Ubiquiti Inc.

Previous wording

The following discussion of our financial condition and results of operations should be read together with the financial statements and related notes that are included elsewhere in this quarterly report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this quarterly report, particularly in Note 9, “Commitments and Contingencies” to our consolidated financial statements and Part II “Other Information”, Item 1-Legal Proceedings and 1A-Risk Factors, in this report.

Current wording

The following discussion of our financial condition and results of operations should be read together with the Consolidated Financial Statements (unaudited) and related notes that are included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes for the fiscal year ended June 30, 2025 contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (the “2025 Annual Report”). In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in Note 9, “Commitments and Contingencies” to our consolidated financial statements and Part II. Item 1. Legal Proceedings and Item 1A. Risk Factors, in this Quarterly Report on Form 10-Q. We assume no obligation to update any of these forward-looking statements.

Previous wording

Tariff and Trade Tensions – 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.

Current wording

Tariff and Trade Tensions– 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 we expect will significantly increase our product costs. For so long as such tariffs are in effect, we expect such tariffs and related trade policy uncertainty 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

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 volatility 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

Russia-Ukraine Military Conflict – We are monitoring the military conflict between Russia and Ukraine, escalating tensions in surrounding countries, and associated economic sanctions. While the impact on our operations in Ukraine and its surrounding countries has not been material to our business or results of operations as of the date hereof, the full impact of the military conflict on our business and results of operations remains uncertain. The extent to which the conflict may impact our business or results of operations in future periods will depend on future developments, including the severity and duration of the conflict, its impact on regional and global economic conditions, as well as its impact on surrounding countries, including its impact on our operations in Ukraine and its surrounding countries, and its impact on global supply chains. Refer to “Part II – Item IA. Risk Factors” for a discussion of these factors and other risks.

Current wording

Russia-Ukraine Military Conflict – We are monitoring the ongoing military conflict between Russia and Ukraine, escalating tensions in surrounding countries, and associated economic sanctions. While the impact on our operations in Ukraine and its surrounding countries has not been material to our business or results of operations as of the date hereof, the full impact of the military conflict on our business and results of operations remains uncertain. The extent to which the conflict may impact our business or results of operations in future periods will depend on future developments, including the severity and duration of the conflict, its impact on regional and global economic conditions, as well as its impact on surrounding countries, including its impact on our operations in Ukraine and its surrounding countries, and its impact on global supply chains. Refer to “Part II – Item IA. Risk Factors” for a discussion of these factors and other risks.

Previous wording

We operate our business as one reportable and operating segment. Further information regarding the segment can be found in Note 12, "Segment Information, Revenues by Geography and Significant Customers" to our Consolidated Financial Statements (unaudited). 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 the segment can be found in Note 12, "Segment Information, Revenues by Geography and Significant Customers" to our Consolidated Financial Statements (unaudited). 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 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.

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 57% of our revenues during the three months ended September 30, 2025. Direct sales accounted for 43% of our revenue during the three months ended September 30, 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 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.

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 such tariffs, and related trade policy uncertainty, 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

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. In other cases, management’s judgment is required in selecting among available alternative accounting standards that provide for different accounting treatment for similar transactions. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the amounts we report as assets, liabilities, revenues, costs and expenses and affect the related disclosures. We base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances. In many instances, we could reasonably use different accounting estimates, and in some instances changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, our actual results could differ significantly from the estimates made by our management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. Our critical accounting policies are discussed in our Annual Report, filed with the SEC on August 23, 2024, and there have been no material changes other than that have been disclosed in Note 2, "Summary of Significant Accounting Policies" to our consolidated financial statements herein. As events continue to evolve our estimates may change materially in future periods. We believe that the accounting policies discussed in our Annual Report, are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Current wording

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. In other cases, management’s judgment is required in selecting among available alternative accounting standards that provide for different accounting treatment for similar transactions. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the amounts we report as assets, liabilities, revenues, costs and expenses and affect the related disclosures. We base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances. In many instances, we could reasonably use different accounting estimates, and in some instances changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, our actual results could differ significantly from the estimates made by our management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. Our critical accounting policies are discussed in our 2025 Annual Report, and there have been no material changes other than that have been disclosed in Note 2, "Summary of Significant Accounting Policies" to our consolidated financial statements herein. As events continue to evolve our estimates may change materially in future periods. We believe that the accounting policies discussed in our 2025 Annual Report, are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Previous wording

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

Current wording

Comparison of Three Months Ended September 30, 2025 and 2024

Previous 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

Current wording

Total revenues increased by $183.4 million, or 33%, from $550.3 million in the three months ended September 30, 2024 to $733.8 million in the three months ended September 30, 2025.

Previous wording

The increase in revenues for the three months ended March 31, 2025, as compared to the same period in the prior year, was driven by an increase in revenue from our Enterprise Technology platform offset in part by a decline in Revenue from our Service Provider Technology platform.

Current wording

The increase in revenues for the three months ended September 30, 2025, as compared to the same period in the prior year, was primarily driven by an increase in revenue from our Enterprise Technology platform, partially offset by a decrease in revenue from our Service Provider Technology platform.

Previous 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.

Current wording

The decrease in Service Provider Technology in the three months ended September 30, 2025, as compared to the same period in the prior year, was primarily due to a decline in revenues in the South America, Asia Pacific and North America 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 nine months ended March 31, 2025 and 2024 (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 months ended September 30, 2025 and 2024 (in thousands, except percentages):

Previous 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.

Current wording

(1) Revenue for the United States was $351.3 million and $248.7 million for the three months ended September 30, 2025 and 2024, respectively.

Previous 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.

Current wording

The increase in North America revenues during the three months ended September 30, 2025, as compared to the same period 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

Total revenues increased $393.4 million, or 28%, from $1,421.0 million in the nine months ended March 31, 2024 to $1,814.4 million in the nine months ended March 31, 2025.

Current wording

Revenues in EMEA increased by $58.2 million, or 28%, from $204.9 million in the three months ended September 30, 2024 to $263.1 million in the three months ended September 30, 2025.

Previous 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.

Current wording

The increase in EMEA revenues during the three months ended September 30, 2025, as compared to the same period in the prior year, was due to increased revenue from both our Enterprise Technology products as well as our Service Provider Technology products.

Previous 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.

Current wording

Revenues in the Asia Pacific region increased by $12.2 million, or 30%, from $40.9 million in the three months ended September 30, 2024 to $53.1 million in the three months ended September 30, 2025.

Previous 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.

Current wording

The increase in Asia Pacific revenues during the three months ended September 30, 2025, as compared to the same period in the prior year, was due to increased revenue from our Enterprise Technology products, partially offset by decreased revenue from our Service Provider Technology products.

Previous 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.

Current wording

The increase in South America revenues during the three months ended September 30, 2025, as compared to the same period in the prior year, was due to increased revenue from our Enterprise Technology products, partially offset by a decrease in revenue from our Service Provider Technology products.

Previous 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.

Current wording

Gross profit margin increased to 46.0% in the three months ended September 30, 2025, compared to 42.1% in the three months ended September 30, 2024. The increase in gross profit margin for the three months ended September 30, 2025, as compared to the comparable prior year period, was primarily driven by favorable product mix and, as a percentage of revenue, lower shipping costs, indirect operating expenses, and excess and obsolete inventory charges, offset in part by higher tariff costs.

Previous 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.

Current wording

Research and development (“R&D”) expenses increased by $10.5 million, or 28%, from $38.0 million in the three months ended September 30, 2024 to $48.5 million in the three months ended September 30, 2025. As a percentage of revenues, R&D expenses remained consistent at 7% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Previous 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.

Current wording

The increase in R&D expenses during the three months ended September 30, 2025, as compared to the comparable prior year period, was primarily driven by higher employee-related expenses, higher prototype-related expenses and software costs.

Previous 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.

Current wording

Sales, general and administrative (“SG&A”) expenses increased by $2.7 million, or 11%, from $24.4 million in the three months ended September 30, 2024 to $27.1 million in the three months ended September 30, 2025. As a percentage of revenues, SG&A expenses remained consistent at 4% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Previous 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.

Current wording

Interest expense and other, net ("I&O") expenses decreased by $7.4 million, or 70%, from $10.6 million in the three months ended September 30, 2024 to $3.2 million in the three months ended September 30, 2025. As a percentage of revenue, I&O expenses decreased from 2% for the three months ended September 30, 2024 to 0.4% for the three months ended September 30, 2025.

Previous 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.

Current wording

The decrease in I&O expenses during the three months ended September 30, 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 losses in the first quarter of fiscal 2026 compared to foreign exchange gains in the comparable prior year period.

Previous 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.

Current wording

Our provision for income taxes increased by $20.0 million, or 65%, from $30.6 million for the three months ended September 30, 2024 to $50.7 million for the three months ended September 30, 2025. Our effective tax rate increased to 19.6% for the three months ended September 30, 2025 as compared to 19.3% for the three months ended September 30, 2024.

Previous 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.

Current wording

The change in effective tax rates for the three months ended September 30, 2025, as compared to the same period in the prior year, was primarily driven by a change in the mix of income earned in various tax jurisdictions as well as in the mix of income eligible for the Foreign-Derived Intangible Income (“FDII”) rules and subject to the Global Intangible Low-Taxes Income ("GILTI") and Pillar Two rules.

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 $151.0 million and $126.3 million as of March 31, 2025 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 $177.2 million and $149.7 million as of September 30, 2025 and June 30, 2025, respectively.

Previous 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.

Current wording

Net cash provided by operating activities during the three months ended September 30, 2025 consisted primarily of net income of $207.9 million, and non-cash adjustments of $12.3 million, partially offset by other changes in operating assets and liabilities that resulted in net cash outflows of $21.7 million. This net change in operating assets and liabilities consisted primarily of a $32.5 million decrease in net accounts payable and accrued liabilities, a $6.6 million increase in inventories, partially offset by a $8.3 million increase in taxes payable, a $8.1 million increase in deferred revenue, and a $1.8 million decrease in vendor deposits.

Previous 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.

Current wording

Net cash provided by operating activities during the three months ended September 30, 2024 consisted primarily of net income of $128.0 million, and the benefit of decreasing vendor deposits of $21.7 million, decreasing inventories of $8.5 million and non-cash adjustments of $15.9 million, further augmented by other changes in operating assets and liabilities that resulted in net cash inflows of $59.7 million. This net change in operating assets and liabilities consisted primarily of a $58.7 million increase in net accounts payable and accrued liabilities, a $6.2 million increase in taxes payable and $5.4 million decrease in accounts receivable.

Previous 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.

Current wording

We used $5.2 million of cash in investing activities during the three months ended September 30, 2025. Our investing activities consisted primarily of $5.2 million of capital expenditures.

Previous 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.

Current wording

We used $2.6 million of cash in investing activities during the three months ended September 30, 2024. Our investing activities consisted primarily of $2.6 million of capital expenditures.

Previous 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.

Current wording

We used $165.8 million of cash in financing activities during the three months ended September 30, 2025. During the three months ended September 30, 2025, we repaid $116.3 million under the Company's Facilities and used $48.4 million related to dividends paid on our common stock.

Previous 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.

Current wording

We used $192.2 million of cash in financing activities during the three months ended September 30, 2024. During the three months ended September 30, 2024, we repaid $155.6 million under the Company’s Facilities and used $36.3 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. 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.

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 enter into a new credit facility before the existing one matures in March 2026,if needed, will be sufficient to meet our near-term working capital requirements, pay quarterly dividends, make 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 the 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 may 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 t…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Our products are generally accompanied by a twelve to twenty-four month warranty from date of purchase, which covers both parts and labor. Generally, the distributor is responsible for the freight costs associated with warranty returns, and we absorb the freight costs of replacing items under warranty. In accordance with FASB's, Accounting Standards Codification ("ASC"), 450-20, Loss Contingencies, we record an accrual when we believe it is reasonably estimable and probable based upon historical experience. We record a provision for estimated future warranty work in cost of goods sold upon recognition of revenues, and we review the resulting accrual regularly and periodically adjust it to reflect changes in warranty estimates.

Current wording

Our products are generally accompanied by a twelve to twenty-four month warranty from date of purchase, which covers both parts and labor. Generally, the distributor is responsible for the freight costs associated with warranty returns, and we absorb the freight costs of replacing items under warranty. In accordance with the Financial Accounting Standard Board’s (“FASB's”), Accounting Standards Codification ("ASC"), 450-20, Loss Contingencies, we record an accrual when we believe it is reasonably estimable and probable based upon historical experience. We record a provision for estimated future warranty work in cost of goods sold upon recognition of revenues, and we review the resulting accrual regularly and periodically adjust it to reflect changes in warranty estimates.

Previous 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.

Current wording

We subcontract with third parties to manufacture our products and supply key components. As of September 30, 2025, we had $1,249.8 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 September 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.

Previous wording

We had other obligations of $5.2 million as of March 31, 2025, which consisted primarily of commitments related to research and development projects.

Current wording

We had other obligations of $4.9 million as of September 30, 2025, which consisted primarily of commitments related to research and development projects.

Previous wording

As of March 31, 2025, we had $37.9 million of unrecognized tax benefits and an additional $5.9 million for 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 September 30, 2025, we had $34.7 million of unrecognized tax benefits and an additional $6.0 million for 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.