What changed in Teradyne,'s 10-K for the fiscal year ended December 31, 2025

[added] In 2025, we had two customers who specified greater than 10% of our consolidated revenues and one additional customer who directly purchased more than 10% of our consolidated revenues. The two specifying customers drove 12% and 10% of consolidated revenues. The additional direct customer accounted for 19% of consolidated revenues including certain revenues specified by our 10% specifiers.

We rely on various information technology networks and systems to process, transmit and store electronic information, including proprietary and confidential data, and to carry out and support a variety of business activities, including manufacturing, research and development, supply chain management, sales and accounting. We have experienced several attempted cyber-attacks of our network. None of the attempted attacks have caused a disruption to our operations or had a material adverse effect on our business or financial results. As a result of the attempts, we have taken further preventive security measures to protect our systems. Despite the preventive security measures we have implemented, we may continue to be vulnerable to attempts by third parties to gain unauthorized access to our networks or sabotage our systems. These attempts, which might be related to criminal hackers, industrial espionage or state-sponsored intrusions, include trying to covertly introduce malware to our computers, networks and systems and impersonating authorized users. Additionally, evolving geopolitical tensions or conflicts have created a heightened risk of cybersecurity attacks. In addition, third party suppliers and service providers that we rely on to manage our networks and systems and who process and store our proprietary and confidential data, including the data of our customers and suppliers, may also be subject to similar attacks. Employees and contractors may also attempt to gain unauthorized access to our systems and steal proprietary and confidential data. Such attempts could result in the misappropriation, theft, misuse, disclosure or loss or destruction of the intellectual property, or the proprietary, confidential or personal information, of Teradyne or our employees, customers, suppliers or other third parties, as well as damage to or disruptions in our information technology networks and systems. These threats are constantly evolving and expanding, such as through the increased use of artificial intelligence in our products and expanding remote work opportunities for our employees, thereby increasing the difficulty of defending against them or implementing adequate preventative measures. Attempts to gain unauthorized access to our information technology networks and systems may be successful, and in some cases, we might be unaware of an incident or its magnitude and effects. [added] A failure in or a breach of our operational or security systems or infrastructure, or those of our suppliers and other service providers, including as a result of cyber-attacks, could have a material adverse effect on our business or financial results, disrupt our business, result in the disclosure or misuse of proprietary or confidential information, damage our reputation, cause losses and increase our costs. We expect to continue to devote significant resources to the security of our information technology networks and systems. Furthermore, our efforts to comply with evolving laws and regulations related to cybersecurity may be costly and any failure to comply could result in investigations, proceedings, investor lawsuits and reputational damage.

[added] customer demand considerations, including the size and timing of customer orders, customers' decisions to accelerate, decelerate or delay shipments, customers' decisions on how to manage their inventory, customers' rate of replacement of our consumable products or their decisions to delay expansion projects;

[added] Following an acquisition, we may not achieve the revenue or net income levels that justify the acquisition. Acquisitions may also result in one-time charges (such as acquisition-related expenses, write-offs or restructuring charges) or in the future, impairment of goodwill or acquired intangible assets, or adjustments to contingent consideration liabilities that adversely affect our operating results. We review our amortizable intangible assets for impairment at the reporting unit level when events or changes in circumstances indicate the carrying value may not be recoverable and we test goodwill for impairment at least annually. Factors that may be considered in assessing whether goodwill or intangible assets may be impaired include a decline in our stock price or market capitalization, reduced estimates of reporting unit future cash flows and slower growth rates in our industries. We have in the past recorded, and may in the future be required to record, a significant charge in our consolidated financial statements during the period in which any impairment of our goodwill or amortizable intangible assets is determined, negatively affecting our financial position and results of operations. Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on experience and to rely heavily on projections of future operating performance. Because we operate in highly competitive environments, projections of our future operating results and cash flows may vary significantly from our actual results.

[added] On January 29, 2026, we and MultiLane, a leading high-speed input/output ("I/O") test and measurement company, announced an agreement to form a joint venture, MultiLane Test Products ("MLTP"). MLTP is being created to serve the growing demand from the AI Data Center equipment market by accelerating the development of test solutions for critical high speed data connections. Under the agreement, MultiLane will contribute all the assets related to its test and measurement business to the joint venture and we will invest approximately $157 million in exchange for 75% ownership of MLTP. This transaction is expected to close in the first half of 2026 and is subject to customary closing conditions.

[added] Interest income decreased by $9.1 million primarily due to lower interest rates and a reduced cash balance compared to 2024. Interest expense increased by $3.2 million primarily due to borrowing from the credit facility during 2025.

[added] In January 2023, our Board of Directors approved a repurchase program for up to $2.0 billion of common stock. In 2025, we repurchased 6.3 million shares of common stock for $702.1 million, which excludes related excise tax, at an average price of $112.21 per share. In 2024, we repurchased 1.7 million shares of common stock for $198.6 million, which excludes related excise tax, at an average price of $114.63 per share. The cumulative repurchases as of December 31, 2025, under the 2023 repurchase program, were 12.0 million shares of common stock for $1,297.3 million, which excludes related excise tax, at an average price per share of $109.38.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

On May 1, 2020, we entered into a three-year, senior secured revolving credit facility of up to $400.0 [added] million (the "Credit Facility"). On December 10, 2021, the credit agreement was amended to extend the maturity date of the [added] Credit Facility to December 10, 2026. On October 5, 2022, the credit agreement was amended to increase the amount of the [added] Credit Facility to $750.0 million from $400.0 million. The amended credit agreement provides that, subject to customary conditions, we may seek to obtain from existing or new lenders the available incremental amount under the credit facility, not to exceed the greater of $200.0 million or 15% of consolidated EBIDTA. We could borrow funds under this [added] Credit Facility at any time for general corporate purposes and working capital. On [added] September 4, 2025, September 19, 2025, and October 7, 2025, Teradyne borrowed a combined $250.0 million under [added] the Credit Facility to support the ramp-up in manufacturing capabilities for Semiconductor Test and the strategy to return cash to shareholders through share repurchases, dividends, and inorganic growth opportunities. On December 31, [added] 2025, we repaid $50 million of the outstanding borrowings. Further, we may incur significant additional secured and unsecured indebtedness in the future.

The market for our products is concentrated with a limited number of significant [added] global customers accounting for a substantial portion of the purchases of test equipment. In each of the years, [added] 2025, 2024 and 2023, our five largest direct customers in aggregate accounted for [added] 44%, 36% and 32% of consolidated revenues, respectively.

[added] If we were to lose any of our significant customers, if our products fail to meet changes in customers' demands or if we suffer a material reduction in our customers' purchase orders, our revenue could decline and our operating results and financial condition could be materially and adversely affected. We would have no or limited contractual recourse if our significant customers decided to stop buying and using our products with limited advance notice to us.

We are subject to U.S. laws and regulations that limit and restrict the export of some of our products and services and may restrict our transactions with certain customers, business [added] partners, suppliers and other persons. In certain circumstances, export control and economic sanctions regulations prohibit the export of certain products, services and technologies, and in other circumstances are required to obtain an export [added] license. We must also comply with export restrictions and laws imposed by other countries affecting trade and investments. [added] Our export compliance program [added] may not be sufficient to prevent all inadvertent compliance violations and there are risks that the compliance controls could be circumvented, exposing us to legal liabilities. As further described below, [added] we cannot quantify the impact that the export controls and economic sanctions has had on our sales, however, compliance with these laws has limited our [added] ability to compete in certain regions, and could continue to limit them in the future. Changes in, and responses to, U.S. trade policy could reduce the competitiveness of our products and cause our sales to drop, which could have a material adverse effect on our business, financial condition or results of operations.

The U.S. government from time to time has issued export restrictions that prohibit U.S. companies from exporting U.S. manufactured products, foreign manufactured products with more than 25% controlled U.S. content, foreign made product which was produced using U.S. technology, as well as U.S. origin technology. For example, the U.S. Department of Commerce has restricted the access of U.S. origin technologies to certain Chinese semiconductor companies by adding those companies to the Entity List and the Foreign Direct Product Rule ("FDP") under U.S. Export Administration Regulations ("EAR"). The addition of certain of these companies to the [added] Entity List has had and will continue to have an adverse impact on our business with these customers. We [added] cannot guarantee that we will be able to file for licenses with the U.S. Department of Commerce [added] or otherwise take actions in the future to minimize the impact of the restrictions on our business.

[added] We cannot predict what further actions may ultimately be taken with respect to tariffs or what products or entities may be subject to such actions, or what reciprocation may be taken by other countries in response to U.S. actions. If we cannot find ways to mitigate the potential impacts from these tariffs successfully or in a timely manner, these additional tariffs and policies could have a significant impact on our business and operating results. The actual impact on any new tariffs is subject to a number of factors including the effective date, duration, amount, scope and nature of the [added] tariffs. To date, recent tariff changes have not had a material adverse effect on our business, financial condition or results of operations, however, in the future, the implementation of additional tariffs by the United States or other countries could have a material adverse effect on our business, financial condition or results of operations.

Pursuant to present [added] U.S. federal regulations and agreements, we are conducting groundwater and subsurface assessment and monitoring and are implementing remediation and corrective action plans for facilities located in Massachusetts and New Hampshire which are no longer conducting manufacturing operations. As of December 31, [added] 2025, we have not incurred material costs as a result of the monitoring and remediation steps taken at the Massachusetts and New Hampshire sites.[added] We may in the future be subject to additional assessment and monitoring or other corrective action as a result of environmental liabilities and may incur significant future costs or disruptions to our operations resulting in a negative impact on our business or financial condition.

Our financial statements are denominated in U.S. dollars. [added] The majority of our Robotics revenue is denominated in foreign currencies, and the strengthening of the U.S. dollar would negatively affect Robotics revenue growth. In addition, many of our liabilities, including our outstanding indebtedness, and certain other cash payments, such as share repurchases, are payable in the United States in U.S. dollars, [added] while a portion of our [added] cash is generated outside the United States. As a result, currency fluctuations and changes in foreign [added] exchange regulations can have a material adverse effect on our liquidity and financial condition.

We depend on Flex Ltd. ("Flex") to manufacture and test our FLEX and J750 family of products from its facility in Malaysia; Plexus Corp. ("Plexus") to manufacture and test our [added] FLEX and Magnum products from its facilities in Malaysia and Thailand and our ETS family of products from its facility in Malaysia; SAM Meerkat to manufacture and test our storage test family of products from its facilities in Malaysia and Thailand and on other contract manufacturers to manufacture other products. If for any reason these contract manufacturers cannot provide us with these products in a timely fashion, or at all, we may not be able to sell these products to our customers until we enter a similar arrangement with an alternative contract manufacturer.

Future cash dividends and share repurchases are subject to the discretion of our Board of Directors and will depend, among other things, upon our earnings, capital requirements and financial condition. [added] We are not required to do either and may reduce or eliminate our cash dividend or share repurchase program in the future. The [added] amount and frequency of our share repurchases may fluctuate and the reduction or elimination of our cash dividend or our share repurchase program could adversely affect the market price of our common [added] stock or reduce our cash reserves.

Additionally, we may [added] fund acquisitions of new businesses, strategic alliances, or joint ventures by utilizing our cash, incurring debt, issuing shares of our common stock, or by other means. We may also face restrictions pursuant to the terms of an acquisition or strategic alliance agreement.

new product [added] selection and ability to predict market requirements and design new products that address those requirements;

ratings changes by any securities analysts who follow our [added] company or the failure to achieve our financial guidance or targets;

compliance with anti-corruption [added] laws, cybersecurity, data privacy regulations, customs and trade regulations;

[added] We anticipate the U.S. Department of Commerce [added] will continue to release new export control regulations. These regulations may continue to have an adverse impact on certain actual or potential customers and on the global semiconductor industry. To the extent the regulations impact actual and potential customers or disrupt the global semiconductor industry, our business and revenues will be adversely impacted.

limit our flexibility in planning for or reacting to changes in our business and the industries in which we [added] complete and placing us at a disadvantage compared to competitors with less debt or debt on more favorable terms.

[added] Since 2015, we [added] have completed the acquisitions of Universal Robots (2015), Energid and MiR [added] (2018), Lemsys and AutoGuide (2019), and most recently, AET and Quantifi in 2025. Additionally, in May 2024, we closed on our strategic partnership agreement with Technoprobe which included [added] our acquisition of 10% of the equity in Technoprobe. We may not be able to realize the benefits of acquiring or successfully growing these businesses. We may continue to acquire additional businesses, form strategic alliances, or create joint ventures with third parties that we believe will complement or augment our existing businesses. We may not be able to realize the expected synergies and cost savings from the integration with our existing operations of other businesses or technologies that we may acquire. In addition, the integration process for our acquisitions may be complex, costly and time consuming and include unanticipated issues, expenses, and liabilities. We may have difficulty in developing, manufacturing, and marketing the products of a newly acquired company in a manner that enhances the performance of our combined businesses or product lines and allows us to realize value from expected synergies.

disruption caused by health pandemics,[added] natural disasters, or global conflict;

Our business operations and supply chain are global and may be disrupted by the implementation of tariffs.[added] In recent years, the United States has imposed significant tariffs on goods from some of our trading partners, and more significant tariffs continue to be threatened in light of rapidly evolving geopolitical tensions.

[added] macroeconomic conditions, a worldwide economic slowdown or disruption in the global financial or industrial markets;

In addition to the actions taken by the United States, China has implemented retaliatory tariffs on products made in the United States and imported into China. [added] The retaliatory tariffs or other trade restrictions implemented by China and possible future retaliatory actions by China or other nations [added] may in the future disrupt our business operations, sales and supply chain and, therefore, have a material adverse effect on our business, financial condition or results of operations.

We rely on various information technology networks and systems to process, transmit and store electronic information, including proprietary and confidential data, and to carry out and support a variety of business activities, including manufacturing, research and development, supply chain management, sales and accounting. We have experienced several attempted cyber-attacks of our network. None of the attempted attacks have caused a disruption to our operations or had a material adverse effect on our business or financial results. As a result of the attempts, we have taken further preventive security measures to protect our systems. Despite the preventive security measures we have implemented, we may continue to be vulnerable to attempts by third parties to gain [added] unauthorized access to our networks or sabotage our systems. These attempts, which might be related to criminal hackers, industrial espionage or state-sponsored intrusions, include trying to covertly introduce malware to our computers, networks and systems and [added] impersonating authorized users. Additionally, evolving geopolitical tensions or conflicts have created a heightened risk of cybersecurity attacks. In addition, third party suppliers and service providers that we rely on to manage our networks and systems and who process and store our proprietary and confidential data, including the data of our customers and suppliers, may also be subject to similar attacks. Employees and contractors may also attempt to gain unauthorized access to our systems and steal proprietary and confidential data. Such attempts could result in the misappropriation, theft, misuse, disclosure or loss or destruction of the intellectual property, or the proprietary, confidential or personal information, of Teradyne or our employees, customers, suppliers or other third parties, as well as damage to or disruptions in our information technology networks and systems. These threats are constantly evolving and expanding, such as through the increased use of artificial intelligence in our products and expanding remote work opportunities for our employees, thereby increasing the difficulty of defending against them or implementing adequate preventative measures. [added] Attempts to gain unauthorized access to our information technology networks and systems may be successful, and in some cases, we might be unaware of an incident or its magnitude and effects. A failure in or a breach of our operational or security systems or infrastructure, or those of our suppliers and other service providers, including as a result of cyber-attacks, could have a material adverse effect on our business or financial results, disrupt our business, result in the disclosure or misuse of proprietary or confidential information, damage our reputation, cause losses and increase our costs. We expect to continue to devote significant resources to the security of our information technology networks and systems. Furthermore, our efforts to comply with evolving laws and regulations related to cybersecurity may be costly and any failure to comply could result in investigations, proceedings, investor lawsuits and reputational damage.

[added] The U.S. Department of Commerce [added] issued and continues to update a list of companies in China and other countries that it considered to be military end users. Compliance with the [added] military end user rule has impacted our ability to sell products to certain customers in China. [added] We cannot be certain that the actions we take will [added] address all of the risks associated with the export controls that may impact our [added] business and our compliance controls could be circumvented, exposing us to legal liabilities.

We believe that our technological position depends primarily on the technical competence and creative ability of our engineers. In a rapidly evolving market, such as ours, the development or acquisition of new technologies, commercialization of those technologies into products and market acceptance and customer demand for those products are critical to our success. [added] In the electronics, semiconductor, and robotics industries, products are often replaced by more technologically advanced substitutes and, as demand for older technology falls, the price at which such products can be sold drops. If we cannot advance new technologies to meet our customers' demands, our revenues and financial condition may be adversely impacted. Successful product development or acquisition, introduction and acceptance depend upon a number of factors, including:

We invest significant resources in the design, manufacturing and testing of our products. However, from time to time, we discover design or manufacturing defects in our products after they have been shipped and, as a result, we have incurred development and remediation costs and settled warranty and product liability claims. In addition, when our products contain defects or have reliability, quality or safety issues, [added] in the past we have conducted a product recall which [added] has resulted in significant repair or replacement costs and[added] substantial delays in product shipments, which in the future could damage our reputation and could make it more difficult to sell our products. We may continue to have warranty and product liability claims or product recalls in the future. Any of these results could have a material adverse effect on our business, results of operations or financial condition.

We hold cash balances in several large financial institutions significantly in excess of the Federal Deposit Insurance Corporation ("FDIC") and global insurance limits. If banks and financial institutions with whom we have banking relationships enter receivership or become insolvent in the future, we may be unable to access, and we may lose some or all of our existing cash, cash equivalents and investments to the extent those funds are not insured or otherwise protected by the FDIC. There is no guarantee that the FDIC or any other global insurer will provide access to uninsured funds in the future in the event of the closure of any other banks or financial institutions in a timely fashion or at all. Any inability to access or delay in accessing these funds could adversely affect our business, financial position, and liquidity.

We face significant competition throughout the world in each of our reportable segments. Some of our competitors have substantial financial and other resources to pursue engineering, manufacturing, marketing and distribution of their products. In addition, we are subject to trade regulations imposed by the United States government, which may not impact some of our competitors. We also face competition from emerging Asian companies and internal development at several of our customers. Some of our competitors have introduced or announced new products with certain performance characteristics that may be considered equal or superior to those we currently offer. We expect our competitors to continue to improve the performance of their current products and to introduce new products or new technologies that provide improved cost of ownership and performance characteristics. [added] In addition, the semiconductor industry has experienced significant consolidation over the past several years. Consolidation among our competitors or customers could lead to a changing competitive landscape, which could negatively impact our competitive position. If in the future we are unable to maintain our competitive position, we could experience downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities and a loss of market acceptance of our [added] products, any of which could have a material adverse effect on our revenues and results of operations.

If we experience a problem with our supply of products from Flex, Plexus, SAM Meerkat, or our other contract manufacturers, it may take us significant time to either manufacture the product or find an alternate contract manufacturer, which could result in substantial expense and disruption to our business.[added] We have, however, significantly invested in our internal manufacturing for FLEX products in our Cebu site.

Competition for employees with skills we require is intense in the high technology industry. We expect intense competition for employees [added] will continue in [added] 2026. Our success will depend on our ability to attract and retain key technical employees. The loss of one or more key or other employees, a decrease in our ability to attract additional qualified employees, or the delay in hiring key personnel could each have a material adverse effect on our business, results of operations or financial condition.[added] In addition, existing or new immigration laws, policies or regulations in the U.S. may limit the pool of available talent in the highly skilled technical labor market.

[added] Our use of AI tools may subject us to significant competitive, legal, regulatory and other risks, and there can be no assurance that our use of AI tools will enhance our products, business operations or result in a benefit to us. Our competitors may be more successful in their use of AI tools, including by developing superior products or improving their operations with the assistance of AI. Additionally, there could be adverse impacts from flawed [added] algorithms, including related to incorporation of third-party copyrighted materials into large language models; data quality and bias, as well as challenges implementing and maintaining AI tools, such as the complications arising from integrating such tools with existing systems and practices, and from reliance on third-party AI vendors. Our use of AI tools, or our customers uses of our products that incorporate AI, could also result in the loss of confidential information or intellectual property or an inability to claim or enforce intellectual property rights, as well as subject us to risks related to intellectual property infringement or misappropriation, data privacy, cybersecurity, and the unauthorized use of our data. The jurisdictions in which we conduct business have and may adopt laws and regulations related to AI, which could cause us to incur greater compliance costs, limit our use of AI tools, or subject us to legal liabilities.

We protect the technology that is incorporated in our products in several ways, including through patent, copyright, trademark and trade secret protection and by contractual agreement. However, even with these protections, our IP may still be challenged, invalidated or subject to other infringement actions. If a significant portion of our IP is invalidated or ineffective, our business could be materially adversely affected.

Our business is international in nature, with our sales, service and administrative personnel and our customers and suppliers located in numerous countries throughout the world. Our operations, and those of our customers and suppliers, are subject to disruption for a variety of reasons, including work stoppages, acts of [added] war and geopolitical conflict, terrorism, health epidemics, fires, earthquakes, hurricanes, typhoons, volcanic eruptions, energy shortages, telecommunication failures, tsunamis, flooding or other natural [added] disasters, including as a result of global climate change. Any disruptions from these events could require substantial expenditures and recovery time to fully resume operations and could also have a material adverse effect on our operations and financial results to the extent that losses are uninsured or exceed insurance recoveries, and to the extent that such disruptions adversely impact our relationships with our customers. Additionally, any such disruption could materially increase our costs and expenses as well as cause delays in, among other things, shipments of products to our customers, our ability to perform services requested by our customers, or the installation and acceptance of our products at customer sites. Any of these conditions could have a material adverse effect on our business, financial condition or results of operations.

We rely on various information technology networks and systems to process, transmit and store electronic information, including proprietary and confidential data, and to carry out and support a variety of business activities, including manufacturing, research and development, supply chain management, sales and accounting. We have experienced several attempted cyber-attacks of our network. None of the attempted attacks have caused a disruption to our operations or had a material adverse effect on our business or financial results. As a result of the attempts, we have taken further preventive security measures to protect our systems. Despite the [added] preventive security measures we have implemented, we may continue to be vulnerable to attempts by third parties to gain unauthorized access to our networks or sabotage our systems. These attempts, which might be related to criminal hackers, industrial espionage or state-sponsored intrusions, include trying to covertly introduce malware to our computers, networks and systems and impersonating authorized users. Additionally, evolving geopolitical tensions or conflicts have created a heightened risk of cybersecurity attacks. In addition, third party suppliers and service providers that we rely on to manage our networks and systems and who process and store our proprietary and confidential data, including the data of our customers and suppliers, may also be subject to similar attacks. Employees and contractors may also attempt to gain unauthorized access to our systems and steal proprietary and confidential data. Such attempts could result in the misappropriation, theft, misuse, disclosure or loss or destruction of the intellectual property, or the proprietary, confidential or personal information, of Teradyne or our employees, customers, suppliers or other third parties, as well as damage to or disruptions in our information technology networks and systems. These threats are constantly evolving and expanding, such as through the increased use of artificial intelligence in our products and expanding remote work opportunities for our employees, thereby increasing the difficulty of defending against them or implementing adequate preventative measures. Attempts to gain unauthorized access to our information technology networks and systems may be successful, and in some cases, we might be unaware of an incident or its magnitude and effects.

As a multinational corporation, we are subject to income taxes as well as non-income-based taxes, in both the United States and various foreign jurisdictions. In certain foreign jurisdictions, we qualify for tax incentives and tax holidays based on our ability to meet, on a continuing basis, various tests relating to our employment levels, research and development expenditures and other qualification requirements in a particular foreign jurisdiction. If we fail to qualify or fail to remain qualified for certain foreign tax incentives and tax holidays, we may be subject to further taxation or an increase in our effective tax rate which would adversely impact our financial results. In [added] December 2025, we entered into an agreement with the Singapore Economic Development Board which extended our Singapore tax holiday under substantially similar terms to the agreement which expired on December 31, [added] 2025. The new tax holiday is scheduled to expire on December 31, [added] 2035.

Capital equipment providers in the electronics, semiconductor industries and robotics, such as Teradyne, have, in the past, been negatively impacted by both sudden slowdowns in the global economies and recurring cyclicality within those industries. These [added] cycles, which can be driven by broad changes to Semiconductor buying patterns, or to specific markets within the Semiconductor industry, have resulted in periods of over-supply; a trend we believe will continue to occur. Our business and results of operations depend, in significant part, upon capital expenditures of manufacturers of semiconductors, electronics, and other industrial products, which in turn depend upon the current and anticipated market demand for those products. Disruption or deterioration in [added] global or industry-specific economic conditions may reduce customer purchases of our products, thereby reducing our revenues and earnings. In addition, such adverse changes in economic conditions, and resulting slowdowns in the market for our products, may, among other things, result in increased price competition for our products, increased risk of excess and obsolete inventories, increased risk in the collectability of our accounts receivable from our customers, potential reserves for credit losses and write-offs of accounts receivable, increased risk of restructuring charges, and higher operating costs as a percentage of revenues, which, in each case and together, adversely affect our operating results. We are unable to predict the likely duration, frequency and severity of disruptions in financial markets, credit availability, and adverse economic conditions throughout the world, and we cannot ensure that the level of revenues or new orders for a fiscal quarter will be sustained in subsequent quarters. We have taken actions to address the effects of general economic variability and recurring industry cyclicality, including implementing cost control and reduction measures. We cannot predict whether these measures will be sufficient to offset global or market-specific disruptions that might affect our businesses and we may need to take additional or different measures in the future.

The global supply shortage of electrical components, including semiconductor chips, impacted our supply chain in 2023. As a result, we experienced and may experience in the future, increases in our lead times and costs for certain components for certain products. We may also experience delays in the delivery of some orders placed by our customers. In addition, inflationary pressures have in the past contributed to increased costs for product components along with wage inflation which yielded a minimal impact to the costs of our products, gross margin and profit for the year. In an effort to mitigate these risks, we may in some cases, incur higher costs due to investment in supply chain resiliency and to secure available inventory or have extended or non-cancellable purchase commitments with semiconductor suppliers, which introduces inventory risk if our forecasts prove inaccurate. We have also sourced components from additional suppliers and multi-sourced and [added] pre-ordered components and finished goods inventory in some cases in an effort to reduce the impact of the adverse supply chain conditions we have experienced in the past. However, if we are unable to secure manufacturing capacities from our current or new suppliers and contract manufacturers, on acceptable terms or at all, or successfully manage our purchase commitments and inventory for components, our ability to deliver our products to our customers in the desired quantities, at competitive prices or in a timely manner may be negatively [added] impacted. We may also not be fully able to pass additional costs on to our customers, which could have a negative impact on our results of operations and financial condition.

We are subject to paying income taxes in the United States and other countries where we operate. Our effective tax rate is dependent on where our earnings are generated and the tax regulations and the interpretation and judgment of administrative tax or revenue authorities in the United States and other countries. We have pursued a global tax strategy that could be adversely affected by the mix of earnings and tax rates in the countries where we operate, changes to tax laws (including but not limited to Pillar Two), tax regulations or an adverse tax ruling by administrative authorities. [added] Because of increasing focus by government taxing authorities on multinational corporations, the tax laws of certain countries in which we do business could change on a prospective or retroactive basis, and as a result our liabilities for taxes, interest and penalties, could significantly increase and adversely affect our financial results. We are also subject to tax audits in the countries where we operate. Any material change in our tax liability resulting from changes in tax laws, tax regulations, administrative rulings or audits from an administrative tax or revenue authority could negatively affect our financial results.

We have been sued for patent infringement [added] in the past and receive notifications from time to time that we may be in violation of patents held by others. An assertion of patent infringement against us, if successful, could have a material adverse effect on our ability to sell our products or it could force us to seek a license to the intellectual property rights of others or alter such products so that they no longer infringe the intellectual property rights of others. A license could be very expensive to obtain or may not be available at all. Similarly, changing our products or processes to avoid infringing the rights of others may be costly or impractical. Additionally, patent litigation [added] has in the past and could in the future require a significant use of management resources and involve a lengthy and expensive defense, even if we eventually prevail. If we do not prevail, we might be forced to pay significant damages, obtain licenses, modify our products, or stop making our products; each of which could have a material adverse effect on our financial condition, operating results or cash flows.

The tax savings attributable to the Singapore tax holiday for the years ended December 31, [added] 2025, 2024 and 2023 were $21.6 million or [added] $0.14 per diluted share, [added] $17.1 million or [added] $0.10 per diluted share, and [added] $1.4 million or [added] $0.01 per diluted share, respectively. These tax savings may not be achievable in subsequent years due to changes in Singapore's tax [added] laws or the issuance of new global minimum tax [added] laws.

We may become subject to campaigns by shareholders advocating corporate actions such as financial restructuring, increased borrowing, special dividends, stock repurchases or [added] divestitures, and changes in management. Such activities could interfere with our ability to execute our business plans, be costly and time-consuming, disrupt our operations, divert the attention of management, or result in our initiating borrowing or increasing our share repurchase plan or dividend, any of which could have an adverse effect on our business or stock price.

We have also outsourced certain general and administrative functions to reputable service providers, many of which are in foreign countries, sometimes impacting communication with them because of language and time differences. Their presence in foreign countries also increases the risk they could be exposed to [added] political, conflict and cybersecurity risk. Additionally, there may be difficulties encountered in coordinating the outsourced operations with existing functions and operations. If we fail in successfully[added] coordinating and managing the outsourced service providers, it may cause an adverse effect on our [added] operations, which could have a material adverse effect on our business, results of operations or financial condition.

[added] Our Third Amended and Restated Revolving Credit Agreement, amended as of November 7, 2023 (the "Credit Agreement") provides a six-year, senior secured revolving credit facility [added] of $750.0 million (the "Credit Facility"). During 2025, we borrowed a combined $250.0 million under the Credit Agreement [added] to fund our capital allocation strategy, of which $200.0 million was outstanding as of year-end. The Credit Agreement is set to expire on December 10, 2026. See Note L: "Debt" for more information regarding our Credit Agreement. As of February [added] 19, 2026, we were in compliance with all covenants under the [added] Credit Agreement.

We [added] believe our cash, cash equivalents, marketable securities and senior secured revolving credit facility will be sufficient to pay our quarterly dividend and meet our working capital and expenditure needs for at least the next twelve months. Inflation has not had a significant long-term impact on earnings.