ONTO INNOVATION INC. 10-Q

Item 1. Financial Statements ONTO INNOVATION INC. CONDENSED CONSOLIDATED S TATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended June 30, June 28, June 30, June 28, 2026 2025 2026 2025 Revenue $ 343,129 $ 253,597 $ 635,078 $ 520,204 Cost of revenue 159,875 131,475 305,435 254,849 Gross profit 183,254 122,122 329,643 265,355 Operating expenses: Research and development 38,879 35,292 73,977 63,322 Sales and marketing 23,105 14,910 44,564 34,626 General and administrative 34,260 25,003 65,669 47,788 Amortization 19,699 8,446 39,399 16,891 Restructuring and other 3,761 6,224 8,970 7,347 Total operating expenses 119,704 89,875 232,579 169,974 Operating income 63,550 32,247 97,064 95,381 Other income, net Interest income, net 5,245 8,631 10,347 17,897 Foreign currency exchange losses ( 139 ) ( 1,149 ) ( 600 ) ( 1,911 ) Other (expense) income, net ( 160 ) 12 ( 263 ) 31 Total other income, net 4,946 7,494 9,484 16,017 Income before provision for income taxes 68,496 39,741 106,548 111,398 Provision for income taxes 8,394 5,830 12,696 13,392 Net income $ 60,102 $ 33,911 $ 93,852 $ 98,006 Earnings per share: Basic $ 1.22 $ 0.69 $ 1.89 $ 2.00 Diluted $ 1.21 $ 0.69 $ 1.88 $ 1.99 Weighted average number of shares outstanding: Basic 49,412 48,925 49,575 49,053 Diluted 49,682 49,016 49,841 49,213 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 1 Table of Contents ONTO INNOVATION INC. CONDENSED CONSOLIDATED STATEM ENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited) Three Months Ended Six Months Ended June 30, June 28, June 30, June 28, 2026 2025 2026 2025 Net income $ 60,102 $ 33,911 $ 93,852 $ 98,006 Other comprehensive (loss) income, net of tax: Change in net unrealized (losses) gains on available-for-sale marketable securities ( 342 ) ( 106 ) ( 1,001 ) 232 Change in currency translation adjustments ( 167 ) 6,868 ( 2,027 ) 8,881 Total other comprehensive (loss) income, net of tax ( 509 ) 6,762 ( 3,028 ) 9,113 Total comprehensive income $ 59,593 $ 40,673 $ 90,824 $ 107,119 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 2 Table of Contents ONTO INNOVATION INC. CONDENSED CONSOLIDA TED BALANCE SHEETS (In thousands) (Unaudited) June 30, 2026 January 3, 2026 ASSETS Current Assets: Cash and cash equivalents $ 1,253,205 $ 346,119 Marketable securities 628,945 293,503 Accounts receivable, net of allowance of $ 2,476 at June 30, 2026 and $ 2,462 at January 3, 2026. 337,384 268,932 Inventories, net 379,243 298,264 Prepaid expenses and other current assets, net 43,164 61,217 Total current assets 2,641,941 1,268,035 Property, plant and equipment, net 123,717 127,184 Goodwill 643,468 644,015 Identifiable intangible assets, net 258,699 298,098 Deferred income taxes 4,408 3,864 Other assets 26,809 26,545 Total assets $ 3,699,042 $ 2,367,741 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 139,430 $ 107,685 Accrued liabilities 55,286 48,544 Deferred revenue 35,916 31,781 Other current liabilities 41,013 30,936 Total current liabilities 271,645 218,946 2031 Notes, net 1,471,731 ― Deferred and other tax liabilities 2,102 20,401 Other non-current liabilities 30,906 27,747 Total liabilities 1,776,384 267,094 Commitments and contingencies Stockholders’ equity: Common stock, $ 0.001 par value, 97,000 shares authorized, 49,033 and 49,702 issued and outstanding at June 30, 2026 and January 3, 2026, respectively. 50 50 Additional paid-in capital 1,098,020 1,366,833 Accumulated other comprehensive loss ( 13,049 ) ( 10,021 ) Accumulated earnings 837,637 743,785 Total stockholders’ equity 1,922,658 2,100,647 Total liabilities and stockholders’ equity $ 3,699,042 $ 2,367,741 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 3 Table of Contents ONTO INNOVATION INC. CONDENSED CONSOLIDATED S TATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six Months Ended June 30, June 28, 2026 2025 Cash flows from operating activities: Net income $ 93,852 $ 98,006 Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: Amortization of intangibles 39,399 16,891 Accretion of discount on marketable securities ( 1,199 ) ( 3,030 ) Depreciation 11,611 10,237 Share-based compensation 17,026 13,492 Provision for inventory valuation 2,689 18,060 Deferred income taxes 1,257 ( 7,272 ) Other, net ( 382 ) 4,733 Changes in operating assets and liabilities ( 76,424 ) ( 1,194 ) Net cash and cash equivalents provided by operating activities 87,829 149,923 Cash flows from investing activities: Purchases of marketable securities ( 652,144 ) ( 419,312 ) Proceeds from maturities and sales of marketable securities 316,622 384,554 Purchases of property, plant and equipment ( 7,242 ) ( 22,005 ) Purchases of non-marketable equity securities — ( 8,000 ) Acquisition related adjustments — ( 57 ) Net cash and cash equivalents used in investing activities ( 342,764 ) ( 64,820 ) Cash flows from financing activities: Purchases and retirement of common stock ( 204,979 ) ( 75,015 ) Tax payments related to shares withheld for share-based compensation plans ( 15,062 ) ( 12,390 ) Issuance of shares through share-based compensation plans 5,927 4,179 Payment for bridge commitment fees ( 3,750 ) — Proceeds from issuance of 2031 Notes, net of issuance costs 1,469,779 — Payment for capped call options ( 88,950 ) — Net cash and cash equivalents provided by (used in) financing activities 1,162,965 ( 83,226 ) Effect of exchange rate changes on cash and cash equivalents ( 944 ) 2,648 Net increase in cash and cash equivalents 907,086 4,525 Cash and cash equivalents at beginning of period 346,119 212,945 Cash and cash equivalents at end of period $ 1,253,205 $ 217,470 Supplemental disclosure of cash flow information: Income taxes paid (net of refunds) $ 5,117 $ 32,641 Supplemental noncash disclosure of cash flow information: Unpaid excise tax on repurchases of common stock $ 2,050 $ — Unpaid debt issuance costs related to issuance of 2031 Notes $ 1,941 $ — Unpaid debt issuance costs related to bridge loan facility $ 678 $ — The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 4 Table of Contents ONTO INNOVATION INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands) (Unaudited) Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Shares Amount Capital Loss Earnings Total Balance at January 3, 2026 49,702 $ 50 $ 1,366,833 $ ( 10,021 ) $ 743,785 $ 2,100,647 Net income — — — — 33,750 33,750 Share-based compensation — — 7,011 — — 7,011 Issuance of shares through share-based compensation plans, net 73 — — — — — Purchases of common stock — — — — — — Share-based compensation plan withholdings ( 31 ) — ( 6,701 ) — — ( 6,701 ) Currency translation — — — ( 1,860 ) — ( 1,860 ) Unrealized loss on investments — — — ( 659 ) — ( 659 ) Balance at March 31, 2026 49,744 $ 50 $ 1,367,143 $ ( 12,540 ) $ 777,535 $ 2,132,188 Net income — — — — 60,102 60,102 Share-based compensation — — 10,015 — — 10,015 Issuance of shares through share-based compensation plans, net 124 — 5,927 — — 5,927 Purchases of common stock (805 ) — ( 207,029 ) — — ( 207,029 ) Capped call option purchase, net of tax impact — — ( 69,675 ) — — ( 69,675 ) Share-based compensation plan withholdings ( 30 ) — ( 8,361 ) — — ( 8,361 ) Currency translation — — — ( 167 ) — ( 167 ) Unrealized loss on investments — — — ( 342 ) — ( 342 ) Balance at June 30, 2026 49,033 $ 50 $ 1,098,020 $ ( 13,049 ) $ 837,637 $ 1,922,658 5 Table of Contents Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Shares Amount Capital Loss Earnings Total Balance at December 28, 2024 49,238 $ 49 $ 1,275,146 $ ( 13,863 ) $ 664,550 $ 1,925,882 Net income — — — — 64,095 64,095 Share-based compensation — — 6,814 — — 6,814 Issuance of shares through share-based compensation plans, net 140 — 4,179 — — 4,179 Purchases of common stock ( 492 ) — ( 17,491 ) — ( 57,524 ) ( 75,015 ) Share-based compensation plan withholdings ( 49 ) — ( 8,684 ) — — ( 8,684 ) Currency translation — — — 2,013 — 2,013 Unrealized gain on investments — — — 338 — 338 Balance at March 29, 2025 48,837 $ 49 $ 1,259,964 $ ( 11,512 ) $ 671,121 $ 1,919,622 Net income — — — — 33,911 33,911 Share-based compensation — — 6,678 — — 6,678 Issuance of shares through share-based compensation plans, net 137 — — — — — Purchases of common stock — — — — — — Share-based compensation plan withholdings ( 37 ) — ( 3,707 ) — — ( 3,707 ) Currency translation — — — 6,868 — 6,868 Unrealized loss on investments — — — ( 106 ) — ( 106 ) Balance at June 28,2025 48,937 $ 49 $ 1,262,935 $ ( 4,750 ) $ 705,032 $ 1,963,266 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 6 Table of Contents ONTO INNOVATION INC. NOTES TO CONDENSED CONSOLI DATED FINANCIAL STATEMENTS (Unaudited) NOTE 1. Basis of Presentation The accompanying interim unaudited Condensed Consolidated Financial Statements have been prepared by Onto Innovation Inc. (the “Company,” “Onto Innovation,” “we,” “our” or “us”) and in the opinion of management reflect all adjustments, consisting of normal recurring accruals, necessary for their fair presentation in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). Certain reclassifications have been made to prior-period amounts to conform to current-period presentation. The interim results for the three and six month periods ended June 30, 2026 are not necessarily indicative of results to be expected for the entire year or any future periods. This interim financial information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 3, 2026 (the “2025 Form 10-K”) filed with the Securities and Exchange Commission on February 24, 2026. The accompanying Condensed Consolidated Balance Sheet at January 3, 2026 has been derived from the audited consolidated financial statements included in the 2025 Form 10-K. On February 18, 2026, the Company’s Board of Directors (“Board”) changed the Company’s fiscal year-end from a 52-53 week fiscal year ending on the Saturday closest to December 31 to a December 31 fiscal year-end. The Company made the fiscal year change on a prospective basis and will not adjust operating results for prior periods. Additionally, the Company has adopted calendar quarter fiscal period ends commencing with the first quarter ended March 31, 2026. The change affects the prior year comparability of the Company’s fiscal quarters in 2025 and has resulted in shifts in the quarterly periods, which is not expected to have a material impact on our quarterly financial results. Our fiscal year ended January 3, 2026 was a 53-week fiscal year. The second quarter of the fiscal year ended January 3, 2026 ended on June 28, 2025. Throughout this document, the three month period ended June 30, 2026 represents the quarterly period that commenced on April 1, 2026, and ended on June 30, 2026. The three month period ended June 28, 2025 represents the quarterly period that commenced on March 30, 2025 and ended on June 28, 2025. The six-month period ended June 30, 2026 represents the period that commenced on January 4, 2026, the first day of our fiscal year, and ended on June 30, 2026. The six-month period ended June 28, 2025 represents the quarterly period that commenced on December 29, 2024 and ended on June 28, 2025. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates made by management include excess and obsolete inventory, fair value of assets acquired and liabilities assumed in a business combination, recoverability and useful lives of property, plant and equipment and identifiable intangible assets, recoverability of goodwill, recoverability of deferred tax assets, allowance for credit losses, liabilities for product warranty, share-based payments and liabilities for tax uncertainties. Actual results could differ from those estimates. These estimates and assumptions are based on historical experience and on various other factors which the Company believes to be reasonable under the circumstances. The Company may engage third-party valuation specialists to assist with estimates related to the valuation of financial instruments, assets and stock awards associated with various contractual arrangements. Such estimates often require the selection of appropriate valuation methodologies and significant judgment. Actual results could differ from these estimates under different assumptions or circumstances and such differences could be material. Recent Accounting Pronouncements Recently Adopted or Effective In December 2025, the FASB issued ASU 2025-12, “Codification Improvements,” which addresses suggestions received from stakeholders regarding the ASC and makes other incremental improvements to U.S. GAAP. The update represents changes to the ASC that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. The amendments in this update are effective for the Company beginning January 1, 2027, with early adoption permitted. The Company adopted this ASU during the quarter ended June 30, 2026. In connection with the adoption, 7 Table of Contents the Company elected an accounting policy to allocate the excess of the repurchase price over par for all shares repurchased and retired to additional paid-in capital on a prospective basis. In July 2025, the FASB issued ASU 2025-05, “Financial Instruments - Credit Losses (Topic 326),” which simplifies the estimation of credit losses on current accounts receivable and current contract assets arising from transactions accounted for under Accounting Standards Codification 606, Revenue from Contracts with Customers. The guidance allows all entities to use a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. The guidance is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. Early adoption is permitted. Entities that elect the practical expedient are required to apply the amendments prospectively. The Company adopted this ASU during the quarter ended March 31, 2026, with no material impact on the condensed consolidated financial statements. Updates Not Yet Effective In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements,” to clarify and reorganize U.S. GAAP interim reporting guidance to improve navigability, applicability, and consistency without changing the fundamental nature or volume of required interim disclosures. This amendment clarifies when ASC 270 is applicable, establishes a disclosure principle requiring disclosure of material events or changes occurring since the most recent annual reporting period, and consolidates into ASC Topic 270 a comprehensive list of interim disclosures required by other codification topics. The amendment also clarifies the form and content of interim financial statements, including guidance for condensed interim reporting. The amendment is effective for the Company for interim periods in 2028, with early adoption permitted. The impact of the adoption of the amendments in this update is not expected to be material to the Company’s consolidated financial position and results of operations. In December 2025, the FASB issued ASU 2025‑10, “Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities , ” to establish specific guidance for the recognition, measurement, presentation, and disclosure of government grants received to reduce diversity and increase consistency amongst business entities in accounting for such grants. This amendment amends ASC Topic 832 to require that a government grant received by a business entity should not be recognized as income until it is probable that a business entity will comply with the conditions attached to the grant and the grant will be received, with any grant related to an asset to be purchased, constructed or acquired such as long-lived assets or inventory to be recognized on the balance sheet as either deferred income or as an adjustment to the cost basis of the related asset, or the cost accumulation approach, as such costs are incurred. Any grant income or deferred income shall be recognized in earnings on a systematic and rational basis over the periods in which a business entity recognizes as expenses the costs for which the grant is intended to compensate, whereas any grants accounted for using the cost accumulation approach will not have a direct subsequent recognition in earnings, but rather reduced depreciation or amortization in accounting for the related asset. Entities are also required to present grants recognized in earnings separately under other income or deducted from the related expense, and provide disclosures of the nature of the government grant received, the accounting policies used to account for the grant, and the significant terms and conditions of the grant. The amendment is effective for the Company for annual and interim periods in 2029, with early adoption and multiple transition methods permitted. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements. In December 2025, the FASB issued ASU 2025-09, “Derivatives and Hedging (Topic 815): Hedge Accounting Improvements,” to amend certain aspects of its hedge accounting guidance to better reflect an entity’s risk management activities in the financial statements. The guidance expands the hedged risks permitted to be aggregated in a group of individual forecasted transactions and increases the variable price components eligible to be designated as the hedged risk in the forecasted purchase or sale of nonfinancial assets. For public business entities, the provisions of ASU 2025-09 are effective for fiscal years beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, “Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,” which removes all references to software development stages and clarifies the threshold entities apply to begin capitalizing costs. ASU 2025-06 is effective for annual periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. The ASU may be applied prospectively, retrospectively or through a modified transition approach with early adoption permitted. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40),” which requires additional disclosure of certain costs and expenses, including inventory purchases, employee compensation, selling expense and depreciation expense within the notes to financial statements. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning 8 Table of Contents after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the updated standard will have on its financial statements and related disclosures. NOTE 2. Acquisitions and Investments Proposed Investment On April 20, 2026, the Company 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 (“Rigaku”) for approximately $ 710 million. In connection with the Rigaku Transaction, the Company will receive the right to nominate one director to Rigaku’s board of directors. The Company expects to account for the minority investment under the fair value option method and will not consolidate financial results. The Rigaku Transaction is expected to close in the second half of 2026. Completed Acquisition On November 17, 2025 (the “Acquisition Date”), the Company completed the previously announced acquisition of Semilab USA LLC (“Semilab USA”), pursuant to the Equity Purchase Agreement (the “Purchase Agreement”), dated as of June 27, 2025, by and among the Company, Semilab International Zrt. (the “Seller”), Semilab Zrt. and Semilab USA, as amended by the Amendment to Equity Purchase Agreement, dated October 9, 2025. The preliminary Acquisition Date fair value of consideration transferred consisted of the following: At Acquisition Date (in thousands, except per share data) Cash paid $ 389,052 Issuance of common stock (1) 81,697 Cash paid to extinguish Semilab USA’s debt 55,892 Total purchase consideration $ 526,641 (1) The fair value is based on the issuance of 641,771 shares of the Company’s common stock, par value $0.001 per share ("Common Stock") with a per share value of $127.30 on the Acquisition Date. The Company accounted for the acquisition of Semilab USA in accordance with ASC Topic 805, Business Combinations (“ASC 805”). The acquired assets and assumed liabilities were recorded at their estimated fair values. The Company determined the estimated fair values with the assistance of valuations performed by a third-party specialist, discounted cash flow analysis, and estimates made by management. The acquisition strengthens the Company’s capabilities in inline wafer contamination monitoring, materials characterization, and unique surface charge metrology. The goodwill recognized reflects the anticipated benefits from expanding the Company’s product portfolio and its growth opportunities in both new and existing markets. As the purchase price exceeded the fair value of Semilab USA’s identifiable net assets, goodwill was recorded in connection with the transaction. The Company does not expect the goodwill to be deductible for income tax purposes. A portion of the overall purchase price was allocated to acquired intangible assets. Amortization expense associated with acquired intangible assets is not deductible for tax purposes. Therefore, a deferred tax liability of $ 46.6 million was established primarily for the future amortization of these intangibles and is included in “other long-term liabilities” in the table below. The inventory fair value step‑up is non‑recurring and is recognized as an increase to cost of revenue as the related inventory is sold. For the year ended January 3, 2026, the Company recognized $ 4.0 million of expense related to the step‑up. During the six months ended June 30, 2026, the Company recognized $ 6.7 million of expense related to the step-up. The remaining balance of approximately $ 2.4 million is expected to be recognized over the estimated sell‑through period of one year following the Acquisition Date. 9 Table of Contents The following table summarizes the preliminary purchase price allocation of the fair values of the assets acquired and liabilities assumed: At Acquisition Date (in thousands) Cash and cash equivalents $ 8,876 Accounts receivable 14,428 Inventories 33,838 Prepaid expenses and other current assets 843 Property, plant and equipment 2,058 Intangible assets 210,000 Other assets 3,592 Accounts payable ( 487 ) Accrued expenses and other current liabilities ( 8,270 ) Other long-term liabilities ( 51,668 ) Total identifiable net assets 213,210 Goodwill 313,431 Total purchase consideration $ 526,641 The following table sets forth the preliminary amounts, allocated to the intangible assets identified and their estimated useful lives as of the Acquisition Date: At Acquisition Date Fair Value Weighted Average Useful Life (in thousands) (in years) Developed technology $ 103,000 7.0 Customer relationships 82,000 6.0 Backlog 20,000 1.3 Tradename 5,000 8.0 Total amortizable intangible assets $ 210,000 The developed technology intangible assets were valued using the relief-from-royalty method under the income approach, which estimates value based on the royalty a market participant would pay to license the technology. Under this approach, the after‑tax royalty savings attributable to ownership represent the economic benefit of the asset. The key assumptions used in the valuation included the estimated royalty rate, projected revenue attributable to the developed technology, the expected useful life of the asset, and a discount rate reflecting the risks associated with the projected cash flows. The assets are amortized on a straight‑line basis over their estimated 7 ‑year useful life, which approximates the expected pattern of economic benefits. The customer relationships and backlog intangible assets were valued using the multi-period excess earnings method under the income approach, which isolates the net cash flows attributable to each asset and discounts them to present value. Significant assumptions included projected customer revenue and attrition rates, estimated operating margins, contributory asset charges, the expected useful life of the asset, and a discount rate reflecting the risks associated with the asset‑specific cash flows. The customer relationship asset is amortized on a straight-line basis over its 6 ‑year estimated life to reflect the pattern of expected economic benefits. The backlog asset is amortized on a straight-line basis over its 1.3 year estimated life to reflect the pattern of expected economic benefits. There were no significant contingencies assumed as part of the acquisition. The purchase price allocation for the Semilab USA acquisition is preliminary and reflects management’s current estimates of the fair value of the assets acquired and liabilities assumed in accordance with ASC 805. The Company is still evaluating certain items within the measurement period, including the final determination of the working capital adjustment, which remains subject to post‑closing review procedures outlined in the Purchase Agreement. Accordingly, the provisional amounts recognized for the acquired net assets are subject to change during the remainder of the measurement period (which will not exceed 12 months from the Acquisition Date). Any such revisions or changes may be material. From the Acquisition Date through January 3, 2026, Semilab USA contributed $ 8.6 million of revenue and an operating loss of $ 6.2 million to the Company’s consolidated results. During the three and six months ended June 30, 2026, Semilab USA 10 Table of Contents contributed $ 20.7 million and $ 46.1 million of revenue, respectively, and an operating loss of $ 4.5 million and $ 9.0 million, respectively, to the Company’s consolidated results. NOTE 3. Fair Value Measurements Recurring Fair Value Measurements The following tables present information about the Company’s assets and liabilities that are regularly measured and carried at fair value on a recurring basis and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value, which is described further within Note 4 Fair Value Measurements to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2026: June 30, 2026 Cash and Cash Equivalents Marketable Securities Level 1 Level 2 Total Level 1 Level 2 Total (in thousands) Assets: Federal and municipal notes and bonds $ — $ 124,772 $ 124,772 $ — $ 308,291 $ 308,291 Cash 226,804 — 226,804 — — — Money market funds 787,462 — 787,462 — — — Certificates of deposit — — — — 73,970 73,970 Commercial paper — 114,167 114,167 — 179,097 179,097 Corporate bonds — — — — 67,587 67,587 Total Cash, Cash Equivalents, and Marketable Securities $ 1,014,266 $ 238,939 $ 1,253,205 $ — $ 628,945 $ 628,945 Foreign currency forward contracts — — — — 1,284 1,284 Total assets $ 1,014,266 $ 238,939 $ 1,253,205 $ — $ 630,229 $ 630,229 January 3, 2026 Cash and Cash Equivalents Marketable Securities Level 1 Level 2 Total Level 1 Level 2 Total (in thousands) Assets: Federal and municipal notes and bonds $ — $ 40,415 $ 40,415 $ — $ 149,554 $ 149,554 Cash 245,130 — 245,130 — — — Money market funds 5,118 — 5,118 — — — Certificates of deposit — — — — 47,338 47,338 Commercial paper — 53,373 53,373 — 32,204 32,204 Corporate bonds — 2,083 2,083 — 64,407 64,407 Total Cash, Cash Equivalents, and Marketable Securities $ 250,248 $ 95,871 $ 346,119 $ — $ 293,503 $ 293,503 Foreign currency forward contracts — — — — 89 89 Total assets $ 250,248 $ 95,871 $ 346,119 $ — $ 293,592 $ 293,592 Items classified within Level 1 of the fair value hierarchy are valued using quoted prices in active markets for identical assets or liabilities. The Company’s marketable securities, comprised of Level 2 available-for-sale debt securities, are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. The foreign currency forward contracts are primarily measured based on the foreign currency spot and forward rates quoted by the banks or foreign currency dealers. There were no impairments of the Company’s assets measured and carried at fair value during the three and six months ended June 30, 2026 and June 28, 2025. There were no changes in valuation techniques during the three and six months ended June 30, 2026 and June 28, 2025. 11 Table of Contents Financial Instruments Not Measured at Fair Value on a Recurring Basis The Company reports its financial instruments at fair value with the exception of its 0.00% Convertible Senior Notes due 2031 (“2031 Notes”). The estimated fair value of the 2031 Notes was determined based on the trading price of the 2031 Notes as of the last day of trading for the period. The Company classifies the fair value of the 2031 Notes as a Level 2 measurement, as the 2031 Notes are not actively traded in the market. On or after March 1, 2031, until the close of business on the second Scheduled Trading Day (as defined in the Indenture governing the 2031 Notes, which is further described in Note 7 below) immediately before the maturity date, the 2031 Notes will be convertible at the option of the noteholders at any time. At June 30, 2026 the carrying value, net of unamortized debt discount and issuance costs, and estimated fair values of the 2031 Notes are as follows: June 30, 2026 Level 2 Carrying Value, net Estimated Fair Value (in thousands) Senior Convertible Notes: 2031 Notes $ 1,471,731 $ 1,982,250 Total senior convertible notes $ 1,471,731 $ 1,982,250 Assets Measured at Fair Value on a Non-Recurring Basis At June 30, 2026 and January 3, 2026 , the Company held investments of $ 8.0 million in the equity of a privately-held company. This non-marketable equity investment is recorded at fair value on a non-recurring basis and is classified as a Level 3 asset in “Other assets” on the Condensed Consolidated Balance Sheets. This non-marketable equity investment is generally accounted for under the measurement alternative, defined as cost, less impairments, adjusted for subsequent observable price changes and is periodically assessed for impairment when events or circumstances indicate that decline in value may have occurred. As of June 30, 2026 , there have been no impairments recorded for the non-marketable equity investment. NOTE 4. Marketable Securities At June 30, 2026 and January 3, 2026, marketable securities are categorized as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) June 30, 2026 Federal and municipal notes and bonds $ 308,452 $ 84 $ ( 245 ) $ 308,291 Certificates of deposit 74,055 3 ( 88 ) 73,970 Commercial paper 179,163 6 ( 72 ) 179,097 Corporate bonds 67,680 32 ( 125 ) 67,587 Total marketable securities $ 629,350 $ 125 $ ( 530 ) $ 628,945 January 3, 2026 Federal and municipal notes and bonds $ 149,004 $ 551 $ ( 1 ) $ 149,554 Certificates of deposit 47,243 95 — 47,338 Commercial paper 32,188 16 — 32,204 Corporate bonds 64,214 193 — 64,407 Total marketable securities $ 292,649 $ 855 $ ( 1 ) $ 293,503 As of June 30, 2026, all of the Company’s marketable securities are available to the Company for use in its current operations. As a result, the Company has classified all of these securities as current assets even though the stated maturity of 12 Table of Contents some individual securities may be one year or more beyond the balance sheet date. The following table shows the fair value of the Company’s marketable securities, by contractual maturity, as of June 30, 2026: June 30, 2026 January 3, 2026 Fair Value Fair Value (in thousands) Due within one year $ 546,640 $ 233,043 Due after one through five years 82,305 60,460 Total marketable securities $ 628,945 $ 293,503 The aggregate fair value of marketable securities with unrealized losses was $ 405 million and $ 21.2 million as of June 30, 2026 and January 3, 2026, respectively. All unrealized losses are reported in Stockholders’ Equity under the caption “Accumulated other comprehensive loss.” As of June 30, 2026 and January 3, 2026 , 125 investments and 11 investments were in an unrealized loss position, respectively. All such investments have been in an unrealized loss position for less than a year and these losses are considered temporary. As of June 30, 2026 and January 3, 2026 , one investment and two investments were in an unrealized loss position, respectively, for greater than a year. The Company has the ability and intent to hold these investments until a recovery of their amortized cost, which may not occur until maturity. The Company expects these securities are subject to minimal credit risk. As a result, the Company did not record any charges for credit-related impairments for its available-for-sale securities for the three and six months ended June 30, 2026 and June 28, 2025 . NOTE 5. Derivative Instruments and Hedging Activities The Company, when it considers it to be appropriate, enters into forward contracts to hedge the economic exposure arising from foreign currency denominated transactions. These contracts are typically denominated in euro, Chinese renminbi, Japanese yen, Korean won, Singapore dollars and Taiwanese dollars. Foreign currency forward contracts are not designated as hedges for accounting purposes, and therefore, the change in fair value is recorded in “Other (expense) income, net,” in the Condensed Consolidated Statements of Operations. The Company records its forward contracts at fair value in either “Prepaid expenses and other current assets” or “Other current liabilities” in the Condensed Consolidated Balance Sheets. The dollar equivalent of the U.S. dollar forward contracts notional amount and related fair values as of June 30, 2026 and January 3, 2026 were as follows: June 30, 2026 January 3, 2026 (in thousands) Notional amount $ 79,847 $ 47,361 Fair value of asset $ 1,284 $ 89 NOTE 6. Balance Sheet Components Inventories Inventories, net of reserves are comprised of the following: June 30, 2026 January 3, 2026 (in thousands) Materials $ 278,289 $ 208,061 Work-in-process 73,127 59,764 Finished goods 27,827 30,439 Total inventories, net $ 379,243 $ 298,264 13 Table of Contents Property, Plant and Equipment Property, plant and equipment, net is comprised of the following: June 30, 2026 January 3, 2026 (in thousands) Machinery and equipment $ 96,572 $ 95,151 Land and building 47,720 47,770 Computer equipment and software 43,703 40,635 Leasehold improvements 25,388 24,040 Furniture and fixtures 4,423 3,920 Total property, plant and equipment, gross 217,806 211,516 Accumulated depreciation ( 94,089 ) ( 84,332 ) Total property, plant and equipment, net $ 123,717 $ 127,184 For the three and six months ended June 30, 2026 , depreciation expense was $ 5.2 million and $ 11.6 million, respectively. For the three and six months ended June 28, 2025 , depreciation expense was $ 5.8 million and $ 10.2 million, respectively. NOTE 7. Debt Obligations Indenture and Notes On May 21, 2026, the Company 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”). The issuance of the 2031 Notes included the exercise in full of the initial purchasers’ option to purchase up to an additional $200 million aggregate principal amount of 2031 Notes . The Company offered and sold the 2031 Notes to the initial purchasers in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and for resale by the initial purchasers to persons reasonably believed to be qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act. The net proceeds from the offering were approximately $ 1.47 billion after deducting the initial purchasers’ discount and commissions but before offering expenses payable. The Company has used or intends to use (i) approximately $ 88.9 million of the net proceeds to fund the cost of entering into the capped call transactions described below, (ii) approximately $ 204.9 million of the net proceeds to repurchase 805 thousand shares of Common Stock concurrently with the pricing of the offering in privately negotiated transactions effected with or through one of the initial purchasers or one or more of its affiliates, at a price per share equal to $ 254.53 , the last reported sale price per share of Common Stock on the NYSE on May 18, 2026 and (iii) the remaining net proceeds for general corporate purposes, which may include financing the Rigaku Transaction. The 2031 Notes will mature on June 1, 2031, unless earlier converted, redeemed or repurchased. The 2031 Notes will not bear regular interest, and the principal amount of the 2031 Notes will not accrete. After giving effect to the initial purchasers’ discount and issuance costs, the 2031 Notes have an effective interest rate of 0.39 %. However, special interest and additional interest, if any, may accrue on the 2031 Notes at a combined rate per annum not exceeding 0.50% upon the occurrence of certain events as described in the Indenture. As of June 30, 2026, the if-converted value of the 2031 Notes did not exceed the aggregate principal amount. Beginning on March 1, 2031 and until the close of business on the second Scheduled Trading Day (as defined in the Indenture) immediately before the maturity date, the 2031 Notes will be convertible at the option of the noteholders at any time. If holders convert, we will settle conversions by paying cash up to the aggregate principal amount of the 2031 Notes to be converted and paying or delivering, as the case may be, cash, shares, or a combination thereof, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the 2031 Notes being converted. Any 2031 Notes that remain outstanding at maturity are required to be repaid in cash. Before March 1, 2031, noteholders will have the right to convert their 2031 Notes only under the following circumstances: 14 Table of Contents (1) during any fiscal quarter (and only during such fiscal quarter) commencing after the fiscal quarter ending on September 30, 2026, if the Last Reported Sale Price (as defined in the Indenture) per share of Common Stock, exceeds 130 % of the conversion price (as described below) for each of at least 20 Trading Days (as defined in the Indenture) (whether or not consecutive) during a period of 30 consecutive Trading Days ending on, and including, the last Trading Day of the immediately preceding fiscal quarter; (2) during the five consecutive business days immediately after any ten consecutive Trading Day period (the “Measurement Period”) in which the Trading Price (as defined in the Indenture) per $1,000 principal amount of 2031 Notes for each Trading Day of the Measurement Period was less than 98 % of the product of the Last Reported Sale Price per share of the Common Stock on such Trading Day and the conversion rate (as described below) on each Trading Day; (3) upon the occurrence of specified corporate events or distributions on the Common Stock as set forth in the Indenture; or (4) if the Company calls such 2031 Notes for redemption. As of June 30, 2026, none of the foregoing conditions permitting early conversion of the 2031 Notes had been satisfied. Accordingly, the 2031 Notes were not convertible at the option of the noteholders as of such date, and the Company has classified the 2031 Notes as a non-current liability. The Company may not redeem the 2031 Notes at its option at any time before June 6, 2029. The Company will have the option to redeem the 2031 Notes, in whole or in part (subject to the partial redemption limitation set forth in the Indenture), at any time, and from time to time, on or after June 6, 2029 and before the 31 st Scheduled Trading Day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid special interest and additional interest, if any, to, but excluding, the redemption date, but only if the Last Reported Sale Price per share of the Common Stock exceeds 130% of the conversion price on (1) each of at least 20 Trading Days, whether or not consecutive, during the 30 consecutive Trading Days ending on, and including, the Trading Day immediately before the date the Company sends the related redemption notice; and (2) the Trading Day immediately before the date the Company sends such notice. In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change (as defined in the Indenture) with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. Pursuant to the partial redemption limitation, the Company may not elect to redeem less than all of the outstanding 2031 Notes unless at least $100.0 million aggregate principal amount of 2031 Notes are outstanding and not subject to redemption as of the time it sends the related redemption notice. The conversion rate for the 2031 Notes will initially be 2.6192 shares of Common Stock per $1,000 principal amount of 2031 Notes, which is equivalent to an initial conversion price of approximately $ 381.80 per share of Common Stock. The conversion rate is subject to adjustment upon certain events specified in the Indenture but will not be adjusted for any accrued or unpaid interest. In addition, upon a Make-Whole Fundamental Change, the Company will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its 2031 Notes in connection with such Make-Whole Fundamental Change. No adjustment to the conversion rate will be made if the Stock Price (as defined in the Indenture) in such Make-Whole Fundamental Change is either less than $254.53 per share or greater than $2,750.00 per share. The Company will not increase the conversion rate to an amount that exceeds 3.9288 shares per $1,000 principal amount of 2031 Notes, subject to adjustment as set forth in the Indenture. Based on the initial conversion rate, the 2031 Notes are initially convertible into approximately 3.9 million shares of the Common Stock (based on an aggregate principal amount of $1.5 billion). Assuming the maximum conversion rate of 3.9288 shares per $1,000 principal amount in connection with a Make Whole Fundamental Change, the 2031 Notes would be convertible into a maximum of approximately 5.9 million shares of Common Stock, subject to adjustment as set forth in the Indenture. If certain corporate events that constitute a Fundamental Change (as defined in the Indenture) occur, then, subject to certain exceptions, noteholders may require the Company to repurchase their 2031 Notes in whole or in part for cash at a price equal to the principal amount of the 2031 Notes to be repurchased, plus accrued and unpaid special interest and additional interest, if any, to, but excluding, the Fundamental Change Repurchase Date (as defined in the Indenture). The Indenture governing the 2031 Notes contains customary terms and covenants, including those limiting the Company’s ability to consolidate with or merge into, or sell, lease or otherwise transfer substantially all of its assets, as well as customary events of default, each as defined in the Indenture. The 2031 Notes are presented as “2031 Notes, net” within non-current liabilities on the condensed consolidated balance sheet as of June 30, 2026 and are carried at amortized cost. The Company evaluated the terms of the 2031 Notes under 15 Table of Contents applicable accounting guidance and concluded that the 2031 Notes are appropriately accounted for as a single liability instrument, with no bifurcation or other separate accounting required. The initial purchasers’ discount of $30 million is treated as a debt issuance cost for financial reporting purposes and as original issue discount for U.S. federal income tax purposes. Accordingly, the Company established a deferred tax asset of approximately $6.5 million at issuance. The $30 million of original issue discount is deductible for tax purposes over the term of the notes under Section 163 of the Internal Revenue Code of 1986, as amended. The 2031 Notes consisted of the following components: June 30, 2026 (in thousands) Principal $ 1,500,000 Unamortized debt issuance costs 28,269 Net carrying amount of the liability component $ 1,471,731 As of June 30, 2026, the Company had unamortized debt issuance costs, including the initial purchasers’ discount, which are being amortized to interest expense over the contractual term of the 2031 Notes using the effective interest method. The remaining amortization period is approximately five years, through the maturity date of June 1, 2031. Such amortization represents non-cash interest expense and will be recognized over the remaining term of the 2031 Notes. Amortization of the debt issuance costs was $0.7 million during each of the three and six months ended June 30, 2026. The future contractual principal payments related to the 2031 Notes are as follows. As the 2031 Notes do not bear regular interest, the table below reflects contractual principal repayments only and excludes non‑cash interest expense associated with the amortization of debt issuance costs. Amount Fiscal Years (in millions) 2026 $ — 2027 — 2028 — 2029 — 2030 — Thereafter 1,500 Total Payments $ 1,500 Capped Call Transactions 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 2031 Notes, respectively, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with several financial institutions, including one or more of the initial purchasers and/or their respective affiliates (the “Option Counterparties”). The Capped Call Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2031 Notes, approximately 3.9 million shares of Common Stock, which corresponds to the number of shares initially underlying the 2031 Notes based on the initial conversion rate. The Capped Call Transactions are expected generally to reduce the potential dilution to the Common Stock upon any conversion of the 2031 Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2031 Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the Capped Call Transactions will initially be $ 509.06 per share of Common Stock, which represents a premium of 100 % over the last reported sale price of the Common Stock of $ 254.53 per share on May 18, 2026, and is subject to certain adjustments under the terms of the Capped Call Transactions. The Capped Call Transactions are separate transactions (in each case entered into by the Company with the Option Counterparties), and are not part of the terms of the 2031 Notes and will not change the noteholders’ rights under the 2031 Notes. Noteholders will not have any rights with respect to the Capped Call Transactions. The Company concluded that the Capped Call Transactions met the criteria for equity classification because they were indexed to the Common Stock and the Company has the 16 Table of Contents discretion to settle the Capped Call Transactions in shares or cash. As a result, the 1 million paid was recorded as a reduction to additional paid-in-capital within the Company’s condensed consolidated balance sheet. The Company structured the Capped Call Transactions as tax-integrated for federal income tax purposes pursuant to applicable U.S. Treasury Regulations. Accordingly, the $ 88.9 million in gross cost of the purchased Capped Call Transactions will be deductible for income tax purposes over the life of the option. As a result, the Company established a deferred income tax asset of $ 19.3 million at inception, with a corresponding offset to additional paid-in capital. Indebtedness 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. NOTE 8. Commitments and Contingencies Warranty Reserves The Company generally provides a warranty on its products for a period of 12 to 14 months against defects in material and workmanship. The Company estimates the costs that may be incurred during the warranty period and records a liability in the amount of such costs at the time revenue is recognized. The Company’s estimate is based primarily on historical experience. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Warranty provisions are generally related to current period sales. Settlements of warranty reserves are generally associated with sales that occurred during the 12 to 14 months prior to the period-end. Changes in the Company’s warranty reserves are as follows: Six Months Ended June 30, June 28, 2026 2025 (in thousands) Balance, beginning of the period $ 10,292 $ 10,858 Accruals 5,298 7,053 Usage ( 5,527 ) ( 5,273 ) Balance, end of the period $ 10,063 $ 12,638 Warranty reserves are reported in the Condensed Consolidated Balance Sheets under the captions “Accrued liabilities” and “Other non-current liabilities.” Legal Matters From time to time, the Company is subject to legal proceedings and claims in the ordinary course of business. In the opinion of management, any potential liabilities resulting from any current disputes would not have a material adverse effect on the Company’s unaudited interim condensed consolidated financial statements. Line of Credit The Company had a credit agreement with a bank that provided for a variable-rate line of credit secured by the marketable securities the Company had with the bank. At January 3, 2026 the Company was permitted to borrow up to 70.0 % of the value of eligible securities held at the time the line of credit was accessed, up to a maximum of $ 100.0 million. 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 in the first quarter of 2026, and did not utilize the line of credit while it was active. 17 Table of Contents Leases As of June 30, 2026, there were no material changes in the Company’s leases from those disclosed in the 2025 Form 10-K, other than those described below. On June 18, 2026, the Company entered into a lease agreement (the “Lease”) for a new corporate headquarters facility located at 3000 Minuteman Road in Andover, Massachusetts. The leased premises consist of approximately 159,947 rentable square feet and will replace the Company’s current headquarters in Wilmington, Massachusetts. The Lease has an initial term of approximately 13 years and is expected to commence in 2027, upon substantial completion of tenant improvements or no later than 12 months following the contractual delivery date, as defined in the Lease. The Lease includes an initial rent of approximately $17.00 per square foot, subject to annual increases of 3%, as well as customary rent abatement periods and phased rent commencement provisions during the early years of the Lease term. Total undiscounted Lease payments over the initial Lease term are expected to be approximately $ 36.4 million. As of June 30, 2026, the Lease had not yet commenced, and therefore no right-of-use asset or corresponding lease liability has been recognized in the Company’s condensed consolidated financial statements. NOTE 9. Revenue The following table represents a disaggregation of revenue by timing of revenue: Three Months Ended Six Months Ended June 30, June 28, June 30, June 28, 2026 2025 2026 2025 (in thousands) Point-in-time $ 322,489 $ 237,414 $ 594,068 $ 486,693 Over-time 20,640 16,183 41,010 33,511 Total revenue $ 343,129 $ 253,597 $ 635,078 $ 520,204 The following table lists the different sources of revenue: Three Months Ended Six Months Ended June 30, June 28, June 30, June 28, 2026 2025 2026 2025 (in thousands, except for percentages) Systems and software $ 294,040 85.7 % $ 214,506 84.6 % $ 541,197 85.2 % $ 445,656 85.7 % Parts 28,713 8.4 % 19,849 7.8 % 55,263 8.7 % 38,025 7.3 % Services 20,376 5.9 % 19,242 7.6 % 38,618 6.1 % 36,523 7.0 % Total revenue* $ 343,129 100.0 % $ 253,597 100.0 % $ 635,078 100.0 % $ 520,204 100.0 % *The sum of the individual percentages may not equal 100% due to rounding. See Note 13 for additional discussion of the Company’s disaggregated revenue by geography. Contract Assets and Contract Liabilities Contract assets consist of amounts we have not invoiced but have completed the related performance obligation. These amounts generally arise from variances between the contractual payment terms and the transaction price assigned to the open performance obligations (e.g., we have recognized revenue in an amount greater than the amount that is billable under the contract). The contract assets amounts are recorded in “Accounts receivable” in the Condensed Consolidated Balance Sheets. As of June 30, 2026 the Company had no contract assets, and as of January 3, 2026 , the Company had contract assets of $ 3.5 million. The Company records contract liabilities when the customer has been billed in advance of the Company completing its performance obligations primarily with respect to liabilities related to service contracts and installation. For contracts that have a duration of one year or less, these amounts are recorded as “Deferred revenue” in the Condensed Consolidated Balance Sheets. For contracts with a duration longer than one year, deferred revenue is recorded in “Other non-current liabilities” in the Condensed Consolidated Balance Sheets. As of June 30, 2026 and January 3, 2026, the Company carried a long-term deferred revenue balance of $ 8.7 million and $ 6.3 million, respectively, within “Other non-current liabilities” in the Condensed Consolidated Balance Sheets. 18 Table of Contents Changes in deferred revenue were as follows: Three Months Ended Six Months Ended June 30, June 28, June 30, June 28, 2026 2025 2026 2025 (in thousands) Balance, beginning of the period $ 39,733 $ 43,599 $ 38,031 $ 37,836 Deferral of revenue 24,239 22,635 40,794 51,616 Recognition of current year deferred revenue ( 5,658 ) ( 14,956 ) ( 19,489 ) ( 29,187 ) Recognition of prior period deferred revenue ( 13,722 ) ( 7,733 ) ( 14,744 ) ( 16,720 ) Balance, end of the period $ 44,592 $ 43,545 $ 44,592 $ 43,545 NOTE 10. Share-Based Compensation The following table presents the detail of share-based compensation expense amounts included in the Company’s Condensed Consolidated Statement of Operations: Three Months Ended Six Months Ended June 30, June 28, June 30, June 28, 2026 2025 2026 2025 (in thousands) Cost of revenue $ 1,226 $ 895 $ 2,168 $ 2,002 Research and development 1,911 1,292 2,927 2,354 Sales and marketing 1,326 651 2,355 1,990 General and administrative 5,552 3,362 9,576 6,668 Restructuring and other — 478 — 478 Total share-based compensation expense $ 10,015 $ 6,678 $ 17,026 $ 13,492 As of June 30, 2026 , there was $ 59.4 million of total unrecognized compensation cost related to restricted stock units granted under the Company’s stock plans. That cost is expected to be recognized over a weighted average period of 2.0 years following June 30, 2026 . NOTE 11. Income Taxes During the three and six months ended June 30, 2026 , the Company recognized an income tax provision of $ 8.4 and $ 12.7 million, respectively, representing an effective tax rate of 12.3 % and 11.9 %, respectively. During the three and six months ended June 28, 2025 the Company recognized an income tax provision of $ 5.8 and $ 13.4 million, respectively, representing an effective tax rate of 14.7 % and 12.0 %, respectively. The effective tax rate for the periods presented is less than the U.S. statutory rate primarily due to projected Foreign Derived Intangible Income deductions, federal research and development tax credits, and excess tax benefits associated with equity compensation. NOTE 12. Earnings Per Share Basic earnings per share is calculated using the weighted average number of shares of Common Stock outstanding during the period. Restricted stock units and employee stock purchase grants are included in the calculation of diluted earnings per share, except when their effect would be anti-dilutive. For the three and six months ended June 30, 2026, 25 thousand and 28 thousand, respectively, restricted stock units were excluded from the computation of diluted earnings per share as their impact would have been antidilutive. For the three and six months ended June 28, 2025, 121 thousand and 70 thousand, respectively, restricted stock units were excluded from the computation of diluted earnings per share as their impact would have been antidilutive. For the 19 Table of Contents three and six months ended June 30, 2026, 603 thousand shares issuable upon conversion of the Company’s convertible notes were excluded from the computation of diluted earnings per share as their impact would have been antidilutive. The Company’s basic and diluted earnings per share amounts are as follows: Three Months Ended Six Months Ended June 30, June 28, June 30, June 28, 2026 2025 2026 2025 (in thousands, except for per share data) Numerator: Net income $ 60,102 $ 33,911 $ 93,852 $ 98,006 Denominator: Basic earnings per share - weighted average shares outstanding 49,412 48,925 49,575 49,053 Effect of potential dilutive securities: Restricted stock units and employee stock purchase grants - dilutive shares 270 91 266 160 Diluted earnings per share - weighted average shares outstanding 49,682 49,016 49,841 49,213 Earnings per share: Basic $ 1.22 $ 0.69 $ 1.89 $ 2.00 Diluted $ 1.21 $ 0.69 $ 1.88 $ 1.99 NOTE 13. Segment Reporting and Geographic Information The Company is organized and operates as one operating and reportable segment: the design, development, manufacture and support of high-performance control metrology, defect inspection, lithography and data analysis systems used by microelectronics device manufacturers. This determination is based on the management approach which designates internal information regularly available to the Chief Operating Decision Maker (“CODM”) for making decisions and assessing performance as the source of determination of the Company’s reportable segments. The Company’s CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis for the purpose of making operating decisions and assessing financial performance. The CODM uses net income as the measure of profit or loss to allocate resources and assess performance. The measure of segment assets is reported on the balance sheet as total assets. 20 Table of Contents The table below presents the Company’s consolidated operating results including significant segment expenses: Three Months Ended Six Months Ended June 30, June 28, June 30, June 28, 2026 2025 2026 2025 (in thousands) Revenue $ 343,129 $ 253,597 $ 635,078 $ 520,204 Less: Adjusted cost of revenue (1) 147,616 115,284 276,841 235,023 Adjusted research and development (2) 38,879 35,292 73,977 64,012 Adjusted sales and marketing (2) 23,061 14,910 44,520 34,626 Adjusted general and administrative (2) 30,753 22,496 59,047 44,432 Other segment items: Restructuring and other (3) 15,268 22,415 30,664 27,173 Merger and acquisitions related (3) 4,303 2,507 13,566 2,666 Amortization 19,699 8,446 39,399 16,891 Operating income 63,550 32,247 97,064 95,381 Total other income, net 4,946 7,494 9,484 16,017 Provision for income taxes 8,394 5,830 12,696 13,392 Net income $ 60,102 $ 33,911 $ 93,852 $ 98,006 (1) Excludes restructuring and other expenses and merger and acquisition related expenses (2) Excludes merger and acquisition related expenses (3) The Company excludes these expenses in order to provide better comparability between periods as they are not representative of the Company’s ongoing operations. The Company’s significant operations outside the United States include sales, service and application offices in Asia and Europe. For geographical revenue reporting, revenue is attributed to the geographic location to which the product is shipped. Revenue by geographic region is as follows: Three Months Ended Six Months Ended June 30, June 28, June 30, June 28, 2026 2025 2026 2025 (in thousands) Revenue from customers: Taiwan $ 106,407 $ 65,616 $ 190,419 $ 168,197 South Korea 100,612 82,650 167,310 175,964 United States 84,366 27,556 168,100 53,153 Europe 16,307 12,846 29,318 29,390 China 14,707 17,337 31,764 29,513 Southeast Asia 11,251 13,824 25,499 21,850 Japan 9,479 33,768 22,668 42,137 Total revenue $ 343,129 $ 253,597 $ 635,078 $ 520,204 The following customers accounted for 10.0% or more of total revenue for the indicated periods: Six Months Ended June 30, June 28, 2026 2025 Customer A 16.2 % 21.6 % Customer B 15.9 % 16.8 % Customer C 14.9 % 17.6 % Customer D 10.3 % ^ ^ The customer accounted for less than 10.0% of total revenue during the period. Five customers’ accounts receivable balances were individually greater than 10.0 % of net accounts receivable at June 30, 2026, representing, in the aggregate approximately 64.3 % of the Company’s total accounts receivable. 21 Table of Contents One customer’s accounts receivable balances was individually greater than 10.0 % of net accounts receivable at January 3, 2026 , representing, approximately 12.2 % of the Company’s total accounts receivable. Substantially all of the Company’s long-lived assets are located within the United States of America. NOTE 14. Share Repurchase Authorization In February 2024, the Board approved a share repurchase authorization (the “2024 Authorization”) , which allowed the Company 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. NOTE 15. Restructuring and Other From time to time, the Company approves restructuring plans, which include workforce reductions, to streamline operations and align the Company’s cost structure with its business outlook. These restructuring plans may result in charges to cost of goods sold for streamlining of certain manufacturing activities and other charges, including inventory write-downs primarily related to the exit of older product lines. Charges to operating expenses primarily include employee severance costs that are paid during the period incurred, charges for streamlining of certain operating activities and impairment charges such as plant, property and equipment. Restructuring and other expenses recorded in the Condensed Consolidated Statements of Operations are as follows: Three Months Ended Six Months Ended June 30, June 28, June 30, June 28, 2026 2025 2026 2025 (in thousands) Cost of goods sold $ 11,507 $ 16,191 $ 21,694 $ 19,826 Operating expenses 3,761 6,224 8,970 7,347 Total restructuring and other $ 15,268 $ 22,415 $ 30,664 $ 27,173