ANALOG DEVICES INC 10-Q

ITEM 1. Financial Statements ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except per share amounts) Three Months Ended Nine Months Ended August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Revenue $ 2,880,348 $ 2,312,209 $ 7,943,590 $ 6,983,952 Cost of sales 1,090,600 1,000,970 3,111,929 3,018,737 Gross margin 1,789,748 1,311,239 4,831,661 3,965,215 Operating expenses: Research and development 454,251 362,671 1,298,980 1,108,960 Selling, marketing, general and administrative 325,706 257,213 913,171 791,420 Amortization of intangibles 187,415 187,754 562,245 567,030 Special charges, net 4,348 12,282 69,980 34,399 Total operating expenses 971,720 819,920 2,844,376 2,501,809 Operating income: 818,028 491,319 1,987,285 1,463,406 Nonoperating expense (income): Interest expense 79,592 85,179 229,559 239,423 Interest income ( 27,083 ) ( 26,432 ) ( 72,295 ) ( 50,870 ) Other, net 2,110 9,581 5,108 13,841 Total nonoperating expense (income) 54,619 68,328 162,372 202,394 Income before income taxes 763,409 422,991 1,824,913 1,261,012 Provision for income taxes 244,891 30,759 345,309 103,811 Net income $ 518,518 $ 392,232 $ 1,479,604 $ 1,157,201 Shares used to compute earnings per common share – basic 494,390 496,338 495,560 496,077 Shares used to compute earnings per common share – diluted 496,726 498,794 497,865 498,689 Basic earnings per common share $ 1.05 $ 0.79 $ 2.99 $ 2.33 Diluted earnings per common share $ 1.04 $ 0.79 $ 2.97 $ 2.32 See accompanying notes. 1 ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands) Three Months Ended Nine Months Ended August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Net income $ 518,518 $ 392,232 $ 1,479,604 $ 1,157,201 Foreign currency translation adjustments 364 198 ( 548 ) 847 Change in fair value of derivative instruments designated as cash flow hedges, net ( 6,359 ) 7,426 11,137 16,752 Changes in pension plans, net 542 ( 141 ) 1,582 985 Other comprehensive (loss) income ( 5,453 ) 7,483 12,171 18,584 Comprehensive income $ 513,065 $ 399,715 $ 1,491,775 $ 1,175,785 See accompanying notes. 2 ANALOG DEVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share and per share amounts) August 2, 2025 November 2, 2024 ASSETS Current Assets Cash and cash equivalents $ 2,321,191 $ 1,991,342 Short-term investments 1,148,096 371,822 Accounts receivable 1,553,259 1,336,331 Inventories 1,596,853 1,447,687 Prepaid expenses and other current assets 305,170 337,472 Total current assets 6,924,569 5,484,654 Non-current Assets Net property, plant and equipment 3,299,278 3,415,550 Goodwill 26,945,180 26,909,775 Intangible assets, net 8,402,630 9,585,464 Deferred tax assets 1,925,442 2,083,752 Other assets 695,502 749,082 Total non-current assets 41,268,032 42,743,623 TOTAL ASSETS $ 48,192,601 $ 48,228,277 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Accounts payable $ 490,723 $ 487,457 Income taxes payable 475,033 447,379 Debt, current — 399,636 Commercial paper notes 548,665 547,738 Accrued liabilities 1,464,617 1,106,070 Total current liabilities 2,979,038 2,988,280 Non-current Liabilities Long-term debt 8,139,938 6,634,313 Deferred income taxes 2,371,536 2,624,392 Income taxes payable 99,880 260,486 Other non-current liabilities 516,367 544,489 Total non-current liabilities 11,127,721 10,063,680 Shareholders’ Equity Preferred stock, $ 1.00 par value, 471,934 shares authorized, none outstanding — — Common stock, $ 0.16 2/3 par value, 1,200,000,000 shares authorized, 491,955,436 shares outstanding ( 496,296,854 on November 2, 2024) 81,994 82,718 Capital in excess of par value 23,938,238 25,082,243 Retained earnings 10,238,695 10,196,612 Accumulated other comprehensive loss ( 173,085 ) ( 185,256 ) Total shareholders’ equity 34,085,842 35,176,317 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 48,192,601 $ 48,228,277 See accompanying notes. 3 ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited) (in thousands) Three Months Ended August 2, 2025 Capital in Accumulated Other Common Stock Excess of Retained Comprehensive Shares Amount Par Value Earnings Loss BALANCE, MAY 3, 2025 496,248 $ 82,710 $ 24,885,204 $ 10,210,338 $ ( 167,632 ) Net income 518,518 Dividends declared and paid - $ 0.99 per share ( 490,161 ) Issuance of stock under stock plans and other 388 65 42,702 Stock-based compensation expense 84,703 Other comprehensive loss ( 5,453 ) Common stock repurchased ( 4,681 ) ( 781 ) ( 1,074,371 ) BALANCE, AUGUST 2, 2025 491,955 $ 81,994 $ 23,938,238 $ 10,238,695 $ ( 173,085 ) Nine Months Ended August 2, 2025 Capital in Accumulated Other Common Stock Excess of Retained Comprehensive Shares Amount Par Value Earnings Loss BALANCE, NOVEMBER 2, 2024 496,297 $ 82,718 $ 25,082,243 $ 10,196,612 $ ( 185,256 ) Net income 1,479,604 Dividends declared and paid - $ 2.90 per share ( 1,437,521 ) Issuance of stock under stock plans and other 2,291 382 103,947 Stock-based compensation expense 235,108 Other comprehensive income 12,171 Common stock repurchased ( 6,633 ) ( 1,106 ) ( 1,483,060 ) BALANCE, AUGUST 2, 2025 491,955 $ 81,994 $ 23,938,238 $ 10,238,695 $ ( 173,085 ) See accompanying notes. 4 Three Months Ended August 3, 2024 Capital in Accumulated Other Common Stock Excess of Retained Comprehensive Shares Amount Par Value Earnings Loss BALANCE, MAY 4, 2024 496,217 $ 82,704 $ 25,103,737 $ 10,239,549 $ ( 177,201 ) Net income 392,232 Dividends declared and paid - $ 0.92 per share ( 456,485 ) Issuance of stock under stock plans and other 827 138 51,881 Stock-based compensation expense 64,051 Other comprehensive income 7,483 Common stock repurchased ( 551 ) ( 92 ) ( 117,888 ) BALANCE, AUGUST 3, 2024 496,493 $ 82,750 $ 25,101,781 $ 10,175,296 $ ( 169,718 ) Nine Months Ended August 3, 2024 Capital in Accumulated Other Common Stock Excess of Retained Comprehensive Shares Amount Par Value Earnings Loss BALANCE, OCTOBER 28, 2023 496,262 $ 82,712 $ 25,313,914 $ 10,356,798 $ ( 188,302 ) Net income 1,157,201 Dividends declared and paid - $ 2.70 per share ( 1,338,703 ) Issuance of stock under stock plans and other 2,989 498 115,857 Stock-based compensation expense 192,262 Other comprehensive income 18,584 Common stock repurchased ( 2,758 ) ( 460 ) ( 520,252 ) BALANCE, AUGUST 3, 2024 496,493 $ 82,750 $ 25,101,781 $ 10,175,296 $ ( 169,718 ) See accompanying notes. 5 ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended August 2, 2025 August 3, 2024 Cash flows from operating activities: Net income $ 1,479,604 $ 1,157,201 Adjustments to reconcile net income to net cash provided by operations: Depreciation 301,323 265,530 Amortization of intangibles 1,202,179 1,318,325 Stock-based compensation expense 235,108 192,262 Deferred income taxes ( 97,318 ) ( 269,566 ) Other ( 1,496 ) 23,826 Changes in operating assets and liabilities ( 8,008 ) 114,134 Total adjustments 1,631,788 1,644,511 Net cash provided by operating activities 3,111,392 2,801,712 Cash flows from investing activities: Purchases of short-term available-for-sale investments ( 1,150,240 ) ( 438,901 ) Maturities of short-term available-for-sale investments 372,778 — Additions to property, plant and equipment ( 318,399 ) ( 565,053 ) Proceeds from sale of property, plant and equipment, net 58,892 — Payments for acquisitions, net of cash acquired ( 45,652 ) — Other ( 13,595 ) 10,710 Net cash used for investing activities ( 1,096,216 ) ( 993,244 ) Cash flows from financing activities: Proceeds from debt 1,490,785 1,087,856 Debt repayments ( 399,998 ) — Proceeds from commercial paper notes 6,867,508 7,709,492 Payments of commercial paper notes ( 6,866,581 ) ( 7,709,273 ) Repurchase of common stock ( 1,484,166 ) ( 520,712 ) Dividend payments to shareholders ( 1,437,521 ) ( 1,338,703 ) Proceeds from employee stock plans 104,329 116,355 Other 40,317 ( 5,512 ) Net cash used for financing activities ( 1,685,327 ) ( 660,497 ) Net increase in cash and cash equivalents 329,849 1,147,971 Cash and cash equivalents at beginning of period 1,991,342 958,061 Cash and cash equivalents at end of period $ 2,321,191 $ 2,106,032 See accompanying notes. 6 ANALOG DEVICES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED AUGUST 2, 2025 (UNAUDITED) (all tabular amounts in thousands except per share amounts and percentages) Note 1 – Basis of Presentation In the opinion of management, the information furnished in the accompanying condensed consolidated financial statements reflects all normal recurring adjustments that are necessary to fairly state the results for these interim periods and should be read in conjunction with Analog Devices, Inc.’s (the Company) Annual Report on Form 10-K for the fiscal year ended November 2, 2024 (fiscal 2024) and related notes. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for the fiscal year ending November 1, 2025 (fiscal 2025) or any future period. The Company has a 52 - 53 week fiscal year that ends on the Saturday closest to the last day in October. Fiscal 2025 is a 52 -week fiscal year and fiscal 2024 was a 53 -week fiscal year. The additional week in fiscal 2024 was included in the first quarter ended February 3, 2024. Therefore, the first nine months of fiscal 2025 included one less week of operations as compared to the first nine months of fiscal 2024. Note 2 – Shareholders’ Equity As of August 2, 2025, the Company’s Board of Directors had authorized the repurchase of an aggregate of $ 26.7 billion of its common stock under its common stock repurchase program and $ 10.3 billion remained available for repurchases under the program. Note 3 – Accumulated Other Comprehensive (Loss) Income The following table provides the changes in accumulated other comprehensive (loss) income (AOCI) by component and the related tax effects during the first nine months of fiscal 2025. Foreign currency translation adjustment Unrealized holding gains/losses on derivatives Pension plans Total November 2, 2024 $ ( 71,511 ) $ ( 85,202 ) $ ( 28,543 ) $ ( 185,256 ) Other comprehensive income before reclassifications ( 548 ) 2,825 — 2,277 Amounts reclassified out of other comprehensive income — 11,454 1,582 13,036 Tax effects — ( 3,142 ) — ( 3,142 ) Other comprehensive income ( 548 ) 11,137 1,582 12,171 August 2, 2025 $ ( 72,059 ) $ ( 74,065 ) $ ( 26,961 ) $ ( 173,085 ) The amounts reclassified out of AOCI into the Condensed Consolidated Statements of Income and the Condensed Consolidated Statements of Shareholders’ Equity with presentation location during each period were as follows: 7 Three Months Ended Nine Months Ended Comprehensive (Loss) Income Component August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Location Unrealized holding gains/losses on derivatives: Currency forwards $ 1,616 $ ( 853 ) $ 483 $ ( 1,445 ) Cost of sales 949 ( 225 ) 220 ( 497 ) Research and development 1,606 ( 1,391 ) ( 442 ) ( 3,782 ) Selling, marketing, general and administrative Interest rate derivatives 3,731 3,731 11,193 11,193 Interest expense 7,902 1,262 11,454 5,469 Total before tax ( 1,135 ) ( 460 ) ( 2,143 ) ( 1,338 ) Tax $ 6,767 $ 802 $ 9,311 $ 4,131 Net of tax Amortization of pension components included in the computation of net periodic pension cost: Actuarial losses $ 542 $ 515 $ 1,582 $ 1,547 Net of tax Total amounts reclassified out of AOCI, net of tax $ 7,309 $ 1,317 $ 10,893 $ 5,678 Note 4 – Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Nine Months Ended August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Net income $ 518,518 $ 392,232 $ 1,479,604 $ 1,157,201 Basic shares: Weighted-average shares outstanding 494,390 496,338 495,560 496,077 Earnings per common share basic: $ 1.05 $ 0.79 $ 2.99 $ 2.33 Diluted shares: Weighted-average shares outstanding 494,390 496,338 495,560 496,077 Assumed exercise of common stock equivalents 2,336 2,456 2,305 2,612 Weighted-average common and common equivalent shares 496,726 498,794 497,865 498,689 Earnings per common share diluted: $ 1.04 $ 0.79 $ 2.97 $ 2.32 Anti-dilutive shares related to: Outstanding stock-based awards 134 3 125 94 8 Note 5 – Special Charges, Net Liabilities related to special charges, net are included in Accrued liabilities in the Condensed Consolidated Balance Sheets. The activity is detailed below: Accrued Special Charges Global Repositioning Actions Balance at November 2, 2024 $ 13,855 Employee severance costs, net 56,334 Severance payments ( 2,887 ) Balance at February 1, 2025 $ 67,302 Employee severance costs, net 5,189 Severance payments ( 51,448 ) Balance at May 3, 2025 $ 21,043 Employee severance costs, net 2,444 Severance payments ( 14,195 ) Balance at August 2, 2025 $ 9,292 The Company recorded net special charges of $ 70.0 million as part of its Global Repositioning Actions in the nine months ended August 2, 2025. The Global Repositioning Actions were part of a transformation initiative aimed at aligning the Company’s enterprise strategy, organizational design and streamlining its operations to achieve its long-term strategic plan. The special charges include severance costs, in accordance with the Company’s ongoing benefit plan or statutory requirements at foreign locations, related to the termination of certain employees in manufacturing, engineering and selling, marketing, general and administrative roles. During the second quarter of fiscal 2025, the Company completed the sale of its facility in Milpitas, CA, that was previously classified as held for sale, for approximately $ 39.7 million, net of selling costs, which resulted in an immaterial loss recorded in Special charges, net. Note 6 – Revenue Revenue Trends by End Market The following tables summarize revenue by end market. The categorization of revenue by end market is determined using a variety of data points including the technical characteristics of the product, the “sold to” customer information, the “ship to” customer information and the end customer product or application into which the Company’s product will be incorporated. As data systems for capturing and tracking this data and the Company’s methodology evolves and improves, the categorization of products by end market can vary over time. When this occurs, the Company reclassifies revenue by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market. 9 Three Months Ended August 2, 2025 August 3, 2024 Revenue % of Revenue* Y/Y% Revenue % of Revenue* Industrial $ 1,285,041 45 % 23 % $ 1,045,291 45 % Automotive 850,619 30 % 22 % 694,905 30 % Consumer 372,197 13 % 21 % 306,832 13 % Communications 372,491 13 % 40 % 265,181 11 % Total revenue $ 2,880,348 100 % 25 % $ 2,312,209 100 % Nine Months Ended August 2, 2025 August 3, 2024 Revenue % of Revenue* Y/Y% Revenue % of Revenue* Industrial $ 3,502,751 44 % 9 % $ 3,223,111 46 % Automotive 2,445,391 31 % 14 % 2,136,173 31 % Consumer 1,009,614 13 % 24 % 817,436 12 % Communications 985,834 12 % 22 % 807,232 12 % Total revenue $ 7,943,590 100 % 14 % $ 6,983,952 100 % * The sum of the individual percentages may not equal the total due to rounding. Revenue by Sales Channel The following tables summarize revenue by sales channel. The Company sells its products globally through a direct sales force, third-party distributors, independent sales representatives and via its website. Distributors are customers that buy products with the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment manufacturers. Other customers include the U.S. government, government prime contractors and certain commercial customers for which revenue is recorded over time. Three Months Ended August 2, 2025 August 3, 2024 Channel Revenue % of Revenue* Revenue % of Revenue* Distributors $ 1,592,407 55 % $ 1,332,244 58 % Direct customers 1,240,924 43 % 940,317 41 % Other 47,017 2 % 39,648 2 % Total revenue $ 2,880,348 100 % $ 2,312,209 100 % Nine Months Ended August 2, 2025 August 3, 2024 Channel Revenue % of Revenue* Revenue % of Revenue* Distributors $ 4,447,959 56 % $ 4,115,836 59 % Direct customers 3,386,571 43 % 2,753,885 39 % Other 109,060 1 % 114,231 2 % Total revenue $ 7,943,590 100 % $ 6,983,952 100 % * The sum of the individual percentages may not equal the total due to rounding. Note 7 – Fair Value Assets and Liabilities Recorded at Fair Value on a Recurring Basis The tables below, set forth by level, present the Company’s financial assets and liabilities, excluding accrued interest components that were accounted for at fair value on a recurring basis as of August 2, 2025 and November 2, 2024. The tables exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of August 2, 2025 and November 2, 2024, the Company held $ 1.4 billion and $ 1.4 billion, respectively, of cash that is excluded 10 from the tables below. August 2, 2025 Fair Value Measurement at Reporting Date Using: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Total Assets Cash equivalents: Available-for-sale: Government and institutional money market funds $ 555,878 $ — $ 555,878 Corporate obligations (1) — 396,109 396,109 Short-term investments (2): Available-for-sale: Corporate obligations (1) — 654,391 654,391 Bank obligations (1) — 493,705 493,705 Other assets: Forward foreign currency exchange contracts (3) — 10,313 10,313 Deferred compensation plan investments 100,559 — 100,559 Total assets measured at fair value $ 656,437 $ 1,554,518 $ 2,210,955 Liabilities Forward foreign currency exchange contracts (3) $ — $ 10,535 $ 10,535 Interest rate derivatives (4) — 17,404 17,404 Total liabilities measured at fair value $ — $ 27,939 $ 27,939 (1) The amortized cost of the Company’s investments classified as available-for-sale as of August 2, 2025 was $ 1.6 billion. (2) Available-for-sale securities are classified as current assets on the Condensed Consolidated Balance Sheets if the securities are available to be converted into cash to fund current operations. (3) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 8, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company’s master netting arrangements. (4) The carrying value of the related debt was adjusted by an equal and offsetting amount. The fair value of interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivatives. See Note 8, Derivatives, in these Notes to Condensed Consolidated Financial Statements. 11 November 2, 2024 Fair Value Measurement at Reporting Date Using: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Total Assets Cash equivalents: Available-for-sale: Government and institutional money market funds $ 592,560 $ — $ 592,560 Short-term investments: Available-for-sale: Securities with one year or less to maturity: Corporate obligations (1) — 71,246 71,246 Bank obligations (1) — 300,576 300,576 Other assets: Forward foreign currency exchange contracts (2) — 7,318 7,318 Deferred compensation plan investments 92,698 — 92,698 Total assets measured at fair value $ 685,258 $ 379,140 $ 1,064,398 Liabilities Forward foreign currency exchange contracts (2) $ — $ 16,279 $ 16,279 Interest rate derivatives (3) — 36,855 36,855 Total liabilities measured at fair value $ — $ 53,134 $ 53,134 (1) The amortized cost of the Company’s investments classified as available-for-sale as of November 2, 2024 was $ 382.9 million. (2) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 8, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company’s master netting arrangements. (3) The carrying value of the related debt was adjusted by an equal and offsetting amount. The fair value of interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivatives. See Note 8, Derivatives, in these Notes to Condensed Consolidated Financial Statements. Assets and Liabilities Not Recorded at Fair Value on a Recurring Basis The table below presents the estimated fair values of certain financial instruments not recorded at fair value on a recurring basis. Given the short tenure of the Company’s commercial paper notes, the carrying value of the outstanding commercial paper notes approximates the fair values, and therefore, are excluded from the table below ($ 548.7 million and $ 547.7 million as of August 2, 2025 and November 2, 2024, respectively). The fair values of the senior unsecured notes are obtained from broker prices and are classified as Level 1 measurements according to the fair value hierarchy. 12 August 2, 2025 November 2, 2024 Principal Amount Outstanding Fair Value Principal Amount Outstanding Fair Value 2025 Notes, due April 2025 $ — $ — 400,000 397,027 2026 Notes, due December 2026 900,000 892,974 900,000 882,795 2027 Notes, due June 2027 440,212 436,034 440,212 421,077 2028 Notes, due June 2028 850,000 855,077 — — 2028 Notes, due October 2028 750,000 696,785 750,000 673,316 2030 Notes, due June 2030 650,000 656,509 — — 2031 Notes, due October 2031 1,000,000 879,165 1,000,000 843,766 2032 Notes, due October 2032 300,000 299,985 300,000 287,172 2034 Notes, due April 2034 550,000 565,982 550,000 553,375 2036 Notes, due December 2036 144,278 139,050 144,278 136,718 2041 Notes, due October 2041 750,000 547,882 750,000 534,435 2045 Notes, due December 2045 332,587 324,873 332,587 322,942 2051 Notes, due October 2051 1,000,000 650,076 1,000,000 655,668 2054 Notes, due April 2054 550,000 532,331 550,000 541,912 Total senior unsecured notes $ 8,217,077 $ 7,476,723 $ 7,117,077 $ 6,250,203 Note 8 – Derivatives Foreign Exchange Exposure Management — The total notional amounts of forward foreign currency derivative instruments designated as hedging instruments of cash flow hedges as of August 2, 2025 and November 2, 2024 were $ 282.2 million and $ 257.0 million, respectively, and the fair values of these instruments in the Company’s Condensed Consolidated Balance Sheets were as follows: Fair Value At Balance Sheet Location August 2, 2025 November 2, 2024 Forward foreign currency exchange contracts Prepaid expenses and other current assets $ 6,800 $ 780 Forward foreign currency exchange contracts Accrued liabilities $ 3,071 $ 4,235 As of August 2, 2025 and November 2, 2024, the total notional amounts of undesignated hedges related to forward foreign currency exchange contracts were $ 184.7 million and $ 176.8 million, respectively, and the fair values of undesignated hedges in the Company’s Condensed Consolidated Balance Sheets were as follows: Fair Value At Balance Sheet Location August 2, 2025 November 2, 2024 Undesignated hedges related to forward foreign currency exchange contracts Prepaid expenses and other current assets $ 3,513 $ 6,538 Undesignated hedges related to forward foreign currency exchange contracts Accrued liabilities $ 7,464 $ 12,044 Interest Rate Exposure Management — The Company does not consider the risk of counterparty default to be significant. The gain or loss on the Company’s interest rate swap transactions attributable to the hedged benchmark interest rate risk and the offsetting gain or loss on the related interest rate swaps were recorded as follows: August 2, 2025 Balance Sheet Location Loss on Swaps Gain on Note Accrued liabilities $ 17,404 $ — Long-term debt $ — $ 17,404 For information on the unrealized holding gains (losses) on derivatives included in and reclassified out of AOCI into the Condensed Consolidated Statements of Income related to forward foreign currency exchange contracts, see Note 3, Accumulated Other Comprehensive (Loss) Income, in these Notes to Condensed Consolidated Financial Statements for further information. 13 Note 9 – Inventories Inventories at August 2, 2025 and November 2, 2024 were as follows: August 2, 2025 November 2, 2024 Raw materials $ 68,721 $ 93,608 Work in process 1,171,900 1,047,022 Finished goods 356,232 307,057 Total inventories $ 1,596,853 $ 1,447,687 Note 10 – Debt Revolving Credit Agreement On April 11, 2025, the Company entered into its Fourth Amended and Restated Revolving Credit Agreement (Revolving Credit Agreement) with the Company and Bank of America, N.A. as administrative agent and the other banks identified therein as lenders, which further amended and restated its revolving credit agreement dated as of June 23, 2021. The Revolving Credit Agreement provides for a five-year unsecured revolving credit facility in an aggregate principal amount of up to $ 3.0 billion, expiring on April 11, 2030. The Revolving Credit Agreement contains customary representations and warranties, and affirmative and negative covenants and events of default applicable to the Company and its subsidiaries. As of August 2, 2025, the Company was in compliance with these covenants. Senior Notes During the second quarter of fiscal 2025, the Company repaid the $ 400.0 million principal amount on its 2025 Notes, due April 2025. On June 16, 2025, in an underwritten public offering, the Company issued $ 850.0 million aggregate principal amount of 4.250 % senior notes due June 15, 2028 (the 2028 Notes) with semi-annual fixed interest payments due on June 15 and December 15 of each year, commencing December 15, 2025. The net proceeds of the offering were $ 845.3 million, after discounts and issuance costs. Prior to May 15, 2028 (the date that is one month prior to the maturity date of the 2028 Notes), the Company may, at its option, redeem the 2028 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to the greater of: (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the 2028 Notes matured on June 15, 2028) on a semi-annual basis at the applicable treasury rate plus 10 basis points less (b) interest accrued to the date of redemption, and (2) 100 % of the principal amount of the 2028 Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to the redemption date. On or after May 15, 2028, the Company may, at its option, redeem the 2028 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100 % of the principal amount of the 2028 Notes being redeemed plus accrued and unpaid interest thereon to the redemption date. The 2028 Notes are unsecured and rank equally in right of payment with all of the Company’s other existing and future unsecured senior indebtedness. On June 16, 2025, in an underwritten public offering, the Company issued $ 650.0 million aggregate principal amount of 4.500 % senior notes due June 15, 2030 (the 2030 Notes) with semi-annual fixed interest payments due on June 15 and December 15 of each year, commencing December 15, 2025. The net proceeds of the offering were $ 645.5 million, after discounts and issuance costs. Prior to May 15, 2030 (the date that is one month prior to the maturity date of the 2030 Notes), the Company may, at its option, redeem the 2030 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to the greater of: (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the 2030 Notes matured on June 15, 2030) on a semi-annual basis at the applicable treasury rate plus 10 basis points less (b) interest accrued to the date of redemption, and (2) 100 % of the principal amount of the 2030 Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to the redemption date. On or after May 15, 2030, the Company may, at its option, redeem the 2030 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100 % of the principal amount of the 2030 Notes being redeemed plus accrued and unpaid interest thereon to the redemption date. The 2030 Notes are unsecured and rank equally in right of payment with all of the Company’s other existing and future unsecured senior indebtedness. The 2028 Notes and the 2030 Notes were issued pursuant to a base indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented by a supplemental indenture, which contains certain covenants, events of default and other customary provisions. The covenants applicable to the 2028 Notes and the 2030 Notes limit the Company’s ability to incur, create, assume or guarantee any debt for borrowed money secured by a lien upon a principal property; enter into certain sale and lease-back transactions with respect to a principal property; and consolidate with 14 or merge into, or transfer or lease all or substantially all of its assets to, any other party. As of August 2, 2025, the Company was in compliance with these covenants. Note 11 – Income Taxes On July 4, 2025, the reconciliation bill, commonly known as the One Big Beautiful Bill Act (OBBBA), was enacted into law. The OBBBA, among other things, eliminates the requirement to capitalize U.S. R&D expenses, permanently extends certain provisions of the Tax Cuts & Jobs Act of 2017 and modifies certain international tax provisions, including changes to the Global Intangible Low-Taxed Income (GILTI) and the foreign-derived intangible income regimes, with effective dates beginning in calendar year 2025 and extending through calendar year 2027. As the OBBBA was enacted during the Company’s fiscal quarter ended August 2, 2025, the Company has considered and reflected the impacts on the condensed consolidated financial statements. The Company is in the process of evaluating the financial statement impact of these provisions to future periods, but does not expect the OBBBA to have a material impact on the consolidated financial statements. The Company accounts for GILTI under the deferred method. As a result of the enactment of the OBBBA, which revised the applicable GILTI tax rate for the Company’s fiscal years beginning in 2027 in the third quarter of fiscal 2025, the Company recorded a net deferred tax expense of $ 153.8 million related to the remeasurement of its GILTI-related deferred tax assets and liabilities. The Company has numerous audits ongoing throughout the world including: an IRS income tax audit for the fiscal years ended October 30, 2021 (fiscal 2021), November 2, 2019 (fiscal 2019) and November 3, 2018 (fiscal 2018); a pre-acquisition IRS income tax audit for Maxim Integrated Products, Inc.’s (Maxim) fiscal years ended June 27, 2015 through August 26, 2021; and various U.S. state and local audits and international audits, including Irish corporate tax audits for fiscal 2021. The Company’s U.S. federal income tax returns prior to fiscal 2018 are no longer subject to examination, except for the applicable Maxim pre-acquisition fiscal years noted above. During the second quarter of fiscal 2025, the Company received an assessment from the U.S. Internal Revenue Service (IRS) for fiscal 2018 and fiscal 2019, totaling approximately $ 267.0 million. The assessment excludes any penalties and interest. The assessment pertains to transfer pricing arrangements between the Company and one of its wholly-owned foreign subsidiaries. The Company firmly disagrees with this assessment and maintains that its transfer pricing is appropriate. Consequently, the Company has not recorded any additional tax liability related to fiscal 2018 and fiscal 2019 in relation to this issue, nor to any other periods. The Company intends to vigorously defend its original tax return position and is currently preparing for an appeal with the IRS. Should the IRS ultimately prevail regarding its assessments for fiscal 2018 and fiscal 2019, such a resolution, along with any potential impact on subsequent fiscal years, could have a material adverse effect on the Company’s income tax expense and net earnings in future periods. Note 12 – New Accounting Pronouncements Standards to Be Implemented Segment Reporting In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which enhances the disclosure requirements for reportable segments. ASU 2023-07 requires segment disclosure to include significant segment expense categories and amounts, and qualitative detail of other segment items. Disclosure of multiple measures of segment profit and loss may also be reported. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact, if any, adoption will have on its financial statement disclosures. Income Taxes In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . ASU 2023-09 requires the disaggregation of information in existing income tax disclosures related to the effective tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact, if any, adoption will have on its financial statement disclosures. 15 Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , requiring public companies to disaggregate key expense categories such as inventory purchases, employee compensation and depreciation in their financial statements. This aims to improve investor insights into company performance. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact, if any, adoption will have on its financial statement disclosures. Note 13 – Subsequent Events On August 15, 2025, the Company increased the aggregate amount that it may issue under its commercial paper program from $ 2.5 billion to $ 3.0 billion outstanding at any time. For further information on the Company’s commercial paper program, see Note 13, Debt , in the Notes to Condensed Consolidated Financial Statements in Part II, Item 8 of the Annual Report on Form 10-K for the fiscal year-ended November 2, 2024, which was filed with the Securities and Exchange Commission on November 26, 2024. On August 19, 2025, the Board of Directors of the Company declared a cash dividend of $ 0.99 per outstanding share of common stock. The dividend will be paid on September 16, 2025 to all shareholders of record at the close of business on September 2, 2025 and is expected to total approximately $ 487.0 million. 16