Marvell Technology, Inc. (MRVL)

Item 1. Business

Our Company

Marvell Technology, Inc., together with its consolidated subsidiaries (“Marvell,” “MTI,” the “Company,” “we,” or “us”) is a leading supplier of data infrastructure semiconductor solutions, spanning the data center core to network edge. We are a fabless supplier of high-performance semiconductor products with core strengths in developing and scaling complex System-on-a-Chip architectures, integrating analog, mixed-signal and digital signal processing functionality. Leveraging leading intellectual property and deep system-level expertise, as well as highly innovative security firmware, our solutions are empowering the data economy and enabling the data center and communications and other end markets.

We currently are incorporated in Delaware, United States. Our corporate headquarters is 1000 N. West Street, Suite 1200 Wilmington, Delaware 19801, and our telephone number is (302) 295-4840. We also have operations in many countries, including Argentina, China, India, Israel, Japan, Singapore, South Korea, Taiwan and Vietnam. Our fiscal year ends on the Saturday nearest January 31.

Recent Developments

On August 14, 2025, we completed the sale of our automotive ethernet business to Infineon Technologies AG for $2.5 billion in cash. In connection with the transaction, during the third quarter of fiscal 2026, we recorded a pre-tax gain on sale of $1.8 billion.

Subsequent to our fiscal 2026 year end, on February 2, 2026, we completed the previously announced acquisition of Celestial AI, Inc. (“Celestial”), a provider of a Photonic FabricTM technology platform purpose-built for next-generation scale-up interconnect. The acquisition of Celestial is expected to accelerate our connectivity strategy for next-generation AI and cloud data centers. At acquisition close, we paid approximately $1.3 billion in cash (or $1.0 billion, net of cash acquired of approximately $300.0 million) and issued approximately 24.5 million shares of our common stock. Contingent on the achievement of specified revenue milestones, we may be required to pay additional cash and issue additional shares of our common stock through fiscal 2029.

Subsequent to our fiscal 2026 year end, on February 10, 2026, we completed the previously announced acquisition of XConn Technologies Holdings, Ltd. (“XConn”), a provider of advanced PCIe and CXL switching silicon, which expands our switching portfolio and augments our Ultra Accelerator LinkTM (“UALinkTM”) scale-up switch team. At acquisition close, we paid approximately $280.0 million in cash and issued approximately 2.1 million shares of our common stock.

Available Information

Our website address is www.marvell.com. The information contained on any website referred to in this Form 10-K does not form any part of this Annual Report on Form 10-K and is not incorporated by reference herein unless expressly noted. We make available free of charge through our website our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file these materials with, or furnish them to, the U.S. Securities and Exchange Commission (“SEC”). In addition, the SEC’s website, www.sec.gov, contains reports, proxy statements, and other information that we file electronically with the SEC.

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Our Markets and Products

Our product solutions serve two end markets: (i) data center and (ii) communications and other. These markets and their corresponding customer products and applications are noted in the table below:

End market			Customer products and applications
Data center			•Cloud and on-premise Artificial intelligence (“AI”) systems •Cloud and on-premise ethernet switching •Cloud and on-premise network-attached storage (“NAS”) •Cloud and on-premise AI servers •Cloud and on-premise general-purpose servers •Cloud and on-premise storage area networks •Cloud and on-premise storage systems •Data center interconnect (“DCI”)
Communications and other			Enterprise networking •Campus and small medium enterprise routers •Campus and small medium enterprise ethernet switches •Campus and small medium enterprise wireless access points (“WAPs”) •Network appliances (firewalls, and load balancers) •Workstations
			Carrier infrastructure •Broadband access systems •Ethernet switches •Optical transport systems •Routers •Wireless radio access network (“RAN”) systems
			Consumer •Broadband gateways and routers •Gaming consoles •Home data storage •Home wireless access points (“WAPs”) •Personal Computers (“PCs”) •Printers •Set-top boxes
			Automotive/industrial •Advanced driver-assistance systems (“ADAS”)* •Autonomous vehicles (“AV”)* •In-vehicle networking* •Industrial ethernet switches •United States military and government solutions •Video surveillance

* These customer products and applications were divested as part of the automotive ethernet business sale on August 14, 2025.

Beginning in the fourth quarter of fiscal 2026, we consolidated revenue previously reported separately as enterprise networking, carrier infrastructure, consumer and automotive/industrial end markets into a new communications and other end market, as shown below. The composition of our data center end market remains unchanged.

We categorize revenue from our two end markets by using a number of data points, including the type of customer purchasing the product, the function of our product being sold, and our knowledge of the end customer product or application into which our product will be incorporated. The categorization of products by end market is inherently subjective and can vary over time as a result of, for example, our knowledge of the ways in which our customers utilize our products.

We serve these two end markets with a broad portfolio of semiconductor solutions based on our compute, networking, security, interconnects, and storage technologies, which are essential and differentiating for these markets.

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The following table summarizes net revenue disaggregated by end market (in millions, except percentages):

	Year Ended
	January 31, 2026		% of Total		February 1, 2025		% of Total	February 3, 2024	% of Total
Data center	$	6,100.3	74	%	$	4,164.2

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-05-28 (period ending 2026-05-02).

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results to differ materially from those implied by the forward-looking statements. Words such as “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “seeks,” “estimates,” “forecasts,” “targets,” “may,” “can,” “will,” “would” and similar expressions identify such forward-looking statements.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Factors that could cause actual results to differ materially from those predicted include, but are not limited to:

•risks related to our ability to design, develop and introduce new and enhanced products, in particular in the Data Center and Communications markets, in a timely and effective manner, as well as our ability to anticipate and adapt to changes in technology;

•risks related to our dependence on a few customers for a significant portion of our revenue, particularly as our major customers comprise an increasing percentage of our revenue, as well as risks related to a significant portion of our sales being concentrated in the data center end market, and risks related to the gain or loss of design wins with our key customers;

•risks related to changes in general macroeconomic conditions such as economic slowdowns, inflation, stagflation, high or rising interest rates, financial institution instability, and recessions; as well as risks related to global economic conditions such as the current armed conflict in Israel and the Middle East;

•risks related to the potential impact of AI on our business model and products;

•risks related to our ability to scale our business;

•risks related to our ability to successfully integrate and to realize anticipated benefits or synergies, on a timely basis or at all, in connection with our past, current, or any future acquisitions, divestitures, significant investments or strategic transactions;

•risks related to tariffs and trade restrictions with China and other foreign nations including risks related to the ability of our customers, particularly in jurisdictions such as China that may be subject to trade restrictions (including the need to obtain export licenses) to develop their own solutions, vertically integrate which may reduce the need for our products, or acquire fully developed solutions from third parties;

•risks related to the extension of lead time due to supply chain disruptions, component shortages that impact the costs and production of our products and kitting process, and constrained availability from other electronic suppliers impacting our customers’ ability to ship their products, which in turn may adversely impact our sales to those customers;

•risks related to our ability to execute on changes in strategy and realize the expected benefits from restructuring activities;

•risks related to cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory;

•risks related to the highly competitive nature of the end markets we serve, particularly within the semiconductor and infrastructure industries;

•risks related to our ability to maintain a competitive cost structure for our manufacturing, assembly, testing and packaging processes and our reliance on third parties to produce our products;

•risks related to our ability to attract, retain and motivate a highly skilled workforce, especially engineering, managerial, sales and marketing employees;

•risks related to any current and future litigation, regulatory investigations, or contractual disputes with customers that could result in substantial costs and a diversion of management’s attention and resources that are needed to successfully maintain and grow our business;

•cybersecurity risks;

•risks related to our debt obligations;

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•risks related to the specific conditions in the end markets we address, including seasonality and volatility in the technology sector and semiconductor industry;

•risks related to failures to qualify our products or our suppliers’ manufacturing lines;

•risks related to failures to protect our intellectual property, particularly outside the United States;

•risks related to the issuance of preferred stock;

•risks related to the potential impact of significant events or natural disasters or the effects of climate change (such as drought, flooding, wildfires, increased storm severity, sea level rise, and power outages), particularly in certain regions in which we operate or own buildings, such as Santa Clara, California, and where our third-party manufacturing partners or suppliers operate, such as Taiwan and elsewhere in the Pacific Rim;

•risks related to our sustainability programs;

•risks related to the impact of the COVID-19 pandemic or other future pandemics, on the global economy and on our customers, suppliers, employees and business; and

•risks related to failures of our customers to agree to pay for NRE (non-recurring engineering) costs, failure to pay enough to cover the costs we incur in connection with NREs or non-payment of previously agreed NRE costs due to us.

Additional factors which could cause actual results to differ materially include those set forth in the following discussion, as well as the risks discussed in Part II, Item 1A, “Risk Factors,” and other sections of this Quarterly Report on Form 10-Q. These forward-looking statements speak only as of the date hereof. Unless required by law, we undertake no obligation to update any forward-looking statements.

Overview

We are a leading supplier of data infrastructure semiconductor solutions, spanning the data center core to network edge. We are a fabless supplier of high-performance semiconductor products with core strengths in developing and scaling complex System-on-a-Chip architectures, integrating analog, mixed-signal and digital signal processing functionality. Leveraging leading intellectual property and deep system-level expertise, as well as highly innovative security firmware, our solutions are empowering the data economy and enabling the data center and communications and other end markets.

Net revenue in the first quarter of fiscal 2027 was $2.4 billion and was 28% higher than net revenue in the first quarter of fiscal 2026. This was due to increases in sales from the data center end market by 27%, and from the communications and other end market by 29%. The increase was partially offset by a decrease in sales from our automotive ethernet product portfolio due to the divestiture of our automotive ethernet business at the beginning of the third quarter of fiscal 2026.

Strong revenue growth from our data center market was driven by AI-related demand for a broad range of our products, including electro-optics, custom, storage, and switching. We have continued to see revenue recovery in our communications and other end market driven by normalizing customer inventory levels.

On February 2, 2026, we completed the acquisition of Celestial AI, Inc., a provider of a Photonic FabricTM technology platform purpose-built for next-generation scale-up interconnect. The acquisition of Celestial is expected to accelerate our connectivity strategy for next-generation AI and cloud data centers.

On February 10, 2026, we completed the acquisition of XConn Technologies Holdings, Ltd., a provider of advanced PCIe and CXL switching silicon. The acquisition of XConn expands our switching portfolio and augments our UALinkTM scale-up switch team.

The unaudited condensed consolidated financial statements include the operating results of Celestial and XConn for the period from the dates of acquisition through our first quarter ended May 2, 2026. See “Note 4 – Business Combinations” and “Note 5 – Goodwill and Acquired Intangible Assets, Net” in the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

During the first quarter of fiscal 2027, Marvell and NVIDIA Corporation (“NVIDIA”) announced a strategic partnership to connect our custom XPUs and compatible scale-up networking with NVIDIA’s AI infrastructure ecosystem. On March 31, 2026, we completed the issuance of Series A Convertible Preferred Stock to NVIDIA for an aggregate purchase price of $2.0 billion. See “Note 10 – Stockholders’ Equity” in the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

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We continue to monitor the environment for potential impacts on supply and demand from tariffs and other geo-political events.

Government Incentives and Grants. We continue to benefit from lower income tax rates in certain jurisdictions through statutory elections or agreements with governmental agencies, which may include a commitment to maintain, or increase, headcount and business investment levels in those jurisdictions. The tax benefits associated with these reduced income tax rates are recorded through our income tax provision for the periods in which such incentive tax rates are effective. However, changes in international taxation, notably the enactment by numerous countries of minimum tax legislation modeled after the Organization for Economic Cooperation and Development’s Pillar Two tax framework, could significantly reduce the income tax benefit associated with these tax incentives.

In addition, certain jurisdictions in which we operate have enacted alternative incentive programs, which operate within the Pillar Two tax framework. We have entered into agreements with governmental agencies to secure such incentives and we record the benefit associated with these incentives as earned when there is reasonable assurance that we will meet the conditions of the incentive agreements and that the incentives will ultimately be received.

Ultimate realization of the incentives is subject to satisfying certain minimum investment levels over the course of the incentive period and government agency reviews and audits of qualifying expenditures. We cannot guarantee that we will achieve the agreed upon investment levels over the incentive period and any failure to meet these investment levels or any change in the current law or government regulations may result in a clawback of some or all of the incentives and a corresponding reversal of any benefit recognized.

Capital Return Program. We remain committed to delivering stockholder value through our stock repurchase and dividend programs. Under the program authorized by our Board of Directors, we may repurchase shares of our common stock in the open market or through privately negotiated transactions. The extent to which we repurchase our stock and the timing of such repurchases will depend upon market conditions, legal rules and regulations, and other corporate considerations, as determined by our management team. During the three months ended May 2, 2026, we repurchased 1.4 million shares of our common stock for $200.0 million. As of May 2, 2026, $5.3 billion remained available for future stock repurchases. Subsequent to quarter end through May 26, 2026, we repurchased 1.1 million shares of our common stock for $200.0 million pursuant to a 10b5-1 trading plan.

We returned $253.8 million to stockholders in the three months ended May 2, 2026 through $200.0 million in repurchases of shares of our common stock and $53.8 million in cash dividends.

Cash and Short-Term Investments. Our cash and cash equivalents were $3.8 billion at May 2, 2026, which were $1.2 billion higher than our balance at January 31, 2026 of $2.6 billion.

Sales and Customer Composition. Our accounts receivable were concentrated with three customers at May 2, 2026, who represented a total of 75% of gross accounts receivable, compared with five customers at May 3, 2025, who represented a total of 72% of gross accounts receivable. Net revenue attributable to significant customers including both distributor and direct customers whose revenues represented 10% or more of total net revenue is presented in the following table:

Three Months Ended

May 2,
2026

May 3,
2025

Direct Customer:

Customer A

16%

Distributor:

Distributor A

45%

36%

We regularly monitor the creditworthiness of our distributor and direct customers, and believe these distributors’ sales to diverse end customers and geographies further serve to mitigate our exposure to credit risk.

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Most of our sales are made to customers with operations located outside of the United States, primarily in Asia, and a majority of our products are manufactured outside the United States. Sales shipped to customers with operations in Asia represented approximately 83% and 74% of our net revenue in the three months ended May 2, 2026 and May 3, 2025, respectively. Because many manufacturers and manufacturing subcontractors of our customers are located in Asia, we expect that most of our net revenue will continue to be represented by sales to our customers in that region. For risks related to our global operations, see Part II, Item 1A, “Risk Factors,” including but not limited to the risk detailed under the caption “We face additional risks due to the extent of our global operations since a majority of our products, and those of many of our customers, are manufactured and sold outside of the United States. The occurrence of any or a combination of the additional risks described below would significantly and negatively impact our business and results of operations.”

The development process for our products is long, which may cause us to experience a delay between the time we incur expenses and the time revenue is generated from these expenditures. We anticipate that the rate of new orders may vary significantly from quarter to quarter. For risks related to our sales cycle, see Part II, Item 1A, “Risk Factors,” including but not limited to the risk detailed under the caption “We are subject to order and shipment uncertainties. If we are unable to accurately predict customer demand, we may hold excess or obsolete inventory, which would reduce our gross margin. Conversely, we may have insufficient inventory or be unable to obtain the supplies or contract manufacturing capacity to meet demand, which would result in lost revenue opportunities and potential loss of market share as well as damaged customer relationships.”

To secure capacity over the long term, we have entered into capacity reservation arrangements with certain foundries and partners. See “Note 9 – Commitments and Contingencies” in the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

Critical Accounting Policies and Estimates

There have been no material changes during the three months ended May 2, 2026 to our critical accounting policies and estimates from the information provided in the “Critical Accounting Policies and Estimates” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

In the current macroeconomic environment, our estimates could require increased judgment and carry a higher degree of variability and volatility. We continue to monitor and assess our estimates in light of developments, and as events continue to evolve and additional information becomes available, our estimates may change materially in future periods.

Results of Operations

The following table sets forth information derived from our Unaudited Condensed Consolidated Statements of Operations expressed as a percentage of net revenue:

	Three Months Ended
	May 2, 2026		May 3, 2025
Net revenue	100.0	%	100.0	%
Cost of goods sold	47.9		49.7
Gross profit	52.1		50.3
Operating expenses:
Research and development	27.0		26.8
Selling, general and administrative	10.7		9.8
Restructuring related charges, net	0.4		(0.6)
Total operating expenses	38.1		36.0
Operating income	14.0		14.3
Interest and other loss, net	(10.6)		(2.9)
Income before income taxes	3.4		11.4
Provision for income taxes	2.0		2.0
Net income	1.4	%	9.4	%

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Three months ended May 2, 2026 and May 3, 2025

Net Revenue

	Three Months Ended
	May 2, 2026		May 3, 2025		% Change
	(in millions, except percentage)
Net revenue	$	2,417.8	$	1,895.3	28%

Our net revenue for the three months ended May 2, 2026 increased by $522.5 million, or 28%, compared to net revenue for the three months ended May 3, 2025. This was primarily due to a 27% increase in sales from the data center end market which benefited from strong AI-related demand. Sales from the communications and other end market also increased by 29%, which has continued to recover due to normalizing customer inventory levels, partially offset by a decrease in sales from our automotive ethernet product portfolio due to the divestiture of our automotive ethernet business at the beginning of the third quarter of fiscal 2026.

Cost of Goods Sold and Gross Profit

	Three Months Ended
	May 2, 2026			May 3, 2025			% Change
	(in millions, except percentage)
Cost of goods sold	$	1,157.0		$	942.9		23%
% of net revenue	47.9		%	49.7		%
Gross profit	$	1,260.8		$	952.4		32%
% of net revenue	52.1		%	50.3		%

Cost of goods sold as a percentage of net revenue decreased for the three months ended May 2, 2026 compared to the three months ended May 3, 2025, which was primarily due to better cost absorption driven by higher revenues, partially offset by a shift in product mix. As a result, gross margin for the three months ended May 2, 2026 increased by 1.8 percentage points, compared to the three months ended May 3, 2025.

Research and Development

	Three Months Ended
	May 2, 2026			May 3, 2025			% Change
	(in millions, except percentage)
Research and development	$	652.3		$	507.7		28%
% of net revenue	27.0		%	26.8		%

Research and development expense increased by $144.6 million in the three months ended May 2, 2026 compared to the three months ended May 3, 2025. The increase was primarily due to higher overall spending to support our R&D initiatives, including increased employee compensation and related costs, primarily driven by growth in headcount including the addition of new employees from our recent acquisitions. The increase is also due to higher acquisition related costs of $22.3 million.

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Selling, General and Administrative

	Three Months Ended
	May 2, 2026			May 3, 2025			% Change
	(in millions, except percentage)
Selling, general and administrative	$	258.4		$	186.4		39%
% of net revenue	10.7		%	9.8		%

Selling, general and administrative expense increased by $72.0 million in the three months ended May 2, 2026 compared to the three months ended May 3, 2025. The increase was primarily due to higher acquisition related costs of $42.6 million, as well as an increase in employee compensation and related costs, primarily driven by increased headcount including the addition of new employees from our recent acquisitions.

Restructuring Related Charges (Gains), Net

	Three Months Ended
	May 2, 2026			May 3, 2025			% Change
	(in millions, except percentage)
Restructuring related charges (gains), net	$	10.7		$	(12.3)		*
% of net revenue	0.4		%	(0.6)		%

*Not meaningful.

We recognized net restructuring related charges of $10.7 million in the three months ended May 2, 2026 as we continued to evaluate our existing operations to increase operational efficiency, decrease costs and increase profitability. See “Note 8 – Restructuring” in the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Interest and Other Loss, Net

	Three Months Ended
	May 2, 2026			May 3, 2025			% Change
	(in millions, except percentage)
Interest expense	$	(52.8)		$	(48.7)		8%
Other expense, net	(203.3)			(6.0)			*
Interest and other loss, net	$	(256.1)		$	(54.7)		*
% of net revenue	(10.6)		%	(2.9)		%

*Not meaningful.

Interest and other loss, net increased by $201.4 million in the three months ended May 2, 2026 compared to the three months ended May 3, 2025. The increase was primarily due to a $331.8 million increase in fair value of the contingent consideration liability associated with the Celestial acquisition, partially offset by an unrealized gain of $81.1 million from the forward stock purchase contract and higher net unrealized gains from equity investments in the three months ended May 2, 2026.

Provision for income taxes

	Three Months Ended
	May 2, 2026		May 3, 2025		% Change
	(in millions, except percentage)
Provision for income taxes	$	48.8	$	38.0	28%

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Our income tax expense for the three months ended May 2, 2026 was $48.8 million compared to a tax expense of $38.0 million for the three months ended May 3, 2025. These amounts differed from the U.S. federal statutory tax rate of 21%, primarily due to a substantial portion of earnings or losses being taxed or benefited at rates lower than the U.S. statutory rate, net of the impact of U.S. taxation of foreign operations, benefits from tax credits, valuation allowance releases, and discrete tax benefits and expenses for excess deductions and deficiencies on stock-based compensation. Income tax expense for the three months ended May 2, 2026 also differs from the U.S. statutory rate of 21% due to non-deductible adjustments to contingent consideration liability, net of the tax impacts of our forward stock purchase contract. The recorded tax expense is based on year-to-date pre-tax results, forecasted pre-tax results, forecasted annual tax expense and discrete adjustments for the respective periods.

The One Big Beautiful Bill Act of 2025 (the “2025 Tax Act”) was signed into law on July 4, 2025. The 2025 Tax Act makes permanent key elements of the 2017 Tax Cuts and Jobs Act and modifies certain provisions of the U.S. International tax framework. Certain provisions of the 2025 Tax Act become effective in fiscal year 2027. Our tax provision for the May 2, 2026 period includes the impact of the 2025 Tax Act. We will continue to evaluate the impact of the 2025 Tax Act on our income taxes.

Our provision for income taxes may be affected by changes in the geographic mix of earnings with different applicable tax rates, acquisitions or divestitures, changes in the realizability of deferred tax assets, accruals related to contingent tax liabilities and period-to-period changes in such accruals, the results of income tax audits, the expiration of statutes of limitations, the implementation of tax planning strategies, tax rulings, court decisions, settlements with tax authorities and changes in tax laws and regulations. It is also possible that significant negative evidence may become available that causes us to conclude that a valuation allowance is needed on certain of our deferred tax assets, which would adversely affect our income tax provision in the period of such change in judgment.

We are subject to legislation based on the Organization for Economic Cooperation and Development’s 15% global minimum tax regime which applies to the majority of countries in which we operate. As a result of this legislation, our foreign earnings are generally subject to a minimum tax rate of 15%. On January 5, 2026, the OECD released a comprehensive package of administrative guidance, including the “side-by-side system” that exempts U.S. parented multinational businesses from certain provisions of Pillar Two, specifically the Income Inclusion Rule and the Undertaxed Profits Rule. The OECD guidance provides that the side-by-side system will be effective for fiscal years beginning on or after January 1, 2026. In certain jurisdictions, local legislative action is needed to effectuate “side by side system” and cannot be considered in our accounting estimate until enactment. The effects of any future legislation in this area are not yet reasonably estimable, but if such legislation is enacted in the future could have a significant effect on our provision for income taxes, our financial results, and our earnings and cash flows.

We are subject to the examination of our income tax returns by the Internal Revenue Service and other tax authorities. The outcome of these audits cannot be predicted with certainty. Management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. If any issues addressed in our tax audits are resolved in a manner not consistent with management’s expectations, we could be required to adjust our provision for income taxes in the period such resolution occurs.

The ultimate realization of deferred tax assets depends upon the generation of future taxable income during the periods in which those assets become deductible or creditable. We evaluate the recoverability of these assets, weighing all positive and negative evidence, and provide or maintain a valuation allowance for these assets if it is more likely than not that some, or all, of the deferred tax assets will not be realized. If negative evidence exists, sufficient positive evidence is necessary to support a conclusion that a valuation allowance is not needed. We consider all available evidence such as our earnings history including the existence of cumulative income or losses, reversals of taxable temporary differences, projected future taxable income, and tax planning strategies. In future periods, it is possible that significant positive or negative evidence could arise that results in a change in our judgment with respect to the need for a valuation allowance, which could result in a tax benefit, or adversely affect our income tax provision, in the period of such change in judgment.

We also continue to evaluate potential changes to our legal structure in response to guidelines and requirements in various international tax jurisdictions where we conduct business. See also Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q, under the caption “Changes in existing taxation benefits, tax rules or tax practices may adversely affect our financial results.”

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Liquidity and Capital Resources

Our principal source of liquidity as of May 2, 2026 consisted of approximately $3.8 billion of cash and cash equivalents, of which approximately $1.6 billion was held by subsidiaries outside of the United States, a portion of which are deemed to be indefinitely reinvested. We manage our worldwide cash requirements by, among other things, reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in the United States.

During the fiscal quarter ended May 2, 2026, we completed the acquisitions of Celestial and XConn in which we paid cash, net of cash acquired and holdback amounts, of $1.0 billion, and $270.2 million, respectively and also issued a total of 26.8 million shares of our common stock. For the Celestial acquisition, contingent on the achievement of specified revenue milestones, we may be required to pay additional cash and issue additional shares of our common stock through fiscal 2029. See “Note 4 – Business Combinations” and “Note 5 – Goodwill and Acquired Intangible Assets, Net” in the Notes to Unaudited Condensed Consolidated Financial Statements for more information.

On March 31, 2026, we completed the issuance and sale of 2.0 million shares of our Series A Convertible Preferred Stock to NVIDIA for an aggregate purchase price of $2.0 billion in cash. The shares of Series A Convertible Preferred Stock are initially convertible in the aggregate into a maximum of approximately 21.8 million shares of our common stock. See “Note 10 – Stockholders’ Equity” in the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

As of May 2, 2026, we had total borrowings outstanding of $5.0 billion, consisting of senior notes outstanding.

On April 15, 2026, we completed a debt offering and issued $1.0 billion Senior Notes with a 10-year term due in 2036 ("2036 Senior Notes"). We used a portion of the net proceeds from the 2036 Senior Notes to repay the $500.0 million 2026 Senior Notes at maturity.

We have a revolving credit facility with a borrowing capacity of up to $1.5 billion and a 5-year term (“2025 Revolving Credit Facility”). As of May 2, 2026, the 2025 Revolving Credit Facility was undrawn and is available for draw down through June 30, 2030.

Subsequent to quarter end, we entered into agreements to secure long-term wafer and substrate manufacturing capacity, in which we committed to pay deposits totaling $870.0 million, payable in quarterly installments from the second quarter of fiscal 2027 through the second quarter of fiscal 2028. For a description of our contractual obligations including debt and purchase commitments, see “Note 7 – Debt,” and “Note 9 – Commitments and Contingencies” in the Notes to Unaudited Condensed Consolidated Financial Statements. We generally expect to satisfy these commitments with cash on hand and cash provided by operating activities.

We may elect to factor trade accounts receivable from time to time as part of our overall liquidity and working capital management strategy. During the three months ended May 2, 2026, we generated cash from operations from the sale of certain trade accounts receivable on a non-recourse basis to a third-party financial institution pursuant to a factoring arrangement. See “Note 14 – Supplemental Financial Information” in the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

We believe that our existing cash and cash equivalents, together with cash generated from operations, and funds from our 2025 Revolving Credit Facility will be sufficient to cover our working capital needs, capital expenditures, investment requirements, any declared dividends, repurchases of our common stock, commitments (including those discussed in “Note 9 – Commitments and Contingencies” in the Notes to Unaudited Condensed Consolidated Financial Statements), and the income tax related to the sale of our automotive ethernet business, for at least the next twelve months. Our capital requirements will depend on many factors, including our rate of sales growth, market acceptance of our products, costs of securing access to adequate manufacturing capacity, the timing and extent of research and development projects and increases in operating expenses, all of which are subject to uncertainty.

To the extent that our existing cash and cash equivalents, together with cash generated from operations, and funds available under our 2025 Revolving Credit Facility are insufficient to fund our future activities, we may need to raise additional funds through public or private debt or equity financing. We may also acquire additional businesses, purchase assets or enter into other strategic arrangements in the future, which could also require us to seek debt or equity financing. Additional equity financing or convertible debt financing may be dilutive to our current stockholders. If we elect to raise additional funds, we may not be able to obtain such funds on a timely basis or on acceptable terms, if at all. In addition, the equity or debt securities that we issue may have rights, preferences or privileges senior to our common stock.

Table of Contents

Future payment of a regular quarterly cash dividend on our common and preferred stock and our planned repurchases of common stock will be subject to, among other things, the best interests of the Company and our stockholders, our results of operations, cash balances and future cash requirements, financial condition, developments in ongoing litigation, statutory requirements under Delaware law, U.S. securities laws and regulations, market conditions and other factors that our Board of Directors may deem relevant. Our dividend payments and repurchases of common stock may change from time to time, and we cannot provide assurance that we will continue to declare dividends or repurchase stock at all or in any particular amounts.

Cash Flows from Operating Activities

Net cash provided by operating activities for the three months ended May 2, 2026 was $638.8 million. We had a net income of $34.5 million adjusted for the following non-cash items: change in fair value of contingent consideration liability of $331.8 million, amortization of acquired intangible assets of $225.2 million, stock-based compensation expense of $207.6 million, depreciation and amortization of $95.4 million, unrealized gain on forward stock purchase contract of $81.1 million, deferred income tax of $13.8 million, and $23.2 million of net loss from other non-cash items. Cash outflow from working capital of $211.6 million for the three months ended May 2, 2026 was primarily driven by decreases in accounts payable, accrued employee compensation, and accrued liabilities and other non-current liabilities, partially offset by a decrease in accounts receivable. The decrease in accounts payable was primarily due to the timing of payments. The decrease in accrued employee compensation was primarily due to bonus payout of our annual employee bonus plan. The decrease in accrued liabilities and other non-current liabilities was primarily driven by decreases in income tax payable and stock rotation accruals, partially offset by higher ship and debit claims accrual. The decrease in accounts receivable was primarily due to increased factoring of receivables and more ratable billings and collections during the quarter.

Net cash provided by operating activities for the three months ended May 3, 2025 was $332.9 million. We had a net income of $177.9 million adjusted for the following non-cash items: amortization of acquired intangible assets of $245.7 million, stock-based compensation expense of $142.1 million, depreciation and amortization of $84.2 million, restructuring related gains of $14.0 million, deferred income tax benefit of $4.3 million, and $44.1 million of net loss from other non-cash items. Cash outflow from working capital of $342.8 million for the three months ended May 3, 2025 was primarily driven by a decrease in accrued employee compensation, and increases in accounts receivable and inventories. The decrease in accrued employee compensation was due to bonus payout of our annual employee bonus plan. The increase in accounts receivable was primarily due to higher sales and lower distribution sales reserves, partially offset by higher factored receivables. Inventories grew sequentially in support of expected revenue growth.

Cash Flows from Investing Activities

For the three months ended May 2, 2026, net cash used in investing activities of $1.4 billion was primarily driven by acquisitions, net of cash acquired of $1.3 billion, and purchases of property and equipment of $155.7 million.

For the three months ended May 3, 2025, net cash used in investing activities of $94.1 million was primarily driven by purchases of property and equipment of $118.8 million, partially offset by proceeds from sales of property and equipment of $25.9 million.

Cash Flows from Financing Activities

For the three months ended May 2, 2026, net cash provided by financing activities of $2.0 billion was primarily attributable to $2.0 billion proceeds from issuance of preferred stock, and $1.0 billion proceeds from borrowings, partially offset by $500.0 million repayment of debt principal, $227.2 million for tax withholding payments on behalf of employees for net share settlements, $200.0 million repurchases of common stock, $53.8 million for payment of our quarterly dividends, and $27.2 million payments on technology license obligations.

For the three months ended May 3, 2025, net cash used in financing activities of $301.2 million was primarily attributable to $340.0 million repurchases of common stock, $51.8 million for payment of our quarterly dividends, $50.2 million for tax withholding payments on behalf of employees for net share settlements, $32.8 million repayment of debt principal, and $26.8 million payments on technology license obligations, partially offset by $200.0 million proceeds from borrowings.

Indemnification Obligations

See “Note 9 – Commitments and Contingencies” in the Notes to Unaudited Condensed Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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Held by

holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Recent insider activity

Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 14 transactions across 5 insiders. Net: -255,060 shares, -$31,959,772.

Date	Insider	Role	Action	Shares	Price	Value
2026-06-01	Koopmans Chris indirect	President and COO	Sell	-10,000	$205.87	-$2,058,700
2026-05-15	Meintjes Willem A	Chief Financial Officer	Sell	-4,000	$175.24	-$700,960
2026-05-13	MURPHY MATTHEW J	Chairman of the Board and CEO	Sell	-7,500	$177.26	-$1,329,450
2026-05-01	Koopmans Chris indirect	President and COO	Sell	-10,000	$162.76	-$1,627,600
2026-04-17	Casper Mark	EVP & Chief Legal Officer	Sell	-10,000	$135.50	-$1,355,000
2026-04-15	MURPHY MATTHEW J	Chairman of the Board and CEO	Sell	-7,500	$134.46	-$1,008,450
2026-04-15	Meintjes Willem A	Chief Financial Officer	Sell	-30,000	$134.01	-$4,020,300
2026-04-16	Bharathi Sandeep	President, Data Center Group	Sell	-66,892	$130.35	-$8,719,372
2026-04-06	Casper Mark indirect	EVP & Chief Legal Officer	Sell	-6,900	$109.45	-$755,205
2026-04-06	Koopmans Chris indirect	President and COO	Sell	-10,000	$110.24	-$1,102,400
2026-04-02	Casper Mark	EVP & Chief Legal Officer	Sell	-10,854	$107.01	-$1,161,487
2026-04-01	Casper Mark	EVP & Chief Legal Officer	Sell	-7,000	$105.11	-$735,770
2026-03-26	Bharathi Sandeep	President, Data Center Group	Sell	-44,414	$99.61	-$4,424,079
2026-03-26	MURPHY MATTHEW J	Chairman of the Board and CEO	Sell	-30,000	$98.70	-$2,961,000

Source: SEC Form 4 filings.

Next expected filings

~2026-08-28 10-Q expected by 2026-09-10 (in 74 days)
~2026-12-02 10-Q expected by 2026-12-15 (in 170 days)
~2027-03-10 10-K expected by 2027-03-31 (in 268 days)
~2027-05-27 10-Q expected by 2027-06-09 (in 346 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-06-11 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
2026-05-28 10-Q Quarterly Report
2026-05-27 8-K Earnings Release; Financial Statements and Exhibits
2026-05-13 DEF 14A Proxy Statement
2026-04-15 8-K Material Agreement Entered; Other Events; Financial Statements and Exhibits
2026-04-08 424B2 Prospectus Supplement
2026-03-31 8-K Unregistered Equity Sale; Bylaws/Articles Amended; Regulation FD Disclosure; Financial Statements and Exhibits
2026-03-19 8-K Other Events; Financial Statements and Exhibits
2026-03-19 8-K Other Events; Financial Statements and Exhibits
2026-03-11 10-K Annual Report
2026-03-05 8-K Earnings Release; Financial Statements and Exhibits
2026-02-18 8-K Other Events; Financial Statements and Exhibits
2026-02-06 8-K Other Events; Financial Statements and Exhibits
2026-02-02 8-K/A Unregistered Equity Sale; Financial Statements and Exhibits
2025-12-12 8-K Other Events; Financial Statements and Exhibits

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