Ultra Clean Holdings, Inc.
For the period ended Sep 25, 2026. Filed Oct 28, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 25, 2026 · Filed Oct 28, 2026
UCTT$41.13+10.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-26; filed 2026-08-04.
0001628280-26-052540
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-25; filed 2026-10-28.
0001628280-26-067880
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 81 previous paragraphs and 85 current paragraphs.
41 unchanged; 37 reworded; 5 added; 2 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Interest income increased modestly for the three and nine months ended September 25, 2026 compared to the same periods in the prior year.
Current report
Other expense, net, for the three months ended September 25, 2026 primarily consisted of foreign exchange losses of $3.6 million partially offset by government grants of $1.6 million. For the three months ended September 26, 2025, other expense, net primarily consisted of debt modification-related costs of $1.1 million.
Current report
Other expense, net, for the nine months ended September 25, 2026 primarily consisted of a $3.4 million loss on extinguishment of debt related to the term loan repayments and bank fees related to the Company’s credit facilities and accounts receivable factoring arrangements of $1.3 million, partially offset by government grants of $1.6 million. For the nine months ended September 26, 2025, other expense, net primarily consisted of foreign exchange losses of $3.4 million and debt modification-related costs of $1.1 million, partially offset by government grants of $2.2 million.
Current report
ATM Program
Current report
On August 14, 2026, we entered into a sales agreement (the “Sales Agreement”) with certain sales agents. Under the Sales Agreement, we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $400.0 million through an “at-the-market” offering program (the “ATM Program”). During the three and nine months ended September 25, 2026, we sold 0.4 million shares under the ATM Program for net proceeds of $34.0 million. During the three and nine months ended September 25, 2026, the aggregate compensation paid to sales agents under the Sales Agreement was $0.6 million. Subsequent to September 25, 2026 and through October 28, 2026, we sold an additional 2.2 million shares under the ATM Program for net proceeds of $169.1 million, a portion of which was used to repay the $50.0 million outstanding under our revolving credit facility. As of October 28, 2026, approximately $193.2 million remained available under the ATM Program.
Removed paragraphs (2)
Previous report
Interest income was relatively consistent for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year.
Previous report
Other income (expense), net improved for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to favorable foreign exchange gains, partially offset by a loss on extinguishment of debt in the current-year six-month period.
Reworded paragraphs (37)
Previous wording
In March 2026, the Company completed a significant financing transaction, issuing $600.0 million of convertible notes and using a portion of the proceeds to repay its term loan and enter into capped call transactions. Separately, the Company repurchased 0.7 million shares for $40.3 million through privately negotiated transactions at market price. See Note 5 - Long-Term Debt, of our Condensed Consolidated Financial Statements, for additional information.
Current wording
In March 2026, the Company completed a significant financing transaction, issuing $600.0 million of convertible notes and using a portion of the proceeds to repay its term loan and enter into capped call transactions. Separately, the Company repurchased 0.7 million shares for $40.3 million through privately negotiated transactions at market price. In August 2026, the Company established an at-the-market equity offering program of up to $400.0 million (the “ATM Program”), under which it sold 0.4 million shares for net proceeds of $34.0 million during the third quarter. Subsequent to September 25, 2026 and through October 28, 2026, the Company sold an additional 2.2 million shares under the ATM Program for net proceeds of $169.1 million and used a portion of the proceeds to repay all $50.0 million of outstanding borrowings under its revolving credit facility. See Note 5, Long-Term Debt, and Note 15, Subsequent Events, of our Condensed Consolidated Financial Statements for additional information..
Previous wording
Our Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States, which require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure at the date of our Condensed Consolidated Financial Statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to inventories, income taxes, business combinations, contingent earn-out liabilities and goodwill, intangible assets and long-lived assets. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the
Current wording
Our Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States, which require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure at the date of our Condensed Consolidated Financial Statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to inventories, income taxes, business combinations, and goodwill, intangible assets and long-lived assets. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis of our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. We consider certain accounting policies related to revenue recognition, inventory valuation, accounting for income taxes, business combinations, valuation of goodwill, intangible assets and long-lived assets to be critical policies due to the estimates and judgments involved in each.
Previous wording
Discussion of Results of Operations for the Three and Six months ended June 26, 2026 compared to the Three and Six months ended June 27, 2025
Current wording
Discussion of Results of Operations for the Three and Nine months ended September 25, 2026 compared to the Three and Nine months ended September 26, 2025
Previous wording
For the three and six month periods ended June 26, 2026, Products revenues increased compared to the same periods in the prior year, primarily due to an increase in customer demand, driven by an overall market improvement in the semiconductor industry.
Current wording
For the three and nine months ended September 25, 2026, Products revenues increased compared to the same periods in the prior year, primarily due to an increase in customer demand, driven by an overall market improvement in the semiconductor industry.
Previous wording
Services revenues increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to an increase in demand across its customer base.
Current wording
Services revenues increased for the three and nine months ended September 25, 2026 compared to the same periods in the prior year, primarily due to an increase in demand across its customer base.
Previous wording
For the three and six months ended June 26, 2026, U.S. and international revenues increased compared to the same periods in the prior year, primarily reflecting improved conditions in the semiconductor capital equipment market, which drove higher customer demand across multiple regions. International revenue grew faster than U.S. revenue in both periods, shifting the geographic mix further toward international.
Current wording
For the three and nine months ended September 25, 2026, U.S. and international revenues increased compared to the same periods in the prior year, primarily reflecting improved conditions in the semiconductor capital equipment market, which drove higher customer demand across multiple regions. International revenue grew faster than U.S. revenue in both periods, shifting the geographic mix further toward international.
Previous wording
For the three-month period ended June 26, 2026, Products cost of revenue increased by $95.5 million compared to the same period in the prior year. The increase was primarily driven by higher material and labor costs of $81.8 million and $18.4 million, respectively, associated with increased production activity, partially offset by a decrease in manufacturing overhead costs of $4.7 million.
Current wording
For the three months ended September 25, 2026, Products cost of revenue increased by $195.3 million compared to the same period in the prior year. The increase was primarily driven by higher material, labor and manufacturing overhead costs of $167.8 million, $23.8 million, and $3.7 million, respectively, associated with increased production activity.
Previous wording
For the six-month period ended June 26, 2026, Products cost of revenue increased by $106.0 million compared to the same period in the prior year. The increase was primarily driven by higher material and labor costs of $80.6 million and $27.8 million, respectively, associated with increased production activity, partially offset by a decrease in manufacturing overhead costs of $2.4 million.
Current wording
For the nine months ended September 25, 2026, Products cost of revenue increased by $301.3 million compared to the same period in the prior year. The increase was primarily driven by higher material, labor and manufacturing overhead costs of $248.5 million, $51.5 million, and $1.3 million, respectively, associated with increased production activity.
Previous wording
For the three and six month periods ended June 26, 2026, Services Cost of revenues increased by $6.4 million and $10.6 million, respectively, compared to the same periods in the prior year.
Current wording
For the three and nine months ended September 25, 2026, Services cost of revenues increased by $7.5 million and $18.1 million, respectively, compared to the same periods in the prior year.
Previous wording
The increase for the three-month period was primarily driven by higher service volume, which resulted in increased labor, overhead, and material costs of $3.7 million, $1.7 million and $1.0 million, respectively.
Current wording
The increase for the three-month period was primarily driven by higher service volume, which resulted in increased labor, overhead, and material costs of $4.0 million, $2.6 million, and $0.9 million, respectively.
Previous wording
The increase for the six-month period was primarily driven by higher service volume, which resulted in increased labor, overhead, and material costs of $5.9 million, $3.0 million and $1.7 million, respectively.
Current wording
The increase for the nine-month period was primarily driven by higher service volume, which resulted in increased labor, overhead, and material costs of $10.0 million, $5.5 million, and $2.6 million, respectively.
Previous wording
Products gross profit and margin increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, due to higher revenue levels, favorable absorption of fixed costs, a favorable product mix, and a shift in sales volumes across different geographic regions.
Current wording
Products gross profit and margin increased for the three and nine months ended September 25, 2026 compared to the same periods in the prior year, due to higher revenue levels, favorable absorption of fixed costs, a favorable product mix, and a shift in sales volumes across different geographic regions.
Previous wording
Services gross profit increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to higher revenue levels. Gross margin remained flat for the six-month period, as cost of revenue grew in line with revenue and offset improved absorption of fixed costs. For the three-month period, gross margin decreased slightly, as cost of revenue growth outpaced revenue growth.
Current wording
Services gross profit and gross margin increased for the three and nine months ended September 25, 2026 compared to the same periods in the prior year, primarily due to higher revenue levels and improved absorption of fixed costs, as cost of revenue grew at a slower rate than revenue.
Previous wording
Products operating income and operating margin increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily reflecting higher gross profit and the absence of the $77.6 million goodwill impairment charge recorded in the prior period.
Current wording
Products operating income and operating margin increased for the three and nine months ended September 25, 2026 compared to the same periods in the prior year, primarily reflecting higher gross profit. The increase for the nine-month period also reflects the absence of the $77.6 million goodwill impairment charge recorded in the second quarter of fiscal 2025.
Previous wording
Services operating income and operating margin increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily reflecting higher gross profit driven by increased revenue, with operating expenses not materially different, and the absence of the $73.5 million goodwill impairment charge recorded in the prior period.
Current wording
Services operating income and operating margin increased for the three and nine months ended September 25, 2026 compared to the same periods in the prior year, primarily reflecting higher gross profit driven by increased revenue, with operating expenses not materially different. The increase for the nine-month period also reflects the absence of the $73.5 million goodwill impairment charge recorded in the second quarter of fiscal 2025.
Previous wording
Research and development expenses increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to higher employee-related compensation costs.
Current wording
Research and development expenses increased for the three and nine months ended September 25, 2026 compared to the same periods in the prior year, primarily due to higher employee-related compensation costs.
Previous wording
Sales and marketing expenses increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to higher employee-related costs.
Current wording
Sales and marketing expenses increased for the three and nine months ended September 25, 2026 compared to the same periods in the prior year, primarily due to higher employee-related costs.
Previous wording
General and administrative expenses increased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to higher employee-related costs.
Current wording
General and administrative expenses increased for the three and nine months ended September 25, 2026 compared to the same periods in the prior year, primarily due to higher employee-related costs.
Previous wording
Interest expense decreased for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year, primarily due to lower interest expense following the term loan prepayment, partially offset by higher amortization of debt issuance costs related to the convertible notes.
Current wording
Interest expense decreased for the three and nine months ended September 25, 2026 compared to the same periods in the prior year, primarily due to lower interest expense following the term loan prepayment, partially offset by higher amortization of debt issuance costs related to the Convertible Notes.
Previous wording
The increase in the provision for income taxes for the three and six month periods ended June 26, 2026 compared to the same periods in the prior year is primarily attributable to the impact of a distribution of earnings from, and change in ownership of, one of the Company’s foreign subsidiaries in the current year, changes in the geographic mix of worldwide earnings and financial results in jurisdictions which are taxed at different rates, and the impact of losses in jurisdictions with full valuation allowances on deferred tax assets.
Current wording
The increase in the provision for income taxes for the nine months ended September 25, 2026 compared to the same period in the prior year is primarily attributable to the impact of a distribution of earnings from, and change in ownership of, one of the Company’s foreign subsidiaries in the current year, changes in the geographic mix of worldwide earnings and financial results in jurisdictions which are taxed at different rates, and the impact of losses in jurisdictions with valuation allowances on deferred tax assets.
Previous wording
The Company recorded a discrete tax expense of $15.1 million in the six months ended June 26, 2026, due to the distribution of earnings from China. The Company recorded a discrete tax expense of $9.6 million in the quarter ended June 26, 2026, due to a change in ownership of one of the Company’s foreign subsidiaries.
Current wording
During the nine months ended September 25, 2026, the Company recorded discrete income tax expense of $15.1 million related to a distribution of earnings from one of its China subsidiaries and $9.6 million related to a change in ownership of one of its foreign subsidiaries.
Previous wording
Management continuously evaluates the need for a valuation allowance on its deferred tax assets and, as of June 26, 2026, concluded that a full valuation allowance on its U.S. federal, state and certain of its foreign deferred tax assets remained appropriate.
Current wording
Management continuously evaluates the need for a valuation allowance on its deferred tax assets and, as of September 25, 2026, concluded that a valuation allowance on its U.S. federal, state and certain of its foreign deferred tax assets remained appropriate.
Previous wording
The following table summarizes the Condensed Consolidated Statements of Cash Flow information:
Current wording
The following table summarizes the Condensed Consolidated Statements of Cash Flows information:
Previous wording
•For the six-month period ended June 26, 2026, cash used in operating activities was $74.4 million, compared to cash provided by operating activities of $57.4 million for the same period in the prior year. The $131.8 million decrease in net cash provided by operating activities was primarily driven by an unfavorable change in net working capital of $145.0 million and an unfavorable change in non-cash items included in net loss of $146.7 million, partially offset by a $159.9 million improvement in net loss.
Current wording
•For the nine months ended September 25, 2026, cash used in operating activities was $116.7 million, compared to cash provided by operating activities of $57.5 million for the same period in the prior year. The $174.2 million decrease in net cash provided by operating activities was primarily driven by an unfavorable change in net working capital of $239.3 million and an unfavorable change in non-cash items included in net income (loss) of $143.7 million, partially offset by a $208.8 million improvement in net income (loss).
Previous wording
•The major contributors to net changes in operating assets and liabilities for the six-month period ended June 26, 2026 were as follows:
Current wording
•The primary contributors to net changes in operating assets and liabilities for the nine months ended September 25, 2026 were as follows:
Previous wording
◦Accounts payable increased by $104.4 million, accrued compensation and related benefits increased by $11.3 million, and other liabilities increased by $13.8 million, primarily reflecting increased production activities and the timing of payments.
Current wording
◦Accounts payable increased by $131.1 million, accrued compensation and related benefits increased by $12.2 million, and other liabilities increased by $30.2 million, primarily reflecting increased production activities and the timing of payments.
Previous wording
◦Accounts receivable decreased by $0.8 million, primarily due to the timing of shipments and collections. Inventories increased by $238.9 million due to higher production levels. Prepaid and other current assets increased by $13.8 million, primarily due to higher prepaid expenses and deposits.
Current wording
◦Accounts receivable increased by $63.6 million, primarily due to higher revenue and the timing of shipments and collections. Inventories increased by $332.4 million due to higher purchases and production levels to support customer demand. Prepaid and other current assets increased by $16.0 million, primarily due to higher prepaid expenses and deposits.
Previous wording
•Net cash used in investing activities during the six-month period ended June 26, 2026 and June 27, 2025 consisted primarily of $25.8 million and $29.2 million purchases of property, plant and equipment, respectively.
Current wording
•Net cash used in investing activities during the nine months ended September 25, 2026 and September 26, 2025 consisted primarily of purchases of property, plant and equipment of $45.3 million and $40.2 million, respectively.
Previous wording
•Net cash provided by financing activities was $48.5 million for the six-month period ended June 26, 2026, compared to cash used in financing activities of $18.8 million for the same period in the prior year. The increase was primarily driven by $600.0 million of proceeds from the issuance of convertible notes and a $15.0 million drawdown on the revolving credit facility. This was partially offset by principal payments on bank borrowings of $481.5 million, repurchases of common stock of $40.0 million, payments for capped call transactions of $25.1 million, and payments of debt issuance costs of $17.4 million. In the prior year, financing activities primarily reflected lower levels of debt repayments and minimal issuance costs, with no comparable convertible note issuance or share repurchase activity.
Current wording
•Net cash provided by financing activities was $116.6 million for the nine months ended September 25, 2026, compared to cash used in financing activities of $22.3 million for the same period in the prior year. The increase was primarily driven by $600.0 million of proceeds from the issuance of the Convertible Notes and $50.0 million of borrowings under the revolving credit facility and $34.0 million of net proceeds from the issuance of common stock under the at-the-market equity program. These proceeds were partially offset by principal payments on bank borrowings of $481.5 million, repurchases of common stock of $40.0 million, payments for capped call transactions of $25.1 million, and payments of debt issuance costs of $17.4 million. In the prior year, financing activities primarily reflected $18.2 million of term loan principal payments and $3.4 million of share repurchases.
Previous wording
We believe we have sufficient capital to fund our working capital needs, satisfy our debt obligations, maintain our existing capital equipment, purchase new capital equipment and make strategic acquisitions. As of June 26, 2026, we had cash and cash equivalents of $255.9 million compared to $311.8 million as of December 26, 2025. Our cash and cash equivalents, cash generated from operations, and amounts available under our revolving line of credit described below were our principal sources of liquidity as of June 26, 2026.
Current wording
32 - cash and cash equivalents of $270.9 million compared to $311.8 million as of December 26, 2025. Our cash and cash equivalents, cash generated from operations, and amounts available under our revolving line of credit and our at-the-market equity program, each described below, were our principal sources of liquidity as of September 25, 2026.
Previous wording
During the six months ended June 26, 2026, the Company sold accounts receivable totaling $49.0 million under this arrangement.
Current wording
During the nine months ended September 25, 2026, the Company sold accounts receivable totaling $84.7 million under this arrangement.
Previous wording
As of June 26, 2026, we have cash of approximately $219.6 million in our foreign subsidiaries. It is not practicable to determine the tax liability that might be incurred if the undistributed earnings of these foreign subsidiaries were to be distributed. It is the Company’s practice and intention to reinvest the earnings of its non-U.S. subsidiaries in those operations, except for certain of its subsidiaries based in Singapore and China. There is no expected Singapore or U.S. tax liability on a distribution of the Singapore earnings. However, the Company has accrued taxes on a portion of the undistributed earnings of the China subsidiary in its financial statements as of June 26, 2026.
Current wording
As of September 25, 2026, we have cash of approximately $198.8 million in our foreign subsidiaries. It is not practicable to determine the tax liability that might be incurred if the undistributed earnings of these foreign subsidiaries were to be distributed. It is the Company’s practice and intention to reinvest the earnings of its non-U.S. subsidiaries in those operations, except for certain of its subsidiaries based in Singapore and China. There is no expected Singapore or U.S. tax liability on a distribution of the Singapore earnings. However, the Company has accrued taxes on a portion of the undistributed earnings of the China subsidiary in its financial statements as of September 25, 2026.
Previous wording
The Company’s total gross debt as of June 26, 2026 reflects $600.0 million aggregate principal amount of 0.00% Convertible Notes due 2031 issued in fiscal year 2026 and a $15.0 million revolver drawdown. The Company's term loan facility was retired in full during fiscal year 2026 and carried no outstanding balance as of June 26, 2026.
Current wording
The Company’s total gross debt as of September 25, 2026 consisted of $600.0 million aggregate principal amount of 0.0% Convertible Notes due 2031 issued in fiscal year 2026 and $50.0 million of outstanding borrowings under the revolving credit facility. The Company's term loan facility was repaid in full during fiscal year 2026 and carried no outstanding balance as of September 25, 2026.
Previous wording
On April 23, 2026, the Company entered into the Tenth Amendment to its Credit Agreement, which increased the aggregate revolving credit commitment from $150.0 million to $250.0 million and extended the maturity date to April 23, 2031. As of June 26, 2026, the Company had $15.0 million of borrowings outstanding under the revolving credit facility, and available borrowing capacity was $230.9 million, net of outstanding letters of credit and borrowings. The Company was in compliance with all financial covenants under the Amended Credit Agreement as of June 26, 2026.
Current wording
On April 23, 2026, the Company entered into the Tenth Amendment to its Credit Agreement, which increased the aggregate revolving credit commitment from $150.0 million to $250.0 million and extended the maturity date to April 23, 2031. As of September 25, 2026, the Company had $50.0 million of borrowings outstanding under the revolving credit facility, and available borrowing capacity was $195.7 million, net of outstanding letters of credit and borrowings. The Company was in compliance with all financial covenants under the Credit Agreement as of September 25, 2026.
Previous wording
As of June 26, 2026, the Company had $230.9 million, $5.9 million and $5.0 million available to draw from its credit facilities in the U.S., Czechia, and Israel, respectively.
Current wording
As of September 25, 2026, the Company had $195.7 million, $5.9 million and $5.0 million available to draw from its credit facilities in the U.S., Czechia, and Israel, respectively.
Previous wording
Capital expenditures were $25.8 million during the six months ended June 26, 2026 and were primarily attributable to the capital invested in our manufacturing and service facilities worldwide. Our anticipated capital expenditures for the remainder of 2026 are expected to be financed primarily from our cash flow generated from operations and cash on hand.
Current wording
Capital expenditures were $45.3 million during the nine months ended September 25, 2026 and were primarily attributable to the capital invested in our manufacturing and service facilities worldwide. Our anticipated capital expenditures for the remainder of fiscal 2026 are expected to be financed primarily from our cash flow generated from operations and cash on hand.
Previous wording
The Company had commitments to various third parties to purchase inventories totaling approximately $971.1 million as of June 26, 2026.
Current wording
The Company had commitments to various third parties to purchase inventories totaling approximately $1,111.0 million as of September 25, 2026.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The increase in the provision for income taxes for the three months ended September 25, 2026 compared to the same period in the prior year is primarily attributable to the increase in worldwide pretax book income, changes in the geographic mix of worldwide earnings and financial results in jurisdictions which are taxed at different rates, and the impact of losses in jurisdictions with valuation allowances on deferred tax assets.
Current report — wording carried from elsewhere
We believe we have sufficient capital to fund our working capital needs, satisfy our debt obligations, maintain our existing capital equipment, purchase new capital equipment and make strategic acquisitions. As of September 25, 2026, we had
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
26 - circumstances, the results of which form the basis of our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. We consider certain accounting policies related to revenue recognition, inventory valuation, accounting for income taxes, business combinations, valuation of goodwill, intangible assets and long-lived assets to be critical policies due to the estimates and judgments involved in each.