What changed in this filing

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Item 1. Financial Statements

2024-02-09 compared with 2023-11-03 · 129 added, 84 removed, 421 unchanged (34% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

September 30, 2023 June 30, 2023

December 31, 2023 June 30, 2023

Current assets:

1 unchanged sentence

Investments — short-term 61 109

Accounts receivable, net of allowance for doubtful accounts of $ 117 and $ 92 at September 30, 2023 and June 30, 2023, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 225 and $ 92 at December 31, 2023 and June 30, 2023, respectively

171,417 167,787

27 unchanged sentences

500,000,000 shares authorized:

60,447,556 and 60,441,896 issued and outstanding as of September 30, 2023 and June 30, 2023, respectively

60,448,287 and 60,441,896 issued and outstanding as of December 31, 2023 and June 30, 2023, respectively

Additional paid–in capital 7,403 4,721

6 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended September 30,

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

2023 2022 2023 2022

Revenues $ 464,954 $ 493,571 $ 928,032 $ 991,654

9 unchanged sentences

Provision for income taxes 20,724 21,676 40,053 39,856

Net income $ 87,750 $ 93,182

Net income and comprehensive income $ 82,116 $ 112,205 $ 169,866 $ 205,387

Net income per share of common stock:

4 unchanged sentences

Diluted 60,451 60,448 60,451 60,448

Other comprehensive income:

Unrealized losses on available-for-sale securities $ — $ ( 49 )

Other comprehensive loss — ( 49 )

Comprehensive income $ 87,750 $ 93,133

See accompanying notes to consolidated financial statements (unaudited).

2 unchanged sentences

(In thousands, except share data)

Three Months Ended September 30, 2023

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

Shares Amount Amount Amount Amount Amount

Three and Six Months Ended December 31, 2023

Common Stock Additional Paid-In Capital Retained Earnings (Deficit) Total Stockholders’ Equity (Deficit)

Shares Amount Amount Amount Amount

Balance at June 30, 2023

7 unchanged sentences

60,447,556 $ 60 $ 5,908 $ ( 69,032 ) $ ( 63,064 )

Three Months Ended September 30, 2022

Net Income — — — 82,116 82,116

Restricted stock units issued, net of tax withholdings 731 — ( 11 ) — ( 11 )

Share-based compensation expense — — 1,506 — 1,506

Dividends paid on Common Stock ($ 0.60 per share)

— — — ( 36,269 ) ( 36,269 )

Balances at December 31, 2023

60,448,287 $ 60 $ 7,403 $ ( 23,185 ) $ ( 15,722 )

Three and Six Months Ended December 31, 2022

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

11 unchanged sentences

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 )

Share-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 )

See accompanying notes to consolidated financial statements (unaudited).

2 unchanged sentences

(In thousands) (Unaudited)

Three Months Ended September 30,

Six Months Ended December 31,

Cash Flows from Operating Activities:

Net income $ 169,866 $ 205,387

Adjustments to reconcile net income to net cash (used in)/provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 9,641 7,636

5 unchanged sentences

Deferred taxes 242 131

Provision for sales returns ( 704 ) —

Other, net ( 31 ) 636

19 unchanged sentences

Tax withholdings related to net share settlements of restricted stock units ( 324 ) ( 594 )

Net cash used in financing activities ( 70,956 ) ( 33,027 )

Net increase (decrease) in cash and cash equivalents ( 6,299 ) 295

Net cash (used in) provided by financing activities ( 156,611 ) 34,416

Net (decrease) increase in cash and cash equivalents ( 17,225 ) 23,281

Cash and cash equivalents at beginning of period 114,826 136,224

21 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, 2023, included in its Annual Report on Form 10-K, as filed with the SEC on August 25, 2023 (the “Annual Report”).

The results of operations for the three months ended September 30, 2023 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, 2023 are not necessarily indicative of the results to be expected for any future periods.

NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

10 unchanged sentences

Actual results could differ materially from those estimates.

Recent Accounting Pronouncements Not Yet Effective

Segment Reporting

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting ( Topic 280 ) (“ASU 2023-07”), which enhances the segment disclosure requirements for public entities on an annual and interim basis.

Under this proposal, public entities will be required to disclose significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”) and included within each reported measure of segment profit or loss.

Additionally, current annual disclosures about a reportable segment’s profit or loss and assets will be required on an interim basis.

Entities will also be required to disclose information about the CODM’s title and position at the Company along with an explanation of how the CODM uses the reported measures of segment profit or loss in their assessment of segment performance and deciding whether how to allocate resources.

Finally, ASU 2023-07 requires all segment disclosures for public entities, even those with a single reportable segment.

The amendments in ASU 2023-07 will become effective on a retrospective basis for annual disclosures in the Company's fiscal year beginning July 1, 2024, with interim period disclosures required effective with the Company's fiscal year beginning July 1, 2025.

Early adoption of ASU 2023-07 is permitted.

We do not expect this ASU to have a significant impact on our disclosures or results of operations, cash flows, and financial condition.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740) ("ASU 2023-09"), which amends the existing guidance relating to the annual disclosures for accounting for income taxes.

ASU 2023-09 requires a public business entity to disclose a tabular rate reconciliation using specified categories and providing additional information for reconciling items that exceed a quantitative threshold.

In addition, ASU 2023-09 requires the disaggregation of federal, state and foreign income taxes paid (net of

funds received), with further disaggregation required for individual jurisdictions in which the income taxes paid exceed five percent of the Company's total income taxes paid.

The provision for income taxes in the Company's statement of operations will also be required to be disaggregated by federal, state and foreign.

The amendments in ASU 2023-09 will become effective for annual disclosures in the Company's fiscal year beginning July 1, 2025, with early adoption permitted.

The FASB indicated ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted.

We expect this ASU to only impact our disclosures with no impact to our results of operations, cash flows, and financial condition.

NOTE 3— REVENUES

8 unchanged sentences

Contract Balances

The timing of revenue recognition, billing and cash collections results in billed accounts receivable, deferred revenue primarily

attributable to PCS and customer deposits on the consolidated balance sheets.

The timing of revenue recognition, billing and cash collections results in billed accounts receivable, deferred revenue primarily attributable to PCS and customer deposits on the consolidated balance sheets.

Accounts receivable are recognized in the period our right to the consideration is unconditional.

2 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, 2023 and June 30, 2023, the Company’s customer deposits were $ 0.4 million and $ 1.2 million, respectively.

As of September 30, 2023, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 19.6 million and $ 7.9 million, respectively.

As of December 31, 2023 and June 30, 2023, the Company’s customer deposits were $ 2.6 million and $ 1.2 million, respectively.

As of December 31, 2023, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 18.2 million and $ 9.7 million, respectively.

As of June 30, 2023, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 17.9 million and $ 7.8 million, respectively.

We expect the deferred revenue to convert to revenue in two years .

For the quarters ended September 30, 2023 and September 30, 2022, we recognized revenues amounting to $ 6.7 million and $ 8.6 million, respectively from previous years' deferred revenue balances.

We expect the majority of our deferred revenue to convert to revenue in two years .

For the three and six months ended December 31, 2023 we recognized revenues amounting to $ 4.3 million and $ 11.0 million respectively from the deferred revenue balance as of June 30, 2023.

For the three and six ended December 31, 2022, we recognized revenues amounting to $ 5.0 million and $ 13.6 million respectively from the deferred revenue balance as of June 30, 2022.

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,

2023 2022 2023 2022

Net income $ 82,116 $ 112,205 $ 169,866 $ 205,387

10 unchanged sentences

Inventories consisted of the following (in thousands):

September 30, 2023 June 30, 2023

December 31, 2023 June 30, 2023

Finished goods $ 587,134 $ 643,499

3 unchanged sentences

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

September 30, 2023 June 30, 2023

December 31, 2023 June 30, 2023

Testing equipment $ 18,546 $ 18,265

10 unchanged sentences

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

September 30, 2023 June 30, 2023

December 31, 2023 June 30, 2023

Hong Kong Tax deposit (1)

5 unchanged sentences

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

(2) Accumulated amortization was $ 6.3 million and $ 5.9 million as of September 30, 2023, and June 30, 2023, respectively.

(2) Accumulated amortization was $ 6.7 million and $ 5.9 million as of December 31, 2023, and June 30, 2023, respectively.

Other Current Liabilities

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

September 30, 2023 June 30, 2023

December 31, 2023 June 30, 2023

Deferred revenue — short-term $ 18,207 17,911

10 unchanged sentences

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

September 30, 2023 June 30, 2023

December 31, 2023 June 30, 2023

Deferred revenue — long-term $ 9,742 $ 7,774

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 $ 8,745 $ 6,394

8 unchanged sentences

The obligations of the Company and certain domestic subsidiaries under the Amended Credit Agreement are required to be guaranteed by the Domestic Guarantors and are collateralized by substantially all assets (excluding intellectual property) of the Company and the Domestic Guarantors.

The Company's unamortized balance of debt issuance costs are $ 2.5 million as of September 30, 2023, which are amortized as interest expense over the life of the Facilities.

The Company's unamortized balance of debt issuance costs are $ 2.2 million as of December 31, 2023, which are amortized as interest expense over the life of the Facilities.

The Company's debt consisted of the following (in thousands):

September 30, 2023 June 30, 2023

December 31, 2023 June 30, 2023

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

12 unchanged sentences

Loans under the Facilities may be prepaid at any time without penalty.

The revolving loans and term loans under the Initial Term Loan Facility bear interest, at the Company’s option, at either (i) a floating rate per annum equal to the Base Rate (as defined below) 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 Adjusted Term SOFR (as defined below) 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.

consolidated total leverage ratio as of the most recently ended fiscal quarter.

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

14 unchanged sentences

The Facilities

As of September 30, 2023, $ 437.5 million was outstanding on the Initial Term Loan Facility, $ 243.8 million was outstanding on the First Amendment Term Loan Facility, and $ 365 million was outstanding on the Revolving Facility, leaving $ 335 million available on the Revolving Facility.

As of December 31, 2023, $ 431.3 million was outstanding on the Initial Term Loan Facility, $ 240.6 million was outstanding on the First Amendment Term Loan Facility, and $ 325 million was outstanding on the Revolving Facility, leaving $ 375 million available on the Revolving Facility.

Term Loan Facilities

During the three months ended September 30, 2023, the Company made aggregate payments of $ 23.8 million under the Term Loan Facilities, of which $ 9.4 million was repayment of principal and $ 14.4 million was payment of interest.

During the six months ended December 31, 2023, the Company made aggregate payments of $ 45.9 million under the Term Loan Facilities, of which $ 18.8 million was repayment of principal and $ 27.1 million was payment of interest.

Revolving Facility

Under the Amended Credit Agreement, during the three months ended September 30, 2023, the Company made aggregate payments

of $ 32.3 million under the Revolving Facility, of which $ 25 million was repayment of principal and $ 7.3 million was payment of interest.

The following table summarizes the Company’s estimated debt and interest payment obligations as of September 30, 2023, for the remainder of fiscal 2024 and future fiscal years (in thousands):

Under the Amended Credit Agreement, during the six months ended December 31, 2023, the Company made aggregate payments of $ 79.0 million under the Revolving Facility, of which $ 65 million was repayment of principal and $ 14.0 million was payment of interest.

The following table summarizes the Company’s estimated debt and interest payment obligations as of December 31, 2023, for the remainder of fiscal 2024 and future fiscal years (in thousands):

2024 (remainder)

4 unchanged sentences

Total $ 55,369 $ 108,890 $ 992,230 $ — $ — $ — $ 1,156,489

(1) Interest payments are calculated based on the applicable rates and payment dates as of September 30, 2023.

(1) Interest payments are calculated based on the applicable rates and payment dates as of December 31, 2023.

Although our interest rates on our debt obligations may vary, we have 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, 2023, 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, 2023, 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, 2023 and 2022 (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, 2023 and 2022 (in thousands):

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

2023 2022 2023 2022

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 the three months ended September 30, 2023 and 2022, were $ 0.2 million, respectively.

Total short-term costs for the three and six months ended December 31, 2023 and 2022, 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, 2023 and 2022, cash paid for amounts associated with the Company's operating lease liabilities were approximately $ 4.3 million and $ 3.6 million, respectively.

For the three months ended December 31, 2023 and 2022, cash paid for amounts associated with the Company's operating lease liabilities were approximately $ 4.3 million and $ 4.0 million, respectively.

For the six months ended December 31, 2023 and 2022, cash paid for amounts associated with the Company's operating lease liabilities were approximately $ 8.6 million and $ 7.6 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, 2023:

Remainder of Fiscal 2024

7 unchanged sentences

Operating Leases

See Note 8, "Leases" for future minimum lease payments under non-cancelable operating leases as of September 30, 2023.

See Note 8, "Leases" for future minimum lease payments under non-cancelable operating leases as of December 31, 2023.

Purchase Obligations

We subcontract with third parties to manufacture our products and supply key components.

As of September 30, 2023, we had $ 1,081.4 million of purchase commitments with these third parties.

As of December 31, 2023, we had $ 1,045.0 million of purchase commitments with these third parties.

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.

There have been no significant liabilities for current or anticipated cancellations recorded as of September 30, 2023.

There have been no significant liabilities for current or anticipated cancellations recorded as of December 31, 2023.

Our consolidated financial position and results of operations could be negatively impacted if we were required to compensate these third parties.

1 unchanged sentence

Transition Tax

We have obligations of $ 50.6 million as of September 30, 2023, related to the mandatory transition tax on accumulated foreign earnings from the 2017 Tax Cuts and Jobs Act.

We have obligations of $ 50.6 million as of December 31, 2023, related to the mandatory transition tax on accumulated foreign earnings from the 2017 Tax Cuts and Jobs Act.

Payment of these obligations are expected to be $ 22.5 million for fiscal 2025 and $ 28.1 million for fiscal 2026.

1 unchanged sentence

Other Obligations

As of September 30, 2023, the Company has other obligations of $ 5.4 million which consisted primarily of commitments related to research and development projects.

As of December 31, 2023, the Company has other obligations of $ 5.5 million which consisted primarily of commitments related to research and development projects.

Indemnification Obligations

13 unchanged sentences

On April 11, 2018, the Court stayed the Original Action pending completion of certain inter partes review (“IPR”) proce edings before the Patent Trial and Appeal Board (“PTO”).

The PTO invalidated asserted claims of two of the three Patents-in-Suit.

The PTO invalidated asserted claims of

two of the three Patents-in-Suit.

On June 16, 2021, Vivato filed a new suit against the Company in the Central District of California, alleging that various Company products infringe some of the non-invalidated claims of the ’728 Patent and U.S.

3 unchanged sentences

The Federal Circuit Court of Appeals affirmed the invalidity of the '231 Patent on May 18, 2023.

That ruling is now on appeal.

All claims asserted against the Company in the Original Action have been dismissed.

3 unchanged sentences

On October 3, 2023, the IPR with respect to the '376 Patent was terminated after the petitioners entered into a settlement agreement with Vivato.

The district court action presently remains stayed.

On November 10, 2023, the Company filed a new IPR petition with respect to the '376 Patent and a motion to reopen the prior IPR proceeding, which remains pending.

On December 4, 2023, the court lifted the stay.

Trial is currently scheduled for June 25, 2024.

The Company plans to vigorously defend itself against these claims;

11 unchanged sentences

On August 8, 2023, Intellectual Ventures I LLC ("IV") filed a patent infringement lawsuit against the Company in the District of Delaware, alleging that various Company products infringe United States Patent Number 8,594,122, which relates to 802.11ac “ Beamforming ” standards.

IV seeks compensatory and enhanced damages, attorneys' fees and costs, and pre- and post-judgment interest.The Company plans to vigorously defend itself against these claims;

IV seeks compensatory and enhanced damages, attorneys' fees and costs, and pre- and post-judgment interest.

The Company plans to vigorously defend itself against these claims;

however, there can be no assurance that the Company will prevail in the lawsuit.

8 unchanged sentences

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

As of September 30, 2023, the Company had 4,920,774 authorized shares available for future issuance under all of its stock incentive plans.

As of December 31, 2023, the Company had 4,921,319 authorized shares available for future issuance under all of its stock incentive plans.

Share-Based Compensation

The following table shows total share-based compensation expense included in the consolidated statements of operations and comprehensive income for the three months ended September 30, 2023 and 2022 (in thousands):

Three Months Ended September 30,

The following table shows total share-based compensation expense included in the consolidated statements of operations and comprehensive income for the three and six months ended December 31, 2023 and 2022 (in thousands):

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

2023 2022 2023 2022

Cost of revenues $ 35 $ 13 $ 69 $ 24

1 unchanged sentence

Sales, general and administrative 310 275 642 543

1,506 1,101 $ 3,006 $ 2,148

Stock Options

During the three months ended September 30, 2023 and 2022, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.0 million and $ 0.6 million, respectively, as determined as of the date of option exercise.

As of September 30, 2023, the Company had no unrecognized compensation costs related to stock options, and the Company did no t grant any employee stock options during the three months ended September 30, 2023, and 2022.

There were no options exercised under the Company’s stock incentive plans during the three months ended December 31, 2023 and 2022.

During the six months ended December 31, 2023 and 2022, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.0 million and $ 0.6 million, respectively, as determined as of the date of option exercise.

As of December 31, 2023, the Company had no unrecognized compensation costs related to stock options, and the Company did no t grant any employee stock options during the three and six months ended December 31, 2023, and 2022.

Restricted Stock Units (“RSUs”)

6 unchanged sentences

RSUs canceled ( 630 ) $ 290.47

Non-vested RSUs, September 30, 2023

Non-vested RSUs, December 31, 2023

71,732 $ 244.90

The intrinsic value of RSUs vested in the three months ended September 30, 2023 and 2022 was $ 1.3 million and $ 2.1 million, respectively.

The total intrinsic value of all outstanding RSUs was $ 10.6 million as of September 30, 2023.

As of September 30, 2023, there were unrecognized compensation costs related to RSUs of $ 12.8 million which the Company expects

to recognize over a weighted average period of 3.3 years.

The intrinsic value of RSUs vested in the three months ended December 31, 2023 and 2022 was $ 0.1 million and $ 0.6 million, respectively.

The intrinsic value of RSUs vested in the six months ended December 31, 2023 and 2022 was $ 1.4 million and $ 2.7 million, respectively.

The total intrinsic value of all outstanding RSUs was $ 10.0 million as of December 31, 2023.

As of December 31, 2023, there were unrecognized compensation costs related to RSUs of $ 11.4 million which the Company expects to recognize over a weighted average period of 3.0 years.

NOTE 12— INCOME TAXES

The Company recorded tax provisions of $ 19.3 million for the three months ended September 30, 2023 as compared to $ 18.2 million for the three months ended September 30, 2022.

The increased provision for the three months ended September 30, 2023 was primarily related to the increase in estimated effective tax rate due to changes in the mix of the income earned in various tax jurisdictions partially offset by a decrease in the Global Intangible Low-Taxed Income ("GILTI") inclusion for the U.S.

taxable income for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022, as well as a release of a reserve for unrecognized tax benefit due to statute of limitation during the three months ended September 30, 2022.

The Company recorded tax provisions of $ 20.7 million and $ 40.1 million for the three and six months ended December 31, 2023 as compared to $ 21.7 million and $ 39.9 million for the three and six months ended December 31, 2022.

Our effective tax rate increased to 20.2 % for the three months ended December 31, 2023 as compared to 16.2 % for the three months ended December 31, 2022.

Our effective tax rate increased from 16.3 % for the six months ended December 31, 2022 to 19.1 % for the six months ended December 31, 2023.

The change in effective tax rates for the three and six months ended December 31, 2023, as compared to the same period in the prior year, was primarily driven by a combination of changes in the mix of the income earned in various tax jurisdictions and a one-time release of a reserve for unrecognized tax benefit due to statute of limitation during the three and six months ended December 31, 2022.

The Company’s estimated fiscal year 2024 effective tax rate, before discrete items, differs from the U.S.

2 unchanged sentences

tax related to our non-U.S.

operations under GILTI rules.

As of September 30, 2023, 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, 2023, the Company recorded an increase of its unrecognized tax benefits of $ 1.0 million for the quarter ended September 30, 2023.

The Company did not release any unrecognized tax benefits for the quarter ended September 30, 2023.

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.

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

As of December 31, 2023, the Company had approximately $ 34.7 million of unrecognized tax benefits, substantially all of which would, if recognized, affect its tax expense.

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

As of September 30, 2023, the Company had $ 3.6 million accrued interest related to uncertain tax matters.

As of December 31, 2023, the Company had $ 4.3 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.

2 unchanged sentences

The majority of the Company's foreign jurisdictions have been concluded through 2014, with the exception of Hong Kong which has been reviewed through 2009 and is currently under audit for the 2010-2017 tax years.

In July 2018, the Company received a draft Notice of Proposed Adjustment (“Draft NOPA”) from the IRS proposing an adjustment to income for the fiscal 2015 and fiscal 2016 tax years based on its interpretation of certain obligations of the non-US entities under the 2015 and 2016 credit facility.

This Draft NOPA was superseded by an Acknowledgement of Facts (“AOF”) issued to the Company by the IRS on January 17, 2020.

4 unchanged sentences

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

On November 8, 2023, the Company filed a Motion for Summary Judgment.

The IRS responded to our Motion on December 26, 2023 and filed a Cross-Motion for Summary Judgment.

On January 22, 2024, the judge assigned to this case rejected both Motions for Summary Judgment.

As such, the Company is awaiting a trial date to be set which it currently expects to receive by the end of December 2024.

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

1 unchanged sentence

Regardless of whether the matter is resolved in the Company’s favor, the final resolution of this matter could be expensive and time-consuming to defend and/or settle.

We estimate the incremental tax liability associated with the income adjustment proposed in the AOF would be approximately $ 50.0 million, excluding potential interest and penalties, after adjusting for the impact of an adjustment on the amount of the transition tax on accumulated foreign earnings from the 2017 Tax Cuts and Jobs Act.

As the Company believes that the tax originally paid in fiscal 2015 and fiscal 2016 is correct and that this matter will more likely than not be sustained based on its technical merits, it has not provided a reserve for this tax uncertainty.

We estimate the incremental tax liability associated with the income adjustment proposed in the AOF would be approximately $ 50.0 million, excluding potential interest and penalties, after adjusting for the impact of an adjustment on the amount of transition tax payable in future years by the Company.

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.

6 unchanged sentences

The Company continues to believe that its tax positions filed with IRD are more likely than not to be sustained based on their technical merits and therefore no reserve has been provided for this tax uncertainty and we expect the $ 60.3 million (net of foreign currency impact) of deposits made with IRD to be refunded upon completion of the audit.

there can be no assurance that this matter will be resolved in the Company’s favor and therefore it's possible that an adverse outcome of the matter could have a material effect on the Company’s results of operations and financial condition.

However, there can be no assurance that this matter will be resolved in the Company’s favor and therefore it's possible that an adverse outcome of the matter could have a material 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,

2023 2022 2023 2022

Enterprise technology $ 391,492 84 % $ 417,408 85 % $ 771,586 83 % $ 843,706 85 %

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,

2023 2022 2023 2022

North America (1)

4 unchanged sentences

Total revenues $ 464,954 100 % $ 493,571 100 % $ 928,032 100 % $ 991,654 100 %

(1) Revenue for the United States was $ 209.2 million and $ 210.3 million for the three months ended September 30, 2023 and 2022, respectively.

(1) Revenue for the United States was $ 210.4 million and $ 209.4 million for the three months ended December 31, 2023 and 2022, respectively.

Revenue for the United States was $ 419.6 million and $ 419.7 million for the six months ended December 31, 2023 and 2022, 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 2, 2023, the Company's Board of Directors approved a quarterly cash dividend of $ 0.60 per share payable on November 20, 2023 to shareholders of record at the close of business on November 13, 2023.

On February 5, 2024, the Company's Board of Directors approved a quarterly cash dividend of $ 0.60 per share payable on February 26, 2024 to shareholders of record at the close of business on February 20, 2024.

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