Keysight Technologies, Inc.

Previous wording

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. This report contains forward-looking statements which include, but are not limited to predictions, future guidance, projections, beliefs, and expectations about the company’s trends, seasonality, cyclicality and growth in, and drivers of, the markets we sell into, our strategic direction, earnings from our foreign subsidiaries, remediation activities, new solution and service introductions, the ability of our solutions to meet market needs, changes to our manufacturing processes, the use of contract manufacturers, the impact of government regulations on our ability to conduct operations, our liquidity position, our ability to generate cash from operations, growth in our businesses, our investments, the potential impact of adopting new accounting pronouncements, our financial results, our purchase commitments, our contributions to our pension plans, the selection of discount rates and recognition of any gains or losses for our benefit plans, our cost-control activities, savings and headcount reduction recognized from our restructuring programs and other cost saving initiatives, and other regulatory approvals, the integration of our completed acquisitions and other transactions, and our transition to lower-cost regions. The forward-looking statements involve risks and uncertainties that could cause Keysight’s results to differ materially from management’s current expectations. Such risks and uncertainties include, but are not limited to, the impact of global economic conditions such as inflation or potential recession, the impacts of increased trade tensions such as an imposition of or increase in tariffs and tightening of export control regulations, slowing demand for products or services, volatility in financial markets, reduced access to credit, changes in interest rates or currency exchange rates, the existence of political or economic instability, impacts of geopolitical tension and conflict in regions outside of the U.S., the impact of new and ongoing litigation, impacts related to net zero emissions commitments, and the impact of volatile weather caused by environmental conditions such as climate change. Our actual results could differ materially from the results contemplated by these forward-looking statements due to various factors, including but not limited to those risks and uncertainties discussed in Part II Item 1A and elsewhere in this Form 10-Q.

Current wording

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. This report contains forward-looking statements which include, but are not limited to predictions, future guidance, projections, beliefs, and expectations about the company’s trends, seasonality, cyclicality and growth in, and drivers of, the markets we sell into, our strategic direction, earnings from our foreign subsidiaries, remediation activities, new solution and service introductions, the ability of our solutions to meet market needs, changes to our manufacturing processes, the use of contract manufacturers, the impact of government regulations on our ability to conduct operations, our liquidity position, our ability to generate cash from operations, growth in our businesses, our investments, the potential impact of adopting new accounting pronouncements, our financial results, our purchase commitments, our contributions to our pension plans, the selection of discount rates and recognition of any gains or losses for our benefit plans, our cost-control activities, savings and headcount reduction recognized from our restructuring programs and other cost saving initiatives, other regulatory approvals, the integration of our completed acquisitions and other transactions, and our transition to lower-cost regions. The forward-looking statements involve risks and uncertainties that could cause Keysight’s results to differ materially from management’s current expectations. Such risks and uncertainties include, but are not limited to, the impact of global economic conditions such as inflation or potential recession, the impacts of increased trade tensions such as an imposition of or increase in tariffs and tightening of export control regulations, slowing demand for products or services, volatility in financial markets, reduced access to credit, changes in interest rates or currency exchange rates, the existence of political or economic instability, impacts of geopolitical tension and conflict in regions outside of the U.S., the impact of new and ongoing litigation, impacts related to net zero emissions commitments, and the impact of volatile weather caused by environmental conditions such as climate change. Our actual results could differ materially from the results contemplated by these forward-looking statements due to various factors, including but not limited to those risks and uncertainties discussed in Part II Item 1A and elsewhere in this Form 10-Q.

Previous wording

We invest in research and development (“R&D”) to align our business with available markets and position the company for growth. Our R&D efforts focus on the development of new software and hardware products, as well as improvements to existing products, and solutions aligned to the industries that we serve. We anticipate that we will continue to have significant R&D expenditures in order to maintain our competitive position with a continuous flow of innovative, high-quality software, solutions, products, and services. We remain committed to investment in R&D and have focused our development efforts on strategic opportunities to capture future growth.

Current wording

We are committed to investing in research and development (“R&D”) and have focused our development efforts on strategic opportunities that align our business with available markets and position the company for growth. Our R&D investments focus on the development of first-to-market solutions with differentiated software and hardware, as well as improvements to existing software and hardware products to provide complete customer solutions addressing the evolving requirements of industries that we serve. We anticipate that we will continue to maintain R&D expenditures to deliver a continuous flow of innovative, high-quality customer solutions, products, and services.

Previous wording

In the fourth quarter of fiscal 2025, we acquired all of the outstanding common stock of Spirent Communications plc (“Spirent”) for $1,415 million, net of $127 million cash acquired, using existing cash. For the three months ended January 31, 2026, our acquisition of Spirent resulted in incremental revenue of $88 million. In our discussion of changes in our results of operations, we have qualitatively disclosed the impact of the Spirent acquisition.

Current wording

In the fourth quarter of fiscal 2025, we acquired all of the outstanding common stock of Spirent Communications plc (“Spirent”) for $1,415 million, net of $127 million cash acquired, using existing cash. For the three and six months ended April 30, 2026, our acquisition of Spirent resulted in incremental revenue of $55 million and $143 million, respectively. In our discussion of changes in our results of operations, we have qualitatively disclosed the impact of the Spirent acquisition.

Previous wording

Impact of U.S. government tariffs

Current wording

U.S. government tariffs and IEEPA tariff refund claims and related customer surcharge refunds

Previous wording

Changes to U.S. tariff policy, which resulted in broad-based increases in tariff rates, impacted our financial results for the three months ended January 31, 2026. Notwithstanding the recent decision by the United States Supreme Court on February 20, 2026, litigation continues in the federal courts regarding the treatment (including recoverability) of certain tariffs. We continue to closely monitor and assess the potential impact of ongoing tariff actions on our results, and take steps across multiple vectors to reduce the impact. This multipronged mitigation approach spans our global manufacturing footprint and sourcing strategies, as well as pricing and cost actions. For additional discussion of risks related to tariffs and trade relations, please refer to the risk factor, in Part II, Item 1A. Risk Factors.

Current wording

Changes to U.S. tariff policy, which resulted in broad-based increases in tariff rates, impacted our financial results for the three and six months ended April 30, 2026. We continue to closely monitor and assess the potential impact of ongoing tariff actions on our results, and take steps across multiple vectors to reduce the impact. This multipronged mitigation approach spans our global manufacturing footprint and sourcing strategies, as well as pricing and cost actions.

Previous wording

Total orders for the three months ended January 31, 2026 were $1,645 million, an increase of 30 percent compared to the same period last year. Foreign currency movements had a favorable impact of 1 percentage point, and acquisitions had a favorable impact of 7 percentage points, on the year-over-year change. Orders increased across all regions.

Current wording

Total orders for the three and six months ended April 30, 2026 were $2,051 million and $3,696 million, respectively, an increase of 56 percent and 43 percent, respectively, compared to the same periods last year. For both the three and six months ended April 30, 2026, foreign currency movements and acquisitions had a favorable impact of 1 percentage point and 7 percentage points, respectively, on the year-over-year change. For the three and six months ended April, 30, 2026 orders increased across all regions.

Previous wording

Revenue for the three months ended January 31, 2026 was $1,600 million, an increase of 23 percent compared to the same period last year. Foreign currency movements had a favorable impact of 1 percentage point, and acquisitions had a favorable impact of 8 percentage points, on the year-over-year change. Revenue increased in both the Communications Solutions Group (“CSG”) and the Electronic Industrial Solutions Group (“EISG”). Revenue from CSG and EISG represented 70 percent and 30 percent, respectively, of total revenue for the three months ended January 31, 2026.

Current wording

Revenue for the three and six months ended April 30, 2026 was $1,717 million and $3,317 million, respectively, an increase of 31 percent and 27 percent, respectively, compared to the same periods last year. For both the three and six months ended April 30, 2026, foreign currency movements and acquisitions had a favorable impact of 1 percentage point and 7 percentage points, respectively, on the year-over-year change. For both periods, revenue increased in the Communications Solutions Group (“CSG”) and the Electronic Industrial Solutions Group (“EISG”). Revenue from CSG and EISG represented 72 percent and 28 percent, respectively, of total revenue for the three months ended April 30, 2026. Revenue from CSG and EISG represented 71 percent and 29 percent, respectively, of total revenue for the six months ended April 30, 2026.

Previous wording

Net income for the three months ended January 31, 2026 was $281 million compared to $169 million for the same period last year. The increase in net income for the three months ended January 31, 2026 was primarily driven by higher revenue, higher income tax benefit due to a net benefit from a favorable audit settlement and net gains on derivative instruments, partially offset by incremental costs from acquired businesses, net losses on equity investments, higher amortization of acquisition-related balances, impact of tariffs, and higher variable people-related costs.

Current wording

Net income for the three and six months ended April 30, 2026 was $349 million and $630 million, respectively, compared to $257 million and $426 million, respectively, for the same periods last year. The increase in net income for the three months ended April 30, 2026 was primarily driven by higher revenue, favorable mix, andnet IEEPA tariff refund claims, partially offset by previous year net gains on derivative instruments, higher people-related costs, incremental costs from acquired businesses, higher amortization of acquisition-related balances, and the impact of ongoing tariffs. The increase in net income for the six months ended April 30, 2026 was primarily driven by higher revenue, favorable mix, higher net income tax benefit, andnet IEEPA tariff refund claims, partially offset by incremental costs from acquired businesses, higher people-related costs, net losses on equity investment, higher amortization of acquisition-related balances, and the impact of ongoing tariffs.

Previous wording

Our first-to-market solutions strategy enables customers to develop new technologies and accelerate innovation and provides a platform for Keysight's long-term growth. Our customers are expected to continue to make R&D investments in certain next-generation technologies and applications, including evolution of 5G, early 6G, quantum computing, high-speed data center networks and infrastructure, satellite networks, artificial intelligence (“AI”), industrial internet of things (“IoT”), defense modernization, and next generation electric vehicles, and autonomous vehicles. We continue to engage actively with our customers and closely monitor the macroeconomic environment, including tariffs, trade restrictions and tightening of export control regulations, monetary and fiscal policies, and geopolitical tensions. We remain confident in the long-term secular growth trends of our markets and our ability to outperform in a variety of market conditions.

Current wording

Our first-to-market solutions strategy enables customers to develop new technologies and accelerate innovation and provides a platform for Keysight's long-term growth. Our customers are expected to continue to make R&D investments in certain next-generation technologies and applications, including evolution of 5G, early 6G, quantum computing, high-speed data center networks and infrastructure, satellite networks, artificial intelligence (“AI”), industrial internet of things (“IoT”), defense modernization, next generation electric vehicles, and autonomous vehicles. We continue to engage actively with our customers and closely monitor the macroeconomic environment, including tariffs, trade restrictions and tightening of export control regulations, monetary and fiscal policies, and geopolitical tensions. We remain confident in the long-term secular growth trends of our markets and our ability to outperform in a variety of market conditions.

Previous wording

There were no material changes during the three months ended January 31, 2026 to the critical accounting estimates described in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

Current wording

There were no material changes during the three and six months ended April 30, 2026 to the critical accounting estimates described in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

Previous wording

Results from Operations - Three months ended January 31, 2026 and 2025

Current wording

Results from Operations - Three and six months ended April 30, 2026 and 2025

Previous wording

The following table provides the percentage change in revenue for the three months ended January 31, 2026 by geographic region and the impact of foreign currency movements as compared to the same period last year.

Current wording

The following table presents the percentage change in revenue by geographic region for the three and six months ended April 30, 2026 and the impact of foreign currency movements as compared to the same periods last year.

Previous wording

Refer to the “Segment Overview” section of Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information on changes in revenue during the three months ended January 31, 2026.

Current wording

Refer to the “Segment Overview” section of Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information on changes in revenue during the three and six months ended April 30, 2026.

Previous wording

Other operating expense (income), net for the three months ended January 31, 2026 was income of $3 million compared to income of $8 million for the same period last year.

Current wording

Other operating expense (income), net for the three and six months ended April 30, 2026 was income of $5 million and $8 million, respectively, compared to income of $3 million and $11 million, respectively, for the same periods last year.

Previous wording

Interest income for the three months ended January 31, 2026 was $16 million compared to $19 million for the same period last year and primarily relates to interest earned on our cash balances. Interest expense for three months ended January 31, 2026 was $29 million compared to $20 million for the same period last year and primarily relates to interest on our senior notes.

Current wording

Interest income for the three and six months ended April 30, 2026 was $18 million and $34 million, respectively, compared to $21 million and $40 million, respectively, for the same periods last year and primarily relates to interest earned on our cash balances. Interest expense for three and six months ended April 30, 2026 was $25 million and $54 million, respectively, compared to $20 million and $40 million, respectively, for the same periods last year and primarily relates to interest on our senior notes.

Previous wording

Other income (expense), net for the three months ended January 31, 2026 was expense of $37 million compared to expense of $18 million for the same period last year. The increase in other expense, net for the three months ended January 31, 2026 is primarily driven by net losses on equity investments, partially offset by net gains on derivative instruments and lower amortization of actuarial losses.

Current wording

Other income (expense), net for the three and six months ended April 30, 2026 was income of $18 million and expense of $19 million, respectively, compared to income of $112 million and $94 million, respectively, for the same periods last year. The decrease in other income, net for the three months ended April 30, 2026 is primarily driven by previous year net gains on derivative instruments (see Note 9, “Derivatives,” for additional information), partially offset by net gains on equity investments and lower amortization of actuarial losses. The increase in other expense, net for the six months ended April 30, 2026 is primarily driven by net losses on equity investments and previous year net gains on derivative instruments (see Note 9, “Derivatives,” for additional information), partially offset by lower amortization of actuarial losses.

Previous wording

As of January 31, 2026 and 2025, our headcount was approximately 16,600 and 15,400, respectively. The increase is primarily driven by acquisitions.

Current wording

As of April 30, 2026 and 2025, our headcount was approximately 16,500 and 15,400, respectively. The increase is primarily driven by acquisitions.

Previous wording

For the three months ended January 31, 2026 and 2025, we recorded an income tax benefit of $83 million and income tax expense of $30 million, respectively, resulting in an effective tax rate of (42%) and 15%, respectively. The effective tax rate is generally lower than the U.S. federal statutory rate of 21% primarily due to favorable tax rates on certain earnings from operations in lower tax jurisdictions, partially offset by U.S. tax on Global Intangible Low-Taxed Income (“GILTI”) inclusions.

Current wording

For the three and six months ended April 30, 2026, we recorded income tax expense of $69 million and an income tax benefit of $14 million, respectively, resulting in an effective tax rate of 16.5 percent and (2.3 percent), respectively. For the three and six months ended April 30, 2025, we recorded an income tax expense of $63 million and $93 million, respectively, resulting in an effective tax rate of 19.5 percent and 17.9 percent, respectively. The effective tax rate is generally lower than the U.S. federal statutory rate of 21 percent primarily due to favorable tax rates on certain earnings from operations in lower tax jurisdictions, partially offset by U.S. tax on Global Intangible Low-Taxed Income (“GILTI”).

Previous wording

For the three months ended January 31, 2026, we recorded net income tax benefits of $106 million from discrete items, driven by $93 million of net benefit from a favorable audit settlement and an $8 million release of reserves due to the expiration of the statute of limitations.

Current wording

For the six months ended April 30, 2026, we recorded net income tax benefits of $87 million from discrete items, driven by a $97 million net benefit from a favorable audit settlement and a $12 million release of reserves due to the expiration of the statute of limitations. These items were partially offset by a $15 million expense related to IEEPA tariff refund claims and $10 million expense from unrecognized tax benefits recorded in the second quarter.

Previous wording

As of January 31, 2026 and October 31, 2025, our long-term income tax liabilities for unrecognized tax benefits were $172 million and $241 million, respectively. The decrease primarily reflected the release of $67 million of uncertain tax positions in connection with an audit settlement in January 2026 as well as an $8 million release of reserves due to the expiration of the statute of limitations, offset by current year increases of $6 million.

Current wording

As of April 30, 2026 and October 31, 2025, our long-term income tax liabilities for unrecognized tax benefits were $185 million and $241 million, respectively. The decrease primarily reflected the release of $68 million of uncertain tax positions in connection with an audit settlement in January 2026 as well as a $12 million release of reserves due to the expiration of the statute of limitations, partially offset by current year increases of $25 million.

Previous wording

CSG revenue for the three months ended January 31, 2026 increased 27 percent compared to the same period last year. Foreign currency movements had a favorable impact of 1 percentage point, and acquisitions had a favorable impact of 10 percentage points on the year-over-year change. Revenue grew across all regions and in both the commercial communications and the aerospace, defense, and government end markets. The increase in revenue was primarily driven by demand in high-speed networks to support the growing need for AI capabilities and aerospace and defense solutions. Our customers continued their R&D spend in next-generation technologies and applications, including AI-driven data center expansion, ongoing 5G standards development and deployment, 400G/800G/1.6T Ethernet, development of new communications technologies (e.g., 6G, Open Radio Access Networks, commercial non-terrestrial networks, quantum), high-speed networking, and major defense and government programs worldwide.

Current wording

CSG revenue for the three and six months ended April 30, 2026 grew across all regions and in both the commercial communications and the aerospace, defense, and government end markets The increase in revenue was primarily driven by demand in high-speed networks to support the growing need for AI capabilities and aerospace and defense solutions. Our customers continued their R&D spend in next-generation technologies and applications, including AI-driven data center expansion, ongoing 5G standards development and deployment, 400G/800G//1.6 terabit Ethernet, development of new communications technologies (e.g., 6G, Open Radio Access Networks, commercial non-terrestrial networks, quantum), high-speed networking, and major defense and government programs worldwide.

Previous wording

Our commercial communications end market revenue for the three months ended January 31, 2026 increased 33 percent year-over-year and represented 67 percent of total CSG revenue. Revenue grew across all regions. The year-over-year increase in revenue was primarily driven by our customers R&D spend in terabit solutions and expanding 400G/800G/1.6T transceiver manufacturing capacity to meet rising demand for AI capabilities. We continued to see investments in high-speed networks due to increasing need for AI capabilities in the data center infrastructure ecosystem, which drove demand for our 400G/800G Ethernet solutions, both in R&D and manufacturing.

Current wording

Our commercial communications end market revenue for the three and six months ended April 30, 2026 increased 40 percent and 36 percent, respectively, year-over-year and represented 70 percent and 69 percent, respectively, of total CSG revenue. For both three and six months ended April 30, 2026, revenue grew across all regions. The year-over-year increase in revenue was primarily driven by our customers R&D spend in terabit solutions and expanding 400G/800G/1.6 terabit transceiver manufacturing capacity to meet rising demand for AI capabilities. We continued to see investments in high-speed networks due to increasing need for AI capabilities in the data center infrastructure ecosystem, which drove demand for our 400G/800G/1.6 terabit Ethernet solutions, both in R&D and manufacturing.

Previous wording

Our aerospace, defense, and government end market revenue for the three months ended January 31, 2026 increased 18 percent year-over-year and represented 33 percent of total CSG revenue. Revenue growth in the Americas and Europe was partially offset by a decline in Asia Pacific. The year-over-year increase in revenue was primarily driven by strong growth in radar and spectrum operations coupled with space and satellite solutions. We continue to see investments in defense modernization and new technologies.

Current wording

Our aerospace, defense, and government end market revenue for the three and six months ended April 30, 2026 increased 24 percent and 21 percent, respectively, year-over-year and represented 30 percent and 31 percent, respectively, of total CSG revenue. For both the three and six months ended April 30, 2026, revenue growth in the Americas and Europe was partially offset by a decline in Asia Pacific. The year-over-year increase in revenue was primarily driven by strong growth in radar and spectrum operations coupled with space and satellite solutions. We continue to see investments in defense modernization and emerging technologies.

Previous wording

Selling, general and administrative expense for the three months ended January 31, 2026 increased 31 percent compared to the same period last year, primarily driven byincremental costs from acquired businesses, higher people-related costs, and higher infrastructure costs.

Current wording

Selling, general and administrative expense for the three and six months ended April 30, 2026 increased 38 percent and 35 percent, respectively, compared to the same periods last year, primarily driven byincremental costs from acquired businesses and higher people-related, selling, and marketing costs.

Previous wording

Operating margin for the three months ended January 31, 2026 was flat compared to the same period last year, driven by flat movements in gross margin and operating expenses as a percentage of sales.

Current wording

Operating margin for the three months ended April 30, 2026 increased 8 percentage points compared to the same period last year, driven by gross margin gains and lower operating expenses as a percentage of sales. Operating margin for the six months ended April 30, 2026 increased 4 percentage points compared to the same period last year, primarily driven by gross margin gains.

Previous wording

EISG serves customers across a diverse set of end markets focused on automotive and energy, semiconductor solutions, and general electronics. The group's solutions consist of electronic design, emulation, test and simulation software, instrumentation, systems, computer-aided engineering solutions, and related services. These solutions are used in the design, simulation, validation, manufacturing, installation, and optimization of electronic equipment.

Current wording

EISG serves customers across a diverse set of end markets focused on semiconductor solutions, general electronics, and automotive and energy. The group's solutions consist of electronic design, emulation, test and simulation software, instrumentation, systems, computer-aided engineering solutions, and related services. These solutions are used in the design, simulation, validation, manufacturing, installation, and optimization of electronic equipment.

Previous wording

EISG revenue for the three months ended January 31, 2026 increased 15 percent compared to the same period last year. Foreign currency movements had a favorable impact of 2 percentage points, and acquisitions had a favorable impact of 3 percentage points on the year-over-year change. Revenue increased in Europe and Asia Pacific, partially offset by a decline in the Americas. Revenue increased across all markets. The increase in revenue was driven by AI-driven demand for advanced semiconductor technologies, software-defined vehicles and autonomous driving, industrial IoT, digital health, and fab capacity.

Current wording

EISG revenue for the three and six months ended April 30, 2026 increased in Asia Pacific and Europe, partially offset by a decline in the Americas. Revenue increased across all markets. The increase in revenue was driven by AI-driven demand for advanced semiconductor technologies and fabrication capacity, next-generation printed circuit board (“PCB”) interconnects, software-defined vehicles and autonomous driving and digital health.

Previous wording

R&D expense for the three months ended January 31, 2026 increased 22 percent compared to the same period last year, primarily driven by incremental costs from acquired businesses, continued investments in key growth opportunities in our end markets and leading-edge technologies, and higher variable people-related costs.

Current wording

R&D expense for both the three and six months ended April 30, 2026 increased 22 percent compared to the same periods last year, primarily driven by continued investments in key growth opportunities in our end markets and leading-edge technologies, incremental costs from acquired businesses, andhigher variable people-related costs.

Previous wording

Selling, general and administrative expense for the three months ended January 31, 2026 increased 17 percent compared to the same period last year, primarily driven byincremental costs from acquired businesses, higher people-related costs, and higher infrastructure costs.

Current wording

Selling, general and administrative expense for both the three and six months ended April 30, 2026 increased 17 percent compared to the same periods last year, primarily driven byincremental costs from acquired businesses and higher people-related, selling, and marketing costs.

Previous wording

Other operating expense (income), net for the three months ended January 31, 2026 was income of $1 million compared to income of $2 million for the same period last year.

Current wording

Other operating expense (income), net for the three and six months ended April 30, 2026 was income of $1 million and $2 million, respectively. Other operating expense (income), net for the three and six months ended April 30, 2025 was income of $1 million and $3 million, respectively.

Previous wording

Net cash provided by operating activities increased $63 million during the three months ended January 31, 2026 compared to the same period last year.

Current wording

Net cash provided by operating activities increased $80 million during the six months ended April 30, 2026 compared to the same period last year.

Previous wording

•Net income for the three months ended January 31, 2026 increased $112 million compared to the same period last year. Non-cash adjustments to net income were $152 million higher, primarily due to a $90 million increase in unrealized losses on investments in equity securities, a $32 million increase in amortization, a $14 million increase in share-based compensation expense, a $9 million decrease in deferred tax benefit, a $7 million increase in depreciation expense, and a $5 million increase in other non-cash expenses, partially offset by a $5 million gain on sale of investments.

Current wording

•Net income for the six months ended April 30, 2026 increased by $204 million compared to the same period last year. Non-cash adjustments to net income increased by $192 million, primarily due to a $71 million increase in net unrealized losses on investments in equity securities, a $65 million increase in amortization, a $36 million increase in share-based compensation expense, a $13 million increase in depreciation expense, and a $10 million decrease in deferred tax benefit, partially offset by a $6 million gain on sale of investments.

Previous wording

•The aggregate change in accounts receivable, inventory, and accounts payable provided net cash of $17 million during the first three months of fiscal 2026 compared to net cash provided of $11 million in the same period last year. The amount of cash flow generated from or used by the aggregate of accounts receivable, inventory, and accounts payable depends upon the cash conversion cycle, which represents the number of days that elapse from the day we pay for the purchase of raw materials and components to the collection of cash from our customers and can be significantly impacted by the timing of shipments and purchases, as well as collections and payments in a period.

Current wording

•The aggregate change in accounts receivable, inventory, and accounts payable used net cash of $49 million during the first six months of fiscal 2026, compared to net cash provided of $112 million in the same period last year. Cash flow generated from or used by the aggregate of accounts receivable, inventory, and accounts payable depends upon the cash conversion cycle, which represents the number of days between payments for raw materials and components and the collection of cash from customers. This cycle can be significantly impacted by the timing of shipments and purchases, as well as the timing of collections and payments in a period.

Previous wording

•The aggregate movements in other assets and liabilities used net cash of $6 million during the first three months of fiscal 2026 compared to net cash provided of $78 million in the same period last year, primarily driven by changes in derivative assets and liabilities (see Note 9, “Derivatives,” for additional information), higher payroll-related payments, net of accruals, higher interest payments, net of accruals, partially offset by changes in deferred revenue and other assets and liabilities.

Current wording

•The aggregate movements in other assets and liabilities used net cash of $24 million during the first six months of fiscal 2026 compared to net cash provided of $131 million in the same period last year. This change was primarily driven by higher income and other tax payments, net of accruals, and net IEEPA tariff refund claims receivable, partially offset by higher payroll-related accruals, net of payments, an increase in deferred revenue, and changes in other assets and liabilities.

Previous wording

Net cash used in investing activities increased $11 million during the three months ended January 31, 2026 compared to the same period last year, primarily driven by $16 million cash used for acquisition activities and $2 million increase in cash used for purchases of property, plant and equipment, partially offset by $7 million proceeds from the sale of investments.

Current wording

Net cash used in investing activities increased by $14 million during the six months ended April 30, 2026 compared to the same period last year. The increase was primarily driven by a $14 million increase in cash used for acquisition activities, a $13 million increase in cash used for purchase of investments, and a $4 million increase in cash used for purchases of property, plant and equipment, partially offset by $17 million of proceeds from the sale of investments.

Previous wording

Net cash used in financing activities increased $25 million during the three months ended January 31, 2026 compared to the same period last year, primarily driven by a $13 million payment of acquisition-related deferred consideration and $12 million higher treasury stock repurchases.

Current wording

Net cash used in financing activities increased by $843 million during the six months ended April 30, 2026 compared to the same period last year. The increase was primarily driven by $748 million of proceeds received in the previous year from the issuance of our 2030 Senior Notes, $82 million higher treasury stock repurchases, and a $14 million payment of acquisition-related consideration.

Previous wording

On November 24, 2025, our board of directors approved a new stock repurchase program authorizing the purchase of up to $1,500 million of the company’s common stock, of which $1,413 million of common stock remained as of January 31, 2026. It replaced the program previously approved in March 2023, under which $110 million of common stock remained. The stock repurchase program may be commenced, suspended, or discontinued at any time at the company’s discretion and does not have an expiration date. See “Issuer Purchases of Equity Securities” under Part II Item 2 for additional information.

Current wording

On November 24, 2025, our board of directors approved a new stock repurchase program, in replacement of the prior program approved in March 2023. The new stock repurchase program authorizes the company to expend up to $1,500 million to repurchase outstanding shares of common stock of the company. As of April 30, 2026, $1,192 million remained available to the company for this purpose. See “Issuer Purchases of Equity Securities” in Part II Item 2 for additional information.

Previous wording

There have been no changes to the principal, maturity, interest rates and interest payment terms of our senior notes during the three months ended January 31, 2026 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

Current wording

There have been no changes to the principal, maturity, interest rates and interest payment terms of our senior notes during the six months ended April 30, 2026 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

Previous wording

On July 30, 2021, we entered into an amended and restated credit agreement (the “Revolving Credit Facility”), which provides a $750 million five-year unsecured revolving credit facility that expires on July 30, 2026. Borrowings under the facility bear an annual interest rate of SOFR + 1.1 percent including a facility fee of 0.1 percent per annum. In addition, the Revolving Credit Facility permits the company, subject to certain customary conditions, on one or more occasions to request to increase the total commitments under the Revolving Credit Facility by up to $250 million in the aggregate. We may use amounts borrowed under the Revolving Credit Facility for general corporate purposes. As of January 31, 2026 and October 31, 2025, we had no borrowings outstanding under the Revolving Credit Facility. We were in compliance with the covenants of the Revolving Credit Facility during the three months ended January 31, 2026.

Current wording

On April 21, 2026, we entered into a new credit agreement (the “Revolving Credit Facility”) that amended and restated our existing credit agreement dated July 30, 2021 (the “2021 Revolving Credit Facility”) in its entirety and provides for a $750 million five-year unsecured revolving credit facility that will expire on April 21, 2031. In addition, the Revolving Credit Facility permits the company, subject to certain customary conditions, on one or more occasions to request to increase the total commitments under the Revolving Credit Facility by up to $350 million in the aggregate. We are obligated to pay an annual facility fee of 0.09 percent for the Revolver Credit Facility. Borrowings under the Revolving Credit Facility in U.S. Dollars bear interest at a rate equal to, at our option, (a) Term Benchmark Rate (primarily Secured Overnight Financing Rate or “SOFR”) plus a margin of 0.91 percent, or (b) higher of (1) the prime rate, (2) the New York Federal Reserve Bank rate plus 0.5 percent, or (3) SOFR plus 1 percent. We may use amounts borrowed under the Revolving Credit Facility for general corporate purposes. As of April 30, 2026, we had no borrowings outstanding under the Revolving Credit Facility. We were in compliance with the covenants of the 2021 Revolving Credit Facility until it was replaced on April 21, 2026, and with the covenants of the Revolving Credit Facility for the period between April 21 and April 30, 2026.

Previous wording

During the three months ended January 31, 2026, we released $56 million of uncertain tax positions resulting from an audit settlement. We believe that we have an adequate provision for any adjustments that may result from tax examinations. However, the outcome of tax examinations cannot be predicted with certainty. Given the numerous tax years and matters that remain subject to examination in various tax jurisdictions, the ultimate resolution of current and future tax examinations could be inconsistent with management’s current expectations.

Current wording

During the six months ended April 30, 2026, we released $68 million of uncertain tax positions resulting from an audit settlement. We believe that we have an adequate provision for any adjustments that may result from tax examinations. However, the outcome of tax examinations cannot be predicted with certainty. Given the numerous tax years and matters that remain subject to examination in various tax jurisdictions, the ultimate resolution of current and future tax examinations could be inconsistent with management’s current expectations.