Financial Analysis

Commitments and Contingencies Purchase Commitments The Company's purchase commitments primarily consist of agreements for the purchase of goods and services including wafer purchase obligations with the Company's wafer foundries, and manufacturing supply capacity reservation commitments. Total purchase commitments as of December 31, 2025, are as follows (in millions): Fiscal Year Ending March 31, Purchase Commitments 2026 $ 194.8 2027 101.3 2028 71.5 2029 16.7 2030 9.6 Thereafter 36.1 Total $ 430.0 Indemnification Contingencies The Company's technology license agreements generally include an indemnification clause that indemnifies the licensee against liability and damages (including legal defense costs) arising from any claims of patent, copyright, trademark or trade secret infringement by the Company's proprietary technology. The terms of these indemnification provisions approximate the terms of the outgoing technology license agreements, which are typically perpetual unless terminated by either party for breach. The possible amount of future payments the Company could be required to make based on agreements that specify indemnification limits, if such indemnifications were required on all of these agreements, is approximately $202.0 million. There are some licensing agreements in place that do not specify indemnification limits. As of December 31, 2025, the Company had not recorded any liabilities related to these indemnification obligations and the Company believes that a …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Debt Debt obligations included in the condensed consolidated balance sheets consisted of the following (in millions) (1) : Coupon Interest Rate Effective Interest Rate December 31, March 31, 2025 2025 Commercial Paper $ 1,106.0 $ 175.0 4.250% 2025 Notes 4.250% 4.6% 1,200.0 4.900% 2028 Notes 4.900% 5.1% 1,000.0 1,000.0 5.050% 2029 Notes 5.050% 5.2% 1,000.0 1,000.0 5.050% 2030 Notes 5.050% 5.2% 1,000.0 1,000.0 Total Senior Indebtedness 4,106.0 4,375.0 2017 Senior Convertible Debt 1.625% 1.8% 37.9 38.0 2024 Senior Convertible Debt 0.750% 1.0% 1,250.0 1,250.0 Total Convertible Debt 1,287.9 1,288.0 Gross long-term debt including current maturities 5,393.9 5,663.0 Less: Debt discount (2) (11.7) (13.1) Less: Debt issuance costs (3) (16.2) (19.5) Net long-term debt including current maturities 5,366.0 5,630.4 Less: Current maturities (4) Net long-term debt $ 5,366.0 $ 5,630.4 (1) The Company had no outstanding borrowings under the Revolving Credit Facility at December 31, 2025 and at March 31, 2025. (2) The unamortized discount consists of the following (in millions): December 31, March 31, 2025 2025 Commercial Paper $ (2.2) $ (0.1) 4.250% 2025 Notes (1.3) 4.900% 2028 Notes (2.5) (3.3) 5.050% 2029 Notes (3.5) (4.3) 5.050% 2030 Notes (3.5) (4.1) Total unamortized discount $ (11.7) $ (13.1) (3) Debt issuance costs consist of the following (in millions): December 31, March 31, 2025 2025 4.250% 2025 Notes $ $ (0.2) 4.900% 2028 Notes (1.3) (1.7) 5.050% 2029 Notes (1.3) (1.8) 5.050% 2030 N …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table represents the Company's net sales by product line (in millions): Three Months Ended December 31, Nine Months Ended December 31, 2025 2024 2025 2024 Mixed-signal Microcontrollers $ 586.5 $ 533.2 $ 1,703.6 $ 1,772.5 Analog 322.9 272.7 960.6 895.4 Other 276.6 220.1 737.7 763.2 Total net sales $ 1,186.0 $ 1,026.0 $ 3,401.9 $ 3,431.1 The following table represents the Company's net sales by customer type (in millions): Three Months Ended December 31, Nine Months Ended December 31, 2025 2024 2025 2024 Distributors $ 559.3 $ 438.7 $ 1,582.2 $ 1,531.2 Direct customers 567.8 556.3 1,695.4 1,807.9 Licensees 58.9 31.0 124.3 92.0 Total net sales $ 1,186.0 $ 1,026.0 $ 3,401.9 $ 3,431.1

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Share-Based Compensation The following table presents the details of the Company's share-based compensation expense (in millions): Three Months Ended December 31, Nine Months Ended December 31, 2025 2024 2025 2024 Cost of sales (1) $ 10.5 $ 7.4 $ 26.5 $ 18.3 Research and development 39.3 28.8 101.6 79.0 Selling, general and administrative 22.8 13.2 59.0 42.4 Pre-tax effect of share-based compensation 72.6 49.4 187.1 139.7 Income tax benefit 15.1 10.4 38.8 29.3 Net income effect of share-based compensation $ 57.5 $ 39.0 $ 148.3 $ 110.4 (1) During the three and nine months ended December 31, 2025, $6.9 million and $16.4 million, respectively, of share-based compensation expense was capitalized to inventory and $10.5 million and $26.5 million, respectively, of previously capitalized share-based compensation expense in inventory was sold. During the three and nine months ended December 31, 2024, $3.6 million and $13.6 million, respectively, of share-based compensation expense was capitalized to inventory and $7.4 million and $18.3 million, respectively, of previously capitalized share-based compensation expense in inventory was sold.

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Intangible Assets and Goodwill Net amounts excluding fully amortized intangible assets, consist of the following (in millions): December 31, 2025 Gross Amount Accumulated Amortization Net Amount Core and developed technology $ 7,206.7 $ (5,278.1) $ 1,928.6 Customer-related 202.5 (162.2) 40.3 In-process research and development 7.1 7.1 Software licenses 285.9 (162.8) 123.1 Total $ 7,702.2 $ (5,603.1) $ 2,099.1 March 31, 2025 Gross Amount Accumulated Amortization Net Amount Core and developed technology $ 7,149.9 $ (4,981.6) $ 2,168.3 Customer-related 199.5 (152.8) 46.7 In-process research and development 50.8 50.8 Software licenses 259.3 (136.1) 123.2 Total $ 7,659.5 $ (5,270.5) $ 2,389.0 The following is an expected amortization schedule for the intangible assets for the remainder of fiscal 2026 through fiscal 2030, absent any future acquisitions or impairment charges (in millions): Fiscal Year Ending March 31, Amortization Expense 2026 $ 134.8 2027 $ 451.5 2028 $ 344.7 2029 $ 269.8 2030 $ 257.8 The Company amortizes intangible assets over their expected useful lives, which range between 1 and 15 years. Amortization expense attributed to intangible assets are assigned to cost of sales and operating expenses as follows (in millions): Three Months Ended December 31, Nine Months Ended December 31, 2025 2024 2025 2024 Amortization expense charged to cost of sales $ 5.3 $ 6.1 $ 15.5 $ 13.7 Amortization expense charged to operating expense 128.7 140.3 383.8 424.8 Total amortization …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Income Taxes The Company accounts for income taxes in accordance with ASC 740. The provision for income taxes is attributable to U.S. federal, state, and foreign income taxes. The Companys tax expense for the nine months ended December 31, 2025 resulted in an effective tax rate of 21.7% and is based on an estimated annual effective tax rate including the tax effect of items required to be recorded discretely in the interim periods in which those items occur. A comparison of the Companys effective tax rates for the nine months ended December 31, 2025 and December 31, 2024 is not meaningful due to changes in the amount of pre-tax income earned, changes in the mix of jurisdictions in which income is earned, and the impact of discrete items relative to the amount of income earned. The Company's effective tax rate is different than the statutory rates in the U.S. due to foreign income taxed at different rates than the U.S., changes in uncertain tax benefit positions, changes to valuation allowances, generation of tax credits, and the impact of Global Intangible Low Tax Income (GILTI) in the U.S. In addition, the Company has numerous tax holidays it receives related to its Thailand manufacturing operations based on its investment in property, plant and equipment in Thailand. The Company's tax holiday periods in Thailand expire at various times in the future, however, the Company actively seeks to obtain new tax holidays. The material components of foreign income taxed at different …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Accounting Pronouncements Pending Adoption In December 2023, the FASB issued ASU 2023-09- Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which modifies the rules on income tax disclosures to enhance the transparency and decision-usefulness of income tax disclosures, particularly in the rate reconciliation table and disclosures about income taxes paid. The amendments are intended to address investors requests for income tax disclosures that provide more information to help them better understand an entitys exposure to potential changes in tax laws and the ensuing risks and opportunities and to assess income tax information that affects cash flow forecasts and capital allocation decisions. The guidance also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. ASU 2023-09 is effective for the Company for the fiscal period ending March 31, 2026. All entities should apply the guidance prospectively but have the option to apply it retrospectively. The new standard will result in enhanced disclosures in the Company's financial statements. In November 2024, the FASB issued ASU 2024-03- Income Statement (Subtopic 220-40 ): Disaggregation of Income Statement Expenses requiring disaggregated disclosures of certain expense captions into specified categories in the notes to the financial statements. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and in …

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Net Sales The following table represents the Company's net sales by product line (in millions): Three Months Ended December 31, Nine Months Ended December 31, 2025 2024 2025 2024 Mixed-signal Microcontrollers $ 586.5 $ 533.2 $ 1,703.6 $ 1,772.5 Analog 322.9 272.7 960.6 895.4 Other 276.6 220.1 737.7 763.2 Total net sales $ 1,186.0 $ 1,026.0 $ 3,401.9 $ 3,431.1 The product lines listed above are included entirely in the Company's semiconductor product segment with the exception of the other product line, which includes products from both the semiconductor product and technology licensing segments. The following table represents the Company's net sales by customer type (in millions): Three Months Ended December 31, Nine Months Ended December 31, 2025 2024 2025 2024 Distributors $ 559.3 $ 438.7 $ 1,582.2 $ 1,531.2 Direct customers 567.8 556.3 1,695.4 1,807.9 Licensees 58.9 31.0 124.3 92.0 Total net sales $ 1,186.0 $ 1,026.0 $ 3,401.9 $ 3,431.1 Distributors are customers that buy products with the intention of reselling them. Distributors generally have a distributor agreement with the Company to govern the terms of the relationship. Direct customers are non-distributor customers, which generally do not have a master sales agreement with the Company. The Company's direct customers primarily consist of OEMs and, to a lesser extent, contract manufacturers. Licensees are customers of the Company's technology licensing segment, which include purchasers of intellectual property and cus …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Geographic and Segment Information The Company's business is made up of two operating segments, semiconductor products and technology licensing. These segments represent management's view of the business for which separate financial information is available and evaluated regularly by the Chief Operating Decision Maker (CODM), which is the Companys Chief Executive Officer. In the semiconductor products segment, the Company designs, develops, manufactures and markets mixed-signal microcontrollers, development tools and analog, interface, mixed-signal, timing, wired and wireless connectivity devices, and memory products. Under the leadership of the CODM, the Company is structured and organized around standardized roles and responsibilities based on product groups and functional activities. The Company's product groups are responsible for product research, design and development. The Company's functional activities include sales, marketing, manufacturing, information technology, human resources, legal and finance. The Company's product groups have similar products, production processes, types of customers and methods for distribution. In addition, the tools and technologies used in the design and manufacture of the Company's products are shared among the various product groups. The Company's product group leaders, under the direction of the CODM, define the product roadmaps and team with sales personnel to achieve design wins and revenue and other performance targets. Product gro …

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Stockholders' Equity Changes in Share Balances The following table shows the changes in each class of shares (in millions): Series A Preferred Stock Common Stock Treasury Stock Balance at March 31, 2024 577.8 41.1 Repurchase of common stock 0.8 Common stock issued under employee equity incentive plans 0.8 Common stock withheld for tax withholdings on employee equity awards (0.2) Treasury stock used for new issuances (0.6) (0.6) Balance at June 30, 2024 577.8 41.3 Repurchase of common stock 0.2 Common stock issued under employee equity incentive plans 0.9 Common stock withheld for tax withholdings on employee equity awards (0.2) Treasury stock used for new issuances (0.7) (0.7) Balance at September 30, 2024 577.8 40.8 Common stock issued under employee equity incentive plans 0.9 Common stock withheld for tax withholdings on employee equity awards (0.2) Treasury stock used for new issuances (0.7) (0.7) Common stock issued to settle convertible debt 0.1 Balance at December 31, 2024 577.9 40.1 Balance at March 31, 2025 1.5 578.0 39.3 Common stock issued for acquisition 0.4 Common stock issued under employee equity incentive plans 0.7 Common stock withheld for tax withholdings on employee equity awards (0.1) Treasury stock used for new issuances (0.6) (0.6) Balance at June 30, 2025 1.5 578.4 38.7 Series A Preferred Stock Common Stock Treasury Stock Common stock issued under employee equity incentive plans 0.9 Common stock withheld for tax withholdings on employee equity awards (0. …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing