What changed in this filing

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Item 9A. Controls and Procedures

2024-08-23 compared with 2023-08-25 · 123 added, 113 removed, 832 unchanged (22% of the section changed)

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Management, with the participation of the Company’s Chief Executive Officer and Chief Accounting and Finance Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2024.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the

time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

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Other Information

Not applicable.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Directors and Executive Officers and Corporate Governance

The information required by this Item 10 is incorporated by reference to our Proxy Statement for the 2023 Annual Meeting of Stockholders (to be filed with the Securities and Exchange Commission within 120 days of our June 30, 2023 fiscal year end) under the headings "Executive Officers," "Proposal One Election of Directors – Information Regarding Nominees,” "Proposal One

Election of Directors - Information Regarding Continuing Directors," and “Corporate Governance.”

The information required by this Item 10 is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders (to be filed with the Securities and Exchange Commission within 120 days of our June 30, 2024 fiscal year end) under the headings "Executive Officers," "Proposal One Election of Directors – Information Regarding Nominees,” "Proposal One Election of Directors - Information Regarding Continuing Directors," and “Corporate Governance.”

Executive Compensation

The information required by this Item 11 is incorporated by reference to our Proxy Statement for the 2023 Annual Meeting of Stockholders (to be filed with the Securities and Exchange Commission within 120 days of our June 30, 2023 fiscal year end) under the headings “Executive Compensation”, “Proposal One Election of Directors – Directors’ Compensation” and “Corporate Governance – Compensation Committee Interlocks and Insider Participation.”

The information required by this Item 11 is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders (to be filed with the Securities and Exchange Commission within 120 days of our June 30, 2024 fiscal year end) under the headings “Executive Compensation”, “Proposal One Election of Directors – Directors’ Compensation” and “Corporate

Governance – Compensation Committee Interlocks and Insider Participation.”

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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10-Q 10.15 November 14, 2011

Amended Technology License Agreement, dated as of September 1, 2010, between Ubiquiti Networks, Inc.

and Atheros Communications, Inc.

S-1 10.12 June 17, 2011

Third Amended and Restated Credit Agreement, dated as of March 30, 2021, by and among Ubiquiti Inc.

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10.1 April 7, 2023

Insider Trading Policy

List of subsidiaries of Ubiquiti Inc.

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Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C.

101.INS XBRL Instance Document X

101.SCH XBRL Taxonomy Schema Linkbase Document X

101.CAL XBRL Taxonomy Calculation Linkbase Document X

101.DEF XBRL Taxonomy Extension Definition Linkbase Document X

101.LAB XBRL Taxonomy Labels Linkbase Document X

101.PRE XBRL Taxonomy Presentation Linkbase Document X

Ubiquiti Inc.

Incentive Compensation Clawback Policy

101.INS Inline XBRL Instance Document X

101.SCH Inline XBRL Taxonomy Schema Linkbase Document X

101.CAL Inline XBRL Taxonomy Calculation Linkbase Document X

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X

101.LAB Inline XBRL Taxonomy Labels Linkbase Document X

101.PRE Inline XBRL Taxonomy Presentation Linkbase Document X

104 Cover Page Interactive Date File - (formatted as Inline XBRL and contained in Exhibit 101)

# Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.

† Portions of the exhibit have been omitted pursuant to an order granted by the Securities and Exchange Commission for confidential treatment.

~ In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No.

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The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Excess and obsolete inventory

As discussed in Note 2 to the consolidated financial statements, the Company’s inventories of $737,121 thousand as of June 30, 2023 are stated at the lower of actual cost, computed using the first-in, first-out method, and net realizable value (NRV).

Valuation of excess or obsolete inventory

As discussed in Note 2 to the consolidated financial statements, the Company’s inventories are stated at the lower of actual cost, computed using the first-in, first-out method, and net realizable value (NRV).

The Company reduces the value of its inventory for estimated obsolescence or lack of marketability by the difference between the cost of the affected inventory and the NRV.

The determination of excess or obsolete inventory is estimated based on a comparison of the quantity and cost of inventory on hand to the Company’s forecast of customer demand, which is dependent on various factors and requires the Company to use judgment in forecasting future demand for its products.

We identified the assessment of the value of certain finished goods inventory as a critical audit matter.

Subjective auditor judgement was required to evaluate the Company’s estimates of forecasted customer demand, which can be affected by market and economic conditions outside the Company’s control, including evaluating whether past consumption is indicative of future inventory demand.

The Company’s determination of the valuation of excess or obsolete inventory is based on a comparison of the quantity and cost of inventory on hand to anticipated demand, alternative uses, and other factors.

As of June 30, 2024, the Company’s inventories totaled $462.0 million.

We identified the assessment of the valuation of certain excess or obsolete finished goods inventory as a critical audit matter.

Subjective auditor judgement was required to evaluate the Company’s estimates of anticipated demand, alternative uses, and other factors, which can be affected by market and economic conditions outside the Company’s control.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s finished goods inventory valuation process.

This included controls related to the development of estimates of forecasted customer demand of inventory.

We evaluated current year estimates of forecasted customer demand used to determine the value of excess and obsolete inventory.

We selected certain inventory items and compared the Company’s prior year estimate of forecasted customer demand to actual sales results to assess the Company’s ability to accurately forecast and evaluate whether past consumption was indicative of future inventory demand.

This included controls related to the development of estimates of anticipated demand of inventory.

We evaluated current year estimates of anticipated demand used to determine the value of excess or obsolete inventory when they differed significantly from historical sales volumes.

We selected certain inventory items and compared the Company’s prior year estimate of anticipated demand to actual sales results to assess the Company’s ability to accurately forecast.

We have served as the Company’s auditor since 2016.

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Total assets $ 1,154,412 $ 1,406,399

Liabilities and Stockholders’ Deficit

Liabilities and Stockholders’ Equity (Deficit)

Current liabilities:

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Commitments and contingencies (Note 9)

Stockholders’ deficit:

Stockholders’ equity (deficit):

Preferred stock—$ 0.001 par value;

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Additional paid–in capital 10,645 4,721

Accumulated other comprehensive (loss) — ( 474 )

Accumulated deficit ( 120,514 ) ( 383,112 )

Total stockholders’ (deficit) ( 115,733 ) ( 382,876 )

Total liabilities and stockholders’ deficit $ 1,406,399 $ 844,712

Retained earnings (deficit) 84,355 ( 120,514 )

Total stockholders’ equity (deficit) 95,060 ( 115,733 )

Total liabilities and stockholders’ equity (deficit) $ 1,154,412 $ 1,406,399

See accompanying notes to consolidated financial statements.

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Net Income — — — 407,641 — 407,641

Other comprehensive income (loss) — — — — ( 475 ) ( 475 )

Reclassification adjustment for loss on investments included in net income — — — — 474 474

Stock options exercised 2,112 — 23 — — 23

Restricted stock units issued, net of tax withholdings 19,259 — ( 686 ) — — ( 686 )

Repurchase of Common Stock ( 2,193,853 ) ( 3 ) ( 1,779 ) ( 616,349 ) — ( 618,131 )

Share-based compensation expense — — 4,734 — — 4,734

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Net Income — — — 349,960 — 349,960

Reclassification adjustment for loss on investments included in net income — — — — 474 474

Stock options exercised 2,112 — 23 — — 23

Restricted stock units issued, net of tax withholdings 20,643 — ( 434 ) — — ( 434 )

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Net income $ 349,960 $ 407,641 $ 378,657

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 19,251 16,292 13,689

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Premium amortization and (discount accretion), net — — 88

Write off unamortized debt issuance costs — — 267

Provision for inventory obsolescence 13,391 2,413 ( 249 )

Provision for excess and obsolete inventory 23,905 13,391 2,413

Provision for loss on vendor deposits 20,019 ( 3,913 ) 8,907

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Accrued and other liabilities 32,617 ( 38,730 ) 58,589

Net cash (used in) provided by operating activities ( 145,428 ) 370,259 612,022

Net cash provided by (used in) operating activities 541,516 ( 145,428 ) 370,259

Cash Flows from Investing Activities:

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Tax withholdings related to net share settlements of restricted stock units ( 434 ) ( 686 ) ( 1,185 )

Net cash provided by (used in) financing activities 144,964 ( 472,273 ) ( 485,955 )

Net cash (used in) provided by financing activities ( 518,025 ) 144,964 ( 472,273 )

Net increase (decrease) in cash and cash equivalents 11,516 ( 21,398 ) ( 113,194 )

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Actual results could differ materially from those estimates.

Management has determined that it operates as one reportable and operating segment as the Company’s Chief Executive Officer, who is the Company’s chief operating decision maker, does not make decisions about resources to be allocated or assess performance on a disaggregated segment basis.

Management has determined that it operates as one reportable and operating segment as the Company’s Chief Executive Officer, who is the Company’s chief operating decision maker ("CODM"), does not make decisions about resources to be allocated or assess performance on a disaggregated segment basis.

Further information regarding Segments can be found in Note 13, to the consolidated financial statements.

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Transaction prices are typically based on contracted rates.

Although payment terms vary, payment is generally due from customers within 60 days of the invoice date and the contracts do not have significant financing components or include extended payment terms.

Although payment terms vary, payment is generally due from distribution customers within 60 days of the invoice date and the contracts do not have significant financing components or include extended payment terms.

The Company is directly responsible for fulfilling its performance obligations in contracts with customers and does not rely on another party to fulfill its promise.

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In certain circumstances, the Company may have recourse from its contract manufacturers for the replacement cost of defective products, which it also factors into its warranty liability assessment.

Allowance for Doubtful Accounts

The Company records its allowance for doubtful accounts based on its assessment of various factors, including historical experience, age of the accounts receivable balances, credit quality of the Company’s customers, current economic conditions and other factors that may affect the customers’ abilities to pay.

Allowance for Credit Losses

The Company records an allowance for its estimate of expected credit losses on its trade receivables based on its assessment of various factors, including historical experience, age of the accounts receivable balances, credit quality of the Company’s customers, current economic conditions and other factors that may affect the customers’ abilities to pay.

In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet its obligations to the Company, the Company records a specific allowance against amounts due from the customer, and thereby reduces the net recognized receivable to the amounts it reasonably believes will be collected.

The allowance for doubtful accounts activity was as follows (in thousands):

The changes in the estimate of expected credit losses for the Company's trade receivables were as follows (in thousands):

Year ended June 30,

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Beginning balance $ 92 $ 52 $ 47

Charged to (released from) expenses 40 5 7

Bad debt write-offs — — ( 163 )

Charged to expenses 406 40 5

Ending balance $ 498 $ 92 $ 52

Long Lived Assets

In accordance with the authoritative guidance for impairment or disposal of long-lived assets (ASC 360), we assess potential impairments to our long-lived assets, including property and equipment, when there is evidence that events or changes in

circumstances indicate that the carrying value may not be recoverable.

We recognize an impairment loss when the undiscounted cash flows expected to be generated by an asset or group of assets, are less than the asset’s carrying value.

Any required impairment loss would be measured as the amount by which the asset’s carrying value exceeds its fair value, and would be recorded as a reduction in the carrying value of the related asset and charged to results of operations.

Any required impairment

loss would be measured as the amount by which the asset’s carrying value exceeds its fair value, and would be recorded as a reduction in the carrying value of the related asset and charged to results of operations.

The Company did not recognize any material impairment losses for fiscal years 2024, 2023 and 2022.

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The Company accounts for income taxes in accordance with accounting guidance which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in its financial statements or tax returns.

Deferred tax assets and liabilities are determined based on the temporary difference between the financial statement carrying

amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Deferred tax assets and liabilities are determined based on the temporary difference between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or

The Company establishes valuation allowances when necessary to reduce deferred tax assets to the amount it expects to realize.

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The Company did not adopt any new accounting standards in fiscal 2024 that were significant to the Company.

Recently Adopted Accounting Pronouncements

There have been no accounting pronouncements or changes in accounting pronouncements that are significant or potentially significant to the Company.

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 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 jurisdictions.

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

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As of June 30, 2024 and 2023, the Company’s customer deposits were $ 1.3 million and $ 1.2 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.

As of June 30, 2024, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 20.3

million and $ 13.4 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 .

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

For fiscal years 2024 and 2023 we recognized revenues amounting to $ 17.9 million and $ 20.8 million, respectively from previous years' deferred revenue balances.

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Other Long-Term Liabilities

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

Deferred revenue — long-term $ 13,416 $ 7,774

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In addition, the Facilities include an option to request increases in the amounts of such credit facilities by up to an additional $ 500 million in the aggregate.

The loans under the Initial Term Loan Facility are payable in quarterly installments of $ 6.25 million per quarter, commencing with the quarter ending June 30, 2021.

On April 3, 2023, the Company as borrower and the Domestic Guarantors entered into a first amendment (the “First Amendment”) to the Third Amended and Restated Credit Agreement (as amended, the “Amended Credit Agreement”) with the financial institutions named as lenders therein and Wells Fargo.

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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 $ 2.7 million as at June 30, 2023, which are amortized as interest expense over the life of the Facilities.

The Company's unamortized balance of debt issuance costs are $ 1.7 million as of June 30, 2024, which are amortized as interest expense over the life of the Facilities.

Our debt consisted of the following (in thousands):

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Under the Amended Credit Agreement, revolving loans and swingline loans may be borrowed, repaid and reborrowed until March 30, 2026, at which time all amounts borrowed must be repaid.

The loans under the Initial Term Loan Facility is payable in quarterly installments of $ 6.25 million per quarter, commencing with the quarter ending June 30, 2021.

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.

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.

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.

The loans under the First Amendment Term Loan Facility bear interest, at the Company's option, at either (i) a floating rate per annum equal to Base Rate plus a margin of between 1.00 % and 1.75 %, 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 Adjusted Term SOFR rate for a specified period, plus a margin between 2.00 % and 2.75 %, depending on the Company's consolidated total leverage ratio as of the most recently ended fiscal quarter.

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The Amended Credit Agreement includes customary events of default that include, among other things, non-payment of principal, interest or fees, inaccuracy of representations and warranties, violation of covenants, cross default to certain other indebtedness, bankruptcy and insolvency events, material judgments, change of control and certain ERISA events.

The occurrence of an event of default could result in the acceleration of the obligations under the Amended Credit Agreement.

The occurrence of an event of default could result in the

acceleration of the obligations under the Amended Credit Agreement.

The Facilities

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Total operating lease liabilities $ 50,900

Weighted-average remaining lease term - operating leases Seven years

Weighted-average remaining lease term - operating leases Six years

Weighted-average discount rate - operating leases 3.5 %

NOTE 9— COMMITMENTS AND CONTINGENCIES

Operating Leases

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

Purchase Obligations

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Transition Tax

The Company has obligations of $ 67.5 million as of June 30, 2023, related to transition tax.

Payment of these obligations are expected to be $ 16.9 million for fiscal 2024, $ 22.5 million for fiscal 2025, and $ 28.1 million for fiscal 2026.

These obligations are included within Income tax payable and Long-term taxes payable on the consolidated balance sheets.

We have an obligation of $ 50.6 million as of June 30, 2024, related to the mandatory transition tax on accumulated foreign earnings from the 2017 Tax Cuts and Jobs Act.

We expect to make payments of $ 22.5 million and $ 28.1 million in the first quarter of fiscal 2025 and 2026, respectively, in relation to this obligation.

This obligation is included within Income tax payable and Long-term taxes payable on our consolidated balance sheets.

Other Obligations

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The Company may be involved, from time to time, in a variety of claims, lawsuits, investigations, and proceedings relating to contractual disputes, intellectual property rights, employment matters, regulatory compliance matters and other litigation matters relating to various claims that arise in the normal course of business.

The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated.

The Company determines whether an estimated loss from a

contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated.

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

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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.

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On October 26, 2022, the court stayed the case pending completion of the IPR.

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

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

On May 16, 2024, the court entered a stipulated 30 -day stay pending settlement discussions.

On June 18, 2024 and July 19, 2024, the court issued further stipulated 30 -day stays pending settlement discussions.

Those discussions are ongoing.

The Company plans to vigorously defend itself against these claims;

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The Company cannot currently estimate the possible loss or range of losses, if any, that it may experience in connection with this litigation.

Network-1 Technologies, Inc.

On October 5, 2022, Network-1 Technologies, Inc.

("Network-1") filed a patent infringement lawsuit against the Company in the District of Delaware, alleging that various Company products infringe United States Patent Number 6,218,930, which relates to 802.3af and 802.3at “ Power over Ethernet ” standards.

Network-1 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.

The Company cannot currently estimate the possible loss or range of losses, if any, that it may experience in connection with this litigation.

Intellectual Ventures I LLC v.

Ubiquiti Inc.

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;

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

The Company cannot currently estimate the possible loss or range of losses, if any, that it may experience in connection with this litigation.

NOTE 10— COMMON STOCK AND TREASURY STOCK

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On May 3, 2022, the Board of Directors of the Company approved a $ 200 million stock repurchase program (the “2022 May Program”).

Under the 2022 May Program, the Company is authorized to repurchase up to $ 200 million of common stock.

The 2022 May Program expires on September 30, 2023.

The Company did not make any repurchases under the 2022 May Program during the twelve months ended June 30, 2023.

As of June 30, 2023, the Company has $ 200 million available for share purchase under the 2022 May Program.

Under the 2022 May Program, the Company was authorized to repurchase up to $ 200 million of common stock.

The 2022 May Program expired on September 30, 2023, and the Company did not make any repurchases under the 2022 May Program.

The following table summarizes total activity related to our stock repurchase programs for the fiscal year end as indicated (in millions, except average price per share):

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Number of shares repurchased and retired — — 2.2

Average price per share N/A $ 281.75 $ 191.90

Aggregate purchase price N/A $ 618.1 $ 219.8

Average price per share N/A N/A $ 281.75

Aggregate purchase price N/A N/A $ 618.1

NOTE 11— SHARE-BASED COMPENSATION

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Stock Options

The following is a summary of option activity for the Company’s stock incentive plans for fiscal 2023:

Common Stock Options Outstanding

of Shares Weighted

Price Weighted

Life (Years) Aggregate

(In thousands)

Balance, June 30, 2022

2,112 $ 10.77 0.37 $ 584,982

Exercised ( 2,112 ) $ 10.77

Balance, June 30, 2023

Vested as of June 30, 2023

Vested and exercisable as of June 30, 2023

During fiscal 2024, 2023 and 2022, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.0 million, $ 0.6 million, and $ 2.3 million, respectively, as determined as of the date of option exercise.

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Congress has considered legislation that would defer the amortization requirement to later years, but as of June 30, 2024, the requirement has not been modified.

Accordingly, we have capitalized our research and development expenses for tax purposes, resulting in higher cash paid for taxes as compared to prior years.

Accordingly, the Company has capitalized research and development expenses for tax purposes, resulting in higher cash paid for taxes as compared to prior years.

The reconciliation of federal statutory income tax to the Company’s provision for income taxes is as follows:

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Effective tax rate 17.4 % 16.2 % 14.8 %

The Company’s effective tax rate increased 1.4 % to 16.2 % in fiscal 2023 from 14.8 % in fiscal 2022.

The Company recorded tax provisions of $ 78.7 million for fiscal 2023 as compared to $ 65.8 million for fiscal 2022.

Our effective tax rate and resulting provision for income taxes for fiscal years 2023 and 2022 reflect the full impact of the TCJA, which resulted in a reduction in the U.S.

statutory rate to 21% which is partially offset by a reduced tax benefit from foreign operations.

Significant components of the Company's deferred tax assets and liabilities as of June 30, 2024 are as follows (in thousands):

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Accrued interest and penalties are included within the related tax liability line in the Consolidated Balance Sheets.

As of June 30, 2023, the Company had $ 2.9 million accrued interest related to uncertain tax matters.

As of June 30, 2024 and 2023, the Company had $ 4.8 million and $ 2.9 million accrued interest related to uncertain tax matters, respectively.

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 (“IRS”) and the IRD.

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

All material consolidated federal, state and local income tax matters have been concluded for years through 2014.

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.

The IRS in its AOF continued to propose an adjustment to the Company’s income for its fiscal 2015 and fiscal 2016 tax years based on the IRS’ interpretation of certain obligations of the Company’s foreign subsidiaries under the Company’s credit facilities.

On May 12, 2020, the IRS issued a final Notice of Proposed Adjustment to the Company with respect to the 2015/2016 tax years.

On May 12, 2020, the IRS issued a final NOPA to the Company with respect to the 2015/2016 tax years.

The Company formally protested the adjustment and the case was moved from the Examination Division to the IRS Appeals Division where a formal review of the facts and the applicable law took place on May 9, 2022.

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

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

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

The Appeals Officer issued a Notice of

Deficiency on August 3, 2022, which upheld the position of the Examination Division.

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 Judgement.

The IRS responded to the Company's Motion on December 26, 2023 and filed a Cross-Motion for Summary Judgement.

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

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 continues to believe that its tax position filed with the IRS with regard to this matter is more likely than not to be sustained based on technical merits.

However, there can be no assurance that this matter will be resolved in the Company’s favor.

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 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 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.

The Company estimates 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.

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, respectively, 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 30, 2023, the Company received notification that the Hong Kong IRD is seeking an additional $ 0.3 million deposit covering the 2017 tax year.

The Company filed a formal protest in response to this notice and the Assessor's office agreed to a reduced deposit of under $ 0.1 million, which was remitted on May 18, 2023.

The refundable deposits are included within other long-term assets on our Consolidated Balance Sheets.

Between fiscal years 2018 and 2023, the Company made payments totaling a combined amount of $ 60.4 million as deposits, with the Hong Kong IRD in connection with extending the statute of limitation for income tax examinations currently under audit for 2010-2017 statutory tax years.

On March 27, 2024, the Company received notification that the Hong Kong IRD is seeking an additional $ 0.8 million deposit covering the 2018 statutory tax year.

The Company filed a formal protest in response to this notice and the Assessor's office agreed to a reduced deposit of under $ 0.1 million covering the 2018 statutory tax year.

The refundable deposits are included within other long-term assets on the Consolidated Balance Sheets.

The IRD is examining the Company’s claims that its revenue is generated through activities performed wholly outside of the Hong Kong tax jurisdiction and are therefore exempt from Hong Kong tax.

The Company is fully cooperating with the examination including submitting documentation in support of its position.

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 $ 60.1 million (net of foreign currency impact) of deposits made with IRD to be refunded upon completion of the audit.

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 the Company expects the $ 60.4 million (net of foreign currency impact) of deposits made with IRD to be refunded upon completion of the audit.

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

Management has determined that the Company operates as one reportable and operating segment as the Company’s Chief Executive Officer, who is the Company’s chief operating decision maker, does not make decisions about resources to be allocated or assess performance on a segment basis.

Management has determined that the Company operates as one reportable and operating segment as the Company’s Chief Executive Officer, who is the Company’s CODM, does not make decisions about resources to be allocated or assess performance on a segment basis.

Furthermore, the Company does not organize or report its costs on a segment basis.

17 unchanged sentences

(1) Revenue for the United States was $ 881.0 million, $ 855.3 million and $ 734.5 million for fiscal 2024, 2023, and 2022, respectively.

Customers with an accounts receivable balance of 10% or greater of total accounts receivable and customers with net revenues of 10% or greater of total revenues are presented below for the periods indicated:

Percentage of Revenues Percentage of Accounts Receivable

Year ended June 30, June 30,

2023 2022 2021 2023 2022

Customer A * * * * 11 %

* denotes less than 10%

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

NOTE 14 — SUBSEQUENT EVENTS

2 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-K

Item 9A. Controls and Procedures