What changed in this filing

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Item 1. Financial Statements

2024-10-29 compared with 2024-07-23 · 118 added, 94 removed, 369 unchanged (36% of the section changed)

2 unchanged sentences

(In thousands, except par value)

September 28,

2024 December 31,

27 unchanged sentences

5,000 shares authorized;

no shares issued and outstanding as of June 29, 2024 and December 31, 2023

no shares issued and outstanding as of September 28, 2024 and December 31, 2023

Common stock, $ 0.025 par value;

100,000 shares authorized;

65,800 shares issued and outstanding as of June 29, 2024, and 65,052 shares issued and outstanding as of December 31, 2023

66,318 shares issued and outstanding as of September 28, 2024, and 65,052 shares issued and outstanding as of December 31, 2023

Additional paid-in capital 1,148,742 1,078,393

Accumulated other comprehensive loss ( 973 ) ( 659 )

Accumulated other comprehensive income (loss) 490 ( 659 )

Accumulated deficit ( 372,202 ) ( 360,379 )

4 unchanged sentences

(In thousands, except per share data)

Three Months Ended Six Months Ended

2023 June 29,

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Revenue $ 200,945 $ 263,835 $ 625,394 $ 774,859

9 unchanged sentences

Interest income, net 3,282 2,658 8,877 6,553

Other income (expense), net ( 286 ) 163 ( 421 ) ( 4 )

Other expense, net ( 178 ) ( 444 ) ( 599 ) ( 448 )

Total interest income and other expense, net 3,104 2,214 8,278 6,105

10 unchanged sentences

Net income (loss) $ ( 3,968 ) $ 16,953 $ ( 11,823 ) $ 35,924

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on available-for-sale marketable securities, net 5 ( 141 ) ( 206 ) 921

Other comprehensive income, net of tax:

Unrealized gain on available-for-sale marketable securities, net 1,190 263 983 1,185

Foreign currency translation adjustments, net 273 ( 33 ) 166 ( 71 )

Total other comprehensive income (loss), net of tax 10 ( 282 ) ( 314 ) 884

Total other comprehensive income, net of tax 1,463 230 1,149 1,114

Comprehensive income (loss) $ ( 2,505 ) $ 17,183 $ ( 10,674 ) $ 37,038

2 unchanged sentences

(In thousands, unaudited)

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity

Shares Amount

Balance as of March 30, 2024 65,525 $ 1,638 $ 1,102,314 $ ( 983 ) $ ( 360,276 ) $ 742,693

Balance as of June 29, 2024 65,800 $ 1,645 $ 1,121,786 $ ( 973 ) $ ( 368,234 ) $ 754,224

Stock-based compensation — — 16,371 — — 16,371

2 unchanged sentences

Other comprehensive income — — — 1,463 — 1,463

Balance as of June 29, 2024 65,800 $ 1,645 $ 1,121,786 $ ( 973 ) $ ( 368,234 ) $ 754,224

Balance as of September 28, 2024 66,318 $ 1,658 $ 1,148,742 $ 490 $ ( 372,202 ) $ 778,688

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity

Shares Amount

Balance as of April 1, 2023 66,244 $ 1,656 $ 1,097,596 $ ( 1,307 ) $ ( 380,106 ) $ 717,839

Balance as of July 1, 2023 66,320 $ 1,658 $ 1,112,434 $ ( 1,589 ) $ ( 370,733 ) $ 741,770

Stock-based compensation — — 16,026 — — 16,026

2 unchanged sentences

Net income — — — — 16,953 16,953

Other comprehensive loss — — — ( 282 ) — ( 282 )

Balance as of July 1, 2023 66,320 $ 1,658 $ 1,112,434 $ ( 1,589 ) $ ( 370,733 ) $ 741,770

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity

Other comprehensive income — — — 230 — 230

Balance as of September 30, 2023 65,950 $ 1,649 $ 1,104,435 $ ( 1,359 ) $ ( 353,780 ) $ 750,945

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity

Shares Amount

4 unchanged sentences

Net loss — — — — ( 11,823 ) ( 11,823 )

Other comprehensive loss — — — ( 314 ) ( 314 )

Balance as of June 29, 2024 65,800 $ 1,645 $ 1,121,786 $ ( 973 ) $ ( 368,234 ) $ 754,224

Other comprehensive income — — — 1,149 — 1,149

Balance as of September 28, 2024 66,318 $ 1,658 $ 1,148,742 $ 490 $ ( 372,202 ) $ 778,688

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity

6 unchanged sentences

Other comprehensive income — — — 1,114 — 1,114

Balance as of July 1, 2023 66,320 $ 1,658 $ 1,112,434 $ ( 1,589 ) $ ( 370,733 ) $ 741,770

Balance as of September 30, 2023 65,950 $ 1,649 $ 1,104,435 $ ( 1,359 ) $ ( 353,780 ) $ 750,945

See accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

(In thousands, unaudited)

Six Months Ended

Nine Months Ended

September 28,

2024 September 30,

Operating activities:

19 unchanged sentences

Maturities of marketable securities 115,529 185,888

Net cash used in investing activities ( 27,019 ) ( 18,772 )

Net cash provided by (used in) investing activities ( 75,927 ) 38,484

Financing activities:

2 unchanged sentences

Payments related to financing arrangements — ( 7,560 )

Net cash provided by financing activities 11,096 4,196

Net cash provided by (used in) financing activities 21,695 ( 23,310 )

Effect of exchange rate changes on cash and cash equivalents 147 101

Net increase in cash and cash equivalents 21,077 11,114

Net increase (decrease) in cash and cash equivalents ( 1,048 ) 56,602

Cash and cash equivalents at beginning of period 63,409 79,073

22 unchanged sentences

Quarterly periods are based on a 4-4-5 calendar with the first quarter ending on the Saturday closest to March 31 st .

As a result, the Company had one less day in the six months ended June 29, 2024 than for the six months ended July 1, 2023.

As a result, the Company had one less day in the nine months ended September 28, 2024 than for the nine months ended September 30, 2023.

The preparation of financial statements in conformity with GAAP for interim financial reporting requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.

2 unchanged sentences

The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023.

The Company’s significant accounting policies did not change during the six months ended June 29, 2024.

The Company’s significant accounting policies did not change during the nine months ended September 28, 2024.

Newly Adopted Accounting Standard

The Company did not adopt any new accounting standards during the six months ended June 29, 2024 that were significant to the Company.

The Company did not adopt any new accounting standards during the nine months ended September 28, 2024 that were significant to the Company.

Recent Accounting Pronouncements Not Yet Adopted

There have been no additional accounting pronouncements or changes in accounting pronouncements during the six months ended June 29, 2024 as compared with the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, that are significant or expected to be significant to the Company.

There have been no additional accounting pronouncements or changes in accounting pronouncements during the nine months ended September 28, 2024 as compared with the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, that are significant or expected to be significant to the Company.

Cash, Cash Equivalents and Marketable Securities

12 unchanged sentences

Realized gains and losses on sales of marketable securities, if any, are determined on the specific identification method and are reclassified from accumulated other comprehensive loss to results of operations as other expense, net.

Realized gains and losses were de minimis for the three and six months ended June 29, 2024 and July 1, 2023.

Realized gains and losses were de minimis for the three and nine months ended September 28, 2024 and September 30, 2023.

Cash, cash equivalents and marketable securities consisted of the following (in thousands):

September 28,

2024 December 31,

3 unchanged sentences

Money market funds 9,177 2,563

government agency securities 3,968 —

government securities 165 9,969

10 unchanged sentences

The amortized cost and fair value of marketable securities were as follows (in thousands):

As of June 29, 2024 Amortized Cost Unrealized Losses Fair Value

As of September 28, 2024 Amortized Cost Unrealized Gains Fair Value

Corporate debt securities $ 108,616 $ 870 $ 109,486

Commercial paper 60,610 ( 27 ) 60,583

government securities 62,682 287 62,969

Commercial paper 34,474 18 34,492

government agency securities 33,720 120 33,840

1 unchanged sentence

$ 246,342 $ 1,323 $ 247,665

As of December 31, 2023 Amortized Cost Unrealized Losses Fair Value

As of December 31, 2023 Amortized Cost Unrealized Gains (Losses) Fair Value

government securities $ 102,167 $ 80 $ 102,247

13 unchanged sentences

The following tables sets forth the Company’s financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands):

As of June 29, 2024 Level 1 Level 2 Total

As of September 28, 2024 Level 1 Level 2 Total

Money market funds $ 9,177 $ — $ 9,177

14 unchanged sentences

Accounts receivable, net consisted of the following (in thousands):

September 28,

2024 December 31,

3 unchanged sentences

Inventory consisted of the following (in thousands):

September 28,

2024 December 31,

3 unchanged sentences

Prepaid expenses and other current assets consisted of the following (in thousands):

September 28,

2024 December 31,

3 unchanged sentences

Property and equipment, net consisted of the following (in thousands):

September 28,

2024 December 31,

8 unchanged sentences

Accrued liabilities consisted of the following (in thousands):

September 28,

2024 December 31,

2 unchanged sentences

Professional and consulting fees 6,102 7,717

Customer advances or rebates 6,044 5,967

Current portion of warranty and retrofit 5,216 5,655

Current portion of warranty 5,383 5,655

Operating leases 4,374 4,142

Customer advances or rebates 4,246 5,967

Taxes payable 3,903 4,317

Travel and event expenses 3,042 3,537

Product returns 2,560 2,897

1 unchanged sentence

Freight 1,189 1,510

Travel expenses 1,001 599

Business events 841 2,938

Operations 753 1,080

Litigation settlement — 3,250

1 unchanged sentence

$ 76,075 $ 116,227

Changes in the Company’s accrued warranty and retrofit liability were as follows (in thousands):

Three Months Ended Six Months Ended

2023 June 29,

Changes in the Company’s accrued warranty liability were as follows (in thousands):

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Balance at beginning of period $ 7,371 $ 8,306 $ 8,029 $ 8,386

Accruals for product warranty and retrofit

Accruals for product warranty

1,057 1,081 1,789 2,899

Cost of warranty and retrofit claims

Cost of warranty claims

( 876 ) ( 995 ) ( 2,266 ) ( 2,893 )

4 unchanged sentences

Certain of the Company’s operating leases contain renewal options and rent acceleration clauses.

Future minimum payments under the non-cancelable operating leases consisted of the following as of June 29, 2024 (in thousands):

Future minimum payments under the non-cancelable operating leases consisted of the following as of September 28, 2024 (in thousands):

Period Future Minimum Lease Payments

3 unchanged sentences

Less imputed interest ( 587 )

As of June 29, 2024, the operating lease liability consisted of the following (in thousands):

As of September 28, 2024, the operating lease liability consisted of the following (in thousands):

Accrued liabilities - current portion of operating leases $ 4,374

2 unchanged sentences

The future minimum lease payments under the lease are $ 3.1 million and are included in the table above.

The weighted average discount rate for the Company’s operating leases as of June 29, 2024 was 5.0 %.

The weighted average remaining lease term as of June 29, 2024 was 3.0 years.

For the three and six months ended June 29, 2024, rent expense was $ 1.1 million and $ 2.3 million, respectively.

For the three and six months ended July 1, 2023, rent expense was $ 1.2 million and $ 2.4 million, respectively.

Cash paid within operating cash flows for operating leases was $ 2.2 million and $ 2.3 million for the six months ended June 29, 2024 and July 1, 2023, respectively.

The weighted average discount rate for the Company’s operating leases as of September 28, 2024 was 4.9 %.

The weighted average remaining lease term as of September 28, 2024 was 2.8 years.

For the three and nine months ended September 28, 2024, rent expense was $ 1.2 million and $ 3.5 million, respectively.

For the three and nine months ended September 30, 2023, rent expense was $ 1.2 million and $ 3.6 million, respectively.

Cash paid within operating cash flows for operating leases was $ 3.4 million for the nine months ended September 28, 2024 and September 30, 2023 for each respective period.

Purchase Commitments

6 unchanged sentences

In the event of termination of services with a manufacturing partner, the Company has purchased, and may be required to purchase in the future, certain of the remaining components inventory held by the CM or ODM as well as any outstanding orders pursuant to the contractual provisions with such CM or ODM.

The estimated excess and obsolete component liabilities related to manufacturing and engineering change orders, termination of manufacturing partners and other factors are included in “Accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets, because the corresponding component parts have not been received by the Company.

The Company records the related charges in “Cost of revenue” in its Condensed Consolidated Statements of Comprehensive Income (Loss).

As of June 29, 2024 and December 31, 2023, the Company had approximately $ 136.3 million and $ 176.3 million, respectively, of outstanding purchase commitments for inventories to be delivered by its suppliers, including CMs and ODMs.

As of September 28, 2024 and December 31, 2023, the Company had approximately $ 142.1 million and $ 176.3 million, respectively, of outstanding purchase commitments for inventories to be delivered by its suppliers, including CMs and ODMs.

From time to time, the Company is involved in various legal proceedings arising from the normal course of business activities.

4 unchanged sentences

The 2019 Plan provides for the grant of stock options, including incentive stock options and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, other stock or cash-based awards and dividend equivalents to eligible individuals.

As of June 29, 2024, there were 2.8 million shares available for issuance under the 2019 Plan.

During the three months ended June 29, 2024, time-based stock option awards exercisable for up to an aggregate of 0.1 million shares of common stock were granted with a grant date weighted-average exercise price of $ 30.07 per share.

During the six months ended June 29, 2024, stock option awards exercisable for up to an aggregate of 0.4 million shares of common stock were granted with a grant date weighted-average exercise price of $ 34.36 per share.

As of September 28, 2024, there were 2.9 million shares available for issuance under the 2019 Plan.

During the three months ended September 28, 2024, time-based stock option awards exercisable for up to an aggregate of 7,000 shares of common stock were granted with a grant date weighted-average exercise price of $ 37.68 per share.

During the nine months ended September 28, 2024, time-based stock option awards exercisable for up to an aggregate of 0.4 million shares of common stock were granted with a grant date weighted-average exercise price of $ 34.43 per share.

These stock option awards vest 25 % on the first anniversary of the vesting commencement date and on a quarterly basis thereafter over an additional three years .

In February 2024, performance-based stock option awards exercisable for up to an aggregate of 2.4 million shares of common stock were granted to certain Company executives with a grant date exercise price of $ 34.26 per share and divided into two plans, with the first plan accounting for 75 % of the total shares granted and the second plan accounting for 25 % of the total shares granted.

plans, with the first plan accounting for 75 % of the total shares granted and the second plan accounting for 25 % of the total shares granted.

The actual number of shares earned is contingent upon achievement of annual corporate financial targets for bookings and non-GAAP net operating income for 2024 (collectively, the “2024 Performance Targets”) during the one-year performance period.

7 unchanged sentences

The maximum award is 100 %.

The probability of meeting a portion of the performance conditions related to these performance-based stock option awards was assessed to be probable as of June 29, 2024, and stock-based compensation expense of $ 1.1 million was recognized for the three months ended June 29, 2024.

For the six months ended June 29, 2024, stock-based compensation expense of $ 2.8 million was recognized.

During the three months ended June 29, 2024, 30,000 shares of common stock were issued pursuant to the exercise of stock options at a weighted-average exercise price of $ 9.11 per share.

During the six months ended June 29, 2024, 0.2 million shares of common stock were issued pursuant to the exercise of stock options at a weighted-average exercise price of $ 8.64 per share.

As of June 29, 2024, unrecognized stock-based compensation expense of $ 70.8 million related to stock options, net of estimated forfeitures, is expected to be recognized over a weighted-average period of 2.1 years.

The probability of meeting a portion of the performance conditions related to these performance-based stock option awards was assessed to be probable as of September 28, 2024, and stock-based compensation expense of $ 1.9 million was recognized for the three months ended September 28, 2024.

For the nine months ended September 28, 2024, stock-based compensation expense of $ 4.7 million was recognized.

During the three months ended September 28, 2024, 55,000 shares of common stock were issued pursuant to the exercise of stock options at a weighted-average exercise price of $ 13.31 per share.

During the nine months ended September 28, 2024, 0.3 million shares of common stock were issued pursuant to the exercise of stock options at a weighted-average exercise price of $ 9.66 per share.

As of September 28, 2024, unrecognized stock-based compensation expense of $ 60.7 million related to stock options, net of estimated forfeitures, is expected to be recognized over a weighted-average period of 1.9 years.

Employee Stock Purchase Plans

3 unchanged sentences

The price of common stock purchased under the ESPP is 85 % of the lower of the fair market value of the common stock on the commencement date and the end date of each six-month offering period.

As of June 29, 2024, there were 4.3 million shares available for issuance under the ESPP.

During the six months ended June 29, 2024, 0.2 million shares were purchased under the ESPP.

As of June 29, 2024, unrecognized stock-based compensation expense of $ 0.3 million related to the ESPP is expected to be recognized over a remaining service period of 0.1 years.

As of September 28, 2024, there were 4.2 million shares available for issuance under the ESPP.

During the nine months ended September 28, 2024, 0.3 million shares were purchased under the ESPP.

As of September 28, 2024, unrecognized stock-based compensation expense of $ 1.2 million related to the ESPP is expected to be recognized over a remaining service period of 0.4 years.

The NQ ESPP allows eligible employees to purchase shares of the Company’s common stock through payroll deductions of up to 25 % of their eligible recurring compensation.

2 unchanged sentences

The maximum number of shares of common stock currently authorized for issuance under the NQ ESPP is 7.5 million shares.

As of June 29, 2024, there were 2.9 million shares available for issuance under the NQ ESPP.

During the six months ended June 29, 2024, 0.5 million shares were purchased and issued.

As of June 29, 2024, unrecognized stock-based compensation expense of $ 14.1 million related to the NQ ESPP is expected to be recognized over a remaining weighted-average service period of 0.9 years.

As of September 28, 2024, there were 2.5 million shares available for issuance under the NQ ESPP.

During the nine months ended September 28, 2024, 0.8 million shares were purchased and issued.

As of September 28, 2024, unrecognized stock-based compensation expense of $ 13.5 million related to the NQ ESPP is expected to be recognized over a remaining weighted-average service period of 0.9 years.

Stock-Based Compensation

The following table summarizes stock-based compensation expense (in thousands):

Three Months Ended Six Months Ended

2023 June 29,

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Cost of revenue $ 770 $ 734 $ 2,113 $ 2,314

9 unchanged sentences

The repurchase program does not obligate the Company to acquire a particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion.

No shares were purchased during the three months ended June 29, 2024.

For the six months ended June 29, 2024, the Company purchased 0.1 million shares of common stock for $ 3.7 million at an average price per share of $ 32.87 .

As of June 29, 2024, the remaining balance under the current authorizations was $ 109.9 million.

No shares were purchased during the three months ended September 28, 2024.

For the nine months ended September 28, 2024, the Company purchased 0.1 million shares of common stock for $ 3.7 million at an average price per share of $ 32.87 .

As of September 28, 2024, the remaining balance under the current authorizations was $ 109.9 million.

Revenue from Contracts with Customers

The Company develops, markets and sells a broadband platform and managed services, and there are no segment managers who are held accountable for operations, operating results and plans for levels or components below the Company unit level.

Accordingly, the Company is considered to be a single reporting segment and operating unit structure.

Accordingly, the Company is a single reporting segment and operating unit structure.

The Company’s chief operating decision maker is the Company’s Chief Executive Officer, who reviews financial information presented on a Company-wide basis, for purposes of allocating resources and evaluating financial performance.

The following is a summary of revenue disaggregated by geographic region based upon the location of the customers (in thousands):

Three Months Ended Six Months Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

United States $ 187,080 $ 235,128 $ 579,873 $ 695,491

8 unchanged sentences

Amounts are billed in accordance with the agreed-upon contractual terms.

Contract assets were $ 3.3 million as of June 29, 2024 as compared to $ 4.7 million as of December 31, 2023, and are included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets.

The Company expects to bill 35 % of the June 29, 2024 balance during 2024.

Contract assets were $ 3.4 million as of September 28, 2024 as compared to $ 4.7 million as of December 31, 2023, and are included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets.

The Company expects to bill 28 % of the September 28, 2024 balance during 2024.

Contract Liability

Deferred revenue was $ 54.2 million, $ 63.9 million and $ 61.5 million as of June 29, 2024, March 30, 2024 and December 31, 2023, respectively.

The decrease in the deferred revenue balance for the three and six months ended June 29, 2024 was driven by $ 13.4 million and $ 20.2 million of revenue recognized that was included in the deferred revenue balance at the beginning of each respective period and to a trend to move to monthly from annual billing arrangements.

Deferred revenue was $ 50.9 million, $ 54.2 million and $ 61.5 million as of September 28, 2024, June 29, 2024 and December 31, 2023, respectively.

The decrease in the deferred revenue balance for the three and nine months ended September 28, 2024 was driven by $ 13.2 million and $ 25.8 million of revenue recognized that was included in the deferred revenue balance at the beginning of each respective period and a trend to move to monthly from annual billing arrangements.

This was partially offset by cash payments received or due in advance of satisfying the Company’s performance obligations.

Revenue allocated to remaining performance obligations (“RPOs”) represents contract revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods but excludes variable consideration where the monthly invoicing is based on usage or where actual usage exceeds the minimum commitment.

RPOs were $ 266.9 million as of June 29, 2024, and the Company expects to recognize as revenue 39 % of this amount over the next 12 months and nearly all of the remainder over the two years thereafter.

RPOs were $ 295.7 million as of September 28, 2024, and the Company expects to recognize as revenue 37 % of this amount over the next 12 months and nearly all of the remainder over the two years thereafter.

Contract Costs

The Company capitalizes certain sales commissions related primarily to multi-year subscriptions and extended warranty support for which the expected amortization period is greater than one year.

As of June 29, 2024 and December 31, 2023, the unamortized balance of deferred commissions was $ 12.7 million and $ 12.0 million, respectively.

For the three and six months ended June 29, 2024, the amount of amortization was $ 2.1 million and $ 4.2 million, respectively, compared to $ 1.5 million and $ 2.9 million for the three and six months ended July 1, 2023, respectively.

As of September 28, 2024 and December 31, 2023, the unamortized balance of deferred commissions was $ 13.8 million and $ 12.0 million, respectively.

For the three and nine months ended September 28, 2024, the amount of amortization was $ 2.3 million and $ 6.4 million, respectively, compared to $ 1.7 million and $ 4.6 million for the three and nine months ended September 30, 2023, respectively.

There was no impairment loss in relation to the costs capitalized for these periods.

Concentration of Customer Risk

No customer accounted for more than 10% of the Company’s revenue for the three and six months ended June 29, 2024 and July 1, 2023.

One customer represented 14 % of the Company’s total receivables as of June 29, 2024.

No customer accounted for more than 10% of the Company’s revenue for the three and nine months ended September 28, 2024 and September 30, 2023.

One customer represented 14 % of the Company’s total receivables and one customer represented 12 % of accounts receivable as of September 28, 2024.

Two customers represented 19 % and 14 % of the Company’s accounts receivable as of December 31, 2023.

The following table presents income taxes and the effective tax rates for the periods indicated (in thousands, except percentages):

Three Months Ended Six Months Ended

2023 June 29,

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Income (loss) before income taxes $ ( 7,792 ) $ 18,143 $ ( 16,006 ) $ 43,781

1 unchanged sentence

Effective tax rate 49.1 % 6.6 % 26.1 % 17.9 %

The Company has historically recorded its interim period provision for income taxes by applying a forecasted annual effective tax rate to year-to-date earnings and adjusting for discrete items.

However, due to the level of forecasted provision for income taxes relative to the forecasted pre-tax income used in computing the effective tax rate, the effective tax rate is highly sensitive

to fluctuations in pre-tax income and does not provide a reasonable estimate for income taxes in the interim period.

As such, the Company has computed its provision for income taxes for the three and six months ended June 29, 2024 using an actual year-to-date tax calculation.

The Company plans to revert to applying a forecasted annual effective tax rate to year-to-date earnings and adjusting for discrete items once that method produces more reasonable results.

The Company’s effective tax rate for the three and six months ended June 29, 2024 and July 1, 2023 differed from the statutory federal corporate tax rate of 21% primarily due to state taxes and the effect of non-deductible stock-based compensation for executive officers offset by the favorable impact of U.S.

The Company’s income taxes for the three and nine months ended September 28, 2024 and September 30, 2023 were determined using an estimated effective tax rate adjusted for discrete items that occurred during the respective periods.

The Company’s effective tax rate for the three and nine months ended September 28, 2024 and September 30, 2023 differed from the statutory federal corporate tax rate of 21% primarily due the effect of non-deductible stock-based compensation for executive officers offset by the favorable impact of U.S.

federal research tax credits, excess tax benefits from stock-based compensation and the U.S.

3 unchanged sentences

Management believes that it is more likely than not that the Company will utilize a significant portion of its deferred tax assets.

The Company maintained a valuation allowance of $ 29.9 million for the three and six months ended June 29, 2024 and July 1, 2023 on certain U.S.

The Company maintained a valuation allowance of $ 29.3 million for the three and nine months ended September 28, 2024, compared to $ 29.9 million for the three and nine months ended September 30, 2023, on certain U.S.

federal and state deferred tax assets that the Company believes are not more likely than not to be realized in future periods.

During the three months ended September 28, 2024, the Company released a valuation allowance of $ 0.6 million related to foreign tax credits that the Company expects to utilize prior to expiration.

The Company considered scheduled reversals of deferred tax liabilities, historic profitability, projected future taxable income, ongoing tax planning strategies and other matters, including the period over which its deferred tax assets will be recoverable, in assessing the need for and the amount of the valuation allowance.

In the event that actual results differ from these estimates, or if the Company decides to adjust these estimates in the future periods, further adjustments to its valuation allowance may be recorded, which could materially impact the Company’s financial position and net income in the period of the adjustment.

In December 2021, the Organization for Economic Cooperation and Development enacted model rules for a new global minimum tax framework (“Pillar Two”), and certain governments in countries which the Company operates have enacted local Pillar Two legislation, with an effective date from January 1, 2024.

Pillar Two legislation, with an effective date from January 1, 2024.

The Company currently does not expect Pillar Two to have a material impact on its financial statements.

1 unchanged sentence

The following table sets forth the computation of basic and diluted net income (loss) per common share for the periods indicated (in thousands, except per share data):

Three Months Ended Six Months Ended

2023 June 29,

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Net income (loss) $ ( 3,968 ) $ 16,953 $ ( 11,823 ) $ 35,924

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements