This information should be read in conjunction with the condensed consolidated financial statements and the notes thereto included in “Part I, Item 1” of this Quarterly Report and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended September 28, 2025 contained in our 2025 Annual Report on Form 10-K. This Quarterly Report (including but not limited to this section titled Management’s Discussion and Analysis of Financial Condition and Results of Operations) contains forward-looking statements. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “may,” “will,” “would” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this Quarterly Report. Additionally, statements concerning future matters such as our future business, prospects, results of operations or financial condition; research and development or technology investments; new or enhanced products, services or technologies; emerging industries or business models; design wins or product launches; industry, market or technology trends, dynamics or transitions; our expectations regarding future demand or supply conditions; strategic investments or acquisitions, and the anticipated timing or benefits thereof; legal or regulatory matters, including the expected impacts of recently enacted or pending tax or other regulatory changes; U.S./China trade or national security tensions; vertical integration by our customers; competition; annual effective tax rates; and other statements regarding matters that are not historical are also forward-looking statements. Although forward-looking statements in this Quarterly Report reflect our good faith judgment, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include without limitation those discussed under the heading “Risk Factors” below, as well as those discussed elsewhere in this Quarterly Report. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. Third Quarter Fiscal 2026 Overview Revenues for the third quarter of fiscal 2026 were $9.9 billion, a decrease of 4% compared to the year ago quarter, with net income of $2.0 billion, a decrease of 25% compared to the year ago quarter. Key items from the third quarter of fiscal 2026 included: •QCT revenues decreased by 5% in the third quarter of fiscal 2026 compared to the year ago quarter due to lower handset revenues, partially offset by higher automotive and IoT revenues. •QTL revenues decreased by 3% in the third quarter of fiscal 2026 compared to the year ago quarter. •Investment and other income, net increased by $656 million compared to the year ago quarter, primarily due to higher net gains from initial public offerings of certain QSI equity investments. Our Business and Operating Segments We develop and commercialize foundational technologies and products used across industries and applications from mobile devices to other areas including automotive and the internet of things (IoT). We derive revenues principally from sales of integrated circuit products and licensing our intellectual property, including patents and other rights. We are organized on the basis of products and services and have three reportable segments. We conduct business primarily through our QCT (Qualcomm CDMA Technologies) semiconductor business and our QTL (Qualcomm Technology Licensing) licensing business. Our QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments. We also have nonreportable segments, including QGOV (Qualcomm Government Technologies) and our Data Center business. Our reportable segments are operated by QUALCOMM Incorporated and its direct and indirect subsidiaries. Substantially all of our products and services businesses, including QCT, and substantially all of our engineering and research and development functions are operated by Qualcomm Technologies, Inc. (QTI), a subsidiary of QUALCOMM Incorporated, and QTI’s subsidiaries. QTL is operated by QUALCOMM Incorporated, which owns the vast majority of our patent 18 portfolio. Neither QTI nor any of its subsidiaries has any right, power or authority to grant any licenses or other rights under or to any patents owned by QUALCOMM Incorporated. Seasonality. Many of our products and much of our intellectual property are incorporated into consumer wireless devices, which are subject to seasonality and other fluctuations in demand. Our revenues have historically fluctuated based on consumer demand for devices, as well as on the timing of customer/licensee device launches and/or innovation cycles (such as the transition to the next generation of wireless technologies). This has resulted in fluctuations in QCT revenues in advance of and during device launches incorporating our products and in QTL revenues when licensees’ sales occur. These trends may or may not continue in the future. Further, the trends for QTL have been, and may in the future be, impacted by disputes and/or resolutions with licensees and/or governmental investigations or proceedings. Results of Operations Revenues (in millions) Three Months Ended Nine Months Ended June 28, 2026 June 29, 2025 Change June 28, 2026 June 29, 2025 Change Equipment and services $ 8,475 $ 8,893 $ (418) $ 28,002 $ 28,193 $ (191) Licensing 1,472 1,472 — 4,796 4,820 (24) $ 9,947 $ 10,365 $ (418) $ 32,798 $ 33,013 $ (215) Third quarter 2026 vs. 2025 The decrease in revenues in the third quarter of fiscal 2026 was primarily due to: - $502 million in lower equipment and services revenues from our QCT segment - $40 million in lower licensing revenues from our QTL segment + $88 million in higher equipment and services revenues from our Data Center segment, primarily driven by our acquisition of Alphawave in the first quarter of fiscal 2026 First nine months 2026 vs. 2025 The decrease in revenues in the first nine months of fiscal 2026 was primarily due to: - $367 million in lower equipment and services revenues from our QCT segment - $143 million in licensing revenues from a settlement of a licensing dispute in the second quarter of fiscal 2025, which was not allocated to our segment results + $182 million in higher equipment and services revenues from our Data Center segment, primarily driven by our acquisition of Alphawave in the first quarter of fiscal 2026 + $80 million in higher licensing revenues from our QTL segment Costs and Expenses (in millions, except percentages) Three Months Ended Nine Months Ended June 28, 2026 June 29, 2025 Change June 28, 2026 June 29, 2025 Change Cost of revenues $ 4,670 $ 4,606 $ 64 $ 15,138 $ 14,704 $ 434 Gross margin 53 % 56 % 54 % 55 % Third quarter and first nine months 2026 vs. 2025 Gross margin percentage decreased in the third quarter and first nine months of fiscal 2026 primarily due to a decrease in QCT gross margin percentage. 19 Three Months Ended Nine Months Ended June 28, 2026 June 29, 2025 Change June 28, 2026 June 29, 2025 Change Research and development $ 2,607 $ 2,226 $ 381 $ 7,523 $ 6,672 $ 851 % of revenues 26 % 21 % 23 % 20 % Third quarter 2026 vs. 2025 The increase in research and development expenses in the third quarter of fiscal 2026 was primarily due to: + $244 million increase driven by higher costs related to the development of wireless and integrated circuit technologies (including investments in key growth and diversification opportunities), primarily driven by lower non-recurring engineering cost reimbursements for product-related development work + $101 million increase in share-based compensation expense First nine months 2026 vs. 2025 The increase in research and development expenses in the first nine months of fiscal 2026 was primarily due to: + $541 million increase driven by higher costs related to the development of wireless and integrated circuit technologies (including investments in key growth and diversification opportunities), primarily driven by lower non-recurring engineering cost reimbursements for product-related development work and an increase in employee-related expenses + $269 million increase in share-based compensation expense We expect to continue investing in key growth and diversification initiatives. The increase in our share-based compensation expense includes the replacement of our annual cash incentive awards for fiscal 2026 and 2027 with a two-year equity award for our broader non-executive leadership team. This approach is designed to motivate and retain our team to execute our long-term diversification strategy, while further aligning their compensation with the interests of our stockholders. Three Months Ended Nine Months Ended June 28, 2026 June 29, 2025 Change June 28, 2026 June 29, 2025 Change Selling, general and administrative $ 976 $ 771 $ 205 $ 2,738 $ 2,200 $ 538 % of revenues 10 % 7 % 8 % 7 % Third quarter 2026 vs. 2025 The increase in selling, general and administrative expenses in the third quarter of fiscal 2026 was primarily due to: + $62 million increase in share-based compensation expense + $27 million increase in sales and marketing expenses (including investments in growth and diversification initiatives) + $24 million increase in expenses driven by the revaluation of our deferred compensation obligation (which resulted in a corresponding increase in net gains on deferred compensation plan assets within investment and other income, net due to the revaluation of the related assets) First nine months 2026 vs. 2025 The increase in selling, general and administrative expenses in the first nine months of fiscal 2026 was primarily due to: + $184 million increase in share-based compensation expense + $91 million increase in acquisition-related expenses + $64 million increase in sales and marketing expenses (including investments in growth and diversification initiatives) Three Months Ended Nine Months Ended June 28, 2026 June 29, 2025 Change June 28, 2026 June 29, 2025 Change Other expense $ 68 $ — $ 68 $ 97 $ — $ 97 Third quarter and first nine months 2026 vs. 2025 Other expenses in the third quarter and first nine months of fiscal 2026 consisted of restructuring and restructuring-related charges (substantially all of which related to severance costs). 20 Interest Expense and Investment and Other Income, Net (in millions) Three Months Ended Nine Months Ended June 28, 2026 June 29, 2025 Change June 28, 2026 June 29, 2025 Change Interest expense $ 178 $ 168 $ 10 $ 519 $ 493 $ 26 Investment and other income, net Interest and dividend income $ 97 $ 160 $ (63) $ 347 $ 495 $ (148) Net gains on marketable securities 726 204 522 605 241 364 Net gains on other investments 19 5 14 237 30 207 Net gains on deferred compensation plan assets 149 84 65 135 65 70 Impairment losses on other investments (38) (52) 14 (61) (93) 32 Equity in net earnings (losses) of investees 66 (4) 70 149 13 136 Other (5) (39) 34 46 (3) 49 $ 1,014 $ 358 $ 656 $ 1,458 $ 748 $ 710 Net gains on marketable securities in the third quarter and first nine months of fiscal 2026 was primarily driven by the initial public offerings of certain QSI equity investments. Net gains on other investments in the first nine months of fiscal 2026 was primarily driven by observable price changes on certain of our QSI non-marketable equity investments. The increase in net earnings of investees in the first nine months of fiscal 2026 was primarily driven by an increase in our share of earnings in certain QSI equity method investments. The decrease in interest and dividend income in the first nine months of fiscal 2026 was primarily due to lower balances of interest-bearing securities. Income Tax Expense (in millions, except percentages) The following table summarizes the primary factors that caused our income tax provision to differ from the expected income tax provision at the U.S. federal statutory rate: Three Months Ended Nine Months Ended June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Expected income tax provision at federal statutory tax rate $ 517 $ 620 $ 1,731 $ 2,035 Benefit of releasing valuation allowance on federal deferred tax assets — — (5,724) — Benefit from foreign-derived deduction eligible income (FDDEI) (36) (269) (332) (929) Benefit related to the federal research and development tax credit (58) (67) (156) (186) Foreign currency loss (gain) related to foreign withholding tax receivable 28 (123) 148 42 Excess tax benefit associated with share-based awards (50) (21) (68) (98) Other 59 146 265 170 Income tax expense (benefit) $ 460 $ 286 $ (4,136) $ 1,034 Effective tax rate 19 % 10 % (50 %) 11 % We estimate our annual effective income tax rate to be 40% benefit for fiscal 2026, which is lower than the U.S. federal statutory rate. Additional information regarding our annual effective income tax rate and income tax expense is provided in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 3. Income Taxes.” In the fourth quarter of fiscal 2025, tax reform legislation included in the One Big Beautiful Bill Act (OBBB) was enacted in the United States. The OBBB included significant corporate tax reforms, including changes to the foreign-derived deduction eligible income (FDDEI) regime and changes allowing domestic research and development (R&D) expenditures to be deducted as incurred beginning in fiscal 2026 (under prior law such expenditures were capitalized and amortized over five 21 years). As a result, we expected to be perpetually subject to CAMT and established a $5.7 billion valuation allowance on our federal deferred tax assets in fiscal 2025. In the second quarter of fiscal 2026, the U.S. Department of Treasury and the Internal Revenue Service issued Notice 2026-07, which, among other items, allows us to reduce CAMT by certain previously capitalized domestic R&D expenditures. As a result, we no longer expect to be subject to CAMT in the foreseeable future, and therefore, we now expect to realize our existing federal deferred tax assets. Accordingly, we released our valuation allowance on our federal deferred tax assets resulting in a $5.7 billion income tax benefit in the second quarter of fiscal 2026. Changes in future taxable income, tax laws and other factors may change our determination regarding whether we will be able to realize our deferred tax assets. Unrecognized tax benefits were $3.0 billion and $2.7 billion at June 28, 2026 and September 28, 2025, respectively. We believe that it is reasonably possible that our unrecognized tax benefits will change within the next twelve months. Segment Results The following should be read in conjunction with our financial results for the third quarter of fiscal 2026 for each reportable segment included in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 6. Segment Information.” QCT Segment (in millions, except percentages) Three Months Ended Nine Months Ended June 28, 2026 June 29, 2025 Change June 28, 2026 June 29, 2025 Change Revenues Handsets $ 5,086 $ 6,328 $ (1,242) $ 18,934 $ 20,831 $ (1,897) Automotive 1,588 984 604 4,015 2,904 1,111 IoT (internet of things) 1,830 1,681 149 5,244 4,811 433 Total revenues (1) $ 8,504 $ 8,993 $ (489) $ 28,193 $ 28,546 $ (353) EBT (2) $ 2,192 $ 2,671 $ (479) $ 7,959 $ 8,774 $ (815) EBT as a % of revenues 26 % 30 % -4 points 28 % 31 % -3 points (1) Descriptions of our three QCT revenue streams can be found in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 2. Composition of Certain Financial Statement Items.” (2) Earnings before income taxes. Substantially all of QCT’s revenues consist of equipment and services revenues, which were $8.3 billion and $8.8 billion in the third quarter of fiscal 2026 and 2025, respectively, and $27.7 billion and $28.0 billion in the first nine months of fiscal 2026 and 2025, respectively. QCT revenues mostly relate to sales of our Snapdragon and Dragonwing platforms (which include processors and modems), stand-alone Mobile Data Modems, radio frequency transceiver, power management and wireless connectivity integrated chipsets as well as sales of 4G, 5G sub 6 and 5G millimeter wave RFFE products. Third quarter 2026 vs. 2025 The decrease in QCT revenues in the third quarter of fiscal 2026 was primarily due to: - lower handsets revenues, primarily due to lower chipset shipments to certain major OEMs (primarily driven by customers adjusting build plans to reduce their inventory levels as a result of the negative effects of recent memory supply constraints and related price increases) + higher automotive revenues, due to a $381 million increase in revenues per unit driven by favorable mix and higher average selling prices and $223 million in higher shipments primarily from new vehicle launches with our Snapdragon digital cockpit and advanced driver assistance and automated driving (ADAS/AD) products + higher IoT revenues, primarily due to an increase in revenues per unit primarily driven by favorable mix QCT EBT as a percentage of revenues decreased in the third quarter of fiscal 2026 primarily due to: - lower gross margin, primarily driven by higher product cost, partially offset by higher average selling prices - lower revenues 22 First nine months 2026 vs. 2025 The decrease in QCT revenues in the first nine months of fiscal 2026 was primarily due to: - lower handsets revenues, primarily due to lower chipset shipments to certain major OEMs (primarily driven by customers adjusting build plans to reduce their inventory levels as a result of the negative effects of recent memory supply constraints and related price increases) + higher automotive revenues, due to a $560 million increase in revenues per unit driven by favorable mix and higher average selling prices and $551 million in higher shipments primarily from new vehicle launches with our Snapdragon digital cockpit and ADAS/AD products + higher IoT revenues, primarily due to an increase in revenues per unit primarily driven by favorable mix QCT EBT as a percentage of revenues decreased in the first nine months of fiscal 2026 primarily due to: - higher operating expenses, primarily driven by higher research and development and selling, general and administrative expenses - lower gross margin, primarily driven by higher product cost, partially offset by higher average selling prices - lower revenues QTL Segment (in millions, except percentages) Three Months Ended Nine Months Ended June 28, 2026 June 29, 2025 Change June 28, 2026 June 29, 2025 Change Licensing revenues $ 1,278 $ 1,318 $ (40) $ 4,252 $ 4,172 $ 80 EBT 881 942 (61) 3,105 3,028 77 EBT as a % of revenues 69 % 71 % -2 points 73 % 73 % — Third quarter 2026 vs. 2025 The decrease in QTL licensing revenues in the third quarter of fiscal 2026 was primarily due to: - $67 million decrease in estimated sales of cellular products - $25 million in lower royalty revenues recognized related to devices sold in prior periods + $59 million increase in revenues per unit, which was primarily driven by favorable mix QTL EBT as a percentage of revenues decreased in the third quarter of fiscal 2026 primarily due to: - higher operating expenses, primarily driven by higher selling, general and administrative expenses - lower revenues First nine months 2026 vs. 2025 The increase in QTL licensing revenues in the first nine months of fiscal 2026 was primarily due to: + $111 million increase in revenues per unit, which was primarily driven by favorable mix + $53 million increase in estimated sales of cellular products - $65 million in lower royalty revenues recognized related to devices sold in prior periods QTL EBT as a percentage of revenues remained approximately flat in the first nine months of fiscal 2026. QSI Segment (in millions) Three Months Ended Nine Months Ended June 28, 2026 June 29, 2025 Change June 28, 2026 June 29, 2025 Change Revenues $ — $ — $ — $ — $ — $ — EBT 768 149 619 917 179 738 Third quarter 2026 vs. 2025 QSI EBT increased in the third quarter of fiscal 2026 primarily due to higher net gains on marketable securities resulting from the initial public offerings of certain of our equity investments. First nine months 2026 vs. 2025 QSI EBT increased in the first nine months of fiscal 2026 primarily due to $380 million in higher net gains on marketable securities resulting from the initial public offerings of certain of our equity investments, $207 million in higher net gains from observable price changes on certain of our non-marketable equity investments and a $136 million increase in our share of earnings in equity method investments. 23 Looking Forward We believe that on-device AI and high-performance, low-power computing combined with cellular technology (such as 5G) will continue to drive adoption of certain technologies that are already commonly used in smartphones by industries and applications beyond mobile handsets, such as automotive and IoT. We believe it is important that we remain a leader in such technology development, standardization, intellectual property creation and licensing, and a leading developer and supplier of integrated circuit products in order to sustain and grow our business long-term. As we look forward to the next several quarters: •We expect recent memory supply constraints and related pricing increases to adversely affect demand from several handset OEMs, which will negatively impact our financial results. The extent to which these conditions may affect our business will depend on future developments, including memory supply availability, memory and device pricing dynamics and end‑consumer demand for devices, all of which remain uncertain. •The semiconductor industry is experiencing a broad-based increase in input costs and capacity constraints across wafer fabrication, assembly, test, advanced packaging, memory and other materials, due in part to increasing demand for leading-edge technologies, AI and data center applications. As a result, we continue to see increased product costs from certain of our key suppliers, which could negatively impact our margins. Further, if these supply and capacity constraints limit the availability of components, manufacturing capacity or related services from our suppliers, we may be unable to fully satisfy customer demand, which could result in lost or delayed revenue and adversely affect our results of operations, cash flows and financial condition. •We continue to monitor changes in global trade policy, including tariffs and related trade actions announced by the U.S., China and other countries. The degree to which such tariffs and other related actions impact our business, financial condition and results of operations will depend on future developments, which are uncertain. Changes to global trade policies may negatively impact demand, pricing and cost for our products and technologies, and contribute to the inherent uncertainties in estimating future customer demand, which may result in increased excess or obsolete inventory or reserve charges, negatively impacting our results of operations and cash flows. See “Risk Factors” in this Quarterly Report, including the Risk Factor titled “We operate in the highly cyclical semiconductor industry, which is subject to significant downturns. We are also susceptible to declines in global, regional and local economic conditions generally. Our stock price and financial results are subject to substantial quarterly and annual fluctuations due to these dynamics, among others.” •We expect continued intense competition, including from vertical integration by certain of our customers (for example, Apple and Samsung). In particular, Apple utilizes its own modem (rather than our products) in certain of its smartphones and we expect that Apple will increasingly use its own modem products, rather than our products, in its future devices, which will have a significant negative impact on our QCT revenues, results of operations and cash flows. •U.S./China trade relations and/or national security protection policies may negatively impact our business, growth prospects and results of operations. See “Risk Factors” in this Quarterly Report, including the Risk Factor titled “A significant portion of our business is concentrated in China, and the risks of such concentration are exacerbated by U.S./China trade and national security tensions.” We are also involved in certain legal proceedings, including those described in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 5. Commitments and Contingencies.” Litigation is inherently uncertain, and, while we intend to continue to vigorously defend ourselves in such matters, the unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition or cash flows. In addition to the foregoing business and market-based matters, we continue to devote resources to working with and educating participants in the wireless industry and governments as to the benefits of our licensing programs and our extensive technology investments in promoting a highly competitive and innovative wireless industry. However, we expect that certain companies may be dissatisfied with the need to pay reasonable royalties for the use of our technologies and not welcome the success of our licensing programs in enabling new, highly cost-effective competitors to their products. Accordingly, such companies and/or governments or regulators may continue to challenge our business model in various forums throughout the world. Further discussion of risks related to our business is provided in the section titled “Risk Factors” included in this Quarterly Report. 24 Liquidity and Capital Resources Our principal sources of liquidity are our existing cash, cash equivalents and marketable securities, cash generated from operations and cash provided by our debt programs. The following tables present selected financial information related to our liquidity at June 28, 2026 and September 28, 2025 and for the first nine months of fiscal 2026 and 2025 (in millions): June 28, 2026 September 28, 2025 Change Cash, cash equivalents and marketable securities (including restricted cash) Cash and cash equivalents $ 4,533 $ 5,520 $ (987) Restricted cash (1) — 2,323 (2,323) Marketable securities 3,771 4,635 (864) $ 8,304 $ 12,478 $ (4,174) Debt (2) $ 15,270 $ 14,811 $ 459 (1) In connection with the acquisition of Alphawave, which closed in the first quarter of fiscal 2026, we had agreed to restrict the use of approximately $2.3 billion of cash to be held for purposes of satisfying payment of the consideration to effect the acquisition. Additional information regarding our acquisition of Alphawave is provided in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 8. Acquisitions.” (2) Consists of our issued debt, including $2.0 billion classified as current and maturing in May 2027, and $498 million of outstanding commercial paper reported as short-term debt as of June 28, 2026. At June 28, 2026, our credit facility was undrawn. Nine Months Ended June 28, 2026 June 29, 2025 Change Net cash provided by operating activities $ 8,405 $ 10,016 $ (1,611) Net cash used by investing activities (1,648) (329) (1,319) Net cash used by financing activities (10,046) (9,760) (286) Cash, cash equivalents and marketable securities (including restricted cash). The net decrease in cash, cash equivalents and marketable securities (including restricted cash) for the first nine months of fiscal 2026 was primarily due to $6.8 billion in payments to repurchase 42 million shares of our common stock (which includes repurchases that offset share issuances in connection with the acquisition of Alphawave), $2.9 billion in cash dividends paid, $1.6 billion in capital expenditures, $1.6 billion in cash paid for acquisitions and other investments (net of cash acquired) and $888 million in payments of tax withholdings related to the vesting of share-based awards, partially offset by cash provided by operating activities and $495 million in net proceeds of commercial paper. During the first nine months of fiscal 2026, income taxes paid were greater than our provision. This was primarily driven by the $5.7 billion release of our valuation allowance on federal deferred tax assets in the second quarter of fiscal 2026 and our final installment payment for a one-time U.S. repatriation tax accrued in fiscal 2018 of $663 million. The OBBB includes significant corporate tax reforms, including the permanent reinstatement of deducting domestic research and development expenditures as incurred beginning in fiscal 2026 (under prior law such expenditures were capitalized and amortized over five years). We expect this change will have a favorable effect on our cash flows from operations due to significantly lower cash tax payments. Net changes in our operating assets and liabilities for the first nine months of fiscal 2026 negatively impacted our operating cash flows primarily driven by an increase in inventory reflecting certain customer demand impacts from memory supply constraints, partially offset by a decrease in other assets and increase in payroll, benefits and other liabilities. The decrease in other assets is primarily due to the utilization of prior advanced supply agreement payments. The increase in payroll, benefits and other liabilities is primarily due to an increase in accrued customer incentives, which included the impact of timing of related payments, partially offset by payments related to our employee cash incentive program. Capital Return Program. Our stock repurchase program is subject to periodic evaluations to determine when and if repurchases are in the best interests of our stockholders, and we may accelerate, suspend, delay or discontinue repurchases at any time. We currently intend to continue to use cash dividends as a means of returning capital to stockholders, subject to capital availability and our view that cash dividends are in the best interests of our stockholders, among other factors. Additional information regarding our capital returns is provided in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 4. Capital Stock.” 25 Additional Capital Requirements. Expected working and other capital requirements are described in our 2025 Annual Report on Form 10-K in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” At June 28, 2026, other than for the changes disclosed in the “Notes to Condensed Consolidated Financial Statements”, “Looking Forward” and “Liquidity and Capital Resources” in this Quarterly Report, there have been no other material changes to our expected working and other capital requirements described in our 2025 Annual Report on Form 10-K. Further, regulatory authorities in certain jurisdictions have investigated our business practices and instituted proceedings against us and they or other regulatory authorities may do so in the future. Additionally, certain of our direct and indirect customers and licensees have pursued, and they or others may in the future pursue, litigation, arbitration or other strategies against us related to our business. Unfavorable resolutions of one or more of these matters have had and could in the future have a material adverse effect on our business, revenues, results of operations, financial condition and cash flows. See “Risk Factors” in this Quarterly Report. We believe, based on our current business plan and the facts and factors known by us, our cash, cash equivalents and marketable securities, our expected cash flow generated from operations and our expected financing activities will satisfy our working and other capital requirements for at least the next 12 months and thereafter for the foreseeable future. See “Risk Factors” in this Quarterly Report. Recent Accounting Guidance Information regarding recent accounting guidance and the impact of such guidance on our condensed consolidated financial statements is provided in this Quarterly Report in the “Notes to Condensed Consolidated Financial Statements, Note 1. Basis of Presentation and Significant Accounting Policies Update.”