What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-01 compared with 2024-01-31 · 136 added, 102 removed, 412 unchanged (37% of the section changed)

3 unchanged sentences

(Unaudited, in millions, except per share amounts)

Three Months Ended

December 29, 2023 December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Net revenue $ 1,046.0 $ 1,153.1 $ 2,247.5 $ 2,482.4

5 unchanged sentences

Amortization of intangibles 0.2 3.8 0.5 25.7

Restructuring, impairment, and other charges 16.2 0.4

Restructuring, impairment, and other charges (benefits) ( 0.3 ) 23.1 15.9 23.5

Total operating expenses 231.1 254.1 479.2 524.7

2 unchanged sentences

Other income, net

10.8 5.4 14.1 6.0

Income before income taxes 192.9 259.8 444.6 610.5

11 unchanged sentences

(Unaudited, in millions)

Three Months Ended

December 29, 2023 December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Net income $ 183.3 $ 232.8 $ 414.6 $ 542.2

7 unchanged sentences

(In millions, except per share amounts)

December 29, 2023 September 29, 2023

March 29, 2024 September 29, 2023

ASSETS (unaudited)

32 unchanged sentences

525.0 shares authorized;

160.2 shares issued and outstanding at December 29, 2023, and 159.5 shares issued and outstanding at September 29, 2023

160.4 shares issued and outstanding at March 29, 2024, and 159.5 shares issued and outstanding at September 29, 2023

Additional paid-in capital 252.2 172.4

7 unchanged sentences

(Unaudited, in millions)

Three Months Ended

December 29, 2023 December 30, 2022

Six Months Ended

March 29, 2024 March 31, 2023

Cash flows from operating activities:

19 unchanged sentences

Sales and maturities of marketable securities 15.4 65.1

Other 4.4 0.1

Net cash used in investing activities ( 56.5 ) ( 329.2 )

4 unchanged sentences

Net proceeds from exercise of stock options 1.1 1.1

Proceeds from employee stock purchase plan 18.2 15.5

Payments of debt ( 300.0 ) ( 200.0 )

12 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions)

(Unaudited, in millions)

Shares of common stock Par value of common stock Shares of treasury stock Value of treasury stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total stockholders ’ equity

Balance at September 29, 2023

159.5 $ 39.9 — $ — $ 172.4 $ 5,876.0 $ ( 5.6 ) $ 6,082.7

Net income — — — — — 231.3 — 231.3

3 unchanged sentences

Dividends declared — — — — — ( 108.9 ) — ( 108.9 )

Other comprehensive income — — — — — — ( 0.1 ) ( 0.1 )

Other comprehensive loss — — — — — — ( 0.1 ) ( 0.1 )

Balance at December 29, 2023

160.2 $ 40.1 — $ — $ 194.4 $ 5,998.4 $ ( 5.7 ) $ 6,227.2

Net income — $ — — $ — $ — $ 183.3 $ — $ 183.3

Exercise and settlement of share-based awards, net of shares withheld for taxes 0.2 — — ( 0.6 ) 18.1 — — 17.5

Share-based compensation expense — — — — 40.3 — — 40.3

Repurchase and retirement of common stock — — — 0.6 ( 0.6 ) — — —

Dividends declared — — — — — ( 109.1 ) — ( 109.1 )

Balance at March 29, 2024

160.4 $ 40.1 — $ — $ 252.2 $ 6,072.6 $ ( 5.7 ) $ 6,359.2

Balance at September 30, 2022

160.2 $ 40.0 — $ — $ 11.9 $ 5,421.9 $ ( 4.8 ) $ 5,469.0

Net income — — — — — 309.4 — 309.4

3 unchanged sentences

Dividends declared — — — — — ( 99.4 ) — ( 99.4 )

Other comprehensive income — — — — — — ( 0.8 ) ( 0.8 )

Other comprehensive loss — — — — — — ( 0.8 ) ( 0.8 )

Balance at December 30, 2022

159.1 $ 39.7 — $ — $ 3.9 $ 5,511.9 $ ( 5.6 ) $ 5,549.9

Net income — $ — — $ — $ — $ 232.8 $ — $ 232.8

Exercise and settlement of share-based awards, net of shares withheld for taxes 0.2 — — ( 0.7 ) 15.6 — — 14.9

Share-based compensation expense — — — — 43.0 — — 43.0

Repurchase and retirement of common stock ( 0.1 ) — — 0.7 ( 6.3 ) ( 3.5 ) — ( 9.1 )

Dividends declared — — — — — ( 98.6 ) — ( 98.6 )

Balance at March 31, 2023

159.2 $ 39.7 — $ — $ 56.2 $ 5,642.6 $ ( 5.6 ) $ 5,732.9

See accompanying Notes to Consolidated Financial Statements.

18 unchanged sentences

The fiscal year ended on September 29, 2023 consisted of 52 weeks (“fiscal 2023”).

The three months ended December 29, 2023, and December 30, 2022, each consisted of 13 weeks.

The three and six months ended March 29, 2024, and March 31, 2023, each consisted of 13 weeks and 26 weeks, respectively.

Property, Plant, and Equipment

3 unchanged sentences

Leasehold improvements are depreciated over the lesser of the economic life or the life of the associated lease.

During the three months ended December 29, 2023, the Company changed its accounting estimate for the expected useful lives of certain machinery and equipment.

During the six months ended March 29, 2024, the Company changed its accounting estimate for the expected useful lives of certain machinery and equipment.

The Company evaluated its current asset base and reassessed the estimated useful lives of certain machinery and equipment in connection with its recent usage of older equipment, including considering the technological and physical obsolescence of such machinery and equipment.

Based on its ability to re-use equipment across generations of process technologies and historical usage trends, the Company determined that the expected useful lives for certain machinery and equipment should be increased by up to two years to reflect more closely the estimated economic lives of those assets.

This change in estimate was applied prospectively effective for the first quarter of fiscal 2024 and resulted in a decrease in depreciation expense of $ 22.9 million for the three months ended December 29, 2023.

This benefit increased income from operations by $ 2.6 million and decreased ending inventory by $ 20.3 million as of December 29, 2023.

As a result of this change in accounting estimate, net income increased by $ 2.6 million and diluted earnings per share increased by $ 0.02 for the three months ended December 29, 2023.

This change in estimate was applied prospectively effective during the first quarter of fiscal 2024 and resulted in a decrease in depreciation expense of $ 18.9 million and $ 37.7 million for the three and six months ended March 29, 2024, respectively.

This benefit decreased cost of goods sold by $ 1.8 million for each of the three and six months ended March 29, 2024, respectively, decreased research and development expenses by $ 2.5 million and $ 4.9 million for the three and six months ended March 29, 2024, respectively, and decreased ending inventory by $ 31.0 million as of March 29, 2024.

As a result of this change in accounting estimate, net income increased by $ 4.3 million and $ 6.7 million and diluted earnings per share increased by $ 0.03 and $ 0.04 for the three and six months ended March 29, 2024, respectively.

Recently Issued Accounting Pronouncements

14 unchanged sentences

Net revenue by geographic area is as follows (in millions):

Three Months Ended

December 29, 2023 December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

United States $ 795.1 $ 846.6 $ 1,764.3 $ 1,874.9

6 unchanged sentences

Net revenue by sales channel is as follows (in millions):

Three Months Ended

December 29, 2023 December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Distributors $ 914.7 $ 1,003.0 $ 1,977.9 $ 2,187.4

6 unchanged sentences

Current Noncurrent

December 29, 2023 September 29, 2023 December 29, 2023 September 29, 2023

March 29, 2024 September 29, 2023 March 29, 2024 September 29, 2023

Treasury and government securities $ 12.4 $ 15.1 $ 3.0 $ 4.1

2 unchanged sentences

Total marketable securities $ 12.9 $ 15.6 $ 3.0 $ 4.1

Neither gross unrealized gains and losses nor realized gains and losses were material as of December 29, 2023, or September 29, 2023.

Neither gross unrealized gains and losses nor realized gains and losses were material as of March 29, 2024, or September 29, 2023.

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

5 unchanged sentences

Assets and liabilities recorded at fair value on a recurring basis consisted of the following (in millions):

December 29, 2023 September 29, 2023

March 29, 2024 September 29, 2023

Fair Value Measurements Fair Value Measurements

4 unchanged sentences

Total assets at fair value $ 1,221.3 $ 1,212.6 $ 8.7 $ — $ 738.5 $ 718.5 $ 20.0 $ —

(1) Cash equivalents included in Levels 1 and 2 consist of money market funds and corporate bonds and notes, commercial paper, and agency securities purchased with less than ninety days until maturity.

(1) Cash equivalents included in Levels 1 and 2 consist of money market funds and U.S.

Treasury and government securities purchased with less than ninety days until maturity.

Assets Measured and Recorded at Fair Value on a Nonrecurring Basis

The Company’s non-financial assets and liabilities, such as goodwill, intangible assets, and other long-lived assets resulting from business combinations, are measured at fair value using income approach valuation methodologies at the date of acquisition and are subsequently re-measured if there are indicators of impairment.

During the three months ended December 29, 2023, the Company abandoned a previously capitalized in-process research and development (“IPR&D”) project and recorded an impairment charge of $ 16.1 million.

There were no indicators of impairment identified during the three months ended December 30, 2022.

During the three months ended March 29, 2024, there were no indicators of impairment identified.

During the six months ended March 29, 2024, the Company abandoned a previously capitalized in-process research and development (“IPR&D”) project and recorded an impairment charge of $ 16.1 million.

During the three and six months ended March 31, 2023, the Company recorded impairment charges of $ 17.0 million.

Fair Value of Debt

2 unchanged sentences

The carrying amount and estimated fair value of debt consists of the following (in millions):

December 29, 2023 September 29, 2023

March 29, 2024 September 29, 2023

Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value

3 unchanged sentences

Inventory consists of the following (in millions):

December 29, 2023 September 29, 2023

March 29, 2024 September 29, 2023

Raw materials $ 33.9 $ 57.2

4 unchanged sentences

Property, plant, and equipment, net consists of the following (in millions):

December 29, 2023 September 29, 2023

March 29, 2024 September 29, 2023

Land and improvements $ 11.9 $ 11.8

7 unchanged sentences

GOODWILL AND INTANGIBLE ASSETS

There were no changes to the carrying amount of goodwill during the three months ended December 29, 2023.

There were no changes to the carrying amount of goodwill during the three and six months ended March 29, 2024.

The Company tests its goodwill for impairment annually as of the first day of its fourth fiscal quarter and in interim periods if certain events occur indicating the carrying value of goodwill may be impaired.

There were no indicators of impairment noted during the three months ended December 29, 2023.

There were no indicators of impairment noted during the three and six months ended March 29, 2024.

Intangible assets consist of the following (in millions):

Period (Years) December 29, 2023 September 29, 2023

Period (Years) March 29, 2024 September 29, 2023

Carrying Amount

4 unchanged sentences

Fully amortized intangible assets are eliminated from both the gross and accumulated amortization amounts in the first quarter of each fiscal year.

Amortization expense related to definite-lived intangible assets was $ 48.1 million and $ 72.0 million for the three months ended December 29, 2023 and December 30, 2022, respectively.

During each of the three and six months ended March 29, 2024, $ 55.7 million of IPR&D assets were transferred to definite-lived intangible assets, and are being amortized over their useful lives of 8 years.

During the three and six months ended March 31, 2023, $ 1.8 million and $ 9.5 million of IPR&D assets were transferred to definite-lived intangible assets, and are being amortized over their useful lives of 12 years, respectively.

Amortization expense related to definite-lived intangible assets was $ 45.5 million and $ 93.6 million for the three and six months ended March 29, 2024, respectively.

Amortization expense related to definite-lived intangible assets was $ 51.4 million and $ 123.4 million for the three and six months ended March 31, 2023, respectively.

Annual amortization expense for the next five fiscal years related to definite-lived intangible assets, excluding IPR&D, is expected to be as follows (in millions):

3 unchanged sentences

The provision for income taxes consists of the following components (in millions):

Three Months Ended

December 29, 2023 December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

United States income taxes $ ( 4.6 ) $ 16.1 $ 7.5 $ 42.5

2 unchanged sentences

Effective tax rate 5.0 % 10.4 % 6.7 % 11.2 %

The difference between the Company’s effective tax rate and the 21.0 % United States federal statutory rate for the three months ended December 29, 2023 and December 30, 2022 resulted primarily from foreign earnings taxed at rates lower than the federal statutory rate, a benefit from foreign-derived intangible income deduction (“FDII”), and research and experimentation and foreign tax credits earned, partially offset by a tax on global intangible low-taxed income (“GILTI”), and tax expense related to share-based compensation shortfalls.

The difference between the Company’s effective tax rate and the 21.0 % United States federal statutory rate for the three and six months ended March 29, 2024 and March 31, 2023 resulted primarily from foreign earnings taxed at rates lower than the federal statutory rate, a benefit from foreign-derived intangible income deduction (“FDII”), and research and experimentation and foreign tax credits earned, partially offset by a tax on global intangible low-taxed income (“GILTI”), and tax expense related to share-based compensation shortfalls.

In August 2022, the U.S.

1 unchanged sentence

The Company is subject to the provisions of CAMT in fiscal 2024 .

CAMT had no impact to the Company’s consolidated financial statements for the three months ended December 29, 2023.

CAMT had no impact to the Company’s consolidated financial statements for the three and six months ended March 29, 2024.

COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property rights.

From time to time, third parties have asserted and may in the future assert patent, copyright, trademark, and other intellectual property rights to technologies that are important to the Company’s business and have demanded and may in the future demand that the Company

license their technology.

The outcome of any such litigation cannot be predicted with certainty and some such lawsuits, claims, or proceedings may be disposed of unfavorably to the Company.

1 unchanged sentence

From time to time the Company may also be involved in legal proceedings in the ordinary course of business.

The Company monitors the status of legal proceedings and other contingencies on an ongoing basis to ensure loss contingencies are recognized and disclosed in its financial statements and footnotes.

The Company monitors the status of legal proceedings and other contingencies on an ongoing basis to assess whether loss contingencies should be recognized and disclosed in its financial statements and footnotes.

The Company does not believe there are any pending legal proceedings that are reasonably possible to result in a material loss.

16 unchanged sentences

The Company maintains certain minimum purchase commitments under long-term capacity reservation agreements primarily with foundries for the purchase of wafers.

Under these agreements, the Company has agreed to pay refundable deposits to the suppliers in exchange for reserved manufacturing production capacity over the term of the agreements.

As of December 29, 2023, the remaining deposits under the long-term capacity reservation agreements were $ 43.0 million and $ 16.0 million recorded within other current assets and other long-term assets, respectively.

Under these agreements, the Company has agreed to pay a combination of refundable deposits and prepayments to the suppliers in exchange for reserved manufacturing production capacity over the term of the agreements.

As of March 29, 2024, the remaining deposits and prepayments under the long-term capacity reservation agreements were $ 41.7 million and $ 1.3 million, respectively, recorded within other current assets and $ 100.0 million and $ 15.8 million, respectively, recorded within other long-term assets.

STOCKHOLDERS’ EQUITY

5 unchanged sentences

The Company currently expects to fund the January 31, 2023 stock repurchase program using the Company’s working capital.

During the three months ended December 29, 2023, the Company did not repurchase any shares of its common stock pursuant to the January 31, 2023 stock repurchase program.

As of December 29, 2023, $ 2.0 billion remained available under the January 31, 2023 stock repurchase program.

During the three months ended December 30, 2022, the Company paid $ 166.2 million (including commissions) in connection with the repurchase of 1.8 million shares of its common stock (paying an average price of $ 90.57 per share), all of which shares were repurchased pursuant to the January 26, 2021 stock repurchase program.

On January 30, 2024 , the Company announced that the Board of Directors had declared a cash dividend on the Company’s common stock of $ 0.68 per share.

This dividend is payable on March 12, 2024 , to the Company’s stockholders of record as of the close of business on February 20, 2024 .

During the three and six months ended March 29, 2024, the Company did not repurchase any shares of its common stock pursuant to the January 31, 2023 stock repurchase program.

As of March 29, 2024, $ 2.0 billion remained available under the January 31, 2023 stock repurchase program.

During the three months ended March 31, 2023, the Company paid $ 9.1 million (including commissions) in connection with the repurchase of 0.1 million shares of its common stock (paying an average price of $ 91.08 per share).

During the six months ended March 31, 2023, the Company paid $ 175.3 million (including commissions) in connection with the repurchase of 1.9 million shares of its common stock (paying an average price of $ 90.60 per share), all of which shares were repurchased pursuant to the January 26, 2021 stock repurchase program.

On April 30, 2024 , the Company announced that the Board of Directors had declared a cash dividend on the Company’s common stock of $ 0.68 per share.

This dividend is payable on June 11, 2024 , to the Company’s stockholders of record as of the close of business on May 21, 2024 .

Dividends charged to retained earnings were as follows (in millions, except per share data):

3 unchanged sentences

First quarter $ 0.68 $ 108.9 $ 0.62 $ 99.4

Second quarter 0.68 109.1 0.62 98.6

Total dividends $ 1.36 $ 218.0 $ 1.24 $ 198.0

Share-based Compensation

The following table summarizes the share-based compensation expense by line item in the Consolidated Statements of Operations (in millions):

Three Months Ended

December 29, 2023 December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Cost of goods sold $ 11.5 $ 7.5 $ 20.3 $ 10.2

4 unchanged sentences

The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share amounts):

Three Months Ended

December 29, 2023 December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Net income $ 183.3 $ 232.8 $ 414.6 $ 542.2

6 unchanged sentences

Basic earnings per share are calculated by dividing net income by the weighted average number of shares of the Company’s common stock outstanding during the period.

The calculation of diluted earnings per share includes the dilutive effect of equity-based awards that were outstanding during the three months ended December 29, 2023, and December 30, 2022, using the treasury stock method.

The calculation of diluted earnings per share includes the dilutive effect of equity-based awards that were outstanding during the three and six months ended March 29, 2024, and March 31, 2023, using the treasury stock method.

Shares issuable upon the vesting of performance stock awards are likewise included in the calculation of diluted earnings per share as of the date the condition(s) have been satisfied, assuming the end of the reporting period was the end of the contingency period.

2 unchanged sentences

Other current assets consist of the following (in millions):

December 29, 2023 September 29, 2023

March 29, 2024 September 29, 2023

Prepaid expenses $ 261.4 $ 306.0

2 unchanged sentences

Other current liabilities consist of the following (in millions):

December 29, 2023 September 29, 2023

March 29, 2024 September 29, 2023

Accrued customer liabilities $ 226.7 $ 270.9

7 unchanged sentences

Words such as “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” targets,” “will,” “would,” and similar expressions or variations or negatives of such words are intended to identify forward-looking statements but are not the exclusive means of identifying forward-looking statements in this report.

Additionally, statements concerning future matters such as the possible impacts of geopolitical conflicts, inflation, recession, and the COVID-19 pandemic, as well as the development of new products, enhancements of technologies, sales levels, expense levels, the benefits of acquisitions we have made or may make in the future, and other statements regarding matters that are not historical are forward-looking statements.

Additionally, statements concerning future matters such as the possible impacts of geopolitical conflicts, inflation, recession, and global health crises, as well as the development of new products, enhancements of technologies, sales levels, expense levels, the benefits of acquisitions we have made or may make in the future, and other statements regarding matters that are not historical are forward-looking statements.

Although forward-looking statements in this report reflect the good faith judgment of our management as of the date the statement is first made, such statements can only be based on facts and factors then known and understood by us.

6 unchanged sentences

RESULTS OF OPERATIONS

Three Months Ended December 29, 2023, and December 30, 2022

Three and Six Months Ended March 29, 2024, and March 31, 2023

The following table sets forth the results of our operations expressed as a percentage of net revenue:

Three Months Ended

December 29, 2023 December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Net revenue 100.0 % 100.0 % 100.0 % 100.0 %

5 unchanged sentences

Amortization of intangibles — 0.3 — 1.0

Restructuring, impairment, and other charges 1.4 —

Restructuring, impairment, and other charges (benefits) — 2.0 0.7 0.9

Total operating expenses 22.1 22.1 21.3 21.1

2 unchanged sentences

Other income, net

1.0 0.5 0.7 0.2

Income before income taxes 18.4 22.5 19.8 24.6

3 unchanged sentences

Our highly innovative analog and mixed-signal semiconductors are connecting people, places, and things spanning a number of new and previously unimagined applications within the aerospace, automotive, broadband, cellular infrastructure, connected home, defense, entertainment and gaming, industrial, medical, smartphone, tablet, and wearable markets.

During the three months ended December 29, 2023, the following key factors contributed to our overall results of operations, financial position, and cash flows:

• Net revenue decreased to $1,201.5 million for the three months ended December 29, 2023, as compared to $1,329.3 million for the corresponding period in fiscal 2023, driven primarily by a decrease in demand for our non-mobile analog and mixed-signal products, partially offset by an increase in demand for our mobile products from smartphone customers in the Android ecosystem.

During the three months ended March 29, 2024, the following key factors contributed to our overall results of operations, financial position, and cash flows:

• Net revenue decreased to $1,046.0 million for the three months ended March 29, 2024, as compared to $1,153.1 million for the corresponding period in fiscal 2023, driven primarily by a decrease in demand for our non-mobile analog and mixed-signal products.

• Our ending cash, cash equivalents, and marketable securities balance increased to $1,221.3 million.

The increase in cash, cash equivalents, and marketable securities during the three months ended December 29, 2023, was primarily due to cash generated from operations of $774.9 million, partially offset by repayments of debt of $300.0 million, dividend payments of $108.9 million, and capital expenditures of $22.2 million.

Three Months Ended

December 29, 2023 Change December 30, 2022

The increase in cash, cash equivalents, and marketable securities during the three months ended March 29, 2024, was primarily due to cash generated from operations of $300.2 million, partially offset by dividend payments of $109.1 million, and capital expenditures of $27.6 million.

Three Months Ended Six Months Ended

March 29, 2024 Change March 31, 2023 March 29, 2024 Change March 31, 2023

(dollars in millions)

2 unchanged sentences

We generally experience seasonal peaks during our fourth and first fiscal quarters (which correspond to the second half of the calendar year), primarily as a result of increased worldwide production of consumer electronics in anticipation of holiday sales, whereas our second and third fiscal quarters are typically lower and in line with seasonal industry trends.

The decrease in net revenue for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was driven primarily by a decrease in demand for our non-mobile analog and mixed-signal products, partially offset by an increase in demand for our mobile products from smartphone customers in the Android ecosystem.

Three Months Ended

December 29, 2023 Change December 30, 2022

The decrease in net revenue for the three and six months ended March 29, 2024, as compared with the corresponding periods in fiscal 2023, was driven primarily by a decrease in demand for our non-mobile analog and mixed-signal products.

Three Months Ended Six Months Ended

March 29, 2024 Change March 31, 2023 March 29, 2024 Change March 31, 2023

(dollars in millions)

2 unchanged sentences

Gross profit represents net revenue less cost of goods sold.

Our cost of goods sold consists primarily of purchased materials, labor, and overhead (including depreciation, share-based compensation expense, and amortization of acquisition intangibles, including inventory step-up expense) associated with product manufacturing.

Erosion of average selling prices of established products is typical of the semiconductor industry.

1 unchanged sentence

As part of our normal course of business, we intend to improve gross profit with efforts to increase unit volumes, improve manufacturing efficiencies, lower manufacturing costs of existing products, and by introducing new and higher value-added products.

The decrease in gross profit for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily the result of an unfavorable product mix, lower unit volumes, and lower average selling prices.

The decrease in gross profit for the three and six months ended March 29, 2024, as compared with the corresponding periods in fiscal 2023, was primarily the result of an unfavorable product mix, lower unit volumes, and lower average selling prices.

Research and Development

Three Months Ended

December 29, 2023 Change December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 Change March 31, 2023 March 29, 2024 Change March 31, 2023

(dollars in millions)

2 unchanged sentences

Research and development expenses consist primarily of direct personnel costs including share-based compensation expense, costs for pre-production evaluation, and testing of new devices, non-production masks, engineering prototypes, and design tool costs.

The decrease in research and development expenses for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily related to a decrease in headcount-related expenses, including share-based compensation.

The increase in research and development expenses for the three months ended March 29, 2024, as compared with the corresponding period in fiscal 2023, was primarily related to an increase in certain headcount-related expenses, including share-based compensation, as a result of our increased investment in developing new technologies and products.

The decrease in research and development expenses for the six months ended March 29, 2024, as compared with the corresponding period in fiscal 2023, was primarily related to a decrease in depreciation expense as a result of extending the useful lives of certain machinery and equipment.

For information regarding this change in accounting estimate, refer to Note 1 of the Notes to Consolidated Financial Statements.

Selling, General, and Administrative

Three Months Ended

December 29, 2023 Change December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 Change March 31, 2023 March 29, 2024 Change March 31, 2023

(dollars in millions)

2 unchanged sentences

Selling, general, and administrative expenses include legal and related costs, accounting, treasury, human resources, information systems, customer service, bad debt expense, sales commissions, share-based compensation expense, advertising, marketing, costs associated with business combinations completed or contemplated during the period, and other costs.

The decrease in selling, general, and administrative expenses for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily related to a decrease in professional services costs.

The decrease in selling, general, and administrative expenses for the three and six months ended March 29, 2024, as compared with the corresponding periods in fiscal 2023, was primarily related to a decrease in headcount-related expenses, including share-based compensation and a decrease in professional services costs.

Amortization of Intangibles

Three Months Ended

December 29, 2023 Change December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 Change March 31, 2023 March 29, 2024 Change March 31, 2023

(dollars in millions)

1 unchanged sentence

% of net revenue — % 0.3 % — % 1.0 %

The decrease in amortization expense for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily due to certain intangible assets that were acquired in prior fiscal years reaching the end of their useful lives.

Restructuring, Impairment, and Other Charges

Three Months Ended

December 29, 2023 Change December 30, 2022

The decrease in amortization expense for the three and six months ended March 29, 2024, as compared with the corresponding periods in fiscal 2023, was primarily due to certain intangible assets that were acquired in prior fiscal years reaching the end of their useful lives.

Restructuring, Impairment, and Other Charges (Benefits)

Three Months Ended Six Months Ended

March 29, 2024 Change March 31, 2023 March 29, 2024 Change March 31, 2023

(dollars in millions)

Restructuring, impairment, and other charges

Restructuring, impairment, and other charges (benefits)

$ (0.3) (101.3)% $ 23.1 $ 15.9 (32.3)% $ 23.5

% of net revenue — % 2.0 % 0.7 % 0.9 %

The increase in restructuring, impairment, and other charges for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily due to the abandonment of a previously capitalized IPR&D project.

Restructuring, impairment, and other charges (benefits) for the three months ended March 29, 2024 was not material.

Restructuring, impairment, and other charges (benefits) for the six months ended March 29, 2024 was primarily related to the abandonment of a previously capitalized IPR&D project.

Restructuring, impairment, and other charges (benefits) for the three and six months ended March 31, 2023 was primarily due to asset impairment charges of certain assets held for sale.

Interest Expense

Three Months Ended

December 29, 2023 Change December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 Change March 31, 2023 March 29, 2024 Change March 31, 2023

(dollars in millions)

1 unchanged sentence

% of net revenue 0.7 % 1.6 % 0.8 % 1.4 %

The decrease in interest expense for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was due to the repayment of the outstanding balance on the Term Loans (as defined below).

The decrease in interest expense for the three and six months ended March 29, 2024, as compared with the corresponding periods in fiscal 2023, was due to the repayment of the outstanding balance on the Term Loans (as defined below).

Provision for Income Taxes

Three Months Ended

December 29, 2023 Change December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 Change March 31, 2023 March 29, 2024 Change March 31, 2023

(dollars in millions)

1 unchanged sentence

% of net revenue 0.9 % 2.3 % 1.3 % 2.8 %

We recorded a provision for income taxes of $20.4 million (which consisted of $12.1 million and $8.3 million related to United States and foreign income taxes, respectively) for the three months ended December 29, 2023.

The decrease in income tax expense for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily due to lower income from operations and a lower tax on GILTI, partially offset by an increase in the shortfall in tax deductions for share-based compensation.

We recorded a provision for income taxes of $9.6 million (which consisted of a benefit of $4.6 million and a provision of $14.2 million related to United States and foreign income taxes, respectively) and $30.0 million (which consisted of $7.5 million and $22.5 million related to United States and foreign income taxes, respectively) for the three and six months ended March 29, 2024, respectively.

The decrease in income tax expense for the three and six months ended March 29, 2024, as compared with the corresponding periods in fiscal 2023, was primarily due to lower income from operations and a lower tax on GILTI, partially offset by an increase in the shortfall in tax deductions for share-based compensation.

LIQUIDITY AND CAPITAL RESOURCES

Three Months Ended

(in millions) December 29, 2023 December 30, 2022

Six Months Ended

(in millions) March 29, 2024 March 31, 2023

Cash and cash equivalents at beginning of period $ 718.8 $ 566.0

5 unchanged sentences

Cash provided by operating activities consists of net income for the period adjusted for certain non-cash items and changes in certain operating assets and liabilities.

The $1.5 million increase in cash provided by operating activities during the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily related to favorable changes in working capital of $94.1 million, due primarily to a decrease in inventory, partially offset by lower net income.

The $109.9 million decrease in cash provided by operating activities during the six months ended March 29, 2024, as compared with the corresponding period in fiscal 2023, was primarily related to lower net income and depreciation, partially offset by favorable changes in working capital of $58.7 million, due primarily to a decrease in inventory.

Cash used in investing activities:

Cash used in investing activities consists primarily of capital expenditures and cash paid to purchase marketable securities, offset by cash received related to the sale or maturity of marketable securities.

The $199.6 million decrease in cash used in investing activities during the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily related to a decrease of $162.0 million in purchases of marketable securities and a decrease of $41.3 million in cash used for capital expenditures, partially offset by a decrease of $8.1 million in sales of marketable securities.

Cash used in investing activities consists primarily of capital expenditures, cash paid to acquire intangible assets, and cash paid to purchase marketable securities, offset by cash received related to the sale or maturity of marketable securities.

The $272.7 million decrease in cash used in investing activities during the six months ended March 29, 2024, as compared with the corresponding period in fiscal 2023, was primarily related to a decrease of $259.1 million in purchases of marketable securities and a decrease of $59.1 million in cash used for capital expenditures, partially offset by a decrease of $49.7 million in sales of marketable securities.

Cash used in financing activities:

Cash used in financing activities consists primarily of proceeds and payments related to our long-term borrowings and cash transactions related to equity.

The $144.1 million increase in cash used in financing activities during the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily related to an increase of $300.0 million for the repayment of debt, an increase of $9.5 million in dividend payments, partially offset by a decrease of $166.2 million in stock repurchase activity.

Cash, cash equivalents, and marketable securities totaled $1,047.6 million as of December 29, 2023, representing an increase of $309.1 million from September 29, 2023.

The $57.2 million decrease in cash used in financing activities during the six months ended March 29, 2024, as compared with the corresponding period in fiscal 2023, was primarily related to a decrease of 175.3 million in stock repurchase activity, partially offset by an increase of $100.0 million for the repayment of debt, and an increase of $20.0 million in dividend payments.

Cash, cash equivalents, and marketable securities totaled $1,221.3 million as of March 29, 2024, representing an increase of $482.8 million from September 29, 2023.

We have outstanding $500.0 million of Notes Due 2026 and $500.0 million of Notes Due 2031 (the “Notes”).

During the three months ended December 29, 2023, we repaid $300.0 million of outstanding borrowings under the term loans ( the “Term Loans”) that the Company borrowed on July 26, 2021 under a $1.0 billion term loan facility (the “Term Loan Facility”).

As of December 29, 2023, there were no borrowings outstanding under the Term Loan Facility.

We have a Revolving Credit Agreement (the “Revolving Credit Agreement”) under which we may borrow up to $750.0 million for general corporate purposes and working capital needs of the Company and its subsidiaries.

As of December 29, 2023, there were no borrowings outstanding under the revolving credit facility (the “Revolver”).

During the six months ended March 29, 2024, we repaid $300.0 million of outstanding borrowings under the term loans (the “Term Loans”) that the Company borrowed on July 26, 2021 under a $1.0 billion term loan facility (the “Term Loan Facility”).

As of March 29, 2024, there were no borrowings outstanding under the Term Loan Facility.

We have a Revolving Credit Agreement (the “Revolving Credit Agreement”) under which we may borrow up to $750.0 million for general corporate purposes and working capital needs of

the Company and its subsidiaries.

As of March 29, 2024, there were no borrowings outstanding under the revolving credit facility (the “Revolver”).

The Revolving Credit Agreement expires July 26, 2026.

9 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements