What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-07 · 101 added, 71 removed, 132 unchanged (57% of the section changed)

9 unchanged sentences

• future revenue, gross profits, research and development and engineering expenses, selling, general and administrative expenses, and cash requirements;

• the effects of political, economic, legal, and regulatory changes, including tariffs and trade disputes, or conflicts on our global operations;

• the anticipated effects of tariffs and trade disputes on our business and financial results;

• the effects of natural disasters or public health emergencies on the global economy and on our customers, suppliers, employees, and business;

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• our ability to be successful in managing our cost structure and cash expenditures and results of litigation.

Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995.

Statements contained or incorporated by reference in this Form 10-Q that are not purely historical are forward-looking statements and are subject to safe harbors under Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995.

Forward-looking statements may be identified by words such as, but not limited to, “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “plan,” “should,” “may,” “could,” “will,” “would,” “forecast,” “project” and words or phrases of similar meaning, as they relate to our management or us.

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its ability to open new market opportunities and target high-margin markets;

the strength/weakness of the back-end and/or front-end semiconductor market segments;

the strength/weakness of the back-end and/or front-end semiconductor

market segments;

fluctuations in customer capital spending;

the Company’s ability to effectively manage its supply chain and adequately source components from suppliers to meet customer demand;

the effects of political, economic, legal, and regulatory changes, including tariffs and trade disputes, or conflicts on the Company’s global operations;

the effects of political, economic, legal, and regulatory changes or uncertainties, changes in U.S.

tariff and trade policy and related retaliatory actions, the U.S.

government shutdown] and geopolitical conflicts on the Company’s global operations;

the Company’s ability to adequately protect its intellectual property rights and maintain data security;

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In addition, management is periodically faced with uncertainties, the outcomes of which are not within our control and will not be known for prolonged periods of time.

Certain of these uncertainties are discussed in the 2024 Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2025 in the Items entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no material changes in our critical accounting estimates from the information presented in Part II, Item 7.

Certain of these uncertainties are discussed in the 2024 Form 10-K in the Items entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no material changes in our critical accounting estimates from the information presented in Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2024 Form 10-K.

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Our systems feature sophisticated software and production-worthy automation.

In addition, our advanced process control software portfolio includes powerful solutions for standalone tools, groups of tools, and factory-wide and enterprise-wide suites to enhance productivity and achieve significant cost savings.

In addition, our advanced process control software portfolio includes powerful solutions for standalone tools, groups of tools, and factory-wide and

enterprise-wide suites to enhance productivity and achieve significant cost savings.

Our systems are backed by worldwide customer service and applications support.

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Three Months Ended

September 27,

(in thousands, except for percentages and per share data)

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Diluted earnings per share

• In the fiscal quarter ended June 28, 2025 (the “June 2025 quarter”), revenue decreased 5% compared to the fiscal quarter ended March 29, 2025 (the “March 2025 quarter”), primarily due to lower sales to OSAT, foundry and power customers in the specialty device and advanced packaging market.

• Gross profit as a percentage of revenue for the June 2025 quarter decreased by 6% compared to the March 2025 quarter primarily due to the write down of excess and obsolete inventory.

• Operating expenses for the June 2025 quarter increased by 12% compared to the March 2025 quarter primarily due to an increase in restructuring expenses, research and development project costs, and compensation cost.

Our cash, cash equivalents and marketable securities balance increased to $894.9 million at June 28, 2025, compared to $852.3 million at December 28, 2024.

• In the fiscal quarter ended September 27, 2025 (the “September 2025 quarter”), revenue decreased 14% compared to the fiscal quarter ended June 28, 2025 (the “June 2025 quarter”), primarily due to lower sales to DRAM and NAND customers in the advanced node market as well as lower sales to DRAM and foundry customers in the specialty devices and advanced packaging markets.

• Gross profit as a percentage of revenue for the September 2025 quarter increased by 3% compared to the June 2025 quarter primarily due to the write down of excess and obsolete inventory recorded in the June 2025 quarter.

• Operating expenses for the September 2025 quarter decreased by 3% compared to the June 2025 quarter primarily due to decreased restructuring expenses, research and development project costs, and compensation cost in the September 2025 quarter.

Our cash, cash equivalents and marketable securities balance increased to $983.9 million at September 27, 2025, compared to $852.3 million at December 28, 2024.

This increase was primarily the result of $233.3 million of cash generated from operating activities and $9.7 million of cash from issuance of shares through share-based compensation plans, partially offset by cash used for purchases of our common stock of $75.0 million, capital expenditures of $23.4 million, $12.6 million for tax payments related to net share settlement of employee stock-based compensation plans and purchases of non-marketable equity securities of $8.0 million.

Employee headcount at June 28, 2025 was approximately 1,589.

On June 27, 2025, we entered into a definitive agreement to acquire all the outstanding membership interests of Semilab USA from Semilab International Zrt.

(“Semilab”), for $475.0 million in cash (subject to certain customary purchase price adjustments) and 706,215 shares of our common stock.

Based on the closing price of Onto Innovation’s common stock on June 27, 2025, the total transaction value is approximately $545.0 million.

The transaction is expected to close in the second half of 2025, subject to the satisfaction of customary closing conditions, including U.S.

and Hungarian regulatory approvals.

Employee headcount at September 27, 2025 was approximately 1,593.

On June 27, 2025, we entered into an Equity Purchase Agreement (the “Purchase Agreement”) to acquire all the outstanding membership interests of Semilab USA from Semilab International Zrt.

(“Semilab”), for $475.0 million in cash (subject to certain customary purchase price adjustments) and 706,215 shares of our common stock (the “Transaction”).

On September 25, 2025, each of the Company and Semilab received a request for additional information and documentary material (a “Second Request”) from the U.S.

Department of Justice in connection with the Transaction.

In response to the Second Request, and in order to increase the likelihood of a timely closing for the Transaction, on October 9, 2025, the parties entered into an amendment to the Purchase Agreement (the “Purchase Agreement Amendment”), pursuant to which the parties agreed that the Fourier-Transform infrared spectroscopy reflectometry systems business conducted by Semilab and its affiliates would not be included in the transaction and would instead be retained by Semilab.

The Purchase Agreement Amendment amends the purchase price that the Company will pay to Semilab in the Transaction to $432.3 million in cash (subject to certain customary purchase price adjustments) and 641,771 shares of the Company’s common stock, par value $0.001 per share.

This represents a reduction of approximately $50.0 million in total Transaction value to approximately $495.0 million based upon the closing value of the Company’s common stock on June 27, 2025.

The Company continues to anticipate that the Transaction will be completed in 2025.

See Note 2, “Acquisitions,” in the Notes to the Condensed Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

The United States government has implemented export regulations for U.S.

government has implemented export regulations for U.S.

semiconductor technology sold or provided to customers in China, which have limited our ability to provide certain products and services to customers in China, over the past several years.

government continues to issue new export licensing requirements, and additional updates and other requirements that have had the effect of further limiting our ability to provide certain products and services to customers outside the U.S., including in China.

government continues to issue new export licensing requirements, and additional updates and other

requirements that have had the effect of further limiting our ability to provide certain products and services to customers outside the United States, including in China.

The recent imposition of tariffs by the U.S.

government, and countermeasures taken by foreign countries, has had and will likely continue to have an adverse impact on our business in the near-term.

The full extent of the impact is currently uncertain and will depend both on future developments in global trade policy and the extent to which our efforts to mitigate tariffs impacts are successful.

The full extent of the impact is currently uncertain and will depend both on future developments in global trade policy and the extent to which our efforts to mitigate tariff impacts are successful.

We are continuously assessing the impact of tariffs and related governmental actions on our business.

For a discussion of the risks related to our business and operations, see Part I, Item 1A – Risk Factors of the 2024 Form 10-K and Part II, Item 1A – Risk Factors of this Form 10-Q.

Results of Operations for the Three and Six Months Ended June 28, 2025 and June 29, 2024

Results of Operations for the Three and Nine Months Ended September 27, 2025 and September 28, 2024

Our revenue is primarily derived from the sale of our systems, software licensing, services and spare parts.

Our revenue of $253.6 million increased 4.7% for the three months ended June 28, 2025 as compared to the three months ended June 29, 2024, for which revenue totaled $242.3 million.

For the six-months ended June 28, 2025 and June 29, 2024, our revenue totaled $520.2 million and $471.2 million, respectively, representing a year-over-year increase of 10.4%.

Our revenue of $218.2 million decreased 14% for the three months ended September 27, 2025 as compared to the three months ended September 28, 2024, for which revenue totaled $252.2 million.

For the nine-months ended September 27, 2025 and September 28, 2024, our revenue totaled $738.4 million and $723.4 million, respectively, representing a year-over-year increase of 2%.

The following table lists, for the periods indicated, the different sources of our revenue in dollars and as percentages of our total revenue:

Three Months Ended

Six Months Ended

Nine Months Ended

September 27,

September 28,

September 27,

September 28,

(in thousands, except for percentages)

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Total revenue

Total systems and software revenue increased $4.1 million and $40.4 million for the three and six months ended June 28, 2025, respectively, as compared to the three and six months ended June 29, 2024.

The increases for the three and six months ended June 28, 2025 were primarily attributable to higher sales to DRAM and NAND customers in the advanced node market, partially offset by decreased sales to DRAM, power and logic customers in the specialty device and advanced packaging market.

The increase in total parts and services revenue for the three and six months ended June 28, 2025, as compared to the three and six months ended June 29, 2024, was primarily due to higher parts sales as well as system upgrade and service contract revenue.

Total systems and software revenue decreased $43.3 million and $2.9 million for the three and nine months ended September 27, 2025, respectively, as compared to the three and nine months ended September 28, 2024.

The decreases for the three and nine months ended September 27, 2025 were primarily attributable to lower sales to DRAM, foundry and power customers in the specialty device and advanced packaging market.

These year over year decreases in systems and software revenue were partially offset by increased sales to OSAT customers in the specialty device and advanced packaging market and increased sales to foundry and DRAM customers in the advanced node market.

The increase in total parts and services revenue for the three and nine months ended September 27, 2025, as compared to the three and nine months ended September 28, 2024, was primarily due to higher parts sales and service contract revenue.

Gross Profit.

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Three Months Ended

Six Months Ended

Nine Months Ended

September 27,

September 28,

September 27,

September 28,

(in thousands, except for percentages)

Gross profit as a percentage of revenue

The decrease in gross profit as a percentage of revenue for the three and six months ended June 28, 2025 as compared to the three and six months ended June 29, 2024 was primarily due to restructuring and other expenses for the write down of excess and obsolete inventory.

The decrease in gross profit as a percentage of revenue for the three and nine months ended September 27, 2025 as compared to the three and nine months ended September 28, 2024 was primarily due to restructuring and other expenses for the write down of excess and obsolete inventory.

Operating Expenses.

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These expenditures also include consulting fees, the cost of related supplies and legal costs to defend our patents.

Our research and development expenses were $35.3 million and $63.3 million for the three and six-month periods ended June 28, 2025, respectively, as compared to $27.0 million and $53.6 million for the three and six-month periods ended June 29, 2024, respectively.

The increase in research and development expenses of $8.3 million for the three-month period ended June 28, 2025, as compared to the three-month period ended June 29, 2024 was primarily due to increases in compensation costs, production expenses and depreciation.

The increase in research and development expenses of $9.7 million for the six-month period ended June 28, 2025, as compared to the six-month period ended June 29, 2024 was primarily due to increases in compensation costs, production expenses, depreciation and outside service costs.

Our research and development expenses were $32.5 million and $95.8 million for the three and nine-month periods ended September 27, 2025, respectively, as compared to $28.3 million and $81.9 million for the three and nine-month periods ended September 28, 2024, respectively.

The increase in research and development expenses of $4.2 million for the three-month period ended September 27, 2025, as compared to the three-month period ended September 28, 2024 was primarily due to increases in compensation costs and depreciation.

The increase in research and development expenses of $13.9 million for the nine-month period ended September 27, 2025, as compared to the nine-month period ended September 28, 2024 was primarily due to increases in compensation costs, hardware and software project costs, production expenses, travel expenses, outside service costs and depreciation.

• Sales and Marketing .

Sales and marketing expenses are primarily comprised of salaries, commissions and related costs for sales and marketing personnel, as well as other non-personnel related expenses.

Our sales and marketing expenses were $14.9 million and $34.6 million for the three and six-month periods ended June 28, 2025, respectively, compared to $18.9 million and $37.2 million for the three and six-month periods ended June 29, 2024, respectively.

The decrease in sales and marketing expenses of $4.0 million for the three-month period ended June 28, 2025, as compared to the three-month period ended June 29, 2024, was primarily due to decreases in compensation and outside services costs, partially offset by an increase in production expenses.

The decrease in sales and marketing expenses of $2.6 million for the six-month period ended June 28, 2025, as compared to the six-month period ended June 29, 2024, was primarily due to a decrease in compensation costs, partially offset by an increase in production expense.

Our sales and marketing expenses were $17.1 million and $51.7 million for the three and nine-month periods ended September 27, 2025, respectively, compared to $19.5 million and $56.6 million for the three and nine-month periods ended September 28, 2024, respectively.

The decrease in sales and marketing expenses of $2.4 million for the three-month period ended September 27, 2025, as compared to the three-month period ended September 28, 2024, was primarily due to decreases in compensation costs and production expenses.

The decrease in sales and marketing expenses of $4.9 million for the nine-month period ended September 27, 2025, as compared to the nine-month period ended September 28, 2024, was primarily due to decreases in compensation costs and outside services and fees.

• General and Administrative .

General and administrative expenses are primarily comprised of salaries and related costs for corporate and administrative personnel, as well as other non-personnel related expenses.

Our general and administrative expenses were $25.0 million and $47.8 million for the three and six-month periods ended June 28, 2025, respectively, as compared to $19.7 million and $37.1 million for the three and six-month periods ended June 29, 2024, respectively.

The increase in general and administrative expenses of $5.3 million for the three-month period ended June 28, 2025, as compared to the three-month period ended June 29, 2024, was primarily due to increases in compensation and outside service costs, partially offset by decreases in other general expenses.

The increase in general and administrative expenses of $10.7 million for the six-month period ended June 28, 2025, as compared to the six-month period ended June 29, 2024, was primarily due to increases in compensation and outside service costs, partially offset by decreases in other general expenses.

Our general and administrative expenses were $24.8 million and $72.6 million for the three and nine-month periods ended September 27, 2025, respectively, as compared to $20.3 million and $57.4 million for the three and nine-month periods ended September 28, 2024, respectively.

The increase in general and administrative expenses of $4.5 million for the three-month period ended September 27, 2025, as compared to the three-month period ended September 28, 2024, was primarily due to increases in compensation costs, outside service costs and depreciation.

The increase in general and administrative expenses of $15.2 million for the nine-month period ended September 27, 2025, as compared to the nine-month period ended September 28, 2024, was primarily due to increases in compensation costs and outside service costs.

• Amortization of Identifiable Intangible Assets .

Amortization of identifiable intangible assets was $8.4 million and $16.9 million for the three and six-month periods ended June 28, 2025, respectively, compared to $13.1 million and $26.2 million for the three and six-month periods ended June 29, 2024, respectively.

The decreases in amortization of identifiable intangible assets of $4.7 million and $9.3 million for the three and six-month periods ended June 28, 2025, as compared to the three and six-month periods ended June 29, 2024, was primarily due to certain assets becoming fully amortized.

Amortization of identifiable intangible assets was $8.4 million and $25.3 million for the three and nine-month periods ended September 27, 2025, respectively, compared to $13.1 million and $39.3 million for the three and nine-month periods ended September 28, 2024, respectively.

The decreases in amortization of identifiable intangible assets of $4.7 million and $14.0 million for the three and nine-month periods ended September 27, 2025, as compared to the three and nine-month periods ended September 28, 2024, was primarily due to certain assets becoming fully amortized.

• Restructuring and Other .

Restructuring and other expenses were $4.1 million and $11.4 million for the three and nine-month periods ended September 27, 2025, respectively, compared to $2.2 million and $3.0 million for the three and nine-month periods ended September 28, 2024, respectively.

The increases in restructuring and other expenses of $1.9 million and $8.4 million for the three and nine-month periods ended September 27, 2025, as compared to the three and nine-month periods ended September 28, 2024, were primarily due to business transformation projects that includes the streamlining of various operating activities.

Interest income, net .

Net interest income was $8.6 million and $17.9 million for the three and six-month periods ended June 28, 2025, respectively, as compared to $8.5 million and $15.9 million for the three and six-month periods ended June 29, 2024, respectively.

The increases in net interest income for the three and six-month periods ended June 28, 2025, as compared to the three and six-month periods ended June 29, 2024, were due to higher cash and marketable securities balances, partially offset by lower interest rates during the 2025 period.

Net interest income was $9.3 million and $27.2 million for the three and nine-month periods ended September 27, 2025, respectively, as compared to $8.7 million and $24.5 million for the three and nine-month periods ended September 28, 2024, respectively.

The increases in net interest income for the three and nine-month periods ended September 27, 2025, as compared to the three and nine-month periods ended September 28, 2024, were due to higher cash and marketable securities balances, partially offset by lower interest rates during the 2025 period.

Other (expense) income, net .

Other expense, net was $1.1 million for the three-month period ended June 28, 2025, as compared to other expense, net of $0.1 million for the three-month period ended June 29, 2024.

Other expense, net was $1.9 million for the six-month period ended June 28, 2025, as compared to other income, net of $0.7 million for the six-month period

ended June 29, 2024 Foreign exchange losses during the 2025 period versus foreign exchange gains in the 2024 period were the primary drivers contributing to the period over period changes.

Other expense, net was $1.0 million and $0.7 for the three-month period ended September 27, 2025 and the three-month period ended September 28, 2024, respectively.

Other expense, net was $2.9 million for the nine-month period ended September 27, 2025, as compared to other income, net of $10 thousand for the nine-month period ended September 28, 2024.

Foreign exchange losses during the 2025 period versus foreign exchange gains in the 2024 period were the primary drivers contributing to the period over period changes.

Income Taxes .

We recorded an income tax provision of $5.8 million and $13.4 million for the three and six-month periods ended June 28, 2025, respectively, as compared to $4.3 million and $8.4 million for the three and six-month periods ended June 29, 2024, respectively.

Our effective tax rate of 14.7% and 12.0% for the three and six-month periods ended June 28, 2025, respectively, each differed from the statutory rate of 21%, primarily due to (i) research and development tax credits, (ii) the deduction related to foreign derived intangible income (“FDII”), and (iii) excess tax benefits associated with equity compensation.

Our effective tax rate of 7.5% and 7.7% for the three and six-month periods ended June 29, 2024, respectively, each differed from the statutory rate of 21%, primarily due to (i) research and development tax credits, (ii) the deduction related to FDII, and (iii) excess tax benefits associated with equity compensation.

We recorded an income tax provision of $3.8 million and $17.1 million for the three and nine-month periods ended September 27, 2025, respectively, as compared to $8.0 million and $16.3 million for the three and nine-month periods ended September 28, 2024, respectively.

Our effective tax rate of 12% for both the three and nine-month periods ended September 27, 2025, differed from the statutory rate of 21%, primarily due to research and development tax credits and the deduction related to foreign derived intangible income (“FDII”) for the three month period ended September 27, 2025.

For the nine month period ended September 27, 2025, research and development tax credits, the deduction related to FDII and excess tax benefits associated with equity compensation contributed to the difference with the statutory rate.

Our effective tax rate of 13% and 10% for the three and nine-month periods ended September 28, 2024, respectively, each differed from the statutory rate of 21%, primarily due to research and development tax credits, the deduction related to FDII, and excess tax benefits associated with equity compensation.

Our future effective income tax rate depends on various factors, such as possible changes in tax legislation, the geographic composition of our pre-tax income, the amount of our pre-tax income as business activities fluctuate, non-deductible expenses incurred in connection with business combinations, and research and development tax credits as a percentage of aggregate pre-tax income.

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Numerous countries have enacted, or are in the process of enacting, legislation to implement the Pillar Two model rules with a subset of the rules becoming effective during the current year, and the remaining rules becoming effective in later periods.

In June 2025, the Group of Seven (“G7”) countries (Canada, France, Germany, Italy, Japan, the U.K.

and the United States) agreed to exclude U.S.

Multi-National entities (MNEs) from certain aspects of Pillar Two (the “G7 Statement”) in exchange for the United States not imposing retaliatory taxes through the One Big Beautiful Bill Act.

We will continue to monitor the G7 Statement, which has not yet been incorporated into the OECD framework.

At this point in time, we do not expect any material tax impact associated with Pillar Two rules in the countries where we operate.

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On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act.

Included in this legislation are provisions that allow for the immediate expensing of domestic United States research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S.

Included in this legislation are provisions that allow for the immediate expensing of domestic U.S.

research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S.

taxation of profits derived from foreign operations.

As a result of the enactment of the legislation, we expect an increase to tax expense during the third and fourth quarters of 2025, primarily related to changes in the taxation of profits derived from foreign operations, and more specifically, the foreign-derived intangible income deduction.

We continue to evaluate the impact the new legislation will have on our Consolidated Financial Statements.

However, as the assessment is ongoing, we are not able to quantify the impact on our Consolidated Financial Statements at this time.

The impact of the Act has been accounted for in the provision for taxes for the quarter ended September 27, 2025 and the amount is determined to be immaterial.

The Company continues to evaluate the impact the new legislation will have on the Consolidated Financial Statements for future years.

However, as the assessment is ongoing, the Company is not able to quantify the impact at this time.

Liquidity and Capital Resources

Our cash, cash equivalents and marketable securities consist of the following in dollars for the periods indicated:

September 27,

December 28, 2024

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Sources and Uses of Cash

A summary of cash provided by (used in) operating, investing, and financing activities is as follows in dollars for the periods indicated:

Six Months Ended

A summary of net cash and cash equivalents provided by (used in) operating, investing, and financing activities is as follows in dollars for the periods indicated:

Nine Months Ended

September 27,

September 28,

(in thousands)

Cash provided by operating activities

Cash used in investing activities

Cash used in financing activities

Net cash and cash equivalents provided by operating activities

Net cash and cash equivalents provided by (used in) investing activities

Net cash and cash equivalents used in financing activities

Operating Activities

Net cash and cash equivalents provided by operating activities for the six months ended June 28, 2025 were $149.9 million.

The net cash and cash equivalents provided by operating activities during the six months ended June 28, 2025 resulted primarily from net income, adjusted to exclude the effect of non-cash operating charges, of $151.1 million.

Net cash and cash equivalents provided by operating activities for the nine months ended September 27, 2025 were $233.3 million.

The net cash and cash equivalents provided by operating activities during the nine months ended September 27, 2025 resulted primarily from net income, adjusted to exclude the effect of non-cash operating charges, of $193.3 million.

Significant non-cash operating charges included depreciation, amortization, share-based compensation, provision for inventory valuation and deferred income taxes.

Cash provided by operating activities for the first six months of fiscal 2025 increased compared to the corresponding period in fiscal 2024 primarily due to improved inventory management, higher cash collections and higher investment income.

Our working capital was $1,338.6 million at June 28, 2025 and $1,307.4 million at December 28, 2024.

Cash provided by operating activities for the first nine months of fiscal 2025 increased compared to the corresponding period in fiscal 2024 primarily due to higher cash collections.

Our working capital was $1,382.1 million at September 27, 2025 and $1,307.4 million at December 28, 2024.

Investing Activities

Net cash and cash equivalents used in investing activities for the six months ended June 28, 2025 were $64.8 million.

During the six months ended June 28, 2025, net cash and cash equivalents used in investing activities included purchases of marketable securities of $419.3 million, capital expenditures of $22.0 million and purchases of non-marketable equity securities of $8.0 million, partially offset by proceeds from maturities and sales of marketable securities of $384.6 million.

Net cash and cash equivalents provided by investing activities for the nine months ended September 27, 2025 were $231.9 million.

During the nine months ended September 27, 2025, net cash and cash equivalents provided by investing activities included proceeds from maturities and sales of marketable securities of $684.5 million, partially offset by purchases of marketable securities of $421.2 million, capital expenditures of $23.4 million and purchases of non-marketable equity securities of $8.0 million.

From time to time, we evaluate whether to acquire new or complementary businesses, products or technologies.

We may fund all of or a portion of the price of these investments or acquisitions in cash, stock, or a combination of cash and stock.

Our proposed acquisition of Semilab will cost $432.3 million in cash (subject to certain customary purchase price adjustments) and 641,771 shares of our common stock, par value $0.001 per share.

See Note 2 of the Condensed Consolidated Financial Statements for further discussion regarding this proposed acquisition.

Financing Activities

Net cash and cash equivalents used in financing activities for the six months ended June 28, 2025 were $83.2 million.

During the six months ended June 28, 2025, financing activities used cash primarily for purchases of common stock of $75.0 million and tax payments related to shares withheld to satisfy employee tax obligations in connection with the vesting of awards under share-based compensation plans of $12.4 million, partially offset by proceeds from sales of shares through share-based compensation plans of $4.2 million.

In February 2024, the our Board of Directors approved a share repurchase authorization, which allows the Company to repurchase up to $200 million worth of shares of its common stock.

Net cash and cash equivalents used in financing activities for the nine months ended September 27, 2025 were $77.9 million.

During the nine months ended September 27, 2025, financing activities used cash primarily for purchases of common stock of $75.0 million and tax payments related to shares withheld to satisfy employee tax obligations in connection with the vesting of awards under share-based compensation plans of $12.6 million, partially offset by proceeds from sales of shares through share-based compensation plans of $9.7 million.

In February 2024, our Board of Directors approved a share repurchase authorization, which allows the Company to repurchase up to $200 million worth of shares of its common stock.

Repurchases may be made through both public market and private transactions from time to time.

During the three and six months ended June 28, 2025, we repurchased 0 and 492 thousand shares of common stock under this repurchase authorization, respectively.

As of June 28, 2025, there was $99.9 million available for future share repurchases under this share repurchase authorization.

During the three and nine months ended September 27, 2025, we repurchased 0 and 492 thousand shares of common stock under this repurchase authorization, respectively.

As of September 27, 2025, there was $99.9 million available for future share repurchases under this share repurchase authorization.

We have a credit agreement with a bank that provides for a variable-rate line of credit that is secured by the marketable securities we have with the bank.

We are permitted to borrow up to 70% of the value of eligible securities held at the time the line of credit is accessed, up to a maximum of $100.0 million.

As of June 28, 2025, the available line of credit was $100.0 million with an available interest rate of 5.0%.

As of September 27, 2025, the available line of credit was $100.0 million with an available interest rate of 4.8%.

The credit agreement is available to us until such time that either party terminates the arrangement at its discretion.

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Our future capital requirements will depend on many factors, including the timing and amount of our revenue and our investment decisions, which will affect our ability to generate additional cash.

We expect that our existing cash, cash equivalents, marketable securities and availability under our line of credit will be sufficient to meet our anticipated cash requirements for

working capital, capital expenditures and other cash needs for the next 12 months following the filing of this Form 10-Q.

We expect that our existing cash, cash equivalents, marketable securities and availability under our line of credit will be sufficient to meet our anticipated cash requirements for working capital, capital expenditures, and other cash needs for the next 12 months following the filing of this Form 10-Q.

Thereafter, if cash generated from operations and financing activities is insufficient to satisfy our working capital requirements, we may seek additional funding through bank borrowings, sales of securities or other means.

5 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis