What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-05-12 · 92 added, 62 removed, 178 unchanged (46% of the section changed)

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Since then, we have expanded our SAM to approximately $4 billion through a variety of means.

These include the introduction of products that enable us to address higher-power AC-DC applications (such as our Hiper™ product families), the introduction of LED-driver products, and our entry into the gate-driver market In 2018 we introduced our BridgeSwitch™ motor-driver ICs for BLDC motors, and in 2024 we introduced BridgeSwitch-2, extending the addressable power range of our motor-driver products up to about one horsepower.

In 2018 we introduced our BridgeSwitch™ motor-driver ICs for BLDC motors, and in 2024 we introduced BridgeSwitch-2, extending the addressable power range of our motor-driver products up to about one horsepower.

We have recently introduced a range of products targeting the EV market;

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our EcoSmart™ technology drastically reduces the amount of energy consumed by electronic products when they are plugged in but not in use;

our PowiGaN™ gallium-nitride (“GaN”) transistors reduce energy consumption compared to silicon transistors;

our PowiGaN™ GaN transistors reduce energy consumption compared to silicon transistors;

and our BridgeSwitch™ motor-driver ICs provide highly efficient power conversion for BLDC motors in appliances and industrial applications.

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Changes in trade policies among the United States and other countries, in particular the escalation of trade tensions and higher tariffs as well as the imposition of other barriers to international trade could reduce demand for end products that incorporate our integrated circuits which could adversely affect our business and operating results.

See also our risk factor under Part II, Item 1A captioned, “ Changes in trade policies among the United States and other countries, in particular the escalation and imposition of new and higher tariffs, could reduce demand for end products that incorporate our integrated circuits, which could have a material adverse effect on our revenues and operating results.

See also our risk factor under Part II, Item 1A captioned, “ Changes in trade policies among the United States and other countries, in particular the escalation and imposition of new and higher tariffs and additional export controls, could reduce demand for end products that incorporate our integrated circuits, which could have a material adverse effect on our revenues and operating results.

Further, increased tariffs or the imposition of other barriers to international trade could place pressure on our prices as our customers seek to offset the impact of increased tariffs on their own products.

Compliance with import and export controls could impair our ability to compete in international markets or subject us to liability if we violate these controls.

” Also, external factors such as supply-chain dynamics, widespread health emergencies, and macroeconomic conditions including inflation, fluctuations in interest and exchange rates and bank failures, have caused and can continue to cause our operating results to be volatile.

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Recent Results

Our net revenues were $105.5 million and $91.7 million in the three months ended March 31, 2025 and 2024, respectively.

The increase in net revenues was due to higher sales in all four end-market categories, most significantly in the consumer end-market.

Our top ten customers, including distributors that resell to OEMs and merchant power supply manufacturers, accounted for 80% and 77% of net revenues for the three months ended March 31, 2025 and 2024, respectively.

International sales accounted for 99% and 98% of our net revenues for the three months ended March 31, 2025 and 2024, respectively.

Our gross margin was 55% and 52% for the three months ended March 31, 2025 and 2024, respectively.

The increase in gross margin was primarily due to the favorable impact of the dollar/yen exchange rate on our wafer costs and the favorable impact of higher manufacturing volumes on our cost per unit.

Total operating expenses were $51.5 million and $47.3 million for the three months ended March 31, 2025 and 2024, respectively.

The increase in operating expenses for the three-month period was primarily due to increased stock-based compensation expense and employee-related expenses driven by headcount growth and higher costs associated with employee health insurance and other benefits.

These increases were partially offset by a credit recognized in the three months ended March 31, 2025 related to the recovery of bad debt.

Our net revenues were $115.9 million and $106.2 million in the three months ended June 30, 2025 and 2024, respectively, and $221.4 million and $197.9 million in the six months ended June 30, 2025 and 2024, respectively.

The increase in net revenues for the three-month period was primarily due to higher sales in the industrial end-market.

six-month period, the increase in net revenues was due to higher sales in all four end-market categories, most significantly the industrial end-market.

Our top ten customers, including distributors that resell to OEMs and merchant power supply manufacturers, accounted for approximately 81% of our net revenues for each of the three and six months ended June 30, 2025 and approximately 80% and 78%, respectively, in the corresponding periods of 2024.

International sales accounted for approximately 98% and 99% of our net revenues for the three and six months ended June 30, 2025, respectively, and 99% and 98%, respectively, in the corresponding periods of 2024.

Our gross margin was 55% and 53% for the three months ended June 30, 2025 and 2024, respectively, and 55% and 53% for the six months ended June 30, 2025 and 2024, respectively.

The increase in gross margin was primarily due to favorable end-market mix—reflecting a greater amount of revenues coming from higher-margin end-markets—and the favorable impact of the dollar/yen exchange rate on our wafer costs.

Total operating expenses were $65.3 million and $54.6 million for the three months ended June 30, 2025 and 2024, respectively, and $116.8 million and $101.9 million for the six months ended June 30, 2025 and 2024, respectively.

The increase in operating expenses for the three- and six-month periods was primarily due to an expense related to an employee litigation matter (refer to Note 13, Legal Proceedings and Contingencies, in our Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q), increased employee-related expenses driven by headcount growth and higher costs associated with employee health insurance and other benefits, as well as higher expenses for professional and legal services .

These increases were pa rtially offset by decreased product-development expenses and a credit recognized in the six months ended June 30, 2025 related to the recovery of bad debt.

Critical Accounting Policies and Estimates

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Three Months Ended

Six Months Ended

Cost of revenues

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General and administrative

Other operating expenses

Total operating expenses

Income from operations

Income (loss) from operations

Income before income taxes

Provision for income taxes

Comparison of the three months ended March 31, 2025 and 2024

Provision (benefit) for income taxes

Comparison of the three and six months ended June 30, 2025 and 2024

Net revenues.

Net revenues consist of revenues from product sales, which are calculated net of returns and allowances.

Net revenues for the three months ended March 31, 2024 and 2024 were $105.5 million and $91.7 million, respectively.

The increase in net revenues was due to higher sales in all four end-market categories, most significantly in the consumer end-market.

Our revenue mix by end market for the three months ended March 31, 2025 and 2024 was as follows:

Net revenues for the three and six months ended June 30, 2025 were $115.9 million and $221.4 million, respectively, and $106.2 million and $197.9 million, respectively, in the corresponding periods of 2024.

The increase in net revenues for the three-month period was due primarily to higher sales in the industrial end-market.

For the six-month period, the increase in net revenues was due to higher sales in all four end-market categories, most significantly the industrial end-market.

Our revenue mix by end market for the three and six months ended June 30, 2025 and 2024 was as follows:

Three Months Ended

Six Months Ended

Communications

International sales, consisting of sales outside of the United States of America based on “bill to” customer locations, were $104.2 million and $90.1 million in the three months ended March 31, 2025 and 2024, respectively.

International sales, consisting of sales outside of the United States of America based on “bill to” customer locations, were $114.0 million and $218.2 million in the three and six months ended June 30, 2025, respectively, and $104.6 million and $194.6 million, respectively, in the corresponding periods of 2024.

Although power converters using our products are distributed to end markets worldwide, most are manufactured in Asia.

As a result, sales to this region represented 84% and 81% of our net revenues in the three months ended March 31, 2025 and 2024, respectively.

As a result, sales to this region represented approximately 84% of our net revenues in both the three and six months ended June 30, 2025 and approximately 85% and 83%, respectively, in the corresponding period of 2024.

We expect international sales, and sales to the Asia region in particular, to continue to account for a large portion of our net revenues in the future.

Sales to distributors accounted for 71% and 72% of our net revenues in the three months ended March 31, 2025 and 2024, respectively, with direct sales to OEMs and merchant power supply manufacturers accounting for the remainder.

Sales to distributors accounted for approximately 70% and 71% of our net revenues in the three and six months ended June 30, 2025, respectively, and approximately 69% and 71%, respectively, in the corresponding periods of 2024.

Direct sales to OEMs and merchant power supply manufacturers accounted for the remainder.

The following customers represented 10% or more of our net revenues for the respective periods:

Three Months Ended

Six Months Ended

Salcomp Group

Honestar Technologies Co., Ltd.

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Gross margin is gross profit divided by net revenues.

The following table compares gross profit and gross margin for the three months ended March 31, 2025 and 2024:

The following table compares gross profit and gross margin for the three and six months ended June 30, 2025 and 2024:

Three Months Ended

Six Months Ended

(dollars in millions)

Our gross margin increased primarily due to favorable impact of the dollar/yen exchange rate on our wafer costs and the favorable impact of higher manufacturing volumes on our cost per unit.

Research and development expenses.

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We also record R&D expenses for prototype wafers related to new products until the products are released to production.

The following table compares R&D expenses for the three months ended March 31, 2025 and 2024:

The following table compares R&D expenses for the three and six months ended June 30, 2025 and 2024:

Three Months Ended

Six Months Ended

(dollars in millions)

Headcount (at period end)

R&D expenses increased for the three months ended March 31, 2025 compared to the corresponding period of 2024 primarily due to higher employee benefit-related expenses and increased equipment-related expenses.

R&D expenses for the three-months ended June 30, 2025 were flat compared to the corresponding period of 2024.

R&D expenses increased for the six months ended June 30, 2025 as compared to the corresponding period of 2024 primarily d ue to higher employee-related expenses including employee health insurance and other benefits, as well as increased equipment-related expenses , partially offset by lower stock-based compensation expense and decreased product-development expenses.

Sales and marketing expenses.

Sales and marketing (“S&M”) expenses consist primarily of employee-related expenses, including salaries and stock-based compensation, and commissions to sales representatives, as well as facilities expenses, including expenses associated with our regional sales and support offices.

The following table below compares S&M expenses for the three months ended March 31, 2025 and 2024:

The following table below compares S&M expenses for the three and six months ended June 30, 2025 and 2024:

Three Months Ended

Six Months Ended

(dollars in millions)

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Headcount (at period end)

S&M expenses increased for the three months ended March 31, 2025 compared to the corresponding period of 2024, primarily due to higher sales commissions and increased employee benefit-related expenses.

S&M expenses increased for the three and six months ended June 30, 2025 as compared to the corresponding periods of 2024, primarily due to increased employee-related expenses and increased travel and tradeshow-related expenses.

Increases were partially offset by lower stock-based compensation expense.

General and administrative expenses.

General and administrative (“G&A”) expenses consist primarily of employee-related expenses, including salaries and stock-based compensation expenses for administration, finance, human resources and general management, as well as consulting, professional services, legal and auditing expenses.

The following table below compares G&A expenses for the three months ended March 31, 2025 and 2024:

The following table below compares G&A expenses for the three and six months ended June 30, 2025 and 2024:

Three Months Ended

Six Months Ended

(dollars in millions)

Headcount (at period end)

G&A expenses increased for the three months ended March 31, 2025 compared to the corresponding period of 2024, primarily due to increased stock-based compensation expense related to performance-based awards as well as increased expenses for legal and other professional services.

These increases were partially offset by a credit recognized in the three months ended March 31, 2025 related to the recovery of bad debt.

G&A expenses increased for the three and six months ended June 30, 2025 as compared to the corresponding periods of 2024 primarily due to higher stock-based compensation expense related to performance-based awards, higher salaries and related expenses due to annual merit increases, and higher expenses for professional and legal services.

These increases were partially offset by a credit recognized in the six months ended June 30, 2025 related to the recovery of bad debt.

As described in Note 16, Subsequent Events, in our Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, we expect to record in the third quarter of 2025, net stock-based compensation expense of approximately $15 million related to equity awards modification as a result of our Chief Executive Officer transition.

Other operating expenses.

Other operating expenses were $9.2 million in the three and six months ended June 30, 2025.

This amount consisted of a $9.2 million expense stemming from an employee litigation matter (refer to Note 13, Legal Proceedings and Contingencies, in our Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q).

Other income .

Other income consists primarily of interest income earned on cash and cash equivalents, marketable securities and other investments, and the impact of foreign exchange gains or losses.

The table below compares other income for the three months ended March 31, 2025 and 2024:

The table below compares other income for the three and six months ended June 30, 2025 and 2024:

Three Months Ended

Six Months Ended

(dollars in millions)

Other income for the three months ended March 31, 2025 was similar to the corresponding period of 2024.

Provision for income taxes .

Other income decreased for the three and six months ended June 30, 2025 as compared to the corresponding periods of 2024 primarily due to lower interest income and losses on foreign currency exchange.

Provision (benefit) for income taxes .

Provision for income taxes represents federal, state and foreign taxes.

The table below compares income-tax expense for the three months ended March 31, 2025 and 2024:

The table below compares income-tax expense for the three and six months ended June 30, 2025 and 2024:

Three Months Ended

Six Months Ended

(dollars in millions)

Provision for income taxes

Provision (benefit) for income taxes

Effective tax rate

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Accordingly, the interim effective tax rate may not be reflective of the annual estimated effective tax rate.

Our effective tax rates for the three months ended March 31, 2025 and 2024 was 11.1% and 0.5%, respectively.

Our effective tax rates for the three and six months ended June 30, 2025 was (1.8%) and 9.5%, respectively, and in the corresponding periods of 2024 was 5.8% and 3.5%, respectively.

The effective tax rate in these periods was lower than the statutory federal income-tax rate of 21% due to the geographic distribution of our world-wide earnings in lower-tax jurisdictions and the impact of federal research tax credits.

In the three months ended March 31, 2025, our effective tax rate was unfavorably impacted by the recognition of share-based payments and foreign income subject to U.S.

In the three months ended March 31, 2024, our effective tax

rate was favorably impacted by the recognition of excess tax benefits related to share-based payments and the release of unrecognized tax benefits and unfavorably impacted by foreign income subject to U.S.

In the three and six months ended June 30, 2025, our effective tax rate was negatively impacted by the recognition of a tax deficiency or “shortfall” related to share-based

In the three months ended June 30, 2024, our effective tax rate was favorably impacted by the recognition of excess tax benefits related to share-based payments.

In the six months ended June 30, 2024, our effective tax rate was also favorably impacted by the recognition of excess tax benefits related to share-based payments and by discrete items associated with the release of unrecognized tax benefits.

These benefits were partially offset by U.S.

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We have not been granted any incentivized tax rates and do not operate under any tax holidays in any jurisdiction.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes provisions modifying the corporate income tax code, including the immediate expensing of domestic research and development expenditures for tax purposes, 100% bonus depreciation for qualified assets, and an increase in the statutory tax rate on foreign earnings from 10.5% to 12.6% (effective in the fiscal year 2026).

We have elected to account Net Controlled Foreign Corporation Tested Income (“NCTI”), formerly known as Global Intangible Low-Taxed Income (“GILTI”), under the deferred method.

The deferred tax amounts recorded are based on the evaluation of temporary differences that are expected to reverse as NCTI is incurred in future periods.

As a result, we will remeasure its deferred tax balances related to NCTI for the changes in the tax rate and will record an adjustment to this balance in the fiscal third quarter.

We expect these modifications to result in an increase in our effective tax rate but are still evaluating the magnitude of the impact.

Liquidity and Capital Resources

As of March 31, 2025, we had $289.3 million in cash, cash equivalents and short-term marketable securities, a decrease of $10.7 million from $300.0 million as of December 31, 2024.

As of March 31, 2025, we had working capital, defined as current assets less current liabilities, of $444.9 million, a decrease of approximately $13.8 million from $458.7 million as of December 31, 2024.

As of June 30, 2025, we had $268.7 million in cash, cash equivalents and short-term marketable securities, a decrease of $31.3 million from $300.0 million as of December 31, 2024.

As of June 30, 2025, we had working capital, defined as current assets less current liabilities, of $417.9 million, a decrease of approximately $40.8 million from $458.7 million as of December 31, 2024.

We have a Credit Agreement with Wells Fargo Bank, National Association (the “Credit Agreement”) that provides us with a $75.0 million revolving line of credit to use for general corporate purposes with a $20.0 million sub-limit for the issuance of standby and trade letters of credit.

The Credit Agreement was amended on June 7, 2021, to provide an alternate borrowing rate as a replacement for LIBOR and extend the termination date from April 30, 2022, to June 7, 2026, with all other terms remaining the same.

The Credit Agreement was amended with an effective date of June 28, 2023 to include the Secured Overnight Financing Rates (“SOFR”) as interest rate benchmark rates, with all other terms remaining the same.

The Credit Agreement was amended with an effective date of June 28, 2023 to include the Secured Overnight Financing Rates as interest rate benchmark rates, with all other terms remaining the same.

Our ability to borrow under the revolving line of credit is conditioned upon our compliance with specified covenants, including reporting and financial covenants, primarily a minimum liquidity measure and a debt to earnings ratio, with which we are currently in compliance.

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all advances under the revolving line of credit will become due on such date, or earlier in the event of a default.

As of March 31, 2025, we had no advances outstanding under the Credit Agreement.

As of June 30, 2025, we had no advances outstanding under the Credit Agreement.

Cash from Operating Activities

Our operating activities generated $26.4 million of cash in the three months ended March 31, 2025.

Our operating activities generated $55.5 million of cash in the six months ended June 30, 2025.

Net income for this period was $10.2 million;

we also incurred non-cash stock-based compensation expense, depreciation and an increase in deferred tax assets of $18.8 million, $14.2 million and $0.9 million, respectively.

Sources of cash included a $4.7 million decrease in accounts receivable due to timing of receipts, an increase of $4.0 million in accounts payable (excluding payables related to property and equipment) due to timing of payments and a $3.4 million decrease in prepaid expenses and other assets.

These sources of cash were partially offset by a $3.9 million decrease in taxes payable and accrued liabilities and a $3.5 million increase in inventories.

Operating activities generated $15.9 million of cash in the three months ended March 31, 2024.

Sources of cash included a $10.0 million increase in taxes payable and accrued liabilities and a $6.4 million decrease in prepaid expenses and other assets.

These sources of cash were partially offset by a $2.8 million increase in inventories.

Operating activities generated $33.5 million of cash in the six months ended June 30, 2024.

Net income for this period was $8.8 million;

we also incurred depreciation, non-cash stock-based compensation expense, increase in deferred tax assets, accretion of discount on marketable securities, and amortization of intangibles of $17.1 million, $17.4 million, $3.5 million, $0.9 million and $0.9 million, respectively.

Sources of cash included a $2.2 million decrease in accounts receivable due to timing of receipts, a $1.3 million increase in accounts payable (excluding payables related to property and equipment) due to timing of payments and a $0.8 million decrease in prepaid expenses and other assets.

These sources of cash were partially offset by a $4.7 million increase in inventories due to lower demand during the quarter and a $1.7 million decrease in taxes payable and accrued liabilities.

Sources of cash primarily included a $2.1 million decrease in prepaid expenses and other assets.

These sources of cash were partially offset by a $6.7 million increase in inventories due to lower demand and a $2.0 million increase in accounts receivable due to timing of customer payments.

Cash from Investing Activities

Our investing activities in the three months ended March 31, 2025, generated $4.5 million of cash, primarily consisting of $10.3 million from sales and maturities of marketable securities, net of purchases, offset by $5.7 million for purchases of property and equipment (primarily production-related machinery and equipment).

Our investing activities in the three months ended March 31, 2024 resulted in $0.1 million net use of cash, primarily consisting of $4.3 million used for purchases of property and equipment (primarily production-related machinery and equipment), partially offset by $4.3 million from sales and maturities of marketable securities, net of purchases.

Our investing activities in the six months ended June 30, 2025, generated $37.1 million of cash, primarily consisting of $48.8 million from sales and maturities of marketable securities, net of purchases, offset by $11.7 million for purchases of property and equipment—primarily production-related machinery and equipment.

Our investing activities in the six months ended June 30, 2024 resulted in $0.9 million net use of cash, primarily consisting of $8.5 million used for purchases of property and equipment (primarily production-related machinery and equipment), partially offset by $7.6 million from sales and maturities of marketable securities, net of purchases.

Cash from Financing Activities

Our financing activities in the three months ended March 31, 2025 resulted in a $32.3 million net use of cash, consisting of $23.1 million for the repurchase of our common stock and $12.0 million for the payment of dividends to stockholders, partially offset by proceeds of $2.8 million from the issuance of shares through our employee stock purchase plan.

Our financing activities in the three months ended March 31, 2024 resulted in a $23.3 million net use of cash, consisting of $14.6 million for the repurchase of our common stock and $11.4 million for the payment of dividends to stockholders, partially offset by proceeds of $2.7 million from the issuance of shares through our employee stock purchase plan.

Our financing activities in the six months ended June 30, 2025 resulted in a $76.6 million net use of cash, consisting of $55.7 million for the repurchase of our common stock and $23.8 million for the payment of dividends to stockholders, partially offset by proceeds of $2.8 million from the issuance of shares through our employee stock purchase plan.

Our financing activities in the six months ended June 30, 2024 resulted in a $46.0 million net use of cash, consisting of $26.0 million for the repurchase of our common stock and $22.7 million for the payment of dividends to stockholders, partially offset by proceeds of $2.7 million from the issuance of shares through our employee stock purchase plan.

In October 2023, our board of directors declared dividends of $0.20 per share to be paid to stockholders of record at the end of each quarter in 2024.

In October 2024, our board of directors raised the cash dividend with the declaration of five cash dividends of $0.21 per share to be paid at the end of the fourth quarter in 2024 (in lieu of the previously declared dividend of $0.20 per share announced in October 2023) and at the end of each quarter in 2025.

A dividend payout of $12.0 million occurred on March 31, 2025.

D ividend payouts of $12.0 million and $11.8 million occurred on March 31, 2025 and June 30, 2025, respectively.

The declaration of any future cash dividend is at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that cash dividends are in the best interest of our stockholders.

Stock Repurchases

Over the years, our board of directors have authorized the use of funds to repurchase shares of our common stock.

As of December 31, 2024, we had $48.1 million remaining under our stock-repurchase program .

In the three months ended March 31, 2025, we repurchased approximately 404,000 shares for $23.1 million, leaving $25.0 million in funds authorized as of March 31, 2025.

In April 2025, we utilized the remaining $25.0 million, repurchasing approximately 560,000 shares of our common stock.

Subsequently, our board of directors authorized the use of an additional $50.0 million for the repurchase of our common stock, with repurchases to be executed according to pre-defined price/volume guidelines.

Over the years, our board of directors has authorized the use of funds to repurchase shares of our common stock.

As of December 31, 2024, we had $48.1 million available under a stock-repurchase program announced in November 2024.

After this authorization was exhausted in April 2025, our board of directors authorized the use of an additional $50.0 million for the repurchase of our common stock, with repurchases to be executed according to pre-defined price/volume guidelines in compliance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.

In the three months ended June 30, 2025, we purchased approximately 0.7 million of our shares for $32.6 million.

In the six months ended June 30, 2025, we repurchased approximately 1.1 million of our shares for $55.7 million.

As of June 30, 2025, $42.4 million remained on our repurchase authorization.

The program has no expiration date.

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Contractual Commitments

As of March 31, 2025, there were no material changes in our contractual commitments from those reported in our Annual Report on Form 10-K for the year ended December 31, 2024.

As of June 30, 2025, there were no material changes in our contractual commitments from those reported in our Annual Report on Form 10-K for the year ended December 31, 2024.

Other Information

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federal taxes.

Accordingly, as of March 31, 2025, our worldwide cash and marketable securities are available to fund capital allocation needs, including capital and internal investments, acquisitions, stock repurchases and/or dividends without incurring significant U.S.

Accordingly, as of June 30, 2025, our worldwide cash and marketable securities are available to fund capital allocation needs, including capital and internal investments, acquisitions, stock repurchases and/or dividends without incurring significant U.S.

federal income taxes.

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In that case, we may be forced to use our cash, cash equivalents and short-term investments, use our current financing or seek additional financing from third parties to fund our operations.

We believe that cash generated from operations, together with existing sources of liquidity, will satisfy our projected working capital and other cash requirements for at least the next 12 months.

We believe that cash

generated from operations, together with existing sources of liquidity, will satisfy our projected working capital and other cash requirements for at least the next 12 months.

Our uses of cash beyond the next 12 months will depend on many factors, including the general economic environment in which we operate and our ability to generate cash flow from operations, which are uncertain but include funding our operations and additional capital expenditures.

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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