
PART I—FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The unaudited financial statements for July 4, 2025, show significant revenue growth and a net loss, primarily due to a one-time debt extinguishment loss Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | July 4, 2025 | September 27, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $125,466 | $146,806 | | Short-term investments | $609,760 | $435,082 | | Inventories | $215,388 | $194,490 | | Total current assets | $1,127,355 | $903,078 | | Total assets | $2,003,272 | $1,755,640 | | Liabilities & Equity | | | | Short-term debt | $160,844 | $— | | Total current liabilities | $294,647 | $108,184 | | Long-term debt | $339,351 | $448,281 | | Total liabilities | $739,921 | $629,297 | | Total stockholders' equity | $1,263,351 | $1,126,343 | Condensed Consolidated Statements of Operations Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2025 | Q3 2024 | YoY Change | Nine Months 2025 | Nine Months 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $252,079 | $190,486 | +32.3% | $706,088 | $528,868 | +33.5% | | Gross Profit | $139,436 | $101,409 | +37.5% | $386,701 | $283,931 | +36.2% | | Income from Operations | $37,660 | $19,716 | +91.0% | $90,057 | $46,132 | +95.2% | | Net Income (Loss) | $36,534 | $19,939 | +83.2% | $(99,330) | $47,445 | N/A | | Diluted EPS | $0.48 | $0.27 | +77.8% | $(1.35) | $0.65 | N/A | - The nine-month net loss was primarily driven by a $193.1 million loss on the extinguishment of debt12 Condensed Consolidated Statements of Cash Flows Cash Flow Summary (Nine Months Ended, in thousands) | Cash Flow Activity | July 4, 2025 | June 28, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $165,732 | $100,311 | | Net cash used in investing activities | $(246,131) | $(148,615) | | Net cash provided by (used in) financing activities | $58,796 | $(8,434) | | Net Change in Cash | $(21,340) | $(56,648) | | Cash and cash equivalents - End of period | $125,466 | $117,304 | - Operating cash flow for the nine months ended July 4, 2025, increased significantly to $165.7 million, despite a net loss, primarily due to non-cash charges like a $193.1 million loss on debt extinguishment and $61.6 million in share-based compensation20147 Notes to Condensed Consolidated Financial Statements Revenue by Market (Nine Months Ended, in thousands) | Market | July 4, 2025 | June 28, 2024 | % Change | | :--- | :--- | :--- | :--- | | Industrial & Defense | $304,148 | $258,792 | +17.5% | | Data Center | $213,286 | $141,662 | +50.6% | | Telecom | $188,654 | $128,414 | +46.9% | | Total | $706,088 | $528,868 | +33.5% | - The company completed the acquisition of ENGIN-IC, Inc. on November 5, 2024, for approximately $14.4 million to expand MMIC design capabilities, and the RF Business from Wolfspeed, Inc. on December 2, 2023, for $75.0 million cash and $57.7 million stock394243 - On December 12, 2024, the company exchanged $288.8 million of 2026 Convertible Notes for $257.7 million of new 2029 Convertible Notes, common stock, and cash, resulting in a pre-tax debt extinguishment charge of $193.1 million65 Share-Based Compensation Expense (in thousands) | Period | Three Months Ended July 4, 2025 | Nine Months Ended July 4, 2025 | | :--- | :--- | :--- | | Cost of revenue | $1,728 | $6,376 | | Research and development | $7,109 | $25,235 | | Selling, general and administrative | $8,469 | $29,982 | | Total | $17,306 | $61,593 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes 33.5% revenue growth to strong market performance, improved gross margin, and increased operating expenses, maintaining strong liquidity despite a one-time debt loss Results of Operations Revenue Growth by Market (Nine Months Ended July 4, 2025 vs. June 28, 2024) | Market | Revenue Increase (in millions) | % Change | | :--- | :--- | :--- | | Industrial & Defense | $45.4 | +17.5% | | Data Center | $71.6 | +50.6% | | Telecom | $60.2 | +46.9% | | Total | $177.2 | +33.5% | - Gross margin for the nine months ended July 4, 2025, increased to 54.8% from 53.7%, driven by higher sales volume and decreased production supply costs137 - Research and development (R&D) expenses increased by 37.0% to $181.6 million, primarily due to higher employee-related costs, share-based compensation, and development supplies138 - Selling, general and administrative (SG&A) expenses increased by 9.3% to $115.1 million, mainly due to higher employee-related costs and share-based compensation139 Liquidity and Capital Resources - As of July 4, 2025, the company held $125.5 million in cash and cash equivalents and $609.8 million in liquid short-term investments154 - Net cash from operating activities for the nine months ended July 4, 2025, was $165.7 million, a significant increase from $100.3 million in the prior-year period146147 - The company exchanged a portion of its 2026 Convertible Notes for new 2029 Convertible Notes, resulting in net proceeds of approximately $63.7 million for general corporate purposes155 - Capital expenditures for the fourth fiscal quarter are anticipated to be between $17.0 million and $23.0 million, including investments for the newly acquired RTP Fab150 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces interest rate risk on investments and foreign currency risk on intercompany debt, mitigated by hedging contracts for Euro and Yen exposures - The company's primary market risks are interest rate fluctuations on its cash and investment portfolio and foreign currency exchange rate changes161 - A hypothetical 1% change in interest rates would impact annual interest income by approximately $7.4 million, based on balances as of July 4, 2025162 - To mitigate foreign currency risk on intercompany debt, the company held $33.0 million in notional forward foreign currency contracts (Euro and Yen) as of July 4, 2025164 Item 4. Controls and Procedures Management confirmed effective disclosure controls and procedures as of July 4, 2025, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period165 - No material changes occurred during the most recent fiscal quarter that affected internal control over financial reporting166 PART II—OTHER INFORMATION Item 1. Legal Proceedings The company was not involved in any material pending legal proceedings during the three and nine months ended July 4, 2025 - The company was not involved in any material pending legal proceedings during the reported periods86169 Item 1A. Risk Factors No material changes to risk factors were reported from the 2024 Annual Report on Form 10-K, except as updated in prior quarterly reports - There have been no material changes in the risk factors from those described in the 2024 Annual Report on Form 10-K, except as updated in previous 10-Q filings for the current fiscal year170 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the quarter, the company repurchased 12,442 shares of common stock, primarily for tax obligations related to restricted stock awards Issuer Purchases of Equity Securities (Quarter Ended July 4, 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 5 - May 2, 2025 | 4,850 | $99.29 | | May 3 - May 30, 2025 | 5,710 | $122.53 | | May 31 - July 4, 2025 | 1,882 | $129.02 | | Total | 12,442 | $114.45 | - The shares were withheld from employees to cover tax withholding obligations upon the vesting of restricted stock awards, known as "withhold to cover"172 Item 5. Other Information No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the third fiscal quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended July 4, 2025173 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including corporate governance documents, officer certifications, and XBRL data files