What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-08 compared with 2026-02-06 · 108 added, 96 removed, 211 unchanged (49% of the section changed)

25 unchanged sentences

government has made numerous changes to the tariff rates including temporary pauses with a reduction in rates and product exclusions.

Further, recent judicial rulings have introduced significant additional uncertainty regarding the legal basis for U.S.

tariff policy.

In addition, the U.S.

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The magnitude and scope of the recent changes have increased our product costs.

For so long as such tariffs are in effect, we expect such tariffs and

related trade policy uncertainty will continue to affect our product costs, operating results and margins.

For so long as such tariffs are in effect, we expect such tariffs and related trade policy uncertainty will continue to affect our product costs, operating results and margins.

As a result, our historical and current gross profit margins may not be indicative of our gross profit margins for future periods.

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Although these mitigation efforts are intended to optimize our access to the components required to meet customer demand for our products, we have limited visibility into future sales, which makes it difficult to forecast our future results of operations.

These mitigation efforts have caused our inventory and vendor deposit balances to increase in the past, and they may cause such increases in the future.

These mitigation efforts have caused our inventory and vendor deposit balances to increase in the past, and

they may cause such increases in the future.

These mitigation efforts therefore significantly increase the risks of future material excess, obsolete inventory and related losses.

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Enterprise Technology and Service Provider Technology.

• Enterprise Technology includes our UniFi platforms, including UniFi Cloud Gateways, UniFi WiFi, UniFi Switches, UniFi Protect, UniFi Access, UniFi Talk, UniFi Connect and our AmpliFi platform.

• Enterprise Technology includes our UniFi platforms, including UniFi Cloud Gateways, UniFi WiFi, UniFi Switches, UniFi Protect, UniFi Access, UniFi Talk, UniFi Connect and accessories.

• Service Provider Technology includes our airMAX, UISP, EdgeMAX, UFiber, Wave, GPON and airFiber platforms, as well as embedded radio products and other 802.11 standard products including base stations, radios, backhaul equipment and CPE.

We sell our products and solutions globally to enterprises and service providers primarily through our extensive network of distributors and through direct sales through our webstores.

Sales to distributors accounted for 55% of our revenues during the six months ended December 31, 2025.

Direct sales accounted for 45% of our revenue during the six months ended December 31, 2025.

Sales to distributors accounted for 55% of our revenues during the nine months ended March 31, 2026.

Direct sales accounted for 45% of our revenue during the nine months ended March 31, 2026.

Cost of Revenues

Our cost of revenues is comprised primarily of the costs of procuring finished goods from our contract manufacturers and certain key

components that we consign to certain of our contract manufacturers.

Our cost of revenues is comprised primarily of the costs of procuring finished goods from our contract manufacturers and certain key components that we consign to certain of our contract manufacturers.

In addition, cost of revenues includes labor and other costs w hich include salary, benefits and share-based compensation, in addition to costs associated with tooling, testing and quality assurance, warranty costs, logistics costs, tariffs and excess and obsolete inventory write-downs.

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Our operations organization consists of employees and consultants engaged in the management of our contract manufacturers, new product introduction activities, logistical support and engineering.

Our gross profit has been, and may in the future be, influenced by several factors including changes in product mix, target end markets for our products, channel inventory levels, tariffs, and trade disputes, pricing due to competitive pressure, production costs and global demand for electronic components.

demand for electronic components.

Although we procure and sell our products mostly in U.S.

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To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

Our critical accounting policies are discussed in our Annual Report, and there have been no material changes other than that have been disclosed in Note 2, "Summary of Significant Accounting Policies" to our consolidated financial statements herein.

Our critical accounting policies are discussed in our Annual Report, and there have been no material changes other than that have been disclosed in Note 2, “Summary of Significant Accounting Policies” to our consolidated

financial statements herein.

As events continue to evolve our estimates may change materially in future periods.

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Results of Operations

Comparison of Three and Six Months Ended December 31, 2025 and 2024

Comparison of Three and Nine Months Ended March 31, 2026 and 2025

The following table summarizes our consolidated results of operations for the periods indicated, expressed in dollars and as a percentage of total revenues (in thousands, except percentages):

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

Three Months Ended March 31, Nine Months Ended March 31,

2026 2025 2026 2025

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Total share-based compensation $ 1,612 $ 1,848 $ 5,401 $ 5,337

Total revenues increased $215.0 million, or 36%, from $599.9 million in the three months ended December 31, 2024 to $814.9 million in the three months ended December 31, 2025.

Total revenues increased $398.4 million, or 35%, from $1,150.2 million in the six months ended December 31, 2024 to $1,548.6 million in the six months ended December 31, 2025.

The increase in revenues for the three months and six months ended December 31, 2025, as compared to the same periods in the prior year, was driven by an increase in revenue from both our Enterprise Technology platform and our Service Provider Technology platform.

Revenues by Product Type

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

Total revenues increased $124.0 million, or 19%, from $664.2 million in the three months ended March 31, 2025 to $788.2 million in the three months ended March 31, 2026.

Total revenues increased $522.4 million, or 29%, from $1,814.4 million in the nine months ended March 31, 2025 to $2,336.8 million in the nine months ended March 31, 2026.

The increase in revenues for the three and nine months ended March 31, 2026, as compared to the same periods in the prior year, was driven by an increase in revenue from our Enterprise Technology platform, offset in part by a decrease in revenue from our Service Provider Technology platform.

Revenues by Product Type, expressed in dollars (in thousands) and as a percentage of total revenues

Three Months Ended March 31, Nine Months Ended March 31,

2026 2025 2026 2025

(in thousands, except percentages) (in thousands, except percentages)

% of Revenues % of Revenues % of Revenues % of Revenues

Enterprise technology $ 717,850 91 % $ 585,723 88 % $ 2,103,988 90 % $ 1,574,108 87 %

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Total revenues $ 788,199 100 % $ 664,170 100 % $ 2,336,839 100 % $ 1,814,393 100 %

Enterprise Technology revenue increased $210.8 million, or 41%, from $518.2 million in the three months ended December 31, 2024 to $729.0 million in the three months ended December 31, 2025.

Enterprise Technology revenue increased $397.8 million, or 40%,

from $988.4 million in the six months ended December 31, 2024 to $1,386.1 million in the six months ended December 31, 2025.

The increase in Enterprise Technology revenue during the three months and six months ended December 31, 2025, as compared to the same periods in the prior year, was due to an increase in revenue from our Enterprise Technology platform across all regions.

Service Provider Technology revenue increased $4.2 million, or 5%, from $81.7 million in the three months ended December 31, 2024 to $85.9 million in the three months ended December 31, 2025.

Service Provider Technology revenue increased $0.7 million, or 0.4%, from $161.8 million in the six months ended December 31, 2024 to $162.5 million in the six months ended December 31, 2025.

The increase in Service Provider Technology in the three months ended December 31, 2025, as compared to the same period in the prior year, was due to an increase in revenues across all regions except South America.

The increase in Service Provider Technology in the six months ended December 31, 2025, as compared to the same period in the prior year, was due to an increase in revenues in the North America and EMEA regions.

Revenues by Geography

Enterprise Technology revenue increased $132.1 million, or 23%, from $585.7 million in the three months ended March 31, 2025 to

$717.9 million in the three months ended March 31, 2026.

Enterprise Technology revenue increased $529.9 million, or 34%, from $1,574.1 million in the nine months ended March 31, 2025 to $2,104.0 million in the nine months ended March 31, 2026.

The increase in Enterprise Technology revenue during the three and nine months ended March 31, 2026, as compared to the same periods in the prior year, was due to an increase in revenue from our Enterprise Technology platform across all regions.

Service Provider Technology revenue decreased $8.1 million, or 10%, from $78.4 million in the three months ended March 31, 2025 to $70.3 million in the three months ended March 31, 2026.

Service Provider Technology revenue decreased $7.4 million, or 3.1%, from $240.3 million in the nine months ended March 31, 2025 to $232.9 million in the nine months ended March 31, 2026.

The decrease in Service Provider Technology in the three months ended March 31, 2026, as compared to the same period in the prior year, was due to a decrease in revenues across all regions except North America and South America.

The decrease in Service Provider Technology in the nine months ended March 31, 2026, as compared to the same period in the prior year, was due to a decrease in revenues across all regions except North America.

Revenues by Geography, expressed in dollars (in thousands) and as a percentage of total revenues

We have determined the geographical distribution of our product revenues based on our customers’ ship-to destinations.

A majority of our sales are to distributors who either sell to resellers or directly to end customers, who may be located in different countries than the initial ship-to destination.

The following are our revenues by geography for the three and six months ended December 31, 2025 and 2024 (in thousands, except percentages):

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

The following are our revenues by geography for the three and nine months ended March 31, 2026 and 2025 (in thousands, except percentages):

Three Months Ended March 31, Nine Months Ended March 31,

2026 2025 2026 2025

(in thousands, except percentages)

% of Revenues % of Revenues % of Revenues % of Revenues

North America (1)

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Total revenues $ 788,199 100 % $ 664,170 100 % $ 2,336,839 100 % $ 1,814,393 100 %

(1) Revenue for the United States was $388.3 million and $296.1 million for the three months ended December 31, 2025 and 2024, respectively.

Revenue for the United States was $739.6 million and $544.8 million for the six months ended December 31, 2025 and 2024, respectively.

(1) Revenue for the United States was $374.1 million and $298.5 million for the three months ended March 31, 2026 and 2025, respectively.

Revenue for the United States was $1,113.7 million and $843.3 million for the nine months ended March 31, 2026 and 2025, respectively.

North America

Revenues in North America increased by $121.9 million, or 38%, from $321.6 million in the three months ended December 31, 2024 to $443.6 million in the three months ended December 31, 2025 and increased by $233.5 million, or 39%, from $592.9 million in the six months ended December 31, 2024 to $826.4 million in the six months ended December 31, 2025.

The increase in North America revenues during the three months and six months ended December 31, 2025, as compared to the same periods in the prior year, was due to increased revenue from both our Enterprise Technology products and our Service Provider Technology products.

Revenues in North America increased by $87.5 million, or 27%, from $322.7 million in the three months ended March 31, 2025 to $410.2 million in the three months ended March 31, 2026 and increased by $321.0 million, or 35%, from $915.6 million in the nine months ended March 31, 2025 to $1,236.6 million in the nine months ended March 31, 2026.

The increase in North America revenues during the three and nine months ended March 31, 2026, as compared to the same periods in the prior year, was due to increased revenue from both our Enterprise Technology products and our Service Provider Technology products.

Europe, the Middle East, and Africa (“EMEA”)

Revenues in EMEA increased by $72.1 million, or 35%, from $208.6 million in the three months ended December 31, 2024 to $280.7 million in the three months ended December 31, 2025 and increased by $130.4 million, or 32%, from $413.5 million in the six months ended December 31, 2024 to $543.8 million in the six months ended December 31, 2025.

The increase in EMEA revenues during the three months and six months ended December 31, 2025, as compared to the same periods in the prior year, was due to increased revenue from both our Enterprise Technology products, and our Service Provider Technology products.

Revenues in the Asia Pacific region increased by $11.4 million, or 26%, from $43.1 million in the three months ended December 31, 2024 to $54.5 million in the three months ended December 31, 2025 and increased by $23.6 million, or 28%, from $84.0 million in the six months ended December 31, 2024 to $107.6 million in the six months ended December 31, 2025.

The increase in Asia Pacific revenues during the three months ended December 31, 2025, as compared to the same period in the prior year, was due to increased revenue from both our Enterprise Technology products, and Service Provider Technology products.

The increase in Asia Pacific revenues during the six months ended December 31, 2025, as compared to the same period in the prior year, was due to increased revenue from our Enterprise Technology products, offset in part by decreased revenue from our Service Provider Technology products.

Revenues in EMEA increased by $21.6 million, or 8%, from $282.1 million in the three months ended March 31, 2025 to $303.8 million in the three months ended March 31, 2026 and increased by $152.0 million, or 22%, from $695.6 million in the nine months ended March 31, 2025 to $847.6 million in the nine months ended March 31, 2026.

The increase in EMEA revenues during the three and nine months ended March 31, 2026, as compared to the same periods in the prior year, was due to increased revenue from our Enterprise Technology products, offset in part by a decline in revenues from our Service Provider Technology products.

Revenues in the Asia Pacific region increased by $5.7 million, or 15%, from $37.5 million in the three months ended March 31, 2025 to $43.2 million in the three months ended March 31, 2026 and increased by $29.3 million, or 24%, from $121.5 million in the nine

months ended March 31, 2025 to $150.8 million in the nine months ended March 31, 2026.

The increase in Asia Pacific revenues during the three and nine months ended March 31, 2026, as compared to the same periods in the prior year, was due to increased revenue from our Enterprise Technology products, offset in part by a decline in revenues from our Service Provider Technology products.

South America

Revenues in South America increased by $9.5 million, or 36%, from $26.6 million in the three months ended December 31, 2024 to $36.1 million in the three months ended December 31, 2025 and increased by $11.0 million, or 18%, from $59.8 million in the six months ended December 31, 2024 to $70.8 million in the six months ended December 31, 2025.

The increase in South America revenues during the three months and six months ended December 31, 2025, as compared to the same periods in the prior year, was due to an increase in revenue from our Enterprise Technology products, offset in part by decreased revenue from our Service Provider Technology products.

Gross profit margin increased to 46% in the three months ended December 31, 2025, compared to 41% in the three months ended December 31, 2024 and increased to 46% in the six months ended December 31, 2025, compared to 42% in the six months ended December 31, 2024.

The increase in gross profit margin for the three months ended December 31, 2025, as compared to the comparable prior year period, was primarily driven by favorable product mix, lower shipping costs, lower excess and obsolete inventory charges, offset in part by higher tariff costs.

The increase in gross profit margin for the six months ended December 31, 2025, as compared to the comparable prior year period, was primarily driven by favorable product mix, lower shipping costs, excess and obsolete inventory charges, and warehouse-related expenses, offset in part by higher tariff costs.

Revenues in South America increased by $9.2 million, or 42%, from $21.8 million in the three months ended March 31, 2025 to $31.1 million in the three months ended March 31, 2026 and increased by $20.2 million, or 25%, from $81.7 million in the nine months ended March 31, 2025 to $101.9 million in the nine months ended March 31, 2026.

The increase in South America revenues during the three months ended March 31, 2026, as compared to the same period in the prior year, was due to an increase in revenues from both our Enterprise Technology products and Service Provider Technology products.

The increase in South America revenues during the nine months ended March 31, 2026, as compared to the same period in the prior year, was due to an increase in revenues from our Enterprise Technology products, offset in part by a decline in revenues from our Service Provider Technology products.

Gross profit margin increased to 47% in the three months ended March 31, 2026, compared to 45% in the three months ended March 31, 2025 and increased to 46% in the nine months ended March 31, 2026, compared to 43% in the nine months ended March 31, 2025.

The increase in gross profit margin for the three months ended March 31, 2026, as compared to the comparable prior year period, was primarily driven by favorable product mix, reduced charges for excess and obsolete inventory, lower shipping costs and other indirect costs.

These positive factors were offset in part by higher tariff costs.

The increase in gross profit margin for the nine months ended March 31, 2026, as compared to the comparable prior year period, was primarily driven by favorable product mix, lower shipping costs, reduced charges for excess and obsolete inventory and other indirect costs.

These positive factors were offset in part by higher tariff costs.

Operating Expenses

Research and Development

Research and development (“R&D”) expenses increased by $10.9 million, or 27%, from $40.0 million in the three months ended December 31, 2024 to $50.8 million in the three months ended December 31, 2025.

As a percentage of revenues, R&D expenses decreased from 7% for the three months ended December 31, 2024 to 6% for the three months ended December 31, 2025.

R&D expenses increased by $21.4 million, or 27%, from $78.0 million in the six months ended December 31, 2024 to $99.4 million in the six months ended December 31, 2025.

As a percentage of revenues, R&D expenses decreased from 7% for the six months ended December 31, 2024 to 6% for the six months ended December 31, 2025.

The increase in R&D expenses during the three and six months ended December 31, 2025, as compared to the comparable prior year periods, was primarily driven by higher employee-related expenses and prototype-related expenses.

Research and development (“R&D”) expenses increased by $7.6 million, or 17%, from $44.3 million in the three months ended March 31, 2025 to $51.8 million in the three months ended March 31, 2026.

As a percentage of revenues, R&D expenses remained consistent at 7% for both periods.

R&D expenses increased by $29.0 million, or 24%, from $122.2 million in the nine months ended March 31, 2025 to $151.2 million in the nine months ended March 31, 2026.

As a percentage of revenues, R&D expenses decreased from 7% for the nine months ended March 31, 2025 to 6% for the nine months ended March 31, 2026.

The increase in R&D expenses during the three months ended March 31, 2026, as compared to the comparable prior year period, was primarily driven by higher employee-related expenses, facility costs and software expenses, offset in part by lower depreciation.

The increase in R&D expenses during the nine months ended March 31, 2026, as compared to the comparable prior year period, was primarily driven by higher employee-related expenses, prototype-related expenses, facility costs and software expenses, offset in part by lower depreciation.

Sales, General and Administrative

Sales, general and administrative (“SG&A”) expenses increased by $1.8 million, or 6%, from $28.5 million in the three months ended December 31, 2024 to $30.3 million in the three months ended December 31, 2025.

As a percentage of revenues, SG&A expenses decreased from 5% for the three months ended December 31, 2024 to 4%, for the three months ended December 31, 2025.

SG&A expenses increased by $4.5 million, or 9%, from $52.9 million in the six months ended December 31, 2024 to $57.4 million in the six months ended December 31, 2025.

As a percentage of revenues, SG&A expenses decreased from 5% for the six months ended December 31, 2024 to 4%, for the six months ended December 31, 2025.

The increase in SG&A for the three months ended December 31, 2025, as compared to the comparable prior year period, was primarily due to higher marketing expenses and credit card processing fees arising from increased webstore sales, offset in part by lower bad debt expenses relating to a customer default.

The increase in SG&A for the six months ended December 31, 2025, as compared to the comparable prior year period, was primarily due to higher fees associated with webstore credit card processing, driven by higher webstore sales, marketing expenses, professional fees, and payroll expenses, offset in part by lower bad debt expenses relating to a customer default.

Sales, general and administrative (“SG&A”) expenses increased by $3.3 million, or 13%, from $24.8 million in the three months ended March 31, 2025 to $28.1 million in the three months ended March 31, 2026.

As a percentage of revenues, SG&A expenses remained consistent at 4% for both periods.

SG&A expenses increased by $7.8 million, or 10%, from $77.6 million in the nine months ended March 31, 2025 to $85.5 million in the nine months ended March 31, 2026.

As a percentage of revenues, SG&A expenses remained consistent at 4% for both periods.

The increase in SG&A for the three months ended March 31, 2026, as compared to the comparable prior year period, was primarily attributable to higher credit card processing fees associated with higher webstore sales, higher professional fees, software expenses, marketing expenses and employee-related expenses, offset in part by lower facility costs.

The increase in SG&A for the nine months ended March 31, 2026, as compared to the comparable prior year period, was primarily attributable to higher credit card processing

fees associated with higher webstore sales, higher marketing expenses, professional fees, software expenses and employee-related expenses, offset in part by lower bad debt expenses relating to a customer default.

Interest Expense and Other, net

Interest expense and other, net ("I&O") expenses decreased $9.9 million, or 86% from $11.4 million in the three months ended December 31, 2024 to $1.6 million in the three months ended December 31, 2025.

As a percentage of revenue, I&O decreased from 2% for the three months ended December 31, 2024 to 0% for the three months ended December 31, 2025.

I&O expenses decreased $17.2 million, or 78% from $22.0 million in the six months ended December 31, 2024 to $4.8 million in the six months ended December 31, 2025.

As a percentage of revenue, I&O decreased from 2% for the six months ended December 31, 2024 to 0% for the six months ended December 31, 2025.

The decrease in I&O expenses during both the three and six months ended December 31, 2025, as compared to the comparable prior year periods, was primarily due to lower interest expense, driven by a decrease in borrowings and lower interest rates, and lower foreign exchange losses.

Interest expense and other, net (“I&O”) expenses decreased $4.8 million, or 88% from $5.4 million in the three months ended March 31, 2025 to $0.7 million in the three months ended March 31, 2026.

As a percentage of revenue, I&O decreased from 1% for the three months ended March 31, 2025 to 0% for the three months ended March 31, 2026.

I&O expenses decreased $22.0 million, or 80% from $27.4 million in the nine months ended March 31, 2025 to $5.4 million in the nine months ended March 31, 2026.

As a percentage of revenue, I&O decreased from 2% for the nine months ended March 31, 2025 to 0% for the nine months ended March 31, 2026.

As of March 31, 2026, the Company repaid all of its outstanding debt.

The decrease in I&O expenses during the three months ended March 31, 2026, as compared to the comparable prior year period, was primarily attributable to lower interest expense, driven by a decrease in borrowings and lower interest rates, offset in part by higher foreign exchange losses.

The decrease in I&O expenses during the nine months ended March 31, 2026, as compared to the comparable prior year period, was primarily attributable to lower interest expense driven by a decrease in borrowings and lower interest rates.

Provision for Income Taxes

Our provision for income taxes increased $27.1 million, or 89%, from $30.6 million for the three months ended December 31, 2024 to $57.7 million for the three months ended December 31, 2025.

Our effective tax rate increased to 19.8% for the three months ended December 31, 2025 as compared to 18.3% for the three months ended December 31, 2024.

Our provision for income taxes increased $47.2 million, or 77%, from $61.2 million for the six months ended December 31, 2024 to $108.4 million for the six months ended December 31, 2025.

Our effective tax rate increased from 18.8% for the six months ended December 31, 2024 to 19.7% for the six months ended December 31, 2025.

The change in effective tax rates for the three and six months ended December 31, 2025, as compared to the same periods in the prior year, was primarily driven by a change in the mix of income earned in various tax jurisdictions as well as in the mix of income eligible for the Foreign-Derived Intangible Income (“FDII”) rules and subject to the Global Intangible Low-Taxes Income ("GILTI") and Pillar Two rules.

Our provision for income taxes increased $15.2 million, or 37%, from $41.0 million for the three months ended March 31, 2025 to $56.2 million for the three months ended March 31, 2026.

Our effective tax rate increased from 18.5% for the three months ended March 31, 2025 to 19.4% for the three months ended March 31, 2026.

Our provision for income taxes increased $62.4 million, or 61%, from $102.2 million for the nine months ended March 31, 2025 to $164.6 million for the nine months ended March 31, 2026.

Our effective tax rate increased from 18.7% for the nine months ended March 31, 2025 to 19.6% for the nine months ended March 31, 2026.

The change in effective tax rates for the three and nine months ended March 31, 2026, as compared to the same periods in the prior year, was primarily driven by a change in the mix of income earned in various tax jurisdictions as well as in the mix of income eligible for the Foreign-Derived Intangible Income rules and subject to the Global Intangible Low-Taxes Income and Pillar Two rules.

Liquidity and Capital Resources

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Our principal source of liquidity are cash and cash equivalents, cash generated by operations and the availability of additional funds under the Facilities.

We had cash and cash equivalents of $302.8 million and $149.7 million as of December 31, 2025 and June 30, 2025, respectively.

We had cash and cash equivalents of $368.7 million and $149.7 million as of March 31, 2026 and June 30, 2025, respectively.

Consolidated Cash Flow Data

The following table sets forth the major components of our consolidated statements of cash flows data for the periods presented:

Six Months Ended

Nine Months Ended

(in thousands)

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Cash Flows from Operating Activities

Net cash provided by operating activities during the six months ended December 31, 2025 consisted primarily of net income of $441.5 million, the benefit of decreasing vendor deposits of $7.2 million and non-cash adjustments of $23.9 million, partially offset by other changes in operating assets and liabilities that resulted in net cash outflows of $10.2 million.

This net change in operating assets and liabilities consisted primarily of a $39.7 million decrease in taxes payable, a $11.3 million increase in prepaid expenses and other assets, $3.7 million increase in inventory and $2.2 million decrease in net accounts payable and accrued liabilities, partially offset by a $30.3 million decrease in accounts receivable and $16.5 million increase in deferred revenue.

Net cash provided by operating activities during the six months ended December 31, 2024 consisted primarily of net income of $264.8 million, the benefit of decreasing vendor deposits of $42.9 million and non-cash adjustments of $30.1 million, further augmented by

other changes in operating assets and liabilities that resulted in net cash inflows of $48.4 million.

This net change in operating assets

and liabilities consisted primarily of a $149.3 million increase in net accounts payable and accrued liabilities and $9.0 million increase

in deferred revenue, partially offset by a $78.6 million increase in inventory, a 16.7 million decrease in taxes payable, a $10.3 million

increase in prepaid expenses and other assets and a $4.3 million increase in accounts receivable.

Net cash provided by operating activities during the nine months ended March 31, 2026 consisted primarily of net income of $675.4 million, non-cash adjustments of $32.3 million and the benefit of decreasing inventories of $15.5 million, offset in part by other changes in operating assets and liabilities that resulted in net cash outflows of $93.1 million.

This net change in operating assets and

liabilities was attributable primarily to a $41.3 million decrease in net accounts payable and accrued liabilities, a $39.2 million decrease in taxes payable, a $31.7 million increase in prepaid expenses and other assets, a $6.1 million increase in vendor deposits, and a $1.3 million increase in accounts receivable, offset in part by a $26.6 million increase in deferred revenue.

Net cash provided by operating activities during the nine months ended March 31, 2025 consisted primarily of net income of $445.2 million, the benefit of decreasing vendor deposits of $51.5 million and non-cash adjustments of $44.2 million, offset in part by other changes in operating assets and liabilities that resulted in net cash outflows of $31.3 million.

This net change in operating assets and liabilities consisted primarily of a $135.4 million increase in inventory, a $58.6 million increase in accounts receivable, a 23.3 million decrease in taxes payable and a $15.6 million increase in prepaid expenses and other assets, offset in part by a $181.2 million increase in net accounts payable and accrued liabilities and a $20.4 million increase in deferred revenue.

Cash Flows from Investing Activities

We used $8.8 million of cash in investing activities during the six months ended December 31, 2025.

We used $14.4 million of cash in investing activities during the nine months ended March 31, 2026.

Our investing activities consisted primarily of $14.4 million of capital expenditures.

We used $4.6 million of cash in investing activities during the six months ended December 31, 2024.

We used $7.4 million of cash in investing activities during the nine months ended March 31, 2025.

Our investing activities consisted primarily of $7.4 million of capital expenditures.

Cash Flows from Financing Activities

We used $300.5 million of cash in financing activities during the six months ended December 31, 2025.

During the six months ended December 31, 2025, we repaid $202.5 million under the Company's credit Facilities and used $96.8 million related to dividends paid on our common stock.

We used $374.8 million of cash in financing activities during the six months ended December 31, 2024.

During the six months ended December 31, 2024, we repaid $301.9 million under the Company’s credit Facilities and used $72.6 million related to dividends paid on our common stock.

We believe our existing cash and cash equivalents, in addition to the ability to draw cash under the existing Revolving Facility, and our intention to enter into a new credit facility before the existing one matures in March 2026, if needed, will be sufficient to meet our near-term working capital requirements, pay quarterly dividends, make repurchases of our common stock and meet capital expenditure needs for the next twelve months.

We believe that we have sufficient track record of managing working capital that we will be able to establish a new credit facility prior to the maturity of our existing credit facility satisfying our long-term liquidity requirements in the event that the cash from operations is not adequate to meet our cash needs.

However, this estimate is based on a number of assumptions that may prove to be wrong and we could exhaust our available cash and cash equivalents earlier than presently anticipated or need to rely more heavily on the credit facilities or other sources of liquidity to continue to meet our needs.

Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, the timing and extent of spending to support development efforts, the timing of new product introductions, market acceptance of our products, management of inventory and vendor deposits, the availability of additional funds under the credit facilities and overall economic conditions.

We used $396.9 million of cash in financing activities during the nine months ended March 31, 2026.

During the nine months ended March 31, 2026, we repaid $250.0 million under the Company's credit Facilities and used $145.2 million related to dividends paid on our common stock.

We used $477.6 million of cash in financing activities during the nine months ended March 31, 2025.

During the nine months ended March 31, 2025, we repaid $368.1 million under the Company’s credit Facilities and used $108.9 million related to dividends paid on our common stock.

We believe our existing cash and cash equivalents in addition to the ability to draw cash under the 2026 Revolving Facility, if needed, will be sufficient to meet our near-term working capital requirements, pay quarterly dividends, make repurchases of our common stock and meet capital expenditure needs for the next twelve months.

However, this estimate is based on a number of assumptions that may prove to be wrong and we could exhaust our available cash and cash equivalents earlier than presently anticipated or need to rely more heavily on the 2026 Revolving Facility or other sources of liquidity to continue to meet our needs.

Inflation and the current geopolitical environment have caused and may continue to cause significant volatility in financial markets and the domestic and global economy.

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Generally, the distributor is responsible for the freight costs associated with warranty returns, and we absorb the freight costs of replacing items under warranty.

In accordance with the Financial Accounting Standard Board’s (“FASB's”), Accounting Standards Codification ("ASC"), 450-20, Loss Contingencies, we record an accrual when we believe it is reasonably estimable and

probable based upon historical experience.

In accordance with the Financial Accounting Standard Board’s, Accounting Standards Codification, 450-20, Loss Contingencies, we record an accrual when we believe it is reasonably estimable and probable based upon

historical experience.

We record a provision for estimated future warranty work in cost of goods sold upon recognition of revenues, and we review the resulting accrual regularly and periodically adjust it to reflect changes in warranty estimates.

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We believe the fair value of these indemnification agreements is minimal.

We have not recorded any liabilities for these agreements as of December 31, 2025.

Based upon our historical experience and information known as of the date of this Quarterly Report on Form 10-Q, we do not believe it is likely that we will have material liability for the above indemnities as of December 31, 2025.

We have not recorded any liabilities for these agreements as of March 31, 2026.

Contractual Obligations and Off-Balance Sheet Arrangements

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We believe that we will be able to fund these obligations through our existing cash and cash equivalents, cash generated from operations and the availability of additional funds under the Facilities.

Repayment of Credit Facilities and Entry into New Credit Agreement

On February 27, 2026, we fully repaid all amounts outstanding under the Term Loan Facility.

The Facilities were scheduled to mature on March 30, 2026.

There were no amounts outstanding under the Revolving Facility at maturity.

See Note 7, “Debt” to the Consolidated Financial Statements.

On May 7, 2026, the Company, as borrower and certain domestic subsidiaries, as guarantors, entered into the 2026 Credit Agreement with PNC, the other Lenders named therein, and PNC, as administrative agent for the Lenders, pursuant to which PNC provided the Company with the 2026 Revolving Facility.

In addition, the 2026 Revolving Facility includes an option to request increases in the amounts of such credit facility by up to an additional $500 million in the aggregate.

See Note 15, “Subsequent Events” to the Consolidated Financial Statements.

Purchase Obligations

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

As of December 31, 2025, we had $1,263.8 million of purchase commitments with these third parties.

As of March 31, 2026, we had $1,226.7 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 December 31, 2025.

There have been no significant liabilities for current or anticipated cancellations recorded as of March 31, 2026.

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

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Other Obligations

We had other obligations of $4.9 million as of December 31, 2025, which consisted primarily of commitments related to research and development projects.

We had other obligations of $6.1 million as of March 31, 2026, which consisted primarily of commitments related to research and development projects.

Unrecognized Tax Benefits

As of December 31, 2025, we had $34.7 million of unrecognized tax benefits and an additional $6.6 million for accrued interest classified as non-current liabilities.

As of March 31, 2026, we had $34.7 million of unrecognized tax benefits and an additional $7.1 million for accrued interest classified as non-current liabilities.

At this time, we are unable to make a reasonably reliable estimate of timing of payments in individual years in connection with these tax liabilities.

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When used in this Report, the words “anticipates,” “believes,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and negatives of those terms are intended to identify forward-looking statements.

our products to address a variety of markets, our growth strategies, future prices, our competitive status, our efforts to mitigate shortages of components used to manufacture our products, the effects of government regulations, the impact of tariffs, the expected impact of taxes on our liquidity and results of operations, our compliance with laws and regulations, our expected future operating costs and expenses and expenditure levels for research and development, selling, general and administrative expenses, fluctuations in operating results, fluctuations in our stock price, our payment of dividends, our future liquidity and cash needs, and the adequacy of and our reliance on our sources of liquidity to meet such needs, our ability to access new sources of liquidity, the Facilities (as defined herein), future acquisitions of and investments in complimentary businesses, the expected impact of various accounting policies and rules adopted by the Financial Accounting Standards Board, the military conflict between Russia and Ukraine and the escalating tensions between China and Taiwan on our business and results of operations.

These are statements that relate to future periods and include statements about our future results, sources of revenue, our dividend, our continued growth, market trends, our product development, our introduction of new products, technological developments, the features, benefits and performance of our current and future products, the ability of our products to address a variety of markets, our growth strategies, future prices, our competitive status, our efforts to mitigate shortages of components used to manufacture our products, the effects of government regulations, the impact of tariffs, the expected impact of taxes on our liquidity and results of operations, our compliance with laws and regulations, our expected future operating costs and expenses and expenditure levels for research and development, selling, general and administrative expenses, fluctuations in operating results, fluctuations in our stock price, our payment of dividends, our future liquidity and cash needs, and the adequacy of and our reliance on our sources of liquidity to meet such needs, our ability to access new sources of liquidity, future acquisitions of and investments in complimentary businesses, the expected impact of various accounting policies and rules adopted by the Financial Accounting Standards Board, the military conflict between Russia and Ukraine and the escalating tensions between China and Taiwan on our business and results of operations.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

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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 2. Management’s Discussion and Analysis