What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-22 compared with 2025-10-30 · 89 added, 128 removed, 107 unchanged (67% of the section changed)

8 unchanged sentences

All forward-looking statements and reasons why results may differ included in this Quarterly Report on Form 10-Q are made as of the date hereof, and we assume no obligation to update these forward-looking statements or reasons why actual results might differ.

We develop, market and sell our appliance-based platform, cloud and managed services that enable service providers of all types and sizes to innovate and transform their businesses.

For our customers to successfully transform their businesses into the innovative BXPs of the future, they require actionable data for critical business functions such as network operations, customer support and marketing.

However, this data is often trapped in disparate systems or departmental silos.

Our platform, which includes Calix Cloud, Unlimited Subscriber and Intelligent Access, gathers, analyzes and applies machine learning to deliver real-time insights seamlessly to each key business function.

Our customers utilize these insights to simplify network operations, marketing and customer support and innovate for their customers, business and municipal subscribers by delivering a growing portfolio of SmartLife TM managed services and experiences.

This enables BXPs to grow their businesses through increased subscriber acquisition, loyalty and revenue and to reduce their operating costs, while creating value for their members, investors and the communities they serve.

We market our platform and managed services to communication service providers globally through our direct sales force as well as select resellers.

We develop, market and sell platform, cloud and managed services, which are powered by agentic AI, that enable communication service providers (“CSPs”) providers of all types and sizes to innovate and transform their businesses to focus on delivering outstanding subscriber experiences and become communication experience providers’ (“CXPs”).

The platform combines the Calix Agent Workforce™ with intelligent appliances, software, cloud and fully integrated SmartLife™ managed services to enable simplified business models that acquire, retain and grow subscribers and revenue.

Calix Customer Success guides service providers through every stage of their transformation journey with expertise across technology, business and market insights.

Our partner community extends innovation so customers can grow their businesses across markets at scale.

With deep broadband expertise and an end-to-end approach from the datacenters’ access edge to every residential, business and municipal subscriber location, Calix enables any service provider to simplify operations, engagement and service;

innovate for their subscribers;

and grow value for members, investors and the communities they serve.

This focus on subscriber experience allows CXPs to expand their brand through increased subscriber acquisition, loyalty and revenue while reducing their operating costs.

We market our platform, cloud and managed services to CSPs globally through our direct sales force as well as select resellers.

Our customers range from smaller, regional service providers to some of the world’s largest service providers.

Customers are defined as small (less than 250,000 subscribers), medium (250,000 to 2.5 million subscribers) or large (greater than 2.5 million subscribers).

We have approximately 1,600 active customers that have deployed passive optical, Active Ethernet or point-to-point Ethernet fiber access networks or our subscriber premise systems.

Our revenue and potential revenue growth will depend on our ability to develop, market and sell our platform and managed services to strategically aligned customers of all types such as wireless internet service providers, fiber overbuilders, cable multiple system operators, municipalities and electric cooperatives in the United States and internationally.

We have approximately 1,600 active customers that have deployed passive optical, Active Ethernet or point-to-point Ethernet fiber access networks or our subscriber premise appliances.

Our revenue and potential revenue growth will depend on, among other things, our ability to develop, market and sell our platform and managed services to strategically aligned customers of all types such as managed service providers (“MSPs”), local and competitive exchange carriers, cable multiple system operators (“MSOs”), wireless internet service providers (“WISPs”), fiber overbuilders such as municipalities, electric cooperatives, tribal communities, multiple dwelling units (“MDUs”) and hospitality providers in the U.S.

and internationally.

Our growth is also highly dependent on the speed and willingness of customers to adopt our platform and managed services.

Revenue fluctuations result from many factors, including, but not limited to:

increases or decreases in customer orders for our products and services, global economic and geopolitical events and conditions, including tariffs, trade controls, inflation, economic downturns and market, financial or other factors such as government stimulus that may delay or materially impact customer purchasing decisions, non-availability of products due to supply chain challenges, including component and labor shortages and increasing lead times as well as disruptions as a result of pandemics or natural disasters, contractual terms with customers that result in delayed revenue recognition and varying budget cycles and seasonal buying patterns of our customers.

increases or decreases in customer orders for our products and services, global economic and geopolitical events and conditions, including tariffs, trade controls, inflation, economic downturns and market, financial or other factors such as government stimulus or shutdowns that may delay or materially impact customer purchasing decisions, non-availability of products due to supply chain challenges, including component and labor shortages and increasing lead times as well as disruptions as a result of pandemics or natural disasters, contractual terms with customers that result in delayed revenue recognition and varying budget cycles and seasonal buying patterns of our customers.

More specifically, our customers have in the past spent less in the first quarter as they are finalizing their annual budgets, and in certain regions, customers are challenged by winter weather conditions that inhibit fiber deployment in outside infrastructure.

In recent years, as our revenue from our large customers decreased, we have experienced less year-end volatility due to capital budgetary spending or freezing.

This, combined with an increase in recurring revenue, has resulted in smaller seasonal fluctuations, and we expect this trend to continue.

Our revenue is also dependent upon our customers’ success in growing their subscribers, timing of purchases, capital expenditure plans and decisions to upgrade their networks or adopt new technologies, including adoption of our software and cloud platform solutions, as well as our ability to grow our customer base.

Cost of revenue is strongly correlated to revenue and tends to fluctuate due to all of the above factors that may cause revenue fluctuations.

Factors that have impacted our cost of revenue for the three and nine months ended September 27, 2025 include:

Cost of revenue is strongly correlated to revenue and tends to fluctuate due to all the above factors that may cause revenue fluctuations.

Factors that have impacted our cost of revenue, or that we expect may impact cost of revenue in future periods, also include:

changes in the mix of products delivered, customer location and regional mix, changes in the cost of our inventory, investments to support expansion of cloud and customer support offerings as well as our customer success organization, changes in product warranty, incurrence of retrofit costs, amortization of intangibles, allowances for obligations to our suppliers and inventory write-downs.

Factors that we expect may impact our cost of revenue in future periods include the same factors in the prior quarter, changes in trade policies and the transition from DDR4 to DDR5 memory.

Regarding trade policies, in April 2025, the U.S.

President signed an executive order increasing tariffs on imports from numerous countries, including China and other Asian countries where our sole-source or limited-source suppliers are located.

Currently, the majority of our finished goods are exempt from tariffs.

For imported components for domestic manufacturing and certain finished goods, these actions increased our cost of revenue.

Factors that we expect may impact our cost of revenue in future periods include the same factors in the prior quarter, changes in trade policies and increased memory component prices due to shortages caused by the large scale build out of AI infrastructure.

Regarding trade policies, in February 2026, The U.S.

Supreme Court ruled that the broad tariffs implemented under International Emergency Economic Powers Act (“IEEPA”) exceeded the administration’s authority and eliminated those tariffs.

The impact of the ruling did not have a significant financial impact because the majority of our finished goods are exempt from tariffs.

For imported components for domestic manufacturing and certain finished goods, the original tariff increased our cost of revenue but have since abated.

We continue to evaluate the actions we may be able to take to mitigate such costs as we monitor and navigate this challenging and dynamic operating environment.

Regarding the DDR4 to DDR5 transition, the exit from DDR4 memory will put upward pricing on memory and will potentially increase the cost of our premises system.

In addition, we periodically ship by air versus by ocean in order to meet delivery commitments to our customers, which is more costly.

In addition, we periodically ship by air versus by ocean to meet delivery commitments to our customers, which is more costly.

Cost of revenue also includes fixed expenses related to our internal operations, which could increase our cost of revenue as a percentage of revenue if our revenue declines.

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Our critical accounting policies and estimates, which are revenue recognition and inventory valuation and supplier purchase commitments, are described under “Critical Accounting Policies and Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025.

For the nine months ended September 27, 2025, there have been no significant changes in our critical accounting policies and estimates.

For the three months ended March 28, 2026, there have been no significant changes in our critical accounting policies and estimates.

Recent Accounting Pronouncements

There have been no additional accounting pronouncements or changes in accounting pronouncements during the nine months ended September 27, 2025 as compared with the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2024 that are significant or expected to be significant to us.

There have been no additional accounting pronouncements or changes in accounting pronouncements during the three months ended March 28, 2026 as compared with the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2025 that are significant or expected to be significant to us.

Results of Operations

Comparison of the Three and Nine Months Ended September 27, 2025 and September 28, 2024

Comparison of the Three Months Ended March 28, 2026 and March 29, 2025

The following table sets forth our revenue by customer size (dollars in thousands):

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 Variance

Dollars Variance

Percent September 27,

2025 September 28,

Three Months Ended

2026 March 29,

2025 Variance

Dollars Variance

Large $ 34,747 $ 9,739 $ 25,008 257 % $ 84,227 $ 37,840 $ 46,387 123 %

Medium 30,236 24,070 6,166 26 % 94,349 76,323 18,026 24 %

Small 200,454 167,136 33,318 20 % 548,985 511,231 37,754 7 %

Appliance $ 232,843 $ 179,743 $ 53,100 30 %

Software and service 47,141 40,499 6,642 16 %

$ 279,984 $ 220,242 $ 59,742 27 %

Our revenue increased by $64.5 million and $102.2 million for the three and nine months ended September 27, 2025, respectively, as compared to the corresponding periods in 2024.

After bottoming in the second quarter last year, we have experienced sequential quarterly revenue growth.

That growth has been broad based.

Specifically, during the third quarter of 2025, the large-customer segment increased $25.0 million primarily due to a North American customer that increased its capital expenditures this year relative to last year and the reclassification of a small customer to the large-customer segment after being acquired by a different large customer.

The medium-customer segment increased $6.2 million primarily due to increased shipments to a few customers.

The small-customer segment increased by $33.3 million as BXPs focused on adding subscribers.

For the three and nine months ended September 27, 2025, United States revenue was $249.2 million and $679.4 million, or 94% and 93% of our revenue, respectively, compared to $187.1 million and $579.9 million, or 93% of our revenue for the same periods in 2024.

International revenue was $16.2 million and $48.1 million, or 6% and 7% of our revenue, respectively, for the three and nine months ended September 27, 2025, as compared to $13.9 million and $45.5 million, or 7% of our revenue, for the same periods in 2024.

No customer accounted for more than 10% of our revenue for the three and nine months ended September 27, 2025 or September 28, 2024.

Our revenue increased by $59.7 million during the three months ended March 28, 2026 compared to the corresponding period in 2025.

The increase in appliance revenue was due to the adoption of our platform, cloud and managed services by new customers as we continue to take footprint from legacy box vendors and the continued robust expansion of our appliances within our existing customer base.

The increase in software and service revenue is due to our CXP customers adding new subscribers.

Our software is sold on a per-subscriber basis.

CXPs use our platform, cloud and managed services to deliver better subscriber experiences as evidenced by best-in-class Net Promoter Scores SM , thereby allowing them to take market share.

For the three months ended March 28, 2026, United States revenue was $265.3 million, or 95% of our revenue, compared to $211.2 million, or 96% of our revenue, for the same period in 2025.

International revenue was $14.6 million, or 5% of our revenue, as compared to $9.1 million, or 4% of our revenue, for the same period in 2025.

Our primary focus has been, and in the near term will continue to be, the U.S.

and Canada given our large, direct sales and marketing presence and the amount of government stimulus being invested into underserved and not-served areas of these countries.

With the introduction of our third-generation platform, we will increase our attention on international markets.

No customer accounted for more than 10% of our revenue for the three months ended March 28, 2026 or March 29, 2025.

Gross Profit and Gross Margin

The following table sets forth our gross profit and gross margin (dollars in thousands):

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 Variance

Dollars Variance

Percent September 27,

2025 September 28,

Three Months Ended

2026 March 29,

2025 Variance

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Gross profit:

Appliance $ 133,707 $ 96,998 $ 36,709 38 %

Software and service 25,589 25,710 (121) 0 %

$ 159,296 $ 122,708 $ 36,588 30 %

Gross margin:

Gross profit increased to $152.0 million and $411.0 million for the three and nine months ended September 27, 2025, from $110.0 million and $340.2 million during the corresponding periods in 2024.

These increases were mainly due to the corresponding increases in revenue.

Our gross margin increased by 250 and 210 basis points for the three and nine months ended September 27, 2025, respectively, compared to the corresponding periods in 2024, primarily related to the continued growth in our platform, cloud and managed services offerings.

Appliance 57.4 % 54.0 % 340 bps

Software and service 54.3 % 63.5 % (920) bps

56.9 % 55.7 % 120 bps

Gross profit increased to $159.3 million for the three months ended March 28, 2026 from $122.7 million from the corresponding period in 2025.

This increase was mainly due to the corresponding increase in revenue.

Our gross margin increased by 120 basis points for the three months ended March 28, 2026, compared to the corresponding period in 2025, primarily related to the continued growth in our appliance offerings.

Our software and service gross margin declined by 920 basis points, which related to the transition from our second-generation platform to our third-generation platform during which time we operated in a dual cloud environment to successfully support customer migrations.

Operating Expenses

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The following table sets forth our sales and marketing expenses (dollars in thousands):

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 Variance

Dollars Variance

Percent September 27,

2025 September 28,

Three Months Ended

2026 March 29,

2025 Variance

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Percent of revenue 23 % 26 %

Sales and marketing expenses for the three months ended September 27, 2025 increased by $8.0 million compared with the corresponding period in 2024 primarily due to increases in personnel expenses of $6.2 million, mostly related to incentive compensation and increased headcount, stock-based compensation of $1.5 million and travel expenses of $0.5 million.

These increases were partially offset by a decrease in marketing expenses of $0.5 million.

Sales and marketing expenses for the nine months ended September 27, 2025 increased by $23.5 million compared with the corresponding period in 2024 primarily due to increases in personnel expenses of $14.9 million, mostly related to incentive compensation and increased headcount, stock-based compensation of $10.0 million and travel expenses of $1.6 million.

These increases were partially offset by a decrease in marketing expenses of $2.0 million.

For the three months ended September 27, 2025, sales and marketing expenses as a percentage of revenue declined compared to the year ago period as revenue returned to a record level.

Sales and marketing expenses for the three months ended March 28, 2026 increased by $5.4 million compared with the corresponding period in 2025 primarily due to increases in personnel expenses of $4.7 million, mostly related to incentive compensation and increased headcount, outside services of $0.5 million and software expenses of $0.3 million.

For the three months ended March 28, 2026, sales and marketing expenses as a percentage of revenue declined compared to the year ago period due to increased revenue.

We expect our investments in sales and marketing will increase in absolute dollars on a year-over-year basis, but decline as a percentage of revenue as we continue to land new customers and expand our platform, cloud and managed services.

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The following table sets forth our research and development expenses (dollars in thousands):

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 Variance

Dollars Variance

Percent September 27,

2025 September 28,

Three Months Ended

2026 March 29,

2025 Variance

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Percentage of gross profit 34 % 36 %

Research and development expenses for the three months ended September 27, 2025 increased by $1.6 million as compared with the corresponding period in 2024 mainly due to increases in stock-based compensation of $1.2 million, depreciation and amortization of $0.7 million, outside services of $0.4 million and prototypes and test equipment expenses of $0.4 million.

These increases were partially offset by a decrease in personnel expenses of $0.8 million.

Research and development expenses for the nine months ended September 27, 2025 increased by $2.8 million as compared with the corresponding period in 2024 mainly due to increases in stock-based compensation of $3.2 million, depreciation and amortization of $1.6 million and prototypes and test equipment expenses of $1.2 million.

These increases were partially offset by decreases in personnel expenses of $3.0 million.

For the three and nine months ended September 27, 2025, research and development expenses as a percentage of gross profit decreased to 31% from 41% and 33% from 39%, respectively, due to the increase in revenue and gross margin.

We expect our investments in research and development to increase in absolute dollars and as a percentage of gross profit in the short term as we accelerate the development of AI functionality and capabilities of our platform, cloud and managed services.

Research and development expenses for the three months ended March 28, 2026 increased by $10.7 million as compared with the corresponding period in 2025 mainly due to increases in personnel expenses of $5.1 million, outside services of $3.7 million, stock-based compensation expense of $0.8 million, depreciation and amortization of $0.8 million and allocated shared services expenses of $0.5 million.

For the three months ended March 28, 2026, research and development expenses as a percentage of gross profit decreased to 34% from 36% due to the increase in revenue and gross margin and we expect our investments in research and development to increase in absolute dollars and as a percentage of gross profit in the short term as we accelerate the development of artificial intelligence (“AI”) functionality and capabilities of our platform, cloud and managed services.

General and Administrative Expenses

The following table sets forth our general and administrative expenses (dollars in thousands):

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 Variance

Dollars Variance

Percent September 27,

2025 September 28,

Three Months Ended

2026 March 29,

2025 Variance

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Percent of revenue 10 % 12 %

General and administrative expenses for the three months ended September 27, 2025 increased by $4.1 million as compared with the corresponding period in 2024 mainly due to increases in personnel expenses of $1.9 million, mostly related to incentive compensation and increased headcount, and stock-based compensation of $1.6 million.

General and administrative expenses for the nine months ended September 27, 2025 increased by $8.4 million as compared with the corresponding period in 2024 mainly due to increases in personnel expenses of $4.7 million and stock-based compensation of $3.9 million.

These increases were partially offset by a decrease in professional services expenses of $0.8 million.

For the three and nine months ended September 27, 2025, general and administrative expenses as a percentage of revenue were relatively flat compared to the same periods in 2024.

We expect our general and administrative investments to be fairly constant in absolute dollars in the near term and decline as a percentage of revenue.

General and administrative expenses for the three months ended March 28, 2026 increased by $1.7 million as compared with the corresponding period in 2025 mainly due to increases in personnel expenses of $1.0 million, mostly related to incentive compensation and increased headcount.

For the three months ended March 28, 2026, general and administrative expenses as a percentage of revenue decreased to 10% from 12% due to the increase in revenue.

We expect our general and administrative investments to increase in absolute dollars but decline as a percentage of revenue.

Interest and Other Expense, net

The following table sets forth our interest and other expense, net (dollars in thousands):

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 Variance

Dollars Variance

Percent September 27,

2025 September 28,

Three Months Ended

2026 March 29,

2025 Variance

2 unchanged sentences

Percent of revenue 1 % 1 %

For the three months ended September 27, 2025, interest and other expense, net was down slightly compared with the corresponding period in 2024 due to lower accretion of marketable securities.

For the nine months ended September 27, 2025, interest and other expense, net increased by $0.8 million compared with the same period a year ago as we had a larger average cash balance.

For the three months ended March 28, 2026, interest and other expense, net was down compared with the corresponding period in 2025 due to a lower balance of marketable securities.

We repurchased 3.3 million shares of common stock for $170.9 million during the first quarter of 2026.

The following table sets forth our income taxes (dollars in thousands):

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 Variance

Dollars Variance

Percent September 27,

2025 September 28,

Three Months Ended

2026 March 29,

2025 Variance

Dollars Variance

Income taxes (benefit) $ 4,676 $ (3,824) $ 8,500 (222) % $ 10,099 $ (4,183) $ 14,282 (341) %

Income taxes $ 4,022 $ 1,797 $ 2,225 124 %

Effective tax rate 26.4 % (60.1) %

For the three and nine months ended September 27, 2025, our income tax expense was $4.7 million and $10.1 million for an effective tax rate of 23.0% and 48.6%, respectively, which differed from the statutory rate of 21% primarily due to the effect of non-deductible stock-based compensation for executive officers offset by the favorable impact of U.S.

For the three months ended March 28, 2026, our income tax expense was $4.0 million for an effective tax rate of 26.4%, which differed from the statutory rate of 21% primarily due to state taxes, the effect of non-deductible stock-based compensation for executive officers offset by the favorable impact of U.S.

federal research tax credits and excess tax benefits from stock-based compensation.

The effective tax rate for the three months ended September 27, 2025 is lower than the corresponding period in 2024 primarily due to lower return-to-provision adjustments and higher excess tax benefits from share-based compensation exercises, offset by a relatively higher level of non-deductible stock-based compensation for executive officers.

The effective tax rate for the nine months ended September 27, 2025 is higher than the corresponding period in 2024 primarily as a result of higher pre-tax earnings with a relatively higher level of non-deductible stock-based compensation for executive officers.

The effective tax rate for the three months ended March 28, 2026 is higher than the corresponding period in 2025 primarily due to higher pre-tax earnings with a relatively lower level of non-deductible expenses.

Our income taxes may be subject to fluctuation during the year and in future years as new information is obtained.

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We fund our operations and investing activities from cash flow generated from our operations as well as the issuance of common stock under our equity incentive plans.

As of September 27, 2025, we had cash, cash equivalents and marketable securities of $339.6 million, which consisted of deposits held at banks and major financial institutions and highly liquid marketable securities such as U.S.

As of March 28, 2026, we had cash, cash equivalents and marketable securities of $243.3 million, which consisted of deposits held at banks and major financial institutions and highly liquid marketable securities such as U.S.

government and its agency securities, corporate debt securities and commercial paper.

Operating Activities

Net cash provided by operating activities was $88.9 million for the nine months ended September 27, 2025 and consisted of net income of $10.7 million and non-cash charges of $85.1 million partially offset by cash flow decreases of $6.8 million reflected in the net change in assets and liabilities.

Net cash provided by operating activities was $14.6 million for the three months ended March 28, 2026 and consisted of net income of $11.2 million and non-cash charges of $25.8 million partially offset by cash flow decreases of $22.4 million reflected in the net change in assets and liabilities.

Non-cash charges primarily consisted of stock-based compensation of $20.6 million, depreciation and amortization of $4.4 million and deferred income taxes of $1.3 million partially offset by the net accretion of available-for-sale securities of $0.4 million.

Cash flow decreases resulting from the net change in assets and liabilities primarily consisted of an increase in accounts receivable of $8.1 million due to higher revenue, an increase in inventory of $5.3 million to support increased revenue, a

decrease in deferred revenue of $3.7 million and a decrease in accrued liabilities of $1.0 million relating to various factors including a decrease in incentive compensation related accruals.

This was partially offset by a decrease in prepaid expenses and other assets of $11.3 million mainly due to a reduction in our inventory deposits.

Net cash provided by operating activities was $53.0 million for the nine months ended September 28, 2024 and consisted of a net loss of $11.8 million offset by non-cash charges of $49.1 million and cash flow increases of $15.7 million reflected in the net change in assets and liabilities.

Cash flow decreases resulting from the net change in assets and liabilities primarily consisted of an increase in inventory of $20.9 million to support increased revenue, an increase in accounts receivable of $17.4 million due to higher revenue and decrease in accrued liabilities of $11.4 million relating to various factors including a decrease in incentive compensation related accruals.

This was partially offset by an increase in accounts payable of $26.2 million due to increased inventory purchases and a decrease in prepaid expenses and other assets of $0.8 million.

Net cash provided by operating activities was $17.2 million for the three months ended March 29, 2025 and consisted of a net loss of $4.8 million offset by non-cash charges of $21.4 million and cash flow increases of $0.6 million reflected in the net change in assets and liabilities.

Non-cash charges primarily consisted of stock-based compensation of $19.7 million and depreciation and amortization of $4.3 million partially offset by deferred income taxes of $1.5 million and the net accretion of available-for-sale securities of $1.1 million.

Cash flow increases resulting from the net change in assets and liabilities primarily consisted of a decrease in accounts receivable of $40.8 million and inventory of $32.4 million, both in line with our revenue decline, and a decrease in prepaid expenses and other assets of $7.7 million mainly due to a decrease in our inventory deposits.

These changes were partially offset by a decrease in accrued liabilities of $42.6 million relating to various factors including a decrease in our liability for components, a decrease in incentive compensation related accruals and the settlement of a legal matter;

a decrease in accounts payable of $11.8 million due to decreased inventory purchases;

and a decrease in deferred revenue of $10.6 million primarily due to the recognition of previously deferred revenue and a trend to move customers to monthly from annual billing arrangements.

Cash flow increases resulting from the net change in assets and liabilities primarily

consisted of a decrease in accounts receivable of $3.8 million due to the timing of customer payments, an increase in deferred revenue of $3.2 million driven by support contract renewals, a decrease in prepaid expenses and other assets of $2.8 million mainly due to a reduction in our inventory deposits and an increase in accounts payable of $3.5 million due to the timing of inventory receipts.

This was partially offset by a decrease in accrued liabilities of $14.6 million relating to various factors including a decrease in incentive compensation related accruals.

Investing Activity

For the nine months ended September 27, 2025, cash used in investing activities of $0.9 million consisted of capital expenditures of $13.7 million, consisting primarily of purchases of test equipment, partially offset by net maturities and sales of marketable securities of $12.8 million.

For the nine months ended September 28, 2024, cash used in investing activities of $75.9 million consisted of net purchases of marketable securities of $63.0 million and capital expenditures of $12.9 million, consisting primarily of purchases of test and computer equipment.

For the three months ended March 28, 2026, cash provided by investing activities consisted of net maturities and sales of marketable securities of $56.0 million partially offset by capital expenditures of $8.1 million, consisting primarily of purchases of test equipment.

For the three months ended March 29, 2025, cash provided by investing activities of $11.0 million consisted of net purchases of marketable securities of $15.3 million and partially offset by capital expenditures of $4.3 million, consisting primarily of purchases of test and computer equipment.

Financing Activities

Net cash used in financing activities of $36.2 million for the nine months ended September 27, 2025 primarily consisted repurchases of our common stock of $77.0 million partially offset by proceeds from the issuance of common stock related to our equity plans of $40.8 million.

Net cash provided by financing activities of $21.7 million for the nine months ended September 28, 2024 primarily consisted of proceeds from the issuance of common stock related to our equity plans of $25.4 million partially offset by repurchases of our common stock of $3.7 million.

Net cash used in financing activities of $150.9 million for the three months ended March 28, 2026 primarily consisted repurchases of our common stock of $170.9 million partially offset by proceeds from the issuance of common stock related to our equity plans of $20.0 million.

Net cash used in financing activities of $29.1 million for the three months ended March 29, 2025 primarily consisted repurchases of our common stock of $40.0 million partially offset by proceeds from the issuance of common stock related to our equity plans of $10.8 million.

Working Capital and Capital Expenditure Needs

1 unchanged sentence

We believe that our outsourced approach to manufacturing provides us significant flexibility in both managing inventory levels and financing our inventory.

Furthermore, we have a common stock repurchase program, which had $125.9 million available as of September 27, 2025.

Furthermore, we have a common stock repurchase program, which had $63.4 million available as of March 28, 2026.

Our stock repurchase program does not require us to purchase a specific number of shares and may be modified, suspended or terminated at any time.

In April 2026, our Board of Directors authorized a $100.0 million increase to our common stock repurchase program.

We believe, based on our current operating plan and expected operating cash flows, that our existing cash, cash equivalents and marketable securities will be sufficient to meet our anticipated cash needs for at least the next twelve months.

1 unchanged sentence

Contractual Obligations and Commitments

Our principal commitments as of September 27, 2025 consisted of contractual obligations under non-cancelable outstanding purchase obligations and operating lease obligations for office space.

The following table summarizes our contractual obligations as of September 27, 2025 (in thousands):

Our principal commitments as of March 28, 2026 consisted of contractual obligations under non-cancelable outstanding purchase obligations and operating lease obligations for office space.

The following table summarizes our contractual obligations as of March 28, 2026 (in thousands):

Payments Due by Period

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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 2. Management’s Discussion and Analysis