Overview The following discussion should be read in conjunction with our Consolidated Financial Statements and Notes thereto included elsewhere in this Form 20-F. The following discussion contains statements of future expectations and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, or Section 21E of the Securities Exchange Act of 1934, each as amended, particularly in the sections “— Critical Accounting Policies Using Significant Estimates”, “— Business Outlook”, “— Liquidity and Capital Resources” and “— Financial Outlook: Capital Investment”. Our actual results may differ significantly from those projected in the forward-looking statements. For a discussion of factors that might cause future actual results to differ materially from our recent results or those projected in the forward-looking statements in addition to the factors set forth below, see “Cautionary Note Regarding Forward-Looking Statements” and "Item 3. Key Information — Risk Factors”. We assume no obligation to update the forward-looking statements or such risk factors. Critical Accounting Policies Using Significant Estimates The preparation of our Consolidated Financial Statements in accordance with U.S. GAAP requires us to make estimates and assumptions. The primary areas that require significant estimates and judgments by us include, but are not limited to: •sales allowances for discounts, price protection, product returns and other rebates; •inventory obsolescence reserves and assessment of normal manufacturing capacity to determine costs capitalized in inventory; •annual and trigger-based impairment review of goodwill and intangible assets, as well as the assessment of events, which could trigger impairment testing on tangible assets, and the assessment of our long-lived assets economic useful lives; •recognition and measurement of loss contingencies; •valuation at fair value of assets acquired and liabilities assumed on business acquisitions, and measurement of any significant contingent consideration; •assumptions used in measuring expected credit losses and impairment charges on financial assets; •assumptions used in assessing the number of awards expected to vest on stock-based compensation plans; •assumptions used in calculating net defined benefit pension obligations and other long-term employee benefits; and •determination of the amount of tax expected to be paid and tax benefit expected to be received, including deferred income tax assets, valuation allowance and provisions for uncertain tax positions and claims. We base the estimates and assumptions on historical experience and on various other factors such as market trends, market information used by market participants and the latest available business plans that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. While we regularly evaluate our estimates and assumptions, the actual results we experience could differ materially and adversely from our estimates. We believe the following critical accounting policies require us to make significant judgments and estimates in the preparation of our Consolidated Financial Statements: 51 Revenue recognition. Arrangements with customers are considered contracts if all the following criteria are met: (a) parties have approved the contract and are committed to perform their respective obligations; (b) each party’s rights regarding the goods or services to be transferred can be identified; (c) payment terms for the goods or services to be transferred can be identified; (d) the contract has commercial substance and (e) collectability of substantially all of the consideration is probable. We recognize revenue from products sold to a customer, including distributors, when we satisfy a performance obligation by transferring control over a product to the customer. In certain circumstances, we may enter into agreements that concern principally revenues from services, where the performance obligation is satisfied over time. The objective when allocating the transaction price is to allocate the transaction price to each performance obligation (or distinct good or service) in an amount that depicts the amount of consideration to which we expect to be entitled in exchange for transferring the promised goods or services to the customer. The payment terms typically range between 30 to 90 days. Certain of our customers require us to hold inventory as consignment in their hubs and only purchase inventory when they require it. Revenue for sales of such inventory is recognized when, at the customer’s option, the products are withdrawn from the consignment and we satisfy a performance obligation by transferring control over a product to the customer. We may also enter into several multi-annual capacity reservation and volume commitment arrangements with certain of our customers. These agreements constitute a binding commitment for our customers to purchase and for us to supply allocated commitment volumes in exchange for additional consideration. The consideration related to commitment fees is reported as revenues from sale of products as it is usually based on delivered quantities. Consistent with standard business practice in the semiconductor industry, price protection is granted to distribution customers on their existing inventory of our products to compensate them for changes in market prices. We accrue a provision for price protection based on a rolling historical price trend computed monthly as a percentage of gross distributor sales. This historical price trend represents differences in recent months between the invoiced price and the final price to the distributor, adjusted to accommodate a significant change in the selling price. The short outstanding inventory time, visibility into the inventory product pricing and long distributor pricing history have enabled us to reliably estimate price protection provisions at period-end. We record the accrued amounts as a deduction of “Net sales” in the consolidated statements of income at the time of the sale. Our customers occasionally return our products for technical reasons. Our standard terms and conditions of sale provide that if we determine that products do not conform, we will repair or replace the non-conforming products, or issue a credit note or rebate of the purchase price. Quality returns are identified shortly after sale in customer quality control testing. We record the accrued amounts as a deduction of “Net sales” in the consolidated statements of income, using contractual and historical information. We record a provision for warranty costs as a charge on the line “Cost of sales” in the consolidated statements of income, based on historical trends of warranty costs incurred as a percentage of sales, which we had determined to be a reasonable estimate of the probable losses to be incurred for warranty claims in a period. Any potential warranty claims are subject to our determination that we are at fault for damages, and such claims must usually be submitted within a short period of time following the date of sale. This warranty is given in lieu of all other warranties, conditions or terms expressed or implied by statute or common law. Our contractual terms and conditions typically limit our liability to the sales value of the products that gave rise to the claims. Our insurance policy relating to product liability covers third-party physical damages and bodily injury, indirect financial damages as well as immaterial non-consequential damages caused by defective products. In addition to product sales, we enter into arrangements with customers consisting in transferring licenses or related to license services. The revenue generated from these arrangements is reported on the line “Other revenues” of the consolidated statements of income. Trade accounts receivable. We use a lifetime expected credit losses allowance for all trade receivables. The allowance includes reasonable assumptions about future credit trends. The historical 52 credit loss rates are adjusted to reflect current and forward-looking information on macro-economic factors affecting the ability of our customers to settle the receivables. Adjustments to the expected credit losses allowance are reported in the line “Selling, general and administrative expenses” in the consolidated statements of income. Business combinations and goodwill. The acquisition method of accounting applied to business combinations requires extensive use of estimates and judgments to allocate the purchase price to the fair value of acquired assets less assumed liabilities, including any contingent consideration, net of related deferred tax impacts. If the assumptions and estimates used to allocate the purchase price are not correct or if business conditions change, purchase price adjustments or future asset impairment charges could be required. As of December 31, 2025, the value of goodwill in our consolidated balance sheet amounted to $315 million. Impairment of goodwill. Goodwill recognized in business combinations is not amortized but is tested for impairment annually, or more frequently if a triggering event indicating a possible impairment exists. Goodwill subject to potential impairment is tested at the reporting unit level. This impairment test determines whether the fair value of each reporting unit under which goodwill is allocated is lower than the total carrying amount of relevant net assets allocated to such reporting unit, including its allocated goodwill. We record an impairment loss on goodwill when a reporting unit’s carrying value exceeds its fair value. Significant management judgments and estimates are used in forecasting the future discounted cash flows associated with the reporting unit, including: the applicable industry’s sales volume forecast and selling price evolution, the reporting unit’s market penetration and its revenues evolution, the market acceptance of certain new technologies and products, the relevant cost structure, the discount rates applied using a weighted average cost of capital and the perpetuity rates used in calculating cash flow terminal values. Our evaluations are based on financial plans updated with the latest available projections of the semiconductor market, our sales expectations and our costs evolution, and are consistent with the plans and estimates that we use to manage our business. It is possible, however, that the plans and estimates used may prove to be incorrect, and future adverse changes in market conditions, changes in strategies, lack of performance of major customers or operating results of acquired businesses that are not in line with our estimates may require the recognition of impairment losses. We performed our annual impairment test of goodwill during the fourth quarter of 2025 and concluded that there was no goodwill impairment loss. Impairment charges could result from new valuations triggered by changes in our product portfolio or strategic alternatives, particularly in the event of a downward shift in future revenues or operating cash flows in relation to our current plans or in case of capital injections by, or equity transfers to, third parties at a value lower than the current carrying value. Intangible assets subject to amortization. Intangible assets subject to amortization include intangible assets purchased from third parties recorded at cost and intangible assets acquired in business combinations initially recorded at fair value. Intangible assets are comprised mainly of technologies and licenses, and computer software. Intangible assets with finite useful lives are reflected net of any impairment losses and are amortized over their estimated useful lives. Amortization begins when the intangible asset is available for its intended use. Amortization reflects the pattern in which the asset’s economic benefits are consumed, which usually consists in applying the straight-line method to allocate the cost of the intangible assets over the estimated useful lives. The carrying value of intangible assets with finite useful lives is evaluated whenever changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its fair value. We evaluate the remaining useful life of an intangible asset at each reporting date to determine whether events and circumstances warrant a revision to the remaining period of amortization. Our evaluations are based on financial plans updated with the latest available projections of growth in the semiconductor market and our sales expectations. They are consistent with the plans and estimates that we use to manage our business. It is possible, however, that the plans and estimates used may be incorrect and that future adverse changes in market conditions or operating results of businesses acquired may not be in line with our estimates and may therefore require us to recognize impairment charges on certain intangible assets. 53 In 2025 we recorded a $20 million impairment charge on a license under joint development with a third party, for which future use is no longer expected. In 2024 and 2023, we impaired $9 million and $42 million respectively of certain technologies acquired as part of recent business combinations with no alternative future use. We will continue to monitor the carrying value of our assets. If market conditions deteriorate, this could result in future impairment losses. Further impairment charges could also result from new valuations triggered by changes in our product portfolio or by strategic transactions, particularly in the event of a downward shift in future revenues or operating cash flows in relation to our current plans or in case of capital injections by, or equity transfers to, third parties at a value lower than the one underlying the carrying amount. As of December 31, 2025, the value of intangible assets subject to amortization in our consolidated balance sheet amounted to $324 million. Property, plant and equipment. Our business requires substantial investments in technologically advanced manufacturing facilities, which may become significantly underutilized or obsolete as a result of rapid changes in demand and ongoing technological evolution. The largest component of our long-lived assets is our manufacturing equipment primarily in our front-end activities, for which the useful life is estimated to be six years, except for our 300mm manufacturing equipment and certain back-end equipment whose useful life is estimated to be ten years. This estimate is based on our experience using the equipment over time. Depreciation expense is an important element of our manufacturing cost structure. We begin to depreciate property, plant and equipment when it is ready for its intended use. Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of tangible assets or groups of assets held for use might not be recoverable. Several impairment indicators exist for making this assessment, such as: restructuring plans, significant changes in the technology, market, economic or legal environment in which we operate, available evidence of obsolescence of the asset, or indication that its economic performance is, or will be, worse than expected. In determining the recoverability of assets to be held and used, we initially assess whether the carrying value of the tangible assets or group of assets exceeds the undiscounted cash flows associated with these assets. If exceeded, we then evaluate whether an impairment charge is required by determining if the asset’s carrying value also exceeds its fair value. We normally estimate this fair value based on independent market appraisals or the sum of discounted future cash flows, using market participants assumptions such as the utilization of our fabrication facilities and the ability to upgrade such facilities, change in the selling price and the adoption of new technologies. We also evaluate and adjust, if appropriate, the assets’ useful lives at each reporting date. In 2025, we recorded a total $169 million impairment charge on buildings ($30 million), facilities ($86 million) and machinery and equipment ($53 million), following the launch and subsequent execution of our company-wide program aimed to reshape our manufacturing footprint and resizing our cost base. In 2024 and 2023, no significant impairment charge was recorded on property, plant and equipment. Our evaluations are based on financial plans updated with the latest projections of growth in the semiconductor market and our sales expectations, from which we derive the future production needs and loading of our manufacturing facilities, and which are consistent with the plans and estimates that we use to manage our business. These plans are highly variable due to the high volatility of the semiconductor business and therefore are subject to continuous modifications. If future growth differs from the estimates used in our plans, in terms of both market growth and production allocation to our manufacturing plants, this could require a further review of the carrying amount of our tangible assets and result in a potential impairment loss. As of December 31, 2025, we did not hold any significant assets held for sale. Inventories. Inventories are stated at the lower of cost or net realizable value. Actual cost is based on an adjusted standard cost, which approximates cost on a first-in first-out basis for all categories of inventory (raw materials, work-in-process, finished products). Actual cost is therefore dependent on our manufacturing performance and is based on the normal utilization of our production 54 capacity. In case of underutilization of our manufacturing facilities, we estimate the costs associated with unused capacity. These costs are not included in the valuation of inventories but are charged directly to cost of sales in the consolidated statements of income. Net realizable value is based upon the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Inventory reserve is estimated for excess uncommitted inventories based on historical sales data, order backlog and production plans. We perform, on a continuous basis, write-offs of inventories, which have the characteristics of slow-moving, old production dates and technical obsolescence. We evaluate inventory to identify obsolete or slow-selling items, as well as inventory that is not of saleable quality and we record a specific reserve if we estimate the inventory will eventually be written off. To the extent that future negative market conditions generate order backlog cancellations and declining sales, or if future conditions are less favorable than the projected revenue assumptions, we could record additional inventory reserve, which would have a negative impact on our gross margin. Share-based compensation. Share-based awards are granted to senior executives and selected employees. We measure the cost of share-based service awards based on the fair value of the awards as of the grant date reflecting the market price of the underlying shares at the date of the grant, reduced by the present value of the dividends expected to be paid on the shares during the requisite service period. While the awards granted to selected employees are subject to a three-year service period, the majority of the awards granted to senior executives are subject to a three-year cliff vesting period and the fulfillment of certain performance conditions. The expense is recognized over the requisite service period. In 2025, approximately one-half of the total amount of shares awarded were contingent on the achievement of performance conditions. In order to determine share-based compensation to be recorded for the period, we use estimates on the number of awards expected to vest, including the probability of achieving the performance conditions including those relating to our financial results compared to industry performance. Our assumptions related to industry performance are generally taken with a one quarter lag in line with the availability of market information. In 2025, 2024 and 2023, we recorded a total charge of approximately $193 million, $222 million and $236 million relating to our outstanding stock award plans, respectively. Financial assets. The financial assets held at reporting date are primarily receivables, debt securities and equity securities. Receivables are measured at amortized cost less any currently expected credit loss allowance. Investments in equity securities that have readily determinable fair values and for which we do not have the ability to exercise significant influence are classified as financial assets measured at fair value through earnings. For investments in equity securities without readily determinable fair values and for which we do not have the ability to exercise significant influence, we have elected to apply the cost-method as a measurement alternative. We determine the classification of our financial assets at initial recognition. The fair values of publicly traded securities are based on current market prices. If the market for a financial asset is not active and if no observable market price is obtainable, we measure fair value by using assumptions and estimates. In measuring fair value, we make maximum use of market inputs and minimize the use of unobservable inputs. Debt securities are classified as-available-for-sale financial assets, with changes in fair value recognized as a component of other comprehensive income in our consolidated statements of comprehensive income. Debt securities classified as available-for-sale totaled $985 million and were reported as marketable securities in the consolidated balance sheet as of December 31, 2025. As of December 31, 2025, we hold equity securities with a total carrying amount of $190 million, of which $25 million corresponding to cost-method investments and $165 million to equity securities measured at fair value through earnings, including $127 million carrying amount for our interest stake in InnoScience (Suzhou), a publicly traded entity on the main segment of Hong Kong Stock Exchange. This investment generated in 2025 a $76 million unrealized gain reported as a non-operating income in our consolidated statement of income. 55 Income taxes. We make estimates and judgments in determining income tax for the period, comprising current and deferred income tax. We assess the income tax expected to be paid related to the current year taxable profit in each tax jurisdiction and recognize deferred income tax for all temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the Consolidated Financial Statements. We also assess the Pillar II income tax charges expected to be paid applying the legislation enacted as of December 31, 2025. We also recognize deferred tax assets on temporary differences arising from tax losses carried forward and tax credits. Furthermore, at each reporting date, we assess all material uncertain tax positions in all jurisdictions to determine the amount of income tax benefits that we do not expect to reasonably sustain. As of December 31, 2025, we had uncertain tax positions estimated at $142 million. We also assess the likelihood of realization of our deferred tax assets. Their ultimate realization is dependent upon, among other things, our ability to generate future taxable profit available, or tax credits before their expiration, or our ability to implement prudent and feasible tax planning, or the possibility to settle uncertain tax positions against available net operating loss carry forwards, or similar tax losses and credits. We record a valuation allowance against the deferred tax assets when we consider it is more likely than not that the deferred tax assets will not be realized. As of December 31, 2025, we had deferred tax assets of $408 million, net of valuation allowance. We could be required to record further valuation allowances thereby reducing the amount of total deferred tax assets, resulting in an increase in our income tax charge, if our estimates of projected future taxable income and benefits from available tax strategies are reduced as a result of a change in business conditions or in management’s plans or due to other factors, or if changes in current tax regulations are enacted that impose restrictions on the timing or extent of our ability to utilize net operating losses and tax credit carry-forwards in the future. Likewise, a change in the tax rates applicable in the various jurisdictions or unfavorable outcomes of any ongoing tax audits could have a material impact on our future tax provisions in the periods in which these changes could occur. Pension and post-employment benefits. Our consolidated statements of income and our consolidated balance sheets include amounts for pension obligations and other long-term employee benefits that are measured using actuarial valuations. As of December 31, 2025, our pension and other long-term employee benefit obligations net of plan assets amounted to $516 million. These valuations are based on key assumptions, including discount rates, expected long-term rates of return on plan assets, turnover rates and salary increase rates. The assumptions used in the determination of the net periodic benefit cost are updated on an annual basis at the beginning of each fiscal year or more frequently upon the occurrence of significant events. Any changes in the pension schemes or in the above assumptions can have an impact on our valuations. The measurement date we use for our plans is December 31. Patent and other IP litigation or claims. We record a provision when we believe that it is probable that a liability has been incurred at the date of the Consolidated Financial Statements and the amount of the loss can be reasonably estimated. We regularly evaluate losses and claims to determine whether they need to be adjusted based on current information available to us. Such estimates are difficult to the extent that they are largely dependent on the status of ongoing litigation that may vary based on positions taken by the court with respect to issues submitted, demands of opposing parties, changing laws, discovery of new facts or other matters of fact or law. As of December 31, 2025, based on our current evaluation of ongoing litigation and claims we face, we have not estimated any amounts that could have a material impact on our results of operations and financial condition with respect to either probable or possible risks. In the event of litigation that is adversely determined with respect to our interests, or in the event that we need to change our evaluation of a potential third-party claim based on new evidence, facts or communications, unexpected rulings or changes in the law, this could have a material adverse effect on our results of operations or financial condition at the time it were to materialize. We are in discussion with several parties with respect to claims against us relating to possible infringement of IP rights. We are also involved in certain legal proceedings concerning such issues. See “Item 8. Financial Information — Legal Proceedings” and Note 26 to our Consolidated Financial Statements. 56 Other claims. We are subject to the possibility of loss contingencies arising in the ordinary course of business. These include but are not limited to: product liability claims and/or warranty costs on our products, contractual disputes, indemnification claims, employee grievances, tax claims beyond assessed uncertain tax positions as well as claims for environmental damages. We are also exposed to numerous legal risks which until now have not resulted in legal disputes and proceedings. These include risks related to product recalls, environment, shareholder rights, tariffs and export control regulations, anti-trust, anti-corruption, competition as well as other compliance regulations. We may also face claims in the event of breaches of law committed by individual employees or third parties. In determining loss contingencies, we consider the likelihood of a loss of an asset or the occurrence of a liability, as well as our ability to reasonably estimate the amount of such loss or liability. An estimated loss is recorded when we believe that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We regularly re-evaluate any potential losses and claims and determine whether our provisions need to be adjusted based on the current information available to us. As of December 31, 2025, based on our current evaluation of ongoing litigation and claims we face, we have not estimated any amounts that could have a material impact on our results of operations and financial condition with respect to either probable or possible risks. In the event we are unable to accurately estimate the amount of such loss in a correct and timely manner, this could have a material adverse effect on our results of operations or financial condition at the time such loss was to materialize. For further details of our legal proceedings refer to “Item 8. Financial Information — Legal Proceedings” and Note 26 to our Consolidated Financial Statements. Fiscal Year 2025 Under Article 35 of our Articles of Association, our financial year extends from January 1 to December 31, which is the period end of each fiscal year. In 2025, the first quarter ended on March 29, the second quarter ended on June 28, the third quarter ended on September 27 and the fourth quarter ended on December 31. In 2026, the first quarter will end on March 28, the second quarter will end on June 27, the third quarter will end on September 26 and the fourth quarter will end on December 31. Based on our fiscal calendar, the distribution of our revenues and expenses by quarter may be unbalanced due to a different number of days in the various quarters of the fiscal year and can also differ from equivalent prior years’ periods, as illustrated in the below table for the years 2024, 2025 and 2026. Q1 Q2 Q3 Q4 Days 2024 90 91 91 94 2025 88 91 91 95 2026 87 91 91 96 57 2025 Business Overview Our results of operations for each period were as follows: Year ended December 31, Three Months Ended 2025 2024 December 31, 2025 September 27, 2025 December 31, 2024 (In millions, except per share amounts) (Unaudited, in millions, except per share amounts) Net revenues $ 11,800 $ 13,269 $ 3,329 $ 3,187 $ 3,321 Gross profit 3,999 5,220 1,172 1,059 1,253 Gross margin as percentage of net revenues 33.9 % 39.3 % 35.2 % 33.2 % 37.7 % Operating income 175 1,676 125 180 369 Operating margin 1.5 % 12.6 % 3.8 % 5.6 % 11.1 % Net income (loss) attributable to parent company 166 1,557 (30) 237 341 Diluted earnings per share 0.18 1.66 (0.03) 0.26 0.37 Non-U.S. GAAP measures on earnings Operating income before impairment and restructuring charges and one-time items is used by management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items, such as impairment, restructuring charges and other related phase-out costs. Adjusted net earnings and earnings per share ("EPS") are used by management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items like impairment, restructuring charges and other related phase-out costs attributable to ST and other one-time items, net of the relevant tax impact. Year ended December 31, 2025(in millions of U.S. dollars, except per share amount) Gross profit Operating income Net income EPS basic Diluted EPS US GAAP figures, as reported 3,999 175 166 0.19 0.18 Impairment, restructuring charges and other related phase-out costs — 376 376 Estimated income tax effect — — (56) Non-US GAAP 3,999 551 486 0.54 0.53 Three Months ended December 31, 2025(in millions of U.S. dollars, except per share amount) Gross profit Operating income Net income Diluted EPS US GAAP figures, as reported 1,172 125 (30) (0.03) Impairment, restructuring charges and other related phase-out costs — 141 141 Estimated income tax effect — — (11) Non-US GAAP 1,172 266 100 0.11 Three Months ended September 27, 2025 (in millions of U.S. dollars, except per share amount) Gross profit Operating income Net income Diluted EPS US GAAP figures, as reported 1,059 180 237 0.26 Impairment, restructuring charges and other related phase-out costs — 37 37 Estimated income tax effect — — (7) Non-US GAAP 1,059 217 267 0.29 58 Year ended December 31, Three Months Ended 2025 2024 December 31, 2025 September 27, 2025 December 31, 2024 Non-U.S. GAAP measures on earnings (In millions, except per share amounts) (Unaudited, in millions, except per share amounts) Operating Income (non-U.S. GAAP) $ 551 $ 1,676 $ 266 $ 217 $ 369 Operating Margin (non-U.S. GAAP) 4.7 % 12.6 % 8.0 % 6.8 % 11.1 % Net Income (non-U.S. GAAP) 486 1,557 100 267 341 Diluted Earnings Per Share (non-U.S. GAAP) 0.53 1.66 0.11 0.29 0.37 Our total available market is defined as “TAM”, while our serviceable available market is defined as “SAM” and represents the market for products sold by us (i.e., TAM excluding major devices such as microprocessors, GPU/AI accelerators, DRAM and flash-memories, optoelectronics devices other than optical sensors, video processing and wireless application specific market products, such as baseband and application processors). Based on industry data published by WSTS, semiconductor industry revenues in 2025 increased on a year-over-year basis by approximately 26% for the TAM and by approximately 15% for the SAM, to reach approximately $792 billion and $279 billion, respectively. In the fourth quarter of 2025, on a year-over-year basis, the TAM increased by approximately 37% and the SAM increased by approximately 22%. Sequentially, the TAM increased by approximately 14% while the SAM remained substantially flat. Full year 2025 net revenues decreased by 11.1% to $11.80 billion; gross margin was 33.9% and operating margin was 1.5%. Our fourth quarter net revenues amounted to $3,329 million, representing a year-over-year increase of 0.2%, gross margin was 35.2%, and operating margin was 3.8%. On a sequential basis, fourth quarter net revenues increased 4.5%, above the mid-point of our guidance, driven by higher revenues in Personal Electronics and, to a lesser extent, in Communications, Equipment, Computers and Peripherals, and Industrial, while Automotive was below expectations. On a sequential basis, AM&S segment revenues increased 1.1%, P&D segment revenues decreased 3.9%, EMP segment revenues increased 3.9% and RF OC segment revenues increased 30.5%. Our quarterly performance was above the SAM on a sequential basis and below the SAM on a year-over-year basis. Our effective average exchange rate was $1.11 for €1.00 for the full year 2025, compared to $1.08 for €1.00 for full year 2024. Our effective average exchange rate for the fourth quarter of 2025 was $1.14 for €1.00, compared to $1.14 for €1.00 for the third quarter of 2025 and $1.09 for €1.00 for the fourth quarter of 2024. For a more detailed discussion of our hedging arrangements and the impact of fluctuations in exchange rates, see “Impact of Changes in Exchange Rates”. Our 2025 gross margin decreased 540 basis points to 33.9% from 39.3% in 2024, mainly due to lower manufacturing efficiencies and, to a lesser extent, sales price and mix, lower level of capacity reservations fees, negative currency effect and higher unused capacity charges. Our fourth quarter 2025 gross profit was $1,172 million and gross margin was 35.2%, 20 basis points above the mid-point of our guidance mainly due to better product mix. On a sequential basis, gross margin increased by 200 basis points mainly due to higher manufacturing efficiencies, lower front-end unloading charges and more favorable product mix, partially offset by sales price impact. On a year-over-year basis, gross margin decreased 250 basis points, mainly due to lower manufacturing efficiencies and, to a lesser extent, negative currency effect, and lower level of capacity reservation fees. Our operating expenses, comprised of aggregated SG&A and R&D expenses, amounted to $3,676 million in 2025, decreasing by 1.3%, from $3,726 million in the prior year mainly due to lower 59 cost of labor and discretionary expenses, partially offset by negative currency effects. On aggregate, R&D and SG&A expenses were $965 million for the fourth quarter of 2025, compared to $897 million and $943 million in the prior and year-ago quarters, respectively. The sequential increase was mainly due to calendar impact, net of vacation. The year-over-year increase of operating expenses was mainly due to negative currency effect, partially offset by lower discretionary spending. Other income and expenses, net, were $228 million in 2025 compared to $182 million in 2024, increasing mainly due to lower start-up costs. Fourth quarter other income and expenses, net, were $59 million, compared to $55 million in the prior quarter and $59 million in the year-ago quarter. The sequential increase was mainly due to higher income from public funding. Starting 2025, we engaged in a company-wide program aimed to reshape our manufacturing footprint by accelerating the wafer fab capacity to 300mm silicon (Agrate, Italy and Crolles, France) and 200mm silicon carbide (Catania, Italy) and resizing our global cost base. This program is expected to result in strengthening our capability to grow revenues with an improved operating efficiency. Impairment, restructuring charges and other related phase-out costs, totaled $376 million in 2025, of which $189 million of impairment charges, reflecting the comprehensive impairment test carried out during the year, which accounted for the majority of impairment charges recorded and relate to the company-wide program aimed at reshaping our manufacturing footprint and resizing our global cost base. In 2025, we also recorded $176 million of restructuring charges, of which $97 million for labor-related costs and $79 million for non-labor related costs. We also recorded $11 million of phase out costs. No impairment and restructuring charges related to the launch of the company-wide program were recorded in 2024. Impairment, restructuring charges and other related phase-out costs, totaled $141 million in the fourth quarter of 2025, increasing by $104 million compared to $37 million in the third quarter, primarily due to restructuring charges related to employee voluntary termination benefits, non-labor related costs, including contract termination costs, and phase-out costs. Operating income in 2025 was $175 million, decreasing by $1,501 million compared to 2024. Operating income in the fourth quarter was $125 million compared to $180 million and $369 million in the prior and year-ago quarter, respectively. Operating income in 2025 included $376 million impairment, restructuring charges and other related phase-out costs. Excluding these items, non-U.S. GAAP Operating income in 2025 amounted to $551 million compared to $1,676 million in 2024. Non-U.S. GAAP Operating income decreased by $1,125 million due to lower gross profit. Non-U.S. GAAP Operating income in the fourth quarter of 2025 amounted to $266 million compared to $217 million and $369 million in the prior and year-ago quarters, respectively. On a sequential basis, non-U.S. GAAP operating income increased by $49 million mainly due to higher gross profit, partially offset by higher operating expenses. On a year-over-year basis, non-U.S. GAAP operating income decreased by $103 million, primarily due to lower gross margin profitability and negative currency effects. Full year 2025 net income was $166 million, or $0.18 diluted earnings per share, compared to net income of $1,557 million, or $1.66 diluted earnings per share for the full year 2024. Fourth quarter net earnings decreased on a sequential and year-over-year basis to a net loss of $30 million and a -$0.03 diluted earnings per share, compared to a net income of $237 million, or $0.26 diluted earnings per share, in the prior quarter, and a net income of $341 million, or $0.37 diluted earnings per share, in the year-ago quarter. During 2025, our net cash from operating activities was at $2,152 million. Our net cash used in investing activities was at $43 million compared to $3,742 in 2024. Net Capex (non-U.S. GAAP measure) amounted to $1,792 million and $2,531 million in 2025 and 2024 respectively. Our free cash flow (non-U.S. GAAP measure), amounted to $265 million in 2025 compared to $288 million in 2024. Refer to “Liquidity and Capital Resources” for the reconciliation of the free cash flow, a non-U.S. GAAP measure, to our consolidated statements of cash flows. 60 During 2025, we received $156 million of proceeds from noncontrolling interest and used $750 million for the repayment of issued convertible bonds, $367 million for the repurchase of common stock, $321 million of dividends paid to our shareholders and $239 million for long-term debt repayment. Business Outlook Our first quarter 2026 outlook reflects revenues of approximately $3.04 billion at the mid-point decreasing on a sequential basis by 8.7%, plus or minus 350 basis points. Gross margin is expected to be at approximately 33.7%, plus or minus 200 basis points. This outlook is based on an assumed effective currency exchange rate of approximately $1.16 = €1.00 for the 2026 first quarter and includes the impact of existing hedging contracts. The first quarter will close on March 28, 2026. This business outlook does not include any impact from potential further changes to global trade tariffs compared to the current situation, as well as any impact related to the acquisition of NXP's MEMS business, which was completed on February 2, 2026. These are forward-looking statements that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially; in particular, refer to those known risks and uncertainties described in “Cautionary Note Regarding Forward-Looking Statements” and “Item 3. Key Information — Risk Factors” herein. Other Developments On February 9, 2026, we announced an expanded strategic collaboration with Amazon Web Services (AWS) through a multi-year, multi-billion USD commercial engagement serving several product categories, to enable new high performance compute infrastructure for cloud and AI data centers. On February 2, 2026, we announced the closing of the acquisition of NXP Semiconductors' MEMS sensor business, first announced on July 24, 2025. This transaction, focused on automotive safety and non-safety products and sensors for industrial applications, expands ST’s global sensors capabilities and strengthens our global sensors capabilities, unlocking new opportunities for development across automotive, industrial and consumer applications. The transaction was subject to customary closing conditions, including regulatory approvals, which have now been satisfied or waived, and closed on February 2, 2026. On December 18, we held an Extraordinary General Meeting of Shareholders ("EGM"), in Amsterdam, the Netherlands. The proposed resolutions, all approved by our Shareholders were: •the appointment of Mr. Armando Varricchio, as member of the Supervisory Board, for a term expiring at the end of the 2028 AGM; and •the appointment of Mr. Orio Bellezza, as member of the Supervisory Board, for a term expiring at the end of the 2028 AGM. On December 11, we announced that ST and the European Investment Bank ("EIB") have signed a €500 million financing agreement to boost Europe’s competitiveness and strategic autonomy. This represented the first tranche of a broader €1 billion credit line approved by the EIB in favor of ST. On November 20, we announced that ST and TSE, a leading player in solar energy and agrivoltaics in France, have signed a 15-year Power Purchase Agreement ("PPA") to supply renewable electricity from solar parks to STMicroelectronics’ sites in France. On November 18, we announced the introduction by ST of the industry’s first 18nm microcontroller for high-performance applications. 61 On October 21, we announced that ST and SP Group, a leading utilities group in the Asia Pacific and Singapore’s national grid operator, have commenced operations for Singapore’s largest industrial district cooling system at our Ang Mo Kio TechnoPark, reducing carbon emissions by up to 120,000 tons annually and cutting cooling electricity use by 20%. This energy-efficient system supports our goal of carbon neutrality by 2027 and earned Green Mark Platinum certification for sustainability and design excellence. On September 17, we announced that we are advancing our next-generation panel-level packaging technology with a new pilot line at our Tours, France site, operational by Q3 2026. This $60 million investment aims to boost our manufacturing efficiency and innovation for automotive, industrial, and consumer applications, reinforcing ST’s leadership in chip packaging and heterogeneous integration in Europe. On August 20, we published our IFRS 2025 semi annual accounts for the six-month period ended June 28, 2025 on our website and filed them with the Netherlands Authority for the Financial Markets (Authoriteit Financiële Markten). On May 28, we held our AGM (the "2025 AGM"), in Amsterdam, the Netherlands. The proposed resolutions, all of which were approved by our Shareholders, were: •The adoption of the Company's Statutory Annual Accounts for the year ended December 31, 2024, prepared in accordance with IFRS and filed with the Netherlands Authority for the Financial Markets on March 27, 2025; •The distribution of a cash dividend of $0.36 per outstanding share of the Company’s common stock to be distributed in quarterly installments of $0.09 in each of the second, third and fourth quarters of 2025 and first quarter of 2026 to shareholders of record in the month of each quarterly payment; •The adoption of the remuneration for the members of the Supervisory Board; •The appointment of Mr. Werner Lieberherr, as member of the Supervisory Board, for a three-year term expiring at the end of the 2028 AGM, in replacement of Ms. Janet Davidson whose mandate has expired at the end of the 2025 AGM; •The appointment of Ms. Simonetta Acri, as member of the Supervisory Board, for a three-year term expiring at the end of the 2028 AGM in replacement of Ms. Donatella Sciuto whose mandate has expired at the end of the 2025 AGM; •The reappointment of Ms. Ana de Pro Gonzalo, as member of the Supervisory Board, for a three-year term to expire at the end of the 2028 AGM; •The reappointment of Ms. Hélène Vletter-van Dort, as member of the Supervisory Board, for a three-year term to expire at the end of the 2028 AGM; •The appointment of PricewaterhouseCoopers Accountants N.V. as the Company’s external auditor for the financial years 2026-2029; •The appointment of PricewaterhouseCoopers Accountants N.V. to audit the Company’s sustainability reporting for the financial years 2026-2027, to the extent required by law; •The approval of the stock-based portion of the compensation of the President and Chief Executive Officer; •The approval of the stock-based portion of the compensation of the President and Chief Financial Officer; •The authorization to the Managing Board, until the conclusion of the 2026 AGM, to repurchase shares, subject to the approval of the Supervisory Board; 62 •The delegation to the Supervisory Board of the authority to issue new common shares, to grant rights to subscribe for such shares, and to limit and/or exclude existing shareholders’ pre-emptive rights on common shares, until the end of the 2026 AGM; •The discharge of the member of the Managing Board; and •The discharge of the members of the Supervisory Board. On April 10, we detailed our Company-wide program to reshape our manufacturing footprint and resize our global cost base and confirmed the annual cost savings target in the high triple-digit million-dollar range exiting 2027. Specifically, we disclosed further elements of our program to reshape our global manufacturing footprint. On April 10, our Supervisory Board commented on statements made in the Italian press on April 9: •Accusations on the personal transactions made by the two members of our Managing Board on the eve of earnings releases are false. Stock sales done during our blackout period were made by our stock plan administrator, through an automatic procedure, to abide by Swiss tax rules for the Managing Board members and were legal and compliant with Company policy. On the class action under way, the Supervisory Board reviewed the processes and believes that ST has good defense against the allegations. •The Supervisory Board unanimously approved the details of a Company-wide program to reshape our manufacturing footprint, accelerating ST’s wafer-fab capacity to 300mm silicon and 200mm silicon carbide, announced to the markets last year on October 31 and this year on January 30. This plan allows for a major improvement of the competitiveness of the Company. •The Supervisory Board expressed its renewed support to Jean-Marc Chery, Lorenzo Grandi, and the management team, notably in their capacity to execute the transformation during challenging times for the semiconductor industry. On March 31, we announced the signature of an agreement on GaN technology development and manufacturing with Innoscience, the world leader in 8” GaN-on-Si (gallium nitride on silicon) high-performance low-cost manufacturing. Results of Operations Segment Information We design, develop, manufacture and market a broad range of products, including discrete and standard commodity components, ASICs, full-custom devices and semi-custom devices and ASSPs for analog, digital and mixed-signal applications. In addition, we further participate in the manufacturing value chain of smartcard products, which includes the production and sale of both silicon chips and smartcards. Following our reorganization announced in January 2024 into four reportable segments, in the first quarter of 2025 we made further progress in analyzing our global product portfolio, resulting in the following adjustments to our segments effective starting January 1, 2025. Prior-year comparative information has been adjusted accordingly. •In the APMS product group: •the transfer of VIPpower products from the P&D reportable segment to the AM&S reportable segment. 63 • In the MDRP product group: •the newly created ‘Embedded Processing’ reportable segment includes the former ‘MCU’ segment (excluding the RF ASICs mentioned below) as well as custom processing products (automotive ADAS products). •the newly created ‘RF Optical Communications’ reportable segment includes the former ‘D&RF’ segment (excluding Automotive ADAS products) as well as some RF ASICs which were previously part of the former ‘EMP’ segment. As of December 31, 2025, our reportable segments, were as follows: •Analog products, MEMS and Sensors Group (“AM&S”), comprised of ST analog products, MEMS sensors and actuators, and optical sensing solutions. •Power and Discrete products (“P&D”), comprised of discrete and power transistor products. •Embedded Processing (“EMP”), comprised of general-purpose and automotive microcontrollers, connected security products and custom processing products (automotive ADAS). •RF Optical Communications (“RFOC”), comprised of space, ranging & connectivity products, digital audio & signaling solutions and optical & RF COT. Net revenues of “Others” include revenues from sales assembly services and other revenues. For the computation of the segments’ internal financial measurements, the Company uses certain internal rules of allocation for the costs not directly chargeable to the segments, including cost of sales, SG&A expenses and a part of R&D expenses. In compliance with the Company’s internal policies, certain costs are not allocated to the segments, but reported in “Others”. Those comprise unused capacity charges, including incidents leading to power outage, certain unallocated impairment, restructuring charges and other related phase-out costs, management reorganization costs, start-up costs, and other unallocated income (expenses) such as: strategic or special R&D programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to reportable segments, as well as operating earnings of other products. Wafer costs are allocated to the reportable segments based on actual cost. From time to time, with respect to specific technologies, wafer costs are allocated to reportable segments based on market price. 64 Annual Results of Operations The following table sets forth certain financial data from our consolidated statements of income: 2025 2024 2023 in $ million except per share amounts % of net revenues in $ million except per share amounts % of net revenues in $ million except per share amounts % of net revenues Net sales $ 11,754 99.6 % $ 13,217 99.6 % $ 17,239 99.7 % Other revenues $ 46 0.4 $ 52 0.4 $ 47 0.3 Net revenues $ 11,800 100.0 $ 13,269 100.0 $ 17,286 100.0 Cost of sales $ (7,801) (66.1) $ (8,049) (60.7) $ (8,999) (52.1) Gross profit $ 3,999 33.9 $ 5,220 39.3 $ 8,287 47.9 Selling, general and administrative expenses $ (1,632) (13.8) $ (1,649) (12.4) $ (1,631) (9.4) Research and development expenses $ (2,044) (17.3) $ (2,077) (15.7) $ (2,100) (12.2) Other income and expenses, net $ 228 1.9 $ 182 1.4 $ 55 0.4 Impairment, restructuring charges and other related phase-out costs $ (376) (3.2) $ — — $ — — Operating income $ 175 1.5 $ 1,676 12.6 $ 4,611 26.7 Interest income (expense), net $ 168 1.4 $ 218 1.6 $ 171 0.8 Other components of pension benefit costs $ (19) (0.1) $ (15) — $ (19) 0.1 Gain (loss) on financial instruments, net $ 76 0.6 $ (1) — $ — — Income before income taxes and noncontrolling interest $ 400 3.4 $ 1,878 14.2 $ 4,763 27.6 Income tax expense $ (220) (1.9) $ (313) (2.4) $ (541) (3.2) Net income $ 180 1.5 $ 1,565 11.8 $ 4,222 24.4 Net income attributable to noncontrolling interest $ (14) (0.1) $ (8) (0.1) $ (11) — Net income attributable to parent company stockholders $ 166 1.4 % $ 1,557 11.7 % $ 4,211 24.4 % Basic earnings per share (Basic EPS) $ 0.19 — $ 1.73 — $ 4.66 — Diluted earnings per share (Diluted EPS) $ 0.18 — $ 1.66 — $ 4.46 — Non-U.S. GAAP(1) Operating Income (Non-U.S. GAAP) $ 551 4.7 $ 1,676 12.6 $ 4,611 26.7 Net Income (Non-U.S. GAAP) $ 486 4.1 $ 1,565 11.8 $ 4,222 24.4 Diluted Earnings Per Share (Non-U.S. GAAP) $ 0.53 — $ 1.66 — $ 4.46 — ________________________ (1)Non-U.S. GAAP. For reconciliation to U.S. GAAP and information explaining why we believe these measures are important, see "Item 5. Operating and Financial Review and Prospects - 2025 Business Overview". 65 Net revenues Year Ended December 31, % Variation 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in millions) Net sales $ 11,754 $ 13,217 $ 17,239 (11.1) % (23.3) % Other revenues $ 46 $ 52 $ 47 (12.1) 11.3 Net revenues $ 11,800 $ 13,269 $ 17,286 (11.1) % (23.2) % Our 2025 net revenues decreased 11.1% compared to the prior year, as a result of an approximate 6% decrease in average selling prices, due to product mix and lower selling prices, and a 5% decrease in volumes. Our 2024 net revenues decreased 23.2% compared to the prior year, as a result of an approximate 15% decrease in average selling prices, due to product mix and lower selling prices, and a 8% decrease in volumes. In 2025, 2024 and 2023, our largest customer, Apple, accounted for 17.7%, 14.5% and 12.3% of our net revenues, respectively, reported within our four reportable segments. Net revenues by reportable segment Year Ended % Variation 2025 2024 2023 2025 vs 2024 2024 vs 2023 (In millions) AM&S segment $ 5,085 $ 5,429 $ 6,232 (6.3) % (12.9) % P&D segment 1,685 2,461 3,098 (31.5) (20.6) Analog, Power & Discrete, MEMS and Sensors Group ("APMS") 6,770 7,890 9,330 (14.2) (15.4) EMP segment 3,580 3,853 6,353 (7.1) (39.4) RFOC segment 1,436 1,511 1,587 (4.9) (4.8) Microcontrollers, Digital ICs and RF products Group ("MDRF") 5,016 5,364 7,940 (6.5) (32.4) Others 14 15 16 — — Total consolidated net revenues $ 11,800 $ 13,269 $ 17,286 (11.1) % (23.2) % For the full year 2025, AM&S revenues decreased 6.3%, driven by lower volumes of approximately 11%, partially offset by higher average selling prices of approximately 5% due to a more favorable product mix. P&D revenues decreased 31.5%, driven by lower average selling prices of approximately 29% due to a less favorable product mix and lower selling prices, and lower volumes of approximately 3%. EMP revenues decreased 7.1% due to lower volumes of approximately 4% and lower average selling prices of approximately 3% mainly driven by a less favorable product mix. RF OC revenues decreased by 4.9%, driven by lower average selling prices of approximately 19%, due to less favorable product mix, partially offset by higher volumes of approximately 14%. 66 Net revenues by Market Channel(1) Year Ended December 31, 2025 2024 2023 (As percentage of net revenues) OEM 72 % 73 % 66 % Distribution 28 27 34 Total 100 % 100 % 100 % _______________(1) OEMs are the end-customers to which we provide direct marketing application engineering support, while Distribution refers to the distributors and representatives that we engage to distribute our products around the world. By market channel, our 2025 net revenues in Distribution amounted to 28% of our total consolidated revenues, increasing from 27% in 2024. When comparing 2024 with 2023 figures, net revenues in Distribution had decreased by 7%, from 34% to 27%. Net Revenues by Location of Shipment(1) Year Ended December 31, % Variation 2025 2024 2023 2025 vs 2024 2024 vs 2023 (In millions) Europe, Middle-East and Africa ("EMEA") $ 2,449 $ 3,329 $ 4,836 (26.4) % (31.2) % Americas $ 1,896 $ 2,106 $ 2,724 (10.0) (22.7) Asia Pacific $ 7,455 $ 7,834 $ 9,726 (4.8) (19.5) Total consolidated net revenues $ 11,800 $ 13,269 $ 17,286 (11.1) % (23.2) % __________________ (1) Net revenues by location of shipment are classified by location of customer invoiced or reclassified by shipment destination in line with customer demand. For example, products ordered by U.S.-based companies to be invoiced to Asia Pacific affiliates are classified as Asia Pacific revenues. Furthermore, the comparison among the different periods may be affected by shifts in shipments from one location to another, as requested by our customers. By location of shipment, EMEA revenues decreased by 26.4%, mainly driven by lower sales in Analog, General-Purpose & Automotive microcontrollers and P&D. Americas revenues decreased 10.0%, mainly due to lower sales in P&D and Analog, partially offset by higher sales in RF Optical Communications. Asia Pacific revenues decreased 4.8% mainly driven by lower sales in P&D. Gross profit Year Ended December 31, Variation 2025 2024 2023 2025 vs 2024 2024 vs 2023 (In millions) Cost of sales $ (7,801) $ (8,049) $ (8,999) (3.1) % 10.6 % Gross profit $ 3,999 $ 5,220 $ 8,287 (23.4) % (37.0) % Gross margin (as percentage of net revenues) 33.9 % 39.3 % 47.9 % -540 bps -860 bps In 2025, gross margin decreased 540 basis points to 33.9% from 39.3% in 2024, mainly due to lower manufacturing efficiencies and, to a lesser extent, sales price and mix, lower level of capacity reservations fees, negative currency effect and higher unused capacity charges. In 2024, gross margin decreased by 860 basis points to 39.3% from 47.9% in 2023, mainly due to product mix and, to a lesser extent, to sales price and higher unused capacity charges. 67 Operating expenses Year Ended December 31, Variation 2025 2024 2023 2025 vs 2024 2024 vs 2023 (In millions) Selling, general and administrative expenses $ (1,632) $ (1,649) $ (1,631) (1.0) % (1.1) % Research and development expenses $ (2,044) $ (2,077) $ (2,100) (1.6) 1.1 Total operating expenses $ (3,676) $ (3,726) $ (3,731) (1.3) % 0.1 % As percentage of net revenues 31.2 % 28.1 % 21.6 % 310bps 650bps The 2025 operating expenses decreased by 1.3% to $3,676 from $3,726 million in the prior year, mainly due to lower cost of labor and discretionary expenses, partially offset by negative currency effects. The 2024 operating expenses amounted to $3,726 million, substantially flat, decreasing by 0.1% from $3,731 million in the prior year. The R&D expenses were net of research tax credits, which amounted to $122 million in 2025, $140 million in 2024 and $126 million in 2023. Other income and expenses, net Year Ended December 31, 2025 2024 2023 (In millions) Public funding $ 219 $ 266 $ 201 Start-up costs $ (7) $ (69) $ (134) Exchange gains (losses), net $ 24 $ 6 $ 5 Patent costs $ (5) $ (5) $ (12) Gain on sale of non-current assets $ 6 $ 5 $ 6 Cancellation and postponement fees $ (6) $ (18) $ — Other, net $ (3) $ (3) $ (11) Other income and expenses, net $ 228 $ 182 $ 55 As percentage of net revenues 1.9 % 1.4 % 0.3 % In 2025 we recognized other income, net, of $228 million, increasing compared to $182 million in 2024. The increase was mainly due to lower start-up costs. In 2024 we recognized other income, net, of $182 million, decreasing compared to $55 million in 2023. The increase was mainly due to lower start-up costs and higher income from public funding. Impairment, restructuring charges and other related phase-out costs Year Ended December 31, 2025 2024 2023 (In millions) Impairment, restructuring charges and other related phase-out costs $ (376) $ — $ — As percentage of net revenues 3.2 % — % — % 68 Impairment, restructuring charges and other related phase-out costs, totaled $376 million in 2025, of which $189 million of impairment charges, reflecting the comprehensive impairment test carried out during the year, which accounted for the majority of impairment charges recorded and relate to the company-wide program aimed at reshaping our manufacturing footprint and resizing our global cost base. In 2025, we also recorded $176 million of restructuring charges, of which $97 million for labor-related costs and $79 million for non-labor related costs. We also recorded $11 million of phase out costs. No impairment and restructuring charges related to the launch of the company-wide program were recorded in 2024. Operating income Year Ended December 31, 2025 2024 2023 (In millions) Operating income, as reported $ 175 $ 1,676 $ 4,611 As percentage of net revenues 1.5 % 12.6 % 26.7 % Non-U.S. GAAP Operating income (1) $ 551 $ 1,676 $ 4,611 As percentage of net revenues 4.7 % 12.6 % 26.7 % ________________________ (1)Non-U.S. GAAP. For reconciliation to U.S. GAAP and information explaining why we believe these measures are important, see "Item 5. Operating and Financial Review and Prospects - 2025 Business Overview". Operating income in 2025 was $175 million, decreasing by $1,501 million compared to 2024. Operating income in 2025 included $376 million impairment, restructuring charges and other related phase-out costs. Excluding these items, non-U.S. GAAP Operating income in 2025 amounted to $551 million compared to $1,676 million in 2024. Non-U.S. GAAP Operating income decreased by $1,125 million due to lower gross profit. Operating income in 2024 was $1,676 million, decreasing by $2,935 million compared to 2023, mainly driven by the combining effect of lower revenues and gross margin profitability. Operating income by reportable segment Year Ended December 31, 2025 2024 2023 $ million % of net revenues $ million % of net revenues $ million % of net revenues AM&S segment $ 623 14.3 % $ 875 16.2 $ 1,491 8.6 % P&D segment $ (275) 14.7 $ 263 10.7 $ 706 4.1 Analog, Power & Discrete, MEMS and Sensors Group (APMS) $ 348 14.4 $ 1,138 14.4 $ 2,197 12.7 EMP segment $ 536 14.4 $ 684 17.9 $ 2,307 13.3 RFOC segment $ 265 29.7 $ 379 25.1 $ 521 3.0 Microcontrollers, Digital ICs and RF products Group (MDRF) $ 801 19.8 $ 1,063 19.8 $ 2,828 16.4 Total operating income of product groups $ 1,149 9.7 $ 2,201 16.6 $ 5,025 29.1 Others(1) $ (974) — $ (525) — $ (414) — Total consolidated operating income $ 175 12.6 % $ 1,676 12.6 % $ 4,611 26.7 % ________________________ (1)Operating income (loss) of “Others” includes items such as unused capacity charges, incidents leading to power outage, impairment, restructuring charges and other related phase-out costs, management reorganization costs, start-up costs, and other unallocated income (expenses) such as: strategic or special research and development programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to reportable segments (e.g. urgent freight costs, changes in fair value measurement on contingent consideration liabilities), as well as operating earnings of other products. 69 In 2025, AM&S operating income was $623 million, decreasing by $252 million compared to 2024, driven by lower profitability in Analog partially, partially offset by higher profitability in imaging. P&D operating loss was $275 million, decreasing by $538 million from an operative income of $263 million. EMP operating income decreased by $148 million to $536 million with all subgroups decreasing. RF OC operating income decreased by $114 million. Reconciliation to consolidated operating income Year Ended December 31, 2025 2024 2023 (In millions) Total operating income of reportable segments $ 1,149 $ 2,201 $ 5,025 Impairment, restructuring charges and other related phase-out costs $ (376) $ — $ — Impairment loss on intangible assets acquired through business combinations $ — $ — $ (36) Start-up costs $ (7) $ (69) $ (134) Unused capacity charges $ (416) $ (370) $ (120) Other unallocated manufacturing results $ (169) $ (63) $ (94) Gain on sale of non-current assets $ 5 $ 2 $ 4 Cancellation and postponement fees $ — $ (18) $ — Strategic and other research and development programs and other non-allocated provisions(1) $ (11) $ (7) $ (34) Total operating loss Others $ (974) $ (525) $ (414) Total consolidated operating income $ 175 $ 1,676 $ 4,611 ______________ (1) Includes unallocated income and expenses such as certain corporate-level operating expenses and other income (costs) that are not allocated to the reportable segments. Interest income (expense), net Year Ended December 31, 2025 2024 2023 (In millions) Interest income (expense), net $ 168 $ 218 $ 171 As percentage of net revenues 1.4 % 1.6 % 1.0 % In 2025, we recorded a net interest income of $168 million, compared to net interest income of $218 million and a net interest income of $171 million in 2024 and 2023, respectively. In 2025, net interest income was composed of $223 million of interest income, offset by interest expense on borrowings and banking fees of $55 million. In 2024, net interest income was composed of $303 million of interest income, offset by interest expense on borrowings and banking fees of $85 million. 70 Gain (loss) on financial instruments, net Year Ended December 31, 2025 2024 2023 (In millions) Gain (loss) on financial instruments, net $ 76 $ (1) $ — As percentage of net revenues 0.6 % — % — % During 2025, we recognized a $76 million unrealized gain on financial instruments due to the increase in fair value of our equity stake in InnoScience (Suzhou) Technology Holding Co., Ltd., which is measured at fair value through earnings. Income tax expense Year Ended December 31, 2025 2024 2023 (In millions) Income tax expense $ (220) $ (313) $ (541) As percentage of net revenues (1.9) % (2.4) % (3.1) % In 2025, we registered an income tax expense of $220 million, compared to $313 million in 2024 and $541 million in 2023. These amounts reflect the actual taxes calculated on our income before income taxes in each of our jurisdictions and tax benefits, net of valuation allowances, associated with our estimates of the net operating loss realization, in certain jurisdictions, against future taxable profits, Pillar II taxes, one-time tax benefits related to previous year positions and our best estimate of additional tax charges related to potential uncertain tax positions and claims. In 2025, the effective tax rate was 19%, before $143 million of income tax expenses resulting from discrete items, which include a non-cash income tax expense of $80 million from an increase in valuation allowance in one of our tax jurisdiction and a non-cash income tax expense of $66 million related to uncertain tax positions. In 2024, the effective tax rate was 17%, before $6 million of tax benefit from discrete items. In 2023, the effective tax rate was 15%, before $174 million of tax benefit from discrete items, which included a one-time non-cash income tax benefit of $191 million. Our tax rate is variable and depends on changes in the level of operating results within various local jurisdictions and on changes in the taxation rates applicable in these jurisdictions, as well as changes in estimates and assumptions used when assessing our tax positions. Our income tax amounts and rates depend also on our loss carry-forwards and their relevant valuation allowances, which are based on estimated projected plans and available tax planning; in the case of material changes to these plans, the valuation allowances could be adjusted accordingly with an impact on our income tax expense (benefit). We currently enjoy certain tax benefits in some countries. Such benefits may not be available in the future due to changes in the local jurisdictions; our effective tax rate could be different in future periods and may increase in the coming years. In addition, our yearly income tax expense includes the estimated impact of provisions related to income tax positions which have been considered as uncertain. 71 Net income attributable to noncontrolling interest Year Ended December 31, 2025 2024 2023 (In millions) Net income attributable to noncontrolling interest $ (14) $ (8) $ (11) As percentage of net revenues 0.1 % 0.1 % 0.1 % Net income attributable to noncontrolling interest amounted to $14 million in 2025, $8 million in 2024 and $11 million in 2023. Net income attributable to parent company Year Ended December 31, 2025 2024 2023 (In millions) Net income attributable to parent company, as reported $ 166 $ 1,557 $ 4,211 As percentage of net revenues 1.4 % 11.7 % 24.4 % Non-U.S. GAAP Net income attributable to parent company (1) $ 486 $ 1,557 $ 4,211 As percentage of net revenues 4.1 % 11.7 % 24.4 % ________________________ (1)Non-U.S. GAAP. For reconciliation to U.S. GAAP and information explaining why we believe these measures are important, see "Item 5. Operating and Financial Review and Prospects — 2025 Business Overview". For 2025, we reported a net income attributable to parent company of $166 million, compared to $1,557 million and $4,211 million for 2024 and 2023, respectively. The 2025 net income attributable to parent company represented diluted earnings per share of $0.18 compared to $1.66 and $4.46 for 2024 and 2023, respectively. Non-U.S. GAAP Net income and diluted Earnings Per Share, stood at $486 million and $0.53 respectively in 2025 compared to a net income of $1,557 million in the prior year, representing diluted earnings per share of $1.66. Quarterly Results of Operations Certain quarterly financial information for the years 2025 and 2024 are set forth below. Such information is derived from our unaudited Consolidated Financial Statements, prepared on a basis consistent with the audited Consolidated Financial Statements that include, in our opinion, all normal adjustments necessary for a fair statement of the interim information set forth therein. Operating results for any quarter are not necessarily indicative of results for any future period. In addition, in view of the significant volatility we have experienced in recent years, the increasingly competitive nature of the markets in which we operate, the changes in products mix and the currency effects of changes in the composition of sales and production among different geographic regions, we believe that period-to-period comparisons of our operating results should not be relied upon as an indication of future performance. Our quarterly and annual operating results are also affected by a wide variety of other factors that could materially and adversely affect revenues and profitability or lead to significant variability of operating results, please see “Item 3. Key Information — Risk Factors — Risks Related to Our Operations”. As only a portion of our expenses varies with our revenues, there can be no assurance that we will be able to reduce costs promptly or adequately in relation to revenue declines to compensate for the effect of any such factors. As a result, unfavorable changes in the above or other factors have in the past and may in the future adversely affect our operating results. Quarterly results have also been and may be expected to continue to be substantially affected by the cyclical nature of the semiconductor and electronic systems industries, the speed of some process and manufacturing 72 technology developments, market demand for existing products, the timing and success of new product introductions and the levels of provisions and other unusual charges incurred. Certain additions of our quarterly results will not total our annual results due to rounding. Net revenues Three Months Ended % Variation December 31, 2025 September 27, 2025 December 31, 2024 Sequential Year- Over- Year (Unaudited, in millions) Net sales $ 3,313 $ 3,183 $ 3,301 4.1 % 0.4 % Other revenues $ 16 $ 4 $ 20 265.1 (21.9) Net revenues $ 3,329 $ 3,187 $ 3,321 4.5 % 0.2 % Our fourth quarter 2025 net revenues amounted to $3,329 million, registering a sequential increase of 4.5%, above the mid-point of the released guidance driven by higher revenues in Personal Electronics and, to a lesser extent, in CECP and Industrial, while Automotive was below expectations. The sequential increase resulted from higher average selling prices of approximately 5%. On a year-over-year basis, our net revenues increased by 0.2%. Net revenues by reportable segment Three Months Ended % Variation December 31, 2025 September 27, 2025 December 31, 2024 Sequential Year- Over- Year (Unaudited, in millions) AM&S segment $ 1,449 $ 1,434 $ 1,348 1.1 % 7.5 % P&D segment $ 412 $ 429 $ 602 (3.9) (31.6) Analog, Power & Discrete, MEMS and Sensors Group ("APMS") $ 1,861 $ 1,863 $ 1,950 (0.1) (4.6) EMP segment $ 1,015 $ 976 $ 1,002 3.9 1.2 RFOC segment $ 449 $ 345 $ 366 30.5 22.9 Microcontrollers, Digital ICs and RF products Group ("MDRF") $ 1,464 $ 1,321 $ 1,368 10.8 7.0 Others $ 4 $ 3 $ 3 11.1 14.3 Total consolidated net revenues $ 3,329 $ 3,187 $ 3,321 4.5 % 0.2 % On a sequential basis, AM&S revenues increased 1.1%, driven by higher average selling prices of approximately 3% mainly due to product mix, partially offset by lower volumes of approximately 2%. P&D revenues decreased 3.9%, due to lower volumes of approximately 3% and lower average selling prices of approximately 1% mainly driven by lower selling prices. EMP revenues increased 3.9% due to higher average selling prices of approximately 3% mainly due to product mix, and higher volumes of approximately 1%. RF OC revenues increased by 31%, driven by higher average selling prices of approximately 17% mainly due to a more favorable product mix, and higher volumes of approximately 14%. On a year-over-year basis, fourth quarter net revenues increased 0.2%. AM&S revenues increased 7.5%, driven by higher average selling prices of approximately 15% mainly due to product mix, partially offset by lower volumes of approximately 7%. P&D revenues decreased 31.6% compared to the year-ago quarter, driven by lower average selling prices of approximately 31% due to product mix and lower selling prices, and lower volumes of approximately 1%. EMP revenues increased 1.2%, driven by higher volumes of approximately 2%, partially offset by lower average selling prices of 1%. RF OC revenues increased by 22.9% mainly due to higher volumes of 73 approximately 43%, partially offset by lower average selling prices of 20% linked to a less favorable product mix. Net Revenues by Market Channel (1) Three Months Ended December 31, 2025 September 27, 2025 December 31, 2024 (Unaudited, in %) OEM 73 % 73 % 73 % Distribution 27 27 27 Total 100 % 100 % 100 % ________________ (1) OEMs are the end-customers to which we provide direct marketing application engineering support, while Distribution refers to the distributors and representatives that we engage to distribute our products around the world. By market channel, our fourth quarter revenues in Distribution amounted to 27% of our total net revenues, consistent to the previous and year-ago quarters, respectively. Net Revenues by Location of Shipment (1) Three Months Ended % Variation December 31, 2025 September 27, 2025 December 31, 2024 Sequential Year- Over- Year (Unaudited, in millions) EMEA $ 665 $ 661 $ 789 0.6 % (15.8) % Americas $ 545 $ 446 $ 541 22.3 0.7 Asia Pacific $ 2,119 $ 2,080 $ 1,991 1.9 6.4 Total consolidated net revenues $ 3,329 $ 3,187 $ 3,321 4.5 % 0.2 % ________________ (1) Net revenues by location of shipment are classified by location of customer invoiced or reclassified by shipment destination in line with customer demand. For example, products ordered by U.S. based companies to be invoiced to Asia Pacific affiliates are classified as Asia Pacific revenues. Furthermore, the comparison among the different periods may be affected by shifts in shipments from one location to another, as requested by our customers. By region of shipment, in the 2025 fourth quarter, EMEA revenues increased sequentially 0.6%. Americas revenues increased by 22.3% mainly due to higher sales in RF Optical Communications. Asia Pacific revenues increased by 1.9% mainly due to higher sales in General-Purpose & Automotive microcontrollers. On a year-over-year basis, EMEA revenues decreased 15.8%, mainly driven by lower sales in Analog, P&D and General-Purpose & Automotive microcontrollers. Americas revenues increased 0.7%. Asia Pacific revenues increased 6.4%, mainly due to higher sales in imaging and General-Purpose & Automotive microcontrollers subgroups. Gross Profit Three Months Ended Variation December 31, 2025 September 27, 2025 December 31, 2024 Sequential Year- Over- Year (Unaudited, in millions) Cost of sales $ (2,157) $ (2,128) $ (2,068) 1.4 % 4.3 % Gross profit $ 1,172 $ 1,059 $ 1,253 10.7 % (6.5) % Gross margin (as percentage of net revenues) 35.2 % 33.2 % 37.7 % 200bps -250bps 74 Fourth quarter gross profit was $1,172 million and gross margin was 35.2%, 20 basis points above the mid-point of our guidance mainly due to better product mix. On a sequential basis, gross margin increased by 200 basis points mainly due to higher manufacturing efficiencies, lower front-end unloading charges and more favorable product mix, partially offset by sales price impact. On a year-over-year basis, gross margin decreased 250 basis points, mainly due to lower manufacturing efficiencies and, to a lesser extent, negative currency effect, and lower level of capacity reservation fees. Operating expenses Three Months Ended % Variation December 31, 2025 September 27, 2025 December 31, 2024 Sequential Year- Over- Year (Unaudited, in millions) Selling, general and administrative expenses $ (427) $ (395) $ (420) (8.1) % (1.7) % Research and development expenses $ (538) $ (502) $ (523) (7.3) % (2.9) % Total operating expenses $ (965) $ (897) $ (943) (7.7) % (2.4) % As percentage of net revenues 29.0 % 28.1 % 28.4 % 90 bps 60 bps On a sequential basis, operating expenses increased by $68 million, mainly due to calendar impact, net of vacation. On a year-over-year basis, operating expenses increased by $22 million, mainly due to negative currency effect, partially offset by lower discretionary spending. R&D expenses were net of research tax credits, which amounted to $32 million in the fourth quarter of 2025, compared to $30 million and $40 million in the prior and year-ago quarters, respectively. Other income and expenses, net Three Months Ended December 31, 2025 September 27, 2025 December 31, 2024 (Unaudited, in millions) Public funding 63 53 69 Start-up costs — (1) (7) Exchange gains (losses), net 5 3 — Patent costs (3) (1) (1) Gain on sale of non-current assets 1 — — Cancellation and postponement fees (4) 1 (2) Other, net (3) — — Other income and expenses, net 59 55 59 As percentage of net revenues 1.8 % 1.7 % 1.8 % Fourth quarter other income and expenses, net, amounted to $59 million, compared to $55 million in the prior quarter and $59 million in the year-ago quarter. The sequential increase was mainly due to higher income from public funding. 75 Impairment, restructuring charges and other related phase-out costs Three Months Ended December 31, 2025 September 27, 2025 December 31, 2024 (Unaudited, in millions) Impairment, restructuring charges and other related phase-out costs $ (141) $ (37) $ — As percentage of net revenues 4.2 % 1.2 % — % In the fourth quarter of 2025, impairment, restructuring charges and other related phase-out costs amounted to $141 million of which $33 million of impairment charges, $97 million of restructuring charges, including $44 million of labor-related charges, $53 million of non-labor related charges and $11 million phase-out costs, compared to $37 million in the prior quarter. No impairment and restructuring charges related to the launch of the company-wide program were recorded in the year-ago quarter. Operating income Three Months Ended December 31, 2025 September 27, 2025 December 31, 2024 (Unaudited, in millions) Operating income, as reported $ 125 $ 180 $ 369 As percentage of net revenues 3.8 % 5.6 % 11.1 % Non-U.S. GAAP Operating income(1) $ 266 $ 217 $ 369 As percentage of net revenues 8.0 % 6.8 % 11.1 % ________________________ (1)Non-U.S. GAAP. For reconciliation to U.S. GAAP and information explaining why we believe these measures are important, see "Item 5. Operating and Financial Review and Prospects —2025 Business Overview". In the fourth quarter of 2025, operating income was $125 million, compared to an operating income of $180 million and $369 million in the prior and year-ago quarters, respectively. Operating income included $141 million impairment, restructuring charges and other related phase-out costs for the quarter compared to $37 million in the prior quarter. No such charges were recorded in the year-ago quarter. Excluding these items, Non-U.S. GAAP Operating income in the fourth quarter of 2025 amounted to $266 million compared to $217 million and $369 million in the prior and year-ago quarters, respectively. On a sequential basis, non-U.S. GAAP operating income increased by $49 million mainly due to higher gross profit, partially offset by higher operating expenses. On a year-over-year basis, non-U.S. GAAP operating income decreased by $103 million, primarily due to lower gross margin profitability and negative currency effects. 76 Operating income by reportable segment Three Months Ended December 31, 2025 September 27, 2025 December 31, 2024 $ million % of net revenues $ million % of net revenues $ million % of net revenues (Unaudited) AM&S segment $ 235 16.2 % $ 221 15.4 % $ 220 16.3 % P&D segment $ (124) (30.2) % $ (67) (15.6) % $ 45 7.5 % Analog, Power & Discrete, MEMS and Sensors Group (APMS) $ 111 5.9 % $ 154 8.3 % $ 265 13.6 % EMP segment $ 195 19.2 % $ 161 16.5 % $ 181 18.1 % RFOC segment $ 105 23.4 % $ 57 16.6 % $ 95 25.9 % Microcontrollers, Digital ICs and RF products Group (MDRF) $ 300 20.5 % $ 218 16.5 % $ 276 20.2 % Total operating income of operating segments $ 411 12.3 % $ 372 11.7 % $ 541 16.3 % Others(1) $ (286) — $ (192) — $ (172) — Total consolidated operating income $ 125 3.8 % $ 180 5.6 % $ 369 11.1 % __________ (1) Operating income (loss) of “Others” includes items such as unused capacity charges, incidents leading to power outage, impairment, restructuring charges and other related phase-out costs, management reorganization costs, start-up costs, and other unallocated income (expenses) such as: strategic or special research and development programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to reportable segments (e.g. urgent freight costs, changes in fair value measurement on contingent consideration liabilities), as well as operating earnings of other products. On a sequential basis, AM&S operating income was $235 million, increasing by $14 million mainly driven by Analog. P&D reported an operating loss of $124 million, worsening sequentially by $57 million. EMP operating income increased by $34 million sequentially, mainly driven by General-Purpose & Automotive Microcontrollers. RF OC operating income increased by $48 million. On a year-over-year basis, AM&S operating income increased by $15 million reflecting higher profitability in Imaging, partially offset by lower profitability in Analog. P&D reported an operating loss of $124 million from an operating income of $45 million in the year-ago quarter. EMP operating income increased by $14 million mainly driven by General-Purpose & Automotive Microcontrollers. RF OC operating income increased by $10 million. Reconciliation to consolidated operating income Three Months Ended December 31, 2025 September 27, 2025 December 31, 2024 (Unaudited, in millions) Total operating income of reportable segments $ 411 $ 372 $ 541 Impairment, restructuring charges and other related phase-out costs $ (141) $ (37) $ — Start-up costs $ — $ (1) $ (7) Unused capacity charges $ (88) $ (102) $ (118) Cancellation and postponement fees $ — $ — $ (2) Other unallocated manufacturing results $ (52) $ (46) $ (51) Gain on sale of non-current assets $ 1 $ — $ — Strategic and other R&D programs and other non-allocated provisions (1) $ (6) $ (6) $ 6 Total operating income (loss) Others $ (286) $ (192) $ (172) Total consolidated operating income $ 125 $ 180 $ 369 ____________ (1) Includes unallocated income and expenses such as certain corporate-level operating expenses and other income (costs) that are not allocated to the reportable segments. 77 Interest income (expense), net Three Months Ended December 31, 2025 September 27, 2025 December 31, 2024 (Unaudited, in millions) Interest income (expense), net $ 37 $ 38 $ 52 As percentage of net revenues 1.1 % 1.2 % 1.6 % In the fourth quarter of 2025, we recorded net interest income of $37 million, compared to $38 million in the prior quarter and $52 million in the year-ago quarter. The fourth quarter net interest income was composed of $49 million of interest income, partially offset by $12 million of interest expenses on our borrowings and banking fees. Gain (loss) on financial instruments, net Three Months Ended December 31, 2025 September 27, 2025 December 31, 2024 (Unaudited, in millions) Gain (loss) on financial instruments, net $ (9) $ 79 $ — As percentage of net revenues (0.3) % 2.5 % — % During the fourth quarter of 2025, we recognized a $9 million unrealized loss on financial instruments due to the decrease in fair value of our equity stake in InnoScience (Suzhou) Technology Holding Co., Ltd., which is measured at fair value through earnings. Income tax expense Three Months Ended December 31, 2025 September 27, 2025 December 31, 2024 (Unaudited, in millions) Income tax expense (171) (54) (82) As percentage of net revenues (5.1) % (1.7) % (2.5) % During the fourth quarter of 2025 we recorded an income tax expense of $171 million while for the third quarter of 2025 and the fourth quarter of 2024, we recorded an income tax expense of $54 million and $82 million, respectively. The fourth quarter of 2025 income tax expense included a one-time tax expense of $142 million resulting from discrete items, which include a non-cash income tax expense of $80 million from an increase in valuation allowance in one of our tax jurisdiction and a non-cash income tax expense of $66 million related to uncertain tax positions. 78 Net income attributable to parent company Three Months Ended December 31, 2025 September 27, 2025 December 31, 2024 (Unaudited, in millions) Net income (loss) attributable to parent company, as reported $ (30) $ 237 $ 341 As percentage of net revenues (0.9) % 7.4 % 10.3 % Non-U.S. GAAP Net income attributable to parent company (1) $ 100 $ 267 $ 341 As percentage of net revenues 3.0 % 8.4 % 10.3 % ________________________ (1)Non-U.S. GAAP. For reconciliation to U.S. GAAP and information explaining why we believe these measures are important, see "Item 5. Operating and Financial Review and Prospects - 2025 Business Overview. For the fourth quarter of 2025, we reported a net loss of $30 million, compared to a net income of $237 million and $341 million in the prior and year-ago quarters, respectively. For the fourth quarter 2025, net earnings represented diluted earnings per share of -$0.03 compared to $0.26 in the prior quarter and $0.37 in the prior-year quarter. In the fourth quarter of 2025, non-U.S. GAAP Net income stood at $100 million and non-U.S. GAAP diluted Earnings Per Share stood at $0.11, including certain negative one-time tax expenses impact of $0.18 per share. Impact of Changes in Exchange Rates Our results of operations and financial condition can be significantly affected by material changes in the exchange rates between the U.S. dollar and other currencies, particularly the Euro. As a market practice, the reference currency for the semiconductor industry is the U.S. dollar and the market prices of semiconductor products are mainly denominated in U.S. dollars. However, revenues for some of our products are quoted in currencies other than the U.S. dollar, such as Euro-denominated sales, and consequently are directly affected by fluctuations in the value of the U.S. dollar. As a result of currency variations, the appreciation of the Euro compared to the U.S. dollar could increase our level of revenues when translated into U.S. dollars or the depreciation of the Euro compared to the U.S. dollar could decrease our level of revenues when reported in U.S. dollars. Over time and depending on market conditions, the prices in the industry could align to the equivalent amount in U.S. dollars, except that there is a lag between the changes in the currency rate and the adjustment in the price paid in local currency, which is proportional to the amplitude of the currency swing, and such adjustment could be only partial and/or delayed, depending on market demand. Furthermore, certain significant costs incurred by us, such as manufacturing costs, SG&A expenses, and R&D expenses, are largely incurred in the currency of the jurisdictions in which our operations are located. Given that most of our operations are located in the Eurozone and other non-U.S. dollar currency areas, our costs tend to increase when translated into U.S. dollars when the U.S. dollar weakens or to decrease when the U.S. dollar strengthens. Our principal strategy to reduce the risks associated with exchange rate fluctuations is to balance as much as possible the proportion of sales to our customers denominated in U.S. dollars with the amount of materials, purchases and services from our suppliers denominated in U.S. dollars, thereby reducing the potential exchange rate impact of certain variable costs relative to revenues. Moreover, in order to further reduce the exposure to U.S. dollar exchange fluctuations, we hedge certain line items on our consolidated statements of income, in particular with respect to a portion of cost of sales, most of R&D expenses and certain SG&A expenses, located in the Eurozone, which we designate as cash flow hedge transactions. We use two different types of hedging instruments: forward contracts and currency options (including collars). Our consolidated statements of income included income and expense items translated at the average U.S. dollar exchange rate for the period, plus the impact of the hedging contracts expiring during the period. Our effective average exchange rate was $1.11 for €1.00 for the full year 2025 and 79 $1.08 for €1.00 for the full year 2024. Our effective exchange rate was $1.14 for €1.00 for the fourth quarter of 2025, $1.14 for €1.00 for the third quarter of 2025 and $1.09 for €1.00 for the fourth quarter of 2024. These effective exchange rates reflect the actual exchange rates combined with the effect of cash flow hedge transactions impacting earnings in the period. The time horizon of our cash flow hedging for manufacturing costs and operating expenses may run up to 24 months, for a limited percentage of our exposure to the Euro, depending on currency market circumstances. As of December 31, 2025, the outstanding hedged amounts were €1,356 million to cover manufacturing costs and €733 million to cover operating expenses, at an average exchange rate of approximately $1.16 for €1.00 (considering the collars at upper strike), maturing from January 7, 2026 to December 2, 2026. As of December 31, 2025, measured in respect to the exchange rate at period closing of about $1.18 to €1.00, these outstanding hedging contracts and certain settled contracts covering manufacturing expenses capitalized in inventory resulted in a deferred gain of approximately $80 million before tax, recorded in “Accumulated other comprehensive income” in the consolidated statements of equity, compared to a deferred loss of approximately $96 million before tax as of December 31, 2024. During 2025, we also hedged manufacturing costs denominated in Singapore dollars ("SGD"). As of December 31, 2025, no deferred gain or loss of hedging contracts was recorded, compared to a deferred loss of approximately $3 million before tax as of December 31, 2024. Our cash flow hedging policy is not intended to cover our full exposure and is based on hedging a declining portion of our exposure in the next four quarters. In 2025, as a result of our cash flow hedging, we recycled to earnings a gain of $54 million, composed of a $35 million gain impacting cost of sales, a $15 million gain impacting R&D and a $4 million gain impacting SG&A expenses. In 2024, as a result of our cash flow hedging, we recycled to earnings a gain of $16 million, composed of a $13 million gain impacting cost of sales, a $2 million gain impacting R&D and $1 million gain impacting SG&A expenses. In addition to our cash flow hedging, in order to mitigate potential exchange rate risks on our commercial transactions, we purchase and enter into foreign exchange forward contracts and currency options to cover foreign currency exposure in payables or receivables at our affiliates, which we do not designate for hedge accounting. We may in the future purchase or sell similar types of instruments. See “Item 11. Quantitative and Qualitative Disclosures About Market Risk”. Furthermore, we may not predict on a timely basis the amount of future transactions in the volatile industry environment. No assurance may be given that our hedging activities will sufficiently protect us against fluctuations in the value of the U.S. dollar. Consequently, our results of operations have been and may continue to be impacted by fluctuations in exchange rates. The net effect of our consolidated foreign exchange exposure in payables and receivables at our affiliates resulted in a net gain of $24 million recorded in “Other income and expenses, net” in our 2025 consolidated statement of income compared to a net gain of $6 million and $5 million in 2024 and 2023, respectively. The assets and liabilities of subsidiaries whose functional currency is different from the U.S. dollar reporting currency are, for consolidation purposes, translated into U.S. dollars at the period-end exchange rate. Income and expenses, as well as cash flows, are translated at the average exchange rate for the period. The balance sheet impact, as well as the income statement and cash flow impact, of these currency translations have been, and may be, significant from period to period since a large part of our assets and liabilities and activities are accounted for in Euros as they are located in jurisdictions where the Euro is the functional currency. Adjustments resulting from the currency translation are recorded directly in equity and are reported as “Accumulated other comprehensive income” in the consolidated statements of equity. As of December 31, 2025, our outstanding indebtedness was denominated mainly in U.S. dollars and in Euros. For a more detailed discussion, see “Item 3. Key Information — Risk Factors — Risks Related to Our Operations”. 80 Impact of Changes in Interest Rates Interest rates may fluctuate upon changes in financial market conditions and material changes can affect our results of operations and financial condition, since these changes can impact the total interest income received on our cash and cash equivalents, short-term deposits and marketable securities, as well as the total interest expense paid on our financial debt. Our interest income (expense), net, as reported in our consolidated statements of income, is the balance between interest income received from our cash and cash equivalents, short-term deposits and marketable securities and interest expense recorded on our financial liabilities, including bank fees (including fees on committed credit lines or on the sale without recourse of receivables, if any). Our interest income is dependent upon fluctuations in interest rates, mainly in U.S. dollars and Euros, since we invest primarily on a short-term basis; any increase or decrease in the market interest rates would mean a proportional increase or decrease in our interest income. Our interest expenses are also dependent upon fluctuations in interest rates since our financial liabilities include European Investment Bank (“EIB”) and Cassa Depositi e Prestiti SpA (“CDP SpA”) floating rate loans at primarily Euribor plus variable spreads. See Note 15 to our Consolidated Financial Statements. As of December 31, 2025, our total financial resources, including cash and cash equivalents, short-term deposits and marketable securities, generated an average annual interest rate of 3.64%. At the same date, the average annual interest rate on our outstanding debt was 2.02%. A rise in interest rates to address inflation or otherwise will also impact the base rates applicable in our credit arrangements and will result in borrowed funds becoming more expensive to us over time. These financing and inflationary pressures may also reduce disposable income on a macro-economic basis, eroding the values of savings, and could have a negative impact on our customers’ ability to purchase our products in the same volumes. Impact of Changes in Equity Prices In December 2024, we participated to the IPO of InnoScience (Suzhou) which became public on the main segment of Hong Kong Stock Exchange. We acquired a 1.4% equity stake for a total amount of $51 million. As of December 31, 2025, the carrying amount of this financial asset was $127 million. As a publicly traded equity instrument, the InnoScience investment is measured at fair value through earnings. See Note 12 and Note 13 to our Consolidated Financial Statements. Liquidity and Capital Resources Treasury activities are regulated by our policies, which define procedures, objectives and controls. Our policies focus on the management of our financial risk in terms of exposure to currency rates and interest rates. Most treasury activities are centralized, with any local treasury activities subject to oversight from our head treasury office. The majority of our cash and cash equivalents are held in U.S. dollars and Euros and are placed with financial institutions rated at least as single A long-term rating from two of the major rating agencies, meaning at least A3 from Moody’s Investors Service (“Moody’s”) and A- from Standard & Poor’s (“S&P”) or Fitch Ratings (“Fitch”). Marginal amounts are held in other currencies. See “Item 11. Quantitative and Qualitative Disclosures About Market Risk”. Our total liquidity was $4,922 million as of December 31, 2025, decreasing compared to $6,184 million as of December 31, 2024. As of December 31, 2025, our total liquidity was comprised of $2,837 million in cash and cash equivalents, $1,100 million in short-term deposits and $985 million in marketable securities, all classified as current assets. As of December 31, 2025, marketable securities were $985 million invested in U.S. Treasury Bonds, with a rating of Aaa/AA+/AA+ from Moody’s, S&P and Fitch, respectively, and a weighted average maturity of 2.31 years. The securities are classified as available-for-sale and measured at fair value. This fair value measurement corresponds to a Level 1 fair value hierarchy measurement. To optimize the return yield on our short-term investments, we also held $1,100 million of available cash in short-term deposits as of December 31, 2025. These short-term deposits represent liquidity with maturity beyond three months and below one year with no significant risk of changes in fair value. 81 Cash flow We maintain an adequate cash position and a low debt-to-equity ratio to provide us with adequate financial flexibility. As in the past, our cash management policy is to finance our investment needs mainly with net cash from operating activities. During 2025, our cash and cash equivalents increased by $555 million. The components of the net cash increase for 2025 and the comparable periods are set forth below: Year Ended December 31, 2025 2024 2023 (In millions) Net cash from operating activities $ 2,152 $ 2,965 $ 5,992 Net cash used in investing activities $ (43) $ (3,742) $ (5,766) Net cash used in financing activities $ (1,560) $ (155) $ (267) Effect of changes in exchange rates $ 6 $ (8) $ 5 Net cash increase (decrease) $ 555 $ (940) $ (36) Net cash from operating activities. Net cash from operating activities is the sum of (i) net income adjusted for non-cash items and (ii) changes in net working capital. The net cash from operating activities in 2025 was $2,152 million compared to $2,965 million in the prior year, decreasing mainly due to lower net income. Net cash used in investing activities. Investing activities used net cash of $43 million in 2025, decreasing from $3,742 million in the prior year, mainly due to lower capital expenditures, net of capital grants and other contributions, and higher net proceeds from marketable securities and short-term deposits. Net cash used in financing activities. Net cash used in financing activities was $1,560 million in 2025, compared to net cash used in financing activities of $155 million in 2024, and consisted mainly of $750 million repayment of issued convertible bonds, $367 million repurchase of common stock, $321 million of dividends paid to our stockholders and $239 million repayment of financial debt, partially offset primarily by $156 million proceeds from noncontrolling interest. Net Capex and Free Cash Flow (non-U.S. GAAP measures) We present Net Capex as a non-U.S. GAAP measure, to take into consideration the effect of advances from capital grants received on prior periods allocated to property, plant and equipment in the reporting period. Net Capex is reported as part of our Free Cash Flow (non-U.S. GAAP measure). Net Capex, a non-U.S. GAAP measure, is defined as (i) payment for purchase of tangible assets, as reported plus (ii) proceeds from sale of tangible assets, as reported plus (iii) proceeds from capital grants and other contributions, as reported plus (iv) advances from capital grants allocated to property, plant and equipment in the reporting period. We believe Net Capex provides useful information for investors and management because annual capital expenditures budget includes the effect of capital grants. Our definition of Net Capex may differ from definitions used by other companies. 82 Year Ended December 31, 2025 2024 2023 (In millions) Payment for purchase of tangible assets, as reported $ (2,111) $ (3,088) $ (4,439) Proceeds from sale of tangible assets, as reported $ 9 $ 5 $ 8 Proceeds from capital grants and other contributions, as reported $ 258 $ 441 $ 320 Advances from capital grants allocated to property, plant and equipment $ 52 $ 111 $ — Net Capex (non-U.S. GAAP measure) $ (1,792) $ (2,531) $ (4,111) We also present Free Cash Flow, which is a non-U.S. GAAP measure, defined as (i) net cash from operating activities plus (ii) net Capex plus (iii) payment for purchase (and proceeds from sale) of intangible and financial assets and (iv) net cash paid for business acquisitions, if any. We believe Free Cash Flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operations. Free Cash Flow (non U.S. GAAP measure) reconciles with the total cash flow and the net cash increase (decrease) by including the payment for purchases of (and proceeds from matured) marketable securities and net investment in (and proceeds from) short-term deposits, the net cash from (used in) financing activities and the effect of changes in exchange rates while excluding the advances from capital grants received in prior periods allocated to property, plant and equipment in the reporting period. Our definition of Free Cash Flow may differ from definitions used by other companies. Free Cash Flow is determined from our consolidated statements of cash flows as follows: Year Ended December 31, 2025 2024 2023 (In millions) Net cash from operating activities $ 2,152 $ 2,965 $ 5,992 Net Capex $ (1,792) $ (2,531) $ (4,111) Payment for purchase of intangible assets, net of proceeds from sale $ (93) $ (93) $ (97) Payment for purchase of financial assets, net of proceeds from sale $ (2) $ (53) $ (10) Free Cash Flow (non-U.S. GAAP measure) $ 265 $ 288 $ 1,774 In 2025, we had a positive Free Cash Flow of $265 million, compared to positive $288 million and positive $1,774 million in 2024 and 2023, respectively. Capital Resources Net Financial Position and Adjusted Net Financial Position (non-U.S. GAAP measures). Our Net Financial Position represents the difference between our total liquidity and our total financial debt. Our total liquidity includes cash and cash equivalents, short-term deposits and marketable securities, and our total financial debt includes short-term debt and long-term debt, as reported in our consolidated balance sheets. Adjusted Net Financial Position represents net financial position less advances received from capital grants, to present the effect on total liquidity of advances received on capital grants for which capital expenditures have not been incurred yet. Net Financial Position and Adjusted Net Financial Position are not U.S. GAAP measures, but we believe they provide useful information for investors and management because they give evidence of our global position either in terms of net indebtedness or net cash by measuring our capital resources based on cash and cash equivalents, restricted cash, if any, short-term deposits and marketable securities and the total level of our financial debt. Our definition of Net Financial Position may differ from definitions used by other companies and 83 therefore comparability may be limited. Our Net Financial Position and Adjusted Net Financial Position for each period have been determined from our consolidated balance sheets as follows: Year Ended December 31, 2025 2024 2023 (In millions) Cash and cash equivalents $ 2,837 $ 2,282 $ 3,222 Short-term deposits $ 1,100 $ 1,450 $ 1,226 Marketable securities $ 985 $ 2,452 $ 1,635 Total liquidity $ 4,922 $ 6,184 $ 6,083 Current portion of long-term debt $ (298) $ (990) $ (217) Long-term debt $ (1,835) $ (1,963) $ (2,710) Total financial debt $ (2,133) $ (2,953) $ (2,927) Net Financial Position (non-U.S. GAAP measure) $ 2,789 $ 3,231 $ 3,156 Advances from capital grants $ (333) $ (385) $ (152) Adjusted Net Financial Position (non-U.S. GAAP measure) $ 2,456 $ 2,846 $ 3,004 Our Net Financial Position as of December 31, 2025 was a net cash position of $2,789 million, increasing compared to a net cash position of $3,231 million as of December 31, 2024. Cash and cash equivalents amounted to $2,837 million as of December 31, 2025. Short-term deposits amounted to $1,100 million as of December 31, 2025 and consisted of available liquidity with maturity over three months and below one year. Marketable securities amounted to $985 million as of December 31, 2025 and consisted of U.S. Treasury Bonds classified as available-for-sale. Financial debt was $2,133 million, as of December 31, 2025 and was composed of (i) $298 million of short-term debt and (ii) $1,835 million of long-term debt. The breakdown of our total financial debt included (i) $1,109 million in EIB loans, (ii) $170 million in CDP SpA loans, (iii) $749 million in our 2020 Senior Unsecured Convertible Bonds, (iii) $103 million in finance leases and, (iv) $2 million in loans from other funding programs. The EIB loans are comprised of three long-term amortizing credit facilities as part of R&D funding programs. The first one, signed in August 2017, is a €500 million loan in relation to R&D and capital expenditures in the European Union. The entire amount was fully drawn in Euros corresponding to $205 million outstanding as of December 31, 2025. The second one, signed in 2020, is a €500 million credit facility agreement with EIB to support R&D and capital expenditure programs in Italy and France. The amount was fully drawn in Euros representing $352 million outstanding as of December 31, 2025. In 2022, we signed a third long-term amortizing credit facility with EIB of €600 million. Of this amount, €300 million was withdrawn in Euros in 2022, and $300 million was withdrawn in U.S Dollars during 2024, representing a total outstanding balance of $552 million on December 31, 2025. In December 2025, we entered into a €500 million financing agreement with EIB to support the acceleration of R&D and high-volume chip manufacturing in Italy and France. This agreement represents the first tranche of a broader €1 billion credit line approved by EIB in our favor. The CDP SpA loans are comprised of two long-term credit facilities. The first, signed in 2021, is a €150 million loan, fully drawn in Euros, of which $44 million were outstanding as of December 31, 2025. The second one, signed in 2022, is a €200 million loan, fully drawn in Euros, of which $126 million was outstanding as of December 31, 2025. On August 4, 2020, we issued a $1.5 billion principal amount of dual tranche senior unsecured convertible bonds (Tranche A and Tranche B for $750 million each tranche, each, "Tranche A" and "Tranche B", respectively), due 2025 and 2027, respectively. Tranche A bonds were issued at 105.8% 84 as zero-coupon bonds while Tranche B bonds were issued at 104.5% as zero-coupon bonds. The conversion price at issuance was $43.62 for Tranche A equivalent to a 47.5% conversion premium and $45.10 for Tranche B, equivalent to a 52.5% conversion premium. These conversion features correspond to an equivalent of 4,585 shares per each Tranche A bond $200,000 par value and an equivalent of 4,435 shares per each Tranche B bond $200,000 par value. The bonds are convertible by the bondholders or are callable by the issuer upon certain conditions, on a net-share settlement basis, except if the issuer elects a full-cash or full-share conversion as an alternative settlement. The net proceeds from the bond offering were $1,567 million, after deducting issuance costs paid by the Company. On August 4, 2025, we completed the full redemption of our Tranche A convertible bond. As of December 31, 2025, the Company's stock price did not exceed the conversion price of the senior unsecured convertible bonds. Our long-term debt contains standard conditions but does not impose minimum financial ratios. We had unutilized committed medium-term credit facilities with core relationship banks totaling $640 million as of December 31, 2025. As of December 31, 2025, debt payments at principal amount by period were as follows: Payments Due by Period Total 2026 2027 2028 2029 2030 Thereafter (In millions) Long-term debt (including current portion) $ 2,134 $ 298 $ 989 $ 248 $ 171 $ 125 $ 303 In the above table, our 2020 senior unsecured convertible bonds are presented at their principal amount with original maturity date in 2027 for Tranche B, in line with contractual terms. Our current ratings with the two major rating agencies that report on us on a solicited basis, are as follows: S&P: “BBB+” with negative outlook; Moody’s: “Baa1” with stable outlook. Contractual Obligations, Commercial Commitments and Contingencies Our contractual obligations, commercial commitments and contingencies as of December 31, 2025, and for each of the five years to come and thereafter, were as follows: Total 2026 2027 2028 2029 2030 Thereafter (In millions) Foundry purchases(1) $ 774 $ 555 $ 82 $ 68 $ 69 $ — $ — Other obligations(1) $ 1,576 $ 221 $ 209 $ 198 $ 220 $ 88 $ 640 Operating Lease obligations (including current portion)(2) $ 221 $ 52 $ 41 $ 31 $ 23 $ 15 $ 59 Long-term debt obligations (including current portion)(2)(3) $ 2,134 $ 298 $ 989 $ 248 $ 171 $ 125 $ 303 of which: Finance Lease obligations $ 103 $ 49 $ 5 $ 24 $ 1 $ 1 $ 23 Pension obligations (including current portion)(2) $ 403 $ 82 $ 80 $ 66 $ 72 $ 78 $ 25 Other long-term liabilities(2)(4) $ 757 $ 70 $ 135 $ 71 $ 90 $ 72 $ 319 Total $ 5,968 $ 1,327 $ 1,541 $ 706 $ 646 $ 379 $ 1,369 ____________ (1) Items not reflected on the consolidated balance sheet as of December 31, 2025. (2) Items reflected on the consolidated balance sheet as of December 31, 2025. (3) For long-term debt obligations the difference between the total obligations and the total carrying amount of long-term debt is due to the unamortized debt issuance costs on the dual tranche senior unsecured convertible bonds. See Note 15 to our Consolidated Financial Statements as of December 31, 2025 for additional information related to long-term debt. (4) For other long-term liabilities, the difference with the amount reported on the consolidated balance sheet as of December 31, 2025 is related to the long-term portion of the operating lease obligation of $169 million reported under the “Lease obligations” line. See Note 11 and Note 17 to our Consolidated Financial Statements as of December 31, 2025 for additional information related to leases and other long-term liabilities. 85 Purchase and other obligations are primarily comprised of purchase commitments for outsourced foundry wafers and firm contractual commitments related to power purchase and minimum energy efficiency, as part of our actions to become carbon neutral in all direct and indirect emissions (scopes 1 and 2), product transportation, business travel, and employee commuting emissions (our scope 3 focus). Long-term debt obligations mainly consist of bank loans and senior unsecured convertible bonds. In the table above, our 2020 senior unsecured convertible bonds reflect only Tranche B bonds as Tranche A bonds were settled during 2025, and are presented at their principal amount with original maturity date of 2027, in line with contractual terms. In 2026, we expect to repay with available cash and cash equivalents an amount of $249 million related to our loans with the European Investment Bank and CDP SpA through annual and semi-annual installments respectively and $49 million related to our finance leases. See “— Net financial position (non-U.S. GAAP measure)” above. Pension obligations amounting to $403 million consist of our best estimates of the amounts projected to be payable by us for the pension and post-employment plans. The final actual amount to be paid and related timing of such payments may vary significantly due to early retirements, terminations and changes in assumptions rates. See Note 16 to our Consolidated Financial Statements. Other long-term liabilities mainly include future obligations related to other long-term employees benefits, contingent consideration on business combinations and other contractual obligations. In accordance with the authoritative guidance for accounting for uncertainty in income taxes, as of December 31, 2025, liabilities related to uncertain tax positions totaled $142 million, of which $90 million is reported on the line other long-term liabilities in the above table. See Note 17 of our Consolidated Financial Statements. Financial Outlook: Capital Investment Our policy is to modulate our capital spending according to the evolution of the semiconductor market. For 2026, we plan to invest between $2.0 to $2.2 billion in Net Capex (non-U.S. GAAP). Our Net Capex (non-U.S. GAAP) will support capacity additions for selected growth drivers and our manufacturing reshaping plan. In particular: •In Catania, Italy, the new high-volume fully vertically integrated 200mm silicon carbide manufacturing facility for power devices and modules, as well as test and packaging; •in Chongqing, China, the new 200mm silicon carbide device manufacturing joint venture with Sanan Optoelectronics; •in Crolles, France, 300mm wafer fab evolution for digital and Cloud Optical Interconnect; •in Agrate, Italy, the ramp-up of the 300mm wafer fab to support analog mixed signal and smart power HCMOS; •Capital investments in back-end facilities, which in 2026 will be largely focused on: (i) capacity growth on certain package families, (ii) the next generation of Panel-Level Packaging (PLP) technology through a pilot line in Tours, France, and (iii) selected investments for the modernization and expansion assembly and test operations. The remaining part of our Net Capex (non-U.S. GAAP) covers the overall maintenance and efficiency improvements of our manufacturing operations and infrastructure, R&D activities, laboratories as well as the execution of our carbon neutrality programs. We will continue to invest to support revenues growth and new products introduction, taking into consideration factors such as trends in the semiconductor industry, capacity utilization and our goal to 86 become carbon neutral in all direct and indirect emissions (scopes 1 and 2), product transportation, business travel, and employee commuting emissions (our scope 3 focus), and to achieve our 100% renewable electricity sourcing goal by the end of 2027. We expect to need significant financial resources in the coming years for capital expenditures and for our investments in manufacturing and R&D. We plan to fund our capital requirements with cash provided by operating activities, available funds and support from third parties, and may have recourse to borrowings under available credit lines and, to the extent necessary or attractive based on market conditions prevailing at the time, the issuance of debt, convertible bonds or additional equity securities. A substantial deterioration of our economic results, and consequently of our profitability, could generate a deterioration of the cash generated by our operating activities. Therefore, there can be no assurance that, in future periods, we will generate the same level of cash as in prior years to fund our capital expenditure plans for expanding/upgrading our production facilities, our working capital requirements, our R&D and manufacturing costs. We believe that we have the financial resources needed to meet our currently projected business requirements for the next twelve months, including capital expenditures for our manufacturing activities, working capital requirements, approved dividend payments, share buy-backs as part of our current repurchase program and the repayment of our debt in line with maturity dates. Impact of Recently Issued U.S. Accounting Standards See Note 2 to our Consolidated Financial Statements. Backlog and Customers See “Item 4. Information on the Company — Backlog”. 87