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As a result of rounding, there may be immaterial differences in amounts presented and certain calculations may not sum to the total number expressed in each category or tie to a corresponding schedule.
+Added: MKS Inc., formerly known as MKS Instruments, Inc.
+Added: (“MKS,” the “Company,” “our,” or “we”), was founded in 1961 as a Massachusetts corporation.
We enable technologies that transform our world.
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Our solutions are also critical to addressing ever-increasing performance requirements across a wide array of specialty industrial applications.
+Added: Current Trade Environment
+Added: As the global trade landscape continues to evolve to address trade imbalances, national security concerns, and market access issues, including the imposition of significant tariffs on numerous global trading partners and the expansion of various export controls, we continue to implement strategies to strengthen supplier diversification, explore alternative sourcing geographies and optimize logistics routes.
+Added: Our efforts are designed to mitigate cost impacts, maintain operational efficiency, and support supply chain continuity against current and future regulatory risks.
We have three divisions, which are our reportable segments:
Vacuum Solutions Division (“VSD”), Photonics Solutions Division (“PSD”) and Materials Solutions Division (“MSD”).
−Removed: VSD delivers foundational technology solutions to semiconductor manufacturing, electronics and packaging and specialty industrial applications.
+Added: VSD delivers foundational technology solutions for semiconductor manufacturing, electronics and packaging and specialty industrial applications.
VSD products are derived from our core competencies in vacuum technologies, including pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, electronic control technology, reactive gas generation and delivery, power generation and delivery, and fiber optic temperature and position sensing.
−Removed: PSD provides a broad range of solutions including lasers, beam measurement and profiling, precision motion control, vibration isolation systems, photonics instruments, opto-mechanical components, optical elements, laser-based systems for flexible printed circuit board (“PCB”) laser processing, laser-based systems for high density interconnect PCB and package substrate manufacturing.
−Removed: During the quarter ended March 31, 2024, we moved our Optical Sensing Products (“OSP”) product line from the PSD segment to the VSD segment.
−Removed: The purpose of this realignment was to better align the OSP products with semiconductor related products within the VSD segment.
−Removed: Prior periods have been recast to reflect this change.
+Added: PSD provides a broad range of instruments, components and subsystems to leading edge semiconductor manufacturing, electronics and packaging and specialty industrial applications.
+Added: PSD products are derived from our core competencies in lasers, photonics, optics, precision motion control and vibration control.
MSD develops leading process and manufacturing technologies for advanced surface modification, electroless and electrolytic plating, and surface finishing.
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Semiconductor Market
−Removed: MKS is a critical solutions provider for semiconductor manufacturing.
+Added: We are a critical solutions provider for semiconductor manufacturing.
Our products are used in major semiconductor processing steps, such as deposition, etching, cleaning, lithography, metrology, and inspection.
The semiconductor industry continually faces new challenges, as products become smaller, more powerful and highly mobile.
−Removed: Ultra-thin layers, smaller critical dimensions, new materials, 3D structures, and the ongoing need for higher yield and productivity drive the need for tighter process measurement and control, all of which MKS supports.
+Added: Ultra-thin layers, smaller critical dimensions, new materials, 3D structures, and the ongoing need for higher yield and productivity drive the need for tighter process measurement and control, all of which we support.
We believe we are the broadest critical subsystem provider in the wafer fabrication equipment (“WFE”) ecosystem and address over 85% of the market.
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The semiconductor market is subject to rapid demand shifts, which are difficult to predict, and we cannot be certain as to the timing or extent of future demand or any future softening in the semiconductor capital equipment industry.
−Removed: In addition to these rapid demand shifts, the semiconductor capital equipment industry is subject to significant trade restrictions, especially in China.
+Added: In addition to these rapid demand shifts, the semiconductor capital equipment industry has recently been subject to significant trade restrictions, especially in key markets, including China.
Approximately 43% and 42% of our net revenues for 2025 and 2024, respectively, were from sales to customers in the semiconductor market.
−Removed: Net revenues from customers in our semiconductor market increased by $19 million, or 1%, in 2024, compared to 2023, due primarily to an increase in sales of our lithography, metrology and inspection products, which we refer to as our World Class Optics portfolio, partially offset by decreased industry spending on deposition and etch equipment for memory applications, particularly NAND, where MKS is a critical solutions provider.
+Added: Net revenues from customers in our semiconductor market increased by $198 million, or 13%, in 2025, compared to 2024.
+Added: The increase was mainly due to higher sales of our semiconductor capital equipment in logic and foundry applications, higher NAND memory production upgrades, and higher service revenues at VSD, partially offset by decreases in sales in our lithography, metrology and inspection products at PSD.
Electronics and Packaging Market
−Removed: MKS is a foundational solutions provider for the electronics and packaging market.
−Removed: Our portfolio includes photonics components, laser drilling systems, electronics chemistries and plating equipment that are critical for the manufacturing of PCBs and package substrates, and critical to wafer level packaging (“WLP”) applications.
+Added: We are a foundational solutions provider for the electronics and packaging market.
+Added: Our portfolio includes photonics components, laser drilling systems, electronics chemistries and plating equipment that are critical for the manufacturing of printed circuit boards (“PCB”) and package substrates, and critical to wafer level packaging (“WLP”) applications.
Similar to the semiconductor industry, the PCB, package substrate and WLP industries demand smaller features, greater density, and better performance.
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Net revenues from customers in our electronics and packaging market increased by $189 million, or 20%, in 2025 compared to 2024.
−Removed: This increase was primarily due to an increase in industry demand for PCB via drilling systems at PSD and an increase in the volume of chemistry materials at MSD, partially offset by a decline in palladium prices for chemistry products, which lower prices are passed through to our customers, and lower equipment revenue at MSD as customers postponed investment decisions.
+Added: This increase was primarily due to higher chemistry and equipment sales in the electronics market at MSD as well as higher sales of PCB via drilling systems at PSD.
Specialty Industrial Market
−Removed: MKS’ strategy in the specialty industrial market is to leverage our domain expertise and proprietary technologies across a broad array of applications in industrial, life and health sciences, and research and defense markets.
+Added: Our strategy in the specialty industrial market is to leverage our domain expertise and proprietary technologies across a broad array of applications in industrial, life and health sciences, and research and defense markets.
Industrial encompasses a wide range of diverse applications, including chemistries for functional coatings, surface finishing and wear resistance in the automobile industry, vacuum solutions for synthetic diamond manufacturing and photonics for solar manufacturing.
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Net revenues from customers in our specialty industrial market decreased by $42 million, or 4%, in 2025, compared to 2024.
−Removed: This decrease was driven primarily by lower revenue in the solar, general industrial and material processing markets, mainly within VSD and MSD.
+Added: This decrease was primarily driven by lower sales to industrial customers at VSD and lower chemistry and equipment sales to industrial customers at MSD.
International Markets
−Removed: Starting in the second quarter of 2024, we changed our basis of reporting geographical net revenues from the location in which the sale originated to the shipped-to location of the end customer.
−Removed: Prior periods have been recast to reflect this change, which was made to better align with how management reviews geographic net revenues.
A significant portion of our net revenues is from sales to customers in international markets.
International net revenues accounted for approximately 81% and 78% of our total net revenues in 2025 and 2024, respectively.
−Removed: A significant portion of our international net revenues was from customers in China, South Korea, Japan, Taiwan and Singapore.
+Added: We report geographical net revenues based on the shipped-to location of the end customer.
+Added: A significant portion of our international net revenues was from customers in China, South Korea, Singapore, Taiwan and Japan.
We expect international net revenues will continue to account for a significant percentage of total net revenues for the foreseeable future.
Long-lived assets located outside of the United States accounted for approximately 70% and 59% of our total long-lived assets as of December 31, 2025 and 2024, respectively.
−Removed: Long-lived assets include property, plant and equipment, net, right-of-use assets, net and certain other assets.
+Added: Long-lived assets include property, plant and equipment, net, right-of-use assets and certain other assets.
Critical Accounting Policies and Estimates
−Removed: MD&A discusses our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.
+Added: MD&A discusses our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
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For these sales, we use the cost-to-cost input method to measure progress.
−Removed: In cases, where
−Removed: cost-to-cost is not proportionate to our progress in satisfying the performance obligation because of uninstalled materials, we adjust the measure of progress and recognize revenue to the extent of cost incurred to satisfy the performance obligation under the contract.
+Added: In cases, where cost-to-cost is not proportionate to our progress in satisfying the performance obligation because of uninstalled materials, we adjust the measure of progress and recognize revenue to the extent of cost incurred to satisfy the performance obligation under the contract.
Revenue from customized products with no alternative future use to us, and that have an enforceable right to payment for performance completed to date, is also recorded over time.
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We value our inventory at the lower of cost or net realizable value, cost being determined using a standard costing system that approximates actual costs, based on a first-in, first-out method.
−Removed: We regularly review inventory quantities on hand and record a provision to write-down excess and obsolete inventory to its estimated net realizable value, if less
−Removed: than cost, based primarily on our estimated forecast of product demand.
+Added: We regularly review inventory quantities on hand and record a provision to write-down excess and obsolete inventory to its estimated net realizable value, if less than cost, based primarily on our estimated forecast of product demand.
Once our inventory value is written-down and a new cost basis has been established, the inventory value is not increased due to demand increases.
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Excess and obsolete expense was $45 million, $56 million and $64 million for 2025, 2024 and 2023, respectively.
−Removed: The higher excess and obsolete charge in 2023 was partially the result of an inventory write-off related to the discontinuation of a product line in 2023 and partially the result of reduced forecasted usage.
−Removed: The higher excess and obsolete charge in 2024 was the result of reduced forecasted usage.
+Added: The excess and obsolete charge in 2023 was partially due to an inventory write-off as a result of the discontinuation of a product line in 2023 and partially due to reduced forecasted usage.
+Added: The excess and obsolete charges in 2025 and 2024 were mainly the result of reduced forecasted usage.
Warranty Costs.
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Stock-Based Compensation Expense.
−Removed: Stock-based awards include (i) time-based restricted stock units (“RSUs”), (ii) performance-based RSUs based on the achievement of adjusted EBITDA targets (the “Adjusted EBITDA RSUs”), (iii) performance-based RSUs based on the Company’s total shareholder return relative to a group of peers over a three-year performance period (the “rTSR RSUs”) and (iv) employee stock purchase plan rights.
+Added: Stock-based awards include (i) time-based restricted stock units (“time-based RSUs”), (ii) performance-based RSUs based on the achievement of Company adjusted EBITDA targets over a one-year performance period (the “Adjusted EBITDA RSUs”), (iii) performance-based RSUs based on the Company’s total shareholder return relative to a group of peers over a three-year performance period (the “rTSR RSUs”) and (iv) employee stock purchase plan rights.
We record compensation expense for all stock-based compensation awards to employees and directors based upon the estimated fair market value of the underlying instrument.
Accordingly, stock-based compensation cost is measured at the grant date, based upon the fair value of the award.
−Removed: We determine the fair value of time-based RSUs based on the closing market price of our common stock on the date of the award.
−Removed: We determine the original fair value of Adjusted EBITDA RSUs based upon the closing market price of our stock on the date of the award and adjust the fair value quarterly during the first year based upon actual and forecasted results against Adjusted EBITDA targets.
−Removed: Accordingly, the number of performance shares earned will vary based on the level of achievement of financial performance objectives for the applicable period.
−Removed: For each quarter until such time that our financial performance can ultimately be determined, we estimate the number of performance shares to be earned based on an evaluation of the probability of achieving the financial performance objectives.
−Removed: Such estimates are revised, if necessary, in subsequent periods when the underlying factors change our evaluation of the probability of achieving the financial performance objectives.
−Removed: Accordingly, share-based compensation expense associated with performance shares may differ significantly from the amount recorded in the current period.
−Removed: Such values are recognized as expense using the accelerated graded vesting method for Adjusted EBITDA RSUs, all over the requisite service periods.
−Removed: We estimate the fair value of rTSR RSUs using the Monte Carlo simulation model, which requires the use of highly subjective and complex assumptions, including the price volatility of the underlying stock.
−Removed: For the rTSR RSUs, the expense computed for the total shareholder return shares is fixed and recognized on a straight-line basis over the vesting period.
+Added: We determine the fair value of time-based RSUs based on the closing market price of our common stock on the date of grant reduced by the present value of dividends expected to be paid on our common stock prior to vesting.
+Added: We determine the original fair value of Adjusted EBITDA RSUs based upon the closing market price of our common stock on the date of grant reduced by
+Added: the present value of dividends expected to be paid on our common stock prior to vesting and adjust the fair value quarterly during the one-year performance period based upon actual and forecasted results against Company Adjusted EBITDA targets.
+Added: Accordingly, the number of Adjusted EBITDA RSUs earned will depend on the actual Company Adjusted EBITDA achieved for the one-year performance period.
+Added: For each quarter during the one-year performance period, we estimate the number of Adjusted EBITDA RSUs to be earned based on the probability of achieving the Company Adjusted EBITDA targets.
+Added: Such estimates are revised, if necessary, in subsequent periods when the underlying factors change the probability of achieving such Company Adjusted EBITDA targets.
+Added: Accordingly, share-based compensation expense associated with Adjusted EBITDA RSU targets may differ significantly from the amount recorded in the current period.
+Added: Such values are recognized as expense using the accelerated graded vesting method for Adjusted EBITDA RSUs, over the requisite service periods.
+Added: We estimate the fair value of rTSR RSUs using the Monte Carlo simulation model, which requires the use of highly subjective and complex assumptions, including the price volatility of the underlying common stock.
+Added: For the rTSR RSUs, the expense computed is fixed and recognized on a straight-line basis over the service period.
We provide certain employees the opportunity to purchase our shares through an Employee Stock Purchase Plan (“ESPP”).
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Management determined that blended stock-based compensation, a combination of historical and implied volatility, is more reflective of market conditions and a better indicator of expected volatility than historical or implied volatility alone.
−Removed: The assumptions used in calculating the fair value of share-based compensation awards represents management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment.
+Added: The assumptions used in calculating the fair value of share-based compensation awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment.
As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future.
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We make every effort to forecast these future cash flows as accurately as possible with the information available at the time the forecast is developed.
+Added: Effective January 1, 2025, we reassigned goodwill to certain reporting units within PSD resulting from a reorganization of that business.
+Added: The goodwill was reassigned to the new reporting units using the relative fair value approach.
+Added: We also concluded that the fair value of each reporting unit immediately before and after the reorganization exceeded its respective carrying value.
+Added: For more information, see Note 12 to the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.
In performing our annual goodwill impairment test, we are permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount, including goodwill.
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If the fair value is less than the carrying amount, a goodwill impairment loss is measured and recorded.
−Removed: As of October 31, 2024, we performed our annual impairment assessment of goodwill using a qualitative assessment for all of our reporting units.
+Added: As of October 31, 2025 and 2024, we performed our annual impairment assessment of goodwill using a qualitative assessment for all of our reporting units.
We determined that it was more likely than not that the fair values were more than the carrying values for each of the reporting units.
−Removed: During the quarter ended June 30, 2023, as a result of softer industry demand, particularly in the personal computer and smartphone markets, we concluded there was a triggering event at our Electronics (“EL”) and general metal finishing (“GMF”) reporting units, which together constitute MSD, and our Equipment Solutions Business (“ESB”) reporting unit of PSD.
−Removed: We concluded there was no triggering event at our other reporting units within VSD and PSD.
−Removed: For the EL, GMF and ESB reporting units, we performed a quantitative assessment of goodwill using a combination of a market approach and the income approach.
−Removed: This quantitative assessment resulted in a non-cash goodwill impairment of $826 million for the EL reporting unit, $428 million for the GMF reporting unit and $372 million for the ESB reporting unit.
−Removed: In addition, we recorded a $49 million impairment of in-process research and development (“IPR&D”) allocated to the EL reporting unit and a $152 million impairment related to completed technology allocated to the ESB reporting unit.
−Removed: As of October 31, 2023, we performed our annual impairment assessment of goodwill by bypassing the qualitative assessment and using a quantitative assessment for all of our reporting units.
−Removed: As a result of higher WACC mainly caused by overall higher market interest rates, we recorded additional non-cash goodwill impairment charges of $48 million and $13 million at our EL and ESB reporting units, respectively.
−Removed: There was no goodwill impairment at any of our other reporting units.
−Removed: In addition, we recorded a $14 million impairment of IPR&D allocated to the EL reporting unit.
We will continue to monitor and evaluate the carrying value of goodwill and intangible assets.
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We record a valuation allowance to reduce our net deferred tax assets to the amount that is expected to be realized.
−Removed: To the extent we establish a valuation allowance, or determine that a valuation allowance is no longer needed, an expense or benefit is recorded within the provision for income taxes line in the consolidated statements of operations and comprehensive (loss) income.
+Added: Evaluating positive and negative evidence regarding the realization of the net deferred tax assets in accordance with ASC 740, “Accounting for Income Taxes,” is a key judgment in this process.
+Added: This assessment includes an evaluation of scheduled reversals of deferred tax liabilities, estimates of projected future taxable income, and tax-planning strategies.
+Added: To the extent we establish a valuation allowance, or determine that a valuation allowance is no longer needed, an expense or benefit is recorded within the provision for income taxes line in the consolidated statements of operations and comprehensive income (loss).
+Added: In 2025, we decreased our valuation allowance by $72 million, primarily related to certain foreign interest and net operating loss carryforwards.
+Added: Although realization is not guaranteed, we have concluded it is more likely than not that these assets, net of the remaining valuation allowance, will be realized.
We are subject to the income tax laws and regulations of the many jurisdictions in which we operate.
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Amortization of intangible assets
−Removed: Goodwill and intangible asset impairments
−Removed: Gain on sale of long-lived assets
−Removed: Income (loss) from operations
+Added: Income from operations
Interest income
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Loss on extinguishment of debt
−Removed: Other (income) expense, net
−Removed: Income (loss) before income taxes
+Added: Other expense (income), net
+Added: Income before income taxes
Provision (benefit) for income taxes
−Removed: Net income (loss)
Year Ended December 31, 2025 compared to 2024
−Removed: The following table sets forth our net revenues for products and services:
+Added: The following table sets forth our net revenues for product and service:
Years Ended December 31,
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Total net revenues
−Removed: Net product revenues decreased $76 million in 2024, compared to 2023, primarily driven by a decrease of $63 million in net product revenues from our specialty industrial market mainly due to lower solar, general industrial, and material processing sales and a decrease of $12 million in net product revenues from our electronics and packaging market, primarily due to lower equipment revenues at MSD as customers postponed investment decisions and also as a result of lower palladium prices for chemistry products which lower prices are passed through to our customers in our electronics component business at MSD, partially offset by volume increases in chemistry materials.
−Removed: The decrease in our electronics and packaging market was partially offset by an increase in industry demand for PCB via drilling systems at PSD and an increase in the volume of chemistry materials at MSD.
+Added: Net product revenues increased $312 million in 2025, compared to 2024, primarily driven by an increase of $206 million in net product revenues from our electronics and packaging market and an increase of $146 million in our semiconductor market, offset by a decrease of $41 million in our specialty industrial market.
+Added: The increase in the electronics and packaging market was primarily a result of volume increases in chemistry and equipment sales at MSD as well as increased demand for PCB via drilling systems at PSD.
+Added: The increase in the semiconductor market was primarily as a result of increases in sales at VSD, mainly due to an increase in demand in capital equipment related to strength in logic and foundry applications as well as higher NAND memory production upgrades, partially offset by volume decreases in sales in our lithography, metrology and inspection products at PSD.
+Added: The decrease in the specialty industrial market was mainly due to a decrease in sales of our industrial products at VSD and MSD.
Net service revenues consisted mainly of fees for services related to the maintenance and repair of our products, sales of spare parts, and installation and training.
−Removed: Net service revenues increased $40 million in 2024, compared to 2023, primarily due to an increase in net service revenues in our semiconductor market, mainly at VSD, and an increase of net service revenues in our electronics and packaging market, mainly at PSD and MSD.
−Removed: Total international net revenues, including product and service, were $2.8 billion in 2024, compared to $2.7 billion in 2023.
+Added: Net service revenues increased $33 million in 2025, compared to 2024, primarily due to an increase in net service revenues in our semiconductor market, mainly at VSD, offset by a decrease of net service revenues in our electronics and packaging market, mainly at PSD and MSD.
+Added: Total international net revenues, including product and service, were $3.2 billion in 2025, compared to $2.8 billion in 2024, primarily driven by an increase of $155 million in sales to China.
The following table sets forth our net revenues by reportable segment:
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Total net revenues
−Removed: Net revenues for our VSD segment decreased $56 million in 2024, compared to 2023, mainly due to a decrease in revenues from customers in the specialty industrial market, as a result of lower solar and general industrial sales, as well as a decrease in net revenues in the semiconductor market as a result of continued softened demand for semiconductor capital equipment in the deposition and etching tool markets for memory applications, particularly NAND.
−Removed: Net revenues for our PSD segment increased $45 million in 2024, compared to 2023, primarily as a result of an increase in sales of our lithography, metrology and inspection products, that are a part of our World Class Optics portfolio, in our semiconductor market and an increase in industry demand for PCB via drilling systems in our electronics and packaging market.
−Removed: Net revenues for our MSD segment decreased $25 million in 2024, compared to 2023, primarily due to lower equipment revenue in the electronics and packaging market, as customers postponed certain investment decisions, and a decrease in chemistry sales in specialty industrial markets, primarily due to lower palladium prices, which lower prices are passed through to our customers, and the negative impact of foreign exchange, partially offset by volume increases in chemistry materials.
+Added: Net revenues for our VSD segment increased $195 million in 2025, compared to 2024, mainly due to higher sales of our semiconductor capital equipment in logic and foundry applications, higher NAND memory production upgrades and higher service revenues.
+Added: This was partially offset by decreases in industrial applications in our specialty industrial market.
+Added: Net revenues for our PSD segment increased $8 million in 2025, compared to 2024, primarily as a result of increased demand for PCB via drilling systems in our electronics and packaging market offset by decreased sales of our lithography, metrology and inspection products in our semiconductor market.
+Added: Net revenues for our MSD segment increased $142 million in 2025, compared to 2024, primarily due to higher chemistry and equipment sales in our electronics and packaging market partially offset by lower sales in industrial applications within our specialty industrial market.
The following table sets forth gross profit as a percentage of net revenues by product and service:
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Total gross profit percentage
−Removed: Gross profit as a percentage of net product revenues increased by 1.4 percentage points in 2024, compared to 2023, primarily due to favorable product mix, higher factory utilization and lower excess and obsolete inventory charges, partially offset by higher warranty costs.
−Removed: Gross profit as a percentage of net service revenues increased by 8.3 percentage points in 2024, compared to 2023, primarily due to favorable product mix and lower direct labor and overhead cost on repairs.
+Added: Gross profit as a percentage of net product revenues decreased by 0.9 percentage points in 2025, compared to 2024, primarily due to higher duty and tariff costs and unfavorable product mix, partially offset by higher revenue volumes.
+Added: Gross profit as a percentage of net service revenues decreased by 0.8 percentage points in 2025, compared to 2024, primarily due to higher duty and tariff costs and variable compensation, partially offset by lower scrap and rework.
The following table sets forth gross profit as a percentage of net revenues by reportable segment:
−Removed: Gross Profit Excluding Amortization
Years Ended December 31,
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Total gross profit percentage
−Removed: Gross profit as a percentage of net revenues for VSD increased in 2024, compared to 2023, primarily due to higher factory utilization and lower material costs, partially offset by unfavorable product mix, higher excess and obsolete inventory charges and higher warranty costs.
−Removed: Gross profit as a percentage of net revenues for PSD increased in 2024, compared to 2023, primarily due to higher revenue volumes, lower excess and obsolete inventory charges and lower freight and duty costs, partially offset by unfavorable product mix.
−Removed: Gross profit as a percentage of net revenues for MSD increased in 2024, compared to 2023, primarily due to lower palladium prices and favorable product mix, partially offset by higher warranty costs.
+Added: Gross profit as a percentage of net revenues for VSD increased in 2025, compared to 2024, primarily due to higher revenue volumes, improved factory utilization and lower warranty costs, partially offset by higher duty and tariff costs and unfavorable product mix.
+Added: Gross profit as a percentage of net revenues for PSD decreased in 2025, compared to 2024, primarily due to higher duty and tariff costs and variable compensation, partially offset by lower excess and obsolete inventory charges.
+Added: Gross profit as a percentage of net revenues for MSD decreased in 2025, compared to 2024, primarily due to unfavorable product mix as a result of higher chemistry equipment sales, and higher excess and obsolete inventory charges.
The above gross profit percentages by division exclude an immaterial amount of unallocated corporate expense included in the total gross profit percentage.
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Research and development
−Removed: Research and development expenses decreased $17 million in 2024, compared to 2023, mainly due to decreases of $8 million in compensation-related costs, including salaries, fringe and variable compensation expenses, a decrease of $2 million in engineering consulting fees, and a decrease of $5 million of research and development credits and government assistance received in 2024.
+Added: Research and development expenses increased $28 million in 2025, compared to 2024, mainly due to an increase of $21 million in compensation-related costs, including salaries, fringe and variable compensation expenses and a decrease of $2 million in research and development credits and government assistance received.
Our research and development efforts are primarily focused on developing and improving our instruments, components, chemistry, subsystems, systems and process control solutions to improve process performance and productivity.
−Removed: We have thousands of products, and our research and development efforts primarily consist of a large number of projects related to these products, none of which is individually material to us.
+Added: We have thousands of products, and our research and development efforts primarily consist of a large number of projects related to these products, none of which is individually material.
Projects typically have a duration of 3 to 36 months but may be extended for development of new products.
We continue to make product advancements designed to meet our customers’ evolving needs.
−Removed: We have developed, and continue to develop, new products designed to address industry trends, such as the rising demand for more complex hardware architecture related to increasing investments in artificial intelligence, the shrinking of integrated circuit critical dimensions and technology inflections, and, in the flat panel display and solar markets, the transition to larger substrate sizes, which require more advanced processing and process control technology, the continuing drive toward more complex and accurate components and devices within the handset and tablet market, the transition to 5G for both devices and infrastructure, the growth in units and via counts in the high density interconnect PCB drilling market, and the transition from internal combustion to electric vehicles.
+Added: We have developed, and continue to develop, new products designed to address industry trends, such as the rising demand for more complex hardware architecture related to increasing investments in artificial intelligence, the shrinking of integrated circuit critical dimensions and technology inflections, and, in the flat panel display and solar markets, the transition to larger substrate sizes, which require more advanced processing and process control technology, the continuing drive toward more complex and accurate components and devices within the handset and tablet market, the growth in units and via counts in the high density interconnect PCB drilling market, and the transition from internal combustion to electric vehicles.
In addition, we have developed, and continue to develop, products that support the migration to new classes of materials, ultra-thin layers, and 3D structures that are used in small geometry manufacturing.
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Selling, general and administrative
−Removed: Selling, general and administrative expenses decreased $1 million during 2024, compared to 2023, primarily due to a $20 million decrease in compensation-related costs, mainly related to salaries, fringe and variable compensation and a $14 million reduction in net costs mostly incurred in 2023 due to the ransomware event in February 2023.
−Removed: These savings were partially offset by increases of $14 million in information technology investments, $7 million in consulting and professional fees, $5 million in non-income related taxes, $2 million in lease expenses and $2 million in travel expenses.
+Added: Selling, general and administrative expenses increased $50 million during 2025, compared to 2024, primarily due to a $53 million increase in compensation-related costs, mainly related to salaries, fringe and variable compensation, partially offset by a $5 million reduction in consulting and professional fees.
Acquisition and Integration Costs
2 unchanged sentences
Acquisition and integration costs
−Removed: Acquisition and integration costs incurred during 2024 and 2023 were related to consulting and professional fees related to the acquisition of Atotech Limited (“Atotech”) in August 2022 (the “Atotech Acquisition”).
+Added: Acquisition and integration costs incurred during 2024 were related to consulting and professional fees related to the acquisition of Atotech Limited (“Atotech”) in August 2022 (the “Atotech Acquisition”).
Restructuring and other
2 unchanged sentences
Restructuring and other
−Removed: Restructuring and other charges incurred in 2024 and 2023 were primarily related to severance costs as a result of global cost-saving initiatives.
+Added: Restructuring and other charges incurred in 2025 were primarily related to severance costs incurred as a result of a global cost saving initiative implemented during the first quarter of 2025, mainly in the general metals finishing business within MSD, as well as third party costs supporting other strategic initiatives.
+Added: Restructuring and other charges incurred in 2024 were primarily related to severance costs incurred as a result of global cost-saving initiatives implemented in the fourth quarter of 2023.
Fees and Expenses Related to Amendments to the Term Loan Facility
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Fees and expenses related to amendments to the Term Loan Facility
−Removed: In 2024, we recorded fees and expenses related to (i) the Second Amendment to Credit Agreement, dated as of January 22, 2024, by and among us as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender party thereto (the “Second Amendment”) and (ii) the Fourth Amendment to Credit Agreement, dated as of July 23, 2024, by and among us as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender party thereto (the “Fourth Amendment”).
−Removed: In 2023, we recorded fees and expenses related to the First Amendment to Credit Agreement, dated as of October 3, 2023, by and among us as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender party thereto (the “First Amendment”).
+Added: In 2025, we recorded fees and expenses related to the Fifth Amendment to Credit Agreement, dated as of January 24, 2025, by and among us as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender party thereto (the “Fifth Amendment”).
+Added: In 2024, we recorded fees and expenses related to the Fourth Amendment to Credit Agreement, dated as of July 23, 2024, by and among us as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender party thereto (the “Fourth Amendment”) and the Second Amendment to Credit Agreement, dated as of January 22, 2024, by and among us as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender party thereto (the “Second Amendment”).
Amortization of Intangible Assets
2 unchanged sentences
Amortization of intangible assets
−Removed: Amortization of intangible assets decreased $50 million in 2024, compared to 2023, primarily due to the backlog-related intangible assets related to MSD being fully amortized in 2023, and the write-off of completed technology at our ESB reporting unit of PSD in the second quarter of 2023.
−Removed: Goodwill and Intangible Asset Impairments
−Removed: Years Ended December 31,
−Removed: (Dollars in millions)
−Removed: Goodwill and intangible asset impairments
−Removed: During the quarter ended June 30, 2023, as a result of softer industry demand, particularly in the personal computer and smartphone markets, we concluded there was a triggering event at our EL and GMF reporting units, which together constitute MSD, and the ESB reporting unit of PSD.
−Removed: We concluded there was no triggering event at our other reporting units within VSD and PSD.
−Removed: For the EL, GMF and ESB reporting units, we performed a quantitative assessment of goodwill using a combination of a market approach and income approach.
−Removed: Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions that have been deemed reasonable by our management.
−Removed: This quantitative assessment resulted in a non-cash goodwill impairment of $826 million for the EL reporting unit, $428 million for the GMF reporting unit and $372 million for the ESB reporting unit.
−Removed: In addition, we recorded a $49 million impairment
−Removed: of IPR&D allocated to the EL reporting unit and a $152 million impairment related to completed technology allocated to the ESB reporting unit.
−Removed: On October 31, 2023, we performed our annual goodwill and intangible asset impairment assessment.
−Removed: As a result of higher WACC mainly caused by overall higher market interest rates, we recorded additional non-cash goodwill impairment charges of $48 million and $13 million at our EL and ESB reporting units, respectively.
−Removed: In addition, we recorded a $14 million impairment of IPR&D allocated to the EL reporting unit.
−Removed: There were no impairments at any of our other reporting units.
−Removed: On October 31, 2024, we again performed our annual goodwill and intangible asset impairment assessment using a qualitative assessment for all of our reporting units.
−Removed: We determined that it was more likely than not that the fair values were more than the carrying values for each of the reporting units.
−Removed: We will continue to monitor and evaluate the carrying value of goodwill and intangible assets.
−Removed: If market and economic conditions or business performance deteriorate, the likelihood that we would record an impairment charge would increase, which could materially and adversely affect our financial condition and operating results.
−Removed: Gain on Sale of Long-Lived Assets
−Removed: Years Ended December 31,
−Removed: (Dollars in millions)
−Removed: Gain on sale of long-lived assets
−Removed: In 2023, we recorded a gain as a result of receiving cash from the sale of a minority interest investment in a private company.
+Added: Amortization of intangible assets increased $2 million in 2025, compared to 2024, primarily due to the impact of foreign exchange rates on intangible assets at foreign locations.
Interest Expense, Net
3 unchanged sentences
Interest expense, net, decreased by $65 million in 2025, compared to 2024, primarily as a result of the issuance of $1.4 billion of Convertible Notes (as defined and described further below under “Convertible Notes”) in May 2024, at a coupon rate of 1.25%, $1.2 billion of the proceeds of which were used to pay down our loans under the Term Loan Facility, which had an interest rate of approximately 7.8%.
−Removed: In addition in July 2024, we entered into the Fourth Amendment, which decreased the applicable margin for both the USD Tranche B and the EUR Tranche B (each as defined and described further below under “Credit Facilities”) by 0.25%.
−Removed: In addition, interest expense, net was lower in 2024 than 2023 as a result of the voluntary prepayments of $100 million in October 2023, $50 million in February 2024, $50 million in April 2024, $110 million in July 2024 and $216 million in October 2024, on loans under the Term Loan Facility.
+Added: In addition, in July 2024, we entered into the Fourth Amendment, and in January 2025, we entered into the Fifth Amendment, each of which decreased the applicable margin for both the USD Tranche B and EUR Tranche B by 0.25%.
+Added: Interest expense, net was also lower in 2025 as compared to the prior year as a result of various voluntary prepayments totaling $400 million in 2025 and $426 million in 2024, on loans under the Term Loan Facility.
Loss on Extinguishment of Debt
2 unchanged sentences
Loss on extinguishment of debt
−Removed: We recorded a loss on extinguishment of debt as a result of the acceleration of deferred financing and original issue discount costs associated with the Second Amendment in January 2024, Convertible Notes in May 2024 and Fourth Amendment in July 2024.
+Added: In 2025, we recorded a loss on extinguishment of debt as a result of acceleration of deferred financing and original issue discount costs in connection with voluntary prepayments made in 2025 as well as the repricing our USD Tranche B and EUR Tranche B in connection with the Fifth Amendment.
+Added: In 2024, we recorded a loss on extinguishment of debt as a result of the acceleration of deferred financing and original issue discount costs associated with the Second Amendment in January 2024, the issuance of Convertible Notes in May 2024 and the Fourth Amendment in July 2024.
In addition, we recorded a loss on extinguishment of debt as a result of the acceleration of deferred financing and original issue discount costs as a result of voluntary prepayments under the Term Loan Facility made in 2024, as described above.
−Removed: In October 2023, in connection with the First Amendment and the voluntary prepayment of $100 million, we recorded a loss on extinguishment of debt as a result of the acceleration of deferred financing and original issue discount costs.
−Removed: Other (Income) Expense, Net
+Added: Other Expense (Income), Net
Years Ended December 31,
(Dollars in millions)
−Removed: Other (income) expense, net
−Removed: Other (income) expense, net, for 2024 and 2023 primarily relate to net foreign exchange and fair value gains and losses.
−Removed: (Benefit) Provision for Income Taxes
+Added: Other expense (income), net
+Added: Other expense (income), net, for 2025 and 2024 primarily related to net foreign exchange and fair value gains and losses.
+Added: Provision (Benefit) for Income Taxes
Years Ended December 31,
(Dollars in millions)
−Removed: (Benefit) provision for income taxes
+Added: Provision (benefit) for income taxes
Our effective tax rates for 2025 and 2024 were 2.9% and (5.7)%, respectively.
1 unchanged sentence
statutory tax rate, mainly due to the U.S.
−Removed: deduction for foreign derived intangible income (“FDII”) and valuation allowance release partially offset by the increase in withholding taxes.
+Added: deduction for foreign derived intangible income (“FDII”), research and development tax credits and valuation allowance release partially offset by foreign withholding taxes and a waiver of deductions related to the U.S.
+Added: base erosion payments.
Our effective tax rate for 2024 was lower than the U.S.
−Removed: statutory tax rate, mainly due to the impairment of goodwill and intangible assets.
+Added: statutory tax rate, mainly due to the U.S.
+Added: deduction for FDII and valuation allowance release partially offset by foreign withholding taxes.
As of December 31, 2025 and 2024, total gross unrecognized tax benefits, which excludes interest and penalties, was $95 million and $94 million, respectively.
−Removed: The net increase was primarily due to the addition of income tax reserves related to intercompany transactions.
+Added: The net increase was primarily due to the addition of income tax reserves related to intercompany transactions offset by a decrease related to audit settlements.
We accrue interest and, if applicable, penalties for any uncertain tax positions.
1 unchanged sentence
As of December 31, 2025 and 2024, we accrued interest on unrecognized tax benefits of approximately $10 million and $8 million, respectively.
−Removed: Over the next 12 months, it is reasonably possible that we may recognize approximately $3 million of previously net unrecognized tax benefits, excluding interest and penalties, related to various U.S.
−Removed: federal, state and foreign tax positions, primarily due to the expiration of statutes of limitations.
We are subject to examination by U.S.
1 unchanged sentence
federal statute of limitations remains open for tax years 2020 through the present.
+Added: We are under U.S.
+Added: federal audit by the Internal Revenue Service for the years ended December 31, 2020, 2021, and 2022, and do not expect and are not aware of any unrecorded material adjustments.
The statute of limitations for our tax filings in other jurisdictions varies between fiscal years 2020 through the present.
−Removed: We also have certain prior year federal credit carryforwards and state tax loss and credit carryforwards that are subject to examination to the extent used in an open year.
+Added: We also have certain prior year federal credit carryforwards, state tax loss carryforwards and state tax credit carryforwards that are subject to examination to the extent used in an open year.
Our future effective tax rate depends on various factors, including the impact of tax legislation, further interpretations and guidance from U.S.
federal and state governments on the impact of proposed regulations issued by the Internal Revenue Service, as well as the geographic composition of our pre-tax income and changes in income tax reserves for unrecognized tax benefits.
+Added: We monitor these factors and timely adjust our estimates of the effective tax rate accordingly.
While we believe we have adequately provided for all tax positions, amounts asserted by taxing authorities could materially differ from our accrued positions as a result of uncertain and complex application of tax laws and regulations.
2 unchanged sentences
federal, state, and foreign tax matters in future periods as new information becomes available.
−Removed: The Organisation for Economic Co-operation and Development (“OECD”) and participating OECD member countries continue to work toward the enactment of a 15% global minimum corporate tax rate for large multinational enterprise groups, also known as "Pillar Two".
−Removed: Many of the participating countries have enacted legislation that became effective beginning in 2024, while other countries continue to work on defining the underlying rules and administrative procedures.
−Removed: Although the enacted and effective legislation in some countries was applicable to us as of January 1, 2024, and increased our effective income tax rate, the increase did not have a material impact on our overall results of operations or cash flows.
−Removed: We will continue to monitor and evaluate the impacts of the developing legislation.
+Added: The Organisation for Economic Co-operation and Development (“OECD”) and participating OECD member countries have issued rules introducing a 15% global minimum corporate tax rate for large multinational enterprise groups, also known as “Pillar Two.” The adoption and effective dates of these rules vary by country.
+Added: Although the enacted and effective legislation in some countries was applicable to us as of January 1, 2024, the legislation did not have a material impact on our 2025 financial results.
+Added: We will continue to monitor and evaluate the impact of any developing legislation, but we do not anticipate it will have a material impact on our results in future periods.
+Added: On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law.
+Added: The OBBBA includes changes to the U.S.
+Added: tax code, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions.
+Added: The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.
+Added: These changes to the U.S.
+Added: tax code have not had a material impact on our results since the enactment of OBBBA and we do not anticipate these changes to the U.S.
+Added: tax code will have a material impact on our results in future periods.
Liquidity and Capital Resources
2 unchanged sentences
Our total cash and cash equivalents at December 31, 2025 consisted of $199 million held in the United States and $476 million held by our foreign subsidiaries.
−Removed: We believe that our current cash and investments position and available borrowing capacity, together with the cash anticipated to be generated from our operations, will be sufficient to satisfy our estimated working capital, planned capital expenditure requirements, payments of debt, and any future cash dividends declared by our Board of Directors or share repurchases through at least the next 12 months and the foreseeable future.
+Added: We believe that our current cash and investments position and available borrowing capacity, together with the cash anticipated to be generated from our operations, will be sufficient to satisfy our estimated working capital needs, planned capital expenditure requirements, payments of debt, potential settlement of convertible debt conversions and any future cash dividends declared by our Board of Directors or share repurchases through at least the next 12 months and the foreseeable future.
In periods when our sales are growing, higher sales to customers will result in increased trade receivables, and inventories will generally increase as we build products for future sales.
1 unchanged sentence
Conversely, in periods when our sales are declining, our trade accounts receivable and inventory balances will generally decrease, resulting in increased cash from operations.
+Added: Net cash provided by operating activities was $645 million for 2025 and resulted from net income of $295 million, which included non-cash charges of $275 million, mainly the result of $344 million in depreciation and amortization, partially offset by $196 million in deferred income taxes and a net decrease in working capital of $75 million.
+Added: The net decrease in working capital was primarily due to increases in current and non-current accrued compensation of $83 million as a result of higher variable compensation, accounts payable of $55 million and income taxes payable of $21 million, partially offset by increases in inventories of $50 million, as a result of higher business levels, as well as a decrease in other current and non-current liabilities of $32 million.
Net cash provided by operating activities was $528 million for 2024 and resulted from net income of $190 million, which included non-cash charges of $334 million, offset by a net decrease in working capital of $4 million.
1 unchanged sentence
This net decrease in working capital was partially offset by a decrease in other current and non-current liabilities of $43 million, a decrease in current and non-current accrued compensation of $32 million as a result of lower variable compensation and an increase in accounts receivable of $36 million.
−Removed: Net cash provided by operating activities was $319 million for 2023 and resulted from a net loss of $1,841 million, which included non-cash charges of $2,259 million, mainly as a result of goodwill and intangible asset impairment charges of $1,902 million, offset by a net increase in working capital of $99 million.
−Removed: The net increase in working capital was primarily due to a decrease in accounts payable of $99 million, a decrease in income taxes payable of $64 million and an increase in inventory of $76 million.
−Removed: This net increase in working capital was partially offset by a decrease in accounts receivable of $114 million, as a result of lower business levels, and a decrease in other current and non-current assets of $50 million, primarily as a result of a decrease in right of use assets of $31 million, and a decrease in other current and non-current assets of $19 million.
+Added: Net cash used in investing activities was $145 million for 2025, consisting primarily of $148 million in capital expenditures, primarily related to new facility additions in Malaysia and China.
Net cash used in investing activities was $117 million for 2024, consisting primarily of $118 million in capital expenditures.
−Removed: Net cash used in investing activities was $84 million for 2023, consisting primarily of $87 million in capital expenditures, offset by $3 million in proceeds from the sale of long-lived assets.
+Added: Net cash used in financing activities was $562 million for 2025, consisting primarily of normal quarterly debt payments and voluntary debt prepayments that together totaled $451 million, as well as the repurchase of our common stock for $45 million and dividend payments of $59 million.
Net cash used in financing activities was $549 million for 2024, primarily due to net proceeds from the issuance of Convertible Notes of $1.4 billion and incremental loans under the Term Loan Facility in an aggregate principal amount of $761 million.
2 unchanged sentences
We also made payments of $167 million to purchase a capped call option related to the Convertible Notes, $33 million for debt financing costs and $59 million for dividends.
−Removed: Net cash used in financing activities was $259 million for 2023, primarily due to $403 million of payments on our Term Loan Facility and $59 million of dividend payments, partially offset by $216 million in proceeds from our Term Loan Facility.
+Added: On July 25, 2011, our Board of Directors approved a share repurchase program for the repurchase of up to an aggregate of $200 million of our outstanding common stock from time to time in open market purchases, privately negotiated transactions or through other appropriate means.
+Added: The timing and quantity of any shares repurchased depends upon a variety of factors, including business conditions, stock market conditions and business development activities, including, but not limited to, merger and acquisition opportunities.
+Added: These repurchases may be commenced, suspended or discontinued at any time without prior notice.
+Added: Any repurchased shares are held by us as authorized but unissued shares.
+Added: In 2025, we repurchased approximately 546,000 shares of our common stock for total consideration of $45 million.
+Added: repurchased approximately 3.1 million shares of common stock for approximately $172 million pursuant to the program since its adoption.
Holders of our common stock are entitled to receive dividends when and if they are declared by our Board of Directors.
For the years ended December 31, 2025 and 2024, we paid cash dividends of $59 million in the aggregate or $0.88 per share, respectively.
−Removed: Future dividend declarations, if any, as well as the record and payment dates for such dividends, are subject to the final determination of our Board of Directors.
On February 9, 2026, our Board of Directors declared a quarterly cash dividend of $0.25 per share to be paid on March 6, 2026 to shareholders of record as of February 23, 2026.
+Added: Future dividend declarations, if any, as well as the record and payment dates for such dividends, are subject to the final determination of our Board of Directors.
Credit Facilities
−Removed: In connection with the completion of the Atotech Acquisition, on August 17, 2022 (the “Effective Date”) we entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, Barclays Bank PLC, and the lenders from time to time party thereto, which we have amended several times since (as amended, the “Amended Credit Agreement”).
+Added: In connection with the completion of the Atotech Acquisition, on August 17, 2022 (the “Effective Date”) we entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, Barclays Bank PLC, and the lenders from time to time party thereto, which we have amended several times since including, most recently, in February 2026 (as amended, the “Amended Credit Agreement”).
As of December 31, 2025, the Amended Credit Agreement provided for (i) a senior secured term loan facility comprised of two tranches:
a $2.2 billion loan (the “USD Tranche B”) and a €587 million loan (the “Euro Tranche B” and together with the USD Tranche B, the “Term Loan Facility”) and (ii) a senior secured revolving credit facility of $675 million (the “Revolving Facility” and, together with the Term Loan Facility, the “Credit Facilities”), with the commitments under each of the foregoing facilities subject to increase from time to time subject to certain conditions.
+Added: In each of January 2025, June 2025, August 2025 and October 2025, we made an additional voluntary prepayment of $100 million principal amount to the USD Tranche B loan.
As of December 31, 2025, borrowings under the Credit Facilities bore interest at a rate per annum equal to, at our option, any of the following, plus, in each case, an applicable margin:
−Removed: (a) with respect to the USD Tranche B and the Revolving Facility, (x) a base rate determined by reference to the highest of (1) the federal funds effective rate plus 0.50%, (2) the prime rate quoted in The Wall Street Journal, or (3) a forward-looking term rate based on the variable secured overnight financing rate (“Term SOFR”) (plus an applicable credit spread adjustment) for an interest period of one month, plus 1.00%, and (y) a Term SOFR rate (plus an applicable credit spread adjustment) for the interest period relevant to such borrowing, subject to a rate floor of (I) with respect to the USD Tranche B, 0.50% and (II) with respect to the Revolving Facility, 0.0%;
+Added: (a) with respect to the USD Tranche B and the Revolving Facility, (x) a base rate determined by reference to the highest of (1) the federal funds effective rate plus 0.50%, (2) the prime rate quoted in The Wall Street Journal, or (3) a forward-looking term rate based on the variable secured overnight financing rate (“Term SOFR”) (plus, with respect to the Revolving Facility, an applicable credit spread adjustment) for an interest period of one month, plus 1.00%, and (y) a Term SOFR rate (plus, with respect to the Revolving Facility, an applicable credit spread adjustment) for the interest period relevant to such borrowing, subject to a rate floor of (I) with respect to the USD Tranche B, 0.50% and (II) with respect to the Revolving Facility, 0.0%;
and (b) with respect to the Euro Tranche B, a Euro Interbank Offered Rate (“EURIBOR”) rate determined by reference to the costs of funds for Euro deposits for the interest period relevant to such borrowing adjusted for certain additional costs, subject to a EURIBOR rate floor of 0.0%.
−Removed: As of December 31, 2024, the applicable margins for borrowings under the Credit Facilities were (i) under the USD Tranche B and the Revolving
−Removed: Facility, 1.25% with respect to base rate borrowings and 2.25% with respect to Term SOFR borrowings and (ii) under the Euro Tranche B, 2.75%.
+Added: As of December 31, 2025, the applicable margins for borrowings under the Credit Facilities were (i) under the USD Tranche B, 1.00% with respect to base rate borrowings and 2.00% with respect to Term SOFR borrowings, (ii) under the Euro Tranche B, 2.50% and (iii) under the Revolving Facility, 1.50% with respect to base rate borrowings and 2.50% with respect to Term SOFR borrowings.
In addition to paying interest on outstanding principal under the Credit Facilities, we are required to pay a commitment fee in respect of the unutilized commitments under the Revolving Facility.
1 unchanged sentence
We must also pay customary letter of credit fees and agency fees.
−Removed: As of December 31, 2024, the commitment fee was 0.25% per annum, representing a downward adjustment from 0.375% as of June 30, 2024.
+Added: As of December 31, 2025, the commitment fee was 0.25% per annum.
As of December 31, 2025, the principal outstanding on the Term Loan Facility was $2.9 billion, and the weighted average interest rate was 5.4%.
−Removed: The Revolving Facility has a maturity date in August 2027 while the USD Tranche B and Euro Tranche B have a maturity date in August 2029.
+Added: As of December 31, 2025, the Revolving Facility had a maturity date in August 2027 while the Term Loan Facility had a maturity date in August 2029.
As of December 31, 2025, there were no borrowings under the Revolving Facility.
−Removed: We are required to make scheduled quarterly principal payments equal to approximately $10 million with respect to the USD Tranche B and approximately €2 million with respect to the Euro Tranche B, in each case with the balance due thereunder on the seventh anniversary of the Effective Date.
+Added: As of December 31, 2025, we were required to make scheduled quarterly principal payments equal to approximately $10 million with respect to the USD Tranche B and approximately €2 million with respect to the Euro Tranche B, in each case with the balance due thereunder on the maturity date of the Term Loan Facility.
There is no scheduled amortization under the Revolving Facility.
−Removed: Any principal amount outstanding under the Revolving Facility is due and payable in full on the fifth anniversary of the Effective Date.
+Added: Any principal amount outstanding under the Revolving Facility is due and payable in full on the maturity date of the Revolving Facility.
Under the Amended Credit Agreement, we are required to prepay outstanding term loans, subject to certain exceptions, with portions of our annual excess cash flow as well as with the net cash proceeds of certain of its asset sales, certain casualty and condemnation events and the incurrence or issuances of certain debt.
If at any time the aggregate amount of outstanding loans, unreimbursed letter of credit drawings and undrawn letters of credit under the Revolving Facility exceeds the aggregate commitments under the Revolving Facility, we are required to repay outstanding loans and/or cash collateralize letters of credit, with no reduction of the commitment amount.
−Removed: We may voluntarily prepay, and have voluntarily repaid, outstanding loans under the Credit Facilities from time to time, subject to certain conditions, without premium or penalty other than customary “breakage” costs with respect to Term SOFR or EURIBOR loans and any prepayment premium that might be applicable to repayments we make prior to July 24, 2025.
+Added: We may voluntarily prepay, and have voluntarily repaid, outstanding loans under the Credit Facilities from time to time, subject to certain conditions, without premium or penalty other than customary “breakage” costs with respect to Term SOFR or EURIBOR loans and any prepayment premium that might be applicable to repayments we make prior to August 4, 2026.
Additionally, we may voluntarily reduce the unutilized portion of the commitment amount under the Revolving Facility.
All obligations under the Credit Facilities are guaranteed by certain of our wholly-owned domestic subsidiaries and are required to be guaranteed by certain of our future wholly-owned domestic subsidiaries, and are secured by substantially all of our assets and the assets of such subsidiaries, subject to certain exceptions and exclusions.
−Removed: Under the Amended Credit Agreement, we have the ability to incur additional incremental debt facilities in an amount up to (x) the greater of (1) $1,011 million and (2) 75% of consolidated last twelve months earnings before interest, taxes, depreciation, and amortization, plus (y) an amount equal to the sum of all voluntary prepayments of term loans under the Term Loan Facility, plus (z) an additional unlimited amount subject to pro forma compliance with certain leverage ratio tests (based on the security and priority of such incremental debt).
+Added: Under the Amended Credit Agreement, we have the ability to incur additional incremental debt facilities in an amount up to (x) the greater of (1) $1,011 million and (2) 75% of consolidated last 12 months earnings before interest, taxes, depreciation, and amortization, plus (y) an amount equal to the sum of all voluntary prepayments of term loans under the Term Loan Facility, plus (z) an additional unlimited amount subject to pro forma compliance with certain leverage ratio tests (based on the security and priority of such incremental debt).
The Amended Credit Agreement contains customary representations and warranties, covenants and provisions relating to events of default.
1 unchanged sentence
The USD Tranche B and the Euro Tranche B are not subject to financial maintenance covenants.
−Removed: 2025 Amendments and Prepayment of Credit Facilities
−Removed: On January 24, 2025 (the “Fifth Amendment Effective Date”), we entered into the Fifth Amendment to Credit Agreement (the “Fifth Amendment”).
−Removed: Pursuant to the Fifth Amendment, we (i) refinanced our existing USD Tranche B loan and Euro Tranche B loan with a new $2.5 billion USD Tranche B loan and a new €596 million Euro Tranche B loan, (ii) decreased the applicable margin for the USD Tranche B from 2.25% to 2.00% with respect to Term SOFR borrowings and from 1.25% to 1.00% with respect to base rate borrowings, (iii) decreased the applicable margin for the Euro Tranche B from 2.75% to 2.50% and (iv) extended the period during which a 1.00% prepayment premium may be required if we prepay any loans under the USD Tranche B or the Euro Tranche B in connection with a repricing transaction until the date that is six months following the Fifth Amendment Effective Date.
+Added: 2026 Amendment and Prepayment of Credit Facilities
+Added: On February 4, 2026 (the “Sixth Amendment Effective Date”), we entered into the Sixth Amendment to Credit Agreement (the “Sixth Amendment”).
+Added: Pursuant to the Sixth Amendment, we (i) refinanced our existing USD Tranche B loan and Euro Tranche B loan with a new $914 million USD Tranche B loan and a new €587 million Euro Tranche B loan, (ii) refinanced and increased the commitments under our existing Revolving Credit Facility with a new $1 billion Revolving Credit Facility, (iii) decreased the applicable margin for the USD Tranche B from 2.00% to 1.75% with respect to Term SOFR borrowings and from 1.00% to 0.75% with respect to base rate borrowings, (iv) decreased the applicable margin for the Euro Tranche B from 2.50% to 2.00%, (v) decreased the applicable margin under the Revolving Facility from 2.50% to 1.75% with respect to SOFR borrowings and from 1.50% to 0.75% with respect to base rate borrowings, (vi) eliminated the credit spread adjustment applicable to SOFR borrowings of the Revolving Facility, (vii) extended the maturity of the Term Loan Facility to February 2033 and (viii) extended the maturity of the Revolving Facility to February 2031.
+Added: Additionally, pursuant to the Sixth Amendment, we (a) extended the period during which a 1.00% prepayment premium may be required if we prepay any loans under the USD Tranche B or the Euro Tranche B in connection with a repricing transaction until the date that is six months following the Sixth Amendment Effective Date, and (b) reduced the amount of scheduled quarterly principal payments we are required to make with respect to the USD Tranche B to approximately $2 million.
The repriced USD Tranche B loan and Euro Tranche B loan were issued without original issue discount.
−Removed: In connection with the execution of the Fifth Amendment, we paid customary fees and expenses to JPMorgan Chase Bank, N.A.
−Removed: On January 24, 2025, concurrently with the effectiveness of the Fifth Amendment, we made a voluntary prepayment of $100 million principal amount to the USD Tranche B loan, reducing the principal from $2.6 billion to $2.5 billion.
+Added: On February 4, 2026, concurrently with the effectiveness of the Sixth Amendment, we made a voluntary prepayment of approximately $1.3 billion principal amount to the USD Tranche B loan using the net proceeds from the 2034 Notes (as defined below), together with cash on hand, reducing the principal from $2.2 billion to $914 million.
Convertible Notes
On May 16, 2024, we completed a private offering of $1.4 billion aggregate principal amount of convertible senior notes due 2030 (the “Convertible Notes”).
−Removed: The Convertible Notes were sold in a private placement under a purchase agreement, dated as of May 13, 2024, entered into by and among us and Morgan Stanley & Co.
−Removed: Morgan Securities LLC, BofA Securities, Inc.
−Removed: and Mizuho Securities USA LLC, as representatives of the several initial purchasers named therein, for resale to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended.
−Removed: The net proceeds from the offering were approximately $1.4 billion after deducting the initial purchasers’ discounts and commissions and estimated offering expenses paid by us.
We used approximately $167 million of the net proceeds from the offering to pay the cost of the capped call transactions described below.
We used the remaining net proceeds from the offering to repay approximately $1.2 billion in borrowings outstanding under the USD Tranche B, together with accrued interest, as well as for general corporate purposes.
−Removed: As a result of the repayment, we recorded a $38 million loss on extinguishment of debt.
Indenture and the Convertible Notes
3 unchanged sentences
The Convertible Notes will mature on June 1, 2030, unless earlier converted, redeemed or repurchased in accordance with their terms.
−Removed: Subject to certain conditions, on or after June 5, 2027, we may redeem for cash all or any portion of the Convertible Notes at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the trading day immediately preceding the date the notice of redemption is sent.
−Removed: The conversion rate for the Convertible Notes is initially 6.4799 shares of our common stock per one thousand dollars principal amount of Notes, which is equivalent to an initial conversion price of approximately $154.32 per share.
+Added: The conversion rate for the Convertible Notes is initially 6.4799 shares of our common stock per one thousand dollars principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $154.32 per share.
The conversion rate is subject to adjustment upon the occurrence of certain events.
+Added: Subject to certain conditions, on or after June 5, 2027, we may redeem for cash all or any portion of the Convertible Notes at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the trading day immediately preceding the date the notice of redemption is sent.
Upon conversion, we will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted.
−Removed: Prior to March 1, 2030, noteholders may convert all or any portion of their Convertible Notes only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the second scheduled trading day immediately preceding the maturity date.
+Added: Prior to the close of business on the business day immediately preceding March 1, 2030, noteholders may convert all or any portion of their Convertible Notes under the following circumstances:
+Added: • during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ended September 30, 2024, if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the applicable conversion price of the Convertible Notes on each applicable trading day (approximately $200.62 per share based on an initial conversion price of approximately $154.32 per share, which is subject to adjustment upon the occurrence of certain events);
+Added: • during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on each such trading day;
+Added: • if we call any or all of the Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date;
+Added: • upon the occurrence of specified corporate events as specified in the Indenture.
+Added: On or after March 1, 2030, until the close of business on the second scheduled trading day immediately preceding the maturity date, noteholders may convert all or any portion of their Convertible Notes at any time.
If we undergo a fundamental change (as defined in the Indenture) prior to the maturity date of the Convertible Notes, holders may require us to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
The Indenture contains customary terms and covenants, including that upon certain events of default that are occurring and continuing, either the trustee or the holders of at least 25% in aggregate principal amount of the outstanding Convertible Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the Convertible Notes to be due and payable.
−Removed: As of December 31, 2024, the Convertible Notes are classified as a long-term liability, net of issuances costs, on the consolidated balance sheet.
+Added: As of December 31, 2025, the Convertible Notes were classified as a long-term liability, net of issuances costs, on the consolidated balance sheet.
The Convertible Notes were issued at par and costs associated with the issuance of the Convertible Notes are amortized to interest expense over the contractual term of the Convertible Notes.
+Added: There were no conversions of the Convertible Notes in 2025 and 2024.
As of December 31, 2025, the effective interest rate of the Convertible Notes was 1.56%.
2 unchanged sentences
The capped call transactions are expected generally to reduce the potential dilution to our common stock upon conversion of any Convertible Notes and/or offset any cash payments that we are required to make in excess of the principal amount of any converted Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap initially equal to $237.42 per share, which represents a premium of 100% over the last reported sale price of $118.71 per share of our common stock on The Nasdaq Global Select Market on May 13, 2024, and is subject to customary adjustments under the terms of the capped call transactions.
+Added: On February 4, 2026, we completed a private offering (the “2034 Notes Offering”) of €1.0 billion aggregate principal amount of senior notes due 2034 (the “2034 Notes”).
+Added: The Notes were sold in a private placement to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and
+Added: persons outside the United States in reliance on Regulation S under the Securities Act.
+Added: We used the net proceeds from the Offering, together with cash on hand, to prepay approximately $1.3 billion of the USD Tranche B.
+Added: Indenture and the 2034 Notes
+Added: On February 4, 2026, we and the Guarantors (as defined below) entered into an indenture (the “Indenture”) with respect to the 2034 Notes with U.S.
+Added: Bank Trust Company, National Association, as trustee (the “Trustee”).
+Added: Under the Indenture, the 2034 Notes bear interest at a rate of 4.250% per annum, with interest payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2026.
+Added: The 2034 Notes will mature on February 15, 2034, unless earlier redeemed or repurchased in accordance with their terms.
+Added: The 2034 Notes are unconditionally guaranteed, on a senior unsecured basis, jointly and severally, by our existing and future subsidiaries that guarantee the Credit Agreement or are required to become guarantors under certain circumstances and subject to certain exceptions (the “Guarantors”).
+Added: The 2034 Notes and the guarantees are general senior unsecured obligations of us and the Guarantors.
+Added: The 2034 Notes and guarantees will be:
+Added: • pari passu in right of payment with any of our and the Guarantors’ existing and future unsubordinated indebtedness (including the Credit Agreement);
+Added: • effectively subordinated to our and the Guarantors’ existing and future secured indebtedness (including the Credit Agreement) to the extent of the value of the assets securing such indebtedness;
+Added: • senior in right of payment to any of our and the Guarantors’ future subordinated indebtedness;
+Added: • structurally senior to any existing and future indebtedness of us that is not guaranteed by the Guarantors (including the Convertible Notes);
+Added: • structurally subordinated to any existing and future indebtedness and other liabilities of our and the Guarantors’ subsidiaries that are not and do not become Guarantors.
+Added: At any time prior to February 15, 2029, we may redeem the 2034 Notes in whole or in part at a redemption price equal to 100% of their principal amount, plus a make-whole premium, plus accrued and unpaid interest, if any, and additional amounts, if any, to, but excluding, the redemption date.
+Added: At any time and from time to time on or after February 15, 2029, we may redeem for cash all or any portion of the 2034 Notes at a redemption price equal to the percentage of principal amount set forth below, plus accrued and unpaid interest, if any, and additional amounts, if any, to, but excluding, the applicable redemption date, if redeemed during the twelve-month period beginning on February 15 of the year indicated below:
+Added: 2031 and thereafter
+Added: At any time and from time to time prior to February 15, 2029, we may redeem up to 40% of the original aggregate principal amount of the 2034 Notes using the net cash proceeds of certain equity offerings at a redemption price equal to 104.250%.
+Added: In the event of certain developments affecting taxation, we may elect to redeem all, but not less than all, of the 2034 Notes at 100% of their principal amount, plus accrued and unpaid interest, if any, and additional amounts, if any, to, but excluding, the date fixed for redemption.
+Added: Upon the occurrence of a change of control triggering event (as defined in the Indenture), each holder of the 2034 Notes may require us to repurchase all or a portion of their 2034 Notes at a price equal to 101% of their principal amount plus accrued and unpaid interest, if any, and additional amounts, if any, to, but excluding, the repurchase date.
+Added: The Indenture contains customary terms and covenants that limit the ability of us and our Restricted Subsidiaries (as defined in the Indenture) to, among other things, (i) incur liens, (ii) provide guarantees and (iii) consolidate, merge or sell or otherwise dispose of substantially all their assets.
+Added: The Indenture also provides for customary events of default.
+Added: Upon certain events of default that are occurring and continuing, either the Trustee or the holders of at least 30% in aggregate principal amount of the outstanding 2034 Notes may declare the principal of, and accrued and unpaid interest, if any, and additional amounts, if any, on, all the 2034 Notes to be due and payable.
+Added: In the event of certain insolvency and bankruptcy related events of default specified in the Indenture, the principal of, and accrued and unpaid interest, if any, and additional amounts, if any, on, all the 2034 Notes shall automatically become due and payable.
+Added: Based on current interest rates, we expect that the annualized cash interest savings as a result of (i) the Sixth Amendment, (ii) the voluntary prepayment of approximately $1.3 billion principal amount to the USD Tranche B loan and (iii) the 2034 Notes Offering will be approximately $27 million.
Lines of Credit and Borrowing Arrangements
1 unchanged sentence
The lines of credit and financing facility provided for aggregate borrowings as of December 31, 2025 and December 31, 2024 of up to an equivalent of $13 million and $19 million, respectively.
−Removed: There were no borrowings outstanding under these arrangements at December 31, 2024 or December 31, 2023.
+Added: There were no borrowings outstanding under these arrangements at December 31, 2025 and December 31, 2024.
We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments and those utilized as economic hedges.
7 unchanged sentences
While there can be no assurance, we do not anticipate any material non-performance by any of these counterparties.
−Removed: Interest Rate Swap and Interest Rate Cap Agreements
−Removed: We have various interest rate swap agreements maturing through January 31, 2029 that exchange a one-month forward-looking term rate based on Term SOFR paid on the outstanding balance of our USD Term Loan Facility, to a fixed rate.
+Added: Interest Rate Swaps
+Added: We have various interest rate swap agreements, which are cash-flow hedges, maturing through January 31, 2029 that exchange a one-month forward-looking term rate based on Term SOFR paid on the outstanding balance of our USD Term Loan Facility, to a fixed rate.
The notional value of the agreements was $1,900 million and $2,600 million as of December 31, 2025 and December 31, 2024, respectively.
We acquired USD London Interbank Offered Rate (“USD LIBOR”) based interest rate cap agreements as a result of the Atotech Acquisition and had utilized these agreements to offset Term SOFR on our Term Loan Facility.
−Removed: The notional value of the agreements was $700 million as of December 31, 2023 and expired on January 31, 2024.
−Removed: Effective June 30, 2023, our USD LIBOR based interest rate caps were converted to Term SOFR.
−Removed: We also had two USD LIBOR based swaps that were converted to Term SOFR, effective June 30, 2023.
−Removed: The conversions from USD LIBOR to Term SOFR did not have a material impact on our results of operations.
+Added: The interest rate cap agreements expired on January 31, 2024.
The interest rate swaps are recorded at fair value on the consolidated balance sheets and changes in the fair value are recognized in OCI.
3 unchanged sentences
Changes in the fair value of interest rate caps were recorded immediately in earnings, as we did not designate these instruments as hedges and therefore these instruments did not qualify for hedge accounting.
−Removed: There was a benefit on these derivatives of $3 million in 2023 and there was no net impact on these derivatives in 2024.
The cash flows resulting from interest rate agreements are classified in cash flows from operating activities.
−Removed: We expect a gain of approximately $17 million to be reclassified from accumulated OCI into interest expense during the twelve months ending December 31, 2025 related to interest rate swaps.
+Added: We expect an immaterial amount of gains or losses to be reclassified from accumulated OCI into interest expense related to interest rate swaps during the twelve months ending December 31, 2026.
Foreign Exchange Forward Contracts
−Removed: We hedge a portion of our forecasted foreign currency denominated intercompany sales of inventory, over a maximum period of twenty-four months, using foreign exchange forward contracts accounted for as cash-flow hedges.
−Removed: To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, and otherwise meet the hedge accounting criteria, changes in the derivatives’ fair value are not included in current earnings but are included in accumulated OCI in stockholders’ equity.
+Added: We hedge a portion of our forecasted foreign currency denominated intercompany sales of inventory and certain of our foreign subsidiaries’ operating expenses, over a maximum period of twenty-four months, using foreign exchange forward contracts accounted for as cash-flow hedges.
+Added: To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, and otherwise meet the hedge accounting criteria, changes in the derivatives’ fair value are not included in current earnings but are included in OCI in stockholders’ equity.
These changes in fair value will subsequently be reclassified into earnings as applicable, when the forecasted transaction occurs.
−Removed: To the extent that a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded immediately in earnings in the period it occurs.
+Added: To the extent that a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded in earnings in the period it occurs.
The cash flows resulting from foreign exchange forward contracts are classified in the consolidated statements of cash flows as part of cash flows from operating activities.
+Added: Gains and losses on foreign exchange forward contracts that qualify for hedge accounting are classified in cost of revenues in 2025 and 2024 and totaled gains of $4 million and $6 million in 2025 and 2024, respectively.
+Added: There were no ineffective portions of the derivatives recorded in 2025 and 2024.
+Added: We expect an immaterial amount of gains or losses to be reclassified from accumulated OCI into cost of revenues related to foreign exchange forward contracts during the twelve months ending December 31, 2026.
We also enter into foreign exchange forward contracts to hedge against certain monetary asset and liability accounts on the consolidated balance sheet to mitigate the risk associated with certain foreign currency transactions in the ordinary course of business.
−Removed: These derivatives are not designated as cash flow hedging instruments and gains or losses from these derivatives are recorded immediately in other (income) expense, net.
−Removed: The net foreign exchange gain on these derivatives was $1 million in 2024, compared to a loss of $4 million in 2023.
+Added: These derivatives are not designated as cash flow hedging instruments and gains or losses from these derivatives are recorded immediately in other expense (income), net.
+Added: The net foreign exchange loss on these derivatives was $3 million in 2025, compared to a gain of $1 million in 2024.
The cash flows resulting from foreign exchange forward contracts are classified in our consolidated statements of cash flows as part of cash flows from operating activities.
−Removed: We had foreign exchange forward contracts designated as cash flow hedges with notional amounts totaling $74 million and $178 million outstanding at December 31, 2024 and at December 31, 2023, respectively, with the Japanese yen and the South Korean won being the largest notional contracts in both periods.
+Added: We had foreign exchange forward contracts designated as cash flow hedges with notional amounts totaling $5 million and $74 million outstanding at December 31, 2025 and at December 31, 2024, respectively.
+Added: The Canadian dollar was the only notional contract designated as a cash flow hedging instrument for 2025, and the Japanese yen and the South Korean won were the largest notional contracts designated as cash flow hedging instruments for 2024.
We had foreign exchange forward contracts not designated as hedging instruments with notional amounts totaling $367 million and $154 million outstanding at December 31, 2025 and at December 31, 2024, respectively.
−Removed: The British pound and Chinese yuan were the largest notional contracts for 2024, and the Euro and British pound were the largest notional contracts for 2023 for balance sheet hedges not designated as a hedging instrument.
−Removed: As of December 31, 2024, the unrealized gain that will be reclassified from accumulated OCI to cost of revenues over the next twelve months is approximately $7 million.
−Removed: Gains and losses on foreign exchange forward contracts that qualify for hedge accounting are classified in cost of products in 2024 and 2023 and totaled gains of $6 million and $7 million, respectively.
−Removed: There were no ineffective portions of the derivatives recorded in 2024 and 2023.
−Removed: Net Investment Hedge
+Added: The Euro, Chinese yuan, British pound and New Taiwan dollar were the largest notional contracts for 2025, and the British pound and Chinese yuan were the largest notional contracts for 2024 for balance sheet hedges not designated as a hedging instrument.
+Added: Net Investment Hedges
We have designated certain Euro-denominated debt as a net investment hedge to hedge a portion of our net investments in certain of our entities with functional currencies denominated in the Euro.
As of December 31, 2025, we designated as a net investment hedge €587 million in aggregate principal amount of our Euro Tranche B loan.
−Removed: For these nonderivative instruments, we defer recognition of the foreign currency remeasurement gains and losses within the foreign currency translation adjustment component of OCI.
+Added: On February 4, 2026, in connection with the 2034 Notes Offering, we also designated as a net investment hedge €1.0 billion in aggregate principal amount of the 2034 Notes.
+Added: For these net investment hedges, we record foreign currency remeasurement gains and losses within a component of OCI.
+Added: Recognition in earnings of amounts previously recorded in accumulated OCI is limited to circumstances such as the complete or substantially complete liquidation or sale of the net investment in the hedged foreign operations.
Contractual Obligations
16 unchanged sentences
Recent Accounting Pronouncements
−Removed: Income Taxes (Topic 740):
−Removed: Improvements to Income Tax Disclosures
−Removed: In December 2023, the FASB issued ASU No.
−Removed: 2023-09, Income Taxes (Topic 740):
−Removed: Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid.
−Removed: 2023-09 requires a public business entity (“PBE”) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold.
−Removed: In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received.
−Removed: For PBEs, the new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted.
−Removed: An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods or may apply the amendments retrospectively by providing the revised disclosures for all periods presented.
−Removed: We are currently evaluating the impact on the consolidated financial statement disclosures;
−Removed: however, adoption will not impact our consolidated balance sheets, cash flows or income statements.
−Removed: Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):
−Removed: Disaggregation of Income Statement Expenses
−Removed: In November 2024, the FASB issued ASU No.
−Removed: 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):
−Removed: Disaggregation of Income Statement Expenses, which requires public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements.
−Removed: The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.
−Removed: We are currently evaluating the impact on the consolidated financial statement disclosures;
−Removed: however, adoption will not impact our consolidated balance sheets, cash flows or income statements.
+Added: For information on recently issued accounting pronouncements, see Note 4 to the Notes to Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
Quantitative and Qualitat ive Disclosures about Market Risk
4 unchanged sentences
We use both nonderivative and derivative instruments to manage our earnings and cash flow exposure to changes in currency exchange rates.
−Removed: We mainly enter into foreign exchange forward contracts to reduce currency exposure arising from intercompany sales of inventory.
+Added: We mainly enter into foreign exchange forward contracts to reduce currency exposure arising from intercompany sales of inventory and certain of our foreign subsidiaries’ operating expenses.
We also enter into foreign exchange forward contracts to reduce foreign exchange risks arising from the change in fair value of certain foreign currency denominated assets and liabilities.
−Removed: We had foreign exchange forward contracts designated as cash flow hedges with notional amounts totaling $74 million and $178 million outstanding at December 31, 2024 and December 31, 2023, respectively, with the Japanese yen and the South Korean won being the largest notional contracts in both periods.
+Added: We had foreign exchange forward contracts designated as cash flow hedges with notional amounts totaling $5 million and $74 million outstanding at December 31, 2025 and December 31, 2024, respectively.
+Added: The Canadian dollar was the only notional contract designated as a cash flow hedging instrument for 2025, and the Japanese yen and the South Korean won were the largest notional contracts designated as cash flow hedging instruments for 2024.
We had foreign exchange forward contracts not designated as hedging instruments with notional amounts totaling $367 million and $154 million outstanding at December 31, 2025 and December 31, 2024, respectively.
−Removed: For 2024, the British pound and Chinese yuan were the largest notional contracts and for 2023 the Euro and British pound were the largest notional contracts for balance sheet hedges not designated as a hedging instrument.
+Added: For 2025, the Euro, Chinese yuan, British pound and New Taiwan dollar were the largest notional contracts and for 2024 British pound and Chinese yuan were the largest notional contracts for balance sheet hedges not designated as a hedging instrument.
The potential fair value loss for a hypothetical 10% adverse change in the currency exchange rate on our foreign exchange forward contracts at December 31, 2025 and 2024 would be immaterial.
1 unchanged sentence
As of December 31, 2025, we designated as a net investment hedge €587 million in aggregate principal amount of our Euro Tranche B loan.
+Added: On February 4, 2026, in connection with the 2034 Notes Offering, we also designated as a net investment hedge €1.0 billion in aggregate principal amount of 2034 Notes.
For these nonderivative instruments, we defer recognition of the foreign currency remeasurement gains and losses within the foreign currency translation adjustment component of OCI.
12 unchanged sentences
Because the notional amount of our interest rate hedges as of December 31, 2025 equaled approximately 66% of the principal outstanding on our Term Loan Facility, the resulting net impact to interest expense would be approximately $4 million.
+Added: The quantitative information presented reflects the terms of our Term Loan Facility as of December 31, 2025 and does not reflect the Sixth Amendment and 2034 Notes Offering completed in 2026.
+Added: For a discussion of the expected impact on our future interest expense and liquidity, see Part II—Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations— Liquidity and Capital Resources.
+Added: Equity Price Risk
+Added: We are exposed to equity price risk related to the conversion options embedded in our Convertible Notes.
+Added: We issued $1.4 billion of Convertible Notes in May 2024.
+Added: The Convertible Notes bear interest at a fixed rate and therefore have no financial statement risk associated with changes in market interest rates.
+Added: However, the fair value of Convertible Notes fluctuates when interest rates change.
+Added: We carry the Convertible Notes at face value less an unamortized discount on our consolidated balance sheet, and we present the fair value for required disclosure purposes only.
+Added: Additionally, the fair value can be affected when the market price of our common stock fluctuates.
+Added: The potential value of the shares to be distributed to the holders of our Convertible Notes changes when the market price of our stock fluctuates.
+Added: The Convertible Notes will mature on June 1, 2030 unless earlier repurchased by us or converted pursuant to their terms.
+Added: Additional details about the terms of the Convertible Notes can be found in Note 14 to the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.
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.