Cautionary Statement Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Securities Exchange Act of 1934 and the Securities Act of 1933, which are subject to known and unknown risks and uncertainties. The forward-looking statements include statements concerning, among other things, our business strategy (including the influence of anticipated trends and developments in our business and the markets in which we operate), financial and operating results, revenues, gross margins, liquidity, operating expenses, effective tax rate and deferred tax assets, products, projected costs and capital expenditure requirements, research and development programs, sales and marketing initiatives, competition and impact of accounting standards. In some cases, you can identify these statements by forward-looking words, such as “may,” “likely,” “will,” “could,” “forecast,” “should,” “expect,” “estimate,” “plan,” “intend,” “anticipate,” “target,” “believe,” “potential,” “continue,” the negative or plural of these words and other comparable terminology. The forward-looking statements are only predictions based on our current expectations and our projections about future events. All forward-looking statements included in this Quarterly Report on Form 10-Q are based upon information available to us as of the filing date of this Quarterly Report on Form 10-Q. You should not place undue reliance on these forward-looking statements. We have no obligation to update any of these statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements, including risks related to general market trends, the benefits of acquisitions and investments, including our capital expenditures, our restructuring plans, our credit facilities, our supply chain, our tax burden, uncertainties related to public health-related crises, the interpretation and impacts of changes in export controls, tariffs and other trade barriers, military conflicts, political volatility, legislative changes and similar factors, our ability to execute our business strategy including any plans of expansion, and other risks discussed in the section titled “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 27, 2025 and in this Quarterly Report on Form 10-Q. You should carefully consider the numerous risks and uncertainties described under these sections. The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the accompanying notes contained in this Quarterly Report on Form 10-Q. Unless expressly stated or the context otherwise requires, the terms “we,” “our,” “us” and “FormFactor” refer to FormFactor, Inc. and its subsidiaries. Overview FormFactor, Inc., headquartered in Livermore, California, is a leading provider of essential test and measurement technologies along the full semiconductor product lifecycle — from characterization, modeling, reliability, and design de-bug, to qualification and production test. We provide a broad range of high-performance probe cards, analytical probes, probe stations, thermal systems, and cryogenic systems to both semiconductor companies and scientific institutions. Our products provide electrical and optical information from a variety of semiconductor and electro-optical devices and integrated circuits from early research, through development, to high-volume production. Customers use our products and services to optimize device performance and advance yield knowledge. We operate in two reportable segments consisting of the Probe Cards segment and the Systems segment. Sales of our probe cards and analytical probes are included in the Probe Cards segment, while sales of our probe stations, thermal systems and cryogenic systems are included in the Systems segment. We generated net income of $76.6 million in the first six months of fiscal 2026, compared to $15.5 million in the first six months of fiscal 2025. The increase in net income was primarily attributable to higher revenues, including record quarterly revenue in both the first and second quarters of fiscal 2026, and improved gross margins. These favorable factors were partially offset by higher restructuring charges associated with initiatives to better align our cost structure and support gross margin improvement. Recent Developments Tariff refunds — Beginning in 2025, the United States imposed additional tariffs on a wide range of imported products under various legal authorities, including the International Emergency Economic Powers Act (“IEEPA”). These tariffs were subsequently modified through incremental increases, decreases, pauses, and limited exemptions. On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under IEEPA were not authorized by the statute. While the ruling did not establish a refund process, the U.S. Court of International Trade subsequently ordered U.S. Customs 24 and Border Protection (“CBP”) to implement a process to administer refunds, which CBP began executing with the April 20, 2026 deployment of the Consolidated Administration and Processing of Entries (“CAPE”) system for certain IEEPA refund claims. We paid tariffs under IEEPA, and are following the established refund filing and validation process through the CAPE system, along with other importers seeking IEEPA refunds. As of June 27, 2026, we received approximately $0.8 million in IEEPA refunds. We anticipate refunds of approximately $7.0 million to $9.0 million in the third quarter of fiscal 2026. 2026 Restructuring Plans — In January 2026, we adopted restructuring plans that are intended to better align cost structure and support gross margin improvement to our target financial model, while also aligning manufacturing capabilities with current and anticipated business needs and our strategic priorities. As part of this restructuring plan, we are consolidating the manufacturing facilities located in Carlsbad and Baldwin Park, California to other sites. The Baldwin Park site manufactured through January 2026 and the Carlsbad site is expected to manufacture through December 2026. Factory Expansion — In June 2025, we purchased a manufacturing site in Farmers Branch, Texas. We expect to begin production at this site late in the fourth quarter of fiscal 2026, with a ramp to initial target production levels over the course of fiscal 2027. The facility expands our manufacturing footprint and is expected to support incremental production capacity and a more favorable cost structure overall, once ramped to initial target production levels. Critical Accounting Estimates Management’s Discussion and Analysis and Note 2, Summary of Significant Accounting Policies, to the Consolidated Financial Statements in our 2025 Annual Report on Form 10-K describe the significant accounting estimates and significant accounting policies used in preparation of the Consolidated Financial Statements. Actual results in these areas could differ from management’s estimates. During the six months ended June 27, 2026, there were no significant changes in our significant accounting policies or estimates from those reported in our Annual Report on Form 10-K for the year ended December 27, 2025. Results of Operations The following table sets forth our operating results as a percentage of revenues for the periods indicated: Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Revenues 100.0 % 100.0 % 100.0 % 100.0 % Cost of revenues 49.3 62.7 55.1 62.6 Gross profit 50.7 37.3 44.9 37.4 Operating expenses: Research and development 12.0 14.7 12.8 15.4 Selling, general and administrative 14.4 16.1 14.3 17.7 Factory start-up costs 1.9 0.2 2.4 0.1 Total operating expenses 28.3 31.0 29.5 33.2 Operating income 22.4 6.3 15.4 4.2 Interest income, net 1.0 1.3 1.0 1.6 Other income (expense), net 0.1 — 0.1 0.2 Income before income taxes and equity investment 23.5 7.6 16.5 6.0 Provision for income taxes 2.6 1.2 1.5 0.9 Income (loss) from equity investment 0.9 (1.8) 0.8 (0.9) Net income 21.8 % 4.6 % 15.8 % 4.2 % 25 Revenues by Segment and Market Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 (In thousands) Probe Cards $ 209,695 $ 162,108 $ 407,952 $ 298,628 Systems 48,547 33,690 76,434 68,526 $ 258,242 $ 195,798 $ 484,386 $ 367,154 Three Months Ended June 27, 2026 % of Revenues June 28, 2025 % of Revenues $ Change % Change (Dollars in thousands) Probe Cards Markets: Foundry & Logic $ 121,839 47.2 % $ 99,513 50.9 % $ 22,326 22.4 % DRAM 84,999 32.9 57,057 29.1 27,942 49.0 Flash 2,857 1.1 5,538 2.8 (2,681) (48.4) Systems Market: Systems 48,547 18.8 33,690 17.2 14,857 44.1 Total revenues $ 258,242 100.0 % $ 195,798 100.0 % $ 62,444 31.9 % Six Months Ended June 27, 2026 % of Revenues June 28, 2025 % of Revenues $ Change % Change (Dollars in thousands) Probe Cards Markets: Foundry & Logic $ 233,027 48.1 % $ 184,785 50.3 % $ 48,242 26.1 % DRAM 167,932 34.7 105,915 28.8 62,017 58.6 Flash 6,993 1.4 7,928 2.2 (935) (11.8) Systems Market: Systems 76,434 15.8 68,526 18.7 7,908 11.5 Total revenues $ 484,386 100.0 % $ 367,154 100.0 % $ 117,232 31.9 % Foundry & Logic — The increase in Foundry & Logic product revenues for the three and six months ended June 27, 2026, compared to the three and six months ended June 28, 2025, was driven by stronger probe-card demand for networking and high-performance compute microprocessor designs. DRAM — The increase in DRAM product revenues for the three and six months ended June 27, 2026, compared to the three and six months ended June 28, 2025, was primarily driven by increased demand for high-bandwidth memory (“HBM”) designs utilized in generative artificial intelligence applications, with additional contributions from higher demand for other non-HBM DRAM designs. Revenue growth from HBM products accounted for approximately 75% and 69% of the year-over-year increase in DRAM product revenues for the three- and six-month periods, respectively. Flash — The decrease in Flash product revenues for the three and six months ended June 27, 2026, compared to the three and six months ended June 28, 2025, was driven by decreased customer production activity and demand for our products. A portion of Flash product revenues during the period was associated with manufacturing activity at our Baldwin Park manufacturing facility, which was closed in connection with our 2026 Restructuring Plans. As a result of the facility closure and the expected growth of our other end markets, we expect Flash revenues to represent a smaller percentage of our overall revenue mix in future periods. Systems — The increase in Systems market revenues for the three months ended June 27, 2026, compared to the three months ended June 28, 2025, was primarily driven by sales of Triton, our recently introduced high-volume co-packaged optics (“CPO”) testing solution. The increase in Systems market revenues for the six months ended June 27, 2026, compared to the six months ended June 28, 2025, was also primarily driven by sales of Triton, partially offset by lower revenue from legacy product offerings as manufacturing capacity and customer demand increasingly shifted toward the Triton platform. 26 Revenues by Geographic Region Three Months Ended Six Months Ended June 27, 2026 % of Revenues June 28, 2025 % of Revenues June 27, 2026 % of Revenue June 28, 2025 % of Revenue (Dollars in thousands) Taiwan $ 94,421 36.6 % $ 52,879 27.0 % $ 165,261 34.1 % $ 98,241 26.8 % South Korea 73,424 28.4 57,129 29.2 153,986 31.8 100,300 27.3 United States 38,218 14.8 40,924 20.9 67,628 14.0 81,249 22.1 China 16,891 6.5 9,400 4.8 28,253 5.8 23,015 6.3 Europe 9,465 3.7 7,248 3.7 17,239 3.6 15,029 4.1 Malaysia 9,071 3.5 5,155 2.6 12,785 2.6 7,755 2.1 Singapore 6,737 2.6 6,679 3.4 17,012 3.5 12,928 3.5 Japan 4,805 1.9 14,666 7.5 13,087 2.7 24,985 6.8 Rest of the world 5,210 2.0 1,718 0.9 9,135 1.9 3,652 1.0 Total revenues $ 258,242 100.0 % $ 195,798 100.0 % $ 484,386 100.0 % $ 367,154 100.0 % Geographic revenue information is based on the location to which we ship the product. For example, if a certain Taiwan customer purchases through its U.S. subsidiary and requests the products to be shipped to an address in Taiwan, this sale will be reflected in the revenue for Taiwan rather than the U.S. Changes in revenues by geographic region for the three and six months ended June 27, 2026, compared to the three and six months ended June 28, 2025, were primarily attributable to changes in customer demand, product sales mix, and the timing of customer shipments and revenue recognition. Specifically, the changes in revenues by geographic region were attributable to the following: •Taiwan — Increased demand for our Foundry & Logic probe card products and increased demand for Triton, our recently introduced high-volume CPO testing platform within Systems, contributed to the increase in revenues. •South Korea — Increased demand for our DRAM probe card products, including those supporting HBM designs, contributed to the increase in revenues. •United States — Decreased demand for certain Foundry & Logic and Systems customers contributed to the decrease in revenue. •Japan — Decreased demand for legacy Systems products. Cost of Revenues and Gross Margins Cost of revenues consists primarily of manufacturing materials, compensation and benefits, shipping and handling costs, manufacturing-related overhead (including equipment costs, related occupancy, and computer services), warranty costs, inventory adjustments (including write-downs for inventory obsolescence), and amortization of certain intangible assets. Our manufacturing operations rely on a limited number of suppliers to provide key components and materials for our products, some of which are a sole source. We order materials and supplies based on backlog and forecasted customer orders. Tooling and setup costs related to changing manufacturing lots at our suppliers are also included in the cost of revenues. We expense all warranty costs, inventory provisions and amortization of certain intangible assets as cost of revenues. We have been executing on initiatives for gross margin improvements through operational effectiveness and financial discipline, including: •Deploying our workforce and existing manufacturing footprint more effectively, which included the execution of our 2026 Restructuring Plans. During the three and six months ended June 27, 2026, cost of revenues included $4.3 million and $25.8 million of restructuring costs, respectively, in connection with the 2026 Restructuring Plans. •Driving improvement in manufacturing yields in key process areas, innovating to reduce manufacturing spending, and reducing cycle times in key manufacturing operations. 27 Our gross profit and gross margin were as follows (dollars in thousands): Three Months Ended June 27, 2026 June 28, 2025 $ Change % Change Gross profit $ 130,922 $ 72,938 $ 57,984 79.5 % Gross margin 50.7 % 37.3 % Six Months Ended June 27, 2026 June 28, 2025 $ Change % Change Gross profit $ 217,716 $ 137,461 $ 80,255 58.4 % Gross margin 44.9 % 37.4 % Our gross profit and gross margin by segment were as follows (dollars in thousands): Three Months Ended June 27, 2026 June 28, 2025 Probe Cards Systems Corporate and Other Total Probe Cards Systems Corporate and Other Total Gross profit $ 114,056 $ 23,563 $ (6,697) $ 130,922 $ 62,068 $ 13,271 $ (2,401) $ 72,938 Gross margin 54.4 % 48.5 % 50.7 % 38.3 % 39.4 % 37.3 % Six Months Ended June 27, 2026 June 28, 2025 Probe Cards Systems Corporate and Other Total Probe Cards Systems Corporate and Other Total Gross profit $ 214,187 $ 34,165 $ (30,636) $ 217,716 $ 113,683 $ 28,786 $ (5,008) $ 137,461 Gross margin 52.5 % 44.7 % 44.9 % 38.1 % 42.0 % 37.4 % Probe Cards — For the three and six months ended June 27, 2026, gross profit and gross margins increased compared to the three and six months ended June 28, 2025, primarily due to increased revenue from a favorable product mix and higher factory utilization, which includes the impact of our gross margin initiatives described earlier. Systems — For the three and six months ended June 27, 2026, gross profit and gross margins increased compared to the three and six months ended June 28, 2025, primarily due to increased revenue from a favorable product mix on increased volumes, partially offset by an increase in manufacturing spending. Corporate and Other — Corporate and Other includes unallocated expenses relating to restructuring charges, net, stock-based compensation expense, and amortization of intangible assets and fixed asset fair value adjustments due to acquisitions, which are not used in evaluating the results of, or in allocating resources to, our reportable segments. The increase in Corporate and Other costs for the three and six months ended June 27, 2026, compared to the three and six months ended June 28, 2025, was primarily attributable to restructuring charges of $4.3 million and $25.8 million, respectively, incurred in connection with the 2026 Restructuring Plans. Overall — Gross profit and gross margins fluctuate with revenue levels, product mix, selling prices, factory loading, and material costs. For the three and six months ended June 27, 2026, compared to the three and six months ended June 28, 2025, gross profit and gross margins increased due to increased revenue from a favorable product mix and higher factory utilization, which includes the impact of our gross margin initiatives described earlier, partially offset by the restructuring charges incurred in connection with the 2026 Restructuring Plans. Cost of revenues included stock-based compensation expense as follows (in thousands): Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Stock-based compensation $ 1,726 $ 1,690 $ 3,567 $ 3,695 28 Research and Development Three Months Ended June 27, 2026 June 28, 2025 $ Change % Change (Dollars in thousands) Research and development $ 31,099 $ 28,793 $ 2,306 8.0 % % of revenues 12.0 % 14.7 % Six Months Ended June 27, 2026 June 28, 2025 $ Change % Change (Dollars in thousands) Research and development $ 61,879 $ 56,593 $ 5,286 9.3 % % of revenues 12.8 % 15.4 % Research and development expenses increased for the three months ended June 27, 2026, compared to the corresponding period in the prior year, primarily due to higher performance-based compensation, partially offset by lower project material costs, lower stock-based compensation expense, and lower general operating costs. For the six months ended June 27, 2026, research and development expenses increased compared to the corresponding prior-year period, primarily due to higher performance-based compensation and $1.3 million of restructuring charges incurred in connection with the 2026 Restructuring Plans. These increases were partially offset by lower project material costs, lower general operating costs, and lower stock-based compensation expense. A detail of the changes is as follows (in thousands): Three Months Ended June 27, 2026 compared to Three Months Ended June 28, 2025 Six Months Ended June 27, 2026 compared to Six Months Ended June 28, 2025 Employee compensation costs $ 3,953 7,133 Project material costs (809) (1,561) Stock-based compensation expense (570) (812) General operational costs (213) $ (671) Restructuring charges (55) 1,197 $ 2,306 $ 5,286 Research and development included stock-based compensation expense as follows (in thousands): Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Stock-based compensation expense $ 1,966 $ 2,536 $ 4,370 $ 5,182 29 Selling, General and Administrative Three Months Ended June 27, 2026 June 28, 2025 $ Change % Change (Dollars in thousands) Selling, general and administrative $ 37,165 $ 31,482 $ 5,683 18.1 % % of revenues 14.4 % 16.1 % Six Months Ended June 27, 2026 June 28, 2025 $ Change % Change (Dollars in thousands) Selling, general and administrative $ 69,457 $ 64,936 $ 4,521 7.0 % % of revenues 14.3 % 17.7 % Selling, general and administrative expenses increased for the three months ended June 27, 2026, compared to the corresponding period in the prior year, primarily due to higher employee compensation costs resulting from increased performance-based compensation, higher commission expense driven by increased revenue levels, and higher general operating costs. For the six months ended June 27, 2026, selling, general and administrative expenses increased compared to the corresponding prior-year period, primarily due to higher employee compensation costs resulting from increased performance-based compensation and higher commission expense driven by increased revenue levels, partially offset by lower restructuring charges and lower stock-based compensation expense. A detail of the changes is as follows (in thousands): Three Months Ended June 27, 2026 compared to Three Months Ended June 28, 2025 Six Months Ended June 27, 2026 compared to Six Months Ended June 28, 2025 Employee compensation costs $ 4,702 $ 7,917 Commission expenses 616 435 General operating expenses 485 (155) Stock-based compensation expense (199) (1,526) Restructuring charges 79 (2,150) $ 5,683 $ 4,521 Selling, general and administrative included stock-based compensation expense as follows (in thousands): Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Stock-based compensation expense $ 4,966 $ 5,165 $ 8,784 $ 10,310 Stock-based compensation expense was lower for the six months ended June 27, 2026, primarily due to the reversal of previously recognized equity compensation expense resulting from the departure of our former Chief Financial Officer in the first quarter of fiscal 2026. 30 Factory Start-Up Costs Three Months Ended June 27, 2026 June 28, 2025 $ Change % Change (Dollars in thousands) Factory start-up costs $ 4,859 $ 357 $ 4,502 1,261.1 % % of revenues 1.9 % 0.2 % Six Months Ended June 27, 2026 June 28, 2025 $ Change % Change (Dollars in thousands) Factory start-up costs $ 11,933 $ 357 $ 11,576 3,242.6 % % of revenues 2.4 % 0.1 % Factory start-up costs are costs associated with our newly purchased manufacturing site in Farmers Branch, Texas. The start-up costs consist of consulting costs, employee compensation costs, utilities, taxes and licenses, facility maintenance, and other expenses being incurred while the site is being brought to its intended use. These costs are expected to continue throughout the build-out, and will move to cost of revenues as the production ramps begin. Production ramps are expected to begin at this site late in the fourth quarter of fiscal 2026. Interest Income, Net Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 (Dollars in thousands) Interest Income $ 2,878 $ 2,734 $ 5,307 $ 6,150 Weighted average balance of cash and investments $ 335,104 $ 289,427 $ 320,304 $ 319,546 Weighted average yield on cash and investments 3.79 % 4.26 % 3.73 % 4.37 % Interest Expense $ 195 $ 92 $ 450 $ 191 Average debt outstanding $ 11,703 $ 12,827 $ 11,848 $ 12,968 Weighted average interest rate on debt 2.75 % 2.75 % 2.75 % 2.75 % Interest income is earned on our cash, cash equivalents, restricted cash, and marketable securities. Interest income increased for the three months ended June 27, 2026, compared to the corresponding period in the prior year, primarily due to higher average invested balances and interest income recognized on tariff refunds, partially offset by lower yields. Interest income decreased for the six months ended June 27, 2026, compared to the corresponding period in the prior year, primarily due to lower yields on invested balances. Interest expense primarily includes interest on our term loan, interest rate swap derivative contracts, commitment fee on our revolving credit facility, term loan issuance costs amortization charges, and our revolving credit facility issuance costs amortization charges. The interest expense for the three and six months ended June 27, 2026 increased compared with the corresponding period in the prior year due to our entry into the revolving credit facility in the third quarter of fiscal 2025. Other Income (Expense), Net Other income (expense), net, primarily includes the effects of foreign currency and various other gains and losses. We partially mitigate our risks from currency movements by hedging certain balance sheet exposures, which minimizes the impacts during periods of foreign exchange volatility. 31 Provision for Income Taxes Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 (In thousands, except percentages) Provision for income taxes $ 6,729 $ 2,372 $ 7,125 $ 3,447 Effective tax rate 11.1 % 15.9 % 8.9 % 15.4 % Provision for income taxes reflects the tax provision on our operations in foreign and U.S. jurisdictions, offset by tax benefits from tax credits and the foreign-derived deduction eligible income (“FDDEI”) deduction. Our effective tax rate may vary from period to period based on changes in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to U.S. federal, state or foreign tax laws, changes in the benefit or expense related to stock-based compensation expense, future expansion into areas with varying country, state, and local income tax rates, and deductibility of certain costs and expenses by jurisdiction. The decrease in our effective tax rate for the three and six months ended June 27, 2026 compared to the corresponding period in the prior year was primarily driven by increased tax benefits associated with higher U.S. taxable income, including a larger FDDEI deduction, together with increased discrete tax benefits from stock-based compensation. Liquidity and Capital Resources Capital Resources Our working capital increased to $505.3 million at June 27, 2026, compared to $433.2 million at December 27, 2025. Cash and cash equivalents primarily consist of deposits held at banks and money market funds. Marketable securities primarily consist of U.S. treasuries, corporate bonds, U.S. agency securities, and commercial paper. We typically invest in highly rated securities with low probabilities of default. Our investment policy requires investments to be rated single A or better, and limits the types of acceptable investments, issuer concentration and duration of the investment. Our cash, cash equivalents and marketable securities totaled approximately $345.6 million at June 27, 2026, compared to $275.2 million at December 27, 2025. We have the full amount available under our $150 million revolving credit facility as of June 27, 2026. Based on our historical results of operations, we expect that our cash, cash equivalents, and marketable securities on hand, the cash we expect to generate from operations, and the available capacity under our revolving credit facility, will be sufficient to fund our short-term and long-term liquidity requirements primarily arising from: research and development, capital expenditures, including the Farmers Branch expansion, working capital, outstanding commitments, and other liquidity requirements associated with existing operations. However, we cannot be certain that our cash, cash equivalents, and marketable securities on hand, and cash generated from operations, will be available in the future to fund all of our capital and operating requirements. In addition, any future strategic investments and significant acquisitions may require additional cash and capital resources. To the extent necessary, we may consider entering into short and long-term debt obligations, raising cash through a stock issuance, or obtaining new financing facilities, which may not be available on terms favorable to us. If we are unable to obtain sufficient cash or capital to meet our needs on a timely basis and on favorable terms, our business and operations could be materially and adversely affected. If we are unsuccessful in maintaining or growing our revenues, maintaining or reducing our cost structure, or increasing our available cash through debt or equity financings, our cash, cash equivalents and marketable securities may decline. We utilize a variety of tax planning and financing strategies to manage our worldwide cash and deploy funds to locations where needed. As part of these strategies, we indefinitely reinvest a portion of our foreign earnings. Should we require additional capital in the United States, we may elect to repatriate indefinitely-reinvested foreign funds or raise capital in the United States. 32 Cash Flows The following table sets forth our net cash flows from operating, investing and financing activities: Six Months Ended June 27, 2026 June 28, 2025 (In thousands) Net cash provided by operating activities $ 106,764 $ 42,432 Net cash used in investing activities $ (88,711) $ (163,213) Net cash used in financing activities $ (10,722) $ (7,178) Operating Activities Net cash provided by operating activities consists of net income for the period, adjusted for certain non-cash items and changes in certain operating assets and liabilities. Net cash provided by operating activities for the six months ended June 27, 2026 was attributable to net income of $76.6 million and net non-cash expenses of $56.1 million, partially offset by the increase in net working capital of $25.9 million. The cash used in net working capital was primarily driven by increased accounts receivable, net, of $30.7 million and increased inventories of $19.6 million, partially offset by increased accounts payable of $14.5 million, increased accrued liabilities of $5.2 million, and increased deferred revenue of $3.4 million. The non-cash expenses mainly consisted of depreciation and amortization, stock-based compensation, non-cash restructuring, and the provision for excess and obsolete inventories. Investing Activities Net cash used in investing activities for the six months ended June 27, 2026 primarily related to $64.5 million in net purchases of marketable securities and $24.8 million of property, plant and equipment purchases. Financing Activities Net cash used in financing activities for the six months ended June 27, 2026 primarily related to $16.0 million used to pay tax withholdings for net share settlements of employee stock awards, partially offset by $5.8 million received from issuances of common stock under our employee stock purchase plan. Debt Revolving Credit Agreement On July 29, 2025, we entered into a Revolving Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as Administrative Agent, and the lenders party thereto, providing us with a $150 million revolving credit facility (the “Facility”). The Facility has a maturity date of July 29, 2030. The Facility may be used for working capital and other general corporate purposes, subject to the terms and conditions set forth in the Credit Agreement. No amounts were outstanding under the Facility as of June 27, 2026. Borrowings under the Facility will bear interest at a fluctuating rate per annum equal to, at our option, (i) the forward-looking secured overnight financing rate (“SOFR”) term, (ii) a base rate set forth in the Credit Agreement, or (iii) a combination thereof, plus, in each case, an applicable margin calculated based on our leverage ratio. Voluntary prepayments are permissible without penalty, subject to certain conditions pertaining to minimum notice and minimum prepayment and reduction amounts as described in the Credit Agreement. The Facility also bears a quarterly commitment fee ranging from 0.15% to 0.25% on the daily amount by which the commitments under the Facility exceed the outstanding amount. The commitment fee as of June 27, 2026 was 0.15%. The Credit Agreement contains customary representations and warranties, and affirmative and negative covenants and events of default, including limitations on subsidiary indebtedness and liens, and the requirement to maintain specified financial ratios including the requirement to maintain a consolidated total net leverage ratio not exceeding 3.50 to 1.00 as of the last day of each fiscal quarter with an increase to 4.00 to 1.00 for four quarters following a permitted acquisition. We were in compliance with the Facility's covenants as of June 27, 2026. Building Term Loan and Interest Rate Swap On June 22, 2020, we entered into an $18.0 million 15-year credit facility loan agreement (the “Building Term Loan”). The proceeds of the Building Term Loan were used to purchase a building adjacent to our leased facilities in Livermore, California. On May 19, 2023, we amended the Building Term Loan, replacing the benchmark reference rate London Interbank Offered Rate (“LIBOR”) with the term SOFR, with no change to the amount or timing of contractual cash flows. 33 The Building Term Loan bears interest at a rate equal to the applicable SOFR rate plus 1.86% per annum. Interest payments are payable in monthly installments over a fifteen-year period. The interest rate at June 27, 2026, before consideration of interest rate swap discussed in the next paragraph, was 5.48%. As of June 27, 2026, the balance outstanding pursuant to the Building Term Loan was $11.7 million. On March 17, 2020, we entered into an interest rate swap agreement to hedge the interest payment on the Building Term Loan for the notional amount of $18.0 million, and an amortization period that matches the debt. As future levels of LIBOR over the life of the loan were uncertain, we entered into this interest-rate swap agreement to hedge the exposure in interest rate risks associated with movement in LIBOR rates. This agreement was amended on May 19, 2023 to replace the benchmark reference rate LIBOR with SOFR to match the Building Term Loan agreement (as amended). After the amendment, the interest rate swap continues to convert our floating-rate interest into a fixed-rate at 2.75%. As of June 27, 2026, the notional amount of the loan that is subject to this interest rate swap is $11.7 million. Stock Repurchase Programs On October 30, 2023, our Board of Directors authorized a two-year program to repurchase up to $75.0 million of outstanding common stock, with the primary purpose of offsetting potential dilution from issuance of common stock under our stock-based compensation programs. On March 29, 2025, our Board of Directors approved an increase to the repurchase program, authorizing the repurchase of an additional $1.6 million in shares of common stock. During the first fiscal quarter of 2025, we repurchased and retired 665,000 shares of common stock for $22.1 million, utilizing the remaining shares available for repurchase under the program. On April 24, 2025, our Board of Directors authorized a new two-year program to repurchase up to $75.0 million of outstanding common stock to offset potential dilution from issuance of common stock under our stock-based compensation programs. This share repurchase program will expire on April 24, 2027. During fiscal 2025, we repurchased and retired 135,000 shares of common stock for $4.1 million. During the six months ended June 27, 2026, we did not repurchase shares of common stock under this program as we prioritized capital investments associated with the ramp of our Farmers Branch manufacturing facility. As of June 27, 2026, $70.9 million remained available for future repurchases. Contractual Obligations and Commitments The following table summarizes our significant contractual commitments to make future payments in cash under contractual obligations as of June 27, 2026: Payments Due In Fiscal Year Remainder 2026 2027 2028 2029 2030 Thereafter Total Operating leases $ 4,658 $ 8,891 $ 5,212 $ 687 $ 452 $ 961 $ 20,861 Term loans - principal payments 575 1,175 1,208 1,242 1,278 6,212 11,690 Term loans - interest payments(1) 319 588 524 456 383 808 3,078 Revolver - commitment fee(2) 114 228 232 228 131 — 933 Total $ 5,666 $ 10,882 $ 7,176 $ 2,613 $ 2,244 $ 7,981 $ 36,562 (1) Represents our minimum interest payment commitments at 5.48% per annum, excluding the interest rate swap described in Debt, above. (2) Represents our quarterly commitment fee of 0.15% on the daily amount by which the commitments under the Facility exceed the outstanding amount. This commitment assumes no borrowings. The table above excludes our gross liability for unrecognized tax benefits and our deferred grant. The gross liability for unrecognized tax benefits was $55.5 million as of June 27, 2026. The timing of any payments which could result from these unrecognized tax benefits will depend upon a number of factors and, accordingly, the timing of payment cannot be estimated. The deferred grant was $18.0 million as of June 27, 2026, and consists of cash received from a California Competes Grant awarded from the California Governor's Office of Business and Economic Development. The timing of any potential repayments is dependent upon a number of factors, including the number of employees and capital investments within California over the 5-year term. Accordingly, the timing of any repayment cannot be estimated. 34 Off-Balance Sheet Arrangements Historically, we have not participated in transactions that have generated relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of June 27, 2026, we were not involved in any such off-balance sheet arrangements. Recent Accounting Standards For a description of a recent change in accounting standards, including the expected dates of adoption and estimated effects, if any, in our condensed consolidated financial statements, see Note 1, Basis of Presentation and Significant Accounting Policies, in Part I, Item 1 of this Form 10-Q.