What changed in this filing

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Item 1. Financial Statements

2026-05-04 compared with 2025-11-05 · 217 added, 433 removed, 445 unchanged (59% of the section changed)

3 unchanged sentences

(In thousands, except par value)

September 30,

Current assets:

31 unchanged sentences

75,022 75,022

Deferred tax liabilities

90,316 90,480

Other long-term liabilities

22 unchanged sentences

(In thousands, except per-share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Cost of revenue

13 unchanged sentences

(In thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

$ 178,274 $ 144,430 $ 445,791 $ 337,337

Three Months Ended March 31,

Other comprehensive income, net of tax

Foreign currency translation adjustments

919 22,321 25,692 4,186

Change in unrealized gains and losses on available-for-sale securities, net of tax of $ 17 , $ 37 , $ 17 and $( 161 ), respectively

69 977 116 1,680

Net change in unrealized gains and losses on available-for-sale securities

Other comprehensive income, net of tax

988 23,298 25,808 5,866

Comprehensive income

$ 179,262 $ 167,728 $ 471,599 $ 343,203

See accompanying notes to unaudited condensed consolidated financial statements.

6 unchanged sentences

Stockholders’

Three Months Ended September 30, 2025

Balance as of July 1, 2025

47,892 $ 822,582 $ 2,603,177 $ ( 23,691 ) $ 3,402,068

- - 178,274 - 178,274

Other comprehensive income

- - - 988 988

Dividends and dividend equivalents declared ($ 1.56 per share)

- - ( 75,924 ) - ( 75,924 )

Common stock issued

15 3,885 - - 3,885

Repurchases of common stock

( 2 ) ( 2,017 ) - - ( 2,017 )

Stock-based compensation expense

- 60,673 - - 60,673

Balance as of September 30, 2025

47,905 $ 885,123 $ 2,705,527 $ ( 22,703 ) $ 3,567,947

Common Stock and

Additional Paid-in Capital

Comprehensive

Stockholders’

Three Months Ended September 30, 2024

Balance as of July 1, 2024

48,698 $ 1,224,144 $ 1,016,208 $ ( 44,494 ) $ 2,195,858

- - 144,430 - 144,430

Other comprehensive income

- - - 23,298 23,298

Dividends and dividend equivalents declared ($ 1.25 per share)

- - ( 61,879 ) - ( 61,879 )

Common stock issued

88 4,121 - - 4,121

Repurchases of common stock

( 7 ) ( 5,534 ) - - ( 5,534 )

Stock-based compensation expense

- 51,396 - - 51,396

Balance as of September 30, 2024

48,779 $ 1,274,127 $ 1,098,759 $ ( 21,196 ) $ 2,351,690

Common Stock and

Additional Paid-in Capital

Comprehensive

Stockholders’

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Balance as of January 1, 2026

7 unchanged sentences

420 5,830 - - 5,830

Repurchases of common stock

( 6 ) ( 4,501 ) - - ( 4,501 )

Stock-based compensation expense

- 41,098 - - 41,098

Balance as of September 30, 2025

Balance as of March 31, 2026

49,129 $ 983,926 $ 2,703,596 $ ( 10,112 ) $ 3,677,410

3 unchanged sentences

Stockholders’

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Balance as of January 1, 2025

7 unchanged sentences

54 5,335 - - 5,335

Repurchases of common stock

( 19 ) ( 14,160 ) - - ( 14,160 )

Stock-based compensation expense

- 52,807 - - 52,807

Balance as of September 30, 2024

Balance as of March 31, 2025

47,877 $ 764,959 $ 2,351,994 $ ( 43,324 ) $ 3,073,629

3 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

1 unchanged sentence

Depreciation and amortization

Amortization of discount on available-for-sale securities

Gain on deferred compensation plan investments

Loss on deferred compensation plan investments

Deferred taxes, net

9 unchanged sentences

Purchases of property and equipment

Purchases of intangible assets

Sales of property and equipment

Purchases of investments

Maturities and sales of investments

Cash paid for acquisition, net of cash acquired

Contributions to deferred compensation plan

2 unchanged sentences

Property and equipment purchased on extended payment terms

Proceeds from common stock issued under the employee stock purchase plan

Repurchases of common stock

Proceeds from common stock issued

Dividends and dividend equivalents paid

1 unchanged sentence

Effect of change in exchange rates

Net increase in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

Cash, cash equivalents and restricted cash, end of period

Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets:

Cash and cash equivalents

Restricted cash included in other long-term assets

Total cash, cash equivalents, and restricted cash

Supplemental disclosures for cash flow information:

Cash paid for income taxes, net

Cash paid (refunded) for income taxes, net

Non-cash investing and financing activities:

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All intercompany accounts and transactions have been eliminated.

The information in this report should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 3, 2025.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the interim periods presented.

1 unchanged sentence

Summary of Significant Accounting Policies

There have been no changes to the Company’s significant accounting policies during the three and nine months ended September 30, 2025 from those described in the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no changes to the Company’s significant accounting policies during the three months ended March 31, 2026 from those described in the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2025.

Use of Estimates

1 unchanged sentence

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period.

Significant estimates and assumptions used in these condensed consolidated financial statements primarily include those related to income tax valuation allowances, inventory valuation and stock-based compensation.

Significant estimates and assumptions used in these condensed consolidated financial statements primarily include those related to income tax valuation allowances and stock-based compensation.

Actual results could differ from these estimates and assumptions, and any such differences may be material to the Company’s condensed consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted as of September 30, 2025

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which aims to improve an entity’s income tax disclosures around its effective rate reconciliation, income taxes paid, disaggregation of income before income taxes and income tax expense.

The Company will adopt this standard in its Form 10-K for the fiscal year ending December 31, 2025.

The adoption of this standard will result in expanded disclosures in the Notes to Consolidated Financial Statements.

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

New Accounting Pronouncements Not Yet Adopted as of March 31, 2026

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , which aims to provide more detailed information about the types of expenses in commonly presented expense captions.

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The remaining revenue, which primarily consists of royalty revenue from licensing arrangements and revenue from wafer testing services performed for third parties, was not significant in any of the periods presented.

See Note 7 to our unaudited condensed consolidated financial statements for the disaggregation of the Company’s revenue by geographic region.

The Company derives a majority of its revenue from sales to customers located outside North America, with geographic revenue based on the customers’ ship-to locations.

The following is a summary of revenue by geographic region for the periods presented (in thousands):

Three Months Ended March 31,

Country or Region

$ 411,153 $ 363,720

181,616 116,341

81,806 64,364

Southeast Asia

40,749 32,706

35,799 24,992

29,774 15,249

23,184 20,101

$ 804,185 $ 637,554

The Company sells its products to end customers primarily through third-party distributors and value-added resellers.

For the three months ended September 30, 2025 and 2024, 85 % and 88 %, respectively, of the Company’s total sales were made through distribution arrangements.

For the nine months ended September 30, 2025 and 2024, 84 % and 89 %, respectively, of the Company’s total sales were made through distribution arrangements.

For the three months ended March 31, 2026 and 2025, 88 % and 83 %, respectively, of the Company’s total sales were made through distribution arrangements.

These distribution arrangements contain enforceable rights and obligations specific to those distributors and not the end customers.

Purchase orders, which are generally governed by sales agreements or the Company’s standard terms of sale, set the final terms for unit price, quantity, shipping and payment agreed between the Company and the customer.

The Company considers purchase orders to be the contracts with customers.

The unit price stated on purchase orders is considered to be the observable, stand-alone selling price for customer sales arrangements.

The following table summarizes those customers with sales equal to 10% or more of the Company’s total revenue for the periods presented:

Three Months Ended March 31,

Distributor A

Distributor B

Distributor C

*Represents less than 10%.

The Company’s agreements with these third-party distributors were made in the ordinary course of business and may be terminated with or without cause by these distributors with advance notice.

Although the Company may experience a short-term disruption in the distribution of its products and a short-term decline in revenue if its agreement with any of the distributors were terminated, the Company believes that such termination would not have a material adverse effect on its financial statements because it would be able to engage alternative distributors, resellers and other distribution channels to deliver its products to end customers within a relatively short period following any termination of the agreement with a distributor.

The Company considers purchase orders to be contracts with the customers.

The unit price as stated on the purchase orders is considered the observable, stand-alone selling price for the contracts.

The Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised goods or services to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

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The Company accounts for price adjustments and stock rotation rights as variable consideration that reduces the transaction price and recognizes that reduction in the same period the associated revenue is recognized.

Certain U.S.-based distributors have price adjustment rights when they sell the Company’s products to their customers at a price that is lower than the distribution price invoiced by the Company.

When the Company receives claims from the distributors that products have been sold to the end customers at the lower prices, the Company issues the distributors credit memos for the price adjustments.

The Company estimates the price adjustments using the expected value method based on an analysis of historical claims, at both the distributor and product level, as well as an assessment of any known trends of product sales mix.

distributors and non-U.S.

distributors do not have price adjustment rights.

The Company records a credit against accounts receivable for the estimated price adjustments with a corresponding reduction to revenue.

Certain distributors have limited stock rotation rights that permit the return of a small percentage of the previous six months’ purchases in accordance with the contract terms.

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The Company did not recognize any write-offs of accounts receivable or record any allowance for credit losses for the periods presented.

Contract Liabilities:

For customers without credit terms, the Company requires cash payments two weeks before the products are scheduled to be shipped to the customers.

The Company records these payments received in advance of performance as customer prepayments within other accrued liabilities.

As of September 30, 2025 and December 31, 2024, customer prepayments totaled $ 9.4 million and $ 6.9 million, respectively.

All of the customer prepayment balance as of December 31, 2024 has been fulfilled by the Company during the nine months ended September 30, 2025.

The following table summarizes those customers with accounts receivable equal to 10% or more of the Company’s total accounts receivable:

Distributor A

Value-added reseller A

Distributor B

*Represents less than 10%.

Practical Expedients

12 unchanged sentences

The Amended and Restated 2014 Plan will cease being available for new awards on June 11, 2030.

As of September 30, 2025, 3.6 million shares remained available for future issuance under the Amended and Restated 2014 Plan.

As of March 31, 2026, 3.4 million shares remained available for future issuance under the Amended and Restated 2014 Plan.

Stock-Based Compensation Expense

The Company recognized stock-based compensation expense as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

The Company recognized stock-based compensation expense as follows for the periods presented (in thousands):

Three Months Ended March 31,

Cost of revenue

6 unchanged sentences

Restricted Stock Units ( “ RSUs ” )

The Company’s RSUs include time-based RSUs, RSUs with performance conditions (“PSUs”), RSUs with market conditions (“MSUs”), and RSUs with both market and performance conditions (“MPSUs”).

The Company’s RSUs include time-based RSUs, RSUs with performance conditions (“PSUs”) and RSUs with market conditions (“MSUs”).

Vesting of awards with performance conditions or market conditions is subject to the achievement of pre-determined performance or market goals and the approval of such achievement by the Compensation Committee of the Board of Directors (the “Compensation Committee”).

1 unchanged sentence

A summary of RSU activity is presented in the table below (in thousands, except per-share amounts):

Time-Based RSUs

PSUs and MPSUs

Total Time-based RSUs, PSUs and MSUs

Number of Shares

Weighted-Average Grant Date Fair Value Per Share

Outstanding at January 1, 2026

Outstanding at September 30, 2025

( 64 ) $ 398.06

( 14 ) $ 543.83

Outstanding at March 31, 2026

Amount reflects the number of awards that may ultimately be earned based on management’s probability assessment of the achievement of performance conditions at each reporting period.

The intrinsic value related to vested RSUs was $ 49.6 million and $ 494.4 million for the nine months ended September 30, 2025 and 2024, respectively.

The decrease in the intrinsic value was primarily due to the timing of vested RSUs.

As of September 30, 2025, the total intrinsic value of all outstanding RSUs was $ 1.7 billion, based on the closing stock price of $ 920.64 .

As of September 30, 2025, unamortized compensation expense related to all outstanding RSUs was $ 260.7 million with a weighted-average remaining recognition period of approximately two years.

Time-Based RSUs:

For the nine months ended September 30, 2025, the Compensation Committee granted 38,000 RSUs with service conditions to non-executive employees and non-employee directors.

The RSUs generally vest over four years for employees and one year for directors, subject to continued service with the Company.

In February 2025, the Compensation Committee granted 50,000 PSUs to the executive officers, which represent the target number of shares that can be earned based on the degree of achievement of two sets of independent performance goals (“2025 Executive PSUs”).

The fair value related to vested RSUs, as of their respective vesting dates, was $ 75.2 million and $ 31.0 million for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, unamortized compensation expense related to all outstanding RSUs was $ 390.2 million with a weighted-average remaining recognition period of approximately two years.

RSUs generally vest over four years for non-executive employees, three years for executives, and one year for directors, all subject to continued service with the Company.

2026 Executive PSUs:

In February 2026, the Compensation Committee granted 42,000 PSUs to the executive officers, which represent the target number of shares that can be earned based on the degree of achievement of two sets of independent performance goals (the “2026 Executive PSUs”).

For the first goal, the executive officers can earn up to 300 % of the target number of the 2026 Executive PSUs based on the achievement of the Company’s three-year (2026 through 2028) average revenue growth rate in excess of the analog industry’s three-year average revenue growth rate as published by the Semiconductor Industry Association (the “SIA”).

For the second goal, the executive officers can earn up to 200 % of the target number of the 2025 Executive PSUs based on the achievement of the Company’s three-year (2025 through 2027) total stockholder return percentile ranking relative to the constituent entities in the Philadelphia Semiconductor Sector Index (the “PHLX Index”).

For the second goal, the executive officers can earn up to 200 % of the target number of the 2026 Executive PSUs if the Company secures manufacturing capacity that can support a specified level of annual revenue at the end of the three-year performance period.

For both goals, a percentage of the 2026 Executive PSUs will fully vest on December 31, 2028, depending on the degree to which the pre-determined goals are met during the performance period.

Assuming the achievement of the highest level of the performance goals, the total stock-based compensation cost for the 2026 Executive PSUs will be $ 208.2 million.

In February 2025, the Compensation Committee granted 11,000 PSUs to certain non-executive employees, which represent the target number of shares that can be earned based on the degree of achievement of the Company’s 2026 revenue goals for certain regions or product line divisions, or based on the degree of achievement of the Company’s two-year (2025 and 2026) average revenue growth rate compared against the analog industry’s two-year average revenue growth rate as published by the SIA (“2025 Non-Executive PSUs”).

The maximum number of shares that an employee can earn is either 200 % or 300 % of the target number of the 2025 Non-Executive PSUs, depending on the job classification of the employee.

50 % of the 2025 Non-Executive PSUs will vest in the first quarter of 2027 depending on the degree to which the pre-determined goals are met during the performance period.

The remaining 2025 Non-Executive PSUs will vest over the following two years on a quarterly or annual basis.

Assuming the achievement of the highest level of performance goals, the total stock-based compensation cost for the 2025 Non-Executive PSUs will be $ 16.5 million.

The 2025 Executive PSUs and the 2025 Non-Executive PSUs contain a purchase price feature, which requires the employees to pay the Company $ 30 per share upon vesting of the shares.

The $ 30 purchase price requirement is deemed satisfied and waived if the Company’s stock price on the last trading day of the performance period is $30 higher than the grant date stock price of $ 656.29 .

The Company determined the grant date fair value of the 2025 Executive PSUs and the 2025 Non-Executive PSUs using a Monte Carlo simulation model with the following assumptions:

The 2026 Executive PSUs contain a purchase price feature, which requires the executives to pay the Company up to $ 300 per share upon vesting of the shares.

The $ 300 purchase price requirement for executives is deemed satisfied and fully waived if the Company’s stock price on the last trading day of the applicable performance period is $ 300 higher than the grant date stock price of $ 1,164.83 .

The Company determined the grant date fair value of the 2026 Executive PSUs using a Monte Carlo simulation model with the following assumptions:

stock price of $ 1,164.83 , simulation term of three years, expected volatility of 53.39 %, risk-free interest rate of 3.60 %, and expected dividend yield of 0.69 %.

The Monte Carlo simulation model for the 2025 Executive PSUs further utilized correlation coefficients of peer companies of 0.46 to 0.76 .

The correlation coefficients were based on peer companies in the PHLX Index as an aggregate benchmark for determining the market-based total stockholder return component.

There is no illiquidity discount because the awards do not contain any post-vesting sales restrictions.

1 unchanged sentence

Inventories consist of the following (in thousands):

September 30,

Raw materials

7 unchanged sentences

Other current assets consist of the following (in thousands):

September 30,

Prepaid wafer expenses (1)

Other receivables (1)

Prepaids and other

$ 42,689 $ 46,982

Other receivables (1)

$ 42,689 $ 106,982

Prepaid wafer expenses and other receivables relate to a deposit made to a supplier under a long-term wafer supply agreement.

See Note 8 to our unaudited condensed consolidated financial statements for details about the supply agreement.

Other receivables relate to an annually refundable deposit made to a supplier under a long-term wafer supply agreement.

The deposit was received in the quarter ended March 31, 2026.

Other Long-Term Assets

Other long-term assets consist of the following (in thousands):

September 30,

Deferred compensation plan assets

$ 106,031 $ 107,096

Prepaid wafer purchases (1)

Refundable deposit (1)

60,584 57,995

$ 206,615 $ 165,091

Prepaid wafer purchases relate to a deposit made to a supplier under a long-term wafer supply agreement.

See Note 8 to our unaudited condensed consolidated financial statements for details about the supply agreement.

The refundable deposit as of March 31, 2026 is for a long-term assembly service agreement.

Other Accrued Liabilities

Other accrued liabilities consist of the following (in thousands):

September 30,

Dividends and dividend equivalents

$ 103,485 $ 81,510

Income tax payable (1)

51,350 10,534

Stock rotation and sales returns

21,635 17,150

Income tax payable

59,659 43,550

$ 213,691 $ 145,130

The increase in income tax payable during the nine months ended September 30, 2025 was a result of the timing of payments of estimated taxes both domestically and internationally.

Other Long-Term Liabilities

Other long-term liabilities consist of the following (in thousands):

September 30,

Deferred compensation plan liabilities

4 unchanged sentences

$ 119,160 $ 127,835

The Company has operating leases primarily for administrative, sales and marketing offices, manufacturing operations and R&D facilities, and employee housing units.

These leases have remaining lease terms from less than one year to 19 years.

Some of these leases include options to renew the lease term for up to five years or on a month-to-month basis.

The Company does not have finance lease arrangements.

The following table summarizes the balances of operating lease right-of-use (“ROU”) assets and liabilities (in thousands):

September 30,

Financial Statement Line Item

Operating lease ROU assets

Other long- term assets

$ 19,737 $ 16,915

Operating lease liabilities

Other accrued liabilities

$ 3,778 $ 2,819

Other long- term liabilities

$ 15,076 $ 12,974

The following tables summarize certain information related to the leases (in thousands, except percentages and years):

Three Months Ended September 30,

Nine Months Ended September 30,

Operating lease costs

Total lease costs

Three Months Ended September 30,

Nine Months Ended September 30,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows for operating leases

ROU assets obtained in exchange for new operating lease liabilities

September 30,

Weighted-average remaining lease term (in years)

Weighted-average discount rate

As of September 30, 2025, the maturities of the lease liabilities were as follows (in thousands):

2025 (remaining three months)

Total remaining lease payments

imputed interest

Total lease liabilities

As of September 30, 2025 , the Company’s operating leases that had not yet commenced were not material.

NET INCOME PER SHARE

Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding for the period.

Diluted net income per share reflects the potential dilution from contingently issuable shares and calculated using the treasury stock method.

Diluted net income per share reflects the potential dilution from contingently issuable shares and is calculated using the treasury stock method.

Contingently issuable shares, including all types of equity awards, are considered outstanding shares of common stock and included in basic net income per share as of the date that all necessary conditions to earn the awards have been satisfied.

Prior to the end of the contingency period, the number of contingently issuable shares included in diluted net income per share is based on the number of shares, if any, that would be issuable under the terms of the arrangement at the end of the reporting period.

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per-share amounts):

Three Months Ended September 30,

Nine Months Ended September 30,

The following table sets forth the computation of basic and diluted net income per share for the periods presented (in thousands, except per-share amounts):

Three Months Ended March 31,

Weighted-average outstanding shares—basic

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Anti-dilutive common stock equivalents were not material for the periods presented.

SEGMENT, SIGNIFICANT CUSTOMERS AND GEOGRAPHIC INFORMATION

The Company operates in one reportable segment that includes the design, development, marketing and sale of high-performance, semiconductor-based power electronics solutions for the storage and computing, automotive, enterprise data, communications, consumer, and industrial end markets.

SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates in one reportable segment that includes the design, development, marketing and sale of high-performance, semiconductor-based power electronics solutions for the storage and computing, enterprise data, automotive, industrial, communications, and consumer end markets.

The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for the purposes of allocating resources and evaluating financial performance.

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All significant segment expenses have been captured on the face of the Condensed Consolidated Statements of Operations.

The Company sells its products to end customers primarily through third-party distributors and value-added resellers.

The following table summarizes those customers with sales equal to 10% or more of the Company’s total revenue for the periods presented:

Three Months Ended September 30,

Nine Months Ended September 30,

Distributor A

Distributor B

Distributor C

*Represents less than 10%.

The Company’s agreements with these third-party distributors were made in the ordinary course of business and may be terminated with or without cause by either party with advance notice.

Although the Company may experience a short-term disruption in the distribution of its products and a short-term decline in revenue if its agreement with any of the distributors were terminated, the Company believes that such termination would not have a material adverse effect on its financial statements because it would be able to engage alternative distributors, resellers and other distribution channels to deliver its products to end customers within a short period following any termination of the agreement with a distributor.

The following table summarizes those customers with accounts receivable equal to 10% or more of the Company’s total net accounts receivable:

September 30,

Distributor A

Distributor B

The Company derives a majority of its revenue from sales to customers located outside North America, with geographic revenue based on the customers’ ship-to locations.

The following is a summary of revenue by geographic region (in thousands) for the periods presented:

Three Months Ended September 30,

Nine Months Ended September 30,

Country or Region

Southeast Asia

The following is a summary of long-lived assets by geographic region (in thousands):

September 30,

$ 356,585 $ 332,506

205,534 165,107

64,981 65,081

66,764 64,995

$ 693,864 $ 627,689

COMMITMENTS AND CONTINGENCIES

Product Warranties and Rework

The Company generally provides either a one - or two -year warranty against defects in materials and workmanship and will repair products, provide replacements at no charge to customers or issue a refund.

The Company generally provides either a one - or two -year warranty against defects in materials and workmanship and will repair the products, provide replacements at no charge to customers or issue a refund.

As they are considered assurance-type warranties, the Company does not account for them as separate performance obligations.

Historically, the Company’s warranty obligations have not been material.

The Company may also incur rework costs associated with product-related claims.

The Company accrues for warranty and rework costs upon evaluation of customer specific claims.

The changes in warranty reserves were as follows (in thousands) for the periods presented:

Three Months Ended September 30,

Nine Months Ended September 30,

Balance at beginning of period

Warranties issued

Repairs, replacement and refund

Changes in liability for pre-existing warranties

Balance at end of period

Historically, the Company’s warranty obligations and rework costs associated with product-related claims have not been material.

The estimated amount of product warranty and rework liabilities was $ 12.2 million and $ 10.1 million for the periods ended March 31, 2026 and December 31, 2025.

Purchase Commitments

The Company has outstanding purchase obligations with its suppliers and other parties for purchases of goods or services.

The Company has outstanding purchase obligations with its suppliers and other parties that require the purchases of goods or services.

The purchase obligations primarily consist of wafer and other inventory purchases, assembly and other manufacturing services, construction of manufacturing and R&D facilities, purchases of production and other equipment, and license arrangements.

In May 2022, the Company entered into a long-term supply agreement in order to secure manufacturing production capacity for silicon wafers over a four-year period.

As of September 30, 2025, the Company had remaining prepayments under this agreement of $ 60.0 million reported in other current assets on the Condensed Consolidated Balance Sheets.

Total estimated future unconditional purchase commitments to all suppliers and other parties, net of the $ 60.0 million prepayment, as of September 30, 2025 were as follows (in thousands):

2025 (remaining three months)

Total estimated future unconditional purchase commitments to all suppliers and other parties as of March 31, 2026 were as follows (in thousands):

2026 (remaining nine months)

The Company is a party to actions and proceedings in the ordinary course of business, including challenges to the enforceability or validity of its intellectual property, claims that the Company’s products infringe on the intellectual property rights of others, and employment matters.

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The Company defends itself vigorously against any such claims.

Based on current information, the Company does not believe that a material loss from known matters is probable as of September 30, 2025.

CASH, CASH EQUIVALENTS, INVESTMENTS AND RESTRICTED CASH

Based on current information, the Company does not believe that a material loss from known matters is probable as of March 31, 2026.

CASH, CASH EQUIVALENTS AND INVESTMENTS

The following is a summary of the Company’s cash, cash equivalents and debt investments (in thousands):

September 30,

$ 932,144 $ 969,628

Money market funds

130,786 129,674

Certificates of deposit

treasuries and government agency bonds

304,179 157,243

Auction-rate securities backed by student-loan notes

Corporate debt securities

September 30,

$ 1,367,158 $ 1,256,594

Cash and cash equivalents

Investment within short-term investments

$ 1,062,930 $ 1,099,302

Short-term investments

304,179 157,243

Investment within other long-term assets

The following table summarizes the contractual maturities of the short-term and long-term available-for-sale investments as of September 30, 2025 (in thousands):

$ 1,367,158 $ 1,256,594

The following table summarizes the contractual maturities of the short-term and long-term available-for-sale investments as of March 31, 2026 (in thousands):

Amortized Cost

Due in less than 1 year

$ 202,786 $ 202,786

Due in 1 - 5 years

101,393 101,393

Due in greater than 5 years

$ 304,229 $ 304,228

Gross realized gains and losses recognized on the sales of available-for-sale investments were not material for the periods presented.

The following tables summarize the unrealized gain and loss positions related to the available-for-sale investments (in thousands):

September 30, 2025

Amortized Cost

Unrealized Gains

Unrealized Losses

Money market funds

Certificates of deposit

treasuries and government agency bonds

Auction-rate securities backed by student-loan notes

December 31, 2024

Amortized Cost

Unrealized Losses

Money market funds

Certificates of deposit

Corporate debt securities

Auction-rate securities backed by student-loan notes

The following tables present information about the available-for-sale investments that had been in a continuous unrealized loss position for greater than 12 months (in thousands):

September 30, 2025

Greater than 12 Months

Unrealized Losses

Auction-rate securities backed by student-loan notes

December 31, 2024

Greater than 12 Months

Unrealized Losses

Corporate debt securities

Auction-rate securities backed by student-loan notes

An impairment exists when the fair value of an investment is less than its amortized cost basis.

As of September 30, 2025 and December 31, 2024, the Company did not consider the impairment of its investments to be a result of credit losses.

The Company typically invests in highly rated securities, with the primary objective of minimizing the potential risk of principal loss.

The Company’s investment policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer.

When evaluating a debt security for impairment, management reviews factors such as the Company’s intent to sell, or whether it will more likely than not be required to sell, the security before recovery of its amortized cost basis, the extent to which the fair value of the security is less than its cost, the financial condition of the issuer and the credit quality of the investment.

Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the Condensed Consolidated Balance Sheets to the amounts reported on the Condensed Consolidated Statements of Cash Flows (in thousands):

September 30,

Cash and cash equivalents

Restricted cash included in other long-term assets

Total cash, cash equivalents and restricted cash reported on the Condensed Consolidated Statements of Cash Flows

FAIR VALUE MEASUREMENTS

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The following tables detail the fair value of the Company’s financial assets measured on a recurring basis (in thousands):

September 30, 2025

March 31, 2026

Money market funds

$ 130,786 $ 130,786 $ - $ -

Certificates of deposit

treasuries and government agency bonds

304,179 - 304,179 -

Auction-rate securities backed by student-loan notes

Mutual funds and money market funds under deferred compensation plan

75,231 75,231 - -

$ 510,245 $ 206,017 $ 304,179 $ 49

December 31, 2025

Money market funds

$ 129,674 $ 129,674 $ - $ -

Certificates of deposit

Corporate debt securities

157,243 - 157,243 -

Auction-rate securities backed by student-loan notes

Mutual funds and money market funds under deferred compensation plan

Redemptions and changes in the fair value of the auction-rate securities classified as Level 3 assets were not material for the periods presented.

75,484 75,484 - -

$ 362,450 $ 205,158 $ 157,243 $ 49

DEFERRED COMPENSATION PLAN

The following table summarizes the deferred compensation plan balances on the Condensed Consolidated Balance Sheets (in thousands):

September 30,

Deferred compensation plan asset components:

Cash surrender value of corporate-owned life insurance policies

$ 30,800 $ 31,612

Fair value of mutual funds and money market funds

75,231 75,484

$ 106,031 $ 107,096

Deferred compensation plan assets reported in:

Other long-term assets

$ 106,031 $ 107,096

Deferred compensation plan liabilities reported in:

Accrued compensation and related benefits

$ 6,136 $ 3,707

Other long-term liabilities

96,374 103,954

$ 102,510 $ 107,661

OTHER INCOME, NET

The components of other income, net, were as follows (in thousands) for the periods presented:

Three Months Ended September 30,

Nine Months Ended September 30,

The components of other income, net, were as follows for the periods presented (in thousands):

Three Months Ended March 31,

Interest income

Amortization of discount on available-for-sale securities

Gain on deferred compensation plan investments

Charitable commitments

The income tax provision or benefit for interim periods is generally determined using an estimate of the Company’s annual effective tax rate and adjusted for discrete items, if any, in the relevant period.

Each quarter the estimate of the annual effective tax rate is updated, and if the Company’s estimated tax rate changes, a cumulative adjustment is made.

The budget reconciliation bill H.R.1 (“H.R.1 Act”) signed into law on July 4, 2025 makes permanent certain expiring provisions of the 2017 Tax Cuts and Jobs Act and makes modifications to the existing tax framework.

The modifications that primarily impact the Company for the current year are the immediate expensing of domestic R&D and 100% bonus depreciation.

The Company’s tax provision for the three and nine months ended September 30, 2025 includes the estimated impact of the H.R.1 Act.

The income tax expense for the three months ended September 30, 2025 was $ 27.3 million, or 13.3 % of pre-tax income.

The income tax expense for the nine months ended September 30, 2025 was $ 110.7 million, or 19.9 % of pre-tax income.

The effective tax rates were lower than the federal statutory rate of 21 % primarily due to the effect of U.S.

federal tax law changes enacted during the quarter, income generated by the Company’s subsidiaries in lower tax jurisdictions, foreign tax credits, and U.S.

The lower effective tax rates relative to the federal statutory rate were partially offset by the U.S.

impact of foreign earnings and non-deductible stock-based compensation.

The income tax expense for the three months ended September 30, 2024 was $ 29.9 million, or 17.1 % of pre-tax income.

The income tax expense for the nine months ended September 30, 2024 was $ 66.0 million, or 16.4 % of pre-tax income.

The effective tax rates were lower than the federal statutory rate of 21 % primarily due to lower statutory tax rates at certain foreign subsidiaries of the Company, and excess tax benefits from stock-based compensation.

The lower effective tax rates relative to the federal statutory rate were partially offset by the U.S.

impact of foreign earnings.

In January 2025, the Organization for Economic Co-operation and Development (“OECD”) released new Administrative Guidance on the application of the Global Anti-Base Erosion (“GLoBE”) Model Rules.

The Company will continue to evaluate the impact of this release and of other future guidance on the Company’s future global tax provision.

In December 2023, the Bermuda Corporate Income Tax Act of 2023 (the “Bermuda CIT Act”) was enacted and signed into law.

The Bermuda CIT Act includes a 15% corporate income tax applicable to Bermuda businesses that are multinational enterprises with annual revenue of €750M or more beginning in 2025.

As the Company did not realize material taxable income in Bermuda in the three and nine months ended September 30, 2025, no material changes to income tax expense related to the Bermuda CIT Act have been recorded as of September 30, 2025.

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table summarizes the changes in accumulated other comprehensive loss (in thousands):

Foreign Currency

Available-for-Sale

Balance as of January 1, 2025

Other comprehensive income before reclassifications

Amounts reclassified from accumulated other comprehensive income

Net current period other comprehensive income

Balance as of March 31, 2025

Other comprehensive income (loss) before reclassifications

Net current period other comprehensive income (loss)

Balance as of June 30, 2025

Other comprehensive income before reclassifications

Net current period other comprehensive income

Balance as of September 30, 2025

The amount reclassified from accumulated other comprehensive income for the period presented was recorded in other income, net, on the Condensed Consolidated Statements of Operations.

Loss on deferred compensation plan investments

The income tax expense for the three months ended March 31, 2026 and 2025, was $ 54.0 million and $ 38.8 million respectively, or an effective tax rate of 21.8 % and 22.3 % respectively.

The reduction in rate was primarily due to a reduction in non-deductible stock-based compensation.

STOCKHOLDERS’ EQUITY

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The Company has a dividend program approved by its Board of Directors, pursuant to which the Company intends to pay quarterly cash dividends on its common stock.

The Board of Directors declared the following cash dividends (in thousands, except per-share amounts) for the periods presented:

Three Months Ended September 30,

Nine Months Ended September 30,

The Board of Directors declared the following cash dividends for the periods presented (in thousands, except per-share amounts):

Three Months Ended March 31,

Dividend declared per share

As of September 30, 2025 and December 31, 2024, accrued cash dividends totaled $ 74.7 million and $ 59.8 million, respectively.

$ 2.00 $ 1.56

$ 98,258 $ 74,688

As of March 31, 2026 and December 31, 2025, accrued dividends totaled $ 98.3 million and $ 76.0 million, respectively.

The declaration of any future cash dividends is at the discretion of the Board of Directors and will depend on, among other things, the Company’s financial condition, results of operations, capital requirements, business conditions, and other factors that the Board of Directors may deem relevant, as well as a determination that cash dividends are in the best interests of the Company’s stockholders.

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Dividend equivalents accumulated on the underlying RSUs are forfeited if the underlying RSUs do not vest.

As of September 30, 2025 and December 31, 2024 , accrued dividend equivalents totaled $ 8.6 million and $ 5.8 million, respectively.

Stock Repurchase Programs

In October 2023, the Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $ 640.0 million of its common stock, which was fully utilized as of December 31, 2024.

In February 2025, the Board of Directors approved another stock repurchase program authorizing the Company to repurchase up to $ 500.0 million of its common stock through February 2028.

As of March 31, 2026 and December 31, 2025 , accrued dividend equivalents totaled $ 8.0 million and $ 9.4 million, respectively.

Stock Repurchase Program

In February 2025, the Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $ 500.0 million of its common stock through February 2028.

Shares are retired upon repurchase.

The Company repurchased 2,000 and 6,000 shares of its common stock for an aggregate purchase price of $ 2.1 million and $ 5.5 million during the three months ended September 30, 2025 and 2024, respectively.

The Company repurchased 6,000 and 19,000 shares of its common stock for an aggregate purchase price of $ 4.7 million and $ 14.2 million during the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, $ 495.3 million remained available for future repurchases under the program.

The Company did not make any repurchases under this program during the three months ended March 31, 2026 and 2025, respectively.

Stock repurchased under the program may be made through open market repurchases, privately negotiated transactions, or other structures, in accordance with applicable state and federal securities laws, at times and in amounts as management deems appropriate.

The timing and the number of any repurchased common stock will be determined by the Company’s management based on its evaluation of market conditions, legal requirements, share price, and other factors.

The timing and the number of shares of any repurchased common stock will be determined by the Company’s management based on its evaluation of market conditions, legal requirements, share price, and other factors.

The repurchase program does not obligate the Company to purchase any particular number of shares, and may be suspended, modified, or discontinued at any time without prior notice.

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the above-average industry growth of product and market areas that we have targeted;

our plans to grow revenue in a diversified way across regions and increase revenue through the introduction of new products within our existing product families as well as in new product categories and families;

our plans to increase revenue in a diversified way across regions and through the introduction of new products within our existing product families as well as in new product categories and families;

our mission statement to reduce energy and material consumption to improve all aspects of quality of life and create a sustainable future;

the effects of macroeconomic factors, global economic uncertainties, geopolitical tensions and global tariffs, export controls and retaliatory measures on the semiconductor industry and our business;

the effects of macroeconomic factors, global economic uncertainties, current and potential global conflicts and global tariffs, export controls and retaliatory measures on the semiconductor industry and our business;

the effect of changes in laws or economic policies in China or the U.S.;

the effect that liquidity of our investments has on our capital resources;

the continuing application of our products in the storage and computing, automotive, enterprise data, communications, consumer, and industrial end markets;

the continuing application of our products in the storage and computing, enterprise data, automotive, industrial, communications and consumer end markets;

estimates of our future liquidity requirements and the sufficiency of our cash, cash equivalents and short-term investments to operate our business;

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expectations regarding protection of our proprietary technology;

the business outlook for the remainder of 2025 and beyond;

our business outlook for the remainder of 2026 and beyond;

the factors that we believe will impact our business, operations and financial condition, as well as our ability to achieve revenue growth;

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the expected impact of various U.S.

and international tax laws and regulations, including the H.R.1 Act signed into law on July 4, 2025, on our income tax provision, financial position and cash flows;

and international tax laws and regulations on our income tax provision, financial position and cash flows;

our plan to repatriate cash from our foreign subsidiaries;

our ability to fulfill our customers’ evolving needs, enter new market segments and obtain design wins;

our ability to forecast demand accurately and align inventory levels accordingly;

our ability to develop and leverage process technologies as key strategic components of our future growth;

our expectation to capitalize on the length of product life cycles to reduce manufacturing intensity and related emissions;

our ability to recruit and retain application and design engineering personnel;

our expectation to continue devoting significant resources to research and development including related increased expenses;

our ability to engage additional supply chain partners to support future growth and to leverage a diversified and resilient supply chain to reduce exposure to trade- and tariff-related risks;

our intention and ability to execute our stock repurchase program and pay cash dividends and dividend equivalents;

the factors that differentiate us from our competitors;

our ability to timely and adequately remediate our material weakness.

These forward-looking statements generally are identified by the words “would,” “could,” “may,” “should,” “predict,” “potential,” “targets,” “continue,” “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “estimate,” “project,” “forecast,” “will,” and similar expressions.

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Readers should carefully review future reports and documents that we file from time to time with the SEC, such as our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K.

Unless stated otherwise or the context otherwise requires, references to “we,” “our,” and “us” mean Monolithic Power Systems, Inc.

Unless stated otherwise or the context otherwise requires, references to the terms “Monolithic Power Systems,” “MPS,” “Registrant,” the “Company,” “we,” “our,” and “us” as used herein are references to Monolithic Power Systems, Inc.

and its consolidated subsidiaries.

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deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging.

These combined advantages are designed to enable us to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders.

These combined advantages enable us to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders.

We operate in the cyclical semiconductor industry.

We are subject to industry downturns, but we have targeted product and market areas that we believe allow us to operate at above average industry performance levels over the long term.

We work with third parties to manufacture and assemble our ICs.

We work with third parties to manufacture, assemble and test our ICs.

This has enabled us to limit our capital expenditures and fixed costs, while focusing our engineering and design resources on our core strengths.

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We derive most of our revenue from sales through distribution arrangements and direct sales to customers in Asia, where our products are incorporated into end-user products.

Our revenue from sales to customers in Asia was 91% and 94% of our total revenue for the three months ended September 30, 2025 and 2024, respectively, and 93% of our total revenue for each of the nine months ended September 30, 2025 and 2024.

Our revenue from sales to customers in Asia was 92% and 94% of our total revenue for the three months ended March 31, 2026 and 2025, respectively.

We believe our ability to achieve revenue growth will depend, in part, on our ability to develop new products, enter new markets, gain market share, manage litigation risk, diversify our customer base and continue to secure manufacturing capacity.

Macroeconomic Conditions and Regulations

The semiconductor industry is impacted by various macroeconomic challenges including fluctuations in consumer spending, fluctuations in demand for semiconductors, rising inflation, global tariffs and retaliatory measures and announcements regarding same, increased interest rates, and fluctuations in currency rates.

We remain cautious in light of continued challenging macroeconomic conditions and will continue to monitor the potential impact on our operations.

The semiconductor industry is impacted by various macroeconomic challenges including fluctuations in consumer spending, fluctuations in demand for semiconductors, rising inflation, global tariffs and retaliatory measures and announcements regarding the same, increased interest rates, and fluctuations in currency rates.

We remain cautious in light of continued challenging global macroeconomic conditions and will continue to monitor the potential impact on our operations.

The extent and duration of the direct and indirect impact of macroeconomic events on our business, results of operations and overall financial position remain uncertain and depend on future developments.

We closely monitor changes to export control laws, tariffs, trade regulations and other trade requirements.

To date, no restrictions or requirements have had a material impact on our revenue and operations.

For the three months ended March 31, 2026 and through the date we filed this Quarterly Report on Form 10-Q, no restrictions or requirements have had a material impact on our revenue and operations.

We believe that our diverse, agile and resilient supply chain is structured in a way to minimize the impact of tariffs;

however, such restrictions or requirements can be enacted quickly and unexpectedly and could impact our business in the future.

To the extent tariffs, trade regulations or retaliatory measures or announcements regarding same that affect us are implemented, we will seek to take mitigating actions in the near- and medium-term, as necessary, and are committed to complying with all applicable trade laws, regulations and other requirements.

To the extent tariffs, trade regulations or retaliatory measures or announcements regarding the same that affect us are implemented, we will seek to take mitigating actions in the near- and medium-term, as necessary, but there can be no assurance we will be successful.

We are committed to complying with all applicable trade laws, regulations and other requirements.

Critical Accounting Estimates

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GAAP, we are required to make estimates, assumptions and judgments that affect the amounts reported in our financial statements and the accompanying disclosures.

Estimates and judgments used in the preparation of our financial statements are, by their nature, uncertain and unpredictable, and depend upon, among other things, many factors outside of our control, including demand for our products, economic conditions and other current and future events, such as macroeconomic factors, global economic uncertainties, geopolitical tensions and global tariffs, export controls and retaliatory measures and announcements regarding same.

These factors include demand for our products, economic conditions and other current and future events, such as macroeconomic factors, global economic uncertainties, current and potential global conflicts and global tariffs, export controls and retaliatory measures and announcements regarding the same.

Actual results could differ from these estimates and assumptions, and any such differences may be material to our condensed consolidated financial statements.

There have been no material changes during the nine months ended September 30, 2025 to our critical accounting estimates from the information provided in the “Critical Accounting Estimates” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no material changes during the three months ended March 31, 2026 to our critical accounting estimates from the information provided in the “Critical Accounting Estimates” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Results of Operations

The table below sets forth the data on the Condensed Consolidated Statements of Operations as a percentage of revenue:

Three Months Ended September 30,

Nine Months Ended September 30,

The table below sets forth the data on the Condensed Consolidated Statements of Operations as a percentage of revenue for the periods presented:

Three Months Ended March 31,

(In thousands, except percentages)

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Income tax expense

The following table summarizes our revenue by end market:

Three Months Ended September 30,

Nine Months Ended September 30,

The following table summarizes our revenue by end market for the periods presented:

Three Months Ended March 31,

(In thousands, except percentages)

Storage and Computing

Enterprise Data

Storage and Computing

Communications

Revenue for the three months ended September 30, 2025 was $737.2 million, an increase of $117.1 million, or 18.9%, from $620.1 million for the three months ended September 30, 2024.

The increase in revenue was primarily due to higher shipment volume.

For the three months ended September 30, 2025, revenue from the storage and computing market increased $42.6 million, or 29.6%, from the same period in 2024.

This increase was primarily due to higher sales of power solutions for storage applications.

Revenue from the enterprise data market increased $7.0 million, or 3.8%, from the same period in 2024.

Revenue from the automotive market increased $40.2 million, or 36.1%, from the same period in 2024.

This increase was primarily due to higher sales of applications supporting advanced driver assistance systems, infotainment, and motion control.

Revenue from the communications market increased $8.0 million, or 11.1%, from the same period in 2024.

Revenue from the consumer market increased $8.0 million, or 12.4%, from the same period in 2024.

Revenue from the industrial market increased $11.3 million, or 25.6%, from the same period in 2024.

Revenue for the nine months ended September 30, 2025 was $2,039.3 million, an increase of $453.9 million, or 28.6%, from $1,585.4 million for the nine months ended September 30, 2024.

The increase in revenue was primarily due to higher shipment volume.

For the nine months ended September 30, 2025, revenue from the storage and computing market increased $205.3 million, or 56.2%, from the same period in 2024.

This increase was primarily due to higher sales of power solutions for storage applications, notebooks and graphics cards.

Revenue from the automotive market increased $155.9 million, or 54.6%, from the same period in 2024.

This increase was primarily due to higher sales of applications supporting advanced driver assistance systems and infotainment.

Revenue from the enterprise data market decreased $53.0 million, or 10.2%, from the same period in 2024.

Revenue from the communications market increased $63.2 million, or 39.0%, from the same period in 2024.

This increase was primarily driven by higher sales of power solutions for optical modules and routers.

Revenue from the consumer market increased $44.3 million, or 30.6%, from the same period in 2024.

This increase was primarily driven by higher sales of products for home appliances and gaming solutions.

Revenue from the industrial market increased $38.1 million, or 35.7%, from the same period in 2024.

Revenue for the three months ended March 31, 2026 was $804.2 million, an increase of $166.6 million, or 26.1%, from $637.6 million for the three months ended March 31, 2025.

The increase in revenue was primarily due to higher shipment volume and higher average selling prices resulting primarily from product mix.

By end market, first quarter 2026 revenue for enterprise data increased $129.9 million, or 97.7%, from the same period in 2025.

This increase was primarily due to higher sales of power solutions for artificial intelligence (“AI”) and server applications.

Revenue from the storage and computing market of $174.4 million decreased $14.1 million, or 7.5%, from the same period in 2025 primarily due to decreased sales of power solutions for notebooks and graphics cards, partially offset by increased sales of memory and storage applications.

First quarter 2026 automotive revenue of $152.3 million increased $7.4 million, or 5.1%, from the same period in 2025.

Communications revenue of $111.5 million increased $39.8 million, or 55.5%, from the same period in 2025 due to higher sales of power solutions for optical modules and switches.

First quarter 2026 consumer revenue decreased $2.4 million, or 4.2%, from the same period in 2025.

Revenue of $48.6 million from the industrial market increased $6.0 million, or 14.2%, from the same period in 2025.

Cost of Revenue and Gross Margin

Cost of revenue primarily consists of costs incurred to manufacture, assemble and test our products, as well as warranty costs, inventory-related and other overhead costs, and stock-based compensation expense.

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands, except percentages)

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As a percentage of revenue

Cost of revenue was $330.9 million, or 44.9% of revenue, for the three months ended September 30, 2025, and $276.7 million, or 44.6% of revenue, for the three months ended September 30, 2024.

The $54.3 million increase in cost of revenue was primarily driven by higher shipment volume.

Gross margin was 55.1% for the three months ended September 30, 2025, compared with 55.4% for the three months ended September 30, 2024.

The decrease in gross margin was mainly driven by product mix.

Cost of revenue was $913.8 million, or 44.8% of revenue, for the nine months ended September 30, 2025, and $709.0 million, or 44.7% of revenue, for the nine months ended September 30, 2024.

The $204.9 million increase in cost of revenue was primarily driven by higher shipment volume.

Gross margin was 55.2% for the nine months ended September 30, 2025, compared with 55.3% for the nine months ended September 30, 2024.

The decrease in gross margin was mainly driven by product mix, partially offset by a decrease in inventory write-downs as a percentage of revenue.

Cost of revenue was $359.1 million, or 44.7% of revenue, for the three months ended March 31, 2026, and $284.3 million, or 44.6% of revenue, for the three months ended March 31, 2025.

The $74.8 million increase in cost of revenue was primarily driven by product mix and higher shipment volume.

Gross margin was 55.3% for the three months ended March 31, 2026, compared with 55.4% for the three months ended March 31, 2025.

The decrease in gross margin was mainly driven by higher warranty expenses as a percentage of revenue, partially offset by lower manufacturing overhead costs as a percentage of revenue.

Research and Development

R&D expenses primarily consist of cash compensation and benefits, stock-based compensation and deferred compensation for design and product engineers, expenses related to new product development and supplies, and facility costs.

Three Months Ended September 30,

Nine Months Ended September 30,

R&D expenses primarily consist of cash-based compensation and benefits, stock-based compensation and deferred compensation for design and product engineers, expenses related to new product development and supplies, and facilities costs.

Three Months Ended March 31,

(In thousands, except percentages)

As a percentage of revenue

R&D expenses were $98.2 million, or 13.3% of revenue, for the three months ended September 30, 2025, and $85.1 million, or 13.7% of revenue, for the three months ended September 30, 2024.

The $13.1 million increase in R&D expenses was primarily due to an $8.9 million increase in cash compensation and benefits, a $1.2 million increase in stock-based compensation and related expenses, and a $1.1 million increase in laboratory and other supplies.

R&D expenses were $286.7 million, or 14.1% of revenue, for the nine months ended September 30, 2025, and $239.0 million, or 15.1% of revenue, for the nine months ended September 30, 2024.

The $47.7 million increase in R&D expenses was primarily due to a $29.0 million increase in cash compensation and benefits, a $6.3 million increase in new product development expenses, and a $4.1 million increase in laboratory and other supplies.

R&D expenses were $100.6 million, or 12.4% of revenue, for the three months ended March 31, 2026, and $92.2 million, or 14.4% of revenue, for the three months ended March 31, 2025.

The $8.4 million increase in R&D expenses was primarily due to a $4.3 million increase in cash-based compensation and benefits, a $1.3 million increase in laboratory and other supplies, and a $1.3 million increase in facilities costs.

Selling, General and Administrative

SG&A expenses primarily include cash compensation and benefits, stock-based compensation and deferred compensation for sales, marketing and administrative personnel, travel expenses, facilities costs, third party service fees and legal expenses.

Three Months Ended September 30,

Nine Months Ended September 30,

SG&A expenses primarily include cash-based compensation and benefits, stock-based compensation and deferred compensation for sales, marketing and administrative personnel, travel expenses, facilities costs, third-party service fees and legal expenses.

Three Months Ended March 31,

(In thousands, except percentages)

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As a percentage of revenue

SG&A expenses were $112.9 million, or 15.3% of revenue, for the three months ended September 30, 2025, and $94.4 million, or 15.2% of revenue, for the three months ended September 30, 2024.

The $18.5 million increase in SG&A expenses was primarily driven by an $8.3 million increase in cash compensation and benefits, and a $7.0 million increase in stock-based compensation and related expenses.

SG&A expenses were $310.1 million, or 15.2% of revenue, for the nine months ended September 30, 2025, and $261.4 million, or 16.5% of revenue, for the nine months ended September 30, 2024.

The $48.7 million increase in SG&A expenses was primarily driven by a $24.1 million increase in cash compensation and benefits, and a $15.8 million increase in stock-based compensation and related expenses.

SG&A expenses were $103.3 million, or 12.9% of revenue, for the three months ended March 31, 2026, and $92.2 million, or 14.5% of revenue, for the three months ended March 31, 2025.

The $11.1 million increase in SG&A expenses was primarily driven by a $10.0 million increase in cash-based compensation and benefits, a $5.1 million increase in stock-based compensation related payroll taxes, and a $4.4 million increase in legal expenses, partially offset by an $11.1 million decrease in stock-based compensation.

Other Income, Net

Other income, net, was $10.4 million for the three months ended September 30, 2025, compared with $10.3 million for the three months ended September 30, 2024.

Other income, net, was $27.7 million for the nine months ended September 30, 2025, compared with $27.3 million for the nine months ended September 30, 2024.

Other income, net, was $6.0 million for the three months ended March 31, 2026, compared with $5.1 million for the three months ended March 31, 2025.

Income Tax Expense

The income tax provision for interim periods is generally determined using an estimate of our annual effective tax rate and adjusted for discrete items, if any, in the relevant period.

Each quarter the estimate of the annual effective tax rate is updated, and if our estimated tax rate changes, a cumulative adjustment is made.

The modifications that primarily impact us for the current year are the immediate expensing of domestic R&D and 100% bonus depreciation.

Our tax provision for the three and nine months ended September 30, 2025 includes the estimated impact of the H.R.1 Act.

The income tax expense for the three months ended September 30, 2025 was $27.3 million, or 13.3% of pre-tax income.

The income tax expense for the nine months ended September 30, 2025 was $110.7 million, or 19.9% of pre-tax income.

The effective tax rates were lower than the federal statutory rate of 21% primarily due to the effect of U.S.

federal tax law changes enacted during the quarter, income generated by our subsidiaries in lower tax jurisdictions, foreign tax credits, and U.S.

The lower effective tax rates relative to the federal statutory rate were partially offset by the U.S.

impact of foreign earnings and non-deductible stock-based compensation.

The income tax expense for the three months ended September 30, 2024 was $29.9 million, or 17.1% of pre-tax income.

The income tax expense for the nine months ended September 30, 2024 was $66.0 million, or 16.4% of pre-tax income.

The effective tax rates were lower than the federal statutory rate of 21% primarily due to lower statutory tax rates at certain of our foreign subsidiaries, and excess tax benefits from stock-based compensation.

The lower effective tax rates relative to the federal statutory rate were partially offset by the U.S.

impact of foreign earnings.

In January 2025, the OECD released new Administrative Guidance on the application of the GLoBE Model Rules.

We will continue to evaluate the impact of this release and of other future guidance on our future global tax provision.

In December 2023, the Bermuda CIT Act was enacted and signed into law.

See Note 13 to our unaudited condensed consolidated financial statements for further details.

The income tax expense for the three months ended March 31, 2026 and 2025, was $54.0 million and $38.8 million respectively, or an effective tax rate of 21.8% and 22.3% respectively.

The reduction in rate was primarily due to a reduction in non-deductible stock-based compensation.

Liquidity and Capital Resources

September 30,

(In thousands, except percentages)

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Working capital

As of September 30, 2025, we had cash and cash equivalents of $1,081.3 million and short-term investments of $188.2 million, compared with cash and cash equivalents of $691.8 million and short-term investments of $171.1 million as of December 31, 2024.

As of September 30, 2025, $871.0 million of cash and cash equivalents and $154.5 million of short-term investments were held by our foreign subsidiaries.

For the nine months ended September 30, 2025, we repatriated $275 million of cash from certain of our foreign subsidiaries to the U.S.

with minimal tax impact.

We may repatriate additional cash from certain of our foreign subsidiaries in future periods.

As of March 31, 2026, we had cash and cash equivalents of $1,062.9 million and short-term investments of $304.2 million, compared with cash and cash equivalents of $1,099.3 million and short-term investments of $157.2 million as of December 31, 2025.

As of March 31, 2026, $683.0 million of cash and cash equivalents and $304.2 million of short-term investments were held by our foreign subsidiaries.

We may continue to repatriate cash from certain of our foreign subsidiaries to the U.S.

to fund our expenditures in future periods.

We anticipate that earnings from other foreign subsidiaries will continue to be indefinitely reinvested.

Summary of Cash Flows

The following table summarizes our cash flow activities:

Nine Months Ended September 30,

The following table summarizes our cash flow activities for the periods presented:

Three Months Ended March 31,

(In thousands)

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Effect of change in exchange rates

Net increase in cash, cash equivalents and restricted cash

For the nine months ended September 30, 2025, the $112.6 million increase in net cash provided by operating activities compared to the same period in 2024 was primarily due to increased accounts receivable collections, partially offset by increased inventory purchases.

For the nine months ended September 30, 2025, the $150.4 million decrease in net cash used in investing activities compared to the same period in 2024 was primarily due to a decrease of $545.9 million in purchases of investments, partially offset by a decrease of $395.2 million in sales of investments.

For the nine months ended September 30, 2025, the $21.7 million increase in net cash used in financing activities compared to the same period in 2024 was primarily due to an increase of $31.2 million in dividend and dividend equivalent payments, partially offset by a decrease in repurchases of common stock.

Net decrease in cash, cash equivalents and restricted cash

For the three months ended March 31, 2026, the $6.1 million decrease in net cash provided by operating activities compared to the same period in 2025 was primarily due to increased inventory purchases and other changes in working capital, partially offset by increased accounts receivable collections.

For the three months ended March 31, 2026, the $45.2 million decrease in net cash used in investing activities compared to the same period in 2025 was primarily due to $69.2 million higher net purchases of investments, partially offset by $24.1 million higher purchases of property and equipment.

For the three months ended March 31, 2026, the $19.4 million increase in net cash used in financing activities compared to the same period in 2025 was primarily due to an increase of $18.4 million in dividend and dividend equivalent payments.

Cash Requirements

Although consequences of economic uncertainties and macroeconomic conditions, including tariffs and retaliatory measures and announcements regarding same, and other factors could adversely affect our liquidity and capital resources in the future, and cash requirements may fluctuate based on the timing and extent of many factors such as those discussed above, we believe that our balances of cash, cash equivalents and short-term investments of $1,269.5 million as of September 30, 2025, along with cash generated by ongoing operations, will be sufficient to satisfy our liquidity requirements for at least the next 12 months.

Although consequences of economic uncertainties and macroeconomic conditions, including tariffs and retaliatory measures and announcements regarding the same, and many other factors could adversely affect our liquidity and capital resources in the future, and cash requirements may fluctuate based on the timing and extent of many factors such as those discussed above, we believe that our balances of cash, cash equivalents and short-term investments of $1,367.1 million as of March 31, 2026, along with cash generated by ongoing operations, will be sufficient to satisfy our liquidity requirements for the next 12 months.

Our material cash requirements include the following contractual and other obligations:

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Our purchase obligations primarily consist of wafer and other inventory purchases, assembly and other manufacturing services, construction of manufacturing and R&D facilities, purchases of production and other equipment, and license arrangements.

In May 2022, we entered into a long-term supply agreement in order to secure manufacturing production capacity for silicon wafers over a four-year period.

As of September 30, 2025, we had remaining prepayments under this agreement of $60.0 million reported in other current assets on the Condensed Consolidated Balance Sheets.

As of September 30, 2025, total estimated future unconditional purchase commitments to all suppliers and other parties, net of the $60.0 million prepayment, were $499.3 million, of which $443.2 million was due within a year.

Operating Leases

Operating lease obligations represent the undiscounted remaining lease payments primarily for our leased facilities.

As of September 30, 2025, these obligations totaled $18.9 million, of which $3.8 million was short-term.

As of March 31, 2026, total estimated future unconditional purchase commitments to all suppliers and other parties were $588.7 million, of which $557.5 million was due within a year.

Capital Return to Stockholders

In February 2025, our Board of Directors approved a stock repurchase program authorizing us to repurchase up to $500.0 million of our common stock through February 2028.

In February 2025, our Board of Directors approved a new stock repurchase program authorizing us to repurchase up to $500.0 million of our common stock through February 2028.

Shares are retired upon repurchase.

We repurchased 6,000 shares of our common stock for an aggregate purchase price of $4.7 million during the nine months ended September 30, 2025.

As of September 30, 2025, $495.3 million remained available for future repurchases under the program.

The Company did not make any repurchases under this program during the three months ended March 31, 2026.

As of March 31, 2026, $493.4 million remained available for future repurchases under the program.

We currently have a dividend program approved by our Board of Directors, pursuant to which we intend to pay quarterly cash dividends on our common stock.

Based on our historical practice, stockholders of record as of the last business day of the quarter are entitled to receive the quarterly cash dividends when and if declared by the Board of Directors, which are payable to the stockholders in the following month.

As of September 30, 2025, accrued cash dividends totaled $74.7 million.

As of March 31, 2026, accrued dividends totaled $98.3 million.

The declaration of any future cash dividends is at the discretion of our Board of Directors and will depend on, among other things, our financial condition, results of operations, capital requirements, business conditions and other factors that our Board of Directors may deem relevant, as well as a determination that cash dividends are in the best interests of our stockholders.

Other Long-Term Obligations

Other long-term obligations primarily include payments for deferred compensation plan liabilities and accrued dividend equivalents.

As of September 30, 2025, these obligations totaled $102.3 million.

Other long-term obligations primarily include deferred compensation plan liabilities and accrued dividend equivalents.

As of March 31, 2026, these obligations totaled $99.2 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements