What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-05 compared with 2025-11-04 · 107 added, 190 removed, 202 unchanged (60% of the section changed)

3 unchanged sentences

The forward-looking statements include statements concerning, among other things, our business strategy (including the influence of anticipated trends and developments in our business and the markets in which we operate), financial and operating results, revenues, gross margins, liquidity, operating expenses, effective tax rate and deferred tax assets, products, projected costs and capital expenditure requirements, research and development programs, sales and marketing initiatives, competition and impact of accounting standards.

In some cases, you can identify these statements by forward-looking words, such as “may,” “might,” “will,” “could,” “should,” “expect,” “estimate,” “plan,” “anticipate,” “believe,” “continue,” the negative or plural of these words and other comparable terminology.

In some cases, you can identify these statements by forward-looking words, such as “may,” “likely,” “will,” “could,” “forecast,” “should,” “expect,” “estimate,” “plan,” “intend,” “anticipate,” “target,” “believe,” “continue,” the negative or plural of these words and other comparable terminology.

The forward-looking statements are only predictions based on our current expectations and our projections about future events.

10 unchanged sentences

Our products provide electrical and optical information from a variety of semiconductor and electro-optical devices and integrated circuits from early research, through development, to high-volume production.

Customers use our products and services to accelerate profitability by optimizing device performance and advancing yield knowledge.

Customers use our products and services to optimize device performance and advance yield knowledge.

We operate in two reportable segments consisting of the Probe Cards segment and the Systems segment.

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 $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.

The site, which comprises four structures and includes 50,0000 square feet of clean room space, was purchased for $55 million dollars.

This manufacturing facility enabled us to acquire a scarce, fit-for-purpose asset that aligned with our strategic roadmap and provided significant operational flexibility.

Located in a lower-operating cost region, it was one of a handful of existing available facilities in the U.S.

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.

We generated net income of $20.4 million in the first three months of fiscal 2026, compared to $6.4 million in the first three months of fiscal 2025.

The increase in net income was primarily attributable to higher revenues, which reached record quarterly levels, and improved gross margins, partially offset by higher restructuring charges from plans adopted to better align our cost structure and support gross margin improvement to our target financial model.

Recent Developments

2026 Restructuring Plans — In January 2026, we adopted restructuring plans that are intended to better align cost structure and support gross margin improvement to our target financial model, while also aligning manufacturing capabilities with current and anticipated business needs and our strategic priorities.

As part of this restructuring plan, we are consolidating the manufacturing facilities located in Carlsbad and Baldwin Park, California to other sites.

The Baldwin Park site manufactured through January 2026 and the Carlsbad site is expected to manufacture through December 2026.

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

We expect to begin production at this site late in the fourth quarter of fiscal 2026, with a ramp to initial target production levels over the course of fiscal 2027.

The facility expands our manufacturing footprint and is expected to support incremental production capacity and a more favorable cost structure overall, once ramped to initial target production levels.

Critical Accounting Estimates

1 unchanged sentence

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

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 $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.

This investment is accounted for as an equity method investment, with the income or loss from our pro-rata share of the HoldCo's financial results changing our carrying value of the investment.

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 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.

During the three months ended March 28, 2026, 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 27, 2025.

Results of Operations

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

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Three Months Ended

2026 March 29,

Revenues 100.0 % 100.0 %

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Total operating expenses 31.0 35.7

Gain on sale of business — — — 3.6

Operating income 7.4 2.0

Interest income, net 0.9 1.9

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

Other income, net 0.2 0.5

Income before income taxes and equity investment 8.5 4.4

Provision for income taxes 0.2 0.6

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

Income from equity investment 0.7 —

Net income 9.0 % 3.8 %

Revenues by Segment and Market

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Three Months Ended

2026 March 29,

(In thousands)

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Three Months Ended

September 27,

2025 % of Revenues September 28,

2024 % of Revenues $ Change % Change

(Dollars in thousands)

Probe Cards Markets:

Foundry & Logic $ 92,933 45.9 % $ 107,446 51.7 % $ (14,513) (13.5) %

DRAM 68,182 33.6 60,184 28.9 7,998 13.3

Flash 5,265 2.6 4,544 2.2 721 15.9

Systems Market:

36,296 17.9 35,743 17.2 553 1.5

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

Nine Months Ended

September 27,

2025 % of Revenues September 28,

2026 % of Revenues March 29,

2025 % of Revenues $ Change % Change

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Total revenues $ 226,144 100.0 % $ 171,356 100.0 % $ 54,788 32.0 %

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.

Foundry & Logic — The increase in Foundry & Logic product revenues for the three months ended March 28, 2026, compared to the three months ended March 29, 2025, was driven by stronger probe-card demand for networking and high-performance compute microprocessor designs.

DRAM — The increase in DRAM product revenues for the three months ended March 28, 2026, compared to the three months ended March 29, 2025, was primarily driven by increased demand for high-bandwidth memory (“HBM”) designs utilized in generative artificial intelligence applications, with additional contributions from higher demand for other non-HBM DRAM designs.

Flash — The increase in Flash product revenues for the three months ended March 28, 2026, compared to the three months ended March 29, 2025, was driven by increased customer production activity and demand for our products.

A portion of Flash product revenues during the period was associated with manufacturing activity at our Baldwin Park manufacturing facility, which was closed in connection with our 2026 Restructuring Plans.

As a result of this closure, we expect Flash revenues to comprise a lower percentage of our portfolio going forward.

Systems — The decrease in Systems market revenues for the three months ended March 28, 2026, compared to the three months ended March 29, 2025, was driven by decreased sales of probe stations and cryogenic systems, partially offset by an increase in sales of thermal systems.

The decline in probe station sales primarily reflects reduced demand for legacy product offerings as we transition toward production of Triton, our high‑volume co‑packaged optics (“CPO”) testing platform.

Revenues by Geographic Region

Three Months Ended Nine Months Ended

September 27,

2025 % of Revenues September 28,

2024 % of Revenues September 27,

Revenue September 28,

Three Months Ended

2026 % of Revenues March 29,

2025 % of Revenues

(Dollars in thousands)

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China 11,362 5.0 13,615 7.9

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

Singapore 10,275 4.5 6,249 3.6

Japan 8,282 3.7 10,319 6.0

Europe 7,774 3.4 7,781 4.5

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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 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.

Changes in revenues by geographic region for the three months ended March 28, 2026, compared to the three months ended March 29, 2025, were primarily attributable to changes in customer demand, product sales mix, and the timing of customer

shipments and revenue recognition.

Specifically, the changes in revenues by geographic region were attributable to the following:

• South Korea — Increased demand for our DRAM probe card products, including those supporting HBM designs, contributed to the increase in revenues.

• Taiwan — Increased demand for our Foundry & Logic probe card products contributed to the increase in revenues.

• United States — Decreased demand for certain Foundry & Logic and Systems customers contributed to the decrease in revenue.

Cost of Revenues and Gross Margins

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We expense all warranty costs, inventory provisions and amortization of certain intangible assets as cost of revenues.

We have been executing on initiatives for gross margin improvements through operational effectiveness and financial discipline, including:

• Deploying our workforce and existing manufacturing footprint more effectively, which included the execution of our 2026 Restructuring Plans.

In first quarter of 2026, costs of revenues include $21.5 million of restructuring costs in connection with the 2026 Restructuring Plans.

• Driving improvement in manufacturing yields in key process areas, innovating to reduce manufacturing spending, and reducing cycle times in key manufacturing operations.

Our gross profit and gross margin were as follows (dollars in thousands):

Three Months Ended

September 27,

2025 September 28,

2024 $ Change % Change

Gross profit $ 80,626 $ 84,705 $ (4,079) (4.8) %

Gross margin 39.8 % 40.7 %

Nine Months Ended

September 27,

2025 September 28,

2026 March 29,

2025 $ Change % Change

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Three Months Ended

September 27, 2025 September 28, 2024

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

Gross profit $ 67,929 $ 15,244 $ (2,547) $ 80,626 $ 72,855 $ 14,838 $ (2,988) $ 84,705

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

Nine Months Ended

September 27, 2025 September 28, 2024

March 28, 2026 March 29, 2025

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

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Gross margin 50.5 % 38.0 % 38.4 % 37.8 % 44.5 % 37.7 %

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.

Probe Cards — For the three months ended March 28, 2026, gross profit and gross margins increased compared to the three months ended March 29, 2025, primarily due to increased revenue from a favorable product mix, higher factory utilization, and increased volumes, which includes the impact of our gross margin initiatives described earlier, partially offset by increased costs for tariffs.

Systems — For the three months ended March 28, 2026, gross profit and gross margins decreased compared to the three months ended March 29, 2025, primarily as a result of lower factory utilization and decreased volumes.

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

For the three months ended March 28, 2026, corporate and other costs increased compared to the three months ended March 29, 2025, primarily due to the $21.5 million of restructuring charges incurred in connection with the 2026 Restructuring Plans.

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

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.

For the three months ended March 28, 2026, compared to the three months ended March 29, 2025, gross profit and gross margins increased due to increased revenue from a favorable product mix, higher factory utilization, and increased

volumes, which includes the impact of our gross margin initiatives described earlier, partially offset by $21.5 million of restructuring charges incurred in connection with the 2026 Restructuring Plans and increased costs for tariffs which impacted gross margins by 1.4%.

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

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Three Months Ended

2026 March 29,

Stock-based compensation $ 1,841 $ 2,005

1 unchanged sentence

Three Months Ended

September 27,

2025 September 28,

2024 $ Change % Change

(Dollars in thousands)

Research and development $ 28,686 $ 31,243 $ (2,557) (8.2) %

% of revenues 14.1 % 15.0 %

Nine Months Ended

September 27,

2025 September 28,

2026 March 29,

2025 $ Change % Change

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% of revenues 13.6 % 16.2 %

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.

Research and development expenses in the three months ended March 28, 2026 increased compared to the corresponding period in the prior year primarily due to higher performance-based compensation and higher restructuring charges, partially offset by lower project material costs, lower general operational costs, and lower stock-based compensation.

In first quarter of 2026, research and development includes $1.4 million of restructuring costs incurred in connection with the 2026 Restructuring Plans.

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

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)

Three Months Ended March 28, 2026 compared to Three Months Ended March 29, 2025

Employee compensation costs $ 3,180

Restructuring charges 1,252

Project material costs (752)

General operational costs (458)

Stock-based compensation expense (242)

$ (2,557) $ (6,155)

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

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Three Months Ended

2026 March 29,

Stock-based compensation expense

2 unchanged sentences

Three Months Ended

September 27,

2025 September 28,

2024 $ Change % Change

(Dollars in thousands)

Selling, general and administrative $ 32,971 $ 35,607 $ (2,636) (7.4) %

% of revenues 16.3 % 17.1 %

Nine Months Ended

September 27,

2025 September 28,

2026 March 29,

2025 $ Change % Change

2 unchanged sentences

% of revenues 14.3 % 19.5 %

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.

Selling, general and administrative expenses decreased for the three months ended March 28, 2026 compared to the corresponding period in the prior year primarily due to decreased restructuring charges and lower stock-based compensation expense, partially offset by employee compensation costs from higher performance-based compensation.

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

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

Three Months Ended March 28, 2026 compared to Three Months Ended March 29, 2025

Employee compensation costs $ 3,215

Commission expenses (771) (671)

Restructuring charges (2,228)

Stock-based compensation expense (1,327)

Consulting fees (478) (1,909)

General operating expenses (450)

Restructuring charges — 3,007

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

Amortization of intangibles (191)

Commission expenses (181)

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

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Three Months Ended

2026 March 29,

Stock-based compensation expense $ 3,818 $ 5,145

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

Stock-based compensation expense was lower as of March 28, 2026, primarily due to the elimination of previously recognized equity compensation expense related to our former Chief Financial Officer.

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,

2026 March 29,

2025 $ Change % Change

3 unchanged sentences

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.

The start-up costs consist of consulting costs, employee compensation costs, utilities, 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 continue throughout the build-out, with production expected to begin at this site late in the fourth quarter of fiscal 2026.

Interest Income, Net

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Three Months Ended

2026 March 29,

(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 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

Other income (expense), net, primarily includes the effects of foreign currency and various other gains and losses.

The decrease in interest income for the three months ended March 28, 2026, compared with the corresponding period in the prior year, was attributable to lower invested balances and lower yields.

amortization charges.

The interest expense for the three months ended March 28, 2026 increased compared with the corresponding period in the prior year due to entering into the revolving credit facility in the third quarter of fiscal 2025.

Other Income, Net

Other income, net, primarily includes the effects of foreign currency and various other gains and losses.

We partially mitigate our risks from currency movements by hedging certain balance sheet exposures, which minimizes the impacts during periods of foreign exchange volatility.

Provision for Income Taxes

Three Months Ended Nine Months Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Three Months Ended

2026 March 29,

(In thousands, except percentages)

4 unchanged sentences

Our effective tax rate may vary from period to period based on changes in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to U.S.

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 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 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.

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.

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

The decrease in our effective tax rate for the three months ended March 28, 2026 compared to the corresponding period in the prior year was primarily driven by increased stock-based compensation discrete benefits that arose due to the increase in stock price between the grant date and the vesting date of the awards.

Liquidity and Capital Resources

Capital Resources

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

Our working capital increased to $468.7 million at March 28, 2026, compared to $433.2 million at December 27, 2025.

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

Marketable securities primarily consist of corporate bonds, U.S.

treasuries, U.S.

Marketable securities primarily consist of U.S.

treasuries, corporate bonds, U.S.

agency securities, and commercial paper.

1 unchanged sentence

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 $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.

Our cash, cash equivalents and marketable securities totaled approximately $303.3 million at March 28, 2026, compared to $275.2 million at December 27, 2025.

We have the full amount available under our $150 million revolving credit facility as of March 28, 2026.

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:

9 unchanged sentences

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

Nine Months Ended

September 27,

2025 September 28,

Three Months Ended

2026 March 29,

(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 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.

Net cash provided by operating activities for the three months ended March 28, 2026 was attributable to net income of $20.4 million and net non-cash expenses of $37.0 million, partially offset by the increase in net working capital of $12.4 million.

The cash used in net working capital was primarily driven by increased inventories of $7.4 million, increased accounts receivable, net, of $7.0 million, increased prepaid and other current assets of $5.7 million, and decreased accrued liabilities of $5.3 million, partially offset by increased accounts payable of $7.5 million and increased deferred revenue of $6.0 million.

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

Investing Activities

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.

Net cash used in investing activities for the three months ended March 28, 2026 primarily related to $15.2 million of property, plant and equipment purchases and $8.3 million in net purchases of marketable securities.

Financing Activities

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.

Net cash used in financing activities for the three months ended March 28, 2026 primarily related to $6.8 million used to pay tax withholdings for net share settlements of employee stock awards, partially offset by $5.8 million received from issuances of common stock under our employee stock purchase plan.

Revolving Credit Agreement

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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.

No amounts were outstanding under the Facility as of March 28, 2026.

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.

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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 commitment fee as of March 28, 2026 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.

We were in compliance with the Facility's covenants as of March 28, 2026.

Building Term Loan and Interest Rate Swap

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

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.

The interest rate at March 28, 2026, before consideration of interest rate swap discussed in the next paragraph, was 5.53%.

As of March 28, 2026, the balance outstanding pursuant to the Building Term Loan was $12.0 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.

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

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

As of March 28, 2026, the notional amount of the loan that is subject to this interest rate swap is $12.0 million.

Stock Repurchase Programs

On October 30, 2023, our Board of Directors authorized a two-year program to repurchase up to $75.0 million of outstanding common stock, with the primary purpose of offsetting potential dilution from issuance of common stock under our stock-based compensation programs.

During fiscal 2024 we repurchased and retired 1,309,635 shares of common stock for $53.3 million.

On March 29, 2025, our Board of Directors approved an increase to the repurchase program, authorizing the repurchase of an additional $1.6 million in shares of common stock.

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

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.

During fiscal 2025, we repurchased and retired 135,000 shares of common stock for $4.1 million.

During the three months ended March 28, 2026, we did not repurchase and retire shares of common stock under this plan, and as of March 28, 2026, $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 September 27, 2025:

The following table summarizes our significant contractual commitments to make future payments in cash under contractual obligations as of March 28, 2026:

Payments Due In Fiscal Year

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

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

The gross liability for unrecognized tax benefits was $55.5 million as of March 28, 2026.

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 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 deferred grant was $18.0 million as of March 28, 2026, 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 September 27, 2025, we were not involved in any such off-balance sheet arrangements.

As of March 28, 2026, 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