Fourth Quarter 2025 Summary

• Revenues of $759.2 million
• GAAP diluted EPS of $4.41
• Non-GAAP diluted EPS of $3.54

Full Fiscal 2025 Summary

• Revenues of $2.6 billion
• GAAP diluted EPS of $11.76
• Non-GAAP diluted EPS of $10.96

Other Key Financial Highlights

• The Company’s Board of Directors (the “Board”) declared a $0.80 per share cash dividend payable on September 8, 2025 to shareholders of record at the close of business on September 2, 2025.
• The Company intends to pay regular quarterly cash dividends of at least $0.80 per share during each quarter of fiscal year 2026, although all subsequent dividends, and the establishment of record and payment dates, are subject to final determination by the Board each quarter after its review of the Company’s financial performance and results of operations, available cash and cash flow, capital requirements, applicable corporate legal requirements, and other factors.
• The Company has initiated a new stock repurchase program authorizing the Company to repurchase up to $500 million of its common stock, as disclosed in the Form 8-K filed on August 22, 2025.

Revenues

Revenues for the fourth quarter of fiscal 2025 were $759.2 million, representing an increase from the prior quarter of 14.3% and an increase from the comparable prior year period of 49.6%. On a full year basis, revenues for fiscal 2025 were $2.6 billion, representing a 33.4% increase compared to full year fiscal 2024.

The growth in revenues over the prior quarter and the comparable prior year periods were predominantly driven by increase in revenue from our Enterprise Technology platform and to a lesser extent our Service Provider Technology platform.

Gross Margin-Gross Profit as a percentage of Revenue

During the fourth quarter of fiscal 2025, GAAP gross profit was $342.7 million. GAAP gross margin of 45.1% increased by 0.6% as compared to the prior quarter GAAP gross margin of 44.5% and increased by 4.9% as compared to the comparable prior year period GAAP gross margin of 40.2%. On a full year basis, fiscal 2025 GAAP gross profit was $1,117.5 million. Fiscal 2025 GAAP gross margin of 43.4% increased by 5.0% as compared to fiscal 2024 GAAP gross margin of 38.4%.

The increase in gross profit margin as compared to the prior quarter was primarily driven by favorable product mix, and as a percentage of revenue, lower excess and obsolete inventory charges and lower indirect operating expenses, offset in part by higher tariffs. The increase in gross profit margin as compared to the comparable prior year period was primarily driven by favorable product mix, and as a percentage of revenue, lower excess and obsolete inventory charges, shipping costs and indirect operating expenses, partially offset by higher tariffs. The increase in gross profit margin for full fiscal 2025 as compared to full fiscal 2024 was primarily driven by favorable product mix, and as a percentage of revenue, lower excess and obsolete inventory charges and lower indirect operating expenses, partially offset by higher tariffs.

Research and Development

During the fourth quarter of fiscal 2025, research and development (“R&D”) expenses were $47.5 million. This reflects an increase as compared to the R&D expenses of $44.3 million in the prior quarter and R&D expenses of $44.1 million in the comparable prior year period. On a full year basis, fiscal 2025 R&D expenses were $169.7 million, representing an increase of $9.9 million as compared to R&D expenses of $159.8 million for fiscal 2024.

The increase in R&D expenses as compared to the prior quarter was primarily due to increased prototype-related expenses and higher employee-related expenses. The increase in R&D expenses as compared to the comparable prior year period was primarily driven by higher employee-related expenses, offset in part by lower prototype-related expenses. The increase in R&D expenses for fiscal 2025 compared to fiscal 2024 was primarily driven by higher employee-related expenses and higher depreciation and software expenses, partially offset by lower prototype-related expenses.

Sales, General and Administrative

The Company’s sales, general and administrative (“SG&A”) expenses for the fourth quarter of fiscal 2025 were $33.9 million. This reflects an increase as compared to the SG&A expenses of $24.8 million in the prior quarter and an increase compared to the SG&A expenses of $21.7 million in the comparable prior year period. On a full year basis, fiscal 2025 SG&A expenses were $111.5 million, reflecting an increase of $30.5 million as compared to SG&A expenses of $81.0 million for fiscal 2024.

The increase in SG&A costs as compared to the prior quarter was primarily due to reserves taken against accounts receivable, credit card processing fees arising from incremental webstore sales, professional fees, marketing expenses and employee-related expenses. The increase in SG&A costs as compared to the comparable prior year period was primarily due to credit card processing fees arising from incremental webstore sales, reserves taken against accounts receivable and higher employee-related expenses, marketing expenses and professional fees.

Interest Expense and Other, net

During the fourth quarter of fiscal 2025, Interest expense and other, net (“I&O”) expenses were $3.2 million. This reflects a decrease as compared to the I&O expenses in both the prior quarter and the comparable prior year period of $5.4 million and $16.8 million, respectively. On a full year basis, fiscal 2025 I&O expenses were $30.6 million, reflecting a decrease of $44.6 million as compared to the I&O expenses of $75.2 million for fiscal 2024.

The decrease in I&O expenses as compared to the prior quarter was primarily due to lower interest expense driven by a decrease in borrowings. The decrease in I&O expenses as compared to the comparable prior year period was primarily due to lower interest expense driven by a decrease in borrowings and lower interest rates and foreign exchange gains in the fourth quarter of fiscal 2025 compared to foreign exchange losses in the comparable prior year period. The decrease in I&O expense for fiscal 2025 as compared to fiscal 2024 was primarily driven by lower interest expense driven by a decrease in borrowings and lower interest rates.

Income Taxes

During the fourth quarter of fiscal 2025, the Company transferred certain intangible properties held by our foreign subsidiaries to the U.S. A corresponding amount of $53.7 million of R&D expenditures is now recognized as a U.S. deferred tax asset and, pursuant to GAAP, immediately recognized in the fourth quarter of fiscal 2025. The fourth quarter fiscal 2025 GAAP provision for income taxes reflects a benefit of $8.5 million, primarily as a result of this transaction. Please see pages 7 and 8 of this press release for non-GAAP adjustments to our financial results, including adjustments arising from this transaction.

Net Income and Earnings Per Share

During the fourth quarter of fiscal 2025, GAAP net income was $266.7 million and non-GAAP net income was $214.4 million. This reflects an increase in GAAP net income and non-GAAP net income from the comparable prior year period by 156.9% and 104.1%, respectively, primarily driven by higher revenues, higher gross profit and income tax benefit. Fourth quarter fiscal 2025 GAAP earnings per diluted share was $4.41, reflecting an increase of 156.4% when compared to the comparable prior year period, and non-GAAP earnings per diluted share was $3.54, reflecting an increase of 103.4% when compared to the comparable prior year period.