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 Six Months Ended May 2, 2026 May 3, 2025 May 2, 2026 May 3, 2025 Revenue $ 3,623,465 $ 2,640,068 $ 6,783,728 $ 5,063,242 Cost of sales 1,183,667 1,028,458 2,298,955 2,021,329 Gross margin 2,439,798 1,611,610 4,484,773 3,041,913 Operating expenses: Research and development 509,323 441,837 976,723 844,729 Selling, marketing, general and administrative 362,810 302,669 708,063 587,465 Amortization of intangibles 187,985 187,415 375,300 374,830 Special charges, net — 1,745 47,982 65,632 Total operating expenses 1,060,118 933,666 2,108,068 1,872,656 Operating income: 1,379,680 677,944 2,376,705 1,169,257 Nonoperating expense (income): Interest expense 87,619 74,703 173,963 149,967 Interest income ( 28,565 ) ( 21,725 ) ( 60,822 ) ( 45,212 ) Other, net ( 4,202 ) ( 962 ) ( 7,135 ) 2,998 Total nonoperating expense (income) 54,852 52,016 106,006 107,753 Income before income taxes 1,324,828 625,928 2,270,699 1,061,504 Provision for income taxes 148,478 56,158 263,523 100,418 Net income $ 1,176,350 $ 569,770 $ 2,007,176 $ 961,086 Shares used to compute earnings per common share – basic 487,605 496,173 488,239 496,145 Shares used to compute earnings per common share – diluted 490,458 498,201 491,057 498,434 Basic earnings per common share $ 2.41 $ 1.15 $ 4.11 $ 1.94 Diluted earnings per common share $ 2.40 $ 1.14 $ 4.09 $ 1.93 See accompanying notes. 1 ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands) Three Months Ended Six Months Ended May 2, 2026 May 3, 2025 May 2, 2026 May 3, 2025 Net income $ 1,176,350 $ 569,770 $ 2,007,176 $ 961,086 Foreign currency translation adjustments 1,036 ( 753 ) 1,324 ( 912 ) Change in fair value of derivative instruments designated as cash flow hedges, net ( 5,033 ) 17,573 620 17,496 Changes in pension plans, net 195 517 395 1,040 Other comprehensive (loss) income ( 3,802 ) 17,337 2,339 17,624 Comprehensive income $ 1,172,548 $ 587,107 $ 2,009,515 $ 978,710 See accompanying notes. 2 ANALOG DEVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share and per share amounts) May 2, 2026 November 1, 2025 ASSETS Current Assets Cash and cash equivalents $ 2,436,916 $ 2,499,406 Short-term investments 1,002,392 1,152,915 Accounts receivable 2,051,733 1,436,075 Inventories 1,848,405 1,656,323 Prepaid expenses and other current assets 470,327 363,342 Total current assets 7,809,773 7,108,061 Non-current Assets Net property, plant and equipment 3,292,288 3,315,696 Goodwill 26,973,180 26,945,180 Intangible assets, net 7,255,362 8,013,815 Deferred tax assets 1,729,558 1,867,102 Other assets 888,934 742,858 Total non-current assets 40,139,322 40,884,651 TOTAL ASSETS $ 47,949,095 $ 47,992,712 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Accounts payable $ 598,640 $ 543,760 Income taxes payable 325,626 610,370 Debt, current 899,227 — Commercial paper notes 550,198 446,639 Accrued liabilities 2,083,216 1,645,032 Total current liabilities 4,456,907 3,245,801 Non-current Liabilities Long-term debt 7,235,424 8,145,066 Deferred income taxes 1,906,115 2,163,281 Income taxes payable 87,109 100,963 Other non-current liabilities 521,507 521,846 Total non-current liabilities 9,750,155 10,931,156 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, 487,087,040 shares outstanding ( 489,654,097 on November 1, 2025) 81,183 81,611 Capital in excess of par value 22,287,095 23,349,185 Retained earnings 11,525,998 10,539,541 Accumulated other comprehensive loss ( 152,243 ) ( 154,582 ) Total shareholders’ equity 33,742,033 33,815,755 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 47,949,095 $ 47,992,712 See accompanying notes. 3 ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited) (in thousands) Three Months Ended May 2, 2026 Capital in Accumulated Other Common Stock Excess of Retained Comprehensive Shares Amount Par Value Earnings Loss BALANCE, JANUARY 31, 2026 488,204 $ 81,369 $ 22,968,224 $ 10,886,107 $ ( 148,441 ) Net income 1,176,350 Dividends declared and paid - $ 1.10 per share ( 536,459 ) Issuance of stock under stock plans and other 1,202 201 9,665 Stock-based compensation expense 81,721 Other comprehensive loss ( 3,802 ) Common stock repurchased ( 2,319 ) ( 387 ) ( 772,515 ) BALANCE, MAY 2, 2026 487,087 $ 81,183 $ 22,287,095 $ 11,525,998 $ ( 152,243 ) Six Months Ended May 2, 2026 Capital in Accumulated Other Common Stock Excess of Retained Comprehensive Shares Amount Par Value Earnings Loss BALANCE, NOVEMBER 1, 2025 489,654 $ 81,611 $ 23,349,185 $ 10,539,541 $ ( 154,582 ) Net income 2,007,176 Dividends declared and paid - $ 2.09 per share ( 1,020,719 ) Issuance of stock under stock plans and other 1,663 277 59,210 Stock-based compensation expense 167,396 Other comprehensive income 2,339 Common stock repurchased ( 4,230 ) ( 705 ) ( 1,288,696 ) BALANCE, MAY 2, 2026 487,087 $ 81,183 $ 22,287,095 $ 11,525,998 $ ( 152,243 ) See accompanying notes. 4 Three Months Ended May 3, 2025 Capital in Accumulated Other Common Stock Excess of Retained Comprehensive Shares Amount Par Value Earnings Loss BALANCE, FEBRUARY 1, 2025 495,976 $ 82,664 $ 25,041,250 $ 10,131,590 $ ( 184,969 ) Net income 569,770 Dividends declared and paid - $ 0.99 per share ( 491,022 ) Issuance of stock under stock plans and other 1,491 249 19,566 Stock-based compensation expense 72,831 Other comprehensive income 17,337 Common stock repurchased ( 1,219 ) ( 203 ) ( 248,443 ) BALANCE, MAY 3, 2025 496,248 $ 82,710 $ 24,885,204 $ 10,210,338 $ ( 167,632 ) Six Months Ended May 3, 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 961,086 Dividends declared and paid - $ 1.91 per share ( 947,360 ) Issuance of stock under stock plans and other 1,902 317 61,245 Stock-based compensation expense 150,405 Other comprehensive income 17,624 Common stock repurchased ( 1,951 ) ( 325 ) ( 408,689 ) BALANCE, MAY 3, 2025 496,248 $ 82,710 $ 24,885,204 $ 10,210,338 $ ( 167,632 ) See accompanying notes. 5 ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Six Months Ended May 2, 2026 May 3, 2025 Cash flows from operating activities: Net income $ 2,007,176 $ 961,086 Adjustments to reconcile net income to net cash provided by operations: Depreciation 210,843 198,781 Amortization of intangibles 770,593 817,429 Stock-based compensation expense 167,396 150,405 Deferred income taxes ( 120,930 ) ( 149,370 ) Other 4,727 4,203 Changes in operating assets and liabilities ( 799,249 ) ( 36,247 ) Total adjustments 233,380 985,201 Net cash provided by operating activities 2,240,556 1,946,287 Cash flows from investing activities: Maturities of short-term available-for-sale investments 147,817 372,778 Additions to property, plant and equipment, net ( 247,015 ) ( 239,246 ) Proceeds from sale of property, plant and equipment, net — 58,892 Payments for acquisitions, net of cash acquired ( 35,875 ) ( 45,652 ) Other ( 23,882 ) ( 12,880 ) Net cash (used for) provided by investing activities ( 158,955 ) 133,892 Cash flows from financing activities: Debt repayments — ( 399,998 ) Proceeds from commercial paper notes 7,154,789 4,316,340 Payments of commercial paper notes ( 7,051,230 ) ( 4,315,358 ) Repurchase of common stock ( 1,289,401 ) ( 409,014 ) Dividend payments to shareholders ( 1,020,719 ) ( 947,360 ) Proceeds from employee stock plans 59,487 61,562 Other 2,983 ( 1,458 ) Net cash used for financing activities ( 2,144,091 ) ( 1,695,286 ) Net (decrease) increase in cash and cash equivalents ( 62,490 ) 384,893 Cash and cash equivalents at beginning of period 2,499,406 1,991,342 Cash and cash equivalents at end of period $ 2,436,916 $ 2,376,235 See accompanying notes. 6 ANALOG DEVICES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED MAY 2, 2026 (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 1, 2025 (fiscal 2025) 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 October 31, 2026 (fiscal 2026) 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. Certain prior-year amounts have been reclassified to conform to the fiscal 2026 presentation. Note 2 – Shareholders’ Equity As of May 2, 2026, 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 $ 8.5 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 six months of fiscal 2026. Foreign currency translation adjustment Unrealized holding gains/losses on derivatives Pension plans Total November 1, 2025 $ ( 71,700 ) $ ( 69,777 ) $ ( 13,105 ) $ ( 154,582 ) Other comprehensive income before reclassifications 1,324 ( 6,694 ) — ( 5,370 ) Amounts reclassified out of other comprehensive income — 8,517 395 8,912 Tax effects — ( 1,203 ) — ( 1,203 ) Other comprehensive income 1,324 620 395 2,339 May 2, 2026 $ ( 70,376 ) $ ( 69,157 ) $ ( 12,710 ) $ ( 152,243 ) 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: Three Months Ended Six Months Ended Comprehensive (Loss) Income Component May 2, 2026 May 3, 2025 May 2, 2026 May 3, 2025 Location Unrealized holding gains/losses on derivatives: Currency forwards $ ( 552 ) $ 446 $ 72 $ ( 1,133 ) Cost of sales ( 42 ) 118 676 ( 729 ) Research and development ( 513 ) 36 307 ( 2,048 ) Selling, marketing, general and administrative Interest rate derivatives 3,731 3,731 7,462 7,462 Interest expense 2,624 4,331 8,517 3,552 Total before tax ( 667 ) ( 850 ) ( 1,690 ) ( 1,008 ) Tax Total amounts reclassified out of AOCI, net of tax $ 1,957 $ 3,481 $ 6,827 $ 2,544 7 Note 4 – Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Six Months Ended May 2, 2026 May 3, 2025 May 2, 2026 May 3, 2025 Net income $ 1,176,350 $ 569,770 $ 2,007,176 $ 961,086 Basic shares: Weighted-average shares outstanding 487,605 496,173 488,239 496,145 Earnings per common share basic: $ 2.41 $ 1.15 $ 4.11 $ 1.94 Diluted shares: Weighted-average shares outstanding 487,605 496,173 488,239 496,145 Assumed exercise of common stock equivalents 2,853 2,028 2,818 2,289 Weighted-average common and common equivalent shares 490,458 498,201 491,057 498,434 Earnings per common share diluted: $ 2.40 $ 1.14 $ 4.09 $ 1.93 Anti-dilutive shares related to: Outstanding stock-based awards 21 52 63 121 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 1, 2025 $ 4,115 Employee severance costs, net 29,085 Severance payments ( 1,952 ) Balance at January 31, 2026 $ 31,248 Severance payments ( 17,858 ) Balance at May 2, 2026 $ 13,390 The Company recorded net special charges of $ 32.4 million as part of its Global Repositioning Actions in the six months ended May 2, 2026. The Global Repositioning Actions were part of a transformation initiative aimed at aligning the Company’s enterprise strategy and 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 first quarter of fiscal 2026, the Company entered into a sublease agreement for its leased property in San Jose, California. As a result of the sublease transaction, the Company recorded an impairment charge of $ 15.6 million in net special charges, which represented the excess carrying value of the associated asset group over its estimated fair value. The Company estimated fair value using cash flows from the estimated net sublease rental income discounted at a market rate. 8 Note 6 – Industry and Segment Information The Company’s Chief Executive Officer and Chair has been identified as its Chief Operating Decision Maker (CODM). The following table presents a summary of consolidated net income inclusive of significant segment expenses and other expense information provided to the CODM: Three Months Ended Six Months Ended May 2, 2026 May 3, 2025 May 2, 2026 May 3, 2025 Revenue $ 3,623,465 $ 2,640,068 $ 6,783,728 $ 5,063,242 Less: Cost of sales, including human capital expenses therein 1,183,667 1,028,458 2,298,955 2,021,329 Operating expenses: Employee compensation costs 640,791 531,119 1,243,278 998,715 Amortization of acquired intangible assets 187,985 187,415 375,300 374,830 Research and development related costs (excluding employee compensation costs) 150,186 132,443 279,035 263,925 Special charges, net — 1,745 47,982 65,632 Other operating expense (excluding employee compensation costs) (1) 81,156 80,944 162,473 169,554 Nonoperating expense (income) 54,852 52,016 106,006 107,753 Provision for income taxes 148,478 56,158 263,523 100,418 Net income $ 1,176,350 $ 569,770 $ 2,007,176 $ 961,086 _______________________________________ (1) Includes depreciation and amortization expenses, facilities expenses, legal expenses and other discretionary expenses. 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. The assignment of products to end markets may change 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. Three Months Ended May 2, 2026 May 3, 2025 Revenue % of Revenue* Y/Y% Revenue % of Revenue* Industrial $ 1,799,413 50 % 56 % $ 1,150,315 44 % Automotive 871,565 24 % 2 % 856,090 32 % Communications 554,728 15 % 79 % 310,604 12 % Consumer 397,759 11 % 23 % 323,059 12 % Total revenue $ 3,623,465 100 % 37 % $ 2,640,068 100 % Six Months Ended May 2, 2026 May 3, 2025 Revenue % of Revenue* Y/Y% Revenue % of Revenue* Industrial $ 3,296,449 49 % 48 % $ 2,220,569 44 % Automotive 1,681,709 25 % 5 % 1,596,349 32 % Communications 1,009,911 15 % 65 % 610,905 12 % Consumer 795,659 12 % 25 % 635,419 13 % Total revenue $ 6,783,728 100 % 34 % $ 5,063,242 100 % * The sum of the individual percentages may not equal the total due to rounding. 9 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 May 2, 2026 May 3, 2025 Channel Revenue % of Revenue* Revenue % of Revenue* Distributors $ 2,071,312 57 % $ 1,480,088 56 % Direct customers 1,520,090 42 % 1,125,775 43 % Other 32,063 1 % 34,205 1 % Total revenue $ 3,623,465 100 % $ 2,640,068 100 % Six Months Ended May 2, 2026 May 3, 2025 Channel Revenue % of Revenue* Revenue % of Revenue* Distributors $ 3,813,606 56 % $ 2,855,552 56 % Direct customers 2,897,220 43 % 2,145,647 42 % Other 72,902 1 % 62,043 1 % Total revenue $ 6,783,728 100 % $ 5,063,242 100 % * The sum of the individual percentages may not equal the total due to rounding. 10 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 May 2, 2026 and November 1, 2025. 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 May 2, 2026 and November 1, 2025, the Company held $ 1.3 billion and $ 1.4 billion, respectively, of cash that is excluded from the tables below. May 2, 2026 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 $ 702,844 $ — $ 702,844 Corporate obligations (1) — 397,786 397,786 Short-term investments: Available-for-sale: Corporate obligations (1) — 507,277 507,277 Bank obligations (1) — 495,115 495,115 Other assets: Forward foreign currency exchange contracts (2) — 6,500 6,500 Deferred compensation plan investments 117,894 — 117,894 Total assets measured at fair value $ 820,738 $ 1,406,678 $ 2,227,416 Liabilities Forward foreign currency exchange contracts (2) $ — $ 10,020 $ 10,020 Interest rate derivatives (3) — 23,882 23,882 Total liabilities measured at fair value $ — $ 33,902 $ 33,902 (1) The amortized cost of the Company’s investments classified as available-for-sale as of May 2, 2026 was $ 1.4 billion. (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. 11 November 1, 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 $ 740,730 $ — $ 740,730 Corporate obligations (1) — 397,707 397,707 Short-term investments (2): Available-for-sale: Corporate obligations (1) — 656,839 656,839 Bank obligations (1) — 496,076 496,076 Other assets: Forward foreign currency exchange contracts (3) — 6,708 6,708 Deferred compensation plan investments 105,188 — 105,188 Total assets measured at fair value $ 845,918 $ 1,557,330 $ 2,403,248 Liabilities Forward foreign currency exchange contracts (3) $ — $ 7,975 $ 7,975 Interest rate derivatives (4) — 12,550 12,550 Total liabilities measured at fair value $ — $ 20,525 $ 20,525 (1) The amortized cost of the Company’s investments classified as available-for-sale as of November 1, 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. Assets and Liabilities Not Recorded at Fair Value on a Recurring Basis San Jose, California leased property asset group — As a result of a sublease transaction involving a leased property in San Jose, California, the Company estimated the fair value of the sublease assets using discounted cash flows from the estimated net sublease rental income discounted at a market rate and recorded an impairment charge which represented the excess carrying value of the asset group associated with the leased property over its estimated fair value. These assets are considered a Level 2 fair value measurement. See Note 5, Special Charges, Net , in these Notes to Condensed Consolidated Financial Statements for additional information. Debt — 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 ($ 550.2 million and $ 446.6 million as of May 2, 2026 and November 1, 2025, 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 May 2, 2026 November 1, 2025 Principal Amount Outstanding Fair Value Principal Amount Outstanding Fair Value 2026 Notes, due December 2026 900,000 897,767 900,000 895,623 2027 Notes, due June 2027 440,212 437,241 440,212 436,916 2028 Notes, due June 2028 850,000 850,341 850,000 856,345 2028 Notes, due October 2028 750,000 707,652 750,000 704,186 2030 Notes, due June 2030 650,000 652,444 650,000 659,834 2031 Notes, due October 2031 1,000,000 884,422 1,000,000 884,390 2032 Notes, due October 2032 300,000 298,028 300,000 301,546 2034 Notes, due April 2034 550,000 561,447 550,000 571,370 2036 Notes, due December 2036 144,278 137,425 144,278 138,756 2041 Notes, due October 2041 750,000 546,296 750,000 555,925 2045 Notes, due December 2045 332,587 321,506 332,587 327,992 2051 Notes, due October 2051 1,000,000 641,436 1,000,000 662,609 2054 Notes, due April 2054 550,000 524,949 550,000 541,087 Total senior unsecured notes $ 8,217,077 $ 7,460,954 $ 8,217,077 $ 7,536,579 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 May 2, 2026 and November 1, 2025 were $ 343.2 million and $ 297.0 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 May 2, 2026 November 1, 2025 Forward foreign currency exchange contracts Prepaid expenses and other current assets $ 1,162 $ 4,403 Forward foreign currency exchange contracts Accrued liabilities $ 6,150 $ 4,399 As of May 2, 2026 and November 1, 2025, the total notional amounts of undesignated hedges related to forward foreign currency exchange contracts were $ 319.0 million and $ 207.3 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 May 2, 2026 November 1, 2025 Undesignated hedges related to forward foreign currency exchange contracts Prepaid expenses and other current assets $ 5,338 $ 2,305 Undesignated hedges related to forward foreign currency exchange contracts Accrued liabilities $ 3,870 $ 3,576 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: May 2, 2026 November 1, 2025 Balance Sheet Location Loss on Swaps Gain on Note Loss on Swaps Gain on Note Accrued liabilities $ 23,882 $ — $ 12,550 $ — Long-term debt $ — $ 23,882 $ — $ 12,550 For further 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. 13 Note 9 – Inventories Inventories at May 2, 2026 and November 1, 2025 were as follows: May 2, 2026 November 1, 2025 Raw materials $ 68,165 $ 70,183 Work in process 1,389,341 1,218,625 Finished goods 390,899 367,515 Total inventories $ 1,848,405 $ 1,656,323 Note 10 – Income Taxes The Company’s effective tax rates for the three- and six-month periods ended May 2, 2026 and May 3, 2025 were below the U.S. statutory tax rate of 21%, due to lower statutory tax rates applicable to the Company's operations in the foreign jurisdictions in which it earns income. During 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 11 – New Accounting Pronouncements Standards Implemented 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 adopted this ASU in fiscal 2026 and will include required financial statement disclosures in its Annual Report on Form 10-K for fiscal 2026. Standards to Be Implemented 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 adoption will have on its financial statement disclosures. Note 12 – Subsequent Events On May 19, 2026, the Board of Directors of the Company declared a cash dividend of $ 1.10 per outstanding share of common stock. The dividend will be paid on June 16, 2026 to all shareholders of record at the close of business on June 2, 2026 and is expected to total approximately $ 535.8 million. 14