What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-04 compared with 2025-08-05 · 168 added, 124 removed, 224 unchanged (57% of the section changed)

8 unchanged sentences

We have no obligation to update any of these statements.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements, including risks related to general market trends, the benefits of acquisitions and investments, our supply chain, uncertainties related to public health-related crises, the interpretation and impacts of changes in export controls, tariffs and other trade barriers, military conflicts, political volatility and similar factors, our ability to execute our business strategy including any plans of expansion, and other risks discussed in the section titled “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 28, 2024 and in this Quarterly Report on Form 10-Q.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements, including risks related to general market trends, the benefits of acquisitions and investments, our credit facilities, our supply chain, our tax burden, uncertainties related to public health-related crises, the interpretation and impacts of changes in export controls, tariffs and other trade barriers, military conflicts, political volatility, legislative changes and similar factors, our ability to execute our business strategy including any plans of expansion, and other risks discussed in the section titled “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 28, 2024 and in this Quarterly Report on Form 10-Q.

You should carefully consider the numerous risks and uncertainties described under these sections.

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Sales of our probe cards and analytical probes are included in the Probe Cards segment, while sales of our probe stations, thermal systems and cryogenic systems are included in the Systems segment.

We generated net income of $15.5 million in the first six months of fiscal 2025 as compared to $41.2 million in the first six months of fiscal 2024.

The decline in net income is mainly attributable to the $20.3 million gain recognized during the first half of fiscal 2024 from the sale of our China operations that also established an exclusive distribution and partnership agreement to continue sales and support of our products to that region (the “China Transaction”).

We generated net income of $31.1 million in the first nine months of fiscal 2025 as compared to $59.9 million in the first nine months of fiscal 2024.

The decline in net income is mainly attributable to the $20.3 million gain recognized during fiscal 2024 from the sale of our China operations that also established an exclusive distribution and partnership agreement to continue sales and support of our products to that region (the “China Transaction”).

In June 2025, we purchased a manufacturing site in Farmers Branch, Texas.

3 unchanged sentences

that had a clean room and came equipped with the infrastructure to meet our future manufacturing needs.

We expect that the cash expenditures related to this site will be between $140.0 million and $170.0 million dollars in fiscal 2026.

Critical Accounting Estimates

1 unchanged sentence

Actual results in these areas could differ from management’s estimates.

During the six months ended June 28, 2025, there were no significant changes in our significant accounting policies or estimates from those reported in our Annual Report on Form 10-K for the year ended December 28, 2024 except for the addition of a policy related to Equity Investments.

During the nine months ended September 27, 2025, there were no significant changes in our significant accounting policies or estimates from those reported in our Annual Report on Form 10-K for the year ended December 28, 2024 except for the addition of a policy related to Equity Investments.

Equity Investment

On February 21, 2025, Frontier Investments Co., Ltd (“HoldCo”), a joint holding company in which we hold a 20% share of the equity and an affiliate of MBK Partners holds an 80% share of the equity, through HoldCo’s wholly-owned subsidiary, FM Holdings Co., Ltd., acquired 100% of the shares of FICT Limited (“FICT”) from Advantage Partners Inc.

Our initial investment of $67.2 million is comprised of the funding of our share of the purchase price of $59.6 million, subject to changes in foreign currency fluctuations, and acquisition costs of $7.5 million.

Our initial $67.2 million investment comprised of the funding of our share of the purchase price of $59.6 million, subject to changes in foreign currency fluctuations, and acquisition costs of $7.5 million.

Headquartered in Nagano, Japan, FICT is a provider of semiconductor test and high-performance computing industries with complex multi-layer organic substrates, printed circuit boards, and related leading-edge technologies and services.

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We report our pro-rata share of the HoldCo's financial results on a one-quarter lag as their results are not available in time to be recorded in the concurrent period.

During the three and six months ended June 28, 2025, we recorded a $3.5 million loss of our equity share of the HoldCo using lag reporting, that primarily related to costs incurred from the acquisition that are not indicative of its ongoing operating performance.

As of June 28, 2025, the carrying value of our investment was $67.3 million, and recorded in Equity investment on our Condensed Consolidated Balance Sheets.

As of June 28, 2025, we had a $7.3 million basis difference between the carrying value of our investment and our proportionate share of the underlying net assets of the Holdco.

During the three and nine months ended September 27, 2025, we recorded income of $1.2 million and a loss of $2.3 million, respectively, from our equity share of the HoldCo using lag reporting.

As of September 27, 2025, the carrying value of our investment was $66.4 million, and recorded in Equity investment on our Condensed Consolidated Balance Sheets.

As of September 27, 2025, we had a $7.3 million basis difference between the carrying value of our investment and our proportionate share of the underlying net assets of the Holdco.

The basis difference is accounted for as equity method goodwill that is not amortized.

1 unchanged sentence

The following table sets forth our operating results as a percentage of revenues for the periods indicated:

Three Months Ended Six Months Ended

2025 June 29,

2024 June 28,

2025 June 29,

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Revenues 100.0 % 100.0 % 100.0 % 100.0 %

4 unchanged sentences

Selling, general and administrative 16.3 17.1 17.2 18.6

Factory start-up costs 0.5 — 0.2 —

Total operating expenses 30.9 32.1 32.4 34.5

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Other income (expense), net 0.2 (0.3) 0.2 0.1

Income before income taxes 7.6 10.9 6.0 12.7

Income before income taxes and equity investment 10.1 10.1 7.5 11.8

Provision for income taxes 2.9 1.1 1.6 1.4

Loss from equity investment 1.8 — 0.9 —

Loss (income) from equity investment (0.5) — 0.4 —

Net income 7.7 % 9.0 % 5.5 % 10.4 %

Revenues by Segment and Market

Three Months Ended Six Months Ended

2025 June 29,

2024 June 28,

2025 June 29,

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

(In thousands)

3 unchanged sentences

Three Months Ended

2025 % of Revenues June 29,

September 27,

2025 % of Revenues September 28,

2024 % of Revenues $ Change % Change

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Total revenues $ 202,676 100.0 % $ 207,917 100.0 % $ (5,241) (2.5) %

Six Months Ended

2025 % of Revenues June 29,

Nine Months Ended

September 27,

2025 % of Revenues September 28,

2024 % of Revenues $ Change % Change

7 unchanged sentences

Total revenues $ 569,830 100.0 % $ 574,116 100.0 % $ (4,286) (0.7) %

Foundry & Logic — The decrease in Foundry & Logic product revenue for the three and six months ended June 28, 2025, compared to the three and six months ended June 29, 2024, was driven by weaker probe-card demand for client PC and server microprocessor designs.

DRAM — The increase in DRAM product revenue for the six months ended June 28, 2025, compared to the six months ended June 29, 2024, was driven by increased demand for high-bandwidth memory (“HBM”) designs utilized in generative artificial intelligence applications, partially offset by lower demand for other non-HBM DRAM designs, particularly DDR5, due to volatility from trade restrictions with China.

The decrease in DRAM product revenue for the three months ended June 28, 2025, compared to the three months ended June 29, 2024, was driven by timing of customer designs and re-orders that lowered demand for HBM designs utilized in generative artificial intelligence applications, partially offset by increased demand for other non-HBM DRAM designs, particularly DDR5.

Flash — The decrease in Flash product revenue for the six months ended June 28, 2025, compared to the six months ended June 29, 2024, was driven by decreased customer production activity and demand for our products.

The increase in Flash product revenue for the three months ended June 28, 2025, compared to the three months ended June 29, 2024, was driven by increased customer production activity and demand for our products.

Systems — The increase in Systems market revenue for the six months ended June 28, 2025, compared to the six months ended June 29, 2024, was driven by increased sales of cryogenic systems, probe stations, and thermal systems.

The increase in Systems market revenue for the three months ended June 28, 2025, compared to the three months ended June 29, 2024, was driven by increased sales of cryogenic systems and thermal systems, slightly offset by a decline in probe stations.

Foundry & Logic — The decrease in Foundry & Logic product revenue for the three and nine months ended September 27, 2025, compared to the three and nine months ended September 28, 2024, was driven by weaker probe-card demand for client PC and server microprocessor designs.

DRAM — The increase in DRAM product revenue for the three and nine months ended September 27, 2025, compared to the the three and nine months ended September 28, 2024, was driven by increased demand for high-bandwidth memory (“HBM”) designs utilized in generative artificial intelligence applications, partially offset by lower demand for other non-HBM DRAM designs, due to volatility from trade restrictions with China.

Flash — The decrease in Flash product revenue for the nine months ended September 27, 2025, compared to the nine months ended September 28, 2024, was driven by decreased customer production activity and demand for our products.

The increase in Flash product revenue for the three months ended September 27, 2025, compared to the three months ended September 28, 2024, was driven by increased customer production activity and demand for our products.

Systems — The increase in Systems market revenue for the nine months ended September 27, 2025, compared to the nine months ended September 28, 2024, was driven by increased sales of cryogenic systems, probe stations, and thermal systems.

The increase in Systems market revenue for the three months ended September 27, 2025, compared to the three months ended September 28, 2024, was driven by increased sales of thermal systems and probe stations, partially offset by a decline in cryogenic systems.

Revenues by Geographic Region

Three Months Ended Six Months Ended

2025 % of Revenues June 29,

2024 % of Revenues June 28,

Revenue June 29,

Three Months Ended Nine Months Ended

September 27,

2025 % of Revenues September 28,

2024 % of Revenues September 27,

Revenue September 28,

(Dollars in thousands)

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United States 36,375 17.9 55,015 26.5 117,624 20.6 148,672 25.9

Japan 14,666 7.5 7,611 3.9 24,985 6.8 16,153 4.4

China 11,665 5.8 34,513 16.6 34,680 6.1 75,213 13.1

Europe 7,248 3.7 8,815 4.5 15,029 4.1 17,664 4.8

Japan 11,385 5.6 8,056 3.9 36,370 6.4 24,209 4.2

Singapore 9,937 4.9 5,475 2.6 22,865 4.0 14,755 2.6

Europe 7,363 3.6 7,756 3.7 22,392 3.9 25,420 4.4

Malaysia 5,814 2.9 5,280 2.5 13,569 2.4 13,745 2.4

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subsidiary and requests the products to be shipped to an address in South Korea, this sale will be reflected in the revenue for South Korea rather than the U.S.

Changes in revenue by geographic region for the three and six months ended June 28, 2025, compared to the three and six months ended June 29, 2024, were primarily attributable to changes in customer demand, product sales mix, and impacts from trade restrictions.

Changes in revenue by geographic region for the three and nine months ended September 27, 2025, compared to the three and nine months ended September 28, 2024, were primarily attributable to changes in customer demand, impacts from trade restrictions, and product sales mix.

Cost of Revenues and Gross Margins

6 unchanged sentences

Three Months Ended

2025 June 29,

September 27,

2025 September 28,

2024 $ Change % Change

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Gross margin 39.8 % 40.7 %

Six Months Ended

2025 June 29,

Nine Months Ended

September 27,

2025 September 28,

2024 $ Change % Change

3 unchanged sentences

Three Months Ended

June 28, 2025 June 29, 2024

September 27, 2025 September 28, 2024

Probe Cards Systems Corporate and Other Total Probe Cards Systems Corporate and Other Total

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Gross margin 40.8 % 42.0 % 39.8 % 42.3 % 41.5 % 40.7 %

Six Months Ended

June 28, 2025 June 29, 2024

Nine Months Ended

September 27, 2025 September 28, 2024

Probe Cards Systems Corporate and Other Total Probe Cards Systems Corporate and Other Total

1 unchanged sentence

Gross margin 39.1 % 42.0 % 38.3 % 41.8 % 44.2 % 40.8 %

Probe Cards — For the six months ended June 28, 2025, gross profit and gross margins decreased compared to the six months ended June 29, 2024, primarily due to higher manufacturing costs, which included increased costs for tariffs.

For the three months ended June 28, 2025, gross profit and gross margins decreased compared to the three months ended June 29, 2024, primarily due to higher manufacturing costs, which included increased costs for tariffs, and an unfavorable DRAM product mix.

Systems — For the six months ended June 28, 2025, gross profit increased while gross margins decreased compared to the six months ended June 29, 2024, primarily as a result of greater revenues that was offset by an unfavorable product mix as a greater percentage of segment revenues were from lower margin products.

For the three months ended June 28, 2025, gross profit and gross margins decreased compared to the three months ended June 29, 2024, primarily as a result of an unfavorable product mix as a greater percentage of segment revenues were from lower margin products and an increase in manufacturing spending.

Probe Cards — For the three and nine months ended September 27, 2025, gross profit and gross margins decreased compared to the three and nine months months ended September 28, 2024, primarily due to higher manufacturing costs, which included increased costs for tariffs, partially offset by a favorable product mix.

Systems — For the three months ended September 27, 2025, gross profit increased on greater revenue with gross margins increasing slightly, benefitting from the increase in volume when compared to the three months ended September 28, 2024.

For the nine months ended September 27, 2025, gross profit increased while gross margins decreased compared to the nine months ended September 28, 2024, primarily as a result of greater revenues that was offset by an unfavorable product mix as a greater percentage of segment revenues were from lower margin products.

Corporate and Other — Corporate and Other includes unallocated expenses relating to stock-based compensation expense, amortization of intangible assets and fixed asset fair value adjustments due to acquisitions, and restructuring charges, net, which are not used in evaluating the results of, or in allocating resources to, our reportable segments.

Overall — Gross profit and gross margins fluctuate with revenue levels, product mix, selling prices, factory loading, and material costs.

For the six months ended June 28, 2025, compared to the six months ended June 29, 2024, gross profit and gross margins have decreased due to higher manufacturing costs, which included increased costs for tariffs.

For the three months ended June 28, 2025, compared to the three months ended June 29, 2024, gross profit and gross margins have decreased due to higher manufacturing costs, which included increased costs for tariffs, and an unfavorable product mix as described above.

For the three months ended September 27, 2025, compared to the three months ended September 28, 2024, gross profit and gross margins decreased due to higher manufacturing costs, which included increased costs for tariffs, partially offset by a favorable product mix as described above.

For the nine months ended September 27, 2025, compared to the nine months ended September 28, 2024, gross profit and gross margins decreased due to higher manufacturing costs, which included increased costs for tariffs.

Cost of revenues included stock-based compensation expense as follows (in thousands):

Three Months Ended Six Months Ended

2025 June 29,

2024 June 28,

2025 June 29,

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Stock-based compensation $ 1,941 $ 1,934 $ 5,636 $ 5,794

1 unchanged sentence

Three Months Ended

2025 June 29,

September 27,

2025 September 28,

2024 $ Change % Change

2 unchanged sentences

% of revenues 14.1 % 15.0 %

Six Months Ended

2025 June 29,

Nine Months Ended

September 27,

2025 September 28,

2024 $ Change % Change

2 unchanged sentences

% of revenues 15.0 % 15.9 %

Research and development expenses in the three and six months ended June 28, 2025 decreased compared to the corresponding period in the prior year primarily due to lower employee compensation costs from lower performance-based compensation that was partially offset by an increase in employee compensation costs from an increase in headcount and annual pay increases.

The decrease was further impacted from slightly lower project material costs and general operational costs.

Research and development expenses in the three and nine months ended September 27, 2025 decreased compared to the corresponding periods in the prior year primarily due to lower general operational costs, which includes the benefit of a German government grant earned that partially offset expenses, lower project material costs, and lower employee compensation costs from lower performance-based compensation that was partially offset by an increase in employee compensation costs from an increase in headcount and annual pay increases.

A detail of the changes is as follows (in thousands):

Three Months Ended June 28, 2025 compared to Three Months Ended June 29, 2024 Six Months Ended June 28, 2025 compared to Six Months Ended June 29, 2024

Employee compensation costs $ (2,084) (2,169)

Project material costs (259) (933)

Three Months Ended September 27, 2025 compared to Three Months Ended September 28, 2024 Nine Months Ended September 27, 2025 compared to Nine Months Ended September 28, 2024

General operational costs $ (1,634) $ (2,085)

Project material costs (409) (1,342)

Employee compensation costs (360) (2,529)

Stock-based compensation expense (154) (199)

1 unchanged sentence

Research and development included stock-based compensation expense as follows (in thousands):

Three Months Ended Six Months Ended

2025 June 29,

2024 June 28,

2025 June 29,

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Stock-based compensation expense

2 unchanged sentences

Three Months Ended

2025 June 29,

September 27,

2025 September 28,

2024 $ Change % Change

2 unchanged sentences

% of revenues 16.3 % 17.1 %

Six Months Ended

2025 June 29,

Nine Months Ended

September 27,

2025 September 28,

2024 $ Change % Change

2 unchanged sentences

% of revenues 17.2 % 18.6 %

Selling, general and administrative expenses decreased for the three and six months ended June 28, 2025 compared to the corresponding period in the prior year.

The decrease for the three month period was primarily due to decreased employee compensation costs from lower performance-based compensation that was partially offset by an increase in employee costs from an increase from annual pay increases that were slightly offset by lowered headcount.

The decrease was further driven by lower general operating costs, lower consulting fees, and lower stock-based compensation expense.

The decrease for the six month period is consistent with the three month period except the six month period decrease was partially offset by increased restructuring charges from operating efficiency initiatives.

Selling, general and administrative expenses decreased for the three and nine months ended September 27, 2025 compared to the corresponding period in the prior year.

The decrease for the three and nine month periods was primarily due to decreased employee compensation costs from lower performance-based compensation that was partially offset by an increase in employee costs from annual pay increases.

The decrease for the three month period was further driven by lower commission expenses and consulting fees that were partially offset by increased stock-based compensation expense.

The decrease for the nine month period was further driven by lower consulting fees, general operating expenses, commission expenses, and stock-based compensation expense, partially offset by increased restructuring charges from operating efficiency initiatives.

A detail of the changes is as follows (in thousands):

Three Months Ended June 28, 2025 compared to Three Months Ended June 29, 2024 Six Months Ended June 28, 2025 compared to Six Months Ended June 29, 2024

Three Months Ended September 27, 2025 compared to Three Months Ended September 28, 2024 Nine Months Ended September 27, 2025 compared to Nine Months Ended September 28, 2024

Employee compensation costs $ (1,467) $ (5,737)

Restructuring charges — 2,677

General operating expenses (980) (1,525)

Consulting fees (431) (1,390)

Commission expenses (771) (671)

Stock-based compensation expense 727 (490)

Consulting fees (478) (1,909)

General operating expenses (647) (2,853)

Restructuring charges — 3,007

$ (2,636) $ (8,653)

Selling, general and administrative included stock-based compensation expense as follows (in thousands):

Three Months Ended Six Months Ended

2025 June 29,

2024 June 28,

2025 June 29,

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Stock-based compensation expense

$ 5,050 $ 4,323 $ 15,360 $ 15,850

Factory Start-Up Costs

Three Months Ended

September 27,

2025 September 28,

2024 $ Change % Change

(Dollars in thousands)

Factory start-up costs $ 964 $ — $ 964 —

% of revenues 0.5 % — %

Nine Months Ended

September 27,

2025 September 28,

2024 $ Change % Change

(Dollars in thousands)

Factory start-up costs $ 1,321 $ — $ 1,321 —

% of revenues 0.2 % — %

Factory start-up costs are current year costs associated with our newly purchased manufacturing site in Farmers Branch, Texas.

The start-up costs consist of utilities, employee compensation costs, taxes and licenses, facility maintenance, and other expenses being incurred while the site is being brought to its intended use.

These costs are expected to increase as we continue the build-out, with an expected production ramp beginning late in the fourth quarter of fiscal 2026.

Interest Income, Net

Three Months Ended Six Months Ended

2025 June 29,

2024 June 28,

2025 June 29,

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

(Dollars in thousands)

6 unchanged sentences

Interest income is earned on our cash, cash equivalents, restricted cash and marketable securities.

The decrease in interest income for the three and six months ended June 28, 2025, compared with the corresponding periods in the prior year, was attributable to lower invested balances and lower yields.

Interest expense primarily includes interest on our term loan, interest rate swap derivative contracts, and term loan issuance costs amortization charges.

The interest expense for the three and six months ended June 28, 2025 was effectively flat compared to the corresponding periods in the prior year.

This stability is due to our interest rate swap, which fixes the interest rate on our long-term debt.

The decrease in interest income for the three and nine months ended September 27, 2025, compared with the corresponding periods in the prior year, was attributable to lower invested balances and lower yields.

Interest expense primarily includes interest on our term loan, interest rate swap derivative contracts, commitment fee on our revolving credit facility, term loan issuance costs amortization charges, and our revolving credit facility issuance costs amortization charges.

The interest expense for the three and nine months ended September 27, 2025 increased due to entering into the revolving credit facility within the quarter.

Other Income (Expense), Net

2 unchanged sentences

Provision for Income Taxes

Three Months Ended Six Months Ended

2025 June 29,

2024 June 28,

2025 June 29,

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

(In thousands, except percentages)

5 unchanged sentences

federal, state or foreign tax laws, changes in stock-based compensation expense/benefit, future expansion into areas with varying country, state, and local income tax rates, and deductibility of certain costs and expenses by jurisdiction.

The increase in our effective tax rate for the three and six months ended June 28, 2025 compared to the corresponding periods in the prior year was primarily driven by changes in the estimated taxable income by jurisdiction.

The increase in our effective tax rate for the three and nine months ended September 27, 2025 compared to the corresponding periods in the prior year was primarily driven by changes in the estimated taxable income by jurisdiction and the impact of implementing the One Big Beautiful Bill Act (“OBBBA”) tax law changes.

Although the impacts of OBBBA applied for the current fiscal year, the changes were adopted within the three months ended September 27, 2025.

The increase in our effective tax rate for the three months ended September 27, 2025 compared to the corresponding period in the prior year was further impacted by discrete stock-based compensation impacts in the prior year on the provision for income tax expense, that did not repeat in the current year.

One Big Beautiful Bill

On July 4, 2025, the One Big Beautiful Bill (“OBBB”) Act, which includes a broad range of tax reform provisions that may affect our financial results, was signed into law in the United States.

As the effects of tax law changes are recognized in the period of enactment, which occurred in the third quarter, the impacts are not included in our operating results for the six months ended June 28, 2025.

Among other provisions, the OBBB repealed the capitalization of domestic Research and Development (“R&D”) expenditures and includes a reduced deduction rate on Foreign-derived Deduction Eligible Income and income from non-U.S.

On July 4, 2025, the OBBBA, which included a broad range of tax reform provisions that affected our financial results, was signed into law in the United States.

Among other provisions, the OBBBA repealed the capitalization of domestic Research and Development (“R&D”) expenditures and included a reduced deduction rate on Foreign-derived Deduction Eligible Income and income from non-U.S.

subsidiaries.

While we are evaluating the impact of these provisions on our effective tax rate and deferred tax assets in 2025 and future periods, and will continue to do so up until the time an election needs to be made, we currently anticipate an increase in our annual effective tax rate range, which may result in a discrete tax charge within the third quarter.

Furthermore, due to the repealed capitalization of R&D expenditures, we expect to reduce our cash tax payments within the United States for 2025 to zero for the remainder of year.

We evaluated the impact of these provisions and implemented our current strategy that optimizes our overall effective tax rate.

We will continue to evaluate the full impact of these legislative changes as more guidance becomes available.

Liquidity and Capital Resources

Capital Resources

Our working capital decreased to $401.3 million at June 28, 2025, compared to $473.8 million at December 28, 2024.

Our working capital decreased to $429.1 million at September 27, 2025, compared to $473.8 million at December 28, 2024.

Cash and cash equivalents primarily consist of deposits held at banks and money market funds.

4 unchanged sentences

Our investment policy requires investments to be rated single A or better, and limits the types of acceptable investments, issuer concentration and duration of the investment.

Our cash, cash equivalents and marketable securities totaled approximately $249.3 million at June 28, 2025, compared to $360.0 million at December 28, 2024.

Based on our historical results of operations, we expect that our cash, cash equivalents, and marketable securities on hand, and the cash we expect to generate from operations, will be sufficient to fund our short-term and long-term liquidity requirements primarily arising from:

Our cash, cash equivalents and marketable securities totaled approximately $266.0 million at September 27, 2025, compared to $360.0 million at December 28, 2024.

We have the full amount available under our $150 million revolving credit facility as of September 27, 2025.

Based on our historical results of operations, we expect that our cash, cash equivalents, and marketable securities on hand, the cash we expect to generate from operations, and the available capacity under our revolving credit facility, will be sufficient to fund our short-term and long-term liquidity requirements primarily arising from:

research and development, capital expenditures, working capital, outstanding commitments, and other liquidity requirements associated with existing operations.

8 unchanged sentences

The following table sets forth our net cash flows from operating, investing and financing activities:

Six Months Ended

2025 June 29,

Nine Months Ended

September 27,

2025 September 28,

(In thousands)

4 unchanged sentences

Net cash provided by operating activities consists of net income for the period, adjusted for certain non-cash items and changes in certain operating assets and liabilities.

Net cash provided by operating activities for the six months ended June 28, 2025 was attributable to net income of $15.5 million and net non-cash expenses of $49.3 million, partially offset by the increase in net working capital of $22.4 million.

The cash used in net working capital was primarily driven by increased inventories of $12.4 million, increased accounts receivable, net, of $9.6 million, increased prepaid expenses and other current assets of $5.7 million, and lowered accrued liabilities of $4.4 million, partially offset by increased accounts payable of $9.6 million.

The non-cash expenses consisted of depreciation, amortization, stock-based compensation, the provision for excess and obsolete inventories, non cash restructuring, and loss from equity investment.

Net cash provided by operating activities for the nine months ended September 27, 2025 was attributable to net income of $31.1 million and net non-cash expenses of $79.4 million, partially offset by the increase in net working capital of $41.1 million.

The cash used in net working capital was primarily driven by increased accounts receivable, net, of $28.1 million, increased inventories of $13.9 million, decreased operating lease liabilities of $6.1 million, and increased prepaid expenses and other current assets of $4.5 million, partially offset by increased deferred revenue of $6.2 million and accounts payable of $5.7 million.

The non-cash expenses mainly consisted of depreciation, amortization, stock-based compensation, and the provision for excess and obsolete inventories.

Investing Activities

Net cash used in investing activities for the six months ended June 28, 2025 primarily related to $84.8 million of property, plant and equipment purchases, with $55.0 million of the property, plant and equipment purchases relating to our new Farmers Branch manufacturing facility in Texas, $67.2 million used to acquire our equity investment in FICT, and $11.3 million in net purchases of marketable securities.

Net cash used in investing activities for the nine months ended September 27, 2025 primarily related to $92.3 million of property, plant and equipment purchases, with $55.0 million of the property, plant and equipment purchases relating to our new Farmers Branch manufacturing facility in Texas, and $67.2 million used to acquire our equity investment in FICT, partially offset by $2.9 million in net proceeds from the maturities and sale of marketable securities.

Financing Activities

Net cash used in financing activities for the six months ended June 28, 2025 primarily related to $24.6 million used to purchase common stock under our stock repurchase program, $3.6 million used to pay tax withholdings for net share settlements of employee stock awards, partially offset by $21.6 million received from issuances of common stock through a private placement of $15.0 million and under our employee stock purchase plan of $6.6 million.

Net cash used in financing activities for the nine months ended September 27, 2025 primarily related to $26.2 million used to purchase common stock under our stock repurchase program, $8.6 million used to pay tax withholdings for net share settlements of employee stock awards, partially offset by $26.1 million received from issuances of common stock through a private placement of $15.0 million and under our employee stock purchase plan of $11.1 million.

Revolving Credit Agreement

On July 29, 2025, we entered into a Revolving Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as Administrative Agent, and the lenders party thereto, providing us with a $150 million revolving credit facility (the “Facility”).

The Facility has a maturity date of July 29, 2030.

The Facility may be used for working capital and other general corporate purposes, subject to the terms and conditions set forth in the Credit Agreement.

No amounts were outstanding under the Facility as of September 27, 2025.

Borrowings under the Facility will bear interest at a fluctuating rate per annum equal to, at our option, (i) the forward-looking secured overnight financing rate (“SOFR”) term, (ii) a base rate set forth in the Credit Agreement, or (iii) a combination thereof, plus, in each case, an applicable margin calculated based on our leverage ratio.

Voluntary prepayments are permissible without penalty, subject to certain conditions pertaining to minimum notice and minimum prepayment and reduction amounts as described in the Credit Agreement.

The Facility also bears a quarterly commitment fee ranging from 0.15% to 0.25% on the daily amount by which the commitments under the Facility exceed the outstanding amount.

The commitment fee as of September 27, 2025 was 0.15%.

The Credit Agreement contains customary representations and warranties, and affirmative and negative covenants and events of default, including limitations on subsidiary indebtedness and liens, and the requirement to maintain specified financial ratios including the requirement to maintain a consolidated total net leverage ratio not exceeding 3.50 to 1.00 as of the last day of each fiscal quarter with an increase to 4.00 to 1.00 for four quarters following a permitted acquisition.

We were in compliance with the Facility's covenants as of September 27, 2025.

Building Term Loan and Interest Rate Swap

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The proceeds of the Building Term Loan were used to purchase a building adjacent to our leased facilities in Livermore, California.

On May 19, 2023, we amended the Building Term Loan, replacing the benchmark reference rate London Interbank Offered Rate (“LIBOR“) with the term Secured Overnight Financing Rate (“SOFR”), with no change to the amount or timing of contractual cash flows.

The Building Term Loan bears interest at a rate equal to the applicable SOFR rate, plus 0.1145%, plus 1.75% per annum.

On May 19, 2023, we amended the Building Term Loan, replacing the benchmark reference rate London Interbank Offered Rate (“LIBOR”) with the term SOFR, with no change to the amount or timing of contractual cash flows.

The Building Term Loan bears interest at a rate equal to the applicable SOFR rate plus 1.86% per annum.

Interest payments are payable in monthly installments over a fifteen-year period.

The interest rate at June 28, 2025, before consideration of the interest rate swap discussed in the next paragraph, was 6.19%.

As of June 28, 2025, the balance outstanding pursuant to the Building Term Loan was $12.8 million.

The interest rate at September 27, 2025, before consideration of interest rate swap discussed in the next paragraph, was 6.14%.

As of September 27, 2025, the balance outstanding pursuant to the Building Term Loan was $12.5 million.

On March 17, 2020, we entered into an interest rate swap agreement to hedge the interest payment on the Building Term Loan for the notional amount of $18.0 million, and an amortization period that matches the debt.

As future levels of LIBOR over the life of the loan are uncertain, we entered into this interest-rate swap agreement to hedge the exposure in interest rate risks associated with movement in LIBOR rates.

As future levels of LIBOR over the life of the loan were uncertain, we entered into this interest-rate swap agreement to hedge the exposure in interest rate risks associated with movement in LIBOR rates.

This agreement was amended on May 19, 2023 to replace the benchmark reference rate LIBOR with SOFR to match the Building Term Loan agreement (as amended).

After the amendment, the interest rate swap continues to convert our floating-rate interest into a fixed-rate at 2.75%.

As of June 28, 2025, the notional amount of the loan that is subject to this interest rate swap is $12.8 million.

Revolving Credit Agreement

On July 29, 2025, following the quarter-end, we entered into a Revolving Credit Agreement (the “Credit Agreement”) by and among the Borrower, Wells Fargo Bank, National Association, as Administrative Agent, and the lenders party thereto, providing us with a $150 million revolving credit facility (the “Facility”) with an option to draw additional Incremental Term Loans in $25 million increments.

The Facility has a maturity date of July 29, 2030.

The Facility may be used for working capital and other general corporate purposes, subject to the terms and conditions set forth in the Credit Agreement.

Borrowings under the Facility will bear interest at a fluctuating rate per annum equal to, at our option, (i) the forward-looking secured overnight financing rate term, (ii) a base rate set forth in the Credit Agreement, or (iii) a combination thereof, plus, in each case, an applicable margin calculated based on our leverage ratio.

Voluntary prepayments are permissible without penalty, subject to certain conditions pertaining to minimum notice and minimum prepayment and reduction amounts as described in the Term Loan Agreement.

As of September 27, 2025, the notional amount of the loan that is subject to this interest rate swap is $12.5 million.

Stock Repurchase Programs

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This share repurchase program will expire on April 24, 2027.

During the six months ended June 28, 2025, we repurchased and

retired 75,000 shares of common stock for $2.4 million under this plan, and as of June 28, 2025, $72.6 million remained available for future repurchases.

During the nine months ended September 27, 2025, we repurchased and retired 135,000 shares of common stock for $4.1 million under this plan, and as of September 27, 2025, $70.9 million remained available for future repurchases.

Contractual Obligations and Commitments

The following table summarizes our significant contractual commitments to make future payments in cash under contractual obligations as of June 28, 2025:

The following table summarizes our significant contractual commitments to make future payments in cash under contractual obligations as of September 27, 2025:

Payments Due In Fiscal Year

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394 736 664 591 515 1,344 4,244

Revolver - commitment fee (2)

56 224 224 229 224 129 1,086

Total $ 3,000 $ 10,063 $ 9,590 $ 6,066 $ 2,292 $ 10,217 $ 41,228

(1) Represents our minimum interest payment commitments at 6.14% per annum, excluding the interest rate swap described in Debt , above.

(2) Represents our quarterly commitment fee of 0.15% on the daily amount by which the commitments under the Facility exceed the outstanding amount.

This commitment assumes no borrowings.

The table above excludes our gross liability for unrecognized tax benefits and our deferred grant.

The gross liability for unrecognized tax benefits was $52.1 million as of June 28, 2025.

The gross liability for unrecognized tax benefits was $52.0 million as of September 27, 2025.

The timing of any payments which could result from these unrecognized tax benefits will depend upon a number of factors and, accordingly, the timing of payment cannot be estimated.

The deferred grant was $18.0 million as of June 28, 2025, and consists of cash received from a California Competes Grant awarded from the California Governor's Office of Business and Economic Development.

The deferred grant was $18.0 million as of September 27, 2025, and consists of cash received from a California Competes Grant awarded from the California Governor's Office of Business and Economic Development.

The timing of any potential repayments is dependent upon a number of factors, including the number of employees and capital investments within California over the 5-year term.

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Historically, we have not participated in transactions that have generated relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

As of June 28, 2025, we were not involved in any such off-balance sheet arrangements.

As of September 27, 2025, we were not involved in any such off-balance sheet arrangements.

Recent Accounting Standards

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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