QuidelOrtho Corp 10-K

Item 8. Financial Statements and Supplementary Data Index of Consolidated Financial Statements and Schedule Report of Independent Registered Public Accounting Firm (PCAOB ID No. 185 and No. 42 ) 70 Consolidated Balance Sheets 73 Consolidated Statements of Loss 74 Consolidated Statements of Comprehensive (Loss) Income 75 Consolidated Statements of Stockholders’ Equity 76 Consolidated Statements of Cash Flows 77 Notes to Consolidated Financial Statements 79 69 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors QuidelOrtho Corporation: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of QuidelOrtho Corporation and subsidiaries (the Company) as of December 28, 2025, the related consolidated statements of loss, comprehensive (loss) income, stockholders’ equity, and cash flows for the year ended December 28, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2025, and the results of its operations and its cash flows for the year ended December 28, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 28, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 18, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Allowance for contractual rebates As discussed in Notes 1 and 6 to the consolidated financial statements, the Company records revenues from product sales net of contractual rebates that are estimated at the time of sale. As of December 28, 2025, the Company recognized an allowance for contractual rebates of $28.7 million for certain rebates which are dependent on estimated rebate percentages that vary based on end-user sales mix. We identified the evaluation of the allowance for contractual rebates as a critical audit matter. Evaluating the allowance for contractual rebates required challenging auditor judgment because the estimated rebate percentages are dependent on forecasted end-user sales mix and customer contractual terms. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s rebate allowance process, including controls related to the assessment of the estimated rebate percentages. To determine historical rebate percentages, we evaluated historical rebate payments based on historical end-user sales mix. We developed an independent expectation of the allowance for contractual rebates using a combination of the historical rebate percentages, Company internal data, executed contracts, and third-party data and compared our estimate to the amount recorded by the Company. 70 Goodwill impairment assessment As discussed in Notes 1 and 8 to the consolidated financial statements, the Company evaluates goodwill at the reporting unit level for impairment on an annual basis on the first day of the fourth quarter of the fiscal year, or whenever events or changes in circumstances occur that indicate that the fair value of a reporting unit is below its carrying amount. In performing its interim goodwill impairment assessment, reporting unit fair values were estimated by management using a weighting of the discounted cash flow method and guideline public company method. During the year ended December 28, 2025, the Company recognized a goodwill impairment charge of $700.7 million for the Europe, Middle East, and Africa (EMEA), China, and Latin America reporting units, which represented a full impairment of the goodwill allocated to these reporting units. We identified the evaluation of the fair value of the EMEA, China, and Latin America reporting units used in its goodwill impairment assessment as a critical audit matter. Subjective auditor judgment was required to evaluate the discount rates, projected future revenue growth rates, and EBITDA margins used in the Company’s estimate of the fair value of its reporting units. Changes in the discount rates, projected future revenue growth rates, and EBITDA margins would have had a significant impact on the fair value of the reporting units. Additionally, the evaluation of the discount rates required the involvement of professionals with specialized skills and knowledge. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s goodwill impairment assessment process. This included controls related to the Company’s selection of discount rates, projected future revenue growth rates, and EBITDA margins. To evaluate the projected future revenue growth rates and EBITDA margins used in the estimate, we assessed the historical accuracy of the forecasted financial results by comparing historical forecasts to actual results. We also compared the projected future revenue growth rates and EBITDA margins to ranges that were developed using publicly available market data for comparable entities. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the discount rates used by management by comparing them to a range of independently developed discount rates using publicly available market data for comparable companies. /s/ KPMG LLP We have served as the Company’s auditor since 2025. Short Hills, New Jersey February 18, 2026 71 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of QuidelOrtho Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of QuidelOrtho Corporation (the Company) as of December 29, 2024, the related consolidated statements of loss, comprehensive (loss) income, stockholders’ equity and cash flows for each of the two years in the period ended December 29, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 29, 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 29, 2024, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Ernst & Young LLP We served as the Company's auditor from 2002 to 2025. San Diego, California February 27, 2025 72 QUIDELORTHO CORPORATION CONSOLIDATED BALANCE SHEETS (In millions, except par value) December 28, 2025 December 29, 2024 ASSETS Current assets: Cash and cash equivalents $ 169.8 $ 98.3 Accounts receivable, net 417.0 282.4 Inventories 577.6 533.7 Prepaid expenses and other current assets 250.5 262.4 Assets held for sale 32.4 42.1 Total current assets 1,447.3 1,218.9 Property, plant and equipment, net 1,358.3 1,380.2 Right-of-use assets 155.5 168.7 Goodwill — 649.5 Intangible assets, net 2,563.8 2,735.6 Other assets 244.4 270.7 Total assets $ 5,769.3 $ 6,423.6 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 279.4 $ 246.0 Accrued payroll and related expenses 120.3 116.9 Income tax payable 11.5 5.4 Current portion of borrowings 178.3 341.8 Other current liabilities 376.6 288.7 Total current liabilities 966.1 998.8 Operating lease liabilities 154.4 167.2 Long-term borrowings 2,471.9 2,141.3 Deferred tax liabilities 90.0 76.5 Other liabilities 166.4 55.3 Total liabilities 3,848.8 3,439.1 Commitments and contingencies (Note 13) Stockholders’ equity: Preferred stock, $ 0.001 par value per share; 5.0 shares authorized; none issued or outstanding at December 28, 2025 and December 29, 2024 — — Common stock, $ 0.001 par value per share; 126.2 shares authorized; 67.9 and 67.3 shares issued and outstanding at December 28, 2025 and December 29, 2024, respectively 0.1 0.1 Additional paid-in capital 2,931.8 2,884.8 Accumulated other comprehensive loss ( 15.4 ) ( 36.2 ) Retained earnings ( 996.0 ) 135.8 Total stockholders’ equity 1,920.5 2,984.5 Total liabilities and stockholders’ equity $ 5,769.3 $ 6,423.6 See accompanying notes. 73 QUIDELORTHO CORPORATION CONSOLIDATED STATEMENTS OF LOSS (In millions, except per share data) Fiscal Year Ended 2025 2024 2023 Total revenues $ 2,730.2 $ 2,782.9 $ 2,997.8 Cost of sales, excluding amortization of intangibles 1,456.0 1,496.4 1,500.7 Selling, marketing and administrative 746.3 766.8 763.2 Research and development 186.2 218.7 245.0 Amortization of intangible assets 189.2 203.4 204.8 Restructuring, integration and other charges 263.6 127.2 113.4 Goodwill impairment charge 700.7 1,822.6 — Asset impairment charge 9.7 56.9 4.5 Other operating expenses 97.7 51.8 27.1 Operating (loss) income ( 919.2 ) ( 1,960.9 ) 139.1 Interest expense, net 177.6 163.5 147.6 Loss on extinguishment of debt 5.1 — — Other expense, net 5.8 7.1 20.6 Loss before income taxes ( 1,107.7 ) ( 2,131.5 ) ( 29.1 ) Provision for (benefit from) income taxes 24.1 ( 79.5 ) ( 19.0 ) Net loss $ ( 1,131.8 ) $ ( 2,052.0 ) $ ( 10.1 ) Basic loss per share $ ( 16.69 ) $ ( 30.54 ) $ ( 0.15 ) Diluted loss per share $ ( 16.69 ) $ ( 30.54 ) $ ( 0.15 ) Weighted-average shares outstanding - basic 67.8 67.2 66.8 Weighted-average shares outstanding - diluted 67.8 67.2 66.8 See accompanying notes. 74 QUIDELORTHO CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (In millions) Fiscal Year Ended 2025 2024 2023 Net loss $ ( 1,131.8 ) $ ( 2,052.0 ) $ ( 10.1 ) Other comprehensive income (loss) Changes in cumulative translation adjustment, net of tax 61.9 ( 38.4 ) 50.4 Changes in unrealized gains from investments, net of tax — — 0.5 Changes from pension and other post-employment benefits, net of tax 1.3 2.8 ( 2.0 ) Changes in unrealized (losses) gains from cash flow hedges, net of tax: Net unrealized (losses) gains on derivative instruments ( 31.3 ) 52.1 12.6 Reclassification of net realized gains on derivative instruments included in net loss ( 11.1 ) ( 22.7 ) ( 23.9 ) Total change in unrealized (losses) gains from cash flow hedges, net of tax ( 42.4 ) 29.4 ( 11.3 ) Comprehensive (loss) income $ ( 1,111.0 ) $ ( 2,058.2 ) $ 27.5 See accompanying notes. 75 QUIDELORTHO CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In millions) Common Stock Additional paid-in capital Accumulated other comprehensive (loss) income Retained earnings Total stockholders’ equity Shares Par Balance at January 1, 2023 66.4 $ — $ 2,804.3 $ ( 67.6 ) $ 2,197.9 $ 4,934.6 Issuance of common stock under equity compensation plans 0.6 0.1 13.5 — — 13.6 Stock-based compensation expense — — 50.9 — — 50.9 Tax withholdings related to vesting of stock-based awards ( 0.2 ) — ( 13.5 ) — — ( 13.5 ) Repurchases of common stock ( 0.1 ) — ( 7.2 ) — — ( 7.2 ) Other comprehensive income, net of tax — — — 37.6 — 37.6 Net loss — — — — ( 10.1 ) ( 10.1 ) Balance at December 31, 2023 66.7 $ 0.1 $ 2,848.0 $ ( 30.0 ) $ 2,187.8 $ 5,005.9 Issuance of common stock under equity compensation plans 0.7 — 5.4 — — 5.4 Stock-based compensation expense — — 41.0 — — 41.0 Tax withholdings related to vesting of stock-based awards ( 0.1 ) — ( 9.6 ) — — ( 9.6 ) Other comprehensive loss, net of tax — — — ( 6.2 ) — ( 6.2 ) Net loss — — — — ( 2,052.0 ) ( 2,052.0 ) Balance at December 29, 2024 67.3 $ 0.1 $ 2,884.8 $ ( 36.2 ) $ 135.8 $ 2,984.5 Issuance of common stock under equity compensation plans 0.8 — 6.9 — — 6.9 Stock-based compensation expense — — 45.5 — — 45.5 Tax withholdings related to vesting of stock-based awards ( 0.2 ) — ( 5.4 ) — — ( 5.4 ) Other comprehensive income, net of tax — — — 20.8 — 20.8 Net loss — — — — ( 1,131.8 ) ( 1,131.8 ) Balance at December 28, 2025 67.9 $ 0.1 $ 2,931.8 $ ( 15.4 ) $ ( 996.0 ) $ 1,920.5 See accompanying notes. 76 QUIDELORTHO CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Fiscal Year Ended 2025 2024 2023 OPERATING ACTIVITIES: Net loss $ ( 1,131.8 ) $ ( 2,052.0 ) $ ( 10.1 ) Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 442.0 453.4 457.2 Goodwill impairment charge 700.7 1,822.6 — Asset impairment charge 9.7 56.9 4.5 Stock-based compensation expense 45.9 42.1 51.6 Change in deferred tax assets and liabilities 6.3 ( 99.3 ) ( 11.6 ) Payment of accreted interest on contingent and deferred consideration — — ( 9.7 ) Loss on extinguishment of debt 5.1 — — Asset write off related to restructuring, integration and other charges 152.2 — — Asset write off related to tax assessment refund — 20.0 — Other non-cash, net 0.9 ( 2.0 ) ( 6.8 ) Changes in assets and liabilities: Accounts receivable ( 117.5 ) 5.4 160.0 Inventories ( 148.3 ) ( 134.1 ) ( 211.6 ) Prepaid expenses and other current and non-current assets ( 34.6 ) ( 9.5 ) ( 26.9 ) Accounts payable 40.0 ( 23.4 ) 3.0 Accrued payroll and related expenses 0.9 35.0 ( 53.9 ) Income taxes payable 41.7 ( 9.5 ) ( 59.6 ) Other current and non-current liabilities 92.0 ( 22.6 ) ( 5.9 ) Net cash provided by operating activities 105.2 83.0 280.2 INVESTING ACTIVITIES Acquisitions of property, plant, equipment, investments and intangibles ( 188.2 ) ( 195.1 ) ( 209.3 ) Proceeds from held for sale asset, net of costs to sell — 9.3 — Proceeds from government assistance allocated to fixed assets 6.5 — 13.5 Purchases of marketable securities — ( 7.2 ) ( 60.1 ) Proceeds from sale of marketable securities — 63.1 78.3 Loan to LEX Diagnostics ( 11.0 ) ( 20.0 ) ( 10.0 ) Net cash used for investing activities ( 192.7 ) ( 149.9 ) ( 187.6 ) FINANCING ACTIVITIES Proceeds from issuance of common stock 6.1 5.0 11.6 Short-term borrowings, net 3.0 ( 1.6 ) 1.6 Revolving credit facility, net ( 118.0 ) 198.0 — Proceeds from long-term borrowings, net of discount and debt issuance costs 2,559.3 — — Payments on long-term borrowings ( 2,289.2 ) ( 143.0 ) ( 228.0 ) Payments of tax withholdings related to vesting of stock-based awards ( 5.4 ) ( 9.6 ) ( 13.5 ) Repurchases of common stock — — ( 7.2 ) Principal payments of deferred consideration — — ( 30.3 ) Net cash provided by (used for) financing activities 155.8 48.8 ( 265.8 ) Effect of exchange rates on cash 3.0 ( 2.9 ) ( 1.2 ) Net increase (decrease) in cash, cash equivalents and restricted cash 71.3 ( 21.0 ) ( 174.4 ) Cash, cash equivalents and restricted cash at beginning of period 98.5 119.5 293.9 Cash, cash equivalents and restricted cash at end of period $ 169.8 $ 98.5 $ 119.5 77 Fiscal Year Ended 2025 2024 2023 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 172.4 $ 177.5 $ 150.0 Cash (received) paid for income taxes during the period $ ( 25.4 ) $ 41.6 $ 86.6 Purchase of property, equipment and intangibles by incurring current liabilities $ 13.3 $ 25.9 $ 40.6 Transfer of instrument inventories to property, plant and equipment $ 167.3 $ 148.9 $ 154.6 Reduction of other current liabilities upon issuance of restricted share units $ 0.8 $ 0.3 $ 1.9 Initial recognition of finance lease right-of-use asset and liability $ — $ 12.5 $ — See accompanying notes. 78 QuidelOrtho Corporation Notes to Consolidated Financial Statements Note 1. Basis of Presentation and Summary of Significant Accounting Policies Organization and Business The Company’s vision is to advance diagnostics to power a healthier future. With its expertise in immunoassay and molecular testing, clinical chemistry and transfusion medicine, the Company aims to support clarity for clinicians and patients to help create better health outcomes. The Company’s global infrastructure and commercial reach support its customers across more than 140 countries and territories with quality diagnostics, a broad test portfolio and market-leading service. The Company operates globally with manufacturing facilities in the U.S., U.K. and China and with sales centers, administrative offices and warehouses located throughout the world. Basis of Presentation The accompanying Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.” and such principles, “U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for annual financial information. Accounting Periods The Company follows the concept of a fiscal year that ends on the Sunday nearest to the end of the month of December, and fiscal quarters that end on the Sunday nearest to the end of the months of March, June and September. For fiscal years ended 2025, 2024 and 2023, the Company’s fiscal years ended on December 28, 2025, December 29, 2024 and December 31, 2023, respectively. Fiscal years ended 2025, 2024 and 2023 were 52 weeks. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates and underlying assumptions can impact all elements of the financial statements, including, but not limited to, accounting for deductions from revenues (e.g. rebates, returns, sales allowances and discounts), receivable and inventory valuations, fixed asset valuations, useful lives, recoverability of goodwill and tangible and intangible assets, the fair value of assets acquired and liabilities assumed in a business combination and related purchase price allocation, long-term employee benefit obligations, income taxes, environmental matters, litigation and allocations of costs. Estimates are based on historical experience, complex judgments, facts and circumstances available at the time and various other assumptions that are believed to be reasonable under the circumstances but are inherently uncertain and unpredictable. Actual results could differ from those estimates. Consolidation The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Cash and Cash Equivalents The Company considers cash equivalents to be highly liquid investments with a maturity at the date of purchase of three months or less. They are carried at cost plus accrued interest, which approximates fair value because of the short-term maturity of these instruments. Cash equivalents include money market funds and debt securities of high quality institutions. Cash balances may exceed government insured limits in certain jurisdictions. Restricted Cash Restricted cash primarily consists of funds reserved for legal requirements. Restricted cash balances are included in Other assets in the Consolidated Balance Sheets. Accounts Receivable, Allowance for Credit Losses and Concentration of Credit Risk The Company sells its products directly to physician offices, hospitals, clinical laboratories, reference laboratories, urgent care clinics, universities, retail clinics, pharmacies, wellness screening centers, other POC settings, blood banks and donor centers, as well as to individual, non-professional OTC customers, and other distributors in the U.S. and internationally (refer to “—Note 3. Revenue”). The Company periodically assesses the financial strength of these customers and establishes reserves for anticipated losses when necessary, which historically have not been material. The Company establishes a reserve based on historical losses, the age of receivables, customer mix and credit policies, current economic conditions in customers’ country or 79 industry, and expectations associated with reasonable and supportable forecasts, and specific allowances for large or risky accounts. Amounts later determined to be uncollectible are charged or written off against this allowance. T he balance of accounts receivable is net of reserves of $ 97.1 million and $ 99.6 million at December 28, 2025 and December 29, 2024, respectively. Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash equivalents, marketable securities and trade accounts receivable. Credit losses are identified when cash flows received are not expected to be sufficient to recover the amortized cost basis of a security. In the event of a credit loss, only the amount associated with the credit loss is recognized in operating results, with the amount of loss relating to other factors recorded in AOCI. The Company performs credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary, but generally requires no collateral. Credit quality is monitored regularly by reviewing credit history. The Company believes that the concentration of credit risk in its trade accounts receivables is moderated by its credit evaluation process, relatively short collection terms, the high level of credit worthiness of its customers, and letters of credit issued on the Company’s behalf. Potential credit losses are limited to the gross value of accounts receivable. Inventories Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. The Company reviews the components of its inventory periodically for excess, obsolete and impaired inventory and records a reduction to the carrying value when identified. Property, Plant and Equipment Property, plant and equipment are recorded at cost and depreciated over the estimated useful lives of the assets using the straight-line method as follows: Asset type Useful life Building and building improvements 7 - 47 years Machinery and equipment 3 - 7 years Customer leased instruments 3 - 8 years Computer software 3 - 5 years Amortization of leasehold improvements is computed on the straight-line method over the shorter of the lease term or the estimated useful lives of the related assets. When assets are surrendered, retired, sold or otherwise disposed of, their gross carrying values and related accumulated depreciation are removed from the accounts and included in determining gain or loss on such disposals. Maintenance and repairs are expensed as incurred; major replacements and improvements that extend the useful life are capitalized. Assets Held for Sale The following criteria are considered before concluding assets are classified as held for sale: (i) management’s commitment to a plan to sell, (ii) availability for immediate sale in its present condition, (iii) initiation of an active program to identify a buyer, (iv) probability of a completed sale within one year, (v) actively marketed for sale at a reasonable price in relation to its current fair value, and (vi) likelihood of significant changes to the plan will be made or that the plan will be withdrawn. If all of the criteria are met as of the balance sheet date, the net assets are presented separately in the balance sheet as held for sale at the lower of its carrying amount or fair value less costs to sell and is no longer depreciated or amortized while classified as held for sale. The Company assesses the fair value of a long-lived asset less any costs to sell at each reporting period and until the asset is no longer classified as held for sale. Goodwill Goodwill represents the excess of purchase price over the fair values of underlying net assets acquired in an acquisition. The Company assesses goodwill for impairment at the reporting unit level on an annual basis, or whenever events or changes in circumstances occur that indicate that the fair value of a reporting unit is below its carrying amount. The Company’s annual impairment assessment date is the first day of the fourth quarter of the fiscal year. The CODM reviews the Company’s performance and allocates resources based on five operating segments: North America, EMEA, China, JPAC and Latin America, all of which are reportable segments. Each of these five operating segments is considered a reporting unit for the purpose of allocating goodwill and performing the annual goodwill recoverability assessment. 80 When testing goodwill for impairment, the Company first has an option to assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (more than 50%) that impairment exists. Such qualitative factors may include the following: macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and other relevant entity-specific events. In the event the qualitative assessment indicates that an impairment is more likely than not, the Company would be required to perform a quantitative impairment test. Under the quantitative goodwill impairment test, the evaluation of impairment involves comparing the current fair value of each reporting unit to its carrying value, including goodwill. The Company estimates the fair value of its reporting units by using forecasts of discounted future cash flows and peer market multiples. If the fair value of a reporting unit is less than its carrying value, impairment will be recognized in the amount by which the carrying value exceeds the fair value. As a result of the identification of indicators of impairment during the third quarter of 2025, the Company performed an interim impairment test that resulted in non-cash goodwill impairment charges of $ 614.8 million, $ 68.1 million and $ 17.8 million for the EMEA, China and Latin America reporting units, respectively. There was no annual impairment test performed as there was no goodwill remaining on the balance sheet subsequent to the impairment. As a result of the identification of indicators of impairment during the first quarter of 2024, the Company performed an interim impairment test that resulted in a non-cash goodwill impairment charge of $ 1.7 billion for the North America reporting unit. For the annual impairment test as of the beginning of the fiscal fourth quarter of 2024, the Company bypassed the qualitative assessment and proceeded directly to the quantitative goodwill impairment test for all reporting units. The Company concluded that the China and JPAC reporting units’ goodwill were impaired. As a result, the Company recorded non-cash goodwill impairment charges of $ 17.3 million and $ 61.4 million in the fourth quarter of 2024 for the China and JPAC reporting units, respectively. Refer to “—Note 8. Goodwill and Intangible Assets, Net” for further information. Intangible Assets Intangible assets are recorded at cost and amortized on a straight-line basis over their estimated useful lives, except for indefinite-lived intangibles such as goodwill. Software development costs associated with software to be leased or otherwise marketed are expensed as incurred until technological feasibility has been established. After technological feasibility is established, software development costs are capitalized and amortized on a straight-line basis over the estimated product life. Long-lived Assets The process of evaluating the potential impairment of long-lived assets, such as property, plant and equipment and intangible assets, is subjective and requires judgment. The Company reviews long-lived assets for impairment when events or changes in circumstances indicate the carrying value of an asset may not be recoverable. If these circumstances exist, recoverability of assets to be held and used is measured by a comparison of the carrying value of an asset group to future undiscounted net cash flows expected to be generated by the asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Revenue Recognition The Company records revenues primarily from product sales. These revenues are recorded net of rebates and other discounts. These rebates and discounts are estimated at the time of sale, and are largely driven by various customer program offerings, including special pricing agreements, promotions and other volume-based incentives. Rebates and discounts are calculated based on historical experience, estimated discounting levels and estimated distributor inventory balances and recorded as a reduction of sales with offsets to accounts receivable and other current liabilities, respectively. Transaction price for a contract represents the amount to which the Company is entitled in exchange for providing goods and services to the customer. Transaction price does not include amounts subject to uncertainties unless it is probable that there will be no significant reversal of revenue when the uncertainty is resolved. Revenue is recognized when control of the products is transferred to the customers in an amount that reflects the consideration the Company expects to receive from the customers in exchange for those products and services. This process involves identifying the contract with a customer, determining the performance obligations in the contract and the contract price, allocating the contract price to the distinct performance obligations in the contract and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. A performance obligation is considered to be satisfied once the control of a product is transferred to the customer or the service is provided to the customer, meaning the customer has the ability to use and obtain the benefit of the goods or service. The Company generates a portion of its revenue from sales of the QUICKVUE At-Home OTC COVID-19 tests to retail customers. The Company estimates the transaction price for revenue from sales to retail customers based on historical experience and current trends to evaluate when uncertainties related to right of return provisions are resolved. Amounts received or receivable that are expected to be returned are recognized as a refund liability, which is included in Other current liabilities. The refund liability is estimated utilizing historical sale and return rates over the period during which customers have 81 a right of return, taking into account available information on competitive products and contract changes. The refund liability is remeasured at each reporting period to reflect changes in assumptions about expected returns. A portion of product sales includes revenues for diagnostic kits, which are utilized on leased instrument systems under the Company’s “reagent rental” program. The reagent rental program provides customers the right to use the instruments at no separate cost to the customer in consideration for a multi-year agreement to purchase annual minimum amounts of consumables. When an instrument is placed with a customer under a reagent rental agreement, the Company retains title to the equipment and it remains capitalized on the Company’s Consolidated Balance Sheets as Property, plant and equipment, net. The instrument is depreciated on a straight-line basis over the lesser of the lease term or life of the instrument. Depreciation expense is recorded in cost of sales included in the Consolidated Statements of Loss. Instrument and consumables under the reagent rental agreements are deemed two distinct performance obligations. Though the instrument and consumables do not have any use to customers without one another, they are not highly interdependent because they do not significantly affect each other. The Company would be able to fulfill its promise to transfer the instrument even if its customers did not purchase any consumables and the Company would be able to fulfill its promise to provide the consumables even if customers acquired instruments separately. The contract price is allocated between these two performance obligations based on the relative standalone selling prices. The instrument is considered an operating lease. Variable lease revenue and fixed lease revenue represented approximately 5 % and 1 %, respectively, of the Company’s Total revenues for fiscal year ended 2025. Variable lease revenue and fixed lease revenue represented approximately 6 % and 1 %, respectively, of the Company’s Total revenues for fiscal year ended 2024. Variable lease revenue and fixed lease revenue represented approximately 4 % and 1 %, respectively, of the Company’s Total revenues for fiscal year ended 2023. Government Assistance The Company has a previously established agreement between Ortho and BARDA, a division of HHS, which provides funding for Ortho to build manufacturing space and production support equipment to increase COVID-19 assay production capacity, as well as to build a manufacturing facility to produce certain analyzers needed to support COVID-19 testing. Amounts received from BARDA under this grant are recorded as a reduction to the carrying value of the related assets. A portion of the grant is for purposes of reimbursement of certain general and administrative expenses related to the project, which are not capitalized as part of the equipment constructed in connection with the project and are recorded as a reduction to the related expense. The Company received $ 13.5 million during fiscal year ended 2023, which was recorded as a reduction to the carrying value of the related assets. No funding was received during fiscal years ended 2025 and 2024. During fiscal year ended 2025, the Company received $ 6.5 million for the extension of the Pencoed, Wales facility, which is deferred in Other current liabilities and recognized as a reduction to depreciation expense of the fixed asset once in service. Research and Development Costs R&D costs are charged to operations as incurred. Upfront and milestone payments made to third parties in connection with R&D collaborations are expensed as incurred up to the point of regulatory approval. Payments made to third parties at or subsequent to regulatory approval are capitalized and amortized over the remaining useful life of the related product. Amounts capitalized for such payments are included in other intangibles, net of accumulated amortization. The Company enters into collaborative arrangements to develop and commercialize intellectual property. These arrangements typically involve two (or more) parties who are active participants in the collaboration and are exposed to significant risks and rewards dependent on the commercial success of the activities. These collaborations usually involve various activities by one or more parties, including R&D, marketing and selling and distribution. Often, these collaborations require upfront, milestone and royalty or profit share payments, contingent upon the occurrence of certain future events linked to the success of the asset in development. Amounts due from collaborative partners related to development activities are generally reflected as a reduction of R&D expense because the performance of contract development services is not central to the Company’s operations. Product Shipment Costs Product shipment costs are included in Selling, marketing and administrative expense in the accompanying Consolidated Statements of Loss. Shipping and handling costs were $ 134.3 million, $ 125.4 million and $ 124.1 million for fiscal years ended 2025, 2024 and 2023, respectively. Advertising Costs Advertising costs are expensed as incurred and included in Selling, marketing and administrative expense in the accompanying Consolidated Statements of Loss. Advertising costs were $ 8.9 million, $ 6.2 million and $ 15.1 million for fiscal years ended 2025, 2024 and 2023, respectively. 82 Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company’s policy is to recognize the interest expense and penalties related to income tax matters as a component of the income tax provision. The Company does not intend to permanently reinvest earnings of foreign subsidiaries at this time. Accordingly, the Company provides for income taxes and foreign withholding taxes, where applicable, on undistributed earnings. Any repatriation of undistributed earnings would be done at little or no tax cost. Fair Value of Financial Instruments The Company uses the fair value hierarchy established in ASC Topic 820, Fair Value Measurements and Disclosures, which requires that the valuation of assets and liabilities subject to fair value measurements be classified and disclosed by the Company in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The carrying amounts of cash and cash equivalents, accounts receivables, accounts payable and accrued liabilities approximate their fair values due to their short-term nature. Stock-based Compensation Stock-based compensation, comprised of (i) stock options and (ii) RSUs, which include time-based RSUs, performance-based RSUs and restricted stock awards, to employees and non-employee directors, is measured at fair value on the grant date. Compensation expense is recognized over the requisite service period, which is generally the vesting period, and includes an estimate of the awards that will be forfeited, and an estimate of the level of performance the Company will achieve for performance-based awards. Leases Lease liabilities represent the obligation to make lease payments and ROU assets represent the right to use the underlying asset during the lease term. Lease liabilities and ROU assets are recognized at the commencement date of the lease based on the present value of lease payments over the lease term at the commencement date. When the implicit rate is unknown, an incremental borrowing rate based on the information available at the commencement date is used in determining the present value of the lease payments. Options to extend or terminate the lease are included in the determination of the lease term when it is reasonably certain that the Company will exercise such options. For certain classes of assets, the Company accounts for lease and non-lease components as a single lease component. Variable lease payments, including those related to changes in the consumer price index, are recognized in the period in which the obligation for those payments is incurred and are not included in the measurement of the ROU assets or lease liabilities. Short-term leases are excluded from the calculation of the ROU assets and lease liabilities. Operating leases are included in ROU assets, operating lease liabilities and operating lease liabilities non-current in the Consolidated Balance Sheets. Comprehensive (Loss) Income Comprehensive (loss) income includes unrealized gains and losses that are related to cumulative translation adjustments; unrealized gains and losses on marketable securities; changes in unamortized pension and post-employment actuarial gains and losses; and changes in the fair value of derivatives that are designated and qualify as cash flow hedging instruments excluded from the Consolidated Statements of Loss. Acquisitions In a business combination, the assets acquired and liabilities assumed are recorded based on the estimated fair values at the date of acquisition, including intangible assets, IPR&D and contingent payments. Any excess of the purchase price over the estimated fair values of net assets acquired is recorded as goodwill. Business acquisition costs are expensed when incurred. 83 If the Company determines the assets acquired do not meet the definition of a business, the transaction will be accounted for as an acquisition of assets rather than a business combination and no goodwill is recorded. In an asset acquisition, acquired IPR&D with no alternative future use is charged to expense and contingent consideration is not recognized at the acquisition date. Defined Benefit Plans and Other Post-Employment Benefits The Company has defined benefit plans in certain countries and a retiree healthcare reimbursement plan for certain U.S. employees. Defined benefit plans specify an amount of pension benefit that an employee will receive on retirement, usually dependent on factors such as age, years of service and compensation. The net obligation with respect to defined benefit plans is calculated separately for each plan by estimating the amount of the future benefits that employees have earned in return for their service in the current and prior periods. These benefits are then discounted to determine the present value of the obligations and are then adjusted for the impact of any unamortized prior service costs. The net obligation is then determined with reference to the fair value of the plan assets (if any). The discount rate used is the yield on bonds that are denominated in the currency in which the benefits will be paid and that have maturity dates approximating the terms of the obligations. The calculations are performed by qualified actuaries using the projected unit credit method. Recent Accounting Pronouncements Recently Adopted Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , to improve its income tax disclosure requirements. Under the guidance, entities must annually (i) disclose specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold. This ASU was adopted in the fourth quarter of 2025 and is being applied prospectively (refer to “—Note 5. Income Taxes”). The adoption of this ASU did not impact the Company’s results of operations, cash flows or financial condition. Recently Issued Accounting Standards Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires disclosure, in the notes to the financial statements, of specified information about certain costs and expenses. This ASU is effective for public entities for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Other than the respective disclosures, this ASU is not expected to have an impact on the Company’s Consolidated Financial Statements. In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when developing forecasts for estimating expected credit losses. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company is currently evaluating this guidance and does not expect this ASU to have a material impact 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 . Under the guidance, an entity is required to start capitalizing software costs when both of the following occur: (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. The Company is currently evaluating this guidance and does not expect this ASU to have a material impact on its Consolidated Financial Statements. In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements, which includes amendments to more closely align hedge accounting with the economics of the entity’s risk management activities. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods. The Company is currently evaluating this guidance and does not expect this ASU to have a material impact on its Consolidated Financial Statements. In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which establishes the accounting and presentation for government grants received by business entities. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2028 and interim reporting periods within those annual reporting periods. The Company is currently evaluating this guidance and does not expect this ASU to have a material impact on its Consolidated Financial Statements. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements , to improve the navigability of interim disclosure requirements and provide clarity on when that guidance is applicable. The amendments 84 include (i) a comprehensive list of required interim disclosures and (ii) a disclosure principle that requires entities to disclose material events since the end of the last annual reporting period. The amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Other than the respective disclosures, this ASU is not expected to have an impact on the Company’s Consolidated Financial Statements. In December 2025, the FASB issued ASU 2025-12, Codification Improvements. The amendments in this ASU represent changes to the Codification that (i) clarify, (ii) correct errors, or (iii) make minor improvements, and make the Codification easier to understand and apply. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. This ASU is not expected to have an impact on the Company’s Consolidated Financial Statements. Note 2. Computation of Earnings Per Share Basic EPS is computed by dividing Net loss by the weighted-average number of shares of common stock outstanding. Diluted EPS is computed based on the sum of the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period. Potentially dilutive shares of common stock consist of shares issuable from stock options and unvested RSUs. Potentially dilutive shares of common stock from outstanding stock options and unvested RSUs are determined using the average share price for each period under the treasury stock method. The following table presents the calculation of the weighted-average shares used in computing basic and diluted EPS in the respective periods: Fiscal Year Ended (In millions) 2025 2024 2023 Basic weighted-average shares of common stock outstanding 67.8 67.2 66.8 Dilutive potential shares issuable from stock options and RSUs (1) — — — Diluted weighted-average shares of common stock outstanding 67.8 67.2 66.8 (1) In fiscal years ended 2025, 2024 and 2023, all potential shares of common stock issuable for stock options and RSUs were excluded from the dilutive calculations above because the effect of including them would have been anti-dilutive. The dilutive effect of potential shares of common stock issuable for stock options and RSUs on the weighted-average number of shares of common stock outstanding would have been as follows: Fiscal Year Ended (In millions) 2025 2024 2023 Basic weighted-average shares of common stock outstanding 67.8 67.2 66.8 Dilutive potential shares issuable from stock options and RSUs 0.2 0.2 0.5 Diluted weighted-average shares of common stock outstanding 68.0 67.4 67.3 Stock options and RSUs where the combined exercise price and unrecognized stock-based compensation was greater than the average market price for the Company’s common stock were not included in the computations of diluted weighted-average shares because the effect would have been anti-dilutive under the treasury stock method. These stock options and RSUs represented 1.6 million, 1.8 million and 1.6 million shares of common stock for fiscal years ended 2025, 2024 and 2023, respectively. Note 3. Revenue Contract Balances Timing of revenue recognition may differ from timing of invoicing to customers. The Company records an asset when revenue is recognized prior to invoicing a customer (a “contract asset”). Contract assets are included within Prepaid expenses and other current assets in the Company’s Consolidated Balance Sheets and are transferred to accounts receivable when the right to payment becomes unconditional. The contract asset balance consisted of contractual arrangements with certain customers under which the Company invoices the customers based on reportable results generated by its reagents; however, control of the goods transfers to the customers upon shipment or delivery of the products, as determined under the terms of the contract. Using the expected value method, the Company estimates the number of reagents that will generate a reportable result. The Company records the revenue upon shipment and an associated contract asset, and relieves the contract asset upon completion of the invoicing. The balance of the 85 contract asset related to these arrangements was $ 34.7 million and $ 32.5 million as of December 28, 2025 and December 29, 2024, respectively. The Company reviews contract assets for expected credit losses resulting from the collectability of customer accounts. Expected losses are established based on historical losses, customer mix and credit policies, current economic conditions in customers’ country or industry, and expectations associated with reasonable and supportable forecasts. No credit losses related to contract assets were recognized during fiscal years ended 2025 and 2024. The Company recognizes a contract liability when a customer pays an invoice prior to the Company transferring control of the goods or services (“contract liabilities”). The Company’s contract liabilities consist of deferred revenue primarily related to customer service contracts. The Company classifies deferred revenue as current or non-current based on the timing of the transfer of control or performance of the service. The balance of the Company’s current deferred revenue was $ 37.8 million and $ 33.5 million as of December 28, 2025 and December 29, 2024, respectively, and was included in Other current liabilities in the Consolidated Balance Sheets. The Company has one arrangement with a customer where the revenue is expected to be recognized beyond one year. The balance of the deferred revenue included in long-term liabilities was $ 16.9 million and $ 17.3 million as of December 28, 2025 and December 29, 2024, respectively, and was included in Other liabilities in the Consolidated Balance Sheets. The amount of deferred revenue as of December 29, 2024 that was recorded in Total revenues during fiscal year ended 2025 was $ 30.0 million. The amount of deferred revenue as of December 31, 2023 that was recorded in Total revenues during fiscal year ended 2024 was $ 34.0 million. Joint Business with Grifols The Company has the Joint Business between Ortho and Grifols, under which Ortho and Grifols agreed to pursue a collaboration relating to Ortho’s Hepatitis and HIV diagnostics business. The governance of the Joint Business is shared through a supervisory board made up of equal representation by Ortho and Grifols, which is responsible for all significant decisions relating to the Joint Business that are not exclusively assigned to either Ortho or Grifols, as defined in the Joint Business agreement. The Company’s portion of the pre-tax net profit shared under the Joint Business was $ 30.9 million, $ 29.5 million and $ 47.3 million during fiscal years ended 2025, 2024 and 2023, respectively. These amounts included the Company’s portion of the pre-tax net profit of $ 10.7 million, $ 21.1 million and $ 21.4 million during fiscal years ended 2025, 2024 and 2023, respectively, on sales transactions with third parties where the Company is the principal. The Company recognized revenues, cost of sales, excluding amortization of intangibles, and operating expenses, on a gross basis on these sales transactions in their respective lines in the Consolidated Statements of Loss. The Company’s portion of the pre-tax net profit also included revenue from collaboration and royalty agreements of $ 20.2 million, $ 8.4 million and $ 26.0 million during fiscal years ended 2025, 2024 and 2023, respectively, which is presented on a net basis within Total revenues. In December 2025, the Company and Grifols initiated discussions to terminate the Joint Business arrangement prior to its scheduled expiration date in 2039. Accordingly, the Company recorded a charge of $ 65.0 million payable to Grifols over a three-year period in Other operating expenses in the Consolidated Financial Statements for fiscal year ended 2025 to reflect the mutually agreed terms in principle. While the Company continues to engage in discussions with Grifols and additional information may become available as discussions progress, it is reasonably possible that the ultimate resolution of the termination may differ from the estimated amount accrued, and such an amount could be material to the Consolidated Financial Statements. Disaggregation of Revenue The following table summarizes Total revenues by business unit: Fiscal Year Ended (In millions) 2025 2024 (1) 2023 (1) Labs $ 1,505.7 $ 1,427.2 $ 1,425.8 Immunohematology (2) 543.8 522.0 512.0 Donor Screening (2) 52.6 115.1 135.9 Point of Care 601.6 694.6 892.4 Molecular Diagnostics 26.5 24.0 31.7 Total revenues $ 2,730.2 $ 2,782.9 $ 2,997.8 (1) Certain reclassifications have been made to prior period amounts to conform to the current period presentation. (2) As a result of the wind-down of the U.S. donor screening portfolio, the Transfusion Medicine business unit is shown in its two product categories: Immunohematology and Donor Screening. 86 Concentration of Revenue and Credit Risk For both fiscal years ended 2025 and 2024, one customer represented 11 % of Total revenues in the North America segment. For fiscal year ended 2023, no customer individually accounted for more than 10% of Total revenues. Revenue related to the Company’s respiratory products accounted for approximately 15 %, 18 % and 24 % of Total revenues for fiscal years ended 2025, 2024 and 2023, respectively. As of December 28, 2025, no customers had a balance due in excess of 10% of Accounts receivable, net. As of December 29, 2024, customers with a balance due in excess of 10% of Accounts receivable, net totaled $ 33.7 million. Note 4. Segment and Geographic Information The Company operates under five geographically-based reportable segments: North America, EMEA, China, JPAC and Latin America. Although all five segments are engaged in the marketing, distribution and sale of diagnostic instruments and assays for hospitals, retailers, distributors, laboratories and/or blood and plasma centers worldwide, each region is managed separately to better align with the market dynamics of the specific geographic region. Beginning in the fourth quarter of 2025, the Company determined that the JPAC segment, previously included in “Other,” meets the quantitative thresholds for separate reporting under ASC 280. This determination was based on JPAC’s segment revenue exceeding 10% of the combined reported segment revenue. As Latin America is the only remaining immaterial operating segment, results are reported separately. This change in segment reporting did not have an impact on the Company’s previously reported Consolidated Financial Statements. Prior periods have been revised to align with the current period presentation. The following table presents the results of operations of the Company’s reportable segments for fiscal years ended 2025, 2024 and 2023: 87 Fiscal Year Ended 2025 (In millions) North America EMEA China JPAC Latin America Total Total revenues $ 1,488.9 $ 360.7 $ 334.7 $ 293.0 $ 252.9 $ 2,730.2 Less (1) : Cost of sales, excluding amortization of intangibles 512.1 175.9 147.6 164.1 130.7 1,130.4 Selling, marketing and administrative 167.9 95.4 43.9 52.7 43.0 402.9 Research and development 1.6 2.8 3.1 1.6 1.6 10.7 Other expense, net 0.3 4.0 ( 1.1 ) 1.4 ( 0.8 ) 3.8 Total segment Adjusted EBITDA $ 807.0 $ 82.6 $ 141.2 $ 73.2 $ 78.4 1,182.4 Reconciliation of segment Adjusted EBITDA Corporate (2) ( 585.4 ) Depreciation and amortization ( 442.0 ) Interest expense, net ( 177.6 ) Restructuring, integration and other charges ( 263.6 ) Goodwill impairment charge ( 700.7 ) Asset impairment charge ( 9.7 ) Loss on extinguishment of debt ( 5.1 ) Contract termination cost (3) ( 65.0 ) Amortization of deferred cloud computing implementation costs ( 27.0 ) Legal accrual (4) ( 9.4 ) EU medical device regulation transition costs (5) ( 0.7 ) Gain on investments 2.5 Other adjustments ( 6.4 ) Loss before income taxes $ ( 1,107.7 ) 88 Fiscal Year Ended 2024 (In millions) North America EMEA China JPAC Latin America Total Total revenues $ 1,619.8 $ 335.8 $ 325.0 $ 279.4 $ 222.9 $ 2,782.9 Less (1) : Cost of sales, excluding amortization of intangibles 547.0 179.5 148.0 154.1 117.2 1,145.8 Selling, marketing and administrative 179.6 105.8 44.6 54.6 42.0 426.6 Research and development 1.6 2.6 4.3 1.5 1.6 11.6 Other expense, net ( 0.5 ) 1.4 ( 2.4 ) ( 0.7 ) ( 1.5 ) ( 3.7 ) Total segment Adjusted EBITDA $ 892.1 $ 46.5 $ 130.5 $ 69.9 $ 63.6 1,202.6 Reconciliation of segment Adjusted EBITDA Corporate (2) ( 659.7 ) Depreciation and amortization ( 453.4 ) Interest expense, net ( 163.5 ) Restructuring, integration and other charges ( 127.2 ) Goodwill impairment charge ( 1,822.6 ) Asset impairment charge ( 56.9 ) Asset write off (6) ( 20.0 ) Amortization of deferred cloud computing implementation costs ( 14.7 ) Employee compensation charges ( 5.6 ) Prior Credit Agreement amendment fees ( 4.0 ) EU medical device regulation transition costs (5) ( 2.0 ) Loss on disposal (7) ( 1.2 ) Gain on investments 0.7 Other adjustments ( 4.0 ) Loss before income taxes $ ( 2,131.5 ) 89 Fiscal Year Ended 2023 (In millions) North America EMEA China JPAC Latin America Total Total revenues $ 1,877.1 $ 327.3 $ 310.1 $ 272.7 $ 210.6 $ 2,997.8 Less (1) : Cost of sales, excluding amortization of intangibles 644.3 176.2 134.9 152.2 112.5 1,220.1 Selling, marketing and administrative 205.9 105.1 44.7 58.7 41.4 455.8 Research and development 1.6 2.5 4.5 1.6 1.5 11.7 Other expense, net 0.1 2.5 ( 1.2 ) 1.7 ( 1.6 ) 1.5 Total segment Adjusted EBITDA $ 1,025.2 $ 41.0 $ 127.2 $ 58.5 $ 56.8 1,308.7 Reconciliation of segment Adjusted EBITDA Corporate (2) ( 585.5 ) Depreciation and amortization ( 457.2 ) Interest expense, net ( 147.6 ) Restructuring, integration and other charges ( 113.4 ) Asset impairment charge ( 4.5 ) Tax indemnification expense ( 12.6 ) Amortization of deferred cloud computing implementation costs ( 9.2 ) Loss on investments ( 3.6 ) EU medical device regulation transition costs (5) ( 2.5 ) Other adjustments ( 1.7 ) Loss before income taxes $ ( 29.1 ) (1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. (2) Primarily consists of costs related to executive and staff functions, including certain finance, human resources, manufacturing and IT functions, which benefit the Company as a whole. These costs are primarily related to the general management of these functions on a corporate level and the design and development of programs, policies and procedures that are then implemented in the individual segments, with each segment bearing its own cost of implementation. The Company’s corporate function also includes debt and stock-based compensation associated with all employee stock-based awards. (3) Refer to “—Note 3. Revenue” for additional information. (4) Represents reserves accrued in connection with the resolution of a contractual dispute. Refer to “—Note 13. Commitments and Contingencies” for additional information. (5) Represents incremental consulting costs and R&D manufacturing site costs to align compliance of the Company’s existing, on-market products that were previously registered under the European In Vitro Diagnostics Directive regulatory framework with the requirements under the EU’s In Vitro Diagnostic Regulation, which generally apply from May 2022 onwards. (6) Represents the write off of the tax assessment refund related to the Luxembourg net wealth tax, as the weight of available evidence indicated that it is not more likely than not that the position will be sustained during the pendency of an appeal. (7) Represents loss on disposal from the sale of the McKellar, San Diego, CA facility. The Company’s President and CEO is the Company’s CODM. The CODM reviews the segment adjusted EBITDA results against the forecast to assess segment performance and determine how to allocate resources. The CODM does not review and is not provided capital expenditures, total depreciation and amortization or assets by segment, and therefore this information has been excluded as it does not comprise part of management’s key performance metrics. 90 The following presents long-lived assets (excluding intangible assets) and total net revenue by geographic territory: Long-lived Assets as of Total Revenues for Fiscal Year Ended (In millions) December 28, 2025 December 29, 2024 2025 2024 2023 Domestic $ 829.2 $ 947.8 $ 1,436.6 $ 1,568.8 $ 1,829.4 Foreign 529.1 432.4 1,293.6 1,214.1 1,168.4 Total $ 1,358.3 $ 1,380.2 $ 2,730.2 $ 2,782.9 $ 2,997.8 Note 5. Income Taxes Significant components of the provision for income taxes were as follows: Fiscal Year Ended (In millions) 2025 2024 2023 Current: Federal $ ( 1.5 ) $ ( 1.1 ) $ ( 49.3 ) State 0.6 4.9 ( 1.6 ) Foreign 24.9 22.1 36.4 Total current provision (benefit) 24.0 25.9 ( 14.5 ) Deferred: Federal ( 5.5 ) ( 130.5 ) 8.5 State 1.2 0.6 ( 3.6 ) Foreign 4.4 24.5 ( 9.4 ) Total deferred benefit 0.1 ( 105.4 ) ( 4.5 ) Provision for (benefit from) income taxes $ 24.1 $ ( 79.5 ) $ ( 19.0 ) The Company’s income before income taxes was subject to taxes in the following jurisdictions for the following periods: Fiscal Year Ended (In millions) 2025 2024 2023 United States $ ( 523.8 ) $ ( 2,167.1 ) $ ( 163.9 ) Foreign ( 583.9 ) 35.6 134.8 Loss before income taxes $ ( 1,107.7 ) $ ( 2,131.5 ) $ ( 29.1 ) 91 Significant components of the Company’s deferred tax assets and deferred tax liabilities as of December 28, 2025 and December 29, 2024 are shown below: (In millions) December 28, 2025 December 29, 2024 Deferred tax assets: Lease liability $ 43.8 $ 46.2 Allowance for returns and discounts 42.7 38.4 Inventory reserve 22.2 14.7 Stock-based compensation 7.8 9.7 Tax loss, interest expense and credit carryforwards 487.1 468.7 Research & development expenses 68.1 95.7 Employee related obligations 14.9 13.2 Other, net 48.4 — Total deferred tax assets 735.0 686.6 Valuation allowance for deferred tax assets ( 249.8 ) ( 142.4 ) Total deferred tax assets, net of valuation allowance 485.2 544.2 Deferred tax liabilities: Right-of-use assets ( 35.2 ) ( 38.9 ) Intangible assets ( 456.2 ) ( 468.6 ) Property, plant and equipment ( 83.5 ) ( 107.5 ) Other, net — ( 5.7 ) Total deferred tax liabilities ( 574.9 ) ( 620.7 ) Net deferred tax liabilities $ ( 89.7 ) $ ( 76.5 ) Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. During the fiscal year ended 2024 and subsequently in 2025, the Company was no longer demonstrating positive worldwide cumulative pre-tax book income, driven primarily by the impairment of goodwill during 2024 and 2025. Absent utilizing more subjective projections of future income, a portion of the Company’s federal net operating loss and interest expense carryforwards, a portion of certain state net operating loss, interest expense and tax credit carryforwards, and deferred tax assets related to certain foreign subsidiaries were not more likely than not to be realized. The Company maintained a valuation allowance during the fiscal year ended 2025 for those U.S. and foreign deferred tax assets not more likely than not to be utilized. The valuation allowance of $ 249.8 million as of December 28, 2025 represents the portion of the deferred tax asset that management could not conclude was more likely than not to be realized. The Company’s valuation allowance relates primarily to the realization of recorded tax benefits on tax interest and loss carryforwards from operations in the U.S. federal and state jurisdictions as well as Luxembourg, tax credits in U.S. state jurisdictions, and foreign distributors deferred tax assets. The amount of the deferred tax assets considered realizable could be adjusted in future years based on changes in available positive and negative evidence. The Company’s overall valuation allowance recorded on deferred tax assets increased primarily due to an increase in deferred tax assets related to additional U.S. net operating losses and other deferred tax assets recorded during the fiscal year ended 2025. As of December 28, 2025, the Company had U.S. federal NOL carryforwards of $ 1,008.5 million, of which $ 345.0 million are subject to expiration through 2037 and $ 663.5 million are not subject to expiration. In addition, the Company has state NOLs of approximately $ 719.7 million, which will expire in years 2026 through 2044. As of December 28, 2025, the Company had U.S. federal research credit carryforwards of $ 26.0 million and federal foreign tax credits of $ 2.2 million, which will begin to expire in 2034 and 2028, respectively. In addition, the Company had state research credits of $ 21.1 million and state business credit carryforwards of $ 25.6 million, of which none expire. As of December 28, 2025, the Company had $ 148.1 million of NOL carryforwards in certain non-U.S. jurisdictions, net of uncertain tax positions. Of these, $ 110.3 million have no expiration and the remaining $ 37.9 million will expire in years through 2040. Pursuant to Internal Revenue Code Sections 382 and 383, the Company’s use of its NOL and tax credit carryforwards may be limited as a result of cumulative changes in ownership of more than 50% over a three-year period. As a result of an ownership change that occurred in the second quarter of fiscal year ended 2022, the Company may be limited in its ability to utilize its NOL carryforwards and certain other attributes, starting on the ownership change date. 92 The reconciliation of income tax computed at the federal statutory rate to the provision for income taxes from continuing operations pursuant to the disclosure requirements of ASU 2023-09 for the fiscal year ended 2025 was as follows: Fiscal Year Ended 2025 (In millions, except percentages) Amount Percent U.S. Federal Statutory Tax Rate $ ( 232.6 ) 21.00 % State and Local Income Taxes, net of Federal Income Tax Effect (1) ( 8.0 ) 0.72 Foreign Tax Effects China Goodwill Impairment 14.3 ( 1.29 ) Other 1.0 ( 0.09 ) United Kingdom Goodwill Impairment 88.7 ( 8.01 ) Other ( 1.6 ) 0.14 France Goodwill Impairment 20.2 ( 1.82 ) Other 1.5 ( 0.13 ) Other Foreign Jurisdictions Goodwill Impairment 23.7 ( 2.14 ) Other 17.3 ( 1.56 ) Effects of Cross-Border Tax Laws 8.4 ( 0.76 ) Tax Credits Other ( 1.8 ) 0.16 Change in Valuation Allowance 76.4 ( 6.90 ) Non-Deductible Items Other 9.6 ( 0.86 ) Changes in Unrecognized Tax Benefits 9.7 ( 0.88 ) Other Adjustments Other ( 2.7 ) 0.25 Provision for income taxes $ 24.1 ( 2.17 ) % (1) During the fiscal year ended 2025, state taxes in California, Texas, Florida, Georgia, Pennsylvania, Tennessee and Illinois comprised greater than 50% of the tax effect in this category. 93 The reconciliation of income tax computed at the federal statutory rate to the benefit from income taxes from continuing operations for fiscal years ended 2024 and 2023 was as follows: Fiscal Year Ended (In millions) 2024 2023 Tax benefit at statutory tax rate $ ( 447.6 ) $ ( 6.1 ) State tax benefit, net of federal tax ( 7.2 ) ( 2.8 ) Foreign income taxed at rates other than the applicable U.S. rate 10.3 ( 23.0 ) Goodwill Impairment 316.2 — Permanent differences 14.8 ( 4.3 ) Federal and state research credits—current year ( 5.1 ) ( 10.3 ) Stock-based compensation 6.2 1.5 Change in valuation allowance 31.3 10.4 Global Intangible Low-Taxed Income 0.1 20.1 Change in uncertain tax positions ( 7.8 ) ( 11.8 ) Other 9.3 7.3 Benefit from income taxes $ ( 79.5 ) $ ( 19.0 ) The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes that it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcome of examinations by tax authorities in determining the adequacy of its provision for income taxes. The following table summarizes the activity related to the Company’s unrecognized tax benefits: Fiscal Year Ended (In millions) 2025 2024 2023 Beginning balance $ 183.9 $ 28.8 $ 40.0 Increases related to current year tax positions 13.5 — 2.6 Increases (decreases) related to prior year tax positions — 165.4 ( 0.1 ) Decreases due to settlements and expirations ( 0.8 ) ( 10.3 ) ( 13.7 ) Ending balance $ 196.6 $ 183.9 $ 28.8 As of December 28, 2025, December 29, 2024 and December 31, 2023, the Company had unrecognized tax benefits of $ 196.6 million, $ 183.9 million, and $ 28.8 million, respectively, of which $ 20.8 million, $ 16.3 million and $ 21.6 million, respectively, would reduce the Company’s annual effective tax rate, if recognized. The Company’s policy is to recognize the interest expense and penalties related to income tax matters as a component of the income tax expense. The Company had accrued interest and penalties associated with uncertain tax positions of $ 2.4 million as of December 28, 2025 and $ 1.6 million as of December 29, 2024. The Company recognized net interest income of $ 0.2 million, $ 2.4 million and $ 4.3 million for fiscal years ended 2025, 2024 and 2023, respectively, due to the reversals of prior year accrued interest. The Company is subject to periodic audits by domestic and foreign tax authorities. Due to the carryforward of unutilized credits, the Company’s federal tax years from 2014 and onwards are subject to examination by the U.S. authorities. The Company’s state and foreign tax years for 2001 and onwards are subject to examination by applicable tax authorities. The Company believes that it has appropriate support for the income tax positions taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax law applied to the facts of each matter. Ortho is currently under audit in certain jurisdictions for tax years under the responsibility of Johnson & Johnson. Pursuant to the stock and asset purchase agreement entered into by Ortho and Johnson & Johnson in January 2014, Johnson & Johnson retained all income tax liabilities accrued as of the date of acquisition, including reserves for unrecognized tax benefits. Accordingly, all tax liabilities related to these tax years will be indemnified by Johnson & Johnson. During the fourth quarter of fiscal year ended 2023, the federal examination for tax years 2013 through 2014 closed with no liability due. As such, the 94 related unrecognized tax benefits and interest were released totaling $ 19.9 million, offset by $ 5.4 million of competent authority benefits reversed. As of December 28, 2025, the remaining indemnification receivable from Johnson & Johnson totaled $ 3.3 million and is included as a component of Prepaid expenses and other current assets on the Consolidated Balance Sheet. In 2024, the Company determined that an uncertain tax benefit was required to be established related to net operating loss and interest expense carryforwards associated with an on-going Luxembourg income tax audit for tax years 2017 through 2020. As such, Luxembourg net operating loss and interest expense carryforward deferred tax assets that were previously fully offset by a valuation allowance have been reduced by the amount of uncertain tax benefits recorded as a contra deferred tax asset. The following table summarizes the changes to the valuation allowance for balances for fiscal years ended 2025, 2024 and 2023: Beginning Balance Additions Due to Current Year Acquisitions Additions Charged to (Benefit From) Provision for Income Taxes Currency Translation/Other (1) Ending Balance Deferred tax valuation allowance Fiscal year ended December 28, 2025 $ 142.4 — 113.0 ( 5.6 ) $ 249.8 Fiscal year ended December 29, 2024 $ 274.7 — 31.3 ( 163.6 ) $ 142.4 Fiscal year ended December 31, 2023 $ 251.3 — 10.4 13.0 $ 274.7 (1) The other decreases in valuation allowance during fiscal year ended 2024 related predominately to reserves for unrecognized tax benefits recorded on certain Luxembourg tax loss carryforwards during the period. Disclosed below is a summary of net income taxes paid or refunded by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for fiscal year ended 2025. Fiscal Year Ended (In millions) 2025 Income Tax Payments (Net of Refunds) U.S. Federal $ ( 23.2 ) U.S. State and Local New York ( 4.7 ) Other ( 6.1 ) Foreign China 3.6 Other 5.0 Total Taxes Paid (Net of Refunds) $ ( 25.4 ) Note 6. Balance Sheet Account Details Cash, Cash Equivalents and Restricted Cash (In millions) December 28, 2025 December 29, 2024 Cash and cash equivalents $ 169.8 $ 98.3 Restricted cash included in Other assets — 0.2 Cash, cash equivalents and restricted cash $ 169.8 $ 98.5 95 Accounts Receivable, Net Accounts receivables primarily consist of trade accounts receivables with maturities of one year or less and are presented net of reserves: (In millions) December 28, 2025 December 29, 2024 Accounts receivable $ 514.1 $ 382.0 Allowance for contract rebates and discounts ( 79.8 ) ( 85.3 ) Allowance for doubtful accounts ( 17.3 ) ( 14.3 ) Total accounts receivable, net $ 417.0 $ 282.4 The allowance for contractual rebates involves estimating adjustments to revenue based on a high volume of data, including inputs from third-party sources. In addition, the determination of such adjustments includes estimating rebate percentages which are dependent on estimated end-user sales mix and customer contractual terms, which vary across customers, the related balance of which was $ 28.7 million and $ 39.8 million at December 28, 2025 and December 29, 2024, respectively, and was included in the allowance for contract rebates and discounts. The following table summarizes changes to the accounts receivable allowance balances for fiscal years ended 2025, 2024 and 2023: Balance at Beginning of Period Additions Charged to Expense or as Reductions to Revenue (1) Deductions (2) Balance at end of period (In millions) Fiscal year ended December 28, 2025 $ 99.6 $ 550.1 $ ( 552.6 ) $ 97.1 Fiscal year ended December 29, 2024 $ 91.8 $ 486.2 $ ( 478.4 ) $ 99.6 Fiscal year ended December 31, 2023 $ 89.1 $ 493.5 $ ( 490.8 ) $ 91.8 (1) Primarily represents charges for contract rebate allowances recorded as reductions to revenue. Additions to allowance for doubtful accounts are recorded to selling, marketing and administrative expense. (2) The deductions represent actual charges against the accrual described above. Inventories Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Inventories consisted of the following: (In millions) December 28, 2025 December 29, 2024 Raw materials $ 189.9 $ 211.8 Work-in-process (materials, labor and overhead) 107.7 90.6 Finished goods (materials, labor and overhead) 289.0 291.6 Total inventories $ 586.6 $ 594.0 Inventories $ 577.6 $ 533.7 Other assets (1) 9.0 60.3 Total inventories $ 586.6 $ 594.0 (1) Other assets includes inventory expected to remain on hand beyond one year. 96 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: (In millions) December 28, 2025 December 29, 2024 Income taxes and other tax receivables $ 79.8 $ 112.1 Prepaid expenses 53.9 73.2 Other receivables 40.2 24.3 Contract assets 34.7 32.5 Derivatives 13.7 15.1 Other (1) 28.2 5.2 Total prepaid expenses and other current assets $ 250.5 $ 262.4 (1) Primarily relates to cloud computing. Property, Plant and Equipment, Net The following is a summary of property, plant and equipment, net: (In millions) December 28, 2025 December 29, 2024 Equipment, furniture and fixtures $ 777.8 $ 673.2 Building and improvements 332.9 330.0 Customer leased instruments 906.2 728.1 Finance lease right-of-use asset — 12.5 Land 15.1 11.7 Construction in progress 271.1 350.9 Total property, plant and equipment, gross 2,303.1 2,106.4 Less: accumulated depreciation and amortization ( 944.8 ) ( 726.2 ) Total property, plant and equipment, net $ 1,358.3 $ 1,380.2 Construction in progress reflects amounts incurred for construction or improvements of property, plant, or equipment that have not been put in service. In addition, construction in progress includes certain instruments that have not been placed at a customer under a lease agreement that will be reclassified to leased instruments once placed at a customer site. The total expense for depreciation of fixed assets and amortization of leasehold improvements was $ 252.8 million, $ 250.0 million and $ 252.4 million for fiscal years ended 2025, 2024 and 2023, respectively. Other Current Liabilities Other current liabilities consisted of the following: (In millions) December 28, 2025 December 29, 2024 Accrued commissions, rebates and returns $ 70.8 $ 67.4 Accrued interest 48.1 39.0 Deferred revenue 37.8 33.5 Derivatives 32.1 4.0 Operating lease liabilities 29.3 31.1 Professional services 25.8 21.4 Accrued other taxes payable 26.3 20.9 Contract termination cost 25.0 — Other 81.4 71.4 Total other current liabilities $ 376.6 $ 288.7 97 Note 7. Assets Held for Sale As part of the Company’s cost-savings initiatives, the Company has been evaluating its real estate footprint with the goal to relocate and consolidate its operations to improve long-term results. As a result, the Company decided to (i) sell the McKellar, San Diego, CA facility and (ii) sell the Raritan, NJ facility with the intent to subsequently lease back the right to use the property. In the second quarter of 2024, the properties met the requirements for reclassification from property, plant and equipment, net to assets held for sale. The carrying value of the assets was reduced to its estimated relative fair value less costs to sell, resulting in an impairment charge of $ 56.9 million that was included in Asset impairment charge for the fiscal year ended 2024. The McKellar, San Diego, CA facility was sold during the fourth quarter of 2024 for net cash proceeds of $ 9.3 million, resulting in a loss on disposal of $ 1.2 million. This loss was included in Other operating expenses. In the third quarter of 2025, the Company recorded an additional impairment charge of $ 9.7 million as a result of the latest fair value assessment of the Raritan, NJ facility. The Raritan, NJ facility continues to meet the criteria for held for sale. Note 8. Goodwill and Intangible Assets, Net Changes in goodwill were as follows: (In millions) North America EMEA China JPAC Latin America Total Balance at December 31, 2023 $ 1,743.9 $ 582.4 $ 85.7 $ 60.9 $ 19.1 $ 2,492.0 Impairment charge ( 1,743.9 ) — ( 17.3 ) ( 61.4 ) — ( 1,822.6 ) Foreign currency translation — ( 16.4 ) ( 1.8 ) 0.5 ( 2.2 ) ( 19.9 ) Balance at December 29, 2024 $ — $ 566.0 $ 66.6 $ — $ 16.9 $ 649.5 Impairment charge — ( 614.8 ) ( 68.1 ) — ( 17.8 ) ( 700.7 ) Foreign currency translation — 48.8 1.5 — 0.9 51.2 Balance at December 28, 2025 $ — $ — $ — $ — $ — $ — The gross goodwill balance was $ 2,472.1 million as of December 29, 2024. Accumulated goodwill impairment losses were $ 1,822.6 million as of December 29, 2024. Intangible assets consisted of the following: December 28, 2025 December 29, 2024 Description Weighted-average useful life (years) Gross assets Accumulated amortization Net Gross assets Accumulated amortization Net Purchased technology 14.9 $ 999.6 $ ( 310.3 ) $ 689.3 $ 999.5 $ ( 249.6 ) $ 749.9 Customer relationships 20.0 2,036.2 ( 463.5 ) 1,572.7 2,027.1 ( 366.8 ) 1,660.3 License agreements N/A — — — 3.1 ( 3.1 ) — Patent and trademark costs 14.9 402.6 ( 114.1 ) 288.5 401.3 ( 87.6 ) 313.7 Software development costs 5.5 21.5 ( 8.2 ) 13.3 22.7 ( 11.0 ) 11.7 Total intangible assets $ 3,459.9 $ ( 896.1 ) $ 2,563.8 $ 3,453.7 $ ( 718.1 ) $ 2,735.6 * N/A - Not applicable due to zero balance. Interim impairment assessment 2025 During the third quarter of 2025, the Company concluded that the sustained decline in the Company’s stock price and market capitalization was a triggering event requiring an interim goodwill impairment assessment for all reporting units. Based on the Company’s interim goodwill impairment assessment in the third quarter of 2025, the Company concluded that the EMEA, China and Latin America reporting units’ carrying values exceeded their respective fair values. As a result, the Company recorded a non-cash goodwill impairment charge of $ 614.8 million, $ 68.1 million and $ 17.8 million in the third quarter of 2025 for the EMEA, China and Latin America reporting units, respectively, which represented a full impairment of the goodwill allocated to these reporting units. The quantitative goodwill assessment for all reporting units consisted of a fair value calculation that combines an income approach, using a discounted cash flow method, and a market approach, using the guideline public company method. The quantitative goodwill impairment assessment requires the application of a number of significant assumptions, including estimates of future revenue growth rates, EBITDA margins, discount rates and market multiples. The projected future revenue 98 growth rates and EBITDA margins, and the resulting projected cash flows are based on historical experience and internal annual operating plans reviewed by management, extrapolated over the forecast period. Discount rates are determined using a weighted average cost of capital adjusted for risk factors specific to the reporting units. Market multiples are based on the guideline public company method using comparable publicly traded company multiples of revenue and EBITDA for a group of benchmark companies. The Company believes the assumptions that were used in the quantitative goodwill impairment assessment are reasonable and consistent with assumptions that would be used by other marketplace participants. The Company reviews long-lived assets, including intangible assets, for impairment when events or changes in circumstances indicate the carrying value of an asset group may not be recoverable. Given the indications of possible impairment that occurred during the third quarter of 2025, the Company tested its EMEA, China and Latin America long-lived asset group for recoverability and impairment as of September 28, 2025. Recoverability of long-lived assets is measured by a comparison of the carrying value of an asset group to future undiscounted net cash flows expected to be generated by the asset group. The undiscounted cash flows for the EMEA,China and Latin America long-lived asset group were above the carrying value and the Company determined that the long-lived asset group was recoverable, and no impairment existed as of September 28, 2025. Interim impairment assessment 2024 During the first quarter of 2024, the Company concluded that (i) the sustained decline in the Company’s stock price and market capitalization that occurred during the first quarter of 2024, (ii) the faster than expected decline in COVID-19 and flu markets, and (iii) the delay in the timing of expected commercialization for SAVANNA were triggering events requiring an interim goodwill impairment assessment for all reporting units. Based on the Company’s interim goodwill impairment assessment in the first quarter of 2024, the Company concluded that the North America reporting unit’s carrying value exceeded its estimated fair value. As a result, the Company recorded a non-cash goodwill impairment charge of $ 1.7 billion in the first quarter of 2024 for the North America reporting unit, which represented a full impairment of the goodwill allocated to the North America reporting unit. The decline in the estimated fair value of the North America reporting unit and the resulting impairment were primarily driven by revised short-term and mid-term forecasts for revenue and EBITDA expectations in North America. Annual impairment assessment 2024 During the fourth quarter of 2024, the Company conducted its annual goodwill impairment test for all reporting units pursuant to its policy. The Company bypassed the qualitative assessment and proceeded directly to the quantitative goodwill impairment test for all reporting units as of the beginning of the fiscal fourth quarter. Based on the Company’s annual goodwill impairment assessment in the fourth quarter of 2024, the Company concluded that the China and JPAC reporting units’ carrying values exceeded their respective estimated fair values. As a result, the Company recorded non-cash goodwill impairment charges of $ 17.3 million and $ 61.4 million in the fourth quarter of 2024 for the China and JPAC reporting units, respectively, which represented a full impairment of the goodwill allocated to the JPAC reporting unit. The quantitative goodwill impairment assessment for all reporting units consisted of a fair value calculation that combines an income approach, using a discounted cash flow method, and a market approach, using the guideline public company method. The quantitative goodwill impairment assessment requires the application of a number of significant assumptions, including estimates of future revenue growth rates, EBITDA margins, discount rates and market multiples. The projected future revenue growth rates and EBITDA margins, and the resulting projected cash flows are based on historical experience and internal annual operating plans reviewed by management, extrapolated over the forecast period. Discount rates are determined using a weighted average cost of capital adjusted for risk factors specific to the reporting units. Market multiples are based on the guideline public company method using comparable publicly traded company multiples of revenue and EBITDA for a group of benchmark companies. The Company believes the assumptions that were used in the quantitative goodwill impairment assessment are reasonable and consistent with assumptions that would be used by other marketplace participants. The Company also reviews long-lived assets, including intangible assets, for impairment when events or changes in circumstances indicate the carrying value of an asset group may not be recoverable. Given the indications of possible impairment that occurred during the first quarter and fourth quarter of 2024, the Company tested its North America long-lived asset group for recoverability and impairment as of March 31, 2024 and its China and JPAC long-lived asset groups for recoverability and impairment as of December 29, 2024. Recoverability of long-lived assets is measured by a comparison of the carrying value of an asset group to future undiscounted net cash flows expected to be generated by the asset group. The undiscounted cash flows for the North America, China and JPAC long-lived asset groups were above the carrying value and the 99 Company determined that the long-lived asset groups were recoverable, and no impairment existed as of March 31, 2024 for North America and as of December 29, 2024 for China and JPAC. Amortization expense related to the capitalized software costs was $ 3.6 million, $ 2.7 million and $ 0.6 million for fiscal years ended 2025, 2024 and 2023, respectively. Amortization expense (including capitalized software costs) was $ 189.2 million, $ 203.4 million and $ 204.8 million for fiscal years ended 2025, 2024 and 2023, respectively. The expected future annual amortization expense of the Company’s finite-lived intangible assets held as of December 28, 2025 is as follows: (In millions) 2026 $ 185.4 2027 185.5 2028 185.5 2029 185.5 2030 183.3 Note 9. Borrowings The components of borrowings were as follows: (In millions) December 28, 2025 December 29, 2024 Term Loan A $ 1,150.0 $ 2,282.7 Term Loan B 1,450.0 — Revolving Credit Facility 80.0 198.0 Financing lease obligation 1.6 7.9 Other short-term borrowings 3.0 — Other long-term borrowings (1) 13.1 — Unamortized deferred financing costs ( 19.6 ) ( 5.5 ) Unamortized original issue discount ( 27.9 ) — Total borrowings 2,650.2 2,483.1 Less: current portion ( 178.3 ) ( 341.8 ) Long-term borrowings $ 2,471.9 $ 2,141.3 (1) Includes proceeds received from a three-year lease arrangement in India, whereby the Company will sell its instruments placed at customer locations under a reagent rental agreement. The transaction did not qualify as a sale and is accounted for as a financing arrangement. On August 21, 2025 (the “Closing Date”), the Company entered into a credit agreement (the “Credit Agreement”) by and among the Company, as borrower, Bank of America, N.A., as administrative agent and swing line lender (“Bank of America”), and the other lenders and L/C issuers party thereto (together with Bank of America, the “Lenders”). Pursuant to the Credit Agreement, the Lenders provided the Company with (i) a $ 1.15 billion senior secured term loan A facility (the “Term Loan A”), (ii) a $ 100.0 million senior secured delayed draw term loan A facility (the “DDTL Term Loan A”; together with the Term Loan A, the “Term Loan A Facilities”), (iii) a $ 1.45 billion senior secured term loan B facility (the “Term Loan B”; collectively with the Term Loan A Facilities, the “Term Loans”) and (iv) a $ 700.0 million revolving credit facility (the “Revolving Credit Facility”; together with the Term Loans, the “Financing”). The Financing is guaranteed by certain material domestic subsidiaries of the Company (the “Guarantors”) and is secured by liens on substantially all of the assets of the Company and the Guarantors, excluding real property and certain other types of excluded assets. Loans under the Credit Agreement will bear interest at a rate equal to the Term SOFR, plus the Applicable Rate, or Base Rate, plus the Applicable Rate (each as defined in the Credit Agreement). On the Closing Date, the Company borrowed the entire amount of the Term Loan A and the Term Loan B, and the effective interest rates as of December 28, 2025 were 6.87 % and 8.43 %, respectively. The weighted average effective interest rate on aggregate Term Loans, net of interest rate swaps, as of December 28, 2025 was 7.03 %. During the fiscal year ended 2025, the Company recorded a $ 5.1 million loss on extinguishment in connection with the Financing, representing the difference between the reacquisition value and the net carrying value of the extinguished debt. The Company used the proceeds of the Term Loan A and the Term Loan B, along with its cash on hand, to (i) repay the remaining $ 2,213.9 million and $ 490.0 million owed under the previous term loan and previous revolving credit facility, 100 respectively, under the Prior Credit Agreement, which was terminated upon such repayment, including principal, accrued interest and outstanding fees and (ii) pay the fees and expenses incurred in connection with the Financing. In connection with the Credit Agreement, the Company incurred (i) $ 24.8 million of debt issuance costs, of which $ 6.1 million was related to Term Loan A, $ 15.0 million was related to the Term Loan B and $ 3.7 million was related to the Revolving Credit Facility and (ii) $ 29.0 million of an original issue discount on the Term Loan B. Issuance costs and the discount were recorded as a reduction of the principal amount of the borrowings and are amortized using the effective interest method as a component of Interest expense, net over the life of the Term Loans. Debt issuance costs related to the Revolving Credit Facility were recorded as Other assets and are amortized on a straight-line basis over the term of the Revolving Credit Facility. Availability under the Revolving Credit Facility, after deducting letters of credit of $ 23.4 million and $ 80.0 million borrowings outstanding, was $ 596.6 million as of December 28, 2025. During fiscal year ended 2025, the Company borrowed $ 554.0 million and made $ 672.0 million in payments on the Revolving Credit Facility. The Term Loans are subject to quarterly amortization at a quarterly rate of 1.25 % and 0.25 % of the aggregate initial principal amount of the Term A Loan and the Term B loan, respectively, as are set forth in the Credit Agreement. The Term Loan A Facilities and the Revolving Credit Facility will mature on August 21, 2030, and the Term Loan B will mature on August 21, 2032. The Company must prepay loans outstanding under the Credit Agreement in an amount equal to the Net Cash Proceeds (as defined in the Credit Agreement) from (i) certain property dispositions and (ii) the receipt of certain other amounts not in the ordinary course of business, such as certain insurance proceeds and condemnation awards, in each case, if not reinvested within a specified time period as contemplated in the Credit Agreement. The Credit Agreement contains affirmative and negative covenants that are customary for credit agreements of this nature. The negative covenants include, among other matters, limitations on asset sales, mergers, indebtedness, liens, investments and transactions with affiliates. The Credit Agreement contains two financial covenants: (i) a maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) as of the last day of each fiscal quarter of (a) 4.50 to 1.00 for each fiscal quarter in the first three years following the Closing Date and (b) 4.25 to 1.00 for each fiscal quarter thereafter; and (ii) a minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of 3.00 to 1.00 as of the end of any fiscal quarter for the most recently completed four fiscal quarters. The Company was in compliance with the financial covenants as of December 28, 2025. The estimated fair value of the Company’s borrowings under the Term Loans was $ 2,563.5 million at December 28, 2025, compared to the carrying amount, excluding debt issuance costs, of $ 2,600.0 million. The estimated fair value of the Company’s borrowings under the previous term loan under the Prior Credit Agreement was $ 2,254.2 million at December 29, 2024, compared to the carrying amount, excluding debt issuance costs, of $ 2,282.7 million. The estimate of fair value is generally based on the quoted market prices for similar issuances of long-term debt with the same maturities, which is classified as a Level 2 input. The following table provides the detailed amounts within Interest expense, net for fiscal years ended 2025, 2024 and 2023: Fiscal Year Ended (In millions) 2025 2024 2023 Term Loan A $ 120.9 $ 171.9 $ 175.6 Term Loan B 42.4 — — Revolving Credit Facility 19.8 16.4 3.3 Amortization of deferred financing costs 3.6 3.2 3.3 Amortization of original issue discount 1.1 — — Derivative instruments and other ( 8.0 ) ( 25.4 ) ( 29.1 ) Interest income ( 2.2 ) ( 2.6 ) ( 5.5 ) Interest expense, net $ 177.6 $ 163.5 $ 147.6 101 The following table provides a schedule of required future repayments of all borrowings outstanding as of December 28, 2025: (In millions) 2026 $ 178.3 2027 76.3 2028 77.2 2029 54.0 2030 934.5 Thereafter 1,377.4 Total $ 2,697.7 Note 10. Leases The Company leases administrative, R&D, sales and marketing and manufacturing facilities and certain equipment under various non-cancelable lease agreements. Facility leases generally provide for periodic rent increases, and may contain clauses for rent escalation, renewal options or early termination. Operating lease cost for fiscal years ended 2025, 2024 and 2023 was $ 33.1 million, $ 40.4 million and $ 38.4 million, respectively. Variable lease cost for fiscal years ended 2025, 2024 and 2023 was $ 14.2 million, $ 13.2 million and $ 9.8 million, respectively. Finance leases are immaterial to the Company’s Consolidated Financial Statements. The supplemental cash flow information related to operating leases during the respective periods was as follows: Fiscal Year Ended (In millions) 2025 2024 2023 Cash paid for amounts included in the measurement of operating lease liabilities $ 42.4 $ 38.9 $ 36.5 ROU assets obtained in exchange for new lease liabilities $ 19.9 $ 30.5 $ 17.9 The Company leases its facilities and certain equipment. Commitments for minimum rentals under non-cancelable operating leases at the end of fiscal year ended 2025 were as follows: (In millions) 2026 $ 36.6 2027 33.4 2028 30.7 2029 25.0 2030 22.7 Thereafter 63.8 Total lease payments 212.2 Less: imputed interest ( 28.5 ) Total 183.7 Less: current portion ( 29.3 ) Non-current portion $ 154.4 Weighted average remaining lease term 7.0 years Weighted average discount rate 4 % Note 11. Stockholders’ Equity Preferred Stock The Company’s Charter authorizes the issuance of up to 5.0 million shares of preferred stock. The Board is authorized to fix the number of shares of any series of preferred stock and to determine the designation of such shares. No shares of preferred stock were outstanding for fiscal years ended 2025, 2024 or 2023. 102 Equity Incentive Plan The Company assumed Quidel’s 2018 Equity Incentive Plan, as amended and restated (the “Quidel Equity Plan”), including all form of award agreements and grants of awards issued thereunder, and shares of Quidel’s common stock (“Quidel Shares”) subject to the plan were replaced by an equivalent number of shares of QuidelOrtho’s common stock. In connection with the assumption of the Quidel Equity Plan, the plan was renamed the “QuidelOrtho Corporation Amended and Restated 2018 Equity Incentive Plan” (the “2018 Plan”) and all references to the “Company” in the Quidel Equity Plan were changed to QuidelOrtho. At the Company's 2025 Annual Meeting of Stockholders, the Company’s stockholders approved the adoption of the Company’s Second Amended and Restated 2018 Equity Incentive Plan (the “Second A&R 2018 Plan”) to amend and restate the 2018 Plan to (1) increase the number of shares of the Company’s common stock authorized for issuance under the 2018 Plan by 6,200,000 shares; (2) extend the term of the 2018 Plan to May 20, 2035; and (3) make related administrative changes. The Company grants (i) stock options and (ii) RSUs, which include time-based RSUs, performance-based RSUs and restricted stock awards, to employees and non-employee directors, under the Second A&R 2018 Plan. Quidel previously granted stock options under its 2016 Equity Incentive Plan (the “2016 Plan”), Amended and Restated 2010 Equity Incentive Plan (the “2010 Plan”) and Amended and Restated 2001 Equity Incentive Plan (the “2001 Plan”). The 2016 Plan, 2010 Plan and 2001 Plan were terminated at the time of adoption of the Quidel Equity Plan. The terminated 2016 Plan and 2010 Plan continue to govern outstanding options granted thereunder. The Company has stock options and RSUs outstanding, which were issued under these equity incentive plans to certain employees and non-employee directors. Stock options granted under these plans have terms ranging up to ten years , have exercise prices ranging from $ 15.40 to $ 254.00 per share, and generally vest over three or four years . As of December 28, 2025, 4,476,946 shares of common stock remained available for grant and 7,105,501 shares of common stock were reserved for future issuance under the Second A&R 2018 Plan. RSUs The Company grants RSUs to certain officers and directors. Until the restrictions lapse, ownership of the shares underlying the affected RSUs is conditional upon continuous employment with the Company and/or achievement of certain performance goals. For fiscal years ended 2025, 2024 and 2023, the Company granted 1.2 million, 1.2 million and 0.6 million shares of common stock, respectively, of RSUs to certain officers and directors, which either have a time-based, three-year or four-year vesting provision or performance-based vesting provision. During fiscal years ended 2025, 2024 and 2023, RSUs were granted to certain non-employee directors of the Board in lieu of cash compensation as a part of the Company’s Board Deferred Compensation Plan. The compensation expense associated with these RSU grants was $ 0.7 million, $ 0.6 million and $ 0.5 million for fiscal years ended 2025, 2024 and 2023, respectively. Employee Deferred Compensation Plan For fiscal years ended 2025, 2024 and 2023, certain employees of the Company were eligible to participate in the Employee Deferred Compensation Plan with respect to any payments received under the Company’s cash incentive plan. Participating employees could elect to receive 50 % or 100 % of the value of their cash bonus in the form of fully vested RSUs, plus a premium of additional RSUs, issued under the Second A&R 2018 Plan. The premium RSUs are subject to a one-year vesting requirement from the date of issuance. The additional premium is determined based on the length of the deferral period selected by the participating employee as follows: (i) if one year from the date of grant, a premium of 10 % on the amount deferred, (ii) if two years from the date of grant, a premium of 20 % on the amount deferred, or (iii) if four years from the date of grant, a premium of 30 % on the amount deferred. Employee Stock Purchase Plan The Company assumed Quidel’s 1983 Employee Stock Purchase Plan, as amended and restated (the “Quidel ESPP”), and the Quidel Shares subject to the Quidel ESPP were replaced by an equivalent number of shares of QuidelOrtho’s common stock. In connection with the assumption of the Quidel ESPP, the Quidel ESPP was renamed the “QuidelOrtho Corporation Amended and Restated 1983 Employee Stock Purchase Plan” and all references to the “Company” in the Quidel ESPP were changed to QuidelOrtho. Under the ESPP, certain full-time employees were allowed to purchase common stock through payroll deductions (which could not exceed 10 % of the employee’s compensation) at the lower of 85 % of fair market value at the beginning or end of each six-month purchase period. As of December 28, 2025, 360,522 shares of common stock remained available for future issuance. Stock Repurchase Program On August 17, 2022, the Board authorized the Stock Repurchase Program, allowing the Company to repurchase up to $ 300.0 million of its common stock, which expired on August 17, 2024. 103 There were no shares repurchased for the fiscal years ended 2025 or 2024. During fiscal year ended 2023, 120,000 shares of outstanding common stock were repurchased under the Stock Repurchase Program. Note 12. Stock-based Compensation Stock-based compensation expense was as follows: Fiscal Year Ended (In millions) 2025 2024 2023 Cost of sales, excluding amortization of intangibles $ 5.9 $ 5.5 $ 4.3 Selling, marketing and administrative 32.9 26.0 37.7 Research and development 2.9 3.4 4.9 Restructuring, integration and other charges 3.8 7.5 16.9 Total stock-based compensation expense $ 45.5 $ 42.4 $ 63.8 Income tax (expense) benefit $ ( 1.7 ) $ ( 7.1 ) $ 1.7 The table above includes $ 12.2 million of compensation expense related to liability-classified awards for fiscal year ended 2023, which has been settled in cash. These awards primarily represent the $ 7.14 per share cash settled portion of the replacement awards issued in connection with the Combinations. Cash paid to settle liability-classified awards was $ 7.3 million for fiscal year ended 2023. Amounts related to fiscal years ended 2025 and 2024 were not material. For fiscal years ended 2025, 2024 and 2023, the Company recorded $ 0.6 million, $ 0.6 million and $ 1.5 million in stock-based compensation expense, respectively, associated with the Employee Deferred Compensation Plan described in “—Note 11. Stockholders’ Equity.” Stock Options A summary of the status of stock option activity for fiscal year ended 2025 is as follows: (In thousands, except price data) Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Outstanding at December 29, 2024 1,099 $ 87.22 Granted 273 32.52 Exercised ( 70 ) 22.05 Cancellations ( 521 ) 96.45 Outstanding at December 28, 2025 781 $ 67.79 6.99 $ 179 Vested and expected to vest at December 28, 2025 759 $ 68.77 6.93 $ 179 Exercisable at December 28, 2025 384 $ 96.09 5.01 $ 179 Compensation expense related to stock options granted is recognized ratably over the service vesting period for the entire option award. The estimated fair value of each stock option was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for the option grants: Fiscal Year Ended 2025 2024 2023 Risk-free interest rate 3.94 % 4.60 % 3.52 % Expected option life (in years) 5.03 5.69 5.53 Volatility rate 60 % 59 % 57 % Dividend rate 0 % 0 % 0 % Weighted-average grant date fair value $ 17.83 $ 24.37 $ 48.17 The computation of the expected option life is based on a weighted-average calculation combining the average life of options that have already been exercised and post-vest cancellations with the estimated life of the remaining vested and unexercised options. The expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate 104 is based on the U.S. Treasury yield curve over the expected term of the option. The Company has never paid any cash dividends on its common stock, and does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield of zero in the Black-Scholes option valuation model. The Company’s estimated forfeiture rate is based on its historical experience and future expectations. The Company’s determination of fair value is affected by the Company’s stock price, as well as a number of assumptions that require judgment. The total intrinsic value was $ 1.4 million, $ 2.1 million and $ 4.4 million for options exercised during fiscal years ended 2025, 2024 and 2023, respectively. In January 2023, the Compensation Committee of the Board approved a modification to the vesting terms of certain stock options that were previously granted by Ortho to certain Ortho employees, such that the stock options vested on December 31, 2023. The modification resulted in an additional $ 11.1 million of stock-based compensation expense recognized during fiscal year ended 2023. As of December 28, 2025, total unrecognized compensation expense related to stock options was approximately $ 5.7 million and the related weighted-average period over which it is expected to be recognized is approximately 1.9 years. The maximum contractual term of the Company’s stock options is ten years . RSUs A summary of the status of RSU activity for fiscal year ended 2025 is as follows: (In thousands, except price data) Shares Weighted-Average Grant Date Fair Value Non-vested at December 29, 2024 1,382 $ 59.42 Granted 1,172 35.53 Vested ( 587 ) 63.05 Forfeited ( 120 ) 51.57 Non-vested at December 28, 2025 1,847 $ 43.62 The total amount of unrecognized compensation expense related to non-vested RSUs as of December 28, 2025 was approximately $ 48.5 million, which is expected to be recognized over a weighted-average period of approximately 1.8 years. The fair value of RSUs is determined based on the closing market price of the Company’s common stock on the grant date. The weighted-average fair value of RSUs granted during the fiscal years ended December 29, 2024 and December 31, 2023 was $ 50.05 and $ 86.49 , respectively. Note 13. Commitments and Contingencies Purchase Obligations The Company had $ 236.9 million of purchase obligations as of December 28, 2025, the majority of which is expected to be purchased in the next year. These purchase obligations include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including (i) fixed or minimum quantities to be purchased, (ii) fixed, minimum or variable price provisions and (iii) the approximate timing of the transaction, as well as amounts for planned inventory purchases under contractual arrangements. Litigation and Other Legal Proceedings On April 12, 2024, a purported stockholder of the Company filed a putative class action complaint under the federal securities laws against the Company and three of its current and former executives. The complaint, which is captioned Bristol County Retirement System v. QuidelOrtho Corporation, et al., Case No. 1:24-cv-02804-JAV (S.D.N.Y.) (the “Bristol County Complaint”), asserts claims for violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder related to statements regarding sales of the Company’s COVID-19 diagnostic tests and the 510(k) submission for its SAVANNA RVP4 assay. The Bristol County Complaint seeks a judgment determining that the lawsuit can be maintained as a class action and awarding the plaintiff and putative class damages, pre- and post-judgment interest, attorneys’ and experts’ fees, and costs. On December 16, 2024, the court appointed Central States, Southeast and Southwest Areas Health and Welfare Fund and Teamsters Local 710 Pension Fund (“Teamsters Funds”) as lead plaintiffs in the action, and approved their selection of lead counsel. Teamsters Funds filed an amended complaint on February 7, 2025, and added as additional defendants three current and former executives of the Company not previously named in the Bristol County Complaint. On April 4, 2025, the defendants filed a motion to dismiss the amended complaint. 105 On April 25, 2024, and June 21, 2024, two purported stockholders of the Company filed separate stockholder derivative complaints, purportedly on behalf of the Company, against the current and certain former members of the Board and three of the Company’s current and former executives. The complaints, which are captioned Matthew Whitfield v. Kenneth F. Buechler, Ph.D., et al., Case No. 1:24-cv-03176-JAV (S.D.N.Y.) (the “Whitfield Complaint”), and Steven Pinkney v. Douglas Bryant, et al., Case No. 1:24-cv-4753-JAV (S.D.N.Y.) (the “Pinkney Complaint”), assert claims for violations of Sections 10(b), 14(a), and 20(a) of the Exchange Act and Rules 10b-5 and 14a-9 promulgated thereunder, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets related to statements regarding sales of the Company’s COVID-19 diagnostic tests and the 510(k) submission for its SAVANNA RVP4 assay. The Whitfield and Pinkney Complaints seek judgments awarding compensatory and punitive damages against the individual defendants, directing an accounting by the individual defendants, directing the Company and the individual defendants to take actions to improve the Company’s governance and procedures, and awarding the costs and disbursements of the action, including attorneys’ fees, accountants’ and experts’ fees, costs, and expenses. On December 16, 2024, the court consolidated the Whitfield and Pinkney Complaints into a single action and stayed the consolidated derivative action. The Company disputes the allegations of wrongdoing and intends to defend itself vigorously in these matters. The Company is not able to estimate a possible loss or range of loss that may result from these lawsuits or to determine whether such loss, if any, would have a material adverse effect on its business, financial condition, results of operations or liquidity. From time to time, the Company is involved in litigation and other legal proceedings, including matters related to product liability claims, commercial disputes and intellectual property claims, as well as regulatory, employment, and other claims related to its business. The Company accrues for legal claims when, and to the extent that, amounts associated with the claims become probable and are reasonably estimable. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. Estimates of probable losses resulting from these matters are inherently difficult to predict. The actual costs of resolving legal claims may be substantially higher or lower than the amounts accrued for those claims. For those matters as to which the Company is not able to estimate a possible loss or range of loss, the Company is not able to determine whether the loss will have a material adverse effect on its business, financial condition, results of operations or liquidity. During the third quarter of 2025, a final judgment was entered relating to a dispute with a potential supplier for COVID-19 pandemic raw materials and services, which required the Company to pay monetary damages of $ 10.8 million, which was paid in full in the fourth quarter of 2025. Consistent with ASC 450, for the three months ended April 2, 2023, the Company accrued reserves of $ 1.4 million for this matter, representing the minimum amount in the then-estimable range of loss. The Company accrued additional reserves of $ 9.4 million for this matter in the third quarter of 2025. Following the payment of $ 10.8 million in the fourth quarter of 2025, there was no remaining accrual for this matter as of fiscal year ended 2025. Management believes that all current legal actions, to which the Company is able to estimate a possible loss or range of loss, in the aggregate, are not expected to have a material adverse effect on the Company. However, the resolution of, or increase in any accruals for, one or more matters may have a material adverse effect on the Company’s results of operations and cash flows. Licensing Arrangements The Company has entered into various licensing and royalty agreements, which largely require payments by the Company based on specified product sales, as well as the achievement of specified milestones. The Company had royalty and license expenses relating to those agreements of approximately $ 14.0 million, $ 18.5 million and $ 21.8 million for fiscal years ended 2025, 2024 and 2023, respectively. Note 14. Derivative Instruments and Hedging Activities The Company selectively uses derivative and non-derivative instruments to manage market risk associated with changes in interest rates and foreign currency exchange rates. The use of derivatives is intended for hedging purposes only, and the Company does not enter into derivative transactions for speculative purposes. Credit risk represents the Company’s gross exposure to potential accounting loss on derivative instruments that are outstanding or unsettled if all counterparties failed to perform according to the terms of the contract. The Company generally enters into master netting arrangements that reduce credit risk by permitting net settlement of transactions with the same counterparty. The Company does not have any derivative instruments with credit-risk related contingent features that would require it to post collateral. 106 Interest Rate Hedging Instruments The Company’s interest rate risk relates primarily to interest rate exposures on variable rate debt, including the Revolving Credit Facility and Term Loans. Refer to “—Note 9. Borrowings” for additional information on the currently outstanding components of the Revolving Credit Facility and Term Loans. The Company entered into interest rate swap agreements to hedge the related risk of the variability to the Company’s cash flows due to the rates specified for these credit facilities. The Company designates its interest rate swaps as cash flow hedges. The Company records gains and losses due to changes in fair value of the derivatives within OCI and reclassifies these amounts to Interest expense, net in the same period or periods for which the underlying hedged transaction affects earnings. In the event the Company determines the hedged transaction is no longer probable to occur or concludes the hedge relationship is no longer effective, the hedge is prospectively de-designated. Pre-tax unrealized loss of $ 7.6 million as of December 28, 2025 is expected to be reclassified from OCI to earnings in the next 12 months. The following table summarizes the Company’s interest rate derivative agreements as of December 28, 2025, all of which were interest rate swaps: Notional Amount (In millions) Description Hedge Designation Effective Date Expiration Date $ 175.0 Pay 3.7435 % fixed, receive floating rate (1-month USD-SOFR) Designated cash flow hedge August 22, 2025 August 16, 2032 $ 100.0 Pay 3.6275 % fixed, receive floating rate (1-month USD-SOFR) Designated cash flow hedge August 22, 2025 August 22, 2030 $ 200.0 Pay 3.7435 % fixed, receive floating rate (1-month USD-SOFR) Designated cash flow hedge August 22, 2025 August 16, 2032 $ 250.0 Pay 3.6275 % fixed, receive floating rate (1-month USD-SOFR) Designated cash flow hedge August 22, 2025 August 22, 2030 $ 100.0 Pay 3.6275 % fixed, receive floating rate (1-month USD-SOFR) Designated cash flow hedge August 22, 2025 August 22, 2030 $ 225.0 Pay 3.7435 % fixed, receive floating rate (1-month USD-SOFR) Designated cash flow hedge August 22, 2025 August 16, 2032 $ 250.0 Pay 3.6275 % fixed, receive floating rate (1-month USD-SOFR) Designated cash flow hedge August 22, 2025 August 22, 2030 $ 100.0 Pay 3.6275 % fixed, receive floating rate (1-month USD-SOFR) Designated cash flow hedge August 22, 2025 August 22, 2030 $ 100.0 Pay 3.7435 % fixed, receive floating rate (1-month USD-SOFR) Designated cash flow hedge August 22, 2025 August 16, 2032 $ 100.0 Pay 3.7435 % fixed, receive floating rate (1-month USD-SOFR) Designated cash flow hedge August 22, 2025 August 16, 2032 On December 30, 2022, the Company entered into five interest rate swaps with an aggregate notional amount of $ 1.8 billion to hedge part of the variable rate interest payments under the previous term loan under the Prior Credit Agreement. The interest rate swaps became effective December 30, 2022 with an initial maturity date of May 27, 2027. For each of the five interest rate swaps, the Company received floating interest payments monthly based on one-month SOFR and paid fixed rates of 3.7650 %, 3.7725 %, 3.7675 %, 3.7575 % and 3.7725 % to the respective counterparties. These five swaps were terminated early on August 22, 2025. The settlement value of those swaps was embedded into ten interest rate swaps entered into on August 22, 2025 with an aggregate notional amount of $ 1.6 billion as part of the variable rate interest payments under the Term Loans. Refer to the table above for a breakdown of the respective expiration dates by specific interest rate swap. Currency Hedging Instruments The Company has currency risk exposures relating primarily to foreign currency denominated monetary assets and liabilities and forecasted foreign currency denominated intercompany and third-party transactions. The Company uses foreign currency forward contracts and may use option contracts and cross currency swaps to manage its currency risk exposures. The Company’s foreign currency forward contracts are denominated primarily in Australian Dollar, Brazilian Real, British Pound, Canadian Dollar, Chilean Peso, Chinese Yuan/Renminbi, Colombian Peso, Czech Koruna, Danish Krone, Euro, Indian Rupee, Japanese Yen, Mexican Peso, Philippine Peso, Singapore Dollar, South Korean Won, Swedish Krona, Swiss Franc and Thai Baht. The Company designates certain foreign currency forward contracts as cash flow hedges. The Company records gains and losses due to changes in fair value of the derivatives within OCI and reclassifies these amounts to Total revenues and Cost of 107 sales, excluding amortization of intangibles in the same period or periods for which the underlying hedged transaction affects earnings. In the event the Company determines the hedged transaction is no longer probable to occur or concludes the hedge relationship is no longer effective, the hedge is prospectively de-designated. Pre-tax unrealized loss of $ 1.5 million as of December 28, 2025 is expected to be reclassified from OCI to earnings in the next 12 months. The Company also enters into foreign currency forward contracts that are not part of designated hedging relationships and which are intended to mitigate exchange rate risk of monetary assets and liabilities and related forecasted transactions. The Company records these non-designated derivatives at mark-to-market with gains and losses recognized in earnings within Other expense, net. The following table provides details of the currency hedging instruments outstanding as of December 28, 2025: Description Notional Amount (In millions) Hedge Designation Foreign currency forward contracts $ 731.3 Cash Flow Hedge Foreign currency forward contracts $ 1,139.6 Non-designated The following table summarizes pre-tax gains and losses from designated derivative and non-derivative instruments within AOCI for fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023: Designated Hedging Instruments (In millions) Amount of Loss (Gain) Recognized in OCI on Hedges Location of Amounts Reclassified From AOCI Into Loss Amount of Loss (Gain) Reclassified From AOCI Into Loss Fiscal Year Ended 2025 Foreign currency forward contracts (sales) $ 6.5 Total revenues $ ( 3.2 ) Foreign currency forward contracts (purchases) $ 0.4 Cost of sales, excluding amortization of intangibles $ 0.2 Interest rate derivatives $ 23.3 Interest expense, net $ ( 8.1 ) Fiscal Year Ended 2024 Foreign currency forward contracts (sales) $ ( 13.0 ) Total revenues $ 2.5 Foreign currency forward contracts (purchases) $ 0.7 Cost of sales, excluding amortization of intangibles $ 0.3 Interest rate derivatives $ ( 44.8 ) Interest expense, net $ ( 25.5 ) Fiscal Year Ended 2023 Foreign currency forward contracts (sales) $ 7.0 Total revenues $ 4.3 Foreign currency forward contracts (purchases) $ ( 2.5 ) Cost of sales, excluding amortization of intangibles $ 1.9 Interest rate derivatives $ ( 13.4 ) Interest expense, net $ ( 30.1 ) The Company also uses forward exchange contracts to hedge a portion of its net investment in foreign operations against movements in exchange rates. The forward exchange contracts are designated as hedges of the net investment in foreign operations. The unrealized gains or losses on these contracts are recorded in foreign currency translation adjustments within OCI, and remain in AOCI until either the sale or complete or substantially complete liquidation of the subsidiary. The Company excludes certain portions of the change in fair value of its derivative instruments from the assessment of hedge effectiveness (excluded components). Changes in fair value of the excluded components are recognized in OCI. The Company recognizes in earnings the initial value of the excluded components on a straight-line basis over the life of the derivative instrument. 108 The effect of the Company’s net investment hedges on OCI and the Consolidated Statements of Loss are shown below: Net Investment Hedging Relationships (In millions) Amount of Pre-tax Loss (Gain) Recognized in OCI Amount of Pre-tax (Gain) Loss Recognized in Other Expense, Net for Amounts Excluded from Effectiveness Testing Fiscal Year Ended 2025 Foreign exchange contracts $ 38.8 $ ( 10.7 ) Fiscal Year Ended 2024 Foreign exchange contracts $ ( 29.6 ) $ ( 11.6 ) Fiscal Year Ended 2023 Foreign exchange contracts $ 8.5 $ ( 1.0 ) Fair value losses and gains on foreign currency forward contracts, as determined using Level 2 inputs, that do not qualify for hedge accounting treatment are recorded in Other expense, net and were losses of $ 6.7 million and gains of $ 12.4 million for fiscal years ended 2025 and 2024, respectively. Fair value gains and losses on foreign currency forward contracts that do not qualify for hedge accounting treatment were not material for fiscal year ended 2023. The following table summarizes the fair value of designated and non-designated hedging instruments recognized within the Consolidated Balance Sheets as of December 28, 2025 and December 29, 2024: (In millions) December 28, 2025 December 29, 2024 Designated cash flow hedges Interest rate derivatives: Prepaid expenses and other current assets $ 0.3 $ 1.3 Other assets — 12.4 Other liabilities 19.9 — Foreign currency forward contracts: Prepaid expenses and other current assets 4.8 11.0 Other assets 18.5 9.1 Other current liabilities 27.7 3.3 Other liabilities 35.1 1.4 Non-designated hedging instruments Foreign currency forward contracts: Prepaid expenses and other current assets 8.6 2.8 Other current liabilities 4.4 0.7 Fair Value of Derivative Instruments The Company has classified its derivative instruments within Level 2 of the fair value hierarchy, as the fair values were determined using valuation models that use market observable inputs. Note 15. Long-term Employee Benefits Defined Benefit Plans and Other Post-employment Benefits The Company has certain defined benefit plan obligations and related plan assets for employees of non-U.S. subsidiaries. In addition to these defined benefit plans, the Company also has one non-U.S. post-employment benefit plan and a replacement retiree health care reimbursement plan for certain U.S employees. The U.S. plan is funded on a pay-as-you-go basis and is not accepting new participants. 109 Obligation and Funded Status The measurement dates used to determine the defined benefit and other post-employment benefit obligations were December 28, 2025 and December 29, 2024. The following tables set forth the changes to the PBO and plan assets: Fiscal Year Ended (In millions) 2025 2024 Defined Benefit Plans Change in benefit obligation: PBO at beginning of year $ 33.0 $ 36.9 Service cost 2.0 2.1 Interest cost 1.1 1.1 Contributions by plan participants 0.1 0.1 Benefits paid ( 0.8 ) ( 1.3 ) Actuarial gain ( 1.0 ) ( 1.4 ) Settlements ( 1.6 ) ( 1.8 ) Foreign currency exchange rate changes 2.4 ( 2.7 ) PBO at end of year $ 35.2 $ 33.0 Change in plan assets: Fair value of plan assets at beginning of year $ 19.3 $ 20.4 Actual return on plan assets 1.3 1.0 Employer contributions 2.0 2.6 Benefits paid ( 0.8 ) ( 1.0 ) Settlements ( 1.6 ) ( 1.9 ) Foreign currency exchange rate changes 0.6 ( 1.8 ) Fair value of plan assets at end of year $ 20.8 $ 19.3 Funded status at end of year $ ( 14.4 ) $ ( 13.7 ) Amounts recognized on the Consolidated Balance Sheets: Other assets $ 2.3 $ 1.3 Other current liabilities ( 0.6 ) ( 0.4 ) Other liabilities ( 16.1 ) ( 14.6 ) Net amount recognized $ ( 14.4 ) $ ( 13.7 ) Fiscal Year Ended (In millions) 2025 2024 Other Post-employment Benefits Change in benefit obligation: PBO at beginning of year $ 17.4 $ 18.5 Service cost 0.3 0.4 Interest cost 0.7 0.8 Benefits paid ( 1.3 ) ( 1.3 ) Actuarial loss (gain) 0.5 ( 1.0 ) PBO at end of year $ 17.6 $ 17.4 Amounts recognized on the Consolidated Balance Sheets: Other current liabilities $ ( 2.5 ) $ ( 3.8 ) Other liabilities ( 15.1 ) ( 13.6 ) Net amount recognized $ ( 17.6 ) $ ( 17.4 ) 110 PBO is the actuarial present value of benefits attributable to employee service rendered to date and reflects the effects of estimated future pay increases. The ABO is the actuarial present value of benefits attributable to employee service to date, but does not include the effects of estimated future pay increases. The following table reflects the ABO for all defined benefit plans as of December 28, 2025 and December 29, 2024. Further, the table reflects the aggregate PBO, ABO and fair value of plan assets for defined benefit plans with PBO in excess of plan assets and for defined benefit plans with ABO in excess of plan assets. (In millions) December 28, 2025 December 29, 2024 ABO $ 28.0 $ 26.3 Plans with PBO in excess of plan assets PBO $ 23.6 $ 20.7 Fair value of plan assets 7.6 6.1 Plans with ABO in excess of plan assets PBO $ 21.4 $ 18.6 ABO 18.7 16.2 Fair value of plan assets 5.6 4.2 The pre-tax amounts that are not yet reflected in the net periodic benefit cost and are included in AOCI as of December 28, 2025 and December 29, 2024 include the following: Fiscal Year Ended (In millions) 2025 2024 Defined Benefit Plans Accumulated net actuarial gains (losses) $ 1.3 $ ( 0.5 ) Accumulated prior service credit $ 0.1 $ 0.1 Other Post-employment Benefits Accumulated net actuarial gains $ 1.4 $ 1.9 These accumulated net actuarial gains and losses for defined benefit plans and other post-employment benefits primarily relate to differences between the actual net periodic expense and the expected net periodic expense from differences in significant assumptions, including primarily return on plan assets and discount rates used in these estimates. Components of Net Periodic Benefit Cost Net periodic benefit cost for the Company’s defined benefit plans was $ 2.3 million and $ 2.8 million for the fiscal years ended December 28, 2025 and December 29, 2024, respectively, and was primarily related to service cost. Changes in plan assets and benefit obligations recognized in OCI were $( 1.8 ) million for both fiscal years ended December 28, 2025 and December 29, 2024. Net periodic benefit cost for the Company’s other post-employment benefit plans was $ 1.0 million and $ 1.2 million for the fiscal years ended December 28, 2025 and December 29, 2024, respectively, and was primarily related to interest cost. Changes in benefit obligations recognized in OCI were $ 0.5 million and $( 1.0 ) million for the fiscal years ended December 28, 2025 and December 29, 2024, respectively. The components of net periodic benefit cost other than the service cost component are recorded in Other expense, net in the Consolidated Statements of Loss. Assumptions and Sensitivities The following assumptions were used to measure the fair value of the benefit obligations and associated plan assets for the periods below: December 28, 2025 December 29, 2024 Defined Benefit Plans Weighted average discount rate 4.0 % 3.3 % Weighted average rate of compensation increases 3.3 % 3.3 % Other Post-employment Benefits Weighted average discount rate 4.6 % 5.0 % 111 The critical assumptions used in determining the net periodic benefit cost for fiscal years ended 2025 and 2024 are as follows: December 28, 2025 December 29, 2024 Defined Benefit Plans Weighted average discount rate 3.3 % 3.3 % Weighted average expected rate of compensation increases 3.3 % 3.2 % Weighted average expected return on plan assets 3.4 % 2.9 % Other Post-employment Benefits Weighted average discount rate 4.9 % 4.8 % The discount rates used reflect the expected future cash flow based on plan provisions, participant data and the currencies in which the expected future cash flows will occur. For the majority of defined benefit obligations, the Company utilizes prevailing long-term high quality corporate bond indices applicable to the respective country at the measurement date. In countries where established corporate bond markets do not exist, the Company utilizes other index movement and duration analysis to determine discount rates. The long-term rate of return on plan assets assumptions reflect economic assumptions applicable to each country and assumptions related to the preliminary assessments regarding the type of investments to be held by the respective plans. The discount rate is determined as of each measurement date, based on a review of yield rates associated with long-term, high-quality corporate bonds. The calculation separately discounts benefit payments using the spot rates from a long-term, high-quality corporate bond yield curve. The long-term rate of return on plan assets assumption represents the expected average rate of earnings on the funds invested to provide for the benefits included in the benefit obligations and is determined based on a number of factors, including historical market index returns, the anticipated long-term allocation of the plans, historical plan return data, plan expenses and the potential to outperform market index returns. A significant factor in estimating future per capita cost of covered healthcare benefits for retirees is the healthcare cost trend rate assumption. The health care cost trend rate assumptions for other post-retirement benefit plans are as follows: December 28, 2025 Health care cost trend rate assumed for next year - Pre-65 7.17 % Health care cost trend rate assumed for next year - Post-65 7.17 % Rate to which the cost trend rate is assumed to decline 4.00 % Year that the trend rate reaches the ultimate trend rate 2048 Anticipated Contributions to Defined Benefit Plans For funded plans, the Company’s policy is to fund amounts for defined benefit plans sufficient to meet minimum requirements set forth in applicable benefit and local tax laws. Based on the same assumptions used to measure the defined benefit obligations at December 28, 2025, the Company expects to contribute $ 2.0 million to defined benefit plans in fiscal year 2026. Estimated Future Benefit Payments The following table reflects the total benefit payments expected to be made for defined benefit plans and other long-term post-employment benefits: (In millions) Defined Benefit Plans Other Post-employment Benefit Plans 2026 $ 1.9 $ 2.5 2027 1.9 2.3 2028 1.7 2.2 2029 3.0 1.9 2030 3.1 1.6 2031-2035 15.7 7.0 112 Plan Assets The tables below present the fair value of the defined benefit plans by level within the fair value hierarchy, as described in “—Note 1. Basis of Presentation and Summary of Significant Accounting Policies” at December 28, 2025 and December 29, 2024. Fair Value Measurements at December 28, 2025 (In millions) Total Level 1 Level 2 Level 3 U.S. equity securities $ 2.1 $ 2.1 $ — $ — Japan equity securities 3.0 3.0 — — Other international equity securities 0.9 0.9 — — U.S. government bonds 0.2 0.2 — — Japan government bonds 2.1 2.1 — — Other international government bonds 1.8 1.8 — — Cash and cash equivalents 3.1 3.1 — — Insurance contracts 7.6 — — 7.6 Total $ 20.8 $ 13.2 $ — $ 7.6 Fair Value Measurements at December 29, 2024 (In millions) Total Level 1 Level 2 Level 3 U.S. equity securities $ 2.2 $ 2.2 $ — $ — Japan equity securities 3.0 3.0 — — Other international equity securities 0.9 0.9 — — U.S. government bonds 0.5 0.5 — — Japan government bonds 1.2 1.2 — — Other international government bonds 1.8 1.8 — — Cash and cash equivalents 3.6 3.6 — — Insurance contracts 6.1 — — 6.1 Total $ 19.3 $ 13.2 $ — $ 6.1 The Company has funded defined benefit plans in Japan, Korea and Philippines. The Japanese and Philippines plan asset consists primarily of Japan equity and government bond securities, U.S. equity and government bond securities, other international equity and debt securities and cash and cash equivalents. The plan assets are invested in assets with quoted prices in active markets and therefore are classified as Level 1 assets. The Company’s investment strategy is to maintain a target rate of return that is higher than that required to maintain sound defined benefit plan management into the future. In order to achieve its investment targets, the Company has established an asset composition ratio which was formulated from a long-term perspective, taking into account the maturity of the defined benefit plan and other factors. The Company considers expected returns and risks of returns, as well as the correlation between the returns of each investment asset, the diversification of its investments, and other factors related to risk management in order to maximize returns in accordance with its targeted asset mix to achieve its investment targets. The target allocation rates of the Japanese plan are 46 % for debt securities, 51 % for equity securities and 3 % for other assets. The table below presents a roll-forward of activity for the Level 3 assets for fiscal years ended 2025 and 2024: (In millions) Level 3 Assets Balance at December 31, 2023 $ 5.7 Net purchases and settlements 0.4 Balance at December 29, 2024 $ 6.1 Net purchases and settlements 1.5 Balance at December 28, 2025 $ 7.6 Defined Contribution Plans The Company offers defined contribution plans to eligible employees primarily in the U.S., whereby employees contribute a portion of their compensation. Company matching and other Company contributions are also provided to the plans. Once Company matching contributions have been paid, the Company has no further payment obligations. The Company’s 113 contributions for its employees totaled approximately $ 23.2 million, $ 23.6 million and $ 18.6 million for fiscal years ended 2025, 2024 and 2023, respectively, which are recognized as expense as incurred in the Consolidated Statements of Loss. Note 16. Accumulated Other Comprehensive Loss The following table summarizes the changes in balance of AOCI by component: (In millions) Foreign Currency Translation Adjustments Available-for-Sale Investments Pension and Other Post- employment Benefits Cash Flow Hedges Accumulated Other Comprehensive (Loss) Income Balance at January 1, 2023 $ ( 69.3 ) $ ( 0.5 ) $ 0.7 $ 1.5 $ ( 67.6 ) Current period deferrals (1) 51.4 0.5 ( 2.0 ) 12.6 62.5 Amounts reclassified to Net loss ( 1.0 ) — — ( 23.9 ) ( 24.9 ) Net change 50.4 0.5 ( 2.0 ) ( 11.3 ) 37.6 Balance at December 31, 2023 $ ( 18.9 ) $ — $ ( 1.3 ) $ ( 9.8 ) $ ( 30.0 ) Current period deferrals (1) ( 26.8 ) — 2.8 52.1 28.1 Amounts reclassified to Net loss ( 11.6 ) — — ( 22.7 ) ( 34.3 ) Net change ( 38.4 ) — 2.8 29.4 ( 6.2 ) Balance at December 29, 2024 $ ( 57.3 ) $ — $ 1.5 $ 19.6 $ ( 36.2 ) Current period deferrals (1) 72.6 — 1.3 ( 31.3 ) 42.6 Amounts reclassified to Net loss ( 10.7 ) — — ( 11.1 ) ( 21.8 ) Net change 61.9 — 1.3 ( 42.4 ) 20.8 Balance at December 28, 2025 $ 4.6 $ — $ 2.8 $ ( 22.8 ) $ ( 15.4 ) (1) Includes tax impact of (i) $ 1.1 million, $ 5.0 million and $ 3.7 million related to cash flow hedges for fiscal years ended 2025, 2024 and 2023, respectively, and (ii) $ 0.7 million, $ 4.2 million and $ 2.1 million related to foreign currency translation adjustments for fiscal years ended 2025, 2024 and 2023, respectively. Note 17. Restructuring, Integration and Other Charges Restructuring and other charges primarily include costs incurred in the fiscal year ended 2025, in connection with the (i) implementation of cost-reduction, strategic productivity and margin improvement initiatives under the Optimization Plan and (ii) the SAVANNA Exit. The cumulative pre-tax charges to be incurred by the Company to implement the Optimization Plan are expected to be approximately $ 100 million through 2027. The SAVANNA Exit is expected to be substantially complete by the first half of 2027. There were no restructuring or other charges recorded in the fiscal years ended 2024 and 2023. Integration expenses include costs incurred in connection with the Combinations, which have been completed at the end of 2025. The integration expenses amounted to $ 127.2 million and $ 113.4 million for fiscal years ended 2024 and 2023, respectively. 114 The following summarizes Restructuring, integration and other charges: Fiscal Year Ended (In millions) 2025 Restructuring charges: Employee terminations $ 7.6 Asset impairments/write off 0.4 Provision for restructuring (1)(2) 8.0 SAVANNA Exit charges: Employee terminations 1.7 Asset impairments/write off 149.7 Other costs 12.7 SAVANNA Exit charges (2) 164.1 Implementation costs (2)(3) 2.2 Accelerated depreciation 3.8 Integration expenses (2) 89.3 Total charges $ 267.4 Cost of sales, excluding amortization of intangibles $ 3.8 Restructuring, integration and other charges 263.6 Total charges $ 267.4 (1) Primarily represents charges incurred in connection with the Raritan, NJ site exit. The manufacturing activities conducted in the Raritan, NJ facility will be transferred to other facilities. (2) Included in the Restructuring, integration and other charges in the Consolidated Statements of Loss. (3) Represents incremental costs directly related to implementing cost-reduction, strategic productivity and margin improvement initiatives. The components of, and charges in, the restructuring accruals were as follows: (In millions) Employee Terminations Asset impairments/write off Accrual Balance at December 29, 2024 $ — $ — $ — Provision for restructuring 7.6 0.4 8.0 Utilization and other — ( 0.4 ) ( 0.4 ) Balance at December 28, 2025 (1) $ 7.6 $ — $ 7.6 (1) Included in Other current liabilities ( $ 0.5 million ) and Other liabilities ( $ 7.1 million ). 115 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.