Financial Analysis

Commitments and Contingencies Warranty Obligations The Company generally warrants that its products sold to its customers will conform to its approved specifications and be free from defects in material and workmanship under normal use and conditions for one year. The Company may offer a longer warranty period in limited situations based on product type and negotiated warranty terms with certain customers. Commitments The Companys commitments primarily consist of wafer purchase obligations with foundry partners, supply capacity reservation payment commitments with foundries and test and assembly partners, technology license fee obligations, minimum purchase commitments under technology service agreements, and commitments for capital expenditures. Future unconditional purchase commitments as of November 1, 2025 are as follows (in millions): Fiscal Year Purchase Commitments to Foundries and Test and Assembly Partners Technology Services and License Fees Remainder of 2026 $ 539.4 $ 26.2 2027 1,091.8 156.1 2028 119.5 165.5 2029 68.4 119.8 2030 66.3 111.7 Thereafter 182.4 77.3 Total unconditional purchase commitments $ 2,067.8 $ 656.6 Technology license fees include the liabilities under agreements for technology licenses between the Company and various vendors. In addition, as of November 1, 2025, the Company had approximately $101.6 million of commitments for capital expenditures, the majority of which are expected to be paid within the next twelve months. Under the Companys man …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Debt Summary of Borrowings and Outstanding Debt The following table summarizes the Companys outstanding debt at November 1, 2025 and February 1, 2025 (in millions): Effective Interest Rate November 1, 2025 February 1, 2025 Face Value Outstanding: 2026 Term Loan - 5-Year Tranche $ $ 590.6 Term Loan Total 590.6 4.875% MTG/MTI 2028 Senior Notes 4.940% / 4.988% 499.9 499.9 1.650% 2026 Senior Notes 1.839% 500.0 500.0 2.450% 2028 Senior Notes 2.554% 750.0 750.0 5.750% 2029 Senior Notes 5.891% 500.0 500.0 4.750% 2030 Senior Notes 4.880% 500.0 2.950% 2031 Senior Notes 3.043% 750.0 750.0 5.950% 2033 Senior Notes 6.082% 500.0 500.0 5.450% 2035 Senior Notes 5.531% 500.0 Senior Notes Total 4,499.9 3,499.9 Total borrowings $ 4,499.9 $ 4,090.5 Less: Unamortized debt discount and issuance cost (31.0) (26.7) Net carrying amount of debt $ 4,468.9 $ 4,063.8 Less: Current portion (1) 499.5 129.5 Non-current portion $ 3,969.4 $ 3,934.3 (1) As of November 1, 2025, the current portion of outstanding debt that is due within twelve months includes the 2026 Senior Notes. The Company intends to repay the current balance with operating cash flows. The weighted-average interest rate on short-term debt outstanding at November 1, 2025 and February 1, 2025 was 1.650% and 5.785%, respectively. 2026 Term Loan The Companys 2026 Term Loan (the 5-Year Tranche Loan) had a stated floating interest rate which equated to an adjusted term Secured Overnight Financing Rate (SOFR) + 137.5 bps. During the first quarter …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table summarizes net revenue disaggregated by end market (in millions, except percentages): Three Months Ended Nine Months Ended November 1, 2025 % of Total November 2, 2024 % of Total November 1, 2025 % of Total November 2, 2024 % of Total Net revenue by end market: Data center $ 1,517.9 73 % $ 1,101.1 73 % $ 4,449.0 75 % $ 2,798.4 71 % Enterprise networking 237.2 11 % 150.9 10 % 608.3 10 % 455.0 12 % Carrier infrastructure 167.8 8 % 84.7 6 % 436.3 7 % 232.4 6 % Consumer 116.6 6 % 96.5 6 % 295.6 5 % 227.4 6 % Automotive/industrial 35.0 2 % 82.9 5 % 186.7 3 % 236.7 5 % $ 2,074.5 $ 1,516.1 $ 5,975.9 $ 3,949.9 The following table summarizes net revenue disaggregated by primary geographical market based on destination of shipment (in millions, except percentages): Three Months Ended Nine Months Ended November 1, 2025 % of Total November 2, 2024 % of Total November 1, 2025 % of Total November 2, 2024 % of Total Net revenue based on destination of shipment: China $ 838.7 40 % $ 658.4 43 % $ 2,131.0 36 % $ 1,774.8 45 % Taiwan 318.9 15 % 198.5 13 % 1,187.4 20 % 279.6 7 % United States 294.3 14 % 256.0 17 % 910.3 15 % 675.4 17 % Other 622.6 31 % 403.2 27 % 1,747.2 29 % 1,220.1 31 % $ 2,074.5 $ 1,516.1 $ 5,975.9 $ 3,949.9 The following table summarizes net revenue disaggregated by customer type (in millions, except percentages): Three Months Ended Nine Months Ended November 1, 2025 % of Total November 2, 2024 % of Total November 1, 2025 % of Total November 2, 2024 % of T …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

Fair Value Measurements Fair value is an exit price representing the amount that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 Observable inputs that reflect quoted prices for identical assets or liabilities in active markets. Level 2 Other inputs that are directly or indirectly observable in the marketplace. Level 3 Unobservable inputs that are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Companys Level 1 assets include marketable equity investments and securities under the Companys non-qualified deferred compensation (NQDC) plan, which are classified as other non-current assets and valued primarily using quoted market prices. The Companys Level 2 assets include time deposits, as the market inputs used to value these instruments consist of market yield. In addition, forward contracts and the severance pay fund are classified within Level 2 of the fair value hierar …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Goodwill and Acquired Intangible Assets, Net Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The carrying value of goodwill as of November 1, 2025 and February 1, 2025 was $11.1 billion and $11.6 billion, respectively. On August 14, 2025, the Company completed the sale of its automotive ethernet business to Infineon Technologies AG. In connection with the transaction, during the quarter ended November 1, 2025, the Company derecognized $524.7 million of goodwill, which was previously classified as assets held for sale based on the relative fair value of the automotive ethernet business. See Note 1 Basis of Presentation for discussion of the automotive ethernet business divestiture. Acquired Intangible Assets, Net As of November 1, 2025 and February 1, 2025, net carrying amounts excluding fully amortized intangible assets are as follows (in millions, except for weighted-average remaining amortization period): November 1, 2025 Gross Carrying Amounts Accumulated Amortization and Impairment Net Carrying Amounts Weighted-Average Remaining Amortization Period (Years) Developed technologies $ 4,722.0 $ (3,516.2) $ 1,205.8 3.3 Customer contracts and related relationships 2,001.0 (1,555.2) 445.8 1.7 Trade names 50.0 (45.3) 4.7 0.5 Total acquired amortizable intangible assets $ 6,773.0 $ (5,116.7) $ 1,656.3 2.9 In-process research and development 322.0 322.0 n/a T …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Income Tax The Companys tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Companys quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in accurately predicting its pre-tax income or loss and the mix of jurisdictions to which they relate, intercompany transactions, changes in tax laws, the applicability of special tax regimes, changes in how the Company does business, discrete items, and acquisitions or divestitures, as well as the integration of acquisitions. The Company recorded income tax expense of $314.1 million and $391.0 million for the three and nine months ended November 1, 2025, respectively. The Companys estimated effective tax rate for the year differs from the U.S. statutory rate of 21% primarily due to a substantial portion of its earnings, or in some cases, 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 as well as discrete tax benefits and expenses for excess deductions and deficiencies on stock-based compensation. The One …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Accounting Pronouncements Not Yet Effective In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to improve income tax disclosures to enhance transparency and decision usefulness of income tax disclosure. This ASU will be effective for the Companys annual reporting for fiscal 2026 on a prospective basis, with retrospective application permitted. Adoption of this new guidance will result in enhanced cash tax and effective tax rate disclosures in the Notes to Consolidated Financial Statements. The Company is evaluating the impact that this new standard will have on the Companys consolidated financial statement disclosures. The Company does not expect the adoption of this new standard to have a material effect on the Companys results of operations or financial condition. In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses requiring disaggregated disclosure of certain expense captions into specified categories in the notes to financial statements on an annual and interim basis. The ASU is effective for fiscal years beginning after December 15, 2026 with updates to be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is evaluating the impact t …

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Revenue Disaggregation of Revenue The majority of the Companys revenue is generated from sales of the Companys products. The following table summarizes net revenue disaggregated by end market (in millions, except percentages): Three Months Ended Nine Months Ended November 1, 2025 % of Total November 2, 2024 % of Total November 1, 2025 % of Total November 2, 2024 % of Total Net revenue by end market: Data center $ 1,517.9 73 % $ 1,101.1 73 % $ 4,449.0 75 % $ 2,798.4 71 % Enterprise networking 237.2 11 % 150.9 10 % 608.3 10 % 455.0 12 % Carrier infrastructure 167.8 8 % 84.7 6 % 436.3 7 % 232.4 6 % Consumer 116.6 6 % 96.5 6 % 295.6 5 % 227.4 6 % Automotive/industrial 35.0 2 % 82.9 5 % 186.7 3 % 236.7 5 % $ 2,074.5 $ 1,516.1 $ 5,975.9 $ 3,949.9 The following table summarizes net revenue disaggregated by primary geographical market based on destination of shipment (in millions, except percentages): Three Months Ended Nine Months Ended November 1, 2025 % of Total November 2, 2024 % of Total November 1, 2025 % of Total November 2, 2024 % of Total Net revenue based on destination of shipment: China $ 838.7 40 % $ 658.4 43 % $ 2,131.0 36 % $ 1,774.8 45 % Taiwan 318.9 15 % 198.5 13 % 1,187.4 20 % 279.6 7 % United States 294.3 14 % 256.0 17 % 910.3 15 % 675.4 17 % Other 622.6 31 % 403.2 27 % 1,747.2 29 % 1,220.1 31 % $ 2,074.5 $ 1,516.1 $ 5,975.9 $ 3,949.9 These destinations of shipment are not necessarily indicative of the geographic location of the Companys end customers or the countr …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Segment Information The Company operates in one reportable segment the design, development and sale of integrated circuits. The chief executive officer was identified as the chief operating decision maker (CODM). Based on his direct involvement with the Companys operations and product development, the CODM is ultimately responsible for and actively involved in the allocation of resources and the assessment of the Companys performance using consolidated net income (loss) reported on the unaudited condensed consolidated statements of operations. The Companys organizational structure is based along functional lines, with each of the functional department heads, as well as shared resources, reporting directly to the CODM or to a direct report of the CODM. The Company uses a highly-integrated approach in developing its products in that discrete technologies developed by the Company are frequently integrated across many of its products, and substantially all of the Companys integrated circuits are manufactured under similar manufacturing processes. Accordingly, the Company operates under a single operating segment. The following table presents a summary of consolidated net income (loss) inclusive of significant segment expenses and other expense information provided to the CODM (in millions): Three Months Ended Nine Months Ended November 1, 2025 November 2, 2024 November 1, 2025 November 2, 2024 Net revenue $ 2,074.5 $ 1,516.1 $ 5,975.9 $ 3,949.9 Less: Product costs (a) 836.4 599.0 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Subsequent Events Subsequent to quarter end, on December 2, 2025, the Company announced its intent to acquire Celestial AI Inc. (Celestial), a provider of a photonic fabric platform purpose-built for next-generation scale-up interconnect. The Company will issue Celestial shareholders a mix of cash and shares of the Companys common stock to be determined. This represents approximately $3.25 billion in transaction value upon acquisition close and may increase up to a total of approximately $5.5 billion in transaction value depending on the achievement of earn-out milestones after acquisition close. The acquisition is expected to close in the first quarter of calendar 2026, subject to regulatory approval as well as other customary closing conditions. In connection with the Celestial acquisition, the Company issued a warrant to a customer for the purchase of up to 1.0 million warrant shares of the Companys common stock at an exercise price of $87.00 per share. The warrant has an exercise term of six years and a vesting term of five years. The warrant shares vest primarily based on the customers achievement of qualifying product revenue milestones. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing