Ubiquiti Inc.

Previous 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. 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 (unaudited) 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.

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, 2026 contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026 (the “2026 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 10, “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

We develop technology platforms for high-capacity distributed Internet access, unified information technology, and consumer electronics for professional, home and personal use. We categorize our solutions into three main categories: high performance networking technology for enterprises, service providers and consumers. We target the enterprise and service provider markets through our highly engaged community of service providers, distributors, value added resellers, webstores, systems integrators and corporate IT professionals, which we refer to as the Ubiquiti Community. We target consumers through digital marketing, including through our webstores, retail chains and, to a lesser extent, the Ubiquiti Community.

Current wording

We develop technology platforms for high-capacity distributed internet access, unified informationfor secure and easily managed network infrastructure, connected sensors, cameras, access devices, appliances and other endpoint devices for enterprise, industrial and service-provider environments. We categorize our solutions into two main categories: high performance networking technology for enterprises and service providers. We target the enterprise and service provider markets through our highly engaged community of service providers, distributors, value added resellers, webstores, systems integrators and corporate IT professionals, which we refer to as the Ubiquiti Community.

Previous wording

We offer a broad and expanding portfolio of networking products and solutions for operator-owners of wireless internet services (“WISPs”), enterprises and smart homes. Our operator-owner service-provider-product platforms provide carrier-class network infrastructure for fixed wireless broadband, wireless backhaul systems and routing and the related software for WISPs to easily control, track and bill their customers. Our enterprise product platforms provide wireless LAN (“WLAN”) infrastructure, video surveillance products, switching and routing solutions, security gateways, door access systems, and other complimentary WLAN products along with a unique software platform, which enables users to control their network from one simple, easy to use software interface. Our consumer products are targeted to the smart home and highly connected consumers. We believe that our products are differentiated due to our proprietary software, firmware expertise, and hardware design capabilities.

Current wording

We offer a broad and expanding portfolio of networking products and solutions for operator-owners of wireless internet services (“WISPs”), enterprises and smart homes. Our operator-owner service-provider-product platforms provide carrier-class network infrastructure for fixed wireless broadband, wireless backhaul systems and routing and the related software for WISPs to easily control, track and bill their customers. Our enterprise product platforms provide wireless LAN (“WLAN”) infrastructure, video surveillance products, switching and routing solutions, security gateways, door access systems, and other complementary WLAN products along with a unique software platform, which enables users to control their network from one simple, easy to use software interface. We believe that our products are differentiated due to our proprietary software, firmware expertise, and hardware design capabilities.

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. Further, recent judicial rulings have introduced significant additional uncertainty regarding the legal basis for U.S. tariff policy. 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 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 product costs, 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 – The U.S. government issued several executive orders imposing significant tariffs on imports from China, and tariffs on most imports from other countries, 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 and continues to impose new tariffs and implement additional changes to international trade agreements. Further, recent judicial rulings have nullified certain tariffs imposed by the Trump administration. These actions have increased the cost of importing products containing certain raw materials and have affected our operating results and margins and have increased 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 product costs, 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 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.

Current wording

Supply Constraints and Risks – We have experienced in the past, and are currently experiencing 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

China-Taiwan Tensions – We are monitoring the escalating tensions between China and Taiwan, and associated tensions between the U.S. and China. While the impact on our operations in Taiwan has not been material to our business or results of operations as of the date hereof, the full impact of the escalating tensions and potential 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 China-U.S. relations, including its impact on our operations in Taiwan, 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

China-Taiwan Tensions - We are monitoring the escalating tensions between China and Taiwan, and associated tensions between the U.S. and China. While the impact on our operations in Taiwan has not been material to our business or results of operations as of the date hereof, the full impact of the escalating tensions and potential 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 China-U.S. relations, including its impact on our operations in Taiwan, and its impact on global supply chains. Refer to “Part II – Item 1A. Risk Factors” for a discussion of these factors and other risks.

Previous wording

•Enterprise Technology includes our UniFi platforms, including UniFi Cloud Gateways, UniFi WiFi, UniFi Switches, UniFi Protect, UniFi Access, UniFi Talk, UniFi Connect and accessories.

Current wording

•Enterprise Technology includes our UniFi platforms, including UniFi Cloud Gateways, UniFi WiFi, UniFi Switches, UniFi Protect, UniFi Access and UniFi Talk.

Previous wording

•Service Provider Technology includes our airMAX, UISP, EdgeMAX, UFiber, Wave, GPON and airFiber platforms, as well as embedded radio products and other 802.11 standard products including base stations, radios, backhaul equipment and CPE.

Current wording

•Service Provider Technology includes our airMAX, UFiber, Wave, GPON and airFiber platforms, as well as embedded radio products and other 802.11 standard products including base stations, radios, backhaul equipment and customer premise equipment(“CPE”).

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, 2026. Direct sales accounted for 45% of our revenue during the nine months ended March 31, 2026.

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 56% of our revenues during the three months ended September 30, 2026. Webstore sales accounted for 44% of our revenue during the three months ended September 30, 2026.

Previous wording

We currently operate warehouses located in the U.S., Europe and Asia Pacific. In addition, we outsource other logistics warehousing and order fulfillment functions located in Vietnam and to a lesser extent in other countries. We also evaluate and utilize other vendors for various portions of our supply chain from time to time. Our operations organization consists of employees and consultants engaged in the management of our contract manufacturers, new product introduction activities, logistical support and engineering.

Current wording

We currently operate warehouses located in the U.S., Europe and Asia Pacific. In addition, we outsource other logistics warehousing and order fulfillment functions located in Vietnam, Panama and to a lesser extent in other countries. We also evaluate and utilize other vendors for various portions of our supply chain from time to time. Our operations organization consists of employees and consultants engaged in the management of our contract manufacturers, new product introduction activities, logistical support and engineering.

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 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.

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. Recent changes in U.S. trade policy have resulted in significant tariffs on imports from China, and tariffs on most imports from other countries, 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 has recently and 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 recent changes have increased and we expect will continue to 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

•Research and development expenses consist primarily of salary and benefit expenses, including share-based compensation, for employees and costs for contractors engaged in research, design and development activities, as well as costs for prototypes, licensed or purchased intellectual property, facilities and travel. Over time, we expect our research and development costs to increase as we continue making significant investments in developing new products in addition to new versions of our existing products.

Current wording

•Research and development expenses consist primarily of salary and benefit expenses, including share-based compensation, for employees and costs for contractors engaged in research, design and development activities, as well as costs for prototypes, licensed or purchased intellectual property and facilities. Over time, we expect our research and development costs to increase as we continue making significant investments in developing new products in addition to new versions of our existing products.

Previous wording

We use the asset and liability method to account for income taxes. Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. In preparing the consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. We must assess potential exposures and, where necessary, provide a reserve to cover any expected loss. To the extent that we establish a reserve, the provision for income taxes would be increased. If we ultimately determine that payment of these amounts is unnecessary, we reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We record an additional charge in our provision for taxes in the period in which we determine that tax liability is greater than our original estimate. We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. Refer to “Part II—Item 1A. Risk Factors—Risks Related to Regulatory, Legal and Tax Matters—Changes in applicable tax regulations could negatively affect our financial results” for additional information.

Current wording

We use the asset and liability method to account for income taxes. Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. In preparing the consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. We must assess potential exposures and, where necessary, provide a reserve to cover any expected loss. To the extent that we establish a reserve, the provision for income taxes would be increased. If we ultimately determine that payment of these amounts is unnecessary, we reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We record an additional charge in our provision for taxes in the period in which we determine that tax liability is greater than our original estimate. We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations and comprehensive income. Refer to “Part II—Item 1A. Risk Factors—Risks Related to Regulatory, Legal and Tax Matters—Our results could be adversely affected by unfavorable tax law changes, an unfavorable government review of our tax returns, or changes in our geographic earnings mix.” 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, 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 2026 Annual Report, and there have been no material changes other than as 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 2026 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, 2026 and 2025

Current wording

Comparison of Three Months Ended September 30, 2026 and 2025

Previous wording

The increase in revenues for the three and nine months ended March 31, 2026, as compared to the same periods in the prior year, was driven by an increase in revenue from our Enterprise Technology platform, offset in part by a decrease in revenue from our Service Provider Technology platform.

Current wording

The increase in revenues for the three months ended September 30, 2026, as compared to the same period in the prior year, was driven by an increase in revenue from both our Enterprise Technology and Service Provider Technology Platforms. We experienced an increase in both direct sales through our webstores as well as sales through distributors during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025.

Previous wording

The increase in Enterprise Technology revenue during the three and nine months ended March 31, 2026, 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.

Current wording

The increase in Enterprise Technology revenue during the three months ended September 30, 2026, as compared to the same period in the prior year, was primarily driven by our Enterprise Technology platform across all regions.

Previous wording

The decrease in Service Provider Technology in the three months ended March 31, 2026, as compared to the same period in the prior year, was due to a decrease in revenues across all regions except North America and South America. The decrease in Service Provider Technology in the nine months ended March 31, 2026, as compared to the same period in the prior year, was due to a decrease in revenues across all regions except North America.

Current wording

The increase in Service Provider Technology in the three months ended September 30, 2026, as compared to the same period in the prior year, was primarily due to an increase in revenues in all regions except North America.

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, 2026 and 2025 (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, 2026 and 2025 (in thousands, except percentages):

Previous wording

(1) Revenue for the United States was $374.1 million and $298.5 million for the three months ended March 31, 2026 and 2025, respectively. Revenue for the United States was $1,113.7 million and $843.3 million for the nine months ended March 31, 2026 and 2025, respectively.

Current wording

(1) Revenue for the United States was $493.9 million and $351.3 million for the three months ended September 30, 2026 and 2025, respectively.

Previous wording

The increase in North America revenues during the three and nine months ended March 31, 2026, 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 North America revenues during the three months ended September 30, 2026, as compared to the same period in the prior year, was driven by increased revenue from our Enterprise Technology products, offset in part by decreased revenue from our Service Provider Technology products.

Previous wording

The increase in EMEA revenues during the three and nine months ended March 31, 2026, as compared to the same periods in the prior year, was due to increased revenue from our Enterprise Technology products, offset in part by a decline in revenues from our Service Provider Technology products.

Current wording

The increase in EMEA revenues during the three months ended September 30, 2026, as compared to the same period in the prior year, was driven by increased revenue from both our Enterprise Technology products and Service Provider Technology products.

Previous wording

Revenues in the Asia Pacific region increased by $5.7 million, or 15%, from $37.5 million in the three months ended March 31, 2025 to $43.2 million in the three months ended March 31, 2026 and increased by $29.3 million, or 24%, from $121.5 million in the nine months ended March 31, 2025 to $150.8 million in the nine months ended March 31, 2026.

Current wording

Revenues in the Asia Pacific region increased by $14.0 million, or 26%, from $53.1 million in the three months ended September 30, 2025 to $67.1 million in the three months ended September 30, 2026.

Previous wording

The increase in Asia Pacific revenues during the three and nine months ended March 31, 2026, as compared to the same periods in the prior year, was due to increased revenue from our Enterprise Technology products, offset in part by a decline in revenues from our Service Provider Technology products.

Current wording

The increase in Asia Pacific revenues during the three months ended September 30, 2026, as compared to the same period in the prior year, was driven by increased revenue from both our Enterprise Technology products and Service Provider Technology products.

Previous wording

The increase in South America revenues during the three months ended March 31, 2026, as compared to the same period in the prior year, was due to an increase in revenues from both our Enterprise Technology products and Service Provider Technology products. The increase in South America revenues during the nine months ended March 31, 2026, as compared to the same period in the prior year, was due to an increase in revenues from our Enterprise Technology products, offset in part by a decline in revenues from our Service Provider Technology products.

Current wording

The increase in South America revenues during the three months ended September 30, 2026, as compared to the same period in the prior year, was driven by increased revenue from both our Enterprise Technology products and Service Provider Technology products.

Previous wording

Gross profit margin increased to 47% in the three months ended March 31, 2026, compared to 45% in the three months ended March 31, 2025 and increased to 46% in the nine months ended March 31, 2026, compared to 43% in the nine months ended March 31, 2025. The increase in gross profit margin for the three months ended March 31, 2026, as compared to the comparable prior year period, was primarily driven by favorable product mix, reduced charges for excess and obsolete inventory, lower shipping costs and other indirect costs. These positive factors were offset in part by higher tariff costs. The increase in gross profit margin for the nine months ended March 31, 2026, as compared to the comparable prior year period, was primarily driven by favorable product mix, lower shipping costs, reduced charges for excess and obsolete inventory and other indirect costs. These positive factors were offset in part by higher tariff costs.

Current wording

Gross profit margin increased to 47.3% in the three months ended September 30, 2026, compared to 46.0% in the three months ended September 30, 2025. The increase in gross profit margin as compared to the comparable prior year period was primarily driven by lower indirect costs, offset in part by higher component costs.

Previous wording

R&D expenses increased by $29.0 million, or 24%, from $122.2 million in the nine months ended March 31, 2025 to $151.2 million in the nine months ended March 31, 2026. As a percentage of revenues, R&D expenses decreased from 7% for the nine months ended March 31, 2025 to 6% for the nine months ended March 31, 2026.

Current wording

Research and development (“R&D”) expenses increased by $4.7 million, or 10%, from $48.5 million in the three months ended September 30, 2025 to $53.2 million in the three months ended September 30, 2026. As a percentage of revenues, R&D expenses decreased from 7% for the three months ended September 30, 2025 to 5% for the three months ended September 30, 2026.

Previous wording

The increase in R&D expenses during the three months ended March 31, 2026, as compared to the comparable prior year period, was primarily driven by higher employee-related expenses, facility costs and software expenses, offset in part by lower depreciation. The increase in R&D expenses during the nine months ended March 31, 2026, as compared to the comparable prior year period, was primarily driven by higher employee-related expenses, prototype-related expenses, facility costs and software expenses, offset in part by lower depreciation.

Current wording

The increase in R&D expenses during the three months ended September 30, 2026, as compared to the comparable prior year period, was primarily driven by software expenses, employee-related expenses and facility costs.

Previous wording

Sales, general and administrative (“SG&A”) expenses increased by $3.3 million, or 13%, from $24.8 million in the three months ended March 31, 2025 to $28.1 million in the three months ended March 31, 2026. 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 $13.5 million, or 50%, from $27.1 million in the three months ended September 30, 2025 to $40.6 million in the three months ended September 30, 2026. As a percentage of revenues, SG&A expenses remained consistent at 4% for the three months ended September 30, 2026, compared to the three months ended September 30, 2025.

Previous wording

Interest Expense and Other, net

Current wording

Interest income (expense) and other, net

Previous wording

Our provision for income taxes increased $15.2 million, or 37%, from $41.0 million for the three months ended March 31, 2025 to $56.2 million for the three months ended March 31, 2026. Our effective tax rate increased from 18.5% for the three months ended March 31, 2025 to 19.4% for the three months ended March 31, 2026.

Current wording

Our provision for income taxes increased by $26.5 million, or 52%, from $50.7 million for the three months ended September 30, 2025 to $77.2 million for the three months ended September 30, 2026. Our effective tax rate decreased to 19.4% for the three months ended September 30, 2026 as compared to 19.6% for the three months ended September 30, 2025.

Previous wording

The change in effective tax rates for the three and nine months ended March 31, 2026, 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 in the mix of income eligible for the Foreign-Derived Intangible Income rules and subject to the Global Intangible Low-Taxes Income and Pillar Two rules.

Current wording

The change in effective tax rates for the three months ended September 30, 2026, 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 Deduction Eligible Income (“FDDEI”) rules and subject to the Net Controlled-Foreign-Corporation Tested Income (“NCTI”) and Pillar Two rules.

Previous wording

Our principal source of liquidity are cash and cash equivalents, cash generated by operations and the availability of additional funds under the Facilities. We had cash and cash equivalents of $368.7 million and $149.7 million as of March 31, 2026 and June 30, 2025, respectively.

Current wording

Our principal sources of liquidity are cash and cash equivalents, short term investments, cash generated by operations, the availability of additional funds under the. 2026 Revolving Facility (as defined in Note 8, Debt of the Notes to our Consolidated Financial Statements). The following summarizes our cash and cash equivalents and investments (in thousands):

Previous wording

Net cash provided by operating activities during the nine months ended March 31, 2026 consisted primarily of net income of $675.4 million, non-cash adjustments of $32.3 million and the benefit of decreasing inventories of $15.5 million, offset in part by other changes in operating assets and liabilities that resulted in net cash outflows of $93.1 million. This net change in operating assets and liabilities was attributable primarily to a $41.3 million decrease in net accounts payable and accrued liabilities, a $39.2 million decrease in taxes payable, a $31.7 million increase in prepaid expenses and other assets, a $6.1 million increase in vendor deposits, and a $1.3 million increase in accounts receivable, offset in part by a $26.6 million increase in deferred revenue.

Current wording

Net cash provided by operating activities during the three months ended September 30, 2026 was $318.6 million, primarily due to net income of $320.5 million, an increase in Income taxes payable of $62.6 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 $76.8 million. This net change in operating assets and liabilities consisted primarily of a $39.1 million increase in vendor deposits, a $19.2 million increase in Accounts receivable, an $18.5 million increase in Prepaid expenses and other assets, $7.8 million decrease in net accounts payable and accrued liabilities, a $1.1 million increase in inventories, partially offset by an $8.9 million increase in deferred revenue.

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, offset in part 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, a $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, offset in part by a $181.2 million increase in net accounts payable and accrued liabilities and a $20.4 million increase in deferred revenue.

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 an $8.3 million increase in taxes payable, an $8.1 million increase in deferred revenue, and a $1.8 million decrease in vendor deposits.

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 $214.7 million of cash in investing activities during the three months ended September 30, 2026. Our investing activities consisted primarily of $208.4 million of net purchase of available for sale securities and $6.3 million of capital expenditures.

Previous wording

We used $14.4 million of cash in investing activities during the nine months ended March 31, 2026. Our investing activities consisted primarily of $14.4 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 $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 credit Facilities and used $108.9 million related to dividends paid on our common stock.

Current wording

We used $77.1 million of cash in financing activities during the three months ended September 30, 2026. During the three months ended September 30, 2026, we paid $60.5 million for dividends on our common stock and used $15.0 million for repurchases of our common stock.

Previous wording

We used $396.9 million of cash in financing activities during the nine months ended March 31, 2026. During the nine months ended March 31, 2026, we repaid $250.0 million under the Company's credit Facilities and used $145.2 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 credit facility and used $48.4 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 2026 Revolving Facility, if needed, will be sufficient to meet our near-term working capital requirements, pay quarterly dividends, make repurchases of our common stock and meet capital expenditure needs for the next twelve months. 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 2026 Revolving Facility 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 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 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, short term investments in addition to the ability to draw cash under the 2026 Revolving Facility, will be sufficient to meet our near-term working capital requirements, pay quarterly dividends, make repurchases of our common stock and meet capital expenditure needs for the next twelve months. 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 2026 Revolving Facility 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 2026 Revolving Credit Facility 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 accounts 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 economic and geopolitical 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.