What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-05 · 84 added, 82 removed, 117 unchanged (59% of the section changed)

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• our manufacturing practices and ability to deliver both products and services consistent with our customers’ demands and expectations and to strengthen our market position, including our ability to source components, materials, and equipment due to supply chain delays or shortages;

• the closing of the Rigaku Transaction (as defined below);

• the integration of Semilab USA LLC (“Semilab USA”);

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the Company’s ability to maintain relationships with its customers and manage appropriate levels of inventory to meet customer demands;

the Company’s ability to realize the anticipated benefits of the proposed investment in and strategic partnership with Rigaku;

the Company’s ability to complete the proposed transaction on the timing expected or at all;

the ability to obtain required regulatory approvals for the proposed transaction on the timing expected or at all;

the availability of debt financing for the transaction;

the Company’s timing and ability to repay its debt;

the Company’s ability to complete the Rigaku Transaction on the timing expected or at all;

the Company’s ability to realize the anticipated benefits of the Rigaku Transaction;

and the Company’s ability to successfully integrate acquired businesses and technologies, including the business of Semilab USA and to realize the anticipated benefits of such acquisitions.

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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 2025 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.

Certain of these uncertainties are discussed in the 2025 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 2025 Form 10-K.

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We deliver comprehensive solutions throughout the semiconductor fabrication process with our families of proprietary products that provide critical yield-enhancing information, enabling microelectronic device manufacturers to drive down costs and time to market of their devices.

We provide process and yield management solutions

used in both wafer processing facilities, often referred to as “front-end” manufacturing, and in device packaging and test facilities, commonly referred to as “back-end” manufacturing.

We provide process and yield management solutions used in both wafer processing facilities, often referred to as “front-end” manufacturing, and in device packaging and test facilities, commonly referred to as “back-end” manufacturing.

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

Our principal market is semiconductor capital equipment.

Semiconductors packaged as ICs, or “chips,” are used in consumer electronics, server and enterprise systems, mobile computing (including smart phones and tablets), data storage devices, and embedded automotive and control systems.

Semiconductors packaged as integrated circuits (“ICs”), or “chips,” are used in consumer electronics, server and enterprise systems, mobile computing (including smart phones and tablets), data storage devices, and embedded automotive and control systems.

Our core focus is the measurement and control of the structure, composition, and geometry of semiconductor devices as they are fabricated on silicon wafers to improve device performance and manufacturing yields.

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Diluted earnings per share

• In the fiscal quarter ended March 31, 2026 (the “March 2026 quarter”), revenue increased 9.4% compared to the fiscal quarter ended January 3, 2026 (the “January 2026 quarter”), primarily due to revenue attributed to the acquired Semilab USA business of $16.8 million and higher sales to logic and memory customers in advanced nodes.

• Gross profit as a percentage of revenue for the March 2026 quarter increased by 3.7% compared to the January 2026 quarter.

This margin increase was primarily driven by reductions in inventory write downs, restructuring costs related to infrastructure transition, and reductions in costs related to contract manufacturing set-up.

In addition, during the March 2026 quarter $2.2 million of additional inventory step-up amortization was recognized compared to the January 2026 quarter.

• Operating expenses for the March 2026 quarter increased by 2.7% compared to the January 2026 quarter.

This increase was driven by an increase in intangible amortization expense, offset by reductions in transaction costs related to the acquisition of Semilab USA.

Our cash, cash equivalents and marketable securities balance increased to $654.2 million at March 31, 2026, compared to $639.6 million at January 3, 2026.

This increase was primarily the result of $26.3 million of cash generated from operating activities partially offset by capital expenditures of $3.6 million and $6.7 million for tax payments related to net share settlement of employee stock-based compensation plans.

Employee headcount at March 31, 2026 was approximately 1,790.

On April 20, 2026, we entered into a definitive share purchase agreement (the “Transaction”) with Atom Investment, L.P., an affiliate of The Carlyle Group, to acquire 27% of the outstanding common stock of Rigaku Holdings Corporation (“Rigaku”) for approximately $710 million.

The Transaction is expected to close in the second half of 2026.

Also on April 20, 2026, we entered into a commitment letter with Goldman Sachs Bank USA, which provides for a senior secured 364-day $500 million bridge term loan credit facility.

The bridge term loan is intended to be available to the Company to finance, together with other sources of funds, the Transaction and related fees and expenses on or prior to the closing of the Transaction.

• In the fiscal quarter ended June 30, 2026 (the “June 2026 quarter”), revenue increased 17.5% compared to the fiscal quarter ended March 31, 2026 (the “March 2026 quarter”), primarily due to higher sales of inspection and metrology systems supporting advanced packaging and advanced node semiconductor applications.

• Gross profit as a percentage of revenue for the June 2026 quarter increased by 330 basis points compared to the March 2026 quarter.

This margin increase was primarily driven by a favorable shift in sales mix as product sales move toward high-margin inspection and metrology product lines.

• Operating expenses for the June 2026 quarter increased by 6.1% compared to the March 2026 quarter.

This increase was driven by higher compensation-related costs, increased headcount, and engineering spend related to product development activities.

Our cash, cash equivalents and marketable securities balance increased to $1.9 billion at June 30, 2026, compared to $639.6 million at January 3, 2026.

This increase was primarily the result of $1.2 billion of cash provided by financing activities and $87.8 million of cash generated from operating activities partially offset by capital expenditures of $7.2 million.

Employee headcount at June 30, 2026 was approximately 1,867.

On May 21, 2026, we issued $1.5 billion aggregate principal amount of 2031 Notes.

The 2031 Notes were issued pursuant to an Indenture, dated May 21, 2026 (the “Indenture”), between the Company and U.S.

Bank Trust Company, National Association, as trustee (the “Trustee”).

Pursuant to the purchase agreement between the Company and the representative of the initial purchasers of the 2031 Notes, we granted the initial purchasers an option to purchase up to an additional $200 million aggregate principal amount of 2031 Notes.

On May 19, 2026, the initial purchasers exercised this option in full and the 2031 Notes issued on May 21, 2026 include the additional $200 million aggregate principal amount of 2031 Notes.

Also in May 2026, in connection with the pricing of the 2031 Notes and the exercise by the initial purchasers of their option in full to purchase additional Notes, respectively, we entered into the Capped Call Transactions with several financial institutions, including one or more of the initial purchasers and/or their respective affiliates.

On April 20, 2026, we entered into a definitive share purchase agreement (the “Rigaku Transaction”) with Atom Investment, L.P., an affiliate of The Carlyle Group, to acquire 27% of the outstanding common stock of Rigaku Holdings Corporation for approximately $710 million.

The Rigaku Transaction is expected to close in the second half of 2026.

Also on April 20, 2026, we entered into a commitment letter with Goldman Sachs Bank USA, which provides for a senior secured 364-day $500 million bridge term loan credit facility (the “Bridge Commitment”).

The Bridge Commitment was intended to be available to the Company to finance, together with other sources of funds, the Rigaku Transaction and related fees and expenses on or prior to the closing of the Transaction.

On May 21, 2026, we terminated the Bridge Commitment, incurring total costs of $4.4 million.

For a discussion of the risks related to our business and operations, see Part I, Item 1A - Risk Factors of the 2025 Form 10-K and Part II, Item 1A - Risk Factors of this Form 10-Q.

Results of Operations for the Three-Months ended March 31, 2026 and March 29, 2025

Results of Operations for the Three and Six Months ended June 30, 2026 and June 28, 2025

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

Our revenue of $291.9 million increased 9.5% for the three months ended March 31, 2026 as compared to the three months ended March 29, 2025, for which revenue totaled $266.6 million.

Our revenue of $343.1 million increased 35.3% for the three months ended June 30, 2026 as compared to the three months ended June 28, 2025, for which revenue totaled $253.6 million.

For the six months ended June 30, 2026 and June 28, 2025, our revenue totaled $635.1 million and $520.2 million, respectively, representing a year-over-year increase of 22.1%.

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

(in thousands, except for percentages)

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Total revenue*

Total systems and software revenue increased $16.0 million for the three months ended March 31, 2026, as compared to the three months ended March 29, 2025.

The increase was attributable to Semilab USA revenues of $24.0 million, as well as higher sales to advanced packaging customers, partially offset by a decline in sales to advanced node customers.

The increase in total parts and services revenue for the three months ended March 31, 2026, as compared to the three months ended March 29, 2025, was primarily due to increased spending by our customers on system upgrades and repairs of existing systems.

*The sum of the individual percentages may not equal 100% due to rounding.

Total systems and software revenue increased $79.5 million, and $95.5 million for the three and six months ended June 30, 2026, respectively, as compared to the three and six months ended June 28, 2025, respectively.

The increase was attributable to stronger demand for inspection and metrology systems.

The increase in total parts and services revenue for the three and six months ended June 30, 2026, as compared to the three and six months ended June 28, 2025, was primarily due to higher customer support activity and service contract revenue.

Gross Profit.

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Three Months Ended

Six Months Ended

(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 months ended March 31, 2026 as compared to the three months ended March 29, 2025 was primarily due to higher restructuring and other expenses for the write down of excess and obsolete inventory in the 2026 period.

In addition, $6.1 million of inventory step-up amortization attributed to Semilab USA was recognized during the three months ended March 31, 2026.

The increase in gross profit as a percentage of revenue for the three and six months ended June 30, 2026 as compared to the three and six months ended June 28, 2025 was primarily due to increased sales of newer product lines with higher standard margins.

The increase for the three month period also benefited from lower restructuring expenses compared to the prior year period.

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 $35.1 million for the

three-month period ended March 31, 2026, as compared to $28.0 million for the three-month period ended March 29, 2025.

The increase in research and development expenses for the three-month period ended March 31, 2026, as compared to the three-month period ended March 29, 2025 was primarily due to increases in headcount, as well as increased materials and supplies expensed.

Our research and development expenses were $38.9 million and $73.9 million for the three and six month periods ended June 30, 2026, as compared to $35.3 million and $63.3 million for the three and six month periods ended June 28, 2025.

The increase in research and development expenses for the three month period ended June 30, 2026, as compared to the three month period ended June 28, 2025 was primarily due to higher compensation-related costs driven by stock-based compensation expense and increased headcount, as well as increased engineering spend associated with product development activities.

The increase in research and development expenses for the six-month period ended June 30, 2026, as compared to the six-month period ended June 28, 2025 was primarily due to higher compensation-related costs driven by stock-based compensation expense and increased headcount, as well as higher engineering spend associated with product development activities.

• 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 $21.5 million for the three-month period ended March 31, 2026, compared to $19.7 million for the three-month period ended March 29, 2025.

The increase in sales and marketing expenses for the three-month period ended March 31, 2026, as compared to the three-month period ended March 29, 2025, was primarily driven by increases in headcount.

Our sales and marketing expenses were $23.1 million and $44.6 million for the three and six month periods ended June 30, 2026, compared to $14.9 million and $34.6 million for the three and six month periods ended June 28, 2025.

The increase in sales and marketing expenses for the three month period ended June 30, 2026, as compared to the three month period ended June 28, 2025, was primarily driven by higher compensation-related costs and increased headcount to support higher sales activity.

The increase in sales and marketing expenses for the six-month period ended June 30, 2026, as compared to the six-month period ended June 28, 2025, was primarily driven by higher compensation-related costs, increased headcount and higher selling costs associated with increased revenue and customer activity.

• 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 $31.4 million for the three-month period ended March 31, 2026, as compared to $22.8 million for the three-month period ended March 29, 2025.

The increase in general and administrative expenses for the three-month period ended March 31, 2026, as compared to the three-month period ended March 29, 2025, was primarily driven by higher headcount-related compensation costs, expenses associated with the Semilab USA integration, ERP integration costs, related outside services and fees and other general corporate expenses.

Our general and administrative expenses were $34.3 million and $65.7 million for the three and six month periods ended June 30, 2026, as compared to $25.0 million and $47.8 million for the three and six month periods ended June 28, 2025.

The increase in general and administrative expenses for the three month period ended June 30, 2026, as compared to the three month period ended June 28, 2025, was primarily driven by higher compensation-related costs, including stock-based compensation expense.

The increase in general and administrative expenses for the six-month period ended June 30, 2026, as compared to the six-month period ended June 28, 2025, was primarily driven by higher compensation-related costs, including costs associated with the Semilab USA integration.

• Amortization of Identifiable Intangible Assets .

Amortization of identifiable intangible assets was $19.7 million for the three-month period ended March 31, 2026, compared to $8.4 million for the three-month period ended March 29, 2025.

The increase in amortization of identifiable intangible assets for the three months ended March 31, 2026, as compared to the three months ended March 29, 2025, was due to recognition of a full quarter of Semilab USA amortization in the 2026 period.

Amortization of identifiable intangible assets was $19.7 million and $39.4 million for the three and six month periods ended June 30, 2026, compared to $8.4 million and $16.9 million for the three and six month periods ended June 28, 2025.

The increase in amortization of identifiable intangible assets

for the three months ended June 30, 2026, as compared to the three months ended June 28, 2025, was due to Semilab USA amortization.

The increase in amortization of identifiable intangible assets for the six months ended June 30, 2026, as compared to the six months ended June 28, 2025, was due to amortization in connection with the acquisition of Semilab USA.

• Restructuring and Other .

Restructuring and other expenses were $5.2 million for the three-month period ended March 31, 2026, compared to $1.1 million for the three-month period ended March 29, 2025.

The increase in restructuring and other expenses for the three-month period ended March 31, 2026, as compared to the three-month period ended March 29, 2025, was primarily due to an increase in employee severance costs and business transformation projects that includes the streamlining of various operating activities.

Restructuring and other expenses were $3.8 million and $8.9 million for the three and six-month period ended June 30, 2026, compared to $6.2 million and $7.3 million for the three and six month periods ended June 28, 2025.

The increase in restructuring and other expenses for the three month period ended June 30, 2026, as compared to the three month period ended June 28, 2025, and for the six month period ended June 30, 2026, as compared to the six month period ended June 28, 2025, was primarily due to employee severance costs and business transformation projects.

Total other income, net .

Total other income, net was $4.5 million for the three-month period ended March 31, 2026, as compared to $8.5 million for the three-month period ended March 29, 2025.

The decrease in total other income, net for the three months ended March 31, 2026, as compared to the three months ended March 29, 2025, was attributable to interest on lower cash and marketable securities balances in the 2026 period following the use of cash for the acquisition of Semilab USA in the fourth quarter of 2025, partially offset by lower foreign currency exchange losses recognized in the 2026 period.

Total other income, net was $4.9 million and $9.5 million for the three and six month periods ended June 30, 2026, as compared to $7.5 million and $16.0 million for the three and six month periods ended June 28, 2025.

The decrease in total other income, net for the three months ended June 30, 2026, as compared to the three months ended June 28, 2025, and for the six months ended June 30, 2026, as compared to the six months ended June 28, 2025, was attributable to expenses associated with increased capital markets activity and fees related to the Bridge Commitment, as well as amortization of debt issuance costs.

Income Taxes .

We recorded an income tax provision of $4.3 million for the three-month period ended March 31, 2026, as compared to $7.6 million for the three-month period ended March 29, 2025.

Our effective tax rate of 11.3% and 10.6% for the three-month period ended March 31, 2026 and the three-month period ended March 29, 2025, respectively, differed from the statutory rate of 21.0%, primarily due to the tax benefit associated with the Foreign Derived Intangible Income (“FDII”) deductions, federal research and development tax credits, and excess tax benefits associated with equity compensation.

We recorded an income tax provision of $8.4 million and $12.7 million for the three and six month periods ended June 30, 2026, as compared to $5.8 million and $13.4 million for the three and six month periods ended June 28, 2025.

Our effective tax rate of 12.3% and 11.9% for the three and six month periods ended June 30, 2026 and our effective tax rate of 14.7% and 12.0% for the three month period ended June 28, 2025, respectively, differed from the statutory rate of 21.0%, primarily due to the tax benefit associated with the Foreign Derived Intangible Income (“FDII”) deductions, federal research and development tax credits, 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.

We currently have a partial valuation allowance recorded for certain foreign and state loss and credit carryforwards where the realizability of such deferred tax assets is substantially in doubt.

Each quarter we assess the likelihood that we will be able to recover our deferred tax assets primarily relating to state research and development credits.

We consider available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance.

As a result of our analysis, we concluded that it is more likely than not that a portion of our net deferred tax assets will not be realized.

Therefore, we continue to provide a valuation allowance against certain net deferred tax assets.

We continue to monitor available evidence and may reverse some or all of the valuation allowance in future periods, if appropriate.

The Organization for Economic Co-operation and Development (“OECD”) has released guidance covering various topics, including country-by-country reporting, definitional changes to permanent establishment and Base Erosion and Profit Shifting (“BEPS”), an initiative that aims to standardize and modernize global tax policy.

The guidance also established a global minimum tax of 15%.

This guidance has been implemented by several jurisdictions, including jurisdictions in which we operate, and many other jurisdictions are in the process of implementing it.

Depending on the final form of legislation ultimately enacted, there may be significant consequences for us due to our international business activities, including, but not limited to, an increase in our tax uncertainty and adverse effects on our provision for income taxes.

On January 5, 2026, the OECD announced that the Inclusive Framework on Base Erosion and Profit Shifting agreed to a new package of administrative guidance under the Pillar Two global minimum tax rules.

The new administrative guidance allows for U.S.

multinationals to provide for a Side-by-Side Safe Harbor that would exclude U.S.-parented multinational groups from the global minimum tax rule’s Income Inclusion Rule and Undertaxed Profits Rule on the grounds that the existing U.S.

law is sufficiently robust in its taxation of domestic and foreign profits.

Although we will continue to monitor U.S.

and international legislative developments in this area, we cannot predict whether such protective measures or legislation will be adopted by non-U.S.

countries, if any, and whether the U.S.

would have any responsive measures.

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 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.

The impact of the Act has been accounted for in the provision for taxes for the quarter ended March 31, 2026.

Liquidity and Capital Resources

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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:

Three Months Ended

Six Months Ended

(in thousands)

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Net cash and cash equivalents used in investing activities

Net cash and cash equivalents used in financing activities

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

Operating Activities

Net cash and cash equivalents provided by operating activities for the three months ended March 31, 2026 was $26.3 million.

The net cash and cash equivalents provided by operating activities during the three months ended March 31, 2026 resulted primarily from net income, adjusted to exclude the effect of non-cash operating charges, of $67.9 million.

Net cash and cash equivalents provided by operating activities for the six months ended June 30, 2026 was $87.8 million.

The net cash and cash equivalents provided by operating activities during the six months ended June 30, 2026 resulted primarily from net income, adjusted to exclude the effect of non-cash operating charges, of $76.4 million.

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

Cash provided by operating activities for the first three months of 2026 decreased compared to the corresponding period in fiscal 2025, primarily due to timing of accounts receivable payments and higher inventory levels due to revenue growth.

Cash provided by operating activities for the first six months of 2026 decreased compared to the corresponding period in fiscal 2025, primarily due to timing of accounts receivable payments and higher inventory levels driven by revenue growth, partially offset by increased in accounts payable and accrued expense due to the timing of vendor payments and higher operational activity.

Investing Activities

Net cash and cash equivalents used in investing activities for the three months ended March 31, 2026 was $112.6 million.

During the three months ended March 31, 2026, net cash and cash equivalents used in investing activities included purchases of

marketable securities of $179.5 million and capital expenditures of $3.6 million, partially offset by proceeds from maturities and sales of marketable securities of $70.5 million.

Net cash and cash equivalents used in investing activities for the six months ended June 30, 2026 was $342.8 million.

During the six months ended June 30, 2026, net cash and cash equivalents used in investing activities included purchases of marketable securities of $652.1 million and capital expenditures of $7.2 million, partially offset by proceeds from maturities and sales of marketable securities of $316.6 million.

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

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Financing Activities

Net cash and cash equivalents used in financing activities for the three months ended March 31, 2026 was $6.7 million.

During the three months ended March 31, 2026, financing activities used cash for tax payments related to shares withheld to satisfy employee tax obligations in connection with the vesting of awards under share-based compensation plans.

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 months ended March 31, 2026, the Company repurchased no shares of common stock under this repurchase authorization.

As of March 31, 2026, there was $99.9 million available for future share repurchases under this share repurchase authorization.

Net cash and cash equivalents provided by financing activities for the six months ended June 30, 2026 was $1.16 billion.

During the six months ended June 30, 2026, financing activities provided cash from proceeds of the 2031 Notes, partially offset by cash used for the Capped Call Transaction and repurchases of common stock, as well as for tax payments related to shares withheld to satisfy employee tax obligations in connection with the vesting of awards under share-based compensation plans.

In February 2024, the Onto Innovation Board of Directors (the “Board”) approved a share repurchase authorization (the “2024 Authorization,”) which allows us to repurchase up to $200 million worth of shares of Common Stock.

Under the 2024 Authorization, repurchases may be made through both public market and private transactions from time to time.

Any amount paid to repurchase the shares in excess of par value, including transaction costs, would be recorded directly as a decrease to additional paid-in capital.

During the three and six months ended June 30, 2026, no shares of the Company’s common stock were repurchased under the 2024 Authorization.

During the three and six months ended June 28, 2025, no shares, and 492 thousand shares, respectively, of the Company’s common stock were repurchased under the 2024 Authorization.

At June 30, 2026, there was $99.9 million available for future share repurchases under the 2024 Authorization.

Additionally, in May 2026, the Board approved a share repurchase authorization (the “2026 Authorization,”) which allowed the Company to repurchase up to $300 million worth of shares of Common Stock solely in connection with the 2031 Notes issuance.

During the three and six months ended June 30, 2026, 805 thousand shares of the Company’s common stock were repurchased under the 2026 Authorization.

The 2026 Authorization ceases to be in effect and any and all remaining and unused amount under the 2026 Authorization is no longer available for repurchase.

As of June 30, 2026, the net carrying amount of our 2031 Notes of $1.47 billion (principal balance of $1.5 billion maturing in 2031) is presented in non-current liabilities in our condensed consolidated balance sheets.

If the closing price of our stock exceeds $496.34 (or 130% of the conversion price of $381.80) for 20 of the last 30 trading days of any future quarter, our 2031 Notes would become convertible at the option of the holders during the subsequent fiscal quarter and the debt would be reclassified to current liabilities in our consolidated balance sheets.

On April 20, 2026, in connection with the Rigaku Transaction, we entered into a commitment letter with Goldman Sachs Bank USA (“Goldman Sachs”) for a senior secured 364-day $500 million bridge term loan credit facility (the “Bridge Commitment”).

The Bridge Commitment was intended to provide a stop-gap source of funds, together with other sources, to finance the Rigaku Transaction and related fees and expenses on or prior to closing.

In connection with the Bridge Commitment, the Company executed an Engagement Letter, Bridge Commitment Letter, Bridge Administrative Agent Fee Letter, and Bridge Arranger Fee Letter (collectively, the “Bridge Documents”).

The Company incurred total costs of $4.4 million in connection with the Bridge Commitment, including a $3.75 million commitment, underwriting and structuring fee, as well as other related expenses.

On May 21, 2026, following successful execution of the 2031 Notes offering and Capped Call Transactions, we

delivered an executed Notice of Bridge Commitment Termination to Goldman Sachs, terminating the Bridge Commitment in full.

No additional fees were owed in connection with the termination.

The Company had a credit agreement with a bank that provides for a variable-rate line of credit which was secured by the marketable securities the Company has with the bank.

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The available line of credit as of January 3, 2026 was $100.0 million with an available interest rate of 4.3%.

The Company terminated this line of credit during the three months ended March 31, 2026, and did not utilize the line of credit while it was active.

The Company terminated this line of credit during the six months ended June 30, 2026, and did not utilize the line of credit while it was active.

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.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis