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What changed in MACOM Technology Solutions Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MACOM Technology Solutions Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+226 added−226 removedSource: 10-K (2025-11-14) vs 10-K (2024-11-12)

Top changes in MACOM Technology Solutions Holdings, Inc.'s 2025 10-K

226 paragraphs added · 226 removed · 184 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe ESD Association provides standards for safe and proper handling of electrostatic discharge (“ESD”) in electronic manufacturing environments. Our following locations have each received ANSI/ESD S20.20:2021 certification: Lowell, Massachusetts; Ann Arbor, Michigan; Newport Beach, California; Morrisville, North Carolina; Nashua, New Hampshire; and Hsinchu, Taiwan.
Biggest changeIn addition, our Lowell, Massachusetts facility has received IATF16949:2016 automotive quality management system certification, while our sites in Lowell, Massachusetts; Morgan Hill, California; and Limeil-Brévannes, France have also received the ISO 14001:2015 environmental management system certification. The ESD Association provides standards for safe and proper handling of electrostatic discharge (“ESD”) in electronic manufacturing environments.
We believe that the principal competitive factors in our markets include: ▪ the ability of engineering talent to drive innovation and new product development; ▪ the ability to timely design and deliver products and solutions that meet or exceed customers’ performance, reliability and price requirements; ▪ the breadth and diversity of product offerings; ▪ the ability to provide a reliable supply of products in sufficient quantities and in a timely manner; 6 ▪ the quality of customer service and technical support; and ▪ the financial reliability, operational stability and reputation of the supplier.
We believe that the principal competitive factors in our markets include: ▪ the ability of engineering talent to drive innovation and new product development; ▪ the ability to timely design and deliver products and solutions that meet or exceed customers’ performance, reliability and price requirements; ▪ the breadth and diversity of product offerings; 6 ▪ the ability to provide a reliable supply of products in sufficient quantities and in a timely manner; ▪ the quality of customer service and technical support; and ▪ the financial reliability, operational stability and reputation of the supplier.
We also believe that our U.S.-based wafer fabrication facilitates shorter time to market for both new and existing products, shorter production lead times than if we utilized external foundries and allows us to efficiently produce a wide range of low, 7 medium and high-volume products.
We also believe that our U.S.-based wafer fabrication facilitates shorter time to market for both new and existing products, shorter production lead times than if we 7 utilized external foundries and allows us to efficiently produce a wide range of low, medium and high-volume products.
We are also regulated under a number of federal, state and local laws regarding responsible sourcing, recycling, product packaging and product content requirements in the U.S. and other countries, including legislation enacted in the European Union and other foreign jurisdictions that have placed greater restrictions on the use of lead, among other chemicals, in electronic products, which 8 affects materials composition and semiconductor packaging.
We are also regulated under a number of federal, state and local laws regarding responsible sourcing, recycling, product packaging and product content requirements in the U.S. and other countries, including legislation enacted in the European Union and 8 other foreign jurisdictions that have placed greater restrictions on the use of lead, among other chemicals, in electronic products, which affects materials composition and semiconductor packaging.
The following locations have each received ISO 9001:2015 certifications in one or more of their principal functional areas: Lowell, Massachusetts; Ann Arbor, Michigan; Ithaca, New York; Mesa, Arizona; Morgan Hill, Newport Beach and Santa Clara, California; Morrisville, North Carolina; Nashua, New Hampshire; Hamilton, New Jersey; Hsinchu, Taiwan; Cork, Ireland; and Limeil-Brévannes, France.
The following locations have each received ISO 9001:2015 certifications in one or more of their principal functional areas: Lowell, Massachusetts; Ann Arbor, Michigan; Ithaca, New York; Mesa, Arizona; Morgan Hill, Newport Beach and Santa Clara, California; Morrisville and RTP, North Carolina; Nashua, New Hampshire; Hamilton, New Jersey; Hsinchu, Taiwan; Cork, Ireland; and Limeil-Brévannes, France.
Our DEI&B efforts are guided by the following principles: 9 • Diversity is the representation of different people in an organization. • Equity is ensuring that everyone has fair, just and equal opportunities at work. • Inclusion is ensuring that everyone has an equal opportunity to contribute to and influence every part and level of a workplace. • Belonging is ensuring that everyone feels safe and welcome at work.
Our DEI&B efforts are guided by the following principles: • Diversity is the representation of different people in an organization. • Equity is ensuring that everyone has fair, just and equal opportunities at work. • Inclusion is ensuring that everyone has an equal opportunity to contribute to and influence every part and level of a workplace. • Belonging is ensuring that everyone feels safe and welcome at work.
The SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of the websites mentioned above, as well as our LinkedIn, Facebook and YouTube pages and X account, are not incorporated into and should not be considered a part of this report. 10
The SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of the websites mentioned above, as well as our LinkedIn, Facebook and YouTube pages and X account, are not incorporated into and should not be considered a part of this report.
We also use third-party contract manufacturers for assembly, packaging and test functions, and in some cases for fully outsourced turnkey manufacturing of our products. The principal materials used in the production of our IC products are high purity source materials such as gallium, aluminum, arsenic, nitrite, carbon and silicon.
We also use third-party contract manufacturers for assembly, packaging and test functions, and in some cases for fully outsourced turnkey manufacturing of our products. The principal substrate materials used in the production of our IC products are high purity source materials such as gallium, aluminum, arsenic, nitrite, carbon and silicon.
We believe that our analog design capabilities, technology portfolio, in-depth knowledge of critical radar system requirements, integration expertise and track record of reliability make us a valued resource for our I&D customers faced with demanding 4 application parameters.
We believe that our analog design capabilities, technology portfolio, in-depth knowledge of critical radar system requirements, integration expertise and track record of reliability make us a valued resource for our I&D customers faced with demanding application parameters.
Available Information We maintain a website at www.macom.com, including an investors section, at which we routinely post important information, such as webcasts of quarterly earnings calls and other investor events in which we participate or host, and any related materials.
Available Information 10 We maintain a website at www.macom.com, including an investors section, at which we routinely post important information, such as webcasts of quarterly earnings calls and other investor events in which we participate or host, and any related materials.
Our engineers are experts in the design of analog and mixed signal circuits capable of reliable, high-performance RF, microwave, millimeter wave and optical signal transmission and conditioning. Our staff has decades of experience in solving complex design challenges in applications involving high frequency, high power and environmentally rugged operating conditions. Semiconductor process technology.
Our engineers are experts in the design of analog and mixed signal circuits capable of reliable, high-performance RF, microwave, millimeter wave and optical signal transmission and conditioning. Our staff has decades of experience in solving complex design challenges in applications involving high frequency, high power, high data rates and environmentally rugged operating conditions. Semiconductor process technology.
We routinely utilize single sources of supply for various materials based on availability, performance, efficiency or cost considerations. For example, wafers procured from merchant foundries for a particular process technology are generally sourced through a single foundry on which we rely for all of our wafers in that process.
We may utilize single sources of supply for various materials based on availability, performance, efficiency or cost considerations. For example, wafers procured from merchant foundries for a particular process technology are generally sourced through a single foundry on which we rely for all of our wafers in that process.
Approximately 70% of our workforce is male and 30% of our workforce is female. Females represented approximately 14% of our senior management and approximately 17% of our engineering roles. Corporate Culture and Employee Engagement. We are committed to fostering a corporate culture that encourages and seeks the betterment of the Company and the communities in which we conduct business.
Approximately 70% of our workforce is male and 30% of our workforce is female. Females represented approximately 14% of our senior management and approximately 16% of our engineering roles. Corporate Culture and Employee Engagement. We are committed to fostering a corporate culture that encourages and seeks the betterment of the Company and the communities in which we conduct business.
We expect revenue growth in the Data Center market to be driven by the adoption of higher speed processing technologies and the upgrade of data center architectures utilizing 100G, 200G, 400G, 800G, and 1.6T interconnects, which we expect will drive adoption of higher speed optical and photonic links.
We expect revenue growth in the Data Center market to be driven by the adoption of higher speed processing technologies and the upgrade of data center architectures utilizing 100G, 200G, 400G, 800G, 1.6T and 3.2T interconnects, which we expect will drive adoption of higher speed optical and photonic links.
We expect our revenue in the I&D market to be driven by the expansion of our product portfolio that services satellite and space communications, civil and military radar, electronic warfare, test and measurement, scientific, medical and other industrial applications.
We expect our revenue in the I&D market to be driven by the expansion of our product portfolio that services satellite and space-related communications, civil and military radar, electronic warfare, secure communications, test and measurement, scientific, medical and other industrial applications.
For example, our application expertise in power amplifier technology is leveraged across both scientific laboratory equipment applications and commercial and defense radar system applications. Our diode technology is used in switch filter banks of military tactical radios as well as medical imaging MRI systems. Telecom.
For example, our application expertise in power amplifier technology is leveraged across both scientific laboratory equipment applications and commercial and defense radar system applications. Our diode technology is used in switch filter banks of military tactical radios as well as medical imaging MRI systems. 4 Industrial & Defense.
Our primary end markets are: (1) I&D, which includes military and commercial radar, RF jammers, electronic countermeasures, communication data links, satellite communications (“SATCOM”) and various wired and wireless multi-market applications, which include industrial, medical, test and measurement and scientific applications; (2) Data Center, which includes intra-Data Center, Data Center Interconnect (“DCI”) applications, at 100G, 200G, 400G, 800G, 1.6T and higher speeds, enabled by our broad portfolio of analog ICs and photonic components for high speed connectivity customers; and (3) Telecom, which includes carrier infrastructure such as long-haul/metro, 5G and 6G infrastructure, satellite communications and Fiber-to-the-X (FTTx)/passive optical network (“PON”), among others.
Our primary end markets are: (1) I&D, which includes military and commercial radar, RF jammers, electronic countermeasures, communication data links, space-related electronics and various wired and wireless multi-market applications, which include industrial, medical, test and measurement and scientific applications; (2) Data Center, which includes intra-Data Center, Data Center Interconnect (DCI) applications, at 100G, 200G, 400G, 800G, 1.6T and higher speeds, enabled by our broad portfolio of analog ICs and photonic components for high speed connectivity customers; and (3) Telecom, which includes carrier infrastructure such as long-haul/metro, 5G and 6G infrastructure, satellite communications (“SATCOM”) and Fiber-to-the-X (FTTx)/passive optical network (PON), among others.
This strategy is intended to provide us with dependable supply, control over quality, reduced capital investment requirements, faster time to market and additional outsourced capacity when needed. In addition, the know-how developed through the continued operation of our internal fabrication lines provides us with the expertise to better manage our external foundry suppliers.
This strategy is intended to provide us with broad access to process technology, dependable supply, control over quality, reduced capital investment requirements, faster time to market and additional outsourced capacity when needed. In addition, the know-how developed through the continued operation of our internal fabrication lines provides us with the expertise to better manage our external foundry suppliers.
We have also maintained an internship program that supports the professional development of interns and serves as a recruitment tool for full-time employees. We monitor voluntary attrition as an indicator of employee engagement. During fiscal year 2024, our voluntary attrition rate was approximately 7%. Compensation. Our compensation policies recognize and reward individual and collective contributions to our growth and success.
We have also maintained an internship program that supports the professional development of interns and serves as a recruitment tool for full-time employees. We monitor voluntary attrition as an indicator of employee engagement. During fiscal year 2025, our voluntary attrition rate was approximately 6%. Compensation. Our compensation policies recognize and reward individual and collective contributions to our growth and success.
In MRI systems, we provide critical non-magnetic diode products for body coils. For sensing and test and measurement applications, we believe our heterolithic microwave integrated circuit, or HMIC, process is ideal for high-performance, integrated bias networks and switches.
In MRI systems, we provide critical non-magnetic diode products for body coils. For sensing and test and measurement applications, we believe our heterolithic microwave integrated circuit (“HMIC”), process is ideal for high-performance, integrated bias networks and switches.
We have a diverse employee base, serving a wide variety of customers across multiple geographies. We are strengthened by the broad diversity of our employees’ perspectives, backgrounds, cultures, lifestyles and experiences. We continue to create a culture of DEI&B in the workplace in order to promote and effect change at the corporate and community levels.
We have a diverse employee base, serving a wide variety of customers across multiple geographies. We are strengthened by the broad diversity of our employees’ perspectives, backgrounds, cultures, lifestyles and experiences. 9 We support a culture of DEI&B in the workplace in order to promote and effect change at the corporate and community levels.
For fiscal years 2024, 2023 and 2022, no direct customer individually accounted for 10% or more of our revenue and sales to our top 25 direct customers accounted for an aggregate of 47.0%, 51.5% and 47.1% of our revenue, respectively. Competition The markets for our products are highly competitive and are characterized by continuously evolving customer requirements.
For fiscal years 2025, 2024 and 2023, no direct customer individually accounted for 10% or more of our revenue and sales to our top 25 direct customers accounted for an aggregate of 45.6%, 47.0% and 51.5% of our revenue, respectively. Competition The markets for our products are highly competitive and are characterized by continuously evolving customer requirements.
We offer a broad portfolio of thousands of standard and custom devices, which include integrated circuits (“IC”), multi-chip modules (“MCM”), diodes, amplifiers, switches and switch limiters, passive and active components and radio frequency (“RF”) and optical subsystems, which make up dozens of product lines that service over 6,000 end customers in our three primary markets.
We offer a broad portfolio of thousands of standard and custom devices, which include integrated circuits (“ICs”), multi-chip modules (MCM), diodes, amplifiers, switches and switch limiters, passive and active components and radio frequency (RF) and optical subsystems, which make up dozens of product lines that service over 6,000 end customers in our three primary markets.
We do not know whether any of our pending patent applications will result in the issuance of patents or whether the examination process will require us to narrow our claims. The expiration dates of our patents range from 2024 to 2043.
We do not know whether any of our pending patent applications will result in the issuance of patents or whether the examination process will require us to narrow our claims. The expiration dates of our patents range from 2025 to 2044.
We have more than 70 years of application expertise, combined with expertise in analog and mixed signal circuit design, compound semiconductor fabrication (including gallium arsenide (“GaAs”), gallium nitride (“GaN”), indium phosphide (“InP”) and specialized silicon), advanced packaging and back-end assembly and test.
We have more than 70 years of application expertise, combined with expertise in analog and mixed signal circuit design, compound semiconductor fabrication (including gallium arsenide (GaAs), gallium nitride (GaN), indium phosphide (InP) and specialized silicon), advanced packaging and back-end assembly and test.
Our manufacturing model consists of operating internal semiconductor wafer fabrication and assembly and test facilities supplemented with external foundry and assembly and test partners. We operate semiconductor fabrication facilities at our Lowell, Massachusetts headquarters, and in our Ann Arbor, Michigan, and Limeil-Brévannes, France locations.
Our manufacturing model consists of operating internal semiconductor wafer fabrication and assembly and test facilities supplemented with external foundry and assembly and test partners. We operate semiconductor fabrication facilities at our Lowell, Massachusetts headquarters, and in our Research Triangle Park, (“RTP”), North Carolina, Ann Arbor, Michigan, and Limeil-Brévannes, France locations.
None of our U.S.- or Asia-based employees are represented by a collective bargaining agreement; however, as of September 27, 2024, approximately 128 of our employees working in certain European locations were covered by collective bargaining agreements. We consider our relations with employees to generally be good and we have not experienced a work stoppage due to labor issues.
None of our U.S.- or Asia-based employees are represented by a collective bargaining agreement; however, as of October 3, 2025, approximately 129 of our employees working in certain European locations were covered by collective bargaining agreements. We consider our relations with employees to generally be good and we have not experienced a work stoppage due to labor issues.
We also utilize external semiconductor foundries to access additional process technologies and capacity. In aggregate, we utilize a broad array of internal, proprietary process technologies and commercially available foundry technologies, which allows us to select the most appropriate technology to solve our customers’ needs.
In aggregate, we utilize a broad array of internal, proprietary process technologies and commercially available foundry technologies, which allows us to select the most appropriate technology to solve our customers’ needs.
Sales to our distributors accounted for 29.3%, 24.0% and 30.9% of our revenue in fiscal years 2024, 2023 and 2022, respectively.
Sales to our distributors accounted for 32.3%, 29.3% and 24.0% of our revenue in fiscal years 2025, 2024 and 2023, respectively.
Our European products and technologies are subject to the European Union Dual-Use Regulation (EU) No. 2021/821 (the “EU Regulation”), which governs the export of certain goods, software and technology that can be used for both civil and military applications.
Certain of our products and technology require an export license from BIS before we can export them to specified countries. Our European products and technologies are subject to the European Union Dual-Use Regulation (EU) No. 2021/821 (the “EU Regulation”), which governs the export of certain goods, software and technology that can be used for both civil and military applications.
These regulations are constantly changing and may affect our ability to sell certain products in certain markets. We maintain an export compliance program staffed by dedicated personnel under which we screen export transactions against current lists of restricted products, destinations and end users with the objective of managing export-related decisions, transactions and shipping logistics to ensure compliance with these requirements.
We maintain an export compliance program staffed by dedicated personnel under which we screen export transactions against current lists of restricted products, destinations and end users with the objective of managing export-related decisions, transactions and shipping logistics to ensure compliance with these requirements. Workforce Employees.
One of our resellers accounted for 11.3% of our revenue in fiscal year 2024 but did not exceed 10% in fiscal years 2023 and 2022.
One of our resellers accounted for 12.4% and 11.3% of our revenue in fiscal years 2025 and 2024, respectively, but did not exceed 10% in fiscal year 2023. A second reseller accounted for 11.2% of our revenue in fiscal year 2025 but did not exceed 10% in fiscal years 2024 and 2023.
We expect our revenue in the Telecom market to be driven, in part, by 5G and future generation telecommunication deployments and expansion of optical networks, with continued upgrades and expansion of communications equipment and increasing adoption of bandwidth-rich services. Industrial & Defense.
We expect our revenue in the Telecom market to be driven, in part, by 5G and future 6G telecommunication deployments and expansion of optical networks, with continued upgrades and expansion of communications equipment and increasing adoption of bandwidth-rich services. To address our primary markets, we offer a broad range of standard and custom ICs and components.
We believe our ability to select both internal and external technologies in our product solutions is a competitive advantage because it helps us to provide a unique and optimized solution for our customers. The majority of our internal wafer fabrication and internal assembly and test operations are conducted at our Lowell, Massachusetts headquarters.
We believe our ability to select both internal and external technologies in our product solutions is a competitive advantage because it helps us to provide a unique and optimized solution for our customers.
The following facilities have also achieved certification to the AS9100D aerospace standard: Lowell, Massachusetts; Ann Arbor, Michigan; Hamilton, New Jersey; Mesa, Arizona; Morgan Hill, California; Morrisville, North Carolina; and Nashua, New Hampshire. In addition, our Lowell, Massachusetts facility has received IATF16949:2016 automotive quality management system certification and the ISO 14001:2015 environmental management system certification.
The following facilities have also achieved certification to the AS9100D aerospace standard: Lowell, Massachusetts; Ann Arbor, Michigan; Hamilton, New Jersey; Mesa, Arizona; Morgan Hill, California; Morrisville and RTP, North Carolina; and Nashua, New Hampshire.
As of September 27, 2024, we had 726 U.S. and 451 foreign issued patents and 178 U.S. and 311 foreign pending patent applications covering elements of semiconductor devices, circuit design, manufacturing and wafer fabrication.
As of October 3, 2025, we had 729 U.S. and 497 foreign issued patents and 166 U.S. and 269 foreign pending patent applications covering elements of semiconductor devices, circuit design, manufacturing and wafer fabrication.
Certain of our products and technology require an export license under the EU Regulation before we can export them to specified countries. Similar controls exist in other jurisdictions. Failure to comply with these laws could result in sanctions by the government, including substantial monetary penalties, denial of export privileges and debarment from government contracts.
Certain of our products and technology require an export license under the EU Regulation before we can export them to specified countries. Similar controls exist in other jurisdictions.
Workforce Employees. As of September 27, 2024, we employed approximately 1,700 individuals worldwide, including approximately 700 in research and development (“R&D”). We have employees across 17 countries, with 73% in North America, 15% in Asia Pacific and 12% in Europe.
As of October 3, 2025, we employed approximately 2,000 individuals worldwide, including approximately 800 in research and development (“R&D”). We have employees across 18 countries, with 75% in North America, 13% in Asia Pacific and 12% in Europe.
Our acquisition strategy is intended to accelerate our growth, expand our technology portfolio, grow our addressable market and further create stockholder value.
See Note 4 - Acquisitions to our Consolidated Financial Statements included in this Annual Report for more information. Our acquisition strategy is intended to accelerate our growth, expand our technology portfolio, grow our addressable market and further create stockholder value.
We have been accredited by the United States Department of Defense with “Trusted Foundry” status, a designation conferred on microelectronics vendors exhibiting the highest levels of process integrity and protection. 3 In the I&D markets, a domestic fabrication facility may be a requirement to be a strategic supplier, and we believe our status as a Trusted Foundry offers us a further competitive advantage.
Our Lowell, Massachusetts fabrication facility has been accredited by the United States Department of Defense with “Trusted Foundry” status, a designation conferred on microelectronics vendors exhibiting the highest levels of process integrity and protection.
Environmental Regulation Our operations involve the use of hazardous substances and are regulated under federal, state and local laws governing health and safety and the environment in the U.S. and other countries.
Our following locations have each received ANSI/ESD S20.20:2021 certification: Lowell, Massachusetts; Ann Arbor, Michigan; Newport Beach, California; Morrisville, North Carolina; Nashua, New Hampshire; and Hsinchu, Taiwan. Environmental Regulation Our operations involve the use of hazardous substances and are regulated under federal, state and local laws governing health and safety and the environment in the U.S. and other countries.
We also operate wafer fabrication facilities in Ann Arbor, Michigan and in Limeil-Brévannes, France and we expect to assume control of a wafer fabrication facility in Research Triangle Park, North Carolina in the future.
The majority of our internal wafer fabrication and internal assembly and test operations are conducted at our Lowell, Massachusetts headquarters and our RTP, North Carolina wafer fabrication facility. We also operate other wafer fabrication facilities in Ann Arbor, Michigan and in Limeil-Brévannes, France.
We enable the market with a complete product portfolio of Pulse Amplitude Modulation (“PAM-4”) Physical Layers (“PHYs”), Transimpedance Amplifier (“TIAs”), Modulator Drivers, Lasers and Photodetectors, and, in some cases, individual component designs are optimized for use together as a chipset. To address our primary markets, we offer a broad range of standard and custom ICs and components.
We provide a complete product portfolio of Transimpedance Amplifier (TIAs), Modulator Drivers, Lasers and Photodetectors, to support single-mode, multi-mode and silicon photonics based transceivers and, in some cases, individual component designs are optimized for use together as a chipset. Telecom.
(“Wolfspeed”) (the “RF Business,”). The RF Business includes a portfolio of GaN on Silicon Carbide products used in high-performance RF and microwave applications. See Note 4 - Acquisitions to our Consolidated Financial Statements included in this Annual Report for more information.
(the “RF Business,”). The RF Business includes a portfolio of GaN on Silicon Carbide products used in high-performance RF and microwave applications. In connection with the RF Business acquisition, on July 25, 2025 we assumed control of a wafer fabrication facility in RTP, North Carolina.
Demand by Data Center providers for faster data delivery speeds at cost-effective prices is growing rapidly, where higher speeds are necessary to process the current growth in traffic. To solve these challenges, we leverage our broad optical and photonic portfolio of products to enable our customers to deliver optical transceivers that meet the requirements of today’s Data Center deployments.
To solve these challenges, our broad optoelectronic and photonic portfolio provide the building blocks to enable our customers to deliver next generation 800G, 1.6T and 3.2T optical transceivers that are required for today’s Data Center deployments.
Removed
Certain of our products and technology require an export license from BIS before we can export them to specified countries. Additionally, some of our products are subject to the International Traffic in Arms Regulations, which restrict the export of information and material that may be used for military or intelligence applications by a foreign person.
Added
In the I&D markets, a domestic 3 fabrication facility may be a requirement to be a strategic supplier, and we believe our status as a Trusted Foundry for microelectronics goods and services offers us a further competitive advantage. We also utilize external semiconductor foundries to access additional process technologies and capacity.
Added
The Data Center market supports applications like artificial intelligence (AI), Machine Learning and high performance computing demand from Data Center operators for faster data transmission speeds at lower power and latency is growing rapidly.
Added
Additionally, some of our products are subject to the International Traffic in Arms Regulation (in the U.S.) and the EU Common Military List and French Defense Code (in France), which govern the export of military products and technology to foreign persons.
Added
Failure to comply with these laws could result in sanctions by the government, including substantial monetary penalties, denial of export privileges and debarment from government contracts. These regulations are constantly changing and may affect our ability to sell certain products in certain markets.
Added
See Note 4 - Acquisitions to our Consolidated Financial Statements included in this Annual Report for more information. In November 2024, we completed the acquisition of ENGIN-IC, Inc. (“ENGIN-IC”), a fabless semiconductor company that designs advanced GaAs and GaN MMICs and integrated microwave assemblies located in Plano, Texas and San Diego, California.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, if terrorist activity, armed conflict, civil, economic or military unrest, natural disasters, global pandemics, embargoes or other economic sanctions, enforcement actions against governments, governmental entities or private entities or political instability occurs in the U.S. or other locations, such events may disrupt our manufacturing, assembly, logistics, security and communications, labor issues and transportation and other disruptions, and could also result in reduced demand for our products.
Biggest changeFrom time to time, we may attempt to hedge our exposure to foreign currency risk by buying currency contracts or otherwise, and any such efforts involve expense and associated risk that the currencies involved may not behave as we expect and we may lose money on such hedging strategies or not properly hedge our risk. 15 In addition, if terrorist activity, armed conflict, civil, economic or military unrest, natural disasters, global pandemics, embargoes or other economic sanctions, enforcement actions against governments, governmental entities or private entities or political instability occurs in the U.S. or other locations, such events may disrupt our manufacturing, assembly, logistics, security and communications, labor issues and transportation and other disruptions, and could also result in reduced demand for our products.
The potential difficulties we may face in integrating the operations of our acquisitions include, among others: failure to implement our business plans for the combined businesses and consolidation or expansion of production capacity as planned and where applicable; unexpected losses of key employees, customers or suppliers of our acquired companies and businesses; unanticipated issues in conforming our acquired companies’ and businesses’ standards, processes, procedures and controls with our operations; coordinating new product and process development; increasing the scope, geographic diversity and complexity of our operations; diversion of management’s attention from other business concerns; adverse effects on our or our acquired companies’ and businesses’ existing business relationships; unanticipated changes in applicable laws and regulations; operating risks inherent in our acquired companies’ and businesses’ business and operations; unanticipated expenses and liabilities; potential unfamiliarity with our acquired companies and businesses technology, products and markets, which may place us at a competitive disadvantage; and other difficulties in the assimilation of our acquired companies and businesses operations, technologies, products and systems.
The potential difficulties we may face in integrating the operations of our acquisitions include, among others: failure to implement our business plans for the combined businesses and consolidation or expansion of production capacity as planned and where applicable; unexpected losses of key employees, customers or suppliers of our acquired companies and businesses; unanticipated issues in conforming our acquired companies’ and businesses’ standards, processes, procedures and controls with our operations; coordinating new product and process development; increasing the scope, geographic diversity and complexity of our operations; diversion of management’s attention from other business concerns; adverse effects on our or our acquired companies’ and businesses’ existing business relationships; unanticipated changes in applicable laws and regulations; operating risks inherent in our acquired companies’ and businesses’ business and operations; unanticipated expenses and liabilities; potential unfamiliarity with our acquired companies and businesses technology, products and markets, which may place us at a 17 competitive disadvantage; and other difficulties in the assimilation of our acquired companies and businesses operations, technologies, products and systems.
In pursuing transactions, we have and will continue to face numerous risks, including diverting management’s attention from normal daily operations of our business; difficulties in integrating the financial reporting capabilities and operating 16 systems of any acquired operations to maintain effective internal control over financial reporting and disclosure controls and procedures; potential loss of key personnel of the acquired company as well as their know-how, relationships and expertise; challenges successfully integrating acquired personnel, operations and businesses; failing to realize the anticipated synergies and benefits of an acquisition; maintaining favorable business relationships of acquired operations; generating insufficient revenue from completed transactions to offset expenses associated with our efforts; acquiring material or unknown liabilities associated with any acquired operations; litigation associated with merger and acquisition transactions; and increasing expense associated with amortization or depreciation of intangible and tangible assets we acquire.
In pursuing transactions, we have and will continue to face numerous risks, including diverting management’s attention from normal daily operations of our business; difficulties in integrating the financial reporting capabilities and operating systems of any acquired operations to maintain effective internal control over financial reporting and disclosure controls and procedures; potential loss of key personnel of the acquired company as well as their know-how, relationships and expertise; challenges successfully integrating acquired personnel, operations and businesses; failing to realize the anticipated synergies and benefits of an acquisition; maintaining favorable business relationships of acquired operations; generating insufficient revenue from completed transactions to offset expenses associated with our efforts; acquiring material or unknown liabilities associated with any acquired operations; litigation associated with merger and acquisition transactions; and increasing expense associated with amortization or depreciation of intangible and tangible assets we acquire.
Ongoing export control reform that has changed and is expected to continue to change rules applicable to us in the future in ways we do not yet fully understand and we have experienced and will continue to experience 21 challenges in complying with the new rules as they become effective, resulting in difficulties or an inability to ship products to certain countries and customers.
Ongoing export control reform that has changed and is expected to continue to change rules applicable to us in the future in ways we do not yet fully understand and we have experienced and will continue to experience challenges in complying with the new rules as they become effective, resulting in difficulties or an inability to ship products to certain countries and customers.
Our profitability will decline if we fail to accurately forecast customer demand when managing inventory. We generally sell our products on the basis of purchase orders rather than long-term purchase commitments from our customers. Our customers can typically cancel purchase orders or defer product shipments for some period without incurring liability to us.
Our profitability will decline if we fail to accurately forecast customer demand when managing inventory. 11 We generally sell our products on the basis of purchase orders rather than long-term purchase commitments from our customers. Our customers can typically cancel purchase orders or defer product shipments for some period without incurring liability to us.
Our quarterly and annual operating results and related expectations may vary significantly in the future based upon a number of factors, many of which are beyond our control, including: general economic growth or decline in the U.S. or foreign markets; reduction or cancellation of orders by customers; the amount of new customer orders we book and ship in any particular fiscal quarter; relative linearity of our shipments within any particular fiscal quarter; the gain or loss of a key customer or significant changes in demand and/or fluctuations in the markets we serve; fluctuations in the levels of component inventories held by our customers and accurate forecasting by customers; fluctuations in manufacturing output, yields, capacity levels, quality control or other potential problems or delays we or our subcontractors may experience in the fabrication, assembly, testing or delivery of our products; success of our investments in R&D; availability, quality and cost of semiconductor wafers and other raw materials, equipment, components and internal or outsourced manufacturing, packaging and test capacity, particularly where we have only one qualified source of supply; effects of seasonal and other changes in customer demand; effects of competitive pricing pressures, including decreases in ASPs of our products; loss of key personnel or the shortage of available skilled workers; our failure to remain abreast of new and improved semiconductor process technologies; failure of our partners in strategic alliances, which may prevent us from achieving commercial success in such alliance; the exposure of our operations to possible capital and exchange controls, expropriation and other restrictive government actions, changes in intellectual property legal protections and remedies, as well as political unrest, unstable governments and legal systems and inter-governmental disputes; changes in laws and regulations in the U.S. and other countries, or the interpretations thereof; and the effects of war, natural disasters, global pandemics, acts of terrorism, macroeconomic uncertainty or decline including increased levels of inflation or geopolitical unrest. 12 The foregoing factors are difficult to forecast.
Our quarterly and annual operating results and related expectations may vary significantly in the future based upon a number of factors, many of which are beyond our control, including: general economic growth or decline in the U.S. or foreign markets; reduction or cancellation of orders by customers; the amount of new customer orders we book and ship in any particular fiscal quarter; relative linearity of our shipments within any particular fiscal quarter; the gain or loss of a key customer or significant changes in demand and/or fluctuations in the markets we serve; fluctuations in the levels of component inventories held by our customers and accurate forecasting by customers; fluctuations in manufacturing output, yields, capacity levels, quality control or other potential problems or delays we or our subcontractors may experience in the fabrication, assembly, testing or delivery of our products; success of our investments in R&D; availability, quality and cost of semiconductor wafers and other raw materials, equipment, components and internal or outsourced manufacturing, packaging and test capacity, particularly where we have only one qualified source of supply; effects of seasonal and other changes in customer demand; effects of competitive pricing pressures, including decreases in ASPs of our products; loss of key personnel or the shortage of available skilled workers; our failure to remain abreast of new and improved semiconductor process technologies; failure of our partners in strategic alliances, which may prevent us from achieving commercial success in such alliance; the exposure of our operations to possible capital and exchange controls, expropriation and other restrictive government actions, changes in intellectual property legal protections and remedies, as well as political unrest, unstable governments and legal systems and inter-governmental disputes; changes in laws and regulations in the U.S. and other countries, or the interpretations thereof; and the effects of war, natural disasters, global pandemics, acts of terrorism, macroeconomic uncertainty or decline including increased levels of inflation or geopolitical unrest.
These vendors may choose to supply others in preference to us in times of capacity constraint or otherwise, particularly where the other customers purchase in higher volume. Third-party supplier capacity constraints have in the past and may in the future prevent us from supplying customer demand that we otherwise could have fulfilled at attractive prices.
These vendors may choose to supply others in preference to us in times of capacity constraint or otherwise, particularly where the other customers purchase in higher volume. Third-party supplier capacity constraints have in the past and may in the future prevent us from supplying customer 20 demand that we otherwise could have fulfilled at attractive prices.
In certain circumstances, if we do not comply with the terms of a contract or with regulations or statutes, we could be subject to downward contract price adjustments or refund obligations or could in extreme circumstances be assessed civil and criminal penalties or be debarred or suspended from obtaining future contracts for a specified period of time.
In certain circumstances, if we do not comply with the terms of a contract or with regulations or statutes, we could be subject to downward contract price adjustments or refund obligations or could in extreme circumstances be assessed civil and criminal penalties or be debarred or suspended from obtaining 19 future contracts for a specified period of time.
Our ability to refinance the 2026 Convertible Notes or our other indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
Our ability to refinance the 2026 Convertible Notes, the 2029 Convertible Notes or our other indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
As a result, we may be limited in our ability to enforce our rights under such agreements and to collect amounts owed to us. 15 The majority of our contract assembly, packaging and test vendors are located in Asia. We generally do business with our foreign assemblers in U.S. dollars.
As a result, we may be limited in our ability to enforce our rights under such agreements and to collect amounts owed to us. The majority of our contract assembly, packaging and test vendors are located in Asia. We generally do business with our foreign assemblers in U.S. dollars.
For example, we have in the past and may continue to experience additional and new unexpected difficulties, expenses or delays in qualifying and completing certain of our development projects including our 19 GaN-on-Silicon, certain Laser products and our Air Force Research Laboratory related process technology transfer.
For example, we have in the past and may continue to experience additional and new unexpected difficulties, expenses or delays in qualifying and completing certain of our development projects including our GaN-on-Silicon, certain Laser products and our Air Force Research Laboratory related process technology transfer.
Such events may also (i) cause our customers and consumers to reduce, delay or forgo technology spending, (ii) result in customers sourcing products from other suppliers not subject to such restrictions or tariffs, (iii) lead to the insolvency or consolidation of key suppliers and customers and (iv) intensify pricing pressures.
Such events may also (i) cause our customers to reduce, delay or forgo technology spending, (ii) result in customers sourcing products from other suppliers not subject to restrictions or tariffs, (iii) intensify pricing pressures and (iv) lead to the insolvency or consolidation of key suppliers and customers.
Any or all of these factors could negatively affect demand for our products and our business, financial condition and results of operations. Risks Relating to Business Strategies and Personnel We face intense competition in our industry, and our inability to compete successfully could negatively affect our operating results. The semiconductor industry is highly competitive.
Any or all of these factors could negatively impact demand for our products and our business, financial condition and results of operations. Risks Relating to Business Strategies and Personnel We face intense competition in our industry, and our inability to compete successfully could negatively affect our operating results. The semiconductor industry is highly competitive.
Similarly, counterparties to our intellectual property agreements may fail to comply with their obligations under those agreements, requiring us 20 to resort to expensive and time-consuming litigation in an attempt to protect our rights, which may or may not be successful.
Similarly, counterparties to our intellectual property agreements may fail to comply with their obligations under those agreements, requiring us to resort to expensive and time-consuming litigation in an attempt to protect our rights, which may or may not be successful.
Risks Relating to our 2026 Convertible Notes Servicing our debt, including our 2026 Convertible Notes, requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our indebtedness.
Risks Relating to our Convertible Notes Servicing our debt, including our 2026 Convertible Notes and 2029 Convertible Notes, requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our indebtedness.
Our business may not continue to generate cash flow from operations in the future sufficient to service the 2026 Convertible Notes or other indebtedness and make necessary capital expenditures.
Our business may not continue to generate cash flow from operations in the future sufficient to service the 2026 Convertible Notes, the 2029 Convertible Notes or other indebtedness and make necessary capital expenditures.
Failure to comply with environmental regulations could subject us to civil or criminal sanctions and property damage or personal injury claims.
Failure to comply with environmental regulations could subject us to civil or criminal sanctions and property 22 damage or personal injury claims.
In addition, if a make-whole fundamental change occurs prior to the maturity date of the 2026 Convertible Notes, we will in some cases be required to increase the conversion rate for a holder that elects to convert its 2026 Convertible Notes.
In addition, if a make-whole fundamental change occurs prior to the maturity date of the 2026 Convertible Notes and 2029 Convertible Notes, we will in some cases be required to increase the conversion rate for a holder that elects to convert its 2026 Convertible Notes and 2029 Convertible Notes.
Downturns in this industry may be prolonged, and downturns in many sectors of the electronic systems industry have in the past contributed to extended periods of weak demand for semiconductor products.
Downturns in our industry may be prolonged, and downturns in many sectors of the electronic systems industry have in the past contributed to extended periods of weak demand for semiconductor products.
A fundamental change of our Company would trigger an option of the holders of the 2026 Convertible Notes to require us to repurchase the 2026 Convertible Notes.
A fundamental change of our Company would trigger an option of the holders of the 2026 Convertible Notes and 2029 Convertible Notes to require us to repurchase the 2026 Convertible Notes.
As a result, these stockholders will be able to exert a significant degree of influence over our management and affairs and control over matters requiring stockholder approval, including the election of our directors and approval of significant corporate transactions.
As a result, this stockholder will be able to exert a significant degree of influence over our management and affairs and control over matters requiring stockholder approval, including the election of our directors and approval of significant corporate transactions.
Our ability to make payments of the principal of, to pay interest on, or to refinance, our 2026 Convertible Notes (as defined in Note 15 - Debt to the Consolidated Financial Statements included in this Annual Report), or to make cash payments in connection with any conversion of the 2026 Convertible Notes depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
Our ability to make payments of the principal of our 2026 Convertible Notes and our 2029 Convertible Notes (each as defined in Note 15 - Debt to the Consolidated Financial Statements included in this Annual Report), or to make cash payments in connection with any conversion of the 2026 Convertible Notes and the 2029 Convertible Notes depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
We expect to continue to pursue such transactions if appropriate opportunities arise. However, we may not be able to identify suitable transactions in the future or if we do identify such transactions, we may not be able to complete them on commercially acceptable terms or at all and may face intense competition for such opportunities.
However, we may not be able to identify suitable transactions in the future or if we do identify such transactions, we may not be able to complete them on commercially acceptable terms or at all and may face intense competition for such opportunities.
As a result, our gross margin may decrease, we may not reach our expected level of production orders and we may lose market share, which could adversely affect our ability to sustain our revenue growth or maintain our current revenue levels.
As a result, our gross margin may decrease, we may not reach our expected level of production orders and we may lose market share, which could adversely affect our ability to sustain our revenue growth or maintain our current revenue levels. We are subject to supply, order and shipment uncertainties.
Although our internal IT team actively takes steps to protect our information and operational systems, unauthorized persons or disloyal insiders may be able to penetrate our security controls, and develop and deploy viruses, worms and other malicious software programs that compromise and/or exfiltrate our confidential information or that of third parties and cause a disruption or failure of our information and/or operational technology systems.
Although our internal information security team has adopted administrative, technical and physical safeguards and actively takes steps to protect our information, data and operational systems, unauthorized persons or disloyal insiders may be able to penetrate our security controls, and develop and deploy viruses, worms and other malicious software programs that compromise and/or exfiltrate our confidential information or that of third parties and cause a disruption or failure of our information and/or operational technology systems.
In addition, from time to time, we may recruit and hire employees from our competitors, customers, suppliers and distributors, which could result in liability to us and damage our business relationship with these parties.
In addition, from time to time, we may recruit and hire employees from our competitors, customers, suppliers and distributors, which could result in liability to us and damage our business relationship with these parties. We may experience difficulties in managing any future growth.
For example, fiscal year 2024 sales to customers in China and the Asia Pacific region accounted for 24.4% and 12.2% of total fiscal year 2024 sales, respectively. We expect that revenue from international sales generally, and sales to China and the Asia Pacific region specifically, will continue to be a material part of our total revenue.
For example, fiscal year 2025 sales to customers in China and the Asia Pacific region accounted for 28.4% and 11.5% of total fiscal year 2025 sales, respectively. We expect that revenue from international sales generally, and sales to China and the Asia Pacific region specifically, will continue to be a material part of our total revenue.
Sustained uncertainty about, or worsening of, current global economic conditions and further escalation of trade tensions between the U.S. and its trading partners could result in a global economic slowdown and long-term changes to global trade.
Sustained uncertainty about, or worsening of, current global economic conditions and further tariffs and escalations of trade tensions between the U.S. and its trading partners and the decoupling of the global economies could result in an economic slowdown and long-term changes to global trade.
Risks Relating to Production Operations Our internal and external manufacturing, assembly and test model subjects us to various manufacturing and supply risks. We operate leased semiconductor wafer processing and manufacturing facilities at our headquarters in Lowell, Massachusetts, and at our Ann Arbor, Michigan and Limeil-Brévannes, France sites. These facilities are also important internal design, assembly and test facilities.
Risks Relating to Production Operations 18 Our internal and external manufacturing, assembly and test model subjects us to various manufacturing and supply risks. We operate leased semiconductor wafer processing and manufacturing facilities at our headquarters in Lowell, Massachusetts, and at our Ann Arbor, Michigan, RTP, North Carolina and Limeil-Brévannes, France sites.
The U.S. government has made statements and taken certain actions that have led to, and may lead to further, changes to U.S. and international export and import controls or trade policies, including tariffs affecting certain products exported by a number of U.S. trading partners, including China.
The U.S. government has implemented 21 tariff and other trade control policies, and may take further actions, that have led to, and may lead to further, changes to U.S. and international export and import controls or trade policies, including tariffs affecting certain products exported by a number of U.S. trading partners, including China.
For example, between July 8, 2024 and August 7, 2024, the market price of our common stock had a cumulative decline of approximately 18.8%. Companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future.
For example, between February 5, 2025 and April 8, 2025, the market price of our common stock had a cumulative decline of approximately 35.4%. Companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future.
Our R&D expenses were $182.2 million for the fiscal year ended September 27, 2024. In each of the last three fiscal years, we invested in R&D as part of our strategy toward the development of innovative products and solutions to help support our growth and profitability.
Our R&D expenses were $244.5 million for the fiscal year ended October 3, 2025. In each of the last three fiscal years, we invested in R&D as part of our strategy toward the development of innovative products and solutions to help support our growth and profitability.
If any of the above risks occur, our business, financial condition, results of operations and cash flows may be materially and adversely impacted, we may fail to meet the expectations of investors or analysts, and our stock price may decline as a result.
If any of the above risks occur, our business, financial condition, results of operations and cash flows may be materially and adversely impacted, we may fail to meet the expectations of investors or analysts, and our stock price may decline as a result. We depend on third-party sales representatives and distributors for a material portion of our revenues.
If we are unable to comply, or are unable to cause our suppliers or contract manufacturers to comply, with such policies or provisions or meet the requirements of our customers or our investors, a customer may stop purchasing products from us or an investor may sell their shares and/or take legal action against us, which could harm our reputation, revenue and results of operations.
If we are unable to comply, or are unable to cause our suppliers or contract manufacturers to comply, with such policies or provisions or meet the requirements of our customers or our investors, a customer may stop purchasing products from us or an investor may sell their shares and/or take legal action against us, which could harm our reputation, revenue and results of operations. 23 Risks Relating to Ownership of our Common Stock The market price of our common stock may be volatile, which could result in substantial losses for investors.
Sales to customers located outside the U.S. accounted for 55.1% of our revenue for the fiscal year ended September 27, 2024. Sales to customers located in China and the Asia Pacific region typically account for a large portion of our overall sales to customers located outside the U.S.
Sales to customers located outside the U.S. accounted for 56.3% of our revenue for the fiscal year ended October 3, 2025. Sales to customers located in China and the Asia Pacific region typically account for a large portion of our overall sales to customers located outside the U.S.
Further, if we were found to be non-compliant with any rule or regulation, we could be subject to fines, penalties and/or restrictions imposed by government agencies that could adversely affect our operating results.
Further, if we were found to be non-compliant with any rule or regulation, we could be subject to fines, penalties and/or restrictions imposed by government agencies that could adversely affect our operating results. Failure to comply with data privacy regimes could subject us to significant expenses, litigation and reputational harm.
In many cases, the products are also assembled in customized packages or feature high levels of integration. Our products must meet exacting customer specifications for quality, performance and reliability.
Our products involve complexities in both their design and the semiconductor process technology employed in their fabrication. In many cases, the products are also assembled in customized packages or feature high levels of integration. Our products must meet exacting customer specifications for quality, performance and reliability.
Some of our stockholders can exert control over us and they may not make decisions that reflect our interests or those of other stockholders. Our largest stockholder controls a significant amount of our outstanding common stock. As of September 27, 2024, Susan Ocampo beneficially owned 17.8% of our common stock.
Some of our stockholders can exert control over us and they may not make decisions that reflect our interests or those of other stockholders. Our largest stockholder controls a significant amount of our outstanding common stock. As of October 3, 2025, Susan Ocampo beneficial ly owned 12.5% of our common stock.
However, the proceedings are ongoing and several factors beyond our control could cause this loss accrual to prove inadequate, and any future increases to our allocation of responsibility among the PRPs or the future reduction of parties participating in the PRP group could materially increase our potential liability relating to the Omega Site. 22 Environmental regulations such as the WEEE and RoHS directives limit our flexibility and may require us to incur material expense.
However, the proceedings are ongoing and several factors beyond our control could cause this loss accrual to prove inadequate, and any future increases to our allocation of responsibility among the PRPs or the future reduction of parties participating in the PRP group could materially increase our potential liability relating to the Omega Site.
Failure to comply with data privacy regimes could subject us to significant expenses, litigation and reputational harm. In the ordinary course of our business, we have access to sensitive, confidential or personal data or information regarding our employees and others that is subject to privacy and security laws and regulations.
In the ordinary course of our business, we have access to sensitive, confidential or personal data or information regarding our employees and others that is subject to privacy and security laws and regulations.
Various countries require companies selling a broad range of electrical equipment to conform to regulations such as the Waste Electrical and Electronic Equipment (“WEEE”) and the European Directive on Restriction of Hazardous Substances (“RoHS”).
Environmental regulations such as the WEEE and RoHS directives limit our flexibility and may require us to incur material expense. Various countries require companies selling a broad range of electrical equipment to conform to regulations such as the Waste Electrical and Electronic Equipment (“WEEE”) and the European Directive on Restriction of Hazardous Substances (“RoHS”).
The occurrence of any of these events, including the conflicts in Ukraine and Israel, could have a material adverse effect on our operating results. Adverse global economic conditions could have a negative impact on our business, results of operations and financial condition and liquidity.
The occurrence of any of these events, including the conflicts in Ukraine and Israel, could have a material adverse effect on our operating results.
For example, as of September 27, 2024, we had $265.1 million of gross federal net operating loss (“NOL”) carryforwards, which, for those generated prior to the effective date of the 2017 Tax Cuts and Jobs Act (“Tax Act”), will expire at various dates through 2036, while those generated subsequent to the Tax Act have an indefinite carryforward with no expiration.
For example, as of October 3, 2025, we had $240.9 million of gross federal net operating loss (“NOL”) carryforwards, which, for those generated prior to the effective date of the U.S. Tax Act, will expire at various dates through 2038, while those generated subsequent to the U.S. Tax Act have an indefinite carryforward with no expiration.
Despite those efforts, there is a risk that we may be subject to fines and penalties, litigation and reputational harm if we fail to protect the privacy of third party data or to comply with the applicable data privacy regimes. 23 Risks Relating to Ownership of our Common Stock The market price of our common stock may be volatile, which could result in substantial losses for investors.
Despite those efforts, there is a risk that we may be subject to fines and penalties, litigation and reputational harm if we fail to protect the privacy of third-party data or to comply with the applicable data privacy regimes.
In response, many of those trading partners, including China, have imposed or proposed new or higher tariffs on American products. It is unknown whether and to what extent new tariffs (or other new laws or regulations) will be adopted, or the effect that any such actions would have on us or our industry and customers.
It is unknown whether and to what extent new tariffs, export control measures or other new laws or regulations will be adopted, or the effect that any such actions would have on us or our industry and customers.
Provisions in indenture governing the 2026 Convertible Notes may delay or prevent an otherwise beneficial business combination. The terms of the 2026 Convertible Notes require us to repurchase the 2026 Convertible Notes in the event of a “fundamental change” as defined under the indenture governing the 2026 Convertible Notes.
The terms of the 2026 Convertible Notes and 2029 Convertible Notes require us to repurchase the 2026 Convertible Notes in the event of a “fundamental change” as defined under the indenture governing the 2026 Convertible Notes and 2029 Convertible Notes.
We rely on our information technology (“IT”) systems and services for the effective operation of our business and for the secure maintenance and storage of confidential data relating to our business. These systems and services are both internally managed and outsourced, and, in many cases, we rely upon third party service providers.
We rely on our information technology (“IT”) systems and services for the effective operation of our business and for the secure maintenance and storage of confidential data relating to our business.
Furthermore, the indenture that governs the 2026 Convertible Notes prohibits us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the 2026 Convertible Notes. This may have the effect of delaying or preventing an acquisition of our Company that could be beneficial to investors.
Furthermore, the indenture that governs the 2026 Convertible Notes and 2029 Convertible Notes prohibits us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the 2026 Convertible Notes and 2029 Convertible Notes.
Our failure to retain our present employees and hire additional qualified personnel in a timely manner and on reasonable terms could harm our competitiveness and results of operations. In particular, the loss of any member of our senior management team could strengthen a competitor, weaken customer relationships or harm our ability to implement our business strategy.
In particular, the loss of any member of our senior management team could strengthen a competitor, weaken customer relationships or harm our ability to implement our business strategy.
Our failure to successfully compete could result in lower revenue, decreased profitability and a lower stock price. We have made and may, in the future, make acquisitions and investments, which involve numerous risks. We have made certain acquisitions and continue to routinely evaluate potential acquisitions, investments and strategic alliances involving complementary technologies, design teams, products and companies.
We have made and may, in the future, make acquisitions and investments, which involve numerous risks. We have made certain acquisitions and continue to routinely evaluate potential acquisitions, investments and strategic alliances involving complementary technologies, design teams, products and companies. We expect to continue to pursue such transactions if appropriate opportunities arise.
These and similar factors could materially and adversely affect our quarterly and annual operating results and related expectations for future periods. If our operating results in any period do not meet our publicly stated guidance or the expectations of investors or securities analysts, our stock price may decline and has, in the past, declined as a result.
If our operating results in any period do not meet our publicly stated guidance or the expectations of investors or securities analysts, our stock price may decline and has, in the past, declined as a result. 12 We depend on orders from a limited number of customers for a significant percentage of our revenue.
We maintain other internal assembly and test operation facilities as well, including leased sites in Hamilton, New Jersey, Morgan Hill, California, Nashua, New Hampshire, and Hsinchu, Taiwan. We also use multiple external foundries for outsourced semiconductor wafer supply, as well as multiple domestic and Asian assembly and test suppliers to assemble and test our products.
These facilities are also important internal design, assembly and test facilities. We maintain other internal assembly and test operation facilities as well, including leased sites in Hamilton, New Jersey, Morgan Hill, California, Nashua, New Hampshire, and Hsinchu, Taiwan.
Any failure of these internal or third party systems and services to operate effectively could disrupt our operations and have a material adverse effect on our business, financial condition and/or results of operations. Our operations are dependent upon our ability to protect our IT infrastructure against damage from business continuity events that could have a significant disruptive effect.
These systems and services are both internally managed and outsourced, and, in many cases, we rely upon third-party service providers. Any failure of these internal or third-party systems and services to operate effectively could disrupt our operations and have a material adverse effect on our business, financial condition and/or results of operations.
As of September 27, 2024, we had approximately $74.8 million in money market funds and $435.1 million in short-term investments, respectively. The debt security investments consisted of commercial paper, corporate bonds and U.S. Treasury securities. We currently do not use derivat ive financ ial instruments to adjust our investment portfolio risk or income profile.
The debt security investments consisted of commercial paper, corporate bonds and U.S. Treasury securities. We currently do not use derivat ive financ ial instruments to adjust our investment portfolio risk or income profile. These investments, as well as any cash deposited in bank accounts, are subject to general credit, liquidity, market and interest rate risks.
Minor deviations in the manufacturing process can cause substantial manufacturing yield loss or even cause halts in production, which could have a material adverse effect on our revenue and gross margin. Our products involve complexities in both their design and the semiconductor process technology employed in their fabrication.
The effectiveness of our supply chain could be adversely affected by such issues and harm our results of operations. Minor deviations in the manufacturing process can cause substantial manufacturing yield loss or even cause halts in production, which could have a material adverse effect on our revenue and gross margin.
We depend on orders from a limited number of customers for a significant percentage of our revenue. In the fiscal year ended September 27, 2024, no direct customer individually accounted for 10% or more of our revenue and sales to our top 10 direct and distribution customers accounted for an aggregate of 55.8% of our revenue.
In the fiscal year ended October 3, 2025, no direct customers individually accounted for 10% or more of our revenue and sales to our top 10 direct and distribution customers accounted for an aggregate of 56.7% of our revenue.
Adverse global economic conditions have, from time to time, caused or exacerbated significant slowdowns in the industries and markets in which we operate, which have adversely affected our business and results of operations.
Adverse global economic conditions have, in the past, caused significant slowdowns in the industries and markets in which we operate, adversely impacting our business and results of operations. Macroeconomic weakness and uncertainty may also make it more difficult to accurately forecast operating results and raise or refinance debt.
We are unable to predict the extent to which our independent sales representatives and distributors will be successful in marketing and selling our products. Our relationships with our representatives and distributors typically may be terminated by either party at any time, and do not require them to buy any of our products.
Our relationships with our representatives and distributors typically may be terminated by either party at any time, and do not require them to buy any of our products. Sales to distributors accounted for approximately 32.3% of our revenue for the fiscal year ended October 3, 2025.
Sales to distributors accounted for approximately 29.3% of our revenue for the fiscal year ended September 27, 2024. If our sales representatives or distributors cease doing business with us or fail to successfully market and sell our products, our ability to sustain and grow our revenue could be materially adversely affected. We may experience difficulties in managing any future growth.
If our sales representatives or distributors cease doing business with us or fail to successfully market and sell our products, our ability to sustain and grow our revenue could be materially adversely affected. If we lose key personnel or fail to attract and retain key personnel, we may be unable to pursue business opportunities or develop our products.
If we lose key personnel or fail to attract and retain key personnel, we may be unable to pursue business opportunities or develop our products. We believe our continued ability to recruit, hire, retain and motivate highly skilled engineering, operations, sales, administrative and managerial personnel is key to our future success. Competition for these employees is intense.
We believe our continued ability to recruit, hire, retain and motivate highly skilled engineering, operations, sales, administrative and managerial personnel is key to our future success. Competition for these employees is intense. Our failure to retain our present employees and hire additional qualified personnel in a timely manner and on reasonable terms could harm our competitiveness and results of operations.
These investments, as well as any cash deposited in bank accounts, are subject to general credit, liquidity, market and interest rate risks. We regularly maintain cash balances that are not insured or are in excess of the FDIC’s insurance limit.
We regularly maintain cash balances that are not insured or are in excess of the FDIC’s insurance limit.
If the number or severity of claims for which we self-insure increases, it could cause a material and adverse change to our reserves for self-insurance liabilities, as well as to our earnings. Our short-term investment portfolio and certain cash balances could experience a decline in market value or otherwise become illiquid, which could materially and adversely affect our financial results.
Our short-term investment portfolio and certain cash balances could experience a decline in market value or otherwise become illiquid, which could materially and adversely affect our financial results. 14 As of October 3, 2025, we had approximately $63.8 million in money market funds and $673.8 million in short-term investments, respectively.
We depend on third-party sales representatives and distributors for a material portion of our revenues. 17 We sell many of our products to customers through independent sales representatives and distributors, as well as through our direct sales force.
We sell many of our products to customers through independent sales representatives and distributors, as well as through our direct sales force. We are unable to predict the extent to which our independent sales representatives and distributors will be successful in marketing and selling our products.
A general slowdown in the global economy, including a recession, or in a particular region or industry, an increase in trade tensions with U.S. trading partners, inflation or a tightening of the credit markets could negatively impact our business, financial condition and liquidity.
A slowdown in the global economy or in a particular region or industry, uncertainty and volatility in financial markets and other unfavorable changes in economic conditions, such as inflation or major central bank policy actions, as well as an increase in trade tensions and related tariffs, including, but not limited to, the implementation of new tariffs and retaliatory trade measures, could negatively impact our business, financial condition and liquidity.
An escalation of trade tensions between the U.S. and China has resulted in trade restrictions and increased tariffs that harm our ability to participate in Chinese markets or compete effectively with Chinese companies.
An escalation of trade tensions between the United States and its trading partners has resulted in trade restrictions and tensions that may harm our ability to participate in some markets or compete effectively and could limit our ability to sell products in certain markets or source components from specific suppliers, potentially disrupting our supply chain and manufacturing capabilities.
Removed
Sources for certain components, materials and services are limited, which could result in interruptions, delays or reductions in product shipments. Our industry may be affected from time to time by limited supplies of certain key components, materials and services.
Added
For instance, the capital spending on Data Center infrastructure to support artificial intelligence (“AI”) applications is rapidly expanding, which is increasing demand for our products. If capital spending on Data Center infrastructure slows down, demand for our products may decline.
Removed
We have in the past and may in the future, experience delays or reductions in supply shipments, which could reduce our revenue and profitability. If key components, materials or services are unavailable, our costs could increase and our revenue could decline.
Added
The foregoing factors are difficult to forecast. These and similar factors could materially and adversely affect our quarterly and annual operating results and related expectations for future periods.
Removed
Our manufacturing headquarters, design facilities, assembly and test facilities and supply chain, and those of our contract manufacturers, are subject to risk of catastrophic loss due to fire, flood or other natural or man-made disasters.
Added
In the ordinary course of our business, we and our third-party service providers collect, maintain and transmit sensitive data on our networks and systems, including Company and third-party intellectual property and proprietary or confidential business information (such as research data and personal information).
Removed
Any catastrophic loss or significant damage to any of these facilities, particularly our Lowell, Massachusetts, Nashua, New Hampshire, Limeil-Brévannes, France, Morgan Hill, California and Hsinchu, Taiwan locations, as well as the Wolfspeed-managed fabrication facility in Durham, North Carolina, could materially disrupt our operations, delay production, shipments and revenue and result in significant expenses to repair or replace the facility and, in some instances, could significantly curtail our R&D efforts, and adversely affect our business and financial results, revenue and profitability. 11 We are subject to supply, order and shipment uncertainties.
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Our operations are heavily dependent on the functioning of our IT infrastructure to carry out our business processes and our ability to protect our IT infrastructure against damage from business continuity events that could have a significant disruptive effect.
Removed
Variability in self-insurance liability estimates could adversely impact our results of operations. 14 We self-insure for employee health insurance and workers’ compensation insurance coverage up to a predetermined level, beyond which we maintain stop-loss insurance from a third-party insurer. Our aggregate exposure varies from year to year based upon the number of participants in our insurance plans.
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Adverse global economic conditions, including as a result of evolving impacts from global tariffs, sanctions or other trade tensions, and our ability to effectively respond to rapidly changing rules and regulations, could negatively impact our business, results of operations and financial condition and liquidity.
Removed
We estimate our self-insurance liabilities using an analysis provided by our claims administrator and our historical claims experience. Our accruals for insurance reserves reflect these estimates and other management judgments, which are subject to a high degree of variability.
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In addition, as rules and regulations rapidly change across multiple jurisdictions, we could be negatively impacted by any failure to effectively respond to such changes. These risks may be particularly acute in the semiconductor industry, where cyclical demand patterns and rapid technological changes can amplify economic headwinds.
Removed
From time to time, we may attempt to hedge our exposure to foreign currency risk by buying currency contracts or otherwise, and any such efforts involve expense and associated risk that the currencies involved may not behave as we expect and we may lose money on such hedging strategies or not properly hedge our risk.
Added
Our failure to successfully compete could result in lower revenue, decreased profitability and a lower stock price. Changes in U.S. Government Administration Could Materially Affect Our Business, Financial Condition and Results of Operations We operate in a highly regulated industry, and changes in the U.S. political landscape can significantly impact our business. Changes in the U.S.
Removed
Geopolitical issues (including, but not limited to China-Taiwan relations), macroeconomic weakness and uncertainty also make it more difficult for us to accurately forecast revenue, gross margin and expenses.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Audit Committee also reviews the response to data security incidents and breaches as well as the management of third-party cybersecurity risk. Management’s Role Managing Risk At the management level, our cybersecurity program is managed by our Head of Information Security, who reports to our Vice President of Information Technology.
Biggest changeAt the management level, our cybersecurity program is managed by our CISO, who reports to our Senior Vice President and Chief Financial Officer. Our CISO has over twenty-five years of information security experience.
Engaging Third Parties on Risk Management As part of our risk management process, we engage with a range of outside providers, including cybersecurity assessors, consultants, legal advisors and auditors, to conduct periodic internal and external assessments, including, but not limited to, penetration testing. Our collaboration with these third parties also includes regular audits, threat assessments and consultation on security enhancements.
As part of our risk management process, we engage with a range of outside providers, including cybersecurity assessors, consultants, legal advisors and auditors, to conduct periodic internal and external assessments, including, but not limited to, penetration testing. Our collaboration with these third parties also includes regular audits, threat assessments and consultation on security enhancements.
Overseeing Third-party Risk We rely on the third parties for various business functions. In certain circumstances, our third-party services providers have access to some of our information systems and data, depending on the nature of their engagements with us, and we rely on such third parties for the continuous operation of our business operations.
Overseeing Third-party Risk 25 We rely on third parties for various business functions. In certain circumstances, our third-party services providers have access to some of our information systems and data, depending on the nature of their engagements with us, and we rely on such third parties for the continuous operation of our business operations.
We have processes to detect potential vulnerabilities and anomalies through technical safeguards and have adopted policies and procedures around internal and external notification of cybersecurity incidents.
We have processes designed to detect potential vulnerabilities and anomalies through technical safeguards and have adopted policies and procedures around internal and external notification of cybersecurity incidents.
Risks from Cybersecurity Threats As of the date of this report, we are not aware of a cybersecurity incident that resulted in a material effect on our business strategy, results of operations or financial condition, but we cannot provide assurance that we will not be materially affected in the future by such risks or any future material incidents.
As of the date of this report, we are not aware of a cybersecurity incident that resulted in a material effect on our business strategy, results of operations or financial condition, but we cannot provide assurance that we will not be materially affected in the future by such risks or any future material incidents.
We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. Our risk management team collaborates with our Head of Information Security to evaluate and address cybersecurity risks in alignment with our business objectives and operational needs.
We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. Our risk management team collaborates with our Chief Information Security Officer (“CISO”) to evaluate and address cybersecurity risks in alignment with our business objectives and operational needs.
Because we are aware of the risks associated with third-party service providers, we conduct vendor diligence and security assessments of third-party providers before engagement and maintain ongoing monitoring to oversee compliance with our cybersecurity standards. Monitoring Cybersecurity Incidents The Head of Information Security implements and oversees processes for the monitoring of our information systems.
Because of the risks associated with third-party service providers, we conduct vendor diligence and security assessments of certain third-party providers before engagement and maintain ongoing monitoring to oversee compliance with our cybersecurity standards. Monitoring Cybersecurity Incidents The CISO implements and oversees processes for the monitoring of our information systems supported by a security operations center (SOC) and automated monitoring tools.
At least once per year and following any material cybersecurity incidents, the Audit Committee reviews our assessment and management of information security, cybersecurity and technology risks, including the information security and risk management programs and strategies and mitigation strategies.
At least quarterly and following any material cybersecurity incidents, the Audit Committee reviews management’s assessments and management of information security, cybersecurity and technology risks, including the information security and risk management programs and strategies and mitigation strategies. The Audit Committee also reviews the response to data security incidents and breaches as well as the management of third-party cybersecurity risk.
This includes, but is not limited to, the deployment of security measures and system audits to identify potential vulnerabilities. In the event of a cybersecurity incident, we have implemented an incident response plan, which includes actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
We conduct continuous vulnerability scanning, incident simulations and proactive threat hunting. In the event of a cybersecurity incident, we have implemented an incident response plan, which includes actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
Those processes include response to and an assessment of internal and external threats to the security, confidentiality, integrity and availability of our data and information systems, along with other material risks to our operations, at least annually or whenever there are material changes to our systems or operations.
ITEM 1C. Cybersecurity. Risk management and strategy. We have adopted processes designed to identify, assess and manage material risks from cybersecurity threats. Those processes include regular risk assessments and control testing conducted at least annually or whenever there are material changes to our systems or operations.
Removed
ITEM 1C. Cybersecurity. Risk management and strategy. We recognize the importance of developing, implementing and maintaining cybersecurity measures designed to safeguard our information systems and protect the confidentiality, integrity and availability of our data.
Added
Risks from Cybersecurity Threats The semiconductor industry faces heightened cybersecurity risks, and we have experienced and expect to continue to experience cyber-attacks. To-date, we have been successful in defending and protecting against such attacks. However, there is no assurance that we will continue to be able to be successful in protecting and defending against such attacks in the future.
Removed
Managing Material Risks & Integrated Risk Management 25 In the ordinary course of our business, we and our third-party service providers collect, maintain and transmit sensitive data on our networks and systems, including Company and third-party intellectual property and proprietary or confidential business information (such as research data and personal information).
Removed
The secure maintenance of this information is critical to our business and reputation. In addition, we are heavily dependent on the functioning of our information technology infrastructure to carry out our business processes.
Removed
While we have adopted administrative, technical and physical safeguards to protect such systems and data, our systems and those of third-party service providers and customers may be vulnerable to a cyber-attack. We have adopted processes designed to identify, assess and manage material risks from cybersecurity threats.
Removed
Our Head of Information Security has over twenty-five years of information technology 26 experience, with five years of experience in the information security space. Our Head of Information Security holds a Bachelor of Science in Computer Science and a Master of Business Administration.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSite Major Activity (1) Square Footage Lease Expiration Lowell, Massachusetts A, P&F, T&A, AE, S&M and RT 281,700 October 2043 Limeil-Brévannes, France A, P&F, T&A, S&M and RT 164,752 October 2024 Morgan Hill, California A, P&F, R&D, AE, RT, T&A 83,828 February 2028 Newport Beach, California R&D, AE and S&M 57,412 December 2029 Ann Arbor, Michigan P&F, R&D and T&A, RT 50,335 May 2026 Santa Clara, California R&D, AE and S&M 46,270 October 2024 Nashua, New Hampshire R&D, T&A, P&F and RT 33,750 December 2027 Hamilton, New Jersey A, T&A, AE, R&D, S&M and RT 25,750 November 2033 Durham, North Carolina R&D, S&M 25,660 December 2025 Hsinchu, Taiwan P&F, T&A and RT 24,282 December 2027 Milpitas, California R&D, AE and S&M 22,246 September 2029 Cork, Ireland A, R&D, S&M, AE and RT 21,422 August 2026 (1) Major activities include Administration (A), Research and Development (R&D), Production and Fabrication (P&F), Sales and Marketing (S&M), Application Engineering (AE), Test and Assembly (T&A) and Reliability Testing (RT).
Biggest changeIn addition to our corporate headquarters facility the following is a list of our main facilities and their primary functions. 26 Site Major Activity (1) Square Footage Lease Expiration Lowell, Massachusetts A, P&F, T&A, AE, S&M and RT 281,700 October 2043 RTP, North Carolina A, R&D, P&F, T&A, S&M and RT 177,785 June 2037 Limeil-Brévannes, France A, P&F, T&A, S&M and RT 164,752 Owned Morgan Hill, California A, P&F, R&D, AE, RT, T&A 73,783 February 2028 Newport Beach, California R&D, AE and S&M 57,412 June 2035 Ann Arbor, Michigan P&F, R&D and T&A, RT 50,335 May 2026 Hamilton, New Jersey A, T&A, AE, R&D, S&M and RT 35,750 November 2033 Nashua, New Hampshire R&D, T&A, P&F and RT 33,750 December 2027 Hsinchu, Taiwan P&F, T&A and RT 24,282 December 2027 Milpitas, California R&D, AE and S&M 22,246 September 2029 Cork, Ireland A, R&D, S&M, AE and RT 21,422 August 2026 (1) Major activities include Administration (A), Research and Development (R&D), Production and Fabrication (P&F), Sales and Marketing (S&M), Application Engineering (AE), Test and Assembly (T&A) and Reliability Testing (RT).
ITEM 2. PROPERTIES. Our principal executive offices are located in a leased facility in Lowell, Massachusetts. In addition to our corporate headquarters facility the following is a list of our main leased facilities and their primary functions.
ITEM 2. PROPERTIES. Our principal executive offices are located in a leased facility in Lowell, Massachusetts.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe average prices listed in the above table are averages of the fair market prices at which we valued shares withheld for purposes of calculating the number of shares to be withheld. ITEM 6. [RESERVED] 28
Biggest changeThe average prices listed in the above table are averages of the fair market prices at which we valued shares withheld for purposes of calculating the number of shares to be withheld. 28 Equity Compensation Plan Information We have two equity compensation plans under which shares are currently authorized for issuance, our 2021 Omnibus Incentive Plan (the “2021 Plan”) and our 2021 Employee Stock Purchase Plan.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock has been listed on the Nasdaq Global Select Market under the symbol “MTSI” since March 15, 2012. The number of stockholders of record of our common stock as of November 6, 2024 was approximately 73.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock has been listed on the Nasdaq Global Select Market under the symbol “MTSI” since March 15, 2012. The number of stockholders of record of our common stock as of November 11, 2025 was approximately 72.
The amounts represented below assume an investment of $100.00 in our common stock at the closing price of $21.68 on September 27, 2019 and in the Nasdaq Composite Index and the PHLX Semiconductor Index on the closest month end date of September 27, 2019, and assume reinvestment of dividends.
The amounts represented below assume an investment of $100.00 in our common stock at the closing price of $33.80 on October 2, 2020 and in the Nasdaq Composite Index and the PHLX Semiconductor Index on the closest month end date of October 2, 2020, and assume reinvestment of dividends.
Stock Price Performance Graph The following graph shows a comparison from September 27, 2019 through September 27, 2024 of the total cumulative return of our common stock with the total cumulative return of the NASDAQ Composite Index and the PHLX Semiconductor Index.
Stock Price Performance Graph The following graph shows a comparison from October 2, 2020 through October 3, 2025 of the total cumulative return of our common stock with the total cumulative return of the NASDAQ Composite Index and the PHLX Semiconductor Index.
Period Total Number of Shares (or Units) Purchased (1) Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs June 29, 2024—July 26, 2024 737 $ 111.30 — — July 27, 2024—August 23, 2024 1,690 103.13 — — August 24, 2024—September 27, 2024 845 101.45 — — Total 3,272 $ 104.53 — — (1) Our board of directors has approved “withhold to cover” as a tax payment method for vesting of restricted stock awards for our employees.
Period Total Number of Shares (or Units) Purchased (1) Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs July 5, 2025—August 1, 2025 841 $ 138.36 — — August 2, 2025—August 29, 2025 1,900 126.90 — — August 30, 2025—October 3, 2025 717 131.42 — — Total 3,458 $ 130.62 — — (1) Our board of directors has approved “withhold to cover” as a tax payment method for vesting of restricted stock awards for our employees.
The comparisons in the graph are historical and are not intended to forecast or be indicative of possible future performance of our common stock. 27 September 27, 2019 October 2, 2020 October 1, 2021 September 30, 2022 September 29, 2023 September 27, 2024 MACOM Technology Solutions Holdings, Inc. $100.00 $155.90 $301.38 $238.88 $376.29 $514.39 Nasdaq Composite Index $100.00 $140.86 $186.51 $136.43 $172.05 $237.60 PHLX Semiconductor Index $100.00 $143.96 $211.37 $149.51 $222.59 $338.15 Issuer Purchases of Equity Securities The following table presents information with respect to purchases of common stock we made during the fiscal quarter ended September 27, 2024.
The comparisons in the graph are historical and are not intended to forecast or be indicative of possible future performance of our common stock. 27 October 2, 2020 October 1, 2021 September 30, 2022 September 29, 2023 September 27, 2024 October 3, 2025 MACOM Technology Solutions Holdings, Inc. $100.00 $193.31 $153.22 $241.36 $329.94 $376.95 Nasdaq Composite Index $100.00 $132.41 $96.85 $122.14 $168.68 $213.53 PHLX Semiconductor Index $100.00 $146.83 $103.85 $154.62 $234.89 $296.42 Issuer Purchases of Equity Securities The following table presents information with respect to purchases of common stock we made during the fiscal quarter ended October 3, 2025.
Added
Each of our aforementioned plans were approved by our stockholders. The following table provides information regarding securities authorized for issuance as of October 3, 2025 under our equity compensation plans.
Added
Plan Category (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) (b) Weighted-average exercise price of outstanding options, warrants and rights (1) (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity Compensation Plans Approved by Security Holders — $ — 4,228,565 Equity Compensation Plans Not Approved by Security Holders — — — Total — $ — 4,228,565 (1) Does not include 1,419,356 unvested shares outstanding as of October 3, 2025 in the form of restricted stock units under the 2021 Plan, which do not require the payment of any consideration by the recipients.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor additional information related to these and other accounting policies refer to Note 2 - Summary of Significant Accounting Policies to our Consolidated Financial Statements included in this Annual Report which is incorporated by reference herein. 31 RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, our Statements of Operations data (in thousands): Fiscal Years 2024 2023 2022 Revenue $ 729,578 $ 648,407 $ 675,170 Cost of revenue (1) 335,805 262,610 268,989 Gross profit 393,773 385,797 406,181 Operating expenses: Research and development (1) 182,158 148,545 148,228 Selling, general and administrative (1) (2) 137,949 129,852 125,279 Total operating expenses 320,107 278,397 273,507 Income from operations 73,666 107,400 132,674 Other income (expense): Interest income 22,986 20,807 4,251 Interest expense (5,136) (12,384) (8,551) Other income (expense), net (3) 10 (665) 114,746 Other income, net 17,860 7,758 110,446 Income before income taxes 91,526 115,158 243,120 Income tax expense (benefit) (4) 14,667 23,581 (196,835) Net income $ 76,859 $ 91,577 $ 439,955 (1) Includes (a) amortization expense related to intangible assets arising from acquisitions and (b) share-based compensation expense included in our Consolidated Statements of Operations as set forth below (in thousands): Fiscal Years 2024 2023 2022 (a) Intangible amortization expense: Cost of revenue $ 14,790 $ 4,369 $ 7,839 Research and development 4,763 — — Selling, general and administrative 17,612 23,735 25,592 Total intangible amortization expense $ 37,165 $ 28,104 $ 33,431 (b) Share-based compensation expense: Cost of revenue $ 5,938 $ 4,325 $ 4,038 Research and development 18,072 14,808 14,940 Selling, general and administrative 21,634 18,970 22,207 Total share-based compensation expense $ 45,644 $ 38,103 $ 41,185 (2) Fiscal years 2024 and 2023 includes $7.7 million and $9.1 million, respectively, of acquisition transaction costs.
Biggest changeFor additional information related to these and other accounting policies refer to Note 2 - Summary of Significant Accounting Policies to our Consolidated Financial Statements included in this Annual Report which is incorporated by reference herein. 31 RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, our Statements of Operations data (in thousands): Fiscal Years 2025 2024 2023 Revenue $ 967,258 $ 729,578 $ 648,407 Cost of revenue (1) 438,256 335,805 262,610 Gross profit 529,002 393,773 385,797 Operating expenses: Research and development (1) 244,466 182,158 148,545 Selling, general and administrative (1) (2) 154,884 137,949 129,852 Total operating expenses 399,350 320,107 278,397 Income from operations 129,652 73,666 107,400 Other (expense) income: Interest income 29,853 22,986 20,807 Interest expense (5,516) (5,136) (12,384) Loss on extinguishment of debt (193,098) — — Gain on acquired assets and other income (expense), net 10,084 10 (665) Total other (expense) income, net (158,677) 17,860 7,758 (Loss) income before income taxes (29,025) 91,526 115,158 Income tax expense (3) 25,185 14,667 23,581 Net (loss) income $ (54,210) $ 76,859 $ 91,577 (1) Includes (a) amortization expense related to intangible assets arising from acquisitions and (b) share-based compensation expense included in our Consolidated Statements of Operations as set forth below (in thousands): Fiscal Years 2025 2024 2023 (a) Intangible amortization expense: Cost of revenue $ 14,333 $ 14,790 $ 4,369 Research and development 8,892 4,763 — Selling, general and administrative 8,527 17,612 23,735 Total intangible amortization expense $ 31,752 $ 37,165 $ 28,104 (b) Share-based compensation expense: Cost of revenue $ 8,524 $ 5,938 $ 4,325 Research and development 32,144 18,072 14,808 Selling, general and administrative 38,694 21,634 18,970 Total share-based compensation expense $ 79,362 $ 45,644 $ 38,103 (2) Fiscal years 2025, 2024 and 2023 includes $0.1 million, $7.7 million and $9.1 million, respectively, of acquisition transaction costs.
In addition, cash used by operating assets and liabilities was $31.0 million for fiscal year 2024, primarily driven by an increase in inventory of $30.2 million, an increase in accounts receivable of $16.8 million and a decrease in accrued and other liabilities of $7.3 million, partially offset by an increase in accounts payable of $18.2 million.
In addition, cash used by operating assets and liabilities was $31.0 million for fiscal year 2024, primarily driven by an increase in inventory of $30.2 million, an increase in accounts receivable of $16.8 million, and a decrease in accrued and other liabilities of $7.3 million, partially offset by a decrease in accounts payable of $18.2 million.
Cash Flow from Financing Activities: During fiscal year 2024, our cash used in financing activities of $9.1 million was primarily related to $14.2 million of common stock withheld associated with employee taxes on vested equity awards, partially offset by $6.6 million of proceeds from stock option exercises and employee stock purchases.
During fiscal year 2024, our cash used in financing activities of $9.1 million was primarily related to $14.2 million of common stock withheld associated with employee taxes on vested equity awards, partially offset by $6.6 million of proceeds from stock option exercises and employee stock purchases.
Our semiconductor products are electronic components that our customers generally incorporate into larger electronic systems, such as wireless basestations, high-capacity optical networks, data center networks, radar, medical systems and test and measurement applications.
Our semiconductor products are electronic components that our customers generally incorporate into larger electronic systems, such as wireless basestations, high-capacity optical networks, data center networks, radar, medical systems, satellite networks and test and measurement applications.
We expect our revenue in the Telecom market to be driven by 5G deployments, with continued upgrades and expansion of communications equipment, satellite communications networks and increasing adoption of our high-performance RF, millimeter wave, optical and photonic components.
We expect our revenue in the Telecom market to be driven by 5G deployments, with continued upgrades and expansion of communications equipment, SATCOM networks and increasing adoption of our high-performance RF, millimeter wave, optical and photonic components.
We recognize potential liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes and interest will be due.
We recognize potential liabilities for anticipated tax audit matters in the United States and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes and interest will be due.
We plan to use our remaining available cash and cash equivalents and short-term investments for general corporate purposes, including working capital, payment on the 2026 Convertible Notes and leases, or for the acquisition of or investment in complementary technologies, design teams, products and businesses.
We plan to use our remaining available cash and cash equivalents and short-term investments for general corporate purposes, including working capital, payment on the 2026 Convertible Notes and 2029 Convertible Notes, or for the acq uisition of or investment in complementary technologies, design teams, products and businesses.
As of September 27, 2024, we estimated $1.9 million in asset retirement obligations primarily for the restoration of leased facilities upon the termination of the related leases. Although it is reasonably possible that our estimates could change materially in the next twelve months, we are presently unable to reliably estimate when any cash settlement of these obligations may occur. 35
As of October 3, 2025, we estimated $1.9 million in asset retirement obligations primarily for the restoration of leased facilities upon the termination of the related leases. Although it is reasonably possible that our estimates could change materially in the next twelve months, we are presently unable to reliably estimate when any cash settlement of these obligations may occur.
We may need to raise additional capital from time to time through the issuance and sale of equity or debt securities, and there is no assurance that we will be able to do so on favorable terms or at all. As of September 27, 2024, we had no off-balance sheet arrangements.
We may need to raise additional capital from time to time through the issuance and sale of equity or debt securities, and there is no assurance that we will be able to do so on favorable terms or at all. As of October 3, 2025, we had no off-balance sheet arrangements.
A discussion regarding our financial condition and results of operations for fiscal year 2023 compared to our fiscal year ended September 30, 2022 (“fiscal year 2022”) can be found in Part II, Item 7 of our Annual Report on Form 10-K for fiscal year 2023, filed with the Securities and Exchange Commission (the “SEC”) on November 13, 2023.
A discussion regarding our financial condition and results of operations for fiscal year 2024 compared to our fiscal year ended September 29, 2023 (“fiscal year 2023”) can be found in Part II, Item 7 of our Annual Report on Form 10-K for fiscal year 2024, filed with the Securities and Exchange Commission (the “SEC”) on November 12, 2024.
See “ Item 1 - Business ” for additional information. Basis of Presentation We have one reportable operating segment and all intercompany balances have been eliminated in consolidation. We have a 52 or 53-week fiscal year ending on the Friday closest to the last day of September. Fiscal years 2024, 2023 and 2022 each consisted of 52 weeks.
See “ Item 1 - Business ” for additional information. 29 Basis of Presentation We have one reportable operating segment and all intercompany balances have been eliminated in consolidation. We have a 52 or 53-week fiscal year ending on the Friday closest to the last day of September.
As of September 27, 2024, cash held by our indefinitely reinvested foreign subsidiaries was $6.5 million, which, along with cash generated from foreign operations, is expected to be used in the support of international growth and working capital requirements as well as the repayment of certain intercompany loans.
As of October 3, 2025, cash held by our indefinitely reinvested foreign subsidiaries was $5.2 million, which, along with cash generated from foreign operations, is expected to be used in the support of international growth and working capital requirements as well as the repayment of certain intercompany loans.
See Note 20 - Income Taxes to the Consolidated Financial Statements included in this Annual Report for additional information. 32 The following table sets forth, for the periods indicated, our Statements of Operations data expressed as a percentage of our revenue: Fiscal Years 2024 2023 2022 Revenue 100.0 % 100.0 % 100.0 % Cost of revenue 46.0 40.5 39.8 Gross profit 54.0 59.5 60.2 Operating expenses: Research and development 25.0 22.9 22.0 Selling, general and administrative 18.9 20.0 18.6 Total operating expenses 43.9 42.9 40.5 Income from operations 10.1 16.6 19.7 Other income (expense): Interest income 3.1 3.2 0.6 Interest expense (0.7) (1.9) (1.2) Other income (expense), net — (0.1) 17.0 Total other income, net 2.4 1.2 16.4 Income before income taxes 12.5 17.8 36.0 Income tax expense (benefit) 2.0 3.7 (29.2) Net income 10.5 % 14.1 % 65.2 % Comparison of Fiscal Year Ended September 27, 2024 to Fiscal Year Ended September 29, 2023 Revenue.
See Note 20 - Income Taxes to the Consolidated Financial Statements included in this Annual Report for additional information. 32 The following table sets forth, for the periods indicated, our Statements of Operations data expressed as a percentage of our revenue: Fiscal Years 2025 2024 2023 Revenue 100.0 % 100.0 % 100.0 % Cost of revenue 45.3 46.0 40.5 Gross profit 54.7 54.0 59.5 Operating expenses: Research and development 25.3 25.0 22.9 Selling, general and administrative 16.0 18.9 20.0 Total operating expenses 41.3 43.9 42.9 Income from operations 13.4 10.1 16.6 Other (expense) income: Interest income 3.0 3.1 3.2 Interest expense (0.6) (0.7) (1.9) Loss on extinguishment of debt (20.0) — — Gain on acquired assets and other income (expense), net 1.0 — (0.1) Total other (expense) income, net (16.6) 2.4 1.2 (Loss) income before income taxes (3.2) 12.5 17.8 Income tax expense 2.6 2.0 3.7 Net (loss) income (5.8) % 10.5 % 14.1 % Comparison of Fiscal Year Ended October 3, 2025 to Fiscal Year Ended September 27, 2024 Revenue.
The following section generally discusses our financial condition and results of operations for our fiscal year ended September 27, 2024 (“fiscal year 2024 ”) compared to our fiscal year ended September 29, 2023 (“fiscal year 2023”).
The following section generally discusses our financial condition and results of operations for our fiscal year ended October 3, 2025 (“fiscal year 2025 ”) compared to our fiscal year ended September 27, 2024 (“fiscal year 2024”).
Interest expense. In fiscal year 2024, interest expense was $5.1 million, or 0.7% of our revenue, compared to $12.4 million of interest expense, or 1.9% of our revenue, for fiscal year 2023.
In fiscal year 2025, interest expense was $5.5 million, or 0.6% of our revenue, compared to $5.1 million of interest expense, or 0.7% of our revenue, for fiscal year 2024.
Our primary end markets are: (1) I&D, which includes military and commercial radar, RF jammers, electronic countermeasures, communication data links, satellite communications and various wired and wireless multi-market applications, which include industrial, medical, test and measurement and scientific applications; (2) Data Center, enabled by our broad portfolio of analog ICs and photonic components for high speed connectivity customers; and (3) Telecom, which includes carrier infrastructure such as long-haul/metro, 5G and future generation infrastructure, satellite communications and FTTx/PON, among others.
Our primary end markets are: (1) I&D, which includes military and commercial radar, RF jammers, electronic countermeasures, communication data links, space-related electronics and various wired and wireless multi-market applications, which include industrial, medical, test and measurement and scientific applications; (2) Data Center, which includes intra-Data Center, DCI applications, at 100G, 200G, 400G, 800G, 1.6T, 3.2T and higher speeds, enabled by our broad portfolio of analog ICs and photonic components for high speed connectivity customers; and (3) Telecom, which includes carrier infrastructure such as long-haul/metro, 5G and 6G infrastructure, SATCOM and FTTx/PON, among others.
Income taxes We are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our current tax exposure together and assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our Consolidated Balance Sheets.
This process involves estimating our current tax exposure and assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our Consolidated Balance Sheets.
We record an amount as an estimate of probable additional income tax liability at the largest amount that we feel is more likely than not, based upon the technical merits of the position, to be sustained upon audit by the relevant tax authority. Historically, we have not experienced material differences in our estimates and actual results.
We record an amount as an estimate of probable additional income tax liability at the largest amount that we feel is more likely than not, based upon the technical merits of the position, to be sustained upon audit by the relevant tax authority.
Our actual product usage may vary from the historical experience and estimating demand is inherently difficult, particularly given the cyclical nature of the semiconductor industry, both of these factors may result in us recording excess and obsolete inventory amounts that do not match the required amounts.
Our actual product usage may vary from the historical experience and estimating demand is inherently difficult, particularly given the cyclical nature of the semiconductor industry, both of these factors may result in us recording excess and obsolete inventory amounts that do not match the required amounts. 30 Revenue reserves We establish revenue reserves, primarily for product returns, price adjustments and stock rotations for products sold.
Revenue reserves We establish revenue reserves, primarily for product returns, price adjustments and stock rotations for products sold. Each revenue reserve requires the use of judgment and estimates that impact the amount and timing of revenue recognition. We record reductions of revenue for such reserve adjustments, in the same period that the related revenue is recorded.
Each revenue reserve requires the use of judgment and estimates that impact the amount and timing of revenue recognition. We record reductions of revenue for such reserve adjustments, in the same period that the related revenue is recorded.
Our cash flow from operating activities for fiscal year 2023 was $166.9 million and consisted of a net income of $91.6 million, plus adjustments to reconcile our net income to cash provided by operating activities of $103.1 million, and cash used by operating assets and liabilities of $27.8 million.
Our cash flow from operating activities for fiscal year 2024 was $162.6 million and consisted of a net income of $76.9 million, plus adjustments to reconcile our net income to cash provided by operating activities of $116.8 million, and cash used by operating assets and liabilities of $31.0 million.
In fiscal year 2024, interest income was $23.0 million, or 3.1% of our revenue, compared to $20.8 million of interest income, or 3.2% of our revenue, for fiscal year 2023. The change in fiscal year 2024 is primarily due to the general increase in interest rates on our short-term investments and due to the increase in our short-term investments.
In fiscal year 2025, interest income was $29.9 million, or 3.0% of our revenue, compared to $23.0 million of interest income, or 3.1% of our revenue, for fiscal year 2024. The change in fiscal year 2025 is primarily due to an increase in short-term investments and associated interest income. Interest expense.
In fiscal year 2024, research and development expense increased by $33.6 million, or 22.6%, to $182.2 million, representing 25.0% of revenue, compared with $148.5 million, representing 22.9% of revenue, in fiscal year 2023.
In fiscal year 2025, research and development expense increased by $62.3 million, or 34.2%, to $244.5 million, representing 25.3% of revenue, compared with $182.2 million, representing 25.0% of revenue, in fiscal year 2024.
Share-based compensation expense 30 We account for share-based compensation arrangements using the fair value method as described in Note 2 - Summary of Significant Accounting Policies to our Consolidated Financial Statements in this Annual Report.
Share-based compensation expense We account for share-based compensation arrangements using the fair value method as described in Note 2 - Summary of Significant Accounting Policies to our Consolidated Financial Statements in this Annual Report. There are a significant number of estimates and assumptions required for the initial valuation as well as for the ongoing valuation of certain share-based compensation items.
In fiscal year 2024, selling, general and administrative expenses increased by $8.1 million, or 6.2%, to $137.9 million, or 18.9% of revenue, compared with $129.9 million, or 20.0% of revenue, for fiscal year 2023.
In fiscal year 2025, selling, general and administrative expenses increased by $16.9 million, or 12.3%, to $154.9 million, or 16.0% of revenue, compared with $137.9 million, or 18.9% of revenue, for fiscal year 2024.
For additional information related to our Liquidity and Capital Resources, see Note 15 - Debt to our Consolidated Financial Statements included in this Annual Report. Our other significant contractual payment obligations consist of purchase agreements and other commitments. We have purchase commitments of $151.1 million primarily related to services and inventory supply arrangements of which approximately $138.7 million is non-cancelable.
For additional information related to our Liquidity and Capital Resources, see Note 15 - Debt to our Consolidated Financial Statements included in this Annual Report. Our other significant contractual payment obligations consist of purchase agreements and other commitments.
We design, integrate, manufacture and package differentiated, semiconductor-based products that we sell to customers through our direct sales organization, our network of independent sales representatives and our distributors.
Description of Our Revenue Revenue. Our revenue is derived from sales of high-performance RF, microwave, millimeter wave, optical and photonic semiconductor products. We design, integrate, manufacture and package differentiated, semiconductor-based products that we sell to customers through our direct sales organization, our network of independent sales representatives and our distributors.
LIQUIDITY AND CAPITAL RESOURCES The following table summarizes our cash flow activities for the fiscal years ended September 27, 2024 and September 29, 2023, respectively (in thousands): Fiscal Year Ended September 27, 2024 September 29, 2023 Cash and cash equivalents, beginning of period $ 173,952 $ 119,952 Net cash provided by operating activities 162,640 166,917 Net cash used in investing activities (181,133) 36,341 Net cash used in financing activities (9,064) (149,020) Effect of exchange rates on cash balances 411 (238) Cash and cash equivalents, end of period $ 146,806 $ 173,952 Cash Flow from Operating Activities: Our cash flow from operating activities for fiscal year 2024 was $162.6 million and consisted of a net income of $76.9 million, plus adjustments to reconcile our net income to cash provided by operating activities of $116.8 million, and cash used by operating assets and liabilities of $31.0 million.
LIQUIDITY AND CAPITAL RESOURCES The following table summarizes our cash flow activities for the fiscal years ended October 3, 2025 and September 27, 2024, respectively (in thousands): Fiscal Year Ended October 3, 2025 September 27, 2024 Cash and cash equivalents, beginning of period $ 146,806 $ 173,952 Net cash provided by operating activities 235,368 162,640 Net cash used in investing activities (328,263) (181,133) Net cash used in financing activities 58,099 (9,064) Effect of exchange rates on cash balances 132 411 Cash and cash equivalents, end of period $ 112,142 $ 146,806 34 Cash Flow from Operating Activities: Our cash flow from operating activities for fiscal year 2025 was $235.4 million and consisted of a net loss of $54.2 million, plus adjustments to reconcile our net loss to cash provided by operating activities of $327.4 million, and cash used by operating assets and liabilities of $37.8 million.
In addition, cash used by operating assets and liabilities was $27.8 million for fiscal year 2023, primarily driven by a decrease in accrued and other liabilities of $21.3 million, an increase in inventory of $10.6 million, a decrease in accounts payable of $6.7 million, partially offset by a decrease in accounts receivable of $12.3 million. 34 Cash Flow from Investing Activities: Our cash flow used in investing activities for fiscal year 2024 of $181.1 million consisted primarily of cash paid for acquisitions, net of cash acquired of $72.6 million, capital expenditures of $22.4 million, purchases of $426.6 million of short-term investments and other investing activities of $4.3 million, offset by proceeds of $344.8 million for the sale and maturities of short-term investments.
Our cash flow used in investing activities for fiscal year 2024 of $181.1 million consisted primarily of cash paid for acquisitions, net of cash acquired of $72.6 million, capital expenditures of $22.4 million, purchases of $426.6 million of short-term investments and other investing activities of $4.3 million, offset by proceeds of $344.8 million for the sale and maturities of short-term investments.
Revenue from our primary markets, the percentage of change between the years and revenue by primary markets expressed as a percentage of total revenue were (in thousands, except percentages): Fiscal Years 2024 2023 % Change Industrial & Defense $ 351,639 $ 317,128 10.9 % Data Center 197,875 146,982 34.6 % Telecom 180,064 184,297 (2.3) % Total $ 729,578 $ 648,407 12.5 % Industrial & Defense 48.2 % 48.9 % Data Center 27.1 % 22.7 % Telecom 24.7 % 28.4 % Total 100.0 % 100.0 % In fiscal year 2024, our I&D market revenue increased by $34.5 million, or 10.9%, compared to fiscal year 2023.
Revenue from our primary markets, the percentage of change between the years and revenue by primary markets expressed as a percentage of total revenue were (in thousands, except percentages): Fiscal Years 2025 2024 % Change Industrial & Defense $ 419,785 $ 351,639 19.4 % Data Center 292,836 197,875 48.0 % Telecom 254,637 180,064 41.4 % Total $ 967,258 $ 729,578 32.6 % Industrial & Defense 43.4 % 48.2 % Data Center 30.3 % 27.1 % Telecom 26.3 % 24.7 % Total 100.0 % 100.0 % In fiscal year 2025, our I&D market revenue increased by $68.1 million, or 19.4%, compared to fiscal year 2024.
Our core strategy is to develop and innovate high-performance products that address our customers’ most difficult technical challenges in our primary markets: I&D, Data Center and Telecom. 29 We expect our revenue in the I&D market to be driven by the expanding product portfolio that we offer which services applications such as test and measurement, satellite communications, civil and military radar, industrial, automotive, scientific and medical applications, further supported by growth in applications for our multi-market catalog products.
We expect our revenue in the I&D market to be driven by the expanding product portfolio that we offer which services applications such as test and measurement, space-related electronics, civil and military radar, industrial, automotive, scientific and medical applications, further supported by growth in applications for our multi-market catalog products.
Selling, general and administrative expenses increased during fiscal year 2024 primarily due to increases in employee-related costs, primarily driven by headcount from acquisitions, and share-based compensation, partially offset by lower professional fees and intangible amortization. Interest income.
Selling, general and administrative expenses increased during fiscal year 2025 primarily due to an increase in employee-related costs, including variable compensation and share-based compensation, partially offset by decreases in acquisition-related transaction costs and intangible asset amortization. Interest income.
This valuation allowance release resulted in a tax benefit of $202.8 million, or $2.91 per basic share in fiscal year 2022. The application of tax laws and regulations to calculate our tax liabilities is subject to legal and factual interpretation, judgment and uncertainty in a multitude of jurisdictions.
The application of tax laws and regulations to calculate our tax liabilities is subject to legal and factual interpretation, judgment and uncertainty in a multitude of jurisdictions.
Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations, and court rulings.
Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations, including the federal statute controlling tax and spending policies passed by the U.S. Congress on July 4, 2025 (the “July 4, 2025 Bill”), as well as court rulings.
Our cash flow from investing activities for fiscal year 2023 of $36.3 million consisted primarily of proceeds of $515.8 million related to the sale and maturities of short-term investments and proceeds from the sale of equipment of $8.0 million, partially offset by $375.1 million in purchases of short-term investments, $87.7 million for acquisitions, net of cash acquired and capital expenditures of $24.7 million.
Cash Flow from Investing Activities: Our cash flow used in investing activities for fiscal year 2025 of $328.3 million consisted primarily of purchases of $592.4 million of short-term investments, capital expenditures of $42.6 million, purchase of property under financing arrangement of $28.8 million and cash paid for acquisitions, net of cash acquired of $12.7 million, offset by proceeds of $360.2 million for the sale and maturities of short-term investments.
The increase was primarily driven by an increase in sales of 400G and 800G high-performance analog Data Center products, partially offset by a decrease in sales of our legacy connectivity products. In fiscal year 2024, our Telecom market revenue decreased by $4.2 million, or 2.3%, compared to fiscal year 2023.
The increase was primarily driven by an increase in sales of high-performance analog and coherent Data Center products primarily supporting high speed data rates from 100G up to 1.6T. In fiscal year 2025, our Telecom market revenue increased by $74.6 million, or 41.4%, compared to fiscal year 2024.
Adjustments to reconcile our net income to cash provided by operating activities of $103.1 million primarily included depreciation and intangible amortization expense of $52.2 million, share-based compensation expense of $38.1 million and deferred income tax expense of $19.8 million, partially offset by $11.8 million in amortization on marketable securities.
Adjustments to reconcile our net loss to cash provided by operating activities primarily included loss on extinguishment of debt of $193.1 million, depreciation and intangible amortization expense of $63.3 million, share-based compensation expense of $79.4 million.
The decrease was primarily driven by a decrease in sales in broadband access, PON, carrier-based optical semiconductor products and other telecom markets, partially offset by incremental revenue from recent acquisitions. We continue to be negatively impacted by the current macroeconomic conditions, which we expect may result in weaker near-term demand for our products across all three of our primary markets.
Certain areas of our end markets continue to be negatively impacted by macroeconomic and geopolitical conditions, which we expect may result in weaker near-term demand for our products across all three of our primary markets.
Research and development expense increased during fiscal year 2024 primarily as a result of increases in employee-related costs, driven by higher headcount associated with acquisitions, higher intangible asset amortization and share-based compensation expense. 33 Selling, general and administrative.
Research and development expense increased during fiscal year 2025 primarily due to increases in headcount and employee-related costs, including variable compensation, share-based compensation expense and development-related supply costs. Selling, general and administrative.
The undistributed earnings of certain foreign subsidiaries are considered indefinitely reinvested for the periods presented and we do not intend to repatriate such earnings. We believe the decision to reinvest these earnings will not have a significant impact on our liquidity.
We believe the decision to reinvest these earnings will not have a significant impact on our liquidity.
To offset the effect of holidays, for fiscal years in which there are 53 weeks, we typically include the extra week in the first quarter of our fiscal year. Description of Our Revenue Revenue. Our revenue is derived from sales of high-performance RF, microwave, millimeter wave, optical and photonic semiconductor products.
Fiscal year 2025 included 53 weeks and fiscal years 2024 and 2023 each consisted of 52 weeks. To offset the effect of holidays, for fiscal years in which there are 53 weeks, we typically include the extra week in the first quarter of our fiscal year. Our first quarter of fiscal year 2025, ended January 3, 2025, included 14 weeks.
The increase was primarily driven by revenue from recent acquisitions, partially offset by lower sales of legacy products for industrial markets. In fiscal year 2024, our Data Center market revenue increased by $50.9 million, or 34.6%, compared to fiscal year 2023.
The increase was primarily driven by revenue growth from defense programs and the full year contribution of acquisitions. In fiscal year 2025, our Data Center market revenue increased by $95.0 million, or 48.0%, compared to fiscal year 2024.
In fiscal year 2024, our revenue increased by $81.2 million, or 12.5%, to $729.6 million from $648.4 million for fiscal year 2023. Fiscal years 2024 and 2023 each consisted of 52 weeks.
In fiscal year 2025, our revenue increased by $237.7 million, or 32.6%, to $967.3 million from $729.6 million for fiscal year 2024. Fiscal year 2025 included 53 weeks and fiscal year 2024 consisted of 52 weeks. Our first quarter of fiscal year 2025, ended January 3, 2025, included 14 weeks.
See Note 5 - Investments to the Consolidated Financial Statements included in this Annual Report for additional information. (4) Fiscal years 2024, 2023 and 2022 includes a non-cash benefit of $3.6 million, $12.1 million and $202.8 million, respectively, related to the partial release of our valuation allowance.
(3) Fiscal year 2025 includes a non-cash expense of $10.1 million, primarily related to establishing a valuation allowance on foreign NOLs, and fiscal years 2024 and 2023 includes a non-cash benefit of $3.6 million and $12.1 million, respectively, related to the partial release of our valuation allowance.
The increase in gross profit during 2024 was primarily as a result of higher sales primarily driven by recent acquisitions, partially offset by product mix, increased employee-related costs, primarily driven by headcount from acquisitions, higher intangible asset amortization and depreciation expense. Research and development.
Gross margin of 54.7% in fiscal year 2025 increased 70 basis points, compared to fiscal year 2024. The increase in gross profit during 2025 was primarily as a result of higher sales, partially offset by increases in employee-related costs and share-based compensation. 33 Research and development.
During fiscal year 2023, our cash used in financing activities of $149.0 million was primarily related to the $120.8 million payment of the total outstanding principal balance of our Term Loans (as defined in Note 15 - Debt ), $32.6 million of common stock withheld associated with employee taxes on vested equity awards, partially offset by $5.6 million of proceeds from employee stock purchases.
Cash Flow from Financing Activities: During fiscal year 2025, our cash from financing activities of $58.1 million was primarily related to $86.6 million of proceeds from convertible notes, $28.8 million of proceeds from financing arrangement and $10.3 million of proceeds from stock option exercises and employee stock purchases, partially offset by $43.1 million of common stock withheld associated with employee taxes on vested equity awards and $23.2 million of fees for the convertible note exchange and payments for debt issuance costs.
There are a significant number of estimates and assumptions required for the initial valuation as well as for the ongoing valuation of certain share-based compensation items. These estimates may vary significantly and the assumptions may not be accurate resulting us to make adjustments to historically recorded balances.
These estimates may vary significantly, and the assumptions may not be accurate resulting in us having to make adjustments to historically recorded balances. Income taxes We are required to estimate our income taxes in each of the jurisdictions in which we operate.
Holders of the 2026 Convertible Notes (as defined in Note 15 - Debt to the Consolidated Financial Statements included in this Annual Report) may convert their notes at their option at any time prior to the close of business on the business day immediately preceding December 15, 2025 in multiples of $1,000 principal amount, if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to $106.76 for the notes on each applicable trading day.
Therefore, holders of our 2026 Convertible Notes (as defined in Note 15 - Debt to the Consolidated Financial Statements included in this Annual Report) may convert their notes at their option at any time during the subsequent first fiscal quarter ended January 2, 2026 in multiples of $1,000 principal amount.
For additional information on the cash paid for our acquisitions, net of cash acquired, see Note 4 - Acquisitions to our Consolidated Financial Statements included in this Annual Report.
In fiscal year 2025, we recognized a $193.1 million loss on exchange of our 2026 Convertible Notes. See Note 15 - Debt to the Consolidated Financial Statements included in this Annual Report for additional information. Gain on acquired assets.
In fiscal year 2024, income tax expense was $14.7 million, or 2.0% of revenue, compared to an expense of $23.6 million, or 3.7% of revenue, for fiscal year 2023.
In fiscal year 2025, income tax expense was $25.2 million compared to an expense of $14.7 million for fiscal year 2024. The increase in the provision is primarily due to a $10.1 million increase to our valuation allowance.
See Note 20 - Income Taxes to the Consolidated Financial Statements included in this Annual Report for additional information.
The difference between our effective tax rate for fiscal year 2025 and the U.S. federal income tax rate of 21% was primarily driven by non-deductibility of the loss on extinguishment of debt. See Note 20 - Income Taxes to the Consolidated Financial Statements included in this Annual Report for additional information. In July 2025, the U.S.
For additional information on the payment of the total outstanding principal balance of our Term Loans, see Note 15 - Debt to our Consolidated Financial Statements included in this Annual Report. Liquidity As of September 27, 2024, we held $146.8 million of cash and cash equivalents, primarily deposited with financial institutions as well as $435.1 million of liquid short-term investments.
The aggregate principal balance of the 2026 Convertible Notes is $161.2 million. For additional information related to our Liquidity and Capital Resources, see Note 15 - Debt to our Consolidated Financial Statements included in this Annual Report.
The decrease in fiscal year 2024 is primarily due to the August 2023 payment of the total outstanding principal balance of the Term Loans (as defined in Note 15 - Debt to the Consolidated Financial Statements included in this Annual Report). Income tax expense .
The increase in fiscal year 2025 is primarily due to increases in interest expense on financing obligations and amortization of debt issuance costs, partially offset by a decrease in interest expense on convertible notes (see Note 15 - Debt and Note 16- Financing Obligation to the Consolidated Financial Statements included in this Annual Report). Loss on extinguishment of debt.
Removed
On a periodic basis, we reassess valuation allowances on our deferred tax assets, weighing positive and negative evidence, to assess recoverability. We determined that the valuation allowance on the majority of our domestic Net Operating Losses (“NOL”) and R&D tax credit carryforwards and other deferred tax assets should be released as of September 30, 2022.
Added
Our core strategy is to develop and innovate high-performance products that address our customers’ most difficult technical challenges in our primary markets: I&D, Data Center and Telecom.
Removed
In making this determination, we considered positive evidence, including significant cumulative consolidated and U.S. income over the three years ended September 30, 2022, continued revenue growth combined with profitability and expectations regarding financial forecasts. We also considered negative evidence, including the uncertainty relating to the economic and geopolitical environment and global supply chain.
Added
The increase was primarily driven by an increase in sales of products for 5G and SATCOM applications, broadband access and the full year contribution of acquisitions.
Removed
Significant judgment is required in making these assessments to maintain or reverse the majority of our valuation allowances. To the extent our future expectations change, we would have to reassess the recoverability of our deferred tax assets at that time.
Added
In addition, we could be negatively affected by any weakening of global economic conditions, including as a result of the evolving impacts from tariffs, export bans, sanctions or other trade tensions (including implementation of new tariffs or retaliatory trade measures). Gross profit. In fiscal year 2025, our gross profit increased by $135.2 million, or 34.3%, compared to fiscal year 2024.
Removed
(3) Fiscal year 2022 includes a gain on sale of our equity method investment of $118.2 million and includes a non-cash net loss of $3.3 million associated with our equity method investment based on our proportionate share of its losses and changes in equity.
Added
In fiscal year 2025, we recognized a net gain of $10.1 million related to the transfer of assets, primarily inventory, associated with the RTP, North Carolina fabrication facility that we assumed control of on July 25, 2025. See Note 4 - Acquisitions to the Consolidated Financial Statements included in this Annual Report for additional information. Income tax expense .
Removed
Gross profit. In fiscal year 2024, our gross profit increased by $8.0 million, or 2.1%, compared to fiscal year 2023. Gross margin of 54.0% in fiscal year 2024 decreased 550 basis points, compared to fiscal year 2023.
Added
This increase primarily relates to the assessment that certain foreign NOLs were not recoverable, resulting in an allowance of $9.2 million, as well as refinements to the estimate of future California taxable income. For fiscal year 2025, our effective tax rate was (86.8)%.
Removed
The decrease in the provision is primarily due to lower Income before taxes, the Foreign-derived intangible income deduction in the fiscal year ended September 27, 2024 plus a $3.6 million partial release of the valuation allowance, primarily relating to our domestic NOL and R&D tax credit carryforwards, released in our fiscal fourth quarter of 2024.
Added
Government enacted the July 4, 2025 Bill which did not have a significant impact to our financials for the year ended October 3, 2025.
Removed
For fiscal year 2024, our effective tax rate was 16.0%. Our effective tax rate for fiscal year 2024, as compared to the U.S. federal income tax rate of 21%, is impacted primarily by income earned outside the U.S.
Added
The Company is currently evaluating the impact of the July 4, 2025 Bill which will restore the ability to deduct domestic research and development costs in the year they are incurred and no longer requires the deferral and amortization of these costs over five years, among other changes.
Removed
(i.e., global intangible low taxed income), resulting in a 12.7% increase, offset primarily by research and development credits, resulting in a 9.4% decrease, Foreign-derived intangible income deduction, resulting in a 4.5% decrease and partial release of our valuation allowance, resulting in a 4.0% decrease.
Added
We anticipate this change will impact the Company beginning in our fiscal year ending October 2, 2026.
Removed
We made an irrevocable election to pay cash for the principal amount of notes to be converted. The aggregate principal balance of the 2026 Convertible Notes is $450.0 million.
Added
The July 4, 2025 Bill permits the acceleration of any unamortized balance of domestic research and development expenses which were previously deferred and also increases the investment tax credit (“ITC”) relating to the CHIPS Act from 25% to 35% for qualifying assets placed into service after December 31, 2025.
Removed
In addition, we have $23.9 million in fixed payments associated with a power purchase agreement that commenced in fiscal 2023 and has a remaining 13-year term. See Note 16- Financing Obligation for additional detail on the power purchase agreement. Lastly, we have a purchase commitment of $6.7 million related to amounts payable for software over a two year period.
Added
In addition, cash used by operating assets and liabilities was $37.8 million for fiscal year 2025, primarily driven by an increase in inventory of $26.6 million, an increase in accounts receivable of $42.0 million, partially offset by an increase in accounts payable of $22.2 million and an increase in accrued and other liabilities of $11.8 million.
Added
Liquidity As of October 3, 2025, we held $112.1 million of cash and cash equivalents, primarily deposited with financial institutions as well as $673.8 million of liquid short-term investments. The undistributed earnings of certain foreign subsidiaries are considered indefinitely reinvested for the periods presented and we do not intend to repatriate such earnings.
Added
On December 19, 2024, we exchanged approximately $288.8 million in aggregate principal amount of our 2026 Convertible Notes (as defined in Note 15 - Debt to our Consolidated Financial Statements included in this Annual Report) for approximately $257.7 million in aggregate principal amount of the 2029 Convertible Notes (as defined in Note 15 - Debt to our Consolidated Financial Statements included in this Annual Report) , 1,582,958 newly-issued shares of the Company’s common stock, issued at a fair value of $205.9 million, and $17.6 million in cash.
Added
We also issued approximately $86.6 million in aggregate principal amount of the 2029 Convertible Notes, and net proceeds, net of amounts paid associated with the exchange, totaled approximately $63.5 million and are expected to be used for general corporate purposes.
Added
As of October 3, 2025, the aggregate principal balances of the 2026 Convertible Notes and 2029 Convertible Notes are $161.2 million and $344.3 million, respectively, and we are required to pay cash for the principal amount of the notes upon conversion. 35 During the fiscal quarter ended October 3, 2025, our common stock price for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending October 3, 2025 was greater than $106.76 on each applicable trading day.
Added
On or after December 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes in multiples of $1,000 principal amount. We made an irrevocable election to pay cash for the principal amount of notes to be converted.
Added
On January 14, 2025, we announced the execution of a preliminary, non-binding memorandum of terms with the CHIPS Program Office, which could provide for proposed direct funding from the U.S. Department of Commerce under the CHIPS Act of up to $70 million.
Added
We have purchase commitments of $157.1 million primarily related to services and inventory supply arrangements of which approximately $145.1 million are payments due within one year. Some of these purchase commitments may be cancellable.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed8 unchanged
Biggest changeThese forward contracts had a fair value of $0.1 million as of September 27, 2024. 36
Biggest changeThe fair value of these forward contracts is immaterial as of October 3, 2025. 36
The interest rates are variable and fluctuate with current market conditions. The risk associated with fluctuating interest rates is limited to this investment portfolio. We believe that a 1% change in interest rates would have a $5.8 million impact on our interest income, based on cash and cash equivalents and short-term investments balances as of September 27, 2024.
The interest rates are variable and fluctuate with current market conditions. The risk associated with fluctuating interest rates is limited to this investment portfolio. We believe that a 1% change in interest rates would have a $7.9 million impact on our interest income, based on cash and cash equivalents and short-term investments balances as of October 3, 2025.
They are not designated as cash flow or fair value hedges under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging . These forward contracts are marked-to-market with changes in fair value recorded to earnings. As of September 27, 2024, we had $34.4 million in notional forward foreign currency contracts, which were denominated in Euro and Yen.
They are not designated as cash flow or fair value hedges under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging . These forward contracts are marked-to-market with changes in fair value recorded to earnings. As of October 3, 2025, we had $36.0 million in notional forward foreign currency contracts, which were denominated in Euro and Yen.

Other MTSI 10-K year-over-year comparisons