and obsolete inventory charges and warehouse-related operating expenses, partially offset by lower shipping costs and lower tariffs.

Current wording

Gross profit margin increased to 43.4% in fiscal 2025 from 38.4% in fiscal 2024. The increase in gross profit margin for fiscal 2025 as compared to fiscal 2024 was primarily driven by favorable product mix, and as a percentage of revenue, lower excess and obsolete inventory charges and lower indirect operating expenses, partially offset by higher tariffs.

Previous wording

R&D expenses increased $14.6 million, or 10.1%, from $145.2 million in fiscal 2023 to $159.8 million in fiscal 2024. As a percentage of revenues, R&D expenses increased from 7% in fiscal 2023 to 8% in fiscal 2024. The increase in R&D expense for fiscal 2024 versus fiscal 2023 was primarily driven by higher prototype-related expenses and employee-related expenses.

Current wording

R&D expenses increased $9.9 million, or 6.2%, from $159.8 million in fiscal 2024 to $169.7 million in fiscal 2025. As a percentage of revenues, R&D expenses decreased from 8% in fiscal 2024 to 7% in fiscal 2025. The increase in R&D expenses for fiscal 2025 compared to fiscal 2024 was primarily driven by higher employee-related expenses and higher depreciation and software expenses, partially offset by lower prototype-related expenses

Previous wording

Sales, general and administrative (“SG&A”) expenses increased $10.0 million, or 14.1%, from $71.0 million in fiscal 2023 to $81.0 million in fiscal 2024. As a percentage of revenues, SG&A expenses remained consistent at 4% for both fiscal 2023 and 2024. The increase in fiscal 2024 SG&A expenses as compared to fiscal 2023 was primarily driven by higher fees associated with webstore credit card processing, marketing expenses, employee-related expenses and professional fees.

Current wording

Sales, general and administrative (“SG&A”) expenses increased $30.5 million, or 37.7%, from $81.0 million in fiscal 2024 to $111.5 million in fiscal 2025. As a percentage of revenues, SG&A expenses remained consistent at 4% for both fiscal 2024 and 2025. The increase in SG&A expenses for fiscal 2025 compared to fiscal 2024 was primarily driven by credit card processing fees arising from incremental webstore sales, reserves taken against accounts receivable and higher employee-related expenses, marketing expenses and professional fees.

Previous wording

Interest expense and other, net ("I&O") expenses increased $16.9 million, or 29.1%, from $58.2 million in fiscal 2023 to $75.2 million in fiscal 2024. As a percentage of Revenue, I&O expense increased from 3% in fiscal 2023 to 4% in fiscal 2024. The increase in I&O expense for fiscal 2024 as compared to fiscal 2023 was primarily driven by higher interest expense due to increased levels of average debt outstanding and higher interest rates.

Current wording

Interest expense and other, net ("I&O") expenses decreased $44.6 million, or 59.3%, from $75.2 million in fiscal 2024 to $30.6 million in fiscal 2025. As a percentage of Revenue, I&O expense decreased from 4% in fiscal 2024 to 1% in fiscal 2025. The decrease in I&O expense for fiscal 2025 as compared to fiscal 2024 was primarily driven by lower interest expense driven by a decrease in borrowings and lower interest rates.

Previous wording

Our provision for income taxes decreased 6.1% from $78.7 million for fiscal 2023 to $73.9 million for fiscal 2024. Our effective tax rate increased to 17.4% in fiscal 2024 as compared to 16.2% for fiscal 2023. The change in effective tax rates for fiscal 2024 as compared to fiscal 2023 was primarily driven by changes in the mix of income earned in various tax jurisdictions.

Current wording

Our provision for income taxes increased by 26.9% from $73.9 million for fiscal 2024 to $93.7 million for fiscal 2025. Our effective tax rate decreased to 11.6% in fiscal 2025 as compared to 17.4% for fiscal 2024. During the fourth quarter of fiscal 2025, the Company transferred certain intangible properties held by our foreign subsidiaries to the U.S. A corresponding amount of $53.7 million of R&D expenditures is now recognized as a U.S deferred tax asset and, pursuant to GAAP, immediately recognized in the fourth quarter of fiscal 2025. The change in effective tax rates for fiscal 2025 as compared to fiscal 2024 was primarily driven by a one-time deferred tax benefit of $53.7 million arising from this transaction and changes in the mix of the income earned in various tax jurisdictions.

Previous wording

During 2021 the Organization for Economic Co-operation and Development (OECD) announced an agreed-upon framework for its members to implement a global minimum corporate tax of 15% for multinational enterprises, commonly referred to as Pillar Two. Many countries have already proposed or enacted legislation to implement elements of the framework which will apply to Ubiquiti beginning in fiscal year 2025. While we are monitoring developments and evaluating the potential impact on future periods, we do not expect Pillar Two to have a significant impact on our fiscal year 2025 financial results. As additional jurisdictions enact Pillar Two legislation, transactional rules lapse, and other provisions of the minimum tax legislation become effective in our fiscal year 2026, we anticipate that our effective tax rate and cash tax payments may increase in future years.

Current wording

During 2021, the Organization for Economic Co-operation and Development (OECD) announced an agreed-upon framework for its members to implement a global minimum corporate tax of 15% for multinational enterprises, commonly referred to as Pillar Two. Many countries have already proposed or enacted legislation to implement elements of the framework which apply to Ubiquiti beginning in fiscal year 2025. While we are monitoring developments and evaluating the potential impact on future periods, Pillar Two did not have a significant impact on our fiscal year 2025 financial results. As additional jurisdictions enact Pillar Two legislation, transactional rules lapse, and other provisions of the minimum tax legislation become effective in our fiscal year 2026, we anticipate that our effective tax rate and cash tax payments may increase in future years.

Previous wording

Our principal sources of liquidity are cash and cash equivalents, cash generated by operations and the availability of additional funds under the Facilities (as defined herein). We had cash and cash equivalents of $126.3 million and $114.8 million at June 30, 2024 and 2023, respectively.

Current wording

Our principal sources of liquidity are cash and cash equivalents, cash generated by operations and the availability of additional funds under the Facilities (as defined herein). We had cash and cash equivalents of $149.7 million and $126.3 million at June 30, 2025 and 2024, respectively.

Previous wording

For fiscal 2024 the net cash provided by operating activities was $541.5 million, primarily due to net income of $350.0 million, and the benefit of decreasing inventories by $250.7 million and non-cash adjustments of $59.5 million. These cash inflows were partially offset by other changes in operating assets and liabilities that resulted in net cash outflows of $118.6 million. This net change in operating assets and liabilities consisted primarily of a $70.5 million decrease in accounts payable and accrued liabilities, a $17.1 million decrease in income taxes payable, a $18.3 million increase in vendor deposits, a $17.6 million increase in prepaid expenses and other assets partially offset by a $6.6 million increase in deferred revenues.

Current wording

For fiscal 2025 the net cash provided by operating activities was $640.0 million, primarily due to net income of $711.9 million, and the benefit of decreasing vendor deposits of $64.2 million. These cash inflows were partially offset by net cash outflows arising from other changes in operating assets and liabilities of $123.5 million and non-cash adjustments of $12.5 million. This net change in operating assets and liabilities consisted primarily of a $219.9 million increase in inventories, a $86.9 million increase in accounts receivable, a $16.3 million increase in prepaid expenses and other assets, a $10.8 million decrease in income taxes payable, partially offset by a $180.3 million increase in accounts payable and accrued liabilities and $30.1 million increase in deferred revenues.

Previous wording

We used $20.9 million of cash in investing activities during fiscal 2023. Our investing activities consisted primarily of $20.9 million of capital expenditures and purchase of intangible assets.

Current wording

We used $12.6 million of cash in investing activities during fiscal 2025. Our investing activities consisted primarily of $12.6 million of capital expenditures.

Previous wording

We had cash inflows of $145.0 million from financing activities during fiscal 2023. During fiscal 2023, in order to support the increase in inventories, we borrowed a net of $291.9 million under our facilities. We also paid $145.0 million for dividends on our common stock and debt issuance costs of $1.2 million. During fiscal 2023 we increased the size of our facility to include an additional $250.0 million term loan. The proceeds from this new term loan were used to repay a portion of the outstanding revolver loans under the revolving facility. See Note 7 – Debt of the Notes to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K for additional information regarding the Facilities.

Current wording

We used $604.1 million of cash in financing activities during fiscal 2025, which primarily consisted of repayments of debt and payment of common stock dividends. During fiscal 2025, we repaid $175.0 million on our Revolving Facility, net of borrowings, $283.1 million on our Term Loan Facilities, and paid $145.2 million for dividends on our common stock. See Note 7 – Debt of the Notes to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K for additional information regarding the Facilities.

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. See “Part I-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 I-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 existing Revolving Facility and our intention to have a new facility before the existing one matures in March 2026, if needed, will be sufficient to meet our near-term working capital requirements, dividends, repurchases of our common stock 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 prior to the maturity of our existing credit facility, satisfying 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 credit 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 credit 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. See “Part I-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 I-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 p…

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Previous wording

Our contractual obligations represent material expected or contractually committed future payment obligations. We believe that we will be able to fund these obligations through our existing cash and cash equivalents, cash generated from operations and the availability of additional funds under the Facilities.

Current wording

Our contractual obligations represent material expected or contractually committed future payment obligations. We believe that we will be able to fund these obligations through our existing cash and cash equivalents, cash generated from operations and the availability of additional funds under credit facilities.

Previous wording

We subcontract with third parties to manufacture our products and supply key components. As of June 30, 2024 we had $981.7 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 June 30, 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. See Note 9 – Commitments and Contingencies of the Notes to our Consolidated Financial Statements, included in Part IV, Item 15, of this Annual Report on Form 10-K for future payment commitments under purchase commitments as of June 30, 2024.

Current wording

We subcontract with third parties to manufacture our products and supply key components. As of June 30, 2025 we had $1,295.1 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 June 30, 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. See Note 9 – Commitments and Contingencies of the Notes to our Consolidated Financial Statements, included in Part IV, Item 15, of this Annual Report on Form 10-K for future payment commitments under purchase commitments as of June 30, 2025.

Previous wording

We have obligations of $50.6 million as of June 30, 2024, related to the mandatory transition tax on accumulated foreign earnings from the 2017 Tax Cuts and Jobs Act. Payment of these obligations are expected to be $22.5 million for fiscal 2025 and $28.1 million for fiscal 2026. These obligations are included within Income tax payable and Long-term taxes payable on our consolidated balance sheets.

Current wording

We have obligations of $28.1 million as of June 30, 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.

Previous wording

As of June 30, 2024, we have other obligations of $6.1 million which consisted primarily of commitments related to research and development projects.

Current wording

As of June 30, 2025, we have other obligations of $4.4 million which primarily consist of commitments related to research and development projects.

Previous wording

As of June 30, 2024, we had $33.0 million of unrecognized tax benefits and an additional $4.8 million of accrued interest classified as non-current liabilities. At this time, we are unable to make a reasonably reliable estimate of timing of payments in individual years in connection with these tax liabilities.

Current wording

As of June 30, 2025, we had $34.7 million of unrecognized tax benefits and an additional $5.5 million of accrued interest classified as non-current liabilities. At this time, we are unable to make a reasonably reliable estimate of timing of payments in individual years in connection with these tax liabilities.