What changed in this filing

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Item 1. Financial Statements

2023-02-03 compared with 2022-11-04 · 127 added, 132 removed, 410 unchanged (39% of the section changed)

3 unchanged sentences

(In thousands, except share data)

September 30, 2022 June 30, 2022

December 31, 2022 June 30, 2022

Current assets:

1 unchanged sentence

Investments — short-term 162 427

Accounts receivable, net of allowance for doubtful accounts of $ 55 and $ 52 at September 30, 2022 and June 30, 2022, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 55 and $ 52 at December 31, 2022 and June 30, 2022, respectively

151,945 119,627

26 unchanged sentences

500,000,000 shares authorized:

60,428,811 and 60,420,525 outstanding as of September 30, 2022 and June 30, 2022, respectively

60,430,958 and 60,420,525 outstanding as of December 31, 2022 and June 30, 2022, respectively

Additional paid–in capital 2,228 650

7 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2022 2021 2022 2021

Revenues $ 493,571 $ 431,565 $ 991,654 $ 890,479

24 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended September 30, 2022

Common Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity

Three and Six Months Ended December 31, 2022

Common Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity (Deficit)

Shares Amount Amount Amount Amount Amount

Balance at June 30, 2022

60,420,525 $ 60 $ 650 $ ( 383,112 ) $ ( 474 ) $ ( 382,876 )

Net Income — — — 93,182 — 93,182

6 unchanged sentences

Balance at September 30, 2022

Three Months Ended September 30, 2021

Common Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity

60,428,811 $ 60 $ 1,177 $ ( 326,186 ) $ ( 523 ) $ ( 325,472 )

Net Income — — — 112,205 — 112,205

Reclassification adjustment for loss on investments included in net income — — — — 523 523

Restricted stock units issued, net of tax withholdings 2,147 — ( 50 ) — — ( 50 )

Stock-based compensation expense — — 1,101 — — 1,101

Dividends Paid on Common Stock ($ 0.60 per share)

— — — ( 36,257 ) — ( 36,257 )

Balances at December 31, 2022

60,430,958 $ 60 $ 2,228 $ ( 250,238 ) $ — $ ( 247,950 )

Three and Six Months Ended December 31, 2021

Common Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity (Deficit)

Shares Amount Amount Amount Amount Amount

Balance at June 30, 2021

62,582,858 $ 63 $ — $ 2,635 $ 1 $ 2,699

Net Income — — — 132,150 — 132,150

7 unchanged sentences

Balance at September 30, 2021

62,461,356 $ 62 $ — $ 57,910 $ — $ 57,972

Net Income — — — 103,649 — 103,649

Other comprehensive income (loss) — — — — 7 7

Stock options exercised 2,584 — 36 — — 36

Restricted stock units issued, net of tax withholdings 7,947 — ( 181 ) — — ( 181 )

Repurchases of Common Stock ( 434,271 ) — ( 587 ) ( 128,457 ) — ( 129,044 )

Stock-based compensation expense — — 819 — — 819

Dividends Paid on Common Stock ($ 0.60 per share)

— $ — $ — $ ( 37,445 ) $ — $ ( 37,445 )

Balances at December 31, 2021

62,037,616 $ 62 $ 87 $ ( 4,343 ) $ 7 $ ( 4,187 )

See notes to consolidated financial statements.

2 unchanged sentences

(In thousands) (Unaudited)

Three Months Ended September 30,

Six Months Ended December 31,

Cash Flows from Operating Activities:

4 unchanged sentences

Non-cash lease expense 342 1,063

Premium amortization and (discount accretion), net — 24

Provision for inventory obsolescence 5,619 1,396

1 unchanged sentence

Stock-based compensation 2,148 1,628

Provisions for doubtful accounts ( 3 ) 7

Deferred taxes 131 228

Recovery of impaired investment — ( 902 )

Change in unrealized loss on available-for-sale securities 739 13

Other, net ( 100 ) ( 280 )

3 unchanged sentences

Vendor deposits 15,027 ( 19,151 )

Prepaid income taxes ( 36 ) ( 3,703 )

Prepaid expenses and other assets ( 8,946 ) 2,988

17 unchanged sentences

Tax withholdings related to net share settlements of restricted stock units ( 594 ) ( 1,132 )

Net cash (used in) financing activities ( 33,027 ) ( 81,436 )

Net increase in cash and cash equivalents 295 16,512

Net cash provided by (used in) financing activities 34,416 ( 226,820 )

Net increase (decrease) in cash and cash equivalents 23,281 ( 37,239 )

Cash and cash equivalents at beginning of period 136,224 249,418

5 unchanged sentences

Right-of-use asset recognized $ 1,826 $ 27,272

Unpaid stock repurchases $ — $ 2,497

Unpaid property and equipment and other long-term assets $ 357 $ 469

14 unchanged sentences

These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2022, included in its Annual Report on Form 10-K, as filed with the SEC on August 26, 2022 (the “Annual Report”).

The results of operations for the three months ended September 30, 2022 are not necessarily indicative of the results to be expected for any future periods.

The results of operations for the three and six months ended December 31, 2022 are not necessarily indicative of the results to be expected for any future periods.

NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are disclosed in its audited consolidated financial statements for the fiscal year ended June 30, 2022, included in the Annual Report on Form 10-K.

Except as noted below, there have been no other changes to the Company’s significant accounting policies as discussed in the Annual Report.

There have been no changes to the Company’s significant accounting policies as discussed in the Annual Report.

Use of Accounting Estimates

17 unchanged sentences

Disaggregation of Revenue

See Note 15 “Segment Information” for disaggregation of revenue by product category and geography.

See Note 13, "Segment Information, Revenues by Geography and Significant Customers" for disaggregation of revenue by product category and geography.

Contract Balances

4 unchanged sentences

The current portion of deferred revenue is included in other current liabilities and the non-current portion is included in other long-term liabilities in our consolidated balance sheets.

As of September 30, 2022 and June 30, 2022, the Company’s customer deposits were $ 1.8 million and $ 1.1 million, respectively.

As of September 30, 2022, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 18.9 million and $ 6.0 million, respectively.

As of December 31, 2022 and June 30, 2022, the Company’s customer deposits were $ 0.9 million and $ 1.1 million, respectively.

As of December 31, 2022, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 19.1 million and $ 6.2 million, respectively.

As of June 30, 2022, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 20.8 million and $ 5.8 million, respectively.

NOTE 4— FAIR VALUE OF FINANCIAL INSTRUMENTS

Pursuant to the accounting guidance for fair value measurements and its subsequent updates, fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

The accounting guidance establishes a three-tier fair value hierarchy that requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement.

Three levels of inputs may be used to measure fair value:

Level 1 —Quoted prices in active markets for identical assets or liabilities;

Level 2 —Inputs other than the quoted prices in active markets, that are observable either directly or indirectly;

Level 3 —Unobservable inputs based on the Company’s own assumption.

The Company records securities available-for-sale at fair value on a recurring basis.

The Company classifies its investments within Level 1 or 2 because they are valued using either quoted market prices or inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded.

The Company’s fixed income available-for-sale securities consist of high-quality investment grade securities from diverse issuers.

The valuation techniques used to measure the fair value of the Company’s marketable securities incorporate bond terms and conditions, current performance data, proprietary pricing models, real time quotes from contributing dealers, trade prices and other market data.

The Company held no Level 3 financial instruments as of September 30, 2022 and June 30, 2022.

The following tables summarize the Company’s financial instruments’ adjusted cost, gross unrealized gains and losses, and fair value by significant investment category as of September 30, 2022 and June 30, 2022 (in thousands):

September 30, 2022

Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents (1) Short-Term Investments Long-Term Investments

Corporate Securities $ 901 $ — $ ( 523 ) $ 378 $ — $ 378 $ —

Total $ 901 $ — $ ( 523 ) $ 378 $ — $ 378 $ —

(1) Cash and cash equivalents on the consolidated balance sheets includes securities that have a maturity of three months or less at the date of purchase.

The carrying amount approximates fair value, primarily due to the short maturity of cash equivalent instruments.

June 30, 2022

Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents (1) Short-Term Investments Long-Term Investments

Corporate securities $ 901 $ — $ ( 474 ) $ 427 $ — $ 427 $ —

Total $ 901 $ — $ ( 474 ) $ 427 $ — $ 427 $ —

(1) Cash and cash equivalents on the consolidated balance sheets includes securities that have a maturity of three months or less at the date of purchase.

The carrying amount approximates fair value, primarily due to the short maturity of cash equivalent instruments.

For the three months ended September 30, 2022, the Company did no t recognize any material net gains or losses from accumulated other comprehensive income related to realized gains or losses.

During the three months ended September 30, 2022 and 2021, interest income on the Company’s investment securities was immaterial.

The Company had no continuous unrealized loss position from corporate securities as of September 30, 2022 .

The following table represents the adjusted costs and fair value of cash equivalents and investments by contractual maturity as of September 30, 2022 (in thousands):

Available-For-Sale

Adjusted Cost Fair Value

Due within 1 year and money market funds $ 901 $ 378

Total $ 901 $ 378

For certain of the Company’s financial instruments, other than those presented in the disclosures above, including cash, accounts receivable, accounts payable and other current liabilities, the carrying amounts approximate fair value due to their short maturities.

As of September 30, 2022 and June 30, 2022, the Company had outstanding loans associated with its credit facilities, which are carried at historical cost.

The fair value of the Company’s debt disclosed below was estimated based on the current rates offered to the Company for debt with similar terms and remaining maturities and was a Level 2 measurement.

As of September 30, 2022 and June 30, 2022, the fair value of the Company’s debt, which is carried at historical cost was $ 792.5 million and $ 788.8 million, respectively.

NOTE 4— EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share for the periods indicated (in thousands, except per share data):

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2022 2021 2022 2021

Net income $ 112,205 $ 103,649 $ 205,387 $ 235,799

7 unchanged sentences

Diluted $ 1.86 $ 1.66 $ 3.40 $ 3.78

The Company excludes potentially dilutive securities from its diluted net income per share calculation when their effect would be anti-

dilutive to net income per share amounts.

The Company excludes potentially dilutive securities from its diluted net income per share calculation when their effect would be anti-dilutive to net income per share amounts.

NOTE 5— BALANCE SHEET COMPONENTS

Inventories consisted of the following (in thousands):

September 30, 2022 June 30, 2022

December 31, 2022 June 30, 2022

Finished goods $ 573,175 $ 253,260

3 unchanged sentences

Property and equipment, net consisted of the following (in thousands):

September 30, 2022 June 30, 2022

December 31, 2022 June 30, 2022

Testing equipment $ 19,488 $ 16,999

10 unchanged sentences

Other long-term assets consisted of the following (in thousands):

September 30, 2022 June 30, 2022

December 31, 2022 June 30, 2022

Hong Kong Tax deposit (1)

4 unchanged sentences

(1) The Company expects the deposits made with the Hong Kong Inland Revenue Department (“IRD”) to be refunded upon completion of the audit.

See Note 14 to the consolidated financial statements for additional details regarding this ongoing tax audit.

(2) Accumulated amortization was $ 4.7 million and $ 4.3 million as of September 30, 2022, and June 30, 2022, respectively.

See Note 12, "Income Taxes" to the consolidated financial statements for additional details regarding this ongoing tax audit.

(2) Accumulated amortization was $ 5.1 million and $ 4.3 million as of December 31, 2022, and June 30, 2022, respectively.

Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

September 30, 2022 June 30, 2022

December 31, 2022 June 30, 2022

Deferred revenue — short-term $ 19,099 20,766

10 unchanged sentences

Other long-term liabilities consisted of the following (in thousands):

September 30, 2022 June 30, 2022

December 31, 2022 June 30, 2022

Deferred Revenue — long-term $ 6,186 $ 5,822

7 unchanged sentences

Warranty obligations, included in other current liabilities, were as follows (in thousands):

Three Months Ended September 30,

Six Months Ended December 31,

Beginning balance $ 6,394 $ 4,812

7 unchanged sentences

The Company’s Debt consisted of the following (in thousands):

September 30, 2022 June 30, 2022

December 31, 2022 June 30, 2022

Term Facility - short term $ 25,000 $ 25,000

10 unchanged sentences

The Facilities may be prepaid at any time without penalty.

Revolving and Term facilities bear interest, at the Company’s option, at either (i) a floating rate per annum equal to the base rate plus a margin of between 0.50 % and 1.25 %, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter or (ii) a floating per annum rate equal to the applicable LIBOR rate (or replacement rate) for a specified period, plus a margin of between 1.50 % and 2.25 %, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter.

fiscal quarter.

Swingline loans bear interest at a floating rate per annum equal to the base rate plus a margin of between 0.50 % and 1.25 %, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter.

9 unchanged sentences

The Facilities

As of September 30, 2022, $ 462.5 million was outstanding on the Term Facility and $ 330 million outstanding on the Revolving Facility, leaving $ 370 million available on the Revolving Facility.

As of December 31, 2022, $ 456.3 million was outstanding on the Term Facility and $ 440 million outstanding on the Revolving Facility, leaving $ 260 million available on the Revolving Facility.

Term Facility

During the three months ended September 30, 2022, the Company made aggregate payments of $ 10.7 million under the Term Facility, of which $ 6.3 million was repayment of principal and $ 4.4 million was payment of interest.

As of September 30, 2022, the interest rate on the Term Facility was 4.87 %.

This interest rate will reset on October 31, 2022.

During the six months ended December 31, 2022, the Company made aggregate payments of $ 23.3 million under the Term Facility, of which $ 12.5 million was repayment of principal and $ 10.8 million was payment of interest.

As of December 31, 2022, the interest rate on the Term Facility was 6.13 %.

This interest rate reset on January 30, 2023.

Revolving Facility

Under the Third Amended and Restated Credit Agreement, during the three months ended September 30, 2022, the Company made aggregate payments of $ 42.8 million under the Revolving Facility, of which $ 40 million was a repayment of principal and $ 2.8 million was a payment of interest.

As at September 30, 2022 , the interest rates on the Revolving Facility were 4.45 % - 4.87 %.

The following table summarizes the Company’s estimated debt and interest payment obligations as of September 30, 2022, for the remainder of fiscal 2023 and future fiscal years (in thousands):

2023 (remainder) 2024 2025 2026 2027 Thereafter Total

Under the Third Amended and Restated Credit Agreement, during the six months ended December 31, 2022, the Company made aggregate payments of $ 67.7 million under the Revolving Facility, of which $ 60 million was repayment of principal and $ 7.7 million was payment of interest.

As of December 31, 2022, the interest rates on the Revolving Facility were 6.04 % - 6.10 %.

The following table summarizes the Company’s estimated debt and interest payment obligations as of December 31, 2022, for the remainder of fiscal 2023 and future fiscal years (in thousands):

2023 (remainder)

2024 2025 2026 2027 Thereafter Total

Debt payment obligations $ 12,500 $ 25,000 $ 25,000 $ 833,750 $ — $ — $ 896,250

2 unchanged sentences

Total $ 40,369 $ 80,187 $ 78,482 $ 872,736 $ — $ — $ 1,071,774

(1) - Interest payments are calculated based on the applicable rates and payment dates as of September 30, 2022 and assumes the outstanding revolver balance remains at $ 330 million.

(1) Interest payments are calculated based on the applicable rates and payment dates as of December 31, 2022 and assumes the outstanding revolver balance remains at $ 440 million.

Although the Company’s interest rates on debt obligations may vary, the Company has assumed the most recent available interest rates for all periods presented.

2 unchanged sentences

Some of our leases include options to extend the term of such leases for a period from 12 months to 60 months, and/or have options to early terminate the lease.

As of September 30, 2022, we included such options in determining the lease terms for certain of our leases because we were reasonably certain that we would exercise the extension options.

As of December 31, 2022, we included such options in determining the lease terms for certain of our leases because we were reasonably certain that we would

exercise the extension options.

Most of our leases require us to pay certain operating expenses in addition to base rent, such as taxes, insurance and maintenance costs.

The following table summarizes our lease costs for the three months ended September 30, 2022 and 2021 (in thousands):

Financial Statement Classification Three Months Ended September 30,

The following table summarizes our lease costs for the three and six months ended December 31, 2022 and 2021 (in thousands):

Financial Statement Classification Three Months Ended December 31, Six Months Ended December 31,

2022 2021 2022 2021

Operating lease costs:

5 unchanged sentences

The operating lease costs in the table above include costs for long-term and short-term leases.

Total short-term costs for three months ended September 30, 2022 and 2021 were immaterial .

Total short-term costs for the three and six months ended December 31, 2022 and 2021 were immaterial .

Variable lease costs primarily include maintenance, utilities and operating expenses that are incremental to the fixed base rent payments and are excluded from the calculation of operating lease liabilities and ROU assets.

For the three months ended September 30, 2022 and 2021, cash paid for amounts associated with the Company’s operating lease liabilities were approximately $ 3.6 million and $ 3.0 million, respectively.

For the three months ended December 31, 2022 and 2021, cash paid for amounts associated with the Company's operating lease liabilities were approximately $ 4.0 million and $ 3.5 million, respectively.

For the six months ended December 31, 2022 and 2021, cash paid for amounts associated with the Company’s operating lease liabilities were approximately $ 7.6 million and $ 6.5 million, respectively.

Cash paid for amounts associated with the Company’s operating lease liabilities were classified as operating activities in the consolidated statement of cash flows.

The following table shows the Company’s undiscounted future fixed payment obligations under the Company’s recognized operating leases and a reconciliation to the operating lease liabilities as of September 30, 2022:

Remainder of Fiscal 2023

Fiscal 2024 13,845

Fiscal 2025 12,625

Fiscal 2026 8,612

Fiscal 2027 4,922

Thereafter 18,544

6 unchanged sentences

Operating Leases

See Note 9 - Leases for future minimum lease payments under non-cancelable operating leases as of September 30, 2022.

See Note 8, "Leases" for future minimum lease payments under non-cancelable operating leases as of December 31, 2022.

Purchase Obligations

2 unchanged sentences

If we cancel all or part of the orders, we may still be liable to the contract manufacturers for the cost of the components purchased by the subcontractors to manufacture our products.

We periodically review the potential liability, and as of September 30, 2022, we have recorded a purchase obligation liability of $ 7.7 million related to component purchase commitments.

There have been no other significant liabilities for cancellations recorded as of September 30, 2022.

Our consolidated financial position and results of operations could be negatively impacted if we were required to compensate the contract manufacturers for any unrecorded liabilities incurred.

We periodically review the potential liability.

There have been no significant liabilities for cancellations recorded as of December 31, 2022.

Our consolidated financial position and results of operations could be negatively impacted if we were required to compensate the contract manufacturers for any unrecorded liabilities

We may be subject to additional purchase obligations for supply agreements and components ordered by our contract manufacturers based on manufacturing forecasts we provide them each month.

We estimate the amount of these additional purchase obligations to range from $ 1,697.7 million to $ 2,362.8 million as of September 30, 2022, depending upon the timing of orders placed for these components by our contract manufacturers.

We estimate the amount of these additional purchase obligations to range from $ 440.6 million to $ 916.5 million as of December 31, 2022, depending upon the timing of orders placed for these components by our contract manufacturers.

Other Obligations

As of September 30, 2022, the Company has other obligations of $ 6.7 million which consisted primarily of commitments related to research and development projects.

As of December 31, 2022, the Company has other obligations of $ 5.4 million which consisted primarily of commitments related to research and development projects.

Indemnification Obligations

6 unchanged sentences

The Company assesses its potential liability by analyzing specific litigation and regulatory matters using available information.

develops its views on estimated losses in consultation with inside and outside counsel, which involves a subjective analysis of potential results and outcomes, assuming various combinations of appropriate litigation and settlement strategies.

The Company develops its views on estimated losses in consultation with inside and outside counsel, which involves a subjective analysis of potential results and outcomes, assuming various combinations of appropriate litigation and settlement strategies.

Taking all of the above factors into account, the Company records an amount where it is probable that the Company will incur a loss and where that loss can be reasonably estimated.

25 unchanged sentences

The 2022 May Program expires on September 30, 2023.

The Company did not make any repurchases under the 2022 May Program during the three months ended September 30, 2022.

As of September 30, 2022 , the Company had $ 200 million available for share purchase under the 2022 May Program.

NOTE 12— ACCUMULATED OTHER COMPREHENSIVE INCOME

Comprehensive income consists of two components, net income and other comprehensive income.

Other comprehensive income refers to unrealized gains and losses that are recorded as an element of stockholders’ equity but are excluded from net income pursuant to GAAP.

For the three months ended September 30, 2022 and 2021, the Company’s accumulated other comprehensive income includes net unrealized gains and losses from the Company’s available-for-sale securities, respectively.

The Company did not make any repurchases under the 2022 May Program during the three and six months ended December 31, 2022.

As of December 31, 2022, the Company had $ 200 million available for share purchase under the 2022 May Program.

NOTE 11— STOCK BASED COMPENSATION

1 unchanged sentence

The Company’s 2020, 2010 and 2005 Equity Incentive Plan are described in the Company’s Annual Report.

As of September 30, 2022, the Company had 4,959,923 authorized shares available for future issuance under all of its stock incentive plans.

As of December 31, 2022, the Company had 4,960,216 authorized shares available for future issuance under all of its stock incentive plans.

Stock-Based Compensation

The following table shows total stock-based compensation expense included in the consolidated statements of operations and comprehensive income for the three months ended September 30, 2022 and 2021 (in thousands):

Three Months Ended September 30,

The following table shows total stock-based compensation expense included in the consolidated statements of operations and comprehensive income for the three and six months ended December 31, 2022 and 2021 (in thousands):

Three Months Ended December 31, Six Months Ended December 31,

2022 2021 2022 2021

Cost of revenues $ 13 $ 23 $ 24 $ 45

1 unchanged sentence

Sales, general and administrative 275 209 543 427

1,101 819 $ 2,148 $ 1,629

Stock Options

The following is a summary of option activity for the Company’s stock incentive plans for the three months ended September 30, 2022:

The following is a summary of option activity for the Company’s stock incentive plans for the six months ended December 31, 2022:

Common Stock Options Outstanding

4 unchanged sentences

Balance, June 30, 2022

2,112 $ 10.77 0.37 $ 584,982

Exercised ( 2,112 ) $ 10.77

Forfeitures and cancellations

Balance, September 30, 2022 — $ — — $ —

Vested as of September 30, 2022 — $ — — $ —

Vested and exercisable as of September 30, 2022 — $ — — $ —

During the three months ended September 30, 2022 and 2021, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.6 million and $ 0.5 million, respectively, as determined as of the date of option exercise.

As of September 30, 2022, the Company had no unrecognized compensation costs related to stock options.

The Company did no t grant any employee stock options during the three months ended September 30, 2022, and 2021.

Balance, December 31, 2022

Vested as of December 31, 2022

Vested and exercisable as of December 31, 2022

During the three months ended December 31, 2022 and 2021, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.0 million and $ 0.7 million, respectively, as determined as of the date of option exercise.

During the six months ended December 31, 2022 and 2021, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.6 million and $ 1.3 million, respectively, as determined as of the date of option exercise.

As of December 31, 2022, the Company had no unrecognized compensation costs related to stock options.

The Company did no t grant any employee stock options during the three and six months ended December 31, 2022, and 2021.

Restricted Stock Units (“RSUs”)

2 unchanged sentences

Non-vested RSUs, June 30, 2022

53,374 $ 222.24

RSUs granted 9,282 $ 265.89

1 unchanged sentence

RSUs canceled ( 740 ) $ 274.04

Non-vested RSUs, September 30, 2022 53,854 $ 245.11

The intrinsic value of RSUs vested in the three months ended September 30, 2022 and 2021 was $ 2.1 million and $ 3.4 million, respectively.

The total intrinsic value of all outstanding RSUs was $ 15.8 million as of September 30, 2022.

As of September 30, 2022, there were unrecognized compensation costs related to RSUs of $ 9.4 million which the Company expects to recognize over a weighted average period of 3.4 years.

Non-vested RSUs, December 31, 2022

51,210 $ 249.81

The intrinsic value of RSUs vested in the three months ended December 31, 2022 and 2021 was $ 0.6 million and $ 3.0 million, respectively.

The intrinsic value of RSUs vested in the six months ended December 31, 2022 and 2021 was $ 2.7 million and $ 6.0 million, respectively.

The total intrinsic value of all outstanding RSUs was $ 15.2 million as of December 31, 2022.

As of December 31, 2022, there were unrecognized compensation costs related to RSUs of $ 8.4 million which the Company expects to recognize over a weighted average period of 3.1 years.

NOTE 12— INCOME TAXES

The Company recorded tax provisions of $ 18.2 million for the three months ended September 30, 2022 as compared to $ 25.7 million for the three months ended September 30, 2021.

The decrease is primarily related to the reduction in profit before tax and changes in the mix of profit before tax for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021.

The Company recorded tax provisions of $ 21.7 million and $ 39.9 million for the three and six months ended December 31, 2022 as compared to $ 19.0 million and $ 44.8 million for the three and six months ended December 31, 2021.

The increased provision for the three months ended December 31, 2022 is attributable to an increase in taxable income in higher tax jurisdictions as compared to the prior year.

The overall reduction to the tax provision for the six months ended December 31, 2022 is primarily related to the overall decrease in income before income taxes for the period.

The Company’s estimated fiscal year 2023 effective tax rate, before discrete items, differs from the U.S.

2 unchanged sentences

tax related to our non-U.S.

operations under Global Intangible Low-Taxes Income (GILTI) rules.

As of September 30, 2022, the Company had approximately $ 33.4 million of unrecognized tax benefits, substantially all of which would, if recognized, affect its tax expense.

During the three months ended September 30, 2022, the Company recorded an increase of its unrecognized tax benefits of $ 1.1 million and a release of $( 0.4 ) million of its unrecognized tax benefits due to the lapse of the application statute of limitations for the quarter ended September 30, 2022 .

operations under Global Intangible Low-Taxed Income ("GILTI") rules.

As of December 31, 2022, the Company had approximately $ 33.5 million of unrecognized tax benefits, substantially all of which would, if recognized, affect its tax expense.

During the three months ended December 31, 2022, the Company recorded an increase of its unrecognized tax benefits of $ 1.5 million and a release of $ 1.3 million of its unrecognized tax benefits due to the lapse of the application statute of limitations for the quarter ended December 31, 2022.

The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statement of operations and comprehensive income.

Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets.

As of September 30, 2022, the Company had $ 3.6 million accrued interest related to uncertain tax matters.

The Company and one or more of its subsidiaries, files income tax returns in the United States federal jurisdiction, and various state, local, and foreign jurisdictions and is currently undergoing income tax examinations by the U.S.

As of December 31, 2022, the Company had $ 3.3 million accrued interest related to uncertain tax matters.

The Company and one or more of its subsidiaries, file income tax returns in the United States federal jurisdiction, and various state, local, and foreign jurisdictions and is currently undergoing income tax examinations by the U.S.

Internal Revenue Service and the Hong Kong Inland Revenue Department (“IRD”).

2 unchanged sentences

During fiscal years 2022, 2021, 2020, 2019, and 2018, the Company made a total of $ 3.0 million, $ 21.9 million, $ 15.5 million, $ 13.4 million, and $ 6.6 million of deposits with the Hong Kong IRD in connection with extending the statute of limitation for income tax examinations currently under audit for 2010-2016 tax years.

On March 2, 2022, the Company received notification that the Hong Kong IRD is seeking an additional $ 23.5 million deposit covering the 2016 tax year.

On March 2, 2022, the Company received notification that the Hong

Kong IRD is seeking an additional $ 23.5 million deposit covering the 2016 tax year.

The Company filed a formal protest in response to this notice and the Assessor's office agreed to a reduced deposit of $ 3.0 million which was remitted on May 23, 2022.

10 unchanged sentences

The Appeals Officer issued a Notice of Deficiency on August 3, 2022, which upheld the position of the Examination Division.

The Company has filed a petition with the United States Tax Court seeking to have the Notice of Deficiency reversed.

The Company filed a petition with the United States Tax Court seeking to have the Notice of Deficiency reversed on October 24, 2022, and the IRS filed its answer on December 27, 2022.

The Company strongly believes the position of the IRS with regard to this matter is without merit.

3 unchanged sentences

As the Company believes that the tax originally paid in fiscal 2015 and fiscal 2016 is correct, it has not provided a reserve for this tax uncertainty.

However, an adverse outcome may have a material and adverse effect on the Company’s results of operations

and financial condition.

However, an adverse outcome may have a material and adverse effect on the Company’s results of operations and financial condition.

NOTE 13— SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS

4 unchanged sentences

Revenues by product type are as follows (in thousands, except percentages):

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2022 2021 2022 2021

Enterprise technology $ 417,408 85 % $ 330,358 77 % $ 843,706 85 % $ 677,131 76 %

2 unchanged sentences

Revenues by geography based on customer’s ship-to destinations were as follows (in thousands, except percentages):

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2022 2021 2022 2021

North America (1)

4 unchanged sentences

Total revenues $ 493,571 100 % $ 431,565 100 % $ 991,654 100 % $ 890,479 100 %

(1) Revenue for the United States was $ 210.3 million and $ 190.6 million for the three months ended September 30, 2022 and 2021, respectively.

For the periods presented, there were no customers with an accounts receivable balance of 10% or greater of total accounts receivable or customers with net revenues of 10% or greater of total revenues.

(1) Revenue for the United States was $ 209.4 million and $ 172.3 million for the three months ended December 31, 2022 and 2021, respectively.

Revenue for the United States was $ 419.7 million and $ 362.8 million for the six months ended December 31, 2022 and 2021 , respectively.

For the periods presented, there were no customers with an accounts receivable balance of 10% or greater of total accounts receivable

or customers with net revenues of 10% or greater of total revenues.

NOTE 14— SUBSEQUENT EVENTS

On November 4, 2022, the Company's Board of Directors had approved a quarterly cash dividend of $ 0.60 per share payable on November 21, 2022 to shareholders of record at the close of business on November 14, 2022.

On January 31, 2023, the Company's Board of Directors had approved a quarterly cash dividend of $ 0.60 per share payable on February 21, 2023 to shareholders of record at the close of business on February 13, 2023.

Any future dividends will be subject to the approval of the Company’s Board of Directors.

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