Financial Analysis

COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases office facilities under noncancellable operating leases that expire on various dates through 2034, some of which may include options to extend the leases for up to 12 years. The components of lease expense were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) Operating lease costs $ 2,686 $ 4,106 $ 5,467 $ 6,923 The components of right of use assets and lease liabilities were as follows: June 30, 2026 December 31, 2025 (In thousands, except years and percentage data) Operating leases: Operating lease, right of use asset, net (Other assets) $ 35,720 $ 34,573 Operating lease liabilities, current (Accrued liabilities) $ 9,103 $ 8,211 Operating lease liabilities, non-current (Other liabilities) 31,426 31,195 Total operating lease liabilities $ 40,529 $ 39,406 Supplemental lease information: Weighted average remaining lease term 5.1 years 5.6 years Weighted average discount rate 6.2% 6.3% Supplemental cash flow and other information related to operating leases were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,025 $ 2,186 $ 5,870 $ 4,317 Non-cash investing activities: Lease liabilities arising from obtaining right-of-use assets $ 3,220 $ $ 5,969 $ 7,260 Undiscounted cash flows of operating leas …

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Disaggregated revenue by primary geographical market and timing of revenue recognition for the Companys single product line were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) Primary geographical markets: United States $ 226,846 $ 271,330 $ 460,751 $ 534,568 International 65,008 91,823 114,003 184,669 Total $ 291,854 $ 363,153 $ 574,754 $ 719,237 Timing of revenue recognition: Products delivered at a point in time $ 262,796 $ 329,065 $ 516,778 $ 651,951 Products and services delivered over time 29,058 34,088 57,976 67,286 Total $ 291,854 $ 363,153 $ 574,754 $ 719,237 …

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STOCK-BASED COMPENSATION Stock-based Compensation Expense Stock-based compensation expense for all stock-based awards, which includes shares purchased under the Companys employee stock purchase plan (ESPP), restricted stock units (RSUs) and performance stock units (PSUs), expected to vest is measured at fair value on the date of grant and recognized ratably over the requisite service period. The following table summarizes the components of total stock-based compensation expense included in the condensed consolidated statement of operations for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) Cost of revenues $ 3,666 $ 4,311 $ 7,250 $ 8,550 Research and development 17,569 20,481 36,403 42,128 Sales and marketing 12,363 16,657 27,080 33,053 General and administrative 9,782 12,368 21,660 25,210 Restructuring 174 79 152 588 Total $ 43,554 $ 53,896 $ 92,545 $ 109,529 The following table summarizes the various types of stock-based compensation expense for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) RSUs and PSUs $ 41,562 $ 52,666 $ 88,930 $ 106,842 ESPP 1,992 1,230 3,615 2,687 Total $ 43,554 $ 53,896 $ 92,545 $ 109,529 As of June 30, 2026, there was $259.7 million of total unrecognized stock-based compensation expense related to unvested equity awards, which are expected to be recognized over a weighted-average period of 2.2 years Equity Awards Activity …

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"FAIR VALUE MEASUREMENTS The accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An assets or liabilitys categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of such assets or liabilities do not entail a significant degree of judgment. Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 - Valuations based on …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

GOODWILL AND INTANGIBLE ASSETS The Companys goodwill was as follows: June 30, December 31, 2026 2025 (In thousands) Goodwill, beginning of period $ 214,760 $ 211,571 Currency translation adjustment (1,529) 3,189 Goodwill, end of period $ 213,231 $ 214,760 The Companys purchased intangible assets were as follows: June 30, 2026 December 31, 2025 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (In thousands) Intangible assets: Indefinite-lived intangibles $ 286 $ $ 286 $ 286 $ $ 286 Intangible assets with finite lives: Developed technology 47,725 (44,874) 2,851 47,683 (42,242) 5,441 Customer relationships 51,146 (44,922) 6,224 51,114 (42,000) 9,114 Trade-names 37,700 (33,980) 3,720 37,700 (30,253) 7,447 Total purchased intangible assets $ 136,857 $ (123,776) $ 13,081 $ 136,783 $ (114,495) $ 22,288 During the three and six months ended June 30, 2026, intangible assets increased by less than $0.1 million due to the impact of foreign currency translation. Amortization expense related to finite-lived intangible assets was as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) Developed technology $ 1,248 $ 1,619 $ 2,580 $ 3,212 Customer relationships 1,370 1,574 2,882 3,109 Trade-names 1,860 1,885 3,727 3,770 Total amortization expense $ 4,478 $ 5,078 $ 9,189 $ 10,091 Amortization of developed technology is recorded to cost of revenues, amortization of customer relationships and trade-names are recorded to sales and …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES For the three months ended June 30, 2026, the Company recognized an income tax provision of $25.8 million, on an income before income taxes of $61.9 million, compared to an income tax provision of $5.2 million, on income before income taxes of $42.2 million for the three months ended June 30, 2025. For the six months ended June 30, 2026, the Company recognized an income tax provision of $19.4 million, on an income before income taxes of $48.0 million, compared to an income tax provision of $22.3 million, on income before income taxes of $89.1 million for the six months ended June 30, 2025. The income tax provision for the three months ended June 30, 2026 was calculated using the annualized effective tax rate method and includes the cumulative rate catch-up which represents the tax effects resulting from remeasurement of annualized effective tax rate based on the higher forecasted annual pre-tax income. The adjustment also includes tax expense related to the tariff refund. The tax benefit associated with the impact of AMPTC under Section 45X of the Internal Revenue Code of 1986, as amended (the Code), is offset by the tax expense from the cumulative rate catch-up adjustment in the current quarter, profitable foreign jurisdictions, and tax effects of IEEPA tariff refund. AMPTC is generated based on qualifying production and shipment activity and are therefore directly related to the Companys pretax income; however, the AMPTC is treated as permanent items for income …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

DEBT The following table provides information regarding the Companys debt: June 30, 2026 December 31, 2025 (In thousands) Convertible notes Notes due 2028 $ 575,000 $ 575,000 Less: unamortized debt issuance costs (2,164) (2,806) Carrying amount of Notes due 2028 572,836 572,194 Notes due 2026 632,500 Less: unamortized debt issuance costs (317) Carrying amount of Notes due 2026 632,183 Total carrying amount of debt 572,836 1,204,377 Less: debt, current (632,183) Debt, non-current $ 572,836 $ 572,194 The following table presents the total amount of interest cost recognized in the condensed consolidated statement of operations relating to the Companys notes: Six Months Ended June 30, 2026 2025 Notes due 2028 Notes due 2026 Notes due 2028 Notes due 2026 Notes due 2025 (In thousands) Contractual interest expense $ $ $ $ $ 43 Amortization of debt discount 803 Amortization of debt issuance costs 643 317 643 987 75 Total interest cost recognized $ 643 $ 317 $ 643 $ 987 $ 921 Convertible Senior Notes due 2028 On March 1, 2021, the Company issued $575.0 million aggregate principal amount of its 0.0% convertible senior notes due 2028 (the Notes due 2028). The Notes due 2028 will not bear regular interest, and the principal amount of the Notes due 2028 will not accrete. The Notes due 2028 are general unsecured obligations and are governed by an indenture between the Company and U.S. Bank National Association, as trustee. The Notes due 2028 will mature on March 1, 2028, unless earlier rep …

LongTermDebtTextBlock · excerpt; the full note is in the filing

Recently Issued Accounting Pronouncements Not Yet Effective In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (ASU 2024-03), which requires additional disclosure of certain costs and expenses within the notes to the financial statements. ASU 2024-03 will be effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact from ASU 2024-03 on its condensed consolidated financial statements disclosures. In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06), which simplifies the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. ASU 2025-06 permits an entity to apply the new guidance using a prospective, retrospective or modified transition approach. The Company is currently evaluating the impact from ASU 2025-06 on its condensed consolidated financial statements. In December 2025, the FASB issued ASU 2025-10, Accounting for Government Gran …

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"RELATED PARTY TRANSACTIONS In September 2025, the Company invested $6.3 million in cash to purchase convertible notes with an aggregate principal amount of $7.0 million issued by SunPower Inc. (SunPower) (formerly named Complete Solaria, Inc.). The SunPower notes are classified as debt securities, and the Company has elected the fair value option, with changes in fair value recognized in Other income (expense), net, in the condensed consolidated statements of operations. The CEO of SunPower also serves as a member of the Companys Board of Directors, and therefore this transaction constitutes a related party transaction. The notes bear an interest rate of 7% per annum and mature on July 1, 2029. The initial conversion rate is 467.8363 shares of SunPower common stock per $1,000 principal amount of notes (equivalent to a conversion price of approximately $2.14 per share). The terms of the transaction were reviewed and approved by the Companys Audit Committee and were determined to be on an arms-length basis. On March 1, 2026 and April 9, 2026, the Company, in its capacity as a holder of the SunPower notes, executed a consent that allowed SunPower to issue up to $50.0 million of senior secured notes that can be secured by a first-priority lien on SunPowers assets and can rank senior to the Companys unsecured convertible notes. The consent was provided pursuant to the provisions of the existing indenture, which was not modified or amended, and such consent terminated after SunPow …

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RESTRUCTURING AND ASSET IMPAIRMENT CHARGES 2026 Restructuring Plan In January 2026, the Company implemented a restructuring plan (the 2026 Restructuring Plan) designed to better align its workforce and cost structure with its business needs, strategic priorities and ongoing commitment to profitable growth. The following table presents the details of the Companys restructuring charges under the 2026 Restructuring Plan: Three Months Ended June 30, Six Months Ended June 30, 2026 2026 (In thousands) Employee severance and benefits $ 989 $ 4,445 Contract termination charges (12) 300 Asset impairment (19) 40 Total restructuring and asset impairment charges $ 958 $ 4,785 The following table provides information regarding changes in the Companys accrued restructuring balances under the 2026 Restructuring Plan for the periods indicated: Employee Severance and Benefits Contract Termination Charges Asset Impairment Total (In thousands) Balance as of December 31, 2025 $ $ $ $ Charges 4,445 300 40 4,785 Cash payments and receipts, net (3,578) (300) (3,878) Non-cash settlement and other (152) (40) (192) Balance as of June 30, 2026 $ 715 $ $ $ 715 …

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REVENUE RECOGNITION Disaggregated Revenue The Company has one major business activity, which is the design, manufacture and sale of solutions for the solar photovoltaic (PV) industry. Disaggregated revenue by primary geographical market and timing of revenue recognition for the Companys single product line were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) Primary geographical markets: United States $ 226,846 $ 271,330 $ 460,751 $ 534,568 International 65,008 91,823 114,003 184,669 Total $ 291,854 $ 363,153 $ 574,754 $ 719,237 Timing of revenue recognition: Products delivered at a point in time $ 262,796 $ 329,065 $ 516,778 $ 651,951 Products and services delivered over time 29,058 34,088 57,976 67,286 Total $ 291,854 $ 363,153 $ 574,754 $ 719,237 Contract Balances Accounts receivable, and contract assets and contract liabilities from contracts with customers, were as follows: June 30, 2026 December 31, 2025 (In thousands) Accounts receivable $ 273,607 $ 229,881 Long-term accounts receivable (Other assets) $ 46,131 $ Short-term contract assets (Prepaid expenses and other current assets) $ 34,814 $ 35,976 Long-term contract assets (Other assets) $ 135,150 $ 115,067 Short-term contract liabilities (Deferred revenues, current) $ 224,272 $ 180,524 Long-term contract liabilities (Deferred revenues, non-current) $ 358,233 $ 337,923 The Company receives payments from customers based upon contractual payment terms. Accounts recei …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

SEGMENT INFORMATION The Companys chief operating decision maker is the Chief Executive Officer (the CEO). The Company has one business activity, which entails the design, development, manufacture and sale of solutions for the PV industry. There are no segment managers who are held accountable for operations, operating results or plans for levels or components below the consolidated unit level. Accordingly, management has determined that the Company has a single operating and reportable segment. The primary measure of segment profit or loss is consolidated net income as presented below and is used by the CEO for the purpose of evaluating segment performance and allocation of budget to support business expansion, new product development and operational efficiencies. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) Net revenues $ 291,854 $ 363,153 $ 574,754 $ 719,237 Less: Other cost of revenues (1) 220,260 247,799 433,528 483,454 Fair value of AMPTC generated (64,922) (61,040) (119,514) (114,671) Loss from sale of AMPTC generated during 2025 18,905 Tariff refunds (2) (43,411) (43,411) Stock-based compensation expense 43,554 53,896 92,545 109,529 Acquisition related expenses and amortization (3) 4,251 4,467 9,419 8,896 Other restructuring and asset impairment charges (4) 784 3,243 4,633 5,896 Other research and development (5) 28,089 24,940 54,122 53,467 Other sales and marketing (6) 30,533 31,174 61,102 60,877 Other general and administra …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

STOCKHOLDERS' EQUITY In July 2023, the board of directors authorized a share repurchase program (the 2023 Repurchase Program) pursuant to which the Company was authorized to repurchase up to $1.0 billion of the Companys common stock. The Company may repurchase shares of common stock from time to time through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b5-1 plan. During the three months ended June 30, 2026, there were no repurchases of common stock. During the three months ended June 30, 2025, the Company repurchased and subsequently retired 702,948 shares of common stock from the open market at an average cost of $42.67 per share for a total of $30.0 million. During the six months ended June 30, 2026, there were no repurchases of common stock. During the six months ended June 30, 2025, the Company repurchased and subsequently retired 2,297,053 shares of common stock from the open market at an average cost of $56.58 per share for a total of $130.0 million. As of June 30, 2026, $268.7 million remained available for share repurchases under the 2023 Repurchase Program. In July 2026, the board of directors authorized an extension of the term of the 2023 Repurchase Program. The expiration date of the 2023 Repurchase Program was extended from July 26, 2026 to July 26, 2029, unless terminated earlier by the board of directors. All other terms of the 2023 Repurchase Program remain unchanged. …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

"SUBSEQUENT EVENTS In July 2026, the Company amended the secured convertible promissory note with a fair value of $14.5 million, which was originally issued in July 2023 by the stockholders of a privately-held company. The amendment extended the maturity date and modified certain other contractual terms. Refer to Note 9 , ""Fair Value Measurements,"" for additional information. On July 3, 2026, the Company amended the Credit Agreement with Investee. The amendment increased the available aggregate principal amount from $30.0 million to $50.0 million. Refer to Note 9 , ""Fair Value Measurements,"" for additional information. In July 2026, the board of directors authorized an extension of the 2023 Repurchase Program for an additional three years until July 26, 2029. Refer to Note 13 , ""Stockholders Equity,"" for additional information."

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