What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-02-06 · 88 added, 124 removed, 178 unchanged (54% of the section changed)

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These statements are only predictions, based on our current expectations about future events and may not prove to be accurate.

We do not undertake any obligation to update these forward-looking statements to reflect events occurring or circumstances arising after the date of this report.

Risk Factors, of this Quarterly Report on Form 10-Q and Item 1A.

Risk Factors of our Annual Report on Form 10-K for the fiscal year ended March 28, 2025.

We do not undertake any obligation to

update these forward-looking statements to reflect events occurring or circumstances arising after the date of this report.

These forward-looking statements involve risks and uncertainties, and our actual results, performance, or achievements could differ materially from those expressed or implied by the forward-looking statements on the basis of several factors, including economic recessions, inflationary pressures and those other factors that we discuss in Part II Item 1A, Risk Factors, of this Quarterly Report on Form 10-Q and Item 1A, Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended April 3, 2026.

We encourage you to read those sections carefully.

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Gen Digital Inc.

is a global company powering Digital Freedom through its family of trusted consumer brands including Norton, Avast, LifeLock, MoneyLion, and more.

Our portfolio spans Cyber Safety Platform and Trust-Based Solutions, delivering intuitive, AI-powered services that enable people to confidently grow, manage, and protect their digital and financial lives.

From cybersecurity and online privacy to identity protection and financial empowerment, our products and services are designed to meet the real-world needs of today’s digital generation.

Through a foundation of trust and innovation, our brands deliver the protection and confidence people need to thrive in a digital-first world.

Our Cyber Safety Platform delivers technology solutions and superior threat protection to help people navigate the digital world, securely, privately and with confidence.

Our Trust-Based Solutions provide innovative solutions and insights that empower consumers to manage their identity, reputation and finances confidently to achieve freedom.

is a global leader in consumer Cyber Safety and Trust-Based Solutions, empowering people around the world to live safer digital lives while building confidence and control over their financial futures.

Through its trusted brands, including Norton, Avast, LifeLock and MoneyLion, Gen offers cybersecurity, online privacy, identity protection and financial wellness solutions to consumers worldwide.

Our Cyber Safety Platform includes our security, comprehensive suites, and privacy products, which deliver technology solutions and superior threat protection to help people navigate the digital world securely, privately and with confidence.

Our Trust-Based Solutions includes our identity protection, restoration support services, digital reputation, and secure financial wellness, including our first-party MoneyLion products and our Engine marketplace offerings.

Fiscal calendar

We have a 52/53-week fiscal year ending on the Friday closest to March 31.

The three months ended January 2, 2026 and December 27, 2024 each consisted of 13 weeks.

The nine months ended January 2, 2026 consisted of 40 weeks, whereas the nine months ended December 27, 2024 consisted of 39 weeks.

The three months ended July 3, 2026 consisted of 13 weeks, whereas the three months ended July 4, 2025 consisted of 14 weeks.

Our 2027 fiscal year consists of 52 weeks and ends on April 2, 2027.

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The following tables provide our key financial metrics for the periods presented:

Three Months Ended Nine Months Ended

(In millions, except for per share amounts) January 2, 2026 December 27, 2024 January 2, 2026 December 27, 2024

Three Months Ended

(In millions, except for per share amounts) July 3, 2026 July 4, 2025

Net revenues $ 1,336 $ 1,257

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Net income (loss) per share - diluted $ 0.36 $ 0.22

(In millions) January 2, 2026 March 28, 2025

(In millions) July 3, 2026 April 3, 2026

Cash, cash equivalents and restricted cash

$ 619 $ 1,006

Contract liabilities $ 1,919 $ 1,977

Below are our financial highlights for the third quarter of fiscal 2026, compared to the corresponding period in the prior year:

• Net revenues increased $254 million, primarily due to higher sales in both our Cyber Safety Platform products and Trust-Based Solutions, including an increase of $218 million due to the acquisition of MoneyLion, reported in Trust-Based Solutions.

• Operating income increased $59 million, primarily due to increased net revenues described above, largely offset by an increase in marketing costs, payment processing fees, amortization of intangible assets and compensation related expenses.

• Net income increased $33 million and net income per share increased $0.05, primarily due to an increase in operating income as discussed above and a decrease in other income (expense), net resulting from impairment of our non-marketable equity investments and gain on sale of nonfinancial assets.

This is partially offset by an increase in income tax expense.

Below are our financial highlights for the first nine months of fiscal 2026, compared to the corresponding period in the prior year:

• Net revenues increased $792 million, primarily due to higher sales in both our Cyber Safety Platform products and Trust-Based Solutions, including an increase of $588 million due to the acquisition of MoneyLion, and an increase of $87 million due to the favorable impact from the additional week in the first quarter of fiscal 2026.

• Operating income increased $124 million, primarily due to increased net revenues described above, largely offset by an increase in marketing costs, payment processing fees, amortization of intangible assets and compensation related expenses.

• Net income decreased $40 million and net income per share decreased $0.06, primarily due to an increase in income tax expense partially offset by an increase in operating income as discussed above.

• Cash, cash equivalents and restricted cash decreased by $387 million compared to March 28, 2025, primarily due to the cash consideration paid for our acquisition of MoneyLion, principal payments of our Term A and B facilities and share repurchases.

This is partially offset by proceeds from the issuance of our Incremental Term Loan B and cash generated from operating activities during the first nine months of fiscal 2026.

• Contract liabilities decreased $17 million compared to March 28, 2025, primarily due to billing seasonality.

Acquisition of MoneyLion

On April 17, 2025, we completed our acquisition of MoneyLion Inc.

MoneyLion extends our identity solutions into offering comprehensive financial wellness through MoneyLion’s full-featured personal finance platform that includes credit building and financial management services.

See Note 4 of the Notes to the Condensed Consolidated Financial Statements for further information about the acquisition.

Below are our financial highlights for the first quarter of fiscal 2027, compared to the corresponding period in the prior year:

• Net revenues increased $79 million, primarily due to increased sales in our Trust-Based Solutions, partially offset by the impact of the additional week in the first quarter of fiscal 2026 on both segments.

• Operating income (loss) remained relatively flat, primarily due to offsetting increases in net revenues, cost of revenues and operating expenses.

• Net income (loss) increased $80 million and net income per share increased $0.14, primarily due to a decrease in interest and income tax expense.

GLOBAL MACROECONOMIC CONDITIONS

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We continue to monitor the direct and indirect impacts of these global macroeconomic or other geopolitical factors.

If the economic uncertainty continues, we may experience negative impacts on customer renewals, customer collections, sales and marketing efforts, customer deployments, product development, or other financial metrics.

If the economic uncertainty continues, we may experience negative impacts on customer renewals, customer collections, sales and

marketing efforts, customer deployments, product development, or other financial metrics.

Additional broader implications of these events on our business, results of operations, and overall financial position still remain uncertain and could result in further adverse impacts to our reported results.

For further discussion of the potential impacts of global macroeconomic conditions on our business, please see Part 1, Item III and “Risk Factors” in Part II, Item 1A below.

For further discussion of the potential impacts of global macroeconomic conditions on our business, please see Part I, Item 3 and “Risk Factors” in Part II, Item 1A below.

CRITICAL ACCOUNTING ESTIMATES

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Should any of these estimates, judgments or assumptions change or prove to have been incorrect, it could have a material impact on our results of operations, financial position and cash flows.

Our critical accounting policies and estimates were disclosed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended March 28, 2025 and significant policies adopted as a result of our acquisition of MoneyLion are included in Note 1 on this Form 10-Q.

There have been no other material changes in the matters for which we make critical accounting estimates in the preparation of our Condensed Consolidated Financial Statements during the three and nine months ended January 2, 2026.

Recently issued authoritative guidance not yet adopted

ASU 2024-03 and ASU 2025-01, Income Statement - Reporting Comprehensive Income (Subtopic 220-40):

Expense Disaggregation Disclosures.

In November 2024, the Financial Accounting Standards Board (FASB) issued new guidance requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.

This is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

We are currently evaluating the impact of the adoption of this guidance on our Condensed Consolidated Financial Statements and disclosures.

ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

In September 2025, the FASB issued new guidance to improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods, including methods that entities may use to develop software in the future.

This is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

We are currently evaluating the impact of the adoption of this guidance on our Condensed Consolidated Financial Statements and disclosures.

RESULTS OF OPERATIONS

The following table sets forth our Condensed Consolidated Statements of Operations data as a percentage of net revenues for the periods indicated:

Three Months Ended Nine Months Ended

January 2, 2026 December 27, 2024 January 2, 2026 December 27, 2024

Three Months Ended

July 3, 2026 July 4, 2025

Net revenues 100 % 100 %

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Percentages may not add due to rounding.

Three Months Ended Nine Months Ended

(In millions, except for percentages) January 2, 2026 December 27, 2024 Change in % January 2, 2026 December 27, 2024 Change in %

Three Months Ended

(In millions, except for percentages) July 3, 2026 July 4, 2025 Change in %

Net revenues $ 1,336 $ 1,257 6 %

Three Months Ended January 2, 2026 Compared with Three Months Ended December 27, 2024

Net revenues increased $254 million, due to a $20 million increase in sales of our Cyber Safety Platform products and a $234 million increase in sales of our Trust-Based Solutions, including a $218 million increase in Trust-Based Solutions due to the acquisition of MoneyLion.

Nine Months Ended January 2, 2026 Compared with Nine Months Ended December 27, 2024

Net revenues increased $792 million, due to a $134 million increase in sales of our Cyber Safety Platform products and a $658 million increase in sales of our Trust-Based Solutions, including a $588 million increase in Trust-Based Solutions due to the acquisition of MoneyLion.

Net revenues also increased $87 million due to the favorable impact from the additional week in the first quarter of fiscal 2026, impacting both segment financials.

Specifically, the additional week contributed $56 million to our Cyber Safety Platform and $31 million to Trust-Based Solutions.

Three Months Ended July 3, 2026 Compared with Three Months Ended July 4, 2025

Net revenues increased $79 million, primarily due to a $102 million increase in sales of our Trust-Based Solutions, partially offset by a $23 million decrease in sales of our Cyber Safety Platform, due to the $56 million impact of the additional week in the first quarter of fiscal 2026.

The additional week had a $31 million impact on our Trust-Based Solutions net revenues, for a total impact of $87 million across both segments.

Performance Metrics

We regularly monitor a number of metrics in order to measure our current performance and estimate our future performance.

We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of

our business and the effectiveness of our marketing and operational strategies.

We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies.

Our metrics may be calculated in a manner different than similar metrics used by other companies.

The following table summarizes supplemental key performance metrics:

Three Months Ended Nine Months Ended

Three Months Ended

(In millions)

January 2, 2026 December 27, 2024 January 2, 2026 December 27, 2024

July 3, 2026 July 4, 2025

Cyber Safety Platform $ 846 $ 869

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Partner revenues

215 115 628 340

Total net revenues

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(In millions)

January 2, 2026 December 27, 2024

July 3, 2026 July 4, 2025

Total paid customers 81 76

Revenue from Cyber Safety Platform increased $20 million and $134 million, respectively, during the three and nine months ended January 2, 2026 due to growth across our cyber safety membership offerings and, for the nine month period, the additional week in the first quarter of fiscal 2026.

Revenue from Trust-Based Solutions increased $234 million and $658 million, respectively, during the three and nine months ended January 2, 2026 primarily due to the acquisition of MoneyLion, continued growth in our identity point solutions and, for the nine month period, the additional week in the first quarter of fiscal 2026.

Revenue from Cyber Safety Platform decreased $23 million during the three months ended July 3, 2026, primarily due to an impact of $56 million from the additional week in the first quarter of fiscal 2026, partially offset by growth across our Cyber Safety membership offerings.

Revenue from Trust-Based Solutions increased $102 million during the three months ended July 3, 2026, primarily due to continued growth in our Financial Wellness offerings, partially offset by the impact of $31 million from the additional week in the first quarter of fiscal 2026.

Direct revenue reflects subscriptions sold directly through e-commerce or mobile channels, and revenue generated from financial transactions directly made through Gen properties or marketplaces.

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Net revenues by geographical region

Three Months Ended Nine Months Ended

January 2, 2026 December 27, 2024 January 2, 2026 December 27, 2024

Three Months Ended

July 3, 2026 July 4, 2025

Americas 72 % 70 %

EMEA 21 % 21 %

APJ 8 % 10 % 8 % 10 %

The Americas include the U.S., Canada and Latin America;

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APJ includes Asia Pacific and Japan.

Percentage of revenue in Americas increased primarily due to our acquisition of MoneyLion during the three and nine months ended January 2, 2026 as compared to the three and nine months ended December 27, 2024.

Percentage of revenue in Americas increased primarily due to continued growth in our Financial Wellness product offerings during the three months ended July 3, 2026 as compared to the three months ended July 4, 2025.

Cost of revenues

Three Months Ended Nine Months Ended

(In millions, except for percentages) January 2, 2026 December 27, 2024 Change in % January 2, 2026 December 27, 2024 Change in %

Three Months Ended

(In millions, except for percentages) July 3, 2026 July 4, 2025 Change in %

Cost of revenues $ 307 $ 267 15 %

Three Months Ended January 2, 2026 Compared with Three Months Ended December 27, 2024

Cost of revenues increased $75 million, primarily due to a $43 million increase in partner revenue share mainly in Trust-Based Solutions, a $16 million increase in payment processing fees and an $11 million increase in amortization of intangible assets.

Nine Months Ended January 2, 2026 Compared with Nine Months Ended December 27, 2024

Cost of revenues, including the impact of one additional week, increased $224 million, primarily due to a $133 million increase in partner revenue share mainly in Trust-Based Solutions, a $40 million increase in payment processing fees and a $27 million increase in amortization of intangible assets.

Three Months Ended July 3, 2026 Compared with Three Months Ended July 4, 2025

Cost of revenues increased $40 million, primarily due to a $35 million increase in partner revenue share mainly in Trust-Based Solutions.

Operating expenses

Three Months Ended Nine Months Ended

(In millions, except for percentages) January 2, 2026 December 27, 2024 Change in % January 2, 2026 December 27, 2024 Change in %

Three Months Ended

(In millions, except for percentages) July 3, 2026 July 4, 2025 Change in %

Sales and marketing $ 300 $ 297 1 %

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Total operating expenses $ 586 $ 544 8 %

Three Months Ended January 2, 2026 Compared with Three Months Ended December 27, 2024

Sales and marketing expense increased $125 million, primarily due to a $55 million increase in loss on sale of Instacash Advances, a $41 million increase in marketing expenses, a $13 million increase in headcount costs and a $12 million increase in stock-based compensation expense.

Research and development expense increased $12 million, primarily due to a $4 million increase in headcount costs, a $3 million increase in stock-based compensation expense and a $3 million increase in equipment expenses.

General and administrative expense decreased $38 million, primarily due to a $53 million decrease in litigation settlement expense.

This is partially offset by a $9 million increase in stock-based compensation expense.

Amortization of intangible assets increased $12 million, primarily due to our acquisition of MoneyLion.

Restructuring and other costs increased $9 million, primarily due to an increase in severance and termination benefits in connection with the April 2025 Plan.

See Note 12 of the Notes to the Condensed Consolidated Financial Statements for details of the fiscal 2026 restructuring activities.

Nine Months Ended January 2, 2026 Compared with Nine Months Ended December 27, 2024

Sales and marketing expense, including the impact of one additional week, increased $352 million, primarily due to a $146 million increase in loss on sale of Instacash Advances, a $102 million increase in marketing expenses, a $53 million increase in headcount costs and a $37 million increase in stock-based compensation expense.

Research and development expense, including the impact of one additional week, increased $57 million, primarily due to a $28 million increase in headcount costs, a $12 million increase in stock-based compensation expense and a $7 million increase in occupancy and IT costs.

General and administrative expense, including the impact of one additional week, decreased $20 million, primarily due to a $86 million decrease in litigation settlement expense.

This is partially offset by a $31 million increase in stock-based compensation expense, an $18 million increase in headcount costs and an $7 million increase in provision for credit losses on accounts receivables, net.

Amortization of intangible assets increased $34 million, primarily due to our acquisition of MoneyLion.

Restructuring and other costs increased $21 million, primarily due to an increase in severance and termination benefits in connection with the September 2022 and April 2025 Plans.

See Note 12 of the Notes to the Condensed Consolidated Financial Statements for details of the fiscal 2026 restructuring activities.

Three Months Ended July 3, 2026 Compared with Three Months Ended July 4, 2025

Sales and marketing, research and development, general and administrative, and amortization of intangible assets expenses all remained relatively flat.

Restructuring and other costs increased $22 million, primarily due to a $19 million increase in severance and termination benefits in connection with the Fiscal 2027 Plan.

Refer to Note 9 of the Notes to the Condensed Consolidated Financial Statements for details of the fiscal 2027 restructuring activities.

Non-operating income (expense), net

Three Months Ended Nine Months Ended

(In millions) January 2, 2026 December 27, 2024 January 2, 2026 December 27, 2024

Three Months Ended

(In millions) July 3, 2026 July 4, 2025

Interest expense $ (124) $ (156)

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Foreign exchange gain (loss) (1) —

Change in fair value and impairment of non-marketable equity investments

(10) (30) (79) (30)

Gain on sale of nonfinancial assets 15 — 15 —

Gain (loss) on sale of property

Other — — 5 1

Total non-operating income (expense), net $ (120) $ (146)

Three Months Ended January 2, 2026 Compared with Three Months Ended December 27, 2024

Non-operating income (expense), net, decreased by $42 million, primarily due to a $20 million decrease in impairment of our non-marketable equity investments and a $15 million gain on sale of nonfinancial assets in the third quarter of fiscal 2026.

Nine Months Ended January 2, 2026 Compared with Nine Months Ended December 27, 2024

Non-operating income (expense), net, increased by $24 million, primarily due to a $49 million increase in change in fair value and impairment of our non-marketable equity investments.

This is partially offset by a $15 million gain on sale of nonfinancial assets in the third quarter of fiscal 2026.

Three Months Ended July 3, 2026 Compared with Three Months Ended July 4, 2025

Non-operating income (expense), net, decreased by $26 million, primarily due to a $32 million decrease in interest expense.

Provision for income taxes

Three Months Ended Nine Months Ended

(In millions, except for percentages) January 2, 2026 December 27, 2024 January 2, 2026 December 27, 2024

Three Months Ended

(In millions, except for percentages) July 3, 2026 July 4, 2025

Income (loss) before income taxes $ 323 $ 300

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Effective tax rate 33 % 55 %

Our effective tax rate for the three and nine months ended January 2, 2026 and three and nine months ended December 27, 2024, differs from the federal statutory income tax rate primarily due to state taxes, changes in unrecognized tax benefits and related interest and penalties, foreign exchange impacts, increases in valuation allowances, and the U.S.

Our effective tax rate for the three months ended July 3, 2026 and July 4, 2025, differs from the federal statutory income tax rate primarily due to state taxes, changes in unrecognized tax benefits and related interest and penalties, foreign exchange impacts, stock-based compensation, and the U.S.

taxation on foreign earnings.

On July 4, 2025, the One Big Beautiful Bill Act (the Act) was enacted into law in the United States.

The Act includes various provisions that are applicable to us beginning in fiscal year 2026.

These provisions include an allowance to accelerate tax deductions of certain capital expenditures, research & experimentation expenditures, and an increase to the annual limitation of tax-deductible interest expenses.

The impacts of the Act are included in our operating results for the three and nine months ended January 2, 2026.

The Act has not had, and is not expected to have, a material impact on our effective tax rate.

The Organization for Economic Cooperation and Development (OECD) and many countries have proposed to reallocate a portion of profits of large multinational enterprises (MNE) with an annual global turnover exceeding €20 billion to markets where sales arise (Pillar One), as well as enact a global minimum tax rate of at least 15% for MNE with an annual global turnover exceeding €750 million (Pillar Two).

The effective tax rate decreased primarily due to foreign currency movements on the remeasurement of unrecognized tax benefits and deferred tax liabilities on intangible assets.

The Organization for Economic Cooperation and Development (OECD) and many countries have proposed to reallocate a portion of profits of large multinational enterprises (MNEs) with an annual global turnover exceeding €20 billion to markets where sales arise (Pillar One), as well as enact a global minimum tax rate of at least 15% for MNEs with an annual global turnover exceeding €750 million (Pillar Two).

On December 12, 2022, the European Union reached an agreement to implement the Pillar Two directive of the OECD’s reform of international taxation at the European Union level.

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Historically, this has included a quarterly cash dividend, the repayment of debt and the repurchase of shares of our common stock.

Based on past performance and current expectations, we believe that our existing cash and cash equivalents, together with cash generated from operations, amounts available under our Revolving Facility and our future refinancing plans related to our upcoming maturities, will be sufficient to meet our working capital needs, support on-going business activities and finance the expected synergy costs related to the acquisition of MoneyLion through at least the next 12 months and to meet our known long-term contractual obligations.

Based on past performance and current expectations, we believe that our existing cash and cash equivalents, together with cash generated from operations, amounts available under our Revolving Facility and our future refinancing plans related to our upcoming maturities, will be sufficient to meet our working capital needs, support on-going business activities and finance the expected synergy costs related to our acquisitions through at least the next 12 months and to meet our known long-term contractual obligations.

We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months.

However, our future liquidity and capital requirements may vary materially from those as of January 2, 2026, depending on several factors, including, but not limited to, economic conditions;

However, our future liquidity and capital requirements may vary materially from those as of July 3, 2026, depending on several factors, including, but not limited to, economic conditions;

political climate;

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The following summarizes our cash flow activities:

Nine Months Ended

(In millions) January 2, 2026 December 27, 2024

Three Months Ended

(In millions) July 3, 2026 July 4, 2025

Net cash provided by (used in):

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Cash from operating activities

Net cash provided by operating activities of $1,066 million for the nine months ended January 2, 2026 was primarily comprised of net income adjusted for the net effect of non-cash items.

Changes in working capital sources and uses of cash include decreases in Instacash Advances held for sale, income taxes payable, accounts receivable, net and accounts payable.

Net cash provided by operating activities of $434 million for the three months ended July 3, 2026 was primarily comprised of net income adjusted for the net effect of non-cash items.

Changes in working capital sources and uses of cash include

decreases in Instacash Advances held for sale, contract liabilities, and accrued compensation and benefits offset by increases in other liabilities and income taxes payable.

Cash from investing activities

Net cash used in investing activities of $822 million for the nine months ended January 2, 2026 was primarily related to the cash consideration paid for our acquisition of MoneyLion.

Net cash used in investing activities of $15 million for the three months ended July 3, 2026 was primarily related to payments for originations of notes receivables, partially offset by proceeds from principal repayments of notes receivables.

Cash from financing activities

Net cash used in financing activities of $634 million for the nine months ended January 2, 2026 was primarily due to mandatory and voluntary prepayments of our Term A and B Facilities, repurchases of common stock under our repurchase program and quarterly dividend payments.

This was partially offset by proceeds from the issuance of our Incremental Term Loan B of $741 million, net of debt issuance cost.

Net cash used in financing activities of $267 million for the three months ended July 3, 2026 was primarily due to repurchases of common stock under our repurchase program, quarterly dividend payments, principal payments of our Term A and B Facilities and tax payments related to vesting of stock units.

Cash and cash equivalents

As of January 2, 2026, we had cash and cash equivalents of $616 million, excluding restricted cash, of which $403 million was held by our foreign subsidiaries.

Our cash, cash equivalents and short-term investments are managed with the objective to preserve principal, maintain liquidity and generate investment returns.

As of July 3, 2026, we had cash and cash equivalents of $533 million, excluding restricted cash, of which $306 million was held by our foreign subsidiaries.

Our cash and cash equivalents are managed with the objective to preserve principal, maintain liquidity and generate investment returns.

The participation exemption system under current U.S.

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without incurring additional U.S.

federal tax, however, these distributions may be subject to applicable state or foreign taxes.

We have an undrawn revolving credit facility of $1,494 million, net of our letters of credit, which expires in September 2027.

however, these distributions may be subject to applicable state or non-U.S.

We have an undrawn revolving credit facility of $1,495 million, net of our letters of credit, which expires in March 2031.

Stock repurchases

During the nine months ended January 2, 2026 and December 27, 2024, we executed repurchases of 16 million and 11 million of our common stock under our existing stock repurchase program for an aggregate amount of $434 million and $272 million, respectively.

During the three months ended July 3, 2026 and July 4, 2025, we executed repurchases of 4 million and 5 million of our common stock under our existing stock repurchase program for an aggregate amount of $100 million and $134 million, respectively.

Material Cash Requirements

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Debt instruments

As of January 2, 2026, our total outstanding principal amount of indebtedness is summarized as follows.

As of July 3, 2026, our total outstanding principal amount of indebtedness is summarized as follows.

See Note 8 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further information on our debt.

(In millions) January 2, 2026

(In millions) July 3, 2026

Term Loans $ 5,780

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Total debt $ 8,230

The Amended Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including compliance with specified financial ratios.

As of January 2, 2026, we were in compliance with all debt covenants.

See Note 10 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further information regarding financial ratios and debt covenant compliance.

On February 5, 2026, we announced a cash dividend of $0.125 per share of common stock to be paid in March 2026.

The Amended Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including compliance with specified financial ratios, and includes a springing maturity provision applicable solely to the Extended Term A Facility and Revolving Facility pursuant to which the obligations under such facilities may become due and payable prior to the stated maturity dates.

As of July 3, 2026, we were in compliance with all debt covenants.

See Note 8 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further information regarding our debt, including applicable financial ratios, debt covenant compliance and the springing maturity provision applicable to the Extended Term A Facility and Revolving Facility.

On August 6, 2026, we announced a cash dividend of $0.125 per share of common stock to be paid in September 2026.

Any future dividends and dividend equivalents will be subject to the approval of our Board of Directors.

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Under our stock repurchase program, we may purchase shares of our outstanding common stock on the open market (including through trading plans intended to qualify under Rule 10b5-1 under the Exchange Act) and through accelerated stock repurchase transactions.

As of January 2, 2026, the remaining balance of our stock repurchase authorization was $2,294 million and does not have an expiration date.

As of July 3, 2026, the remaining balance of our stock repurchase authorization was $1,994 million and does not have an expiration date.

The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions and other investment opportunities.

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Our principal commitments consist of principal and interest payments related to our debt instruments, obligations under our purchase agreements, obligations under various non-cancellable leases and potential other legal contingencies.

Due to the uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefits and other long-term taxes as of January 2, 2026, we are unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities.

Due to the uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefits and other long-term taxes as of July 3, 2026, we are unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities.

Therefore, $1,610 million in long-term income taxes payable has been excluded from our quarterly review of timing of contractual obligations.

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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