What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-13 compared with 2025-02-14 · 332 added, 199 removed, 782 unchanged (40% of the section changed)

11 unchanged sentences

(In thousands, except per share data)

$ 523,262 $ 509,401 $ 737,154

Cost of revenue

166,319 169,001 222,484

356,943 340,400 514,670

Operating expenses:

Research and development

187,983 159,302 159,770

Selling, general, and administrative

153,632 116,942 137,244

Amortization of acquired intangible assets

Restructuring

52 3,479 3,478

Restructuring and other

4,044 12,291 1,908

Impairment of acquired intangible assets

Acquisition related

Total operating expenses

Income from operations

345,711 305,943 302,400

Income (loss) from operations

11,232 34,457 212,270

Interest income (expense), net

2,896 3,948 2,041

Other income (expense), net

Income before income taxes

Income tax (benefit) expense

( 751 ) ( 2,176 ) 545

Income (loss) before income taxes

13,377 36,229 214,856

Income tax expense (benefit)

10,293 ( 24,902 ) ( 44,205 )

$ 3,084 $ 61,131 $ 259,061

Net income per share:

$ 0.02 $ 0.44 $ 1.88

$ 0.02 $ 0.44 $ 1.85

Shares used in per share calculations:

137,091 137,623 137,694

138,238 138,322 139,790

The accompanying notes are an integral part of these Consolidated Financial Statements.

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(In thousands)

$ 3,084 $ 61,131 $ 259,061

Other comprehensive income (loss):

Translation adjustment

159 ( 694 ) ( 16 )

Change in actuarial valuation of defined benefit pension, net of tax

540 ( 242 ) ( 476 )

Comprehensive income

$ 3,783 $ 60,195 $ 258,569

The accompanying notes are an integral part of these Consolidated Financial Statements.

5 unchanged sentences

$ 133,886 $ 136,291

Accounts receivable, net of allowance for credit losses

Accounts receivable, net

102,277 81,060

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363,874 364,834

Property and equipment, less accumulated depreciation of $ 125,901 at December 28, 2024 and $ 125,856 at December 30, 2023

Property and equipment, less accumulated depreciation of $ 123,654 at January 3, 2026 and $ 125,901 at December 28, 2024

77,032 52,988

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Common stock, $ .01 par value, 300,000,000 shares authorized;

137,704,000 shares issued and outstanding as of December 28, 2024 and 137,340,000 shares issued and outstanding as of December 30, 2023

136,771,000 shares issued and outstanding as of January 3, 2026 and 137,704,000 shares issued and outstanding as of December 28, 2024

Additional paid-in capital

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Cash flows from operating activities:

$ 3,084 $ 61,131 $ 259,061

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

35,481 38,737 34,432

Stock-based compensation expense

115,613 52,985 70,197

Change in deferred income tax provision

5,187 ( 12,069 ) ( 58,614 )

Change in noncurrent taxes payable

( 384 ) ( 19,370 ) 299

Amortization of right-of-use assets

Impairment of acquired intangible assets

6,834 7,530 6,764

Impairment charges

3,497 13,929 —

Charge for expiring production materials

Write-off of non-recoverable cost-method investment

Impairment of operating lease right-of-use asset

Other non-cash adjustments

1,124 2,690 253

Changes in assets and liabilities:

Accounts receivable, net

( 21,217 ) 23,313 ( 10,355 )

Inventories, net

14,208 ( 4,584 ) 11,549

Prepaid expenses and other assets

5,364 ( 11,065 ) ( 6,001 )

Accounts payable

19,690 2,341 ( 7,549 )

Accrued liabilities

( 19,540 ) ( 3,515 ) ( 12,963 )

Accrued payroll obligations

13,405 ( 9,709 ) ( 10,005 )

Operating lease liabilities, current and long-term portions

( 7,239 ) ( 8,487 ) ( 7,480 )

Net cash provided by (used in) operating activities

175,107 140,876 269,588

Cash flows from investing activities:

Capital expenditures

( 42,527 ) ( 20,985 ) ( 20,098 )

Cash paid for software and intellectual property licenses

( 19,781 ) ( 16,708 ) ( 13,152 )

Net cash provided by (used in) investing activities

( 62,308 ) ( 37,693 ) ( 33,250 )

Cash flows from financing activities:

Restricted stock unit tax withholdings

( 23,285 ) ( 33,646 ) ( 52,078 )

Proceeds from issuance of common stock

7,588 6,184 8,365

Repurchase of common stock

Proceeds from long-term debt, net of issuance costs

( 100,000 ) ( 66,998 ) ( 80,004 )

Repayment of long-term debt

— — ( 130,000 )

Net cash provided by (used in) financing activities

( 115,697 ) ( 94,460 ) ( 253,717 )

Effect of exchange rate change on cash

493 ( 749 ) ( 26 )

Net increase (decrease) in cash and cash equivalents

( 2,405 ) 7,974 ( 17,405 )

Beginning cash and cash equivalents

136,291 128,317 145,722

Ending cash and cash equivalents

$ 133,886 $ 136,291 $ 128,317

Supplemental disclosure of cash flow information and non-cash investing and financing activities:

Interest paid

$ — $ — $ 3,240

Income taxes paid, net of refunds

$ 7,768 $ 8,587 $ 15,754

Operating lease payments

$ 8,330 $ 9,567 $ 8,344

Accrued purchases of plant and equipment

$ 6,768 $ 2,132 $ 392

Operating lease right-of-use assets obtained in exchange for lease obligations

$ 32,548 $ 7,428 $ 3,718

The accompanying notes are an integral part of these Consolidated Financial Statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Retained Accumulated

Common Stock Additional Earnings Other

($.01 par value)

2 unchanged sentences

Income (Loss)

Balances, January 1, 2022

Balances, December 31, 2022

137,099 $ 1,371 $ 599,300 $ ( 111,094 ) $ ( 2,414 ) $ 487,163

Components of comprehensive income, net of tax:

— — — 259,061 — 259,061

Other comprehensive income (loss)

— — — — ( 492 ) ( 492 )

Total comprehensive income

Common stock issued in connection with employee equity incentive plans, net of shares withheld for employee taxes

Common stock issued in connection with employee equity incentive awards, net of shares withheld for employee taxes

1,465 14 ( 43,727 ) — — ( 43,713 )

Stock-based compensation expense

— — 70,197 — — 70,197

Repurchase of common stock

( 1,224 ) ( 12 ) ( 80,184 ) — — ( 80,196 )

Balances, December 30, 2023

137,340 $ 1,373 $ 545,586 $ 147,967 $ ( 2,906 ) $ 692,020

Components of comprehensive income, net of tax:

— — — 61,131 — 61,131

Other comprehensive income (loss)

— — — — ( 936 ) ( 936 )

Total comprehensive income

Common stock issued in connection with employee equity incentive plans, net of shares withheld for employee taxes

Common stock issued in connection with employee equity incentive awards, net of shares withheld for employee taxes

1,509 15 ( 27,477 ) — — ( 27,462 )

Stock-based compensation expense

— — 52,985 — — 52,985

Repurchase of common stock

( 1,145 ) ( 11 ) ( 66,795 ) — — ( 66,806 )

Balances, December 28, 2024

137,704 $ 1,377 $ 504,299 $ 209,098 $ ( 3,842 ) $ 710,932

Components of comprehensive income, net of tax:

— — — 3,084 — 3,084

Other comprehensive income (loss)

— — — — 699 699

Total comprehensive income

Common stock issued in connection with employee equity incentive plans, net of shares withheld for employee taxes

Common stock issued in connection with employee equity incentive awards, net of shares withheld for employee taxes

830 8 ( 15,705 ) — — ( 15,697 )

Stock-based compensation expense

— — 115,613 — — 115,613

Repurchase of common stock

Balances, December 28, 2024

( 1,763 ) ( 17 ) ( 100,560 ) — — ( 100,577 )

Balances, January 3, 2026

136,771 $ 1,368 $ 503,647 $ 212,182 $ ( 3,143 ) $ 714,054

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Generally Accepted Accounting Principles ("U.S.

GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC").

GAAP") and pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission ("SEC").

They include the accounts of Lattice and its subsidiaries after the elimination of all intercompany balances and transactions.

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We report based on a 52 or 53 -week fiscal year ending on the Saturday closest to December 31.

Our fiscal 2024, 2023, and 2022 were all 52 -week years that ended on December 28, 2024, December 30, 2023, and December 31, 2022, respectively.

Our fiscal 2025 was a 53 -week year that ended on January 3, 2026.

Our fiscal 2024 and 2023 were both 52 -week years that ended on December 28, 2024 and December 30, 2023, respectively.

Our fiscal 2026 will be a 52 -week year and will end on January 2, 2027.

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Concentrations of Risk

Potential exposure to concentrations of risk may impact revenue, trade accounts receivable, a nd supply of wafers for our new products .

Potential exposure to concentrations of risk may impact revenue, trade accounts receivable, cash and cash equivalents, a nd supply of wafers for our new products .

Sales to distributors have historically accounted for a significant portion of our total revenue.

1 unchanged sentence

Revenue attributable to distributors as a percentage of total revenue is presented in the following table:

Distributor A

31 % 33 % 32 %

Distributor B

Distributor C

Distributor D

Other distributors

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Certain of our distributors accounted for more than 10% of net accounts receivable at the dates presented.

At December 28, 2024 and December 30, 2023 , Arrow accounted for approximately 36 % and 29 %, respectively, and Weikeng accounted for approximately 45 % and 36 %, respectively.

Future accounted for approximately 18 % of net accounts receivable at December 30, 2023.

At January 3, 2026 and December 28, 2024 , Distributor A accounted for approximately 28 % and 36 %, respectively, and Distributor B accounted for approximately 62 % and 45 %, respectively.

Concentration of credit risk with respect to trade accounts receivable is mitigated by our credit and collection process including active management of collections, credit limits, routine credit evaluations for essentially all customers, and secure transactions with letters of credit or advance payments where appropriate.

We regularly review our allowance for doubtful accounts and the aging of our accounts receivable.

We limit our risk exposure related to cash and cash equivalents by placing our cash with high credit quality financial institutions.

At times, such deposits may exceed Federal Deposit Insurance Corporation insurance limits.

We have not experienced any losses on our deposits of cash and cash equivalents.

We rely on a limited number of foundries for our wafer purchases.

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Cash equivalents consist primarily of highly liquid investments in time deposits or money market accounts and are carried at cost, which approximates fair value.

Deposits with financial institutions at times exceed Federal Deposit Insurance Corporation insurance limits.

Foreign Exchange and Translation of Foreign Currencies

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We review and set standard costs quarterly to approximate current actual manufacturing costs.

Our manufacturing overhead standards for product costs are calculated assuming full absorption of actual spending over actual costs.

Our manufacturing overhead standards for product costs are calculated assuming full absorption of actual costs.

The valuation of inventory requires us to estimate excess or obsolete inventory.

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Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets, generally three to seven years for equipment and software, and one to five years for tooling.

Leasehold improvements are amortized over the shorter of the non-cancelable lease term or the estimated useful life of the assets.

Leasehold improvements are amortized over the shorter of the non-cancellable lease term or the estimated useful life of the assets.

We capitalize costs for the fabrication of masks used by our foundry partners to manufacture our products.

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Stock-Based Compensation

We estimate the fair value of share-based awards consistent with the provisions of ASC 718, “ Compensation - Stock Compensation .” We value restricted stock units ("RSUs") restricted stock awards ("RSAs") using the closing market price on the date of grant, and we value stock options using the Black-Scholes option pricing model.

We estimate the fair value of stock-based awards consistent with the provisions of ASC 718, “ Compensation - Stock Compensation ” and recognize stock-based compensation expense on a straight-line basis over the requisite service period, with forfeitures accounted for as they occur.

We value restricted stock units ("RSUs") restricted stock awards ("RSAs") using the closing market price on the date of grant, and we value our employee stock purchase plan ("ESPP") using the Black-Scholes option pricing model.

We have also granted RSUs with a market condition or a performance condition to certain executives.

The terms of these grants, including achievement criteria and vesting schedules, are detailed under the heading " Market-Based and Performance-Based Awards — Grants" in Note 10 - Stock-Based Compensation Plans.

Our current practice is to issue new shares to satisfy option exercises.

Our current practice is to issue new shares to satisfy ESPP purchases.

For RSUs, we issue new shares when awards vest and withhold a portion of these shares on behalf of employees to satisfy the minimum statutory tax withholding requirements.

New Accounting Pronouncements

In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 820 ), Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

In addition, the amendments enhance interim disclosure requirements, clarify the circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements.

The amendments require retrospective application to all periods presented.

The amendments are effective for the Company for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

We have adopted ASU 2023 - 07 with the addition of Note 15 - Segment Reporting , and it did not have a material impact on our consolidated financial statements.

In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ) Improvements to Income Tax Disclosures , which require greater disaggregation of income tax disclosures.

ASU 2023 - 09 aims to improve an entity’s income tax disclosures around its effective rate reconciliation, income taxes paid by jurisdiction, disaggregation of income before income taxes and income tax expense.

This ASU should be applied on a prospective basis, but retrospective application is permitted.

The guidance in this update is effective for fiscal years beginning after December 15, 2024.

We are currently evaluating the future effect of the adoption of this ASU will have on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

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We are currently evaluating the impact of adoption of this new guidance on our consolidated financial statements disclosures.

In September 2025, the FASB issued ASU 2025 - 06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350 - 40 ):

Targeted Improvements to the Accounting for Internal-Use Software .

This ASU is intended to simplify the recognition and disclosure guidance related to capitalized internal-use software costs by removing all references to software development project stages and introducing a more judgment-based framework.

ASU 2025 - 06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those fiscal years, with early adoption permitted as of the beginning of a fiscal year.

This standard may be applied prospectively, retrospectively, or via a modified prospective transition method.

We are currently evaluating the impact of adoption of this new guidance on our consolidated financial statements and disclosures.

Note 2 - Net Income Per Share

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For equity awards with a performance condition, the number of shares that qualified for vesting as of the end of each period presented are included in the diluted share count when the condition for their issuance was satisfied by the end of the respective reporting periods.

See " Note 10 - Stock-Based Compensation Plans " for further discussion of our equity awards with market or performance conditions.

See " Note 10 - Stock-Based Compensation Plans " to our consolidated financial statements for further discussion of our equity awards with market conditions or performance conditions.

A summary of basic and diluted Net income per share is presented in the following table:

3 unchanged sentences

137,091 137,623 137,694

Dilutive effect of employee equity incentive plans

Dilutive effect of employee equity incentive awards

1,147 699 2,096

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Disaggregation of Revenue

The following tables provide information about revenue from contracts with customers disaggregated by channel and by geographical market, based on ship-to location of the customer:

The following tables provide information about revenue from contracts with customers disaggregated by channel and by geographical market.

Revenue is attributed to geographic regions based on the ship-to location of the customer.

The Greater China geography includes revenue associated with shipments to both Hong Kong and mainland China.

Products shipped to Hong Kong may subsequently be transferred to mainland China or other destinations, and products shipped to mainland China may similarly move through intermediary locations

Revenue by Channel

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(In thousands)

Greater China

$ 273,246 52 % $ 206,380 40 % 239,192 32 %

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Contract Balances

Our contract assets relate to our rights to consideration for licenses and royalties due to us as a member of the HDMI Founders consortium.

Our contract assets relate primarily to our rights to consideration for licenses and royalties due to us as a member of the HDMI Founders consortium.

The balance results primarily from the amount of estimated revenue related to HDMI that we have recognized to date, but which has not yet been distributed to us by the HDMI licensing agent.

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Transferred to Accounts receivable or collected

Contract assets as of December 28, 2024

Contract assets as of January 3, 2026

Contract liabilities are included in Accrued liabilities on our Consolidated Balance Sheets.

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Contract liabilities as of December 30, 2023

Product shipments from prepaid customer deposit

Unperformed performance obligations

Accruals for estimated future stock rotation and scrap returns

1 unchanged sentence

Contract liabilities as of December 28, 2024

Unperformed performance obligations

Revenue recognized from satisfied performance obligations

Accruals for estimated future stock rotation and scrap returns

Release of accruals for recognized stock rotation and scrap returns

Contract liabilities as of December 28, 2024

Contract liabilities as of January 3, 2026

Note 4 - Balance Sheet Components

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Allowance for credit losses

Accounts receivable, net of allowance for credit losses

Accounts receivable, net

$ 102,277 $ 81,060

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(In thousands)

Current portion of liability for non-cancelable contracts

Current portion of liability for non-cancellable contracts

$ 13,296 $ 13,534

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Current portion of operating lease liabilities

Foreign, VAT, and other taxes payable

Other accrued liabilities

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(In thousands)

Long-term portion of liability for non-cancelable contracts

Long-term portion of liability for non-cancellable contracts

$ 8,962 $ 16,022

Long-term portion of uncertain tax positions

Other long-term liabilities

2 unchanged sentences

Note 5 - Property and Equipment

December 28, December 30,

January 3, December 28,

(In thousands)

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Our Property and equipment, net by country at the end of each period was as follows:

December 28, December 30,

January 3, December 28,

(In thousands)

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Note 6 - Intangible Assets and Goodwill

In connection with our previous acquisitions , we have recorded identifiable intangible assets related to existing technology, customer relationships, and trade name / trademarks, based on guidance for determining fair value under the provisions of ASC 820, " Fair Value Measurements ." We amortize the intangible assets using the straight-line method over their estimated useful lives.

In connection with our previous acquisitions , we have recorded identifiable intangible assets related to existing technology, customer relationships, and trade name / trademarks.

We amortize the intangible assets using the straight-line method over their estimated useful lives.

Additionally, we have entered into license agreements for third -party technology and recorded them as intangible assets.

These licenses are being amortized to Research and development expense over their estimated useful lives.

Our review of our strategic long-range plan completed at the end of fiscal 2024 concluded that the originally acquired Mirametrix intangible assets had limited future revenue potential due to a decline in customer demand, which we determined was an indicator of impairment.

Our assessment of the fair value of these intangible assets concluded that they had been fully impaired as of December 28, 2024, and we recorded an impairment charge of $ 13.9 million for fiscal 2024 in the Consolidated Statements of Operations.

No impairment charges relating to acquired intangible assets were recorded for fiscal 2025 or 2023.

The following tables summarize the details of our Intangible assets, net as of December 28, 2024 and December 30, 2023 :

December 28, 2024

In fiscal 2024, we recorded an impairment charge of $ 13.9 million relating to acquired intangible assets.

The following tables summarize the details of our Intangible assets, net as of January 3, 2026 and December 28, 2024 :

January 3, 2026

(In thousands)

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Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and intangible assets.

The goodwill balance at December 28, 2024 is comprised of approximately $ 315.4 million from prior acquisitions.

The goodwill balance at January 3, 2026 is comprised of approximately $ 315.4 million from prior acquisitions.

No impairment charges relating to goodwill were recorded for fiscal 2025 , 2024, or 2023.

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On September 1, 2022, we entered into an Amended and Restated Credit Agreement (the “2022 Credit Agreement”), which provides for a five -year secured revolving loan facility with an aggregate principal amount of up to $ 350 million.

We intend to use the revolving loan facility for working capital and general corporate purposes.

We have a zero drawn balance on this facility and, effective December 10, 2025, we deliberately reduced the aggregate available principal amount from up to $ 350 million to up to $ 200 million.

This reduction lowered our carrying costs.

We intend to use the revolving loan facility for working capital and general corporate purposes as appropriate.

At our option, the revolving loans accrue interest at a per annum rate based on ranges determined by our consolidated total leverage ratio of either (i) the base rate (as defined in the 2022 Credit Agreement) plus a margin ranging from 0.25 % to 1.00 %, or (ii) the adjusted Term Secured Overnight Financing Rate ("SOFR") for interest periods of 1, 3 or 6 months plus a margin ranging from 1.25 % to 2.00 %.

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The revolving loans under the 2022 Credit Agreement may be repaid and reborrowed at our discretion, with any remaining outstanding principal amount due and payable on the maturity date of the revolving loan on September 1, 2027.

At December 28, 2024 and December 30, 2023, we had no borrowings outstanding under the 2022 Credit Agreement, as we paid off the outstanding balance of our revolving loans during the third quarter of fiscal 2023.

At January 3, 2026 and December 28, 2024, we had no borrowings outstanding under the 2022 Credit Agreement.

Interest expense related to our long-term debt is included in Interest expense on our Consolidated Statements of Operations as follows:

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Note 8 - Restructuring

In September 2024, our management commenced an internal restructuring plan ("the Q3 2024 Plan"), which includes a global workforce reduction.

Under this plan, we have incurred restructuring costs of approximately $ 7.6 million through December 28, 2024.

The Q3 2024 plan is expected to be largely complete in the first half of fiscal year 2025.

In the third quarter of 2024, our management commenced an internal restructuring plan ("the Q3 2024 Plan"), which includes a global workforce reduction.

Under this plan, we incurred restructuring costs of approximately $ 3.4 million and $ 7.6 million, respectively, in fiscal 2025 and 2024.

Under this plan, approximately $ 11.0 million of total costs have been incurred through January 3, 2026.

The Q3 2024 Plan is expected to be largely complete by the end of the first quarter of fiscal year 2026.

In the third quarter of 2023, our management approved and executed an internal restructuring plan (the “Q3 2023 Plan”), which included a targeted workforce reduction intended to reorganize critical roles and focus skillsets in key growth markets.

We incurred restructuring costs of approximately $ 5.3 million and $ 2.0 million, respectively, in fiscal 2024 and 2023.

Under this plan, approximately $ 7.3 million of total costs have been incurred through December 28, 2024.

We incurred no restructuring costs during fiscal 2025, and incurred restructuring costs of approximately $ 5.3 million and $ 2.0 million, respectively, in fiscal 2024 and 2023.

Under this plan, approximately $ 7.3 million of total costs have been incurred through January 3, 2026.

All actions planned under the Q3 2023 plan have been implemented.

In September 2022, our management approved and implemented additional contract cancellations and workforce reductions under the Q2 2019 Sales Plan, an internal restructuring plan that our management approved and executed in April 2019.

The Q2 2019 Sales Plan focused on a restructuring of the global sales organization through cancellation of certain contracts and a workforce reduction.

Under the Q2 2019 Sales Plan, we recorded a credit adjustment of approximately $ 0.6 million in fiscal 2024, incurred no restructuring costs in fiscal 2023, and incurred approximately $ 1.0 million of incremental restructuring costs in fiscal 2022.

Under this plan, approximately $ 2.5 million of total expense has been incurred through December 28, 2024.

All actions planned under the Q2 2019 Sales Plan have been implemented.

Other restructuring activity in the periods presented consisted of expense adjustments on previous plans.

Costs and adjustments on restructuring plans are recorded to Restructuring on our Consolidated Statements of Operations.

Costs and adjustments on restructuring plans are recorded to Restructuring and other on our Consolidated Statements of Operations.

The restructuring accrual balance is presented in Accrued liabilities and in Other long-term liabilities on our Consolidated Balance Sheets.

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Lease Termination & Fixed Assets

Accrued Restructuring at January 1, 2022

Accrued Restructuring at December 31, 2022

$ 400 $ 5,892 $ 640 $ 6,932

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( 4,387 ) ( 3,014 ) — ( 7,401 )

Accrued Restructuring at December 28, 2024

Accrued Restructuring at January 3, 2026

$ 956 $ — $ — $ 956

Includes employee relocation costs and outplacement costs

Includes termination fees on the cancellation of certain contracts

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Our leases have remaining lease terms of less than 1 year to 10 years, some of which include options to extend for up to 5 years, and some of which include options to terminate within 1 year.

The weighted-average remaining lease term was 3.0 years and the weighted-average discount rate was 6.0 % as of December 28, 2024.

The weighted-average remaining lease term was 6.4 years and the weighted-average discount rate was 4.9 % as of January 3, 2026.

We recorded fixed operating lease expense of $ 8.1 million, $ 8.5 million, and $ 7.8 million, respectively, for fiscal 2025 , 2024, and 2023.

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Balance as of December 28, 2024

Right-of-use assets obtained for new lease contracts during the period

Right-of-use assets obtained for new or renewed lease contracts during the period

Amortization of right-of-use assets during the period

Impairment of right-of use asset during the period (recorded in Restructuring charges)

Adjustments for present value and foreign currency effects

Balance as of December 28, 2024

Balance as of January 3, 2026

Operating lease liabilities

1 unchanged sentence

Balance as of December 28, 2024

Lease liabilities accrued for new lease contracts during the period

Lease liabilities accrued for new or renewed lease contracts during the period

Lease liability for renewed lease on facility restructured prior to adoption of ASC 842

Accretion of lease liabilities

1 unchanged sentence

Adjustments for present value and foreign currency effects

Balance as of December 28, 2024

Balance as of January 3, 2026

Current portion of operating lease liabilities (included in Accrued liabilities)

Long-term operating lease liabilities, net of current portion

Lease obligations for facilities restructured prior to the adoption of Topic 842 totaled approximately $ 3.0 million at December 28, 2024 and continued to be recorded in Other long-term liabilities on our Consolidated Balance Sheets.

Maturities of operating lease liabilities as of December 28, 2024 are as follows:

Maturities of operating lease liabilities as of January 3, 2026 are as follows:

(In thousands)

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Note 10 - Stock-Based Compensation Plans

Employee and Director Stock Options, Restricted Stock, and ESPP Plans

As of December 28, 2024, we have two active equity incentive plans, the "2023 Equity Incentive Plan" (which was adopted in 2023 and superseded the "2013 Incentive Plan", such that no additional shares will be granted under the 2013 Incentive Plan ) and the "2011 Non-Employee Director Equity Incentive Plan", under which shares remain available for grants to employees and non-employee directors, respectively.

As of January 10, 2025, we registered the “2025 Inducement Equity Plan”, under which shares will be available for grants to new hire employees.

"Incentive stock options" under Section 422 of the U.S.

Internal Revenue Code, restricted stock unit ("RSU"), and restricted stock award ("RSA") grants are part of our equity compensation practices for employees who receive equity grants.

Options, RSUs, and RSAs generally vest quarterly over a four -year period beginning on the grant date.

The contractual terms of options granted do not exceed ten years.

Employee and Director Restricted Stock and ESPP Plans

As of January 3, 2026, we have three active equity incentive plans, including the "2023 Equity Incentive Plan" and the "2011 Non-Employee Director Equity Incentive Plan", under which shares remain available for grants to employees and non-employee directors, respectively.

We also have the “2025 Inducement Equity Plan”, under which shares will be available for grants to new hire employees.

Restricted stock unit ("RSU"), and restricted stock award ("RSA") grants are part of our equity compensation practices for employees who receive equity grants.

RSUs and RSAs generally vest quarterly over a four -year period beginning on the grant date.

We also maintain the 2012 Employee Stock Purchase Plan ( "2012 ESPP"), pursuant to which eligible employees may contribute through payroll deductions up to 10 % of base compensation, subject to certain income limits, to purchase shares of our common stock.

1 unchanged sentence

We have treated the 2012 ESPP as a compensatory plan.

At December 28, 2024 , a total of 0.8 million shares of our common stock were available for future purchases under the 2012 ESPP.

At December 28, 2024 , a total of 6.9 million shares of our common stock were available for future grants under the 2023 Equity Incentive Plan and the 2011 Non-Employee Director Equity Incentive Plan.

The 2023 Equity Incentive Plan, 2011 Non-Employee Director Equity Incentive Plan, and the 2025 Inducement Equity Plan do not have any fungible share ratio or counting provision .

Shares subject to stock option grants that expire or are canceled, without delivery of such shares, and shares subject to performance-based restricted stock units that are not delivered due to a failure to not meet the maximum payout threshold, generally become available for re-issuance under equity incentive plans.

At January 3, 2026 , a total of 0.7 million shares of our common stock were available for future purchases under the 2012 ESPP.

A t January 3, 2026, a total of 4.9 million shares of our common stock were available for future grants under the 2023 Equity Incentive Plan and the 2011 Non‑Employee Director Equity Incentive Plan.

At the same date, 1.3 million shares were available for issuance under the 2025 Inducement Equity Plan, which is a standalone, non‑shareholder‑approved plan that may be used only for inducement awards to new hires.

The 2023 Equity Incentive Plan, 2011 Non‑Employee Director Equity Incentive Plan, and the 2025 Inducement Equity Plan do not have any fungible share‑counting provisions.

Shares subject to performance‑based restricted stock units that are not delivered due to failure to meet the maximum payout threshold generally become available for re‑issuance under the applicable equity incentive plans.

Stock-Based Compensation Expense

9 unchanged sentences

$ 115,613 $ 52,985 $ 70,197

The income tax benefit related to total stock-based compensation expense was $ 6.3 million and $ 7.6 million, respectively, for fiscal 2024 and 2023, which is reflected in Income tax (benefit) expense in the Consolidated Statements of Operations.

The income tax benefit related to awards vested or exercised during fiscal 2024 was $ 1.7 million.

The income tax benefit related to total stock-based compensation expense was $ 8.5 million, $ 6.3 million, and $ 7.6 million, respectively, for fiscal 2025, 2024, and 2023, which is reflected in Income tax expense (benefit) in the Consolidated Statements of Operations.

There was no income tax benefit related to awards vested during 2025 due to shortfalls ( actual tax deductions were lower than the U.S.

GAAP compensation cost).

The income tax benefit related to awards vested or exercised during fiscal 2024 and 2023, respectively, was $ 1.7 million and $ 10.4 million.

These amounts do not include the indirect effects of stock-based compensation, which primarily relate to the R&D tax credit.

The income tax benefit related to awards vested or exercised during fiscal 2023 was $ 10.4 million.

The income tax benefits related to stock-based compensation were not significant for fiscal 2022, as they were offset by an increase in the valuation allowance.

ESPP and Stock Options

The fair values of the shares expected to be issued under the employee stock purchase plan and of each option award on the date of grant were estimated using the Black-Scholes valuation model and the assumptions noted in the following table.

No new stock options were granted during fiscal 2024, 2023, or 2022.

The expected volatility of both ESPP shares and stock options is based on the daily historical volatility of our stock price, measured over the ESPP purchase period or the expected term of the option.

Employee Stock Purchase Plan

The fair values of the shares expected to be issued under the employee stock purchase plan were estimated using the Black-Scholes valuation model and the assumptions noted in the following table.

The expected volatility of ESPP shares is based on the daily historical volatility of our stock price, measured over the ESPP purchase period.

The risk-free interest rate is based on the implied yield on a U.S.

Treasury zero -coupon issue with a remaining term closest to the expected term of the option.

The expected term is based on historical vested option exercises and includes an estimate of the expected term for options that are fully vested and outstanding.

Treasury zero -coupon issue with a remaining term closest to the expected term of the offering period.

Dividend yield has no valuation impact, as we have not paid any cash dividends since inception and do not intend to pay any cash dividends in the foreseeable future.

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The weighted average fair values for the ESPP, calculated using the Black-Scholes option pricing model with the noted assumptions for the ESPP, were $ 18.30 , $ 15.50 , and $ 24.38 for fiscal years 2025 , 2024 , and 2023 , respectively.

At December 30, 2023, there was no unrecognized compensation cost related to unvested employee and director stock options.

Compensation expense for all stock-based compensation awards is recognized using the straight-line method.

Compensation expense for the ESPP is recognized using the straight-line method.

We recorde d stock-based compensation expense related to the ESPP of approximately $ 2.3 million, $ 1.8 million, and $ 2.2 million in fiscal 2025 , 2024 , and 2023 , respectively.

Related to stock options, w e recorded no expense in fiscal 2024, 2023 , and 2022 .

The following table summarizes our stock option activity and related information for the year ended December 28, 2024:

(Shares and aggregate intrinsic value in thousands)

Weighted average exercise price

Weighted average remaining contractual term (years)

Aggregate Intrinsic Value

Balance, December 30, 2023

Forfeited or expired

Balance, December 28, 2024

Vested and expected to vest at December 28, 2024

Exercisable, December 28, 2024

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company's closing stock price on the last trading day of the fiscal year and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on that day.

This amount changes based on the fair market value of the Company's stock.

Total intrinsic value of options exercised for fiscal 2024 , 2023 , and 2022 was $ 22.9 million, $ 37.3 million, and $ 24.3 million, respectively.

Time-Based Restricted Stock Unit Awards and Restricted Stock Awards

The following table summarizes the activity for our time-based RSUs and RSAs for the year ended December 28, 2024:

The following table summarizes the activity for our time-based RSUs and RSAs for the year ended January 3, 2026:

(Shares in thousands)

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( 296 ) 62.92

Balance, December 28, 2024

Balance, January 3, 2026

3,255 $ 56.71

At December 28, 2024, there was $ 155.6 million of unrecognized compensation expense related to unvested time-based RSUs and RSAs.

At January 3, 2026, there was $ 162.9 million of unrecognized compensation expense related to unvested time-based RSUs and RSAs.

Compensation expense for RSUs and RSAs is recognized using the straight-line method over the related vesting period.

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In fiscal 2025, 2024, and 2023, we granted awards of RSUs with a market condition to certain executives.

Under the terms of these grants, the RSUs with a market condition vest over a three -year period based on the Company's t otal shareholder return ("TSR") relative to a specified index.

For the 2024 and 2023 grants, the TSR condition is measured relative to the Russell 3000 index on either the third anniversary of the grant date, or equally on the first, second, and third anniversary of the grant date, depending on the executive.

For the 2022 grants, the TSR condition is measured relative to the Russell 2000 index on the third anniversary of the grant date .

Under the terms of these grants, the RSUs with a market condition vest over a three -year period based on the Company's t otal shareholder return ("TSR") relative to the Russell 3000 index, which condition is measured for the grants on either the third anniversary of the grant date, or equally on the first, second, and third anniversary of the grant date, depending on the executive .

The awards may vest at 250 % or 200 %, depending on the executive, if the 75th percentile of the market condition is achieved, with 100 % of the units vesting at the 55th percentile, zero vesting if relative TSR is below the 25th percentile, and vesting scaling for achievement between the 25th and 75th percentile.

In fiscal 2025, we also granted awards of RSUs with a performance condition to certain executives.

Under the terms of these grants, the RSUs with a performance condition will vest if the Company achieves year-over-year revenue growth in excess of the Gartner Non-Memory Semiconductor Revenue Growth benchmark, and the number of shares that vest will scale based on achievement of year-over-year revenue growth compared to certain targets, with maximum vesting up to 250 %.

During fiscal 2025, the Compensation Committee of the Board of Directors approved a modification to the performance condition periods and vesting criteria associated with these revenue growth performance awards and similar awards that were granted to certain executives in fiscal 2024 to align the awards with the Company's growth strategy.

The modification extended the beginning and end dates of each measurement period by one year, such that the performance condition will be measured annually after each fiscal year-end for one - fourth of the grants with the first measurement period beginning in fiscal 2026 and the last measurement period ending at the end of fiscal 2029.

Additionally, the awards were modified such that the measurement and vesting for each tranche will occur on the later of the filing date of the Company’s Annual Report on Form 10 -K for the applicable measurement period, or the date the Gartner Non-Memory Semiconductor Revenue Growth benchmark is published.

Vesting of these awards occurs approximately 4 months after the end of each measurement period.

All other terms of the modified awards including the size of the awards and performance criteria remain the same.

This modification had no material impact on stock-based compensation expense upon adoption.

Also during fiscal 2025, we granted additional awards of RSUs with a performance condition to the majority of our employee population.

Under the terms of these grants, the RSUs with a performance condition will vest if the Company achieves year-over-year revenue growth targets, and the number of shares vested will scale for achievement of year-over-year revenue growth compared to certain targets, with maximum vesting up to 200 % depending on the employee's level.

The performance condition will be measured annually after each fiscal year-end for one -half of the grants with the first measurement period beginning in fiscal 2026 and the last measurement period ending at the end of fiscal 2027.

Vesting of these awards occurs approximately 4 months after the end of each measurement period.

In fiscal 2024, we also granted awards of RSUs with a performance condition to certain executives.

Under the terms of these grants, the RSUs with a performance condition will vest if the Company achieves year-over-year revenue growth in excess of an industry benchmark, and the number of shares vested will scale for achievement of year-over-year revenue growth compared to certain targets, with maximum vesting up to 250 %.

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During fiscal

2025, the market condition for awards granted to certain executives in previous years exceeded the

55th percentile of their TSR condition, and these awards vested at

third tranche of awards granted in fiscal

2022 with a year-over-year revenue growth performance condition vested at the

116.3 % level of achievement, based on the Company's year-over-year revenue growth performance as of

December 30, 2023.

fourth tranche of these awards, the Company did

not meet the year-over-year revenue growth performance criteria as of

December 28, 2024.

During fiscal

2024, the market condition for the majority of awards granted to certain executives in previous years exceeded the

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13 -month vesting period had been met.

During fiscal

2022, the market condition for awards granted to certain executives in previous years exceeded the

75th percentile of their TSR condition, and applicable tranches of these awards vested at

200 % for the respective executives.

Also during fiscal

sixth tranches of

70 %, respectively, of the base number of the awards with an EBITDA performance condition vested, as the Company had met the adjusted EBITDA performance criteria on a trailing

four -quarter basis for

two consecutive trailing

four -quarter periods as of the end of the respective measurement periods.

Market-Based and Performance-Based Awards — Compensation Expense

For our awards with a market condition or a performance condition, we recorded benefits from forfeitures of approximately $ 29.0 million due to executive departures, partially offset by stock compensation expense of approximately $ 28.4 million, in fiscal 2024.

We incurred stock-based compensation expense of approximately $ 26.4 million and $ 24.0 million in fiscal years 2023 and 2022 , respectively.

For our awards with a market condition or a performance condition, we incurred stock compensation expense in fiscal 2025 of approximately $ 43.1 million.

In fiscal 2024, we recorded benefits from forfeitures of approximately $ 29.0 million due to executive departures, partially offset by stock compensation expense of approximately $ 28.4 million.

In fiscal 2023, we incurred stock-based compensation expense of approximately $ 26.4 million.

These amounts are recorded as components of total stock-based compensation.

At December 28, 2024, there was $ 54.4 million of unrecognized compensation expense related to unvested RSUs with a market condition or a performance condition.

At January 3, 2026, there was $ 66.2 million of unrecognized compensation expense related to unvested RSUs with a market condition or a performance condition.

Awards with a market condition were valued using Monte Carlo simulation models.

The following table summarizes the assumptions used at the grant date in the valuation of RSUs with a market or performance condition:

Executive RSUs with a market condition or performance condition

The following table summarizes the assumptions used at the grant date in the valuation of RSUs with a market condition:

Executive RSUs with a market condition

Weighted average expected volatility

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51.04 % to 53.96 %

50.97 % to 54.31 %

Weighted average risk-free interest rate

1 unchanged sentence

3.39 % to 4.53 %

4.28 % to 4.59 %

Expected term (years)

The valuation of RSUs with a performance condition is based on the closing market price on the date of grant.

The following table summarizes the activity for our awards with a market condition or performance condition:

2 unchanged sentences

Balance, December 28, 2024

1,593 $ 62.24

Effect of vesting multiplier

1 unchanged sentence

( 229 ) 72.66

Balance, December 28, 2024

Balance, January 3, 2026

2,115 $ 59.69

Note 11 - Common Stock Repurchase Program

On November 30, 2023, we announced that our Board of Directors had approved a stock repurchase program pursuant to which up to $ 250 million of outstanding common stock could be repurchased from time to time (the "2024 Repurchase Program").

The duration of the 2024 Repurchase Program is through December 28, 2024.

On December 9, 2024, we announced that our Board of Directors had approved a stock repurchase program pursuant to which up to $ 100 million of outstanding common stock could be repurchased from time to time (the "2025 Repurchase Program").

The duration of the 2025 Repurchase Program was through December 31, 2025.

During the fourth quarter of fiscal 2025, we repurchased 217,506 shares for $ 14.1 million, or an average price paid per share of $ 65.03 .

All repurchases were open market transactions funded from available working capital.

All shares repurchased pursuant to the 2024 Repurchase Program were retired by the end of the fourth quarter of fiscal 2024.

All shares repurchased pursuant to the 2025 Repurchase Program were retired upon settlement.

We repurchased a total of 1,763,053 shares for $ 100.0 million, or an average price paid per share of $ 56.72 , during fiscal year 2025.

On December 5, 2025, we announced that our Board of Directors had approved a stock repurchase program pursuant to which up to an additional $250 million of outstanding common stock could be repurchased from time to time (the "2026 Repurchase Program").

The duration of the 2025 Repurchase Program is through December 31, 2025.

The 2026 Repurchase Program has no termination date and may be suspended or discontinued at any time.

No shares were repurchased under the 2026 Repurchase Program during the fourth quarter of fiscal 2025.

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(In thousands)

$ ( 1,792 ) $ 2,595 $ 55,069

15,169 33,634 159,787

Income before taxes

The components of Income tax (benefit) expense are as follows:

$ 13,377 $ 36,229 $ 214,856

The components of Income tax expense (benefit) are as follows:

(In thousands)

Income tax (benefit) expense

Income tax (benefit) expense differs from the amount of income tax determined by applying the applicable U.S.

$ 2,317 $ ( 15,866 ) $ 10,331

( 10 ) 460 1,059

2,799 2,573 3,019

5,106 ( 12,833 ) 14,409

4,912 ( 7,530 ) ( 56,323 )

275 ( 4,539 ) ( 2,291 )

5,187 ( 12,069 ) ( 58,614 )

Income tax expense (benefit)

$ 10,293 $ ( 24,902 ) $ ( 44,205 )

In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ) Improvements to Income Tax Disclosures , which require greater disaggregation of income tax disclosures around the effective rate reconciliation.

The guidance in this update is effective for fiscal years beginning after December 15, 2024, and the Company adopted it prospectively for the year ended January 3, 2026.

Income tax expense (benefit) for the year ended January 3, 2026 differs from the amount of income tax determined by applying the applicable U.S.

statutory federal income tax rate to pretax income as a result of the following differences:

January 3, 2026

(In thousands)

U.S Federal Statutory Tax Rate

State Income Taxes, Net of Federal Benefit*

Foreign Tax Effects

Statutory tax rate difference between Bermuda and United States

( 360 ) ( 2.7 )

Withholding tax

Research and Development tax credits

( 226 ) ( 1.7 )

Stock-based payment awards

( 142 ) ( 1.1 )

Effects of Changes in Tax Law

Nontaxable or Nondeductible Items

Stock-based compensation

Effects of Cross Border Tax Effects

Global Intangible low-taxed income

( 196 ) ( 1.5 )

Foreign-Derived Intangible Income

( 2,243 ) ( 16.8 )

Subpart F Income

( 2,400 ) ( 17.9 )

Foreign Tax Credits

( 7,180 ) ( 53.7 )

Change in Valuation Allowance

Changes in Unrecognized Tax Benefits

Effective Tax Rate

$ 10,293 76.9

*State taxes in Oregon made up the majority (greater than 50 percent) of the tax effect in this category.

The increase in provision for income taxes in fiscal year 2025 compared to fiscal year 2024 was primarily due to nondeductible stock compensation and the recognition of uncertain tax benefits in the previous year.

As previously disclosed for the years ended December 28, 2024 and December 30, 2023, prior to the adoption of ASU 2023 - 09, income tax expense (benefit) differs from the amount of income tax determined by applying the applicable U.S.

statutory federal income tax rate to pretax income as a result of the following differences:

Statutory federal rate

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tax on foreign operations

Capital loss expiration

Valuation allowance

1 unchanged sentence

Effective income tax rate

The decrease in provision for income taxes in fiscal year 2024 compared to fiscal year 2023 was primarily due to the release of the US federal valuation allowance in the prior year and the recognition of uncertain tax benefits in the current year.

We updated our evaluation of the valuation allowance position in the United States through December 28, 2024 and concluded that we should continue to maintain a full valuation allowance against our state deferred tax assets due to insufficient income sources.

The decrease in benefit for income taxes in fiscal year 2024 compared to fiscal year 2023 was primarily due to the release of the US federal valuation allowance in fiscal year 2023 and the recognition of uncertain tax benefits in fiscal year 2024.

On July 4, 2025, the United States enacted tax legislation (the “Tax Act”).

The Tax Act includes significant provisions, such as the permanent extension of certain expiring provisions of The 2017 Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates with certain provisions effective in 2025.

The impacts of provisions effective in 2025 have been incorporated into the income tax provision in fiscal 2025 and did not have a material impact on our effective tax rate.

We updated our evaluation of the valuation allowance position in the United States through January 3, 2026 and concluded that we should continue to maintain a full valuation allowance against our state deferred tax assets due to insufficient income sources.

We will continue to evaluate both positive and negative evidence in future periods to determine if we will realize the deferred tax assets.

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(In thousands)

December 28, 2024

December 30, 2023

January 3, 2026 December 28, 2024

Deferred tax assets:

Intangible assets

Net operating loss carry forwards

$ 12,291 $ 13,332

Tax credit carry forwards

104,199 100,820

Accrued liabilities and reserves

25,136 26,638

Stock-based and deferred compensation

Lease liability

Total deferred tax assets

156,306 152,342

valuation allowance

( 86,268 ) ( 82,684 )

Net deferred tax assets

70,038 69,658

Deferred tax liabilities:

Unremitted earnings

Right of use asset

Total deferred tax liabilities

Net deferred taxes

$ 59,405 $ 64,626

Deferred tax assets

$ 62,675 $ 66,980

Deferred tax liabilities (included in Other long-term liabilities)

( 3,270 ) ( 2,354 )

Net deferred taxes

$ 59,405 $ 64,626

The following table displays the activity related to changes in our valuation allowance for deferred tax assets:

5 unchanged sentences

(In thousands)

December 28, 2024

of period expenses accounts period

January 3, 2026

$ 82,684 $ 3,584 $ — $ 86,268

December 28, 2024

$ 79,100 $ 3,584 $ — $ 82,684

December 30, 2023

At December 28, 2024, we had U.S.

$ 140,533 $ ( 61,433 ) $ — $ 79,100

As of January 3, 2026, we had U.S.

federal net operating loss ("NOL") carryforwards (pretax) of approximately $ 5.7 million which will expire between 2027 and 2031.

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However, if there is a significant change in ownership, future tax attribute utilization may be limited and NOL carryforwards and/or R&D credits will be reduced to reflect the limitation.

Foreign earnings may be subject to withholding taxes in local jurisdictions if they are distributed.

At December 28, 2024, U.S.

income taxes and foreign withholding taxes were not provided for on a cumulative total of approximately $ 3.0 million of the undistributed earnings of our foreign subsidiaries.

We intend to reinvest these earnings indefinitely.

At December 28, 2024 and December 30, 2023, our unrecognized tax benefits associated with uncertain tax positions were $ 29.3 million and $ 61.4 million, respectively, of which $ 26.3 million and $ 58.7 million, respectively, if recognized, would affect the effective tax rate, subject to valuation allowance.

As of December 28, 2024 and December 30, 2023, interest and penalties associated with unrecognized tax benefits were $ 0.4 million and $ 11.3 million, respectively, which are not reflected in the table below.

At January 3, 2026 and December 28, 2024, our unrecognized tax benefits associated with uncertain tax positions were $ 30.1 million, and $ 29.3 million, respectively, of which $ 27.0 million and $ 26.3 million, respectively, if recognized, would affect the effective tax rate, subject to valuation allowance.

As of January 3, 2026 and December 28, 2024, interest and penalties associated with unrecognized tax benefits were $ 0.3 million and $ 0.4 million, respectively, which are not reflected in the table below.

We accrue interest and penalties related to uncertain tax positions in Income tax expense.

4 unchanged sentences

Additions based on tax positions of prior years

Reductions for tax positions of prior years

Reduction as a result of lapse of applicable statute of limitations

7 unchanged sentences

Additions based on tax positions of prior years

Reductions for tax positions of prior years

Reduction as a result of lapse of applicable statute of limitations

Balance at December 28, 2024

Our liability for uncertain tax positions (including penalties and interest) was $ 2.5 million and $ 21.9 million at December 28, 20 24 and December 30, 2023 , respectively, and is recorded as a component of Other long-term liabilities on our Consolidated Balance Sheets.

At December 28, 2024, it is reasonably possible that $ 0.3 million of unrecognized tax benefits and less than $ 0.1 million of associated interest and penalties could be recognized during the next twelve months.

The years that remain subject to examination ar e 2021 for federal income taxes, 2020 for state income taxes, and 2018 for foreign income taxes, including years ending thereafter.

Balance at January 3, 2026

Our liability for uncertain tax positions (including penalties and interest) was $ 2.1 million and $ 2.5 million at January 3, 2026 and December 28, 2024 , respectively, and is recorded as a component of Other long-term liabilities on our Consolidated Balance Sheets.

The years that remain subject to examination are 2022 for federal income taxes, 2021 for state income taxes, and 2020 for foreign income taxes, including years ending thereafter.

However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses or tax credits were generated and carried forward, and make adjustments up to the amount of the net operating losses or credit carryforward amount.

Cash Taxes Paid

The Company adopted ASU

09, Income Taxes (Topic

740 ) prospectively for the year ended

January 3, 2026 and included the following table as a result of our adoption, which presents Income taxes paid, net of refunds, as follows:

(In thousands)

$ 3,006 $ 2,113 $ 9,780

( 26 ) 113 1,299

433 1,417 1,299

( 1,035 ) — —

1,218 1,666 1,624

1,996 — 1,372

1,447 1,520 1,679

Total Foreign

4,329 5,057 4,675

Income taxes paid, net of refunds

$ 7,768 $ 8,587 $ 15,754

Note 13 - Employee Benefit Plans

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Corporate Incentive Plan

For 2024 , 2023 , and 2022 , the Board of Directors of the Company, upon the recommendation of the Compensation Committee, approved the Corporate Incentive Plan (the “CIP”) for the respective fiscal year.

For fiscal 2025 , 2024 , and 2023 , the Board of Directors of the Company, upon the recommendation of the Compensation Committee, approved the Corporate Incentive Plan (the “CIP”) for the respective fiscal year.

The chief executive officer, other executive officers, and other members of senior management, including vice presidents and director-level employees, together with all other employees of the Company not on the Company's sales incentive plan are eligible to participate in the CIP.

Under the CIP, individual cash incentive payments for the eligible employees will be based both on Company financial performance, as measured by achievement of operating income (before incentive plan accruals) and revenue goals within specified ranges established by the Compensation Committee, and Company performance, as measured by the achievement of personal management objectives.

Under the CIP, individual cash or equity incentive payments for the eligible employees will be based both on Company financial performance, as measured by achievement of operating income (before incentive plan accruals) and revenue goals within specified ranges established by the Compensation Committee, and Company performance, as measured by the achievement of personal management objectives.

The Compensation Committee determines the performance of the chief executive officer, the chief financial officer and other participants based on the achievement of the management objectives established by the Compensation Committee during the first quarter of the respective fiscal year.

We recorded approximately $ 16.6 million, $ 1.6 million, and $ 15.0 million of expense under the CIP in fiscal 2025 , 2024 , and 2023 , respectively.

Under our Corporate Incentive Plan, incentive payments

may be made in cash or in shares of our Common Stock, or a combination of both, as determined at the discretion of the Compensation Committee of our Board of Directors.

To the extent incentive payments are settled in equity under the

2023 Equity Incentive Plan, the number of RSUs to be issued is determined by dividing the eligible employee’s incentive payment value by the

30 -calendar day average closing price of our Common Stock during the period ending the day before the date of settlement.

Under this methodology, the value of RSUs issued on the settlement date could differ from the incentive payment value accrued.

Note 14 - Contingencies

Legal Proceedings

On or about December 19, 2018, Steven De Jaray, Perienne De Jaray and Darrell Oswald (collectively, the “Plaintiffs”) commenced an action against the Company in the Multnomah County Circuit Court of the State of Oregon, in connection with the sale of certain products by the Company to the Plaintiffs in or around 2008.

The Plaintiffs alleged the Company violated the Lanham Act, engaged in negligence, fraud, and breach of contract by failing to disclose to the Plaintiffs the export-controlled status of the subject parts.

In January 2019, we removed the action to the United States District Court for the District of Oregon (the “Court”).

On May 24, 2023, the Plaintiffs filed a second amended complaint, which added Apex-Micro Manufacturing Corporation (“Apex-Micro”) as a plaintiff and removed the violation of the Lanham Act claim.

The Plaintiffs sought damages of $ 180 million, punitive damages, and other remedies.

On January 18, 2024, the court dismissed the claims against the Company by Ms.

De Jaray and Mr.

The trial for the remaining claims was held from January 30, 2024 to February 15, 2024.

On February 13, 2024, the Court granted the Company’s Rule 50 motion in part and entered judgment in the Company’s favor as to all of Mr.

De Jaray’s claims and Apex-Micro’s negligence claims.

On February 15, 2024, the jury found that the Company was not liable for all outstanding claims and judgment was entered in favor of the Company.

On March 15, 2024, Mr.

De Jaray and Apex-Micro filed a Notice of Appeal to the United States Court of Appeals for the Ninth Circuit.

On March 18, 2024, Ms.

De Jaray filed a separate Notice of Appeal.

De Jaray’s appeal was dismissed for failure to prosecute on August 1, 2024.

In response to Mr.

De Jaray and Apex Micro's request for an extension, their appeal opening brief was due October 7, 2024.

De Jaray and Apex Micro failed to file their appeal opening brief on October 7 th .

De Jaray's and Apex Micro's appeal was dismissed for failure to prosecute on October 30, 2024.

From time to time, we are exposed to certain additional asserted and unasserted potential claims.

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The Company’s CODM is its Chief Executive Officer.

As of December 28, 2024, we have determined that the Company operates in a single operating and reportable segment:

As of January 3, 2026, we have determined that the Company operates in a single operating and reportable segment:

the core Lattice business, which includes silicon-based and silicon-enabling products, evaluation boards, development hardware, and related intellectual property licensing, services, and sales.

3 unchanged sentences

$ 523,262 $ 509,401 $ 737,154

Cost of revenue

$ 166,319 $ 169,001 $ 222,484

$ 356,943 $ 340,400 $ 514,670

Total operating expenses

4 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Lattice Semiconductor Corporation (the Company) as of December 28, 2024 and December 30, 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 28, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 28, 2024 and December 30, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 28, 2024, in conformity with U.S.

We have audited the accompanying consolidated balance sheets of Lattice Semiconductor Corporation (the Company) as of January 3, 2026 and December 28, 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended January 3, 2026, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 3, 2026 and December 28, 2024, and the results of its operations and its cash flows for each of the three years in the period ended January 3, 2026, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 28, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 14, 2025 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 3, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 13, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

14 unchanged sentences

Inventory Valuation

Description of the Matter

The Company's net inventory totaled $103.4 million as of December 28, 2024.

Description of the Matter The Company's net inventory totaled $89.2 million as of January 3, 2026.

As explained in “Note 1 - Basis of Presentation and Significant Accounting Policies” within the consolidated financial statements, the Company records inventory at the lower of cost or net realizable value, and writes down inventories to net realizable value if it is obsolete or if quantities are in excess of projected customer demand.

Auditing management’s inventory excess and obsolescence reserves was challenging because the calculation of the estimate is complex as it considers a number of factors that are affected by market and economic conditions, such as customer demand and product lifecycle.

How We Addressed the Matter in Our Audit

We evaluated and tested the design and operating effectiveness of the Company's internal controls over the calculation of excess and obsolete inventory, including the determination and application of the assumptions used to estimate the excess and obsolescence reserve.

How We Addressed the Matter in Our Audit We evaluated and tested the design and operating effectiveness of the Company's internal controls over the calculation of excess and obsolete inventory, including the determination and application of the assumptions used to estimate the excess and obsolescence reserve.

Our audit procedures included, among others, evaluating the assumptions and the underlying data used in management's excess and obsolete inventory assessment.

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Opinion on Internal Control Over Financial Reporting

We have audited Lattice Semiconductor Corporation’s internal control over financial reporting as of December 28, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Lattice Semiconductor Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 28, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 28, 2024 and December 30, 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 28, 2024, and the related notes and our report dated February 14, 2025 expressed an unqualified opinion thereon.

We have audited Lattice Semiconductor Corporation’s internal control over financial reporting as of January 3, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Lattice Semiconductor Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of January 3, 2026, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of January 3, 2026 and December 28, 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended January 3, 2026, and the related notes and our report dated February 13, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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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-K

Item 8. Financial Statements and Supplementary Data