Item 1. Financial Statements

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Item 1. Financial Statements

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in thousands, except per share amounts)


	Three Months Ended				Six Months Ended
	May 2, 2026		May 3, 2025		May 2, 2026		May 3, 2025
Revenue	$	3,623,465	$	2,640,068	$	6,783,728	$	5,063,242
Cost of sales	1,183,667		1,028,458		2,298,955		2,021,329
Gross margin	2,439,798		1,611,610		4,484,773		3,041,913
Operating expenses:
Research and development	509,323		441,837		976,723		844,729
Selling, marketing, general and administrative	362,810		302,669		708,063		587,465
Amortization of intangibles	187,985		187,415		375,300		374,830
Special charges, net	—		1,745		47,982		65,632
Total operating expenses	1,060,118		933,666		2,108,068		1,872,656
Operating income:	1,379,680		677,944		2,376,705		1,169,257
Nonoperating expense (income):
Interest expense	87,619		74,703		173,963		149,967
Interest income	(28,565)		(21,725)		(60,822)		(45,212)
Other, net	(4,202)		(962)		(7,135)		2,998
Total nonoperating expense (income)	54,852		52,016		106,006		107,753
Income before income taxes	1,324,828		625,928		2,270,699		1,061,504
Provision for income taxes	148,478		56,158		263,523		100,418
Net income	$	1,176,350	$	569,770	$	2,007,176	$	961,086

Shares used to compute earnings per common share – basic	487,605		496,173		488,239		496,145
Shares used to compute earnings per common share – diluted	490,458		498,201		491,057		498,434

Basic earnings per common share	$	2.41	$	1.15	$	4.11	$	1.94
Diluted earnings per common share	$	2.40	$	1.14	$	4.09	$	1.93

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in thousands)


	Three Months Ended				Six Months Ended
	May 2, 2026		May 3, 2025		May 2, 2026		May 3, 2025
Net income	$	1,176,350	$	569,770	$	2,007,176	$	961,086
Foreign currency translation adjustments	1,036		(753)		1,324		(912)

Change in fair value of derivative instruments designated as cash flow hedges, net	(5,033)		17,573		620		17,496
Changes in pension plans, net	195		517		395		1,040
Other comprehensive (loss) income	(3,802)		17,337		2,339		17,624
Comprehensive income	$	1,172,548	$	587,107	$	2,009,515	$	978,710

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share and per share amounts)


	May 2, 2026		November 1, 2025
ASSETS
Current Assets
Cash and cash equivalents	$	2,436,916	$	2,499,406
Short-term investments	1,002,392		1,152,915
Accounts receivable	2,051,733		1,436,075
Inventories	1,848,405		1,656,323



Prepaid expenses and other current assets	470,327		363,342
Total current assets	7,809,773		7,108,061
Non-current Assets

Net property, plant and equipment	3,292,288		3,315,696
Goodwill	26,973,180		26,945,180
Intangible assets, net	7,255,362		8,013,815
Deferred tax assets	1,729,558		1,867,102

Other assets	888,934		742,858
Total non-current assets	40,139,322		40,884,651
TOTAL ASSETS	$	47,949,095	$	47,992,712
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	598,640	$	543,760


Income taxes payable	325,626		610,370
Debt, current	899,227		—
Commercial paper notes	550,198		446,639

Accrued liabilities	2,083,216		1,645,032
Total current liabilities	4,456,907		3,245,801
Non-current Liabilities
Long-term debt	7,235,424		8,145,066
Deferred income taxes	1,906,115		2,163,281

Income taxes payable	87,109		100,963

Other non-current liabilities	521,507		521,846
Total non-current liabilities	9,750,155		10,931,156

Shareholders’ Equity
Preferred stock, $1.00 par value, 471,934 shares authorized, none outstanding	—		—
Common stock, $0.16 2/3 par value, 1,200,000,000 shares authorized, 487,087,040 shares outstanding (489,654,097 on November 1, 2025)	81,183		81,611
Capital in excess of par value	22,287,095		23,349,185
Retained earnings	11,525,998		10,539,541
Accumulated other comprehensive loss	(152,243)		(154,582)
Total shareholders’ equity	33,742,033		33,815,755
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	47,949,095	$	47,992,712

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

(in thousands)


	Three Months Ended May 2, 2026
				Capital in				Accumulated Other
	Common Stock			Excess of		Retained		Comprehensive
	Shares	Amount		Par Value		Earnings		Loss








BALANCE, JANUARY 31, 2026	488,204	$	81,369	$	22,968,224	$	10,886,107	$	(148,441)

Net income						1,176,350
Dividends declared and paid - $1.10 per share						(536,459)

Issuance of stock under stock plans and other	1,202	201		9,665
Stock-based compensation expense				81,721
Other comprehensive loss								(3,802)
Common stock repurchased	(2,319)	(387)		(772,515)
BALANCE, MAY 2, 2026	487,087	$	81,183	$	22,287,095	$	11,525,998	$	(152,243)

	Six Months Ended May 2, 2026
				Capital in				Accumulated Other
	Common Stock			Excess of		Retained		Comprehensive
	Shares	Amount		Par Value		Earnings		Loss
BALANCE, NOVEMBER 1, 2025	489,654	$	81,611	$	23,349,185	$	10,539,541	$	(154,582)
Net income						2,007,176
Dividends declared and paid - $2.09 per share						(1,020,719)
Issuance of stock under stock plans and other	1,663	277		59,210
Stock-based compensation expense				167,396
Other comprehensive income								2,339
Common stock repurchased	(4,230)	(705)		(1,288,696)
BALANCE, MAY 2, 2026	487,087	$	81,183	$	22,287,095	$	11,525,998	$	(152,243)

See accompanying notes.


	Three Months Ended May 3, 2025
				Capital in				Accumulated Other
	Common Stock			Excess of		Retained		Comprehensive
	Shares	Amount		Par Value		Earnings		Loss







BALANCE, FEBRUARY 1, 2025	495,976	$	82,664	$	25,041,250	$	10,131,590	$	(184,969)

Net income						569,770
Dividends declared and paid - $0.99 per share						(491,022)
Issuance of stock under stock plans and other	1,491	249		19,566
Stock-based compensation expense				72,831
Other comprehensive income								17,337
Common stock repurchased	(1,219)	(203)		(248,443)
BALANCE, MAY 3, 2025	496,248	$	82,710	$	24,885,204	$	10,210,338	$	(167,632)

	Six Months Ended May 3, 2025
				Capital in				Accumulated Other
	Common Stock			Excess of		Retained		Comprehensive
	Shares	Amount		Par Value		Earnings		Loss
BALANCE, NOVEMBER 2, 2024	496,297	$	82,718	$	25,082,243	$	10,196,612	$	(185,256)
Net income						961,086
Dividends declared and paid - $1.91 per share						(947,360)
Issuance of stock under stock plans and other	1,902	317		61,245
Stock-based compensation expense				150,405
Other comprehensive income								17,624
Common stock repurchased	(1,951)	(325)		(408,689)
BALANCE, MAY 3, 2025	496,248	$	82,710	$	24,885,204	$	10,210,338	$	(167,632)

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)


	Six Months Ended
	May 2, 2026		May 3, 2025
Cash flows from operating activities:
Net income	$	2,007,176	$	961,086
Adjustments to reconcile net income to net cash provided by operations:
Depreciation	210,843		198,781
Amortization of intangibles	770,593		817,429

Stock-based compensation expense	167,396		150,405



Deferred income taxes	(120,930)		(149,370)

Other	4,727		4,203
Changes in operating assets and liabilities	(799,249)		(36,247)
Total adjustments	233,380		985,201
Net cash provided by operating activities	2,240,556		1,946,287
Cash flows from investing activities:

Maturities of short-term available-for-sale investments	147,817		372,778

Additions to property, plant and equipment, net	(247,015)		(239,246)
Proceeds from sale of property, plant and equipment, net	—		58,892

Payments for acquisitions, net of cash acquired	(35,875)		(45,652)
Other	(23,882)		(12,880)
Net cash (used for) provided by investing activities	(158,955)		133,892
Cash flows from financing activities:







Debt repayments	—		(399,998)
Proceeds from commercial paper notes	7,154,789		4,316,340
Payments of commercial paper notes	(7,051,230)		(4,315,358)
Repurchase of common stock	(1,289,401)		(409,014)
Dividend payments to shareholders	(1,020,719)		(947,360)
Proceeds from employee stock plans	59,487		61,562

Other	2,983		(1,458)
Net cash used for financing activities	(2,144,091)		(1,695,286)

Net (decrease) increase in cash and cash equivalents	(62,490)		384,893
Cash and cash equivalents at beginning of period	2,499,406		1,991,342
Cash and cash equivalents at end of period	$	2,436,916	$	2,376,235

See accompanying notes.

ANALOG DEVICES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED MAY 2, 2026 (UNAUDITED)

(all tabular amounts in thousands except per share amounts and percentages)

Note 1 – Basis of Presentation

In the opinion of management, the information furnished in the accompanying condensed consolidated financial statements reflects all normal recurring adjustments that are necessary to fairly state the results for these interim periods and should be read in conjunction with Analog Devices, Inc.’s (the Company) Annual Report on Form 10-K for the fiscal year ended November 1, 2025 (fiscal 2025) and related notes. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 2026 (fiscal 2026) or any future period.

The Company has a 52-53 week fiscal year that ends on the Saturday closest to the last day in October. Certain prior-year amounts have been reclassified to conform to the fiscal 2026 presentation.

Note 2 – Shareholders’ Equity

As of May 2, 2026, the Company’s Board of Directors had authorized the repurchase of an aggregate of $26.7 billion of its common stock under its common stock repurchase program and $8.5 billion remained available for repurchases under the program.

Note 3 – Accumulated Other Comprehensive (Loss) Income

The following table provides the changes in accumulated other comprehensive (loss) income (AOCI) by component and the related tax effects during the first six months of fiscal 2026.


	Foreign currency translation adjustment		Unrealized holding gains/losses on derivatives		Pension plans		Total
November 1, 2025	$	(71,700)	$	(69,777)	$	(13,105)	$	(154,582)
Other comprehensive income before reclassifications	1,324		(6,694)		—		(5,370)
Amounts reclassified out of other comprehensive income	—		8,517		395		8,912
Tax effects	—		(1,203)		—		(1,203)
Other comprehensive income	1,324		620		395		2,339

May 2, 2026	$	(70,376)	$	(69,157)	$	(12,710)	$	(152,243)

The amounts reclassified out of AOCI into the Condensed Consolidated Statements of Income and the Condensed Consolidated Statements of Shareholders’ Equity with presentation location during each period were as follows:


	Three Months Ended				Six Months Ended
Comprehensive (Loss) Income Component	May 2, 2026		May 3, 2025		May 2, 2026		May 3, 2025		Location
Unrealized holding gains/losses on derivatives:
Currency forwards	$	(552)	$	446	$	72	$	(1,133)	Cost of sales
	(42)		118		676		(729)		Research and development
	(513)		36		307		(2,048)		Selling, marketing, general and administrative

Interest rate derivatives	3,731		3,731		7,462		7,462		Interest expense

	2,624		4,331		8,517		3,552		Total before tax
	(667)		(850)		(1,690)		(1,008)		Tax










Total amounts reclassified out of AOCI, net of tax	$	1,957	$	3,481	$	6,827	$	2,544

Note 4 – Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:


	Three Months Ended				Six Months Ended
	May 2, 2026		May 3, 2025		May 2, 2026		May 3, 2025
Net income	$	1,176,350	$	569,770	$	2,007,176	$	961,086



Basic shares:
Weighted-average shares outstanding	487,605		496,173		488,239		496,145
Earnings per common share basic:	$	2.41	$	1.15	$	4.11	$	1.94
Diluted shares:
Weighted-average shares outstanding	487,605		496,173		488,239		496,145
Assumed exercise of common stock equivalents	2,853		2,028		2,818		2,289
Weighted-average common and common equivalent shares	490,458		498,201		491,057		498,434
Earnings per common share diluted:	$	2.40	$	1.14	$	4.09	$	1.93
Anti-dilutive shares related to:
Outstanding stock-based awards	21		52		63		121

Note 5 – Special Charges, Net

Liabilities related to special charges, net are included in Accrued liabilities in the Condensed Consolidated Balance Sheets. The activity is detailed below:


Accrued Special Charges	Global Repositioning Actions















































Balance at November 1, 2025	$	4,115
Employee severance costs, net	29,085

Severance payments	(1,952)


Balance at January 31, 2026	$	31,248


Severance payments	(17,858)



Balance at May 2, 2026	$	13,390

The Company recorded net special charges of $32.4 million as part of its Global Repositioning Actions in the six months ended May 2, 2026. The Global Repositioning Actions were part of a transformation initiative aimed at aligning the Company’s enterprise strategy and organizational design and streamlining its operations to achieve its long-term strategic plan. The special charges include severance costs, in accordance with the Company’s ongoing benefit plan or statutory requirements at foreign locations, related to the termination of certain employees in manufacturing, engineering and selling, marketing, general and administrative roles.

During the first quarter of fiscal 2026, the Company entered into a sublease agreement for its leased property in San Jose, California. As a result of the sublease transaction, the Company recorded an impairment charge of $15.6 million in net special charges, which represented the excess carrying value of the associated asset group over its estimated fair value. The Company estimated fair value using cash flows from the estimated net sublease rental income discounted at a market rate.

Note 6 – Industry and Segment Information

The Company’s Chief Executive Officer and Chair has been identified as its Chief Operating Decision Maker (CODM). The following table presents a summary of consolidated net income inclusive of significant segment expenses and other expense information provided to the CODM:


	Three Months Ended				Six Months Ended
	May 2, 2026		May 3, 2025		May 2, 2026		May 3, 2025
Revenue	$	3,623,465	$	2,640,068	$	6,783,728	$	5,063,242
Less:
Cost of sales, including human capital expenses therein	1,183,667		1,028,458		2,298,955		2,021,329
Operating expenses:
Employee compensation costs	640,791		531,119		1,243,278		998,715
Amortization of acquired intangible assets	187,985		187,415		375,300		374,830
Research and development related costs (excluding employee compensation costs)	150,186		132,443		279,035		263,925
Special charges, net	—		1,745		47,982		65,632

Other operating expense (excluding employee compensation costs) (1)	81,156		80,944		162,473		169,554
Nonoperating expense (income)	54,852		52,016		106,006		107,753
Provision for income taxes	148,478		56,158		263,523		100,418
Net income	$	1,176,350	$	569,770	$	2,007,176	$	961,086

(1)Includes depreciation and amortization expenses, facilities expenses, legal expenses and other discretionary expenses.

Revenue Trends by End Market

The following tables summarize revenue by end market. The categorization of revenue by end market is determined using a variety of data points including the technical characteristics of the product, the “sold to” customer information, the “ship to” customer information and the end customer product or application into which the Company’s product will be incorporated. The assignment of products to end markets may change over time. When this occurs, the Company reclassifies revenue by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market.


	Three Months Ended
	May 2, 2026						May 3, 2025
	Revenue		% of Revenue*		Y/Y%		Revenue		% of Revenue*
Industrial	$	1,799,413	50	%	56	%	$	1,150,315	44	%
Automotive	871,565		24	%	2	%	856,090		32	%
Communications	554,728		15	%	79	%	310,604		12	%
Consumer	397,759		11	%	23	%	323,059		12	%


Total revenue	$	3,623,465	100	%	37	%	$	2,640,068	100	%

	Six Months Ended
	May 2, 2026						May 3, 2025
	Revenue		% of Revenue*		Y/Y%		Revenue		% of Revenue*
Industrial	$	3,296,449	49	%	48	%	$	2,220,569	44	%
Automotive	1,681,709		25	%	5	%	1,596,349		32	%
Communications	1,009,911		15	%	65	%	610,905		12	%
Consumer	795,659		12	%	25	%	635,419		13	%
Total revenue	$	6,783,728	100	%	34	%	$	5,063,242	100	%

* The sum of the individual percentages may not equal the total due to rounding.

Revenue by Sales Channel

The following tables summarize revenue by sales channel. The Company sells its products globally through a direct sales force, third-party distributors, independent sales representatives and via its website. Distributors are customers that buy products with the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment manufacturers. Other customers include the U.S. government, government prime contractors and certain commercial customers for which revenue is recorded over time.


	Three Months Ended
	May 2, 2026				May 3, 2025
Channel	Revenue		% of Revenue*		Revenue		% of Revenue*
Distributors	$	2,071,312	57	%	$	1,480,088	56	%
Direct customers	1,520,090		42	%	1,125,775		43	%
Other	32,063		1	%	34,205		1	%
Total revenue	$	3,623,465	100	%	$	2,640,068	100	%

	Six Months Ended
	May 2, 2026				May 3, 2025
Channel	Revenue		% of Revenue*		Revenue		% of Revenue*
Distributors	$	3,813,606	56	%	$	2,855,552	56	%
Direct customers	2,897,220		43	%	2,145,647		42	%
Other	72,902		1	%	62,043		1	%
Total revenue	$	6,783,728	100	%	$	5,063,242	100	%

* The sum of the individual percentages may not equal the total due to rounding.

Note 7 – Fair Value

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The tables below, set forth by level, present the Company’s financial assets and liabilities, excluding accrued interest components that were accounted for at fair value on a recurring basis as of May 2, 2026 and November 1, 2025. The tables exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of May 2, 2026 and November 1, 2025, the Company held $1.3 billion and $1.4 billion, respectively, of cash that is excluded from the tables below.


	May 2, 2026
	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
Assets
Cash equivalents:
Available-for-sale:
Government and institutional money market funds	$	702,844	$	—	$	702,844
Corporate obligations (1)	—		397,786		397,786

Short-term investments:
Available-for-sale:







Corporate obligations (1)	—		507,277		507,277
Bank obligations (1)	—		495,115		495,115




Other assets:
Forward foreign currency exchange contracts (2)	—		6,500		6,500
Deferred compensation plan investments	117,894		—		117,894

Total assets measured at fair value	$	820,738	$	1,406,678	$	2,227,416
Liabilities

Forward foreign currency exchange contracts (2)	$	—	$	10,020	$	10,020
Interest rate derivatives (3)	—		23,882		23,882
Total liabilities measured at fair value	$	—	$	33,902	$	33,902

(1)The amortized cost of the Company’s investments classified as available-for-sale as of May 2, 2026 was $1.4 billion.

(2)The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 8, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company’s master netting arrangements.

(3)The carrying value of the related debt was adjusted by an equal and offsetting amount. The fair value of interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivatives. See Note 8, Derivatives, in these Notes to Condensed Consolidated Financial Statements.


	November 1, 2025
	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
Assets
Cash equivalents:
Available-for-sale:
Government and institutional money market funds	$	740,730	$	—	$	740,730
Corporate obligations (1)	—		397,707		397,707
Short-term investments (2):
Available-for-sale:

Corporate obligations (1)	—		656,839		656,839
Bank obligations (1)	—		496,076		496,076




Other assets:
Forward foreign currency exchange contracts (3)	—		6,708		6,708
Deferred compensation plan investments	105,188		—		105,188

Total assets measured at fair value	$	845,918	$	1,557,330	$	2,403,248
Liabilities

Forward foreign currency exchange contracts (3)	$	—	$	7,975	$	7,975
Interest rate derivatives (4)	—		12,550		12,550
Total liabilities measured at fair value	$	—	$	20,525	$	20,525

(1)The amortized cost of the Company’s investments classified as available-for-sale as of November 1, 2025 was $1.6 billion.

(2)Available-for-sale securities are classified as current assets on the Condensed Consolidated Balance Sheets if the securities are available to be converted into cash to fund current operations.

(3)The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 8, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company’s master netting arrangements.

(4)The carrying value of the related debt was adjusted by an equal and offsetting amount. The fair value of interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivatives. See Note 8, Derivatives, in these Notes to Condensed Consolidated Financial Statements.

Assets and Liabilities Not Recorded at Fair Value on a Recurring Basis

San Jose, California leased property asset group — As a result of a sublease transaction involving a leased property

in San Jose, California, the Company estimated the fair value of the sublease assets using discounted cash flows from the estimated net sublease rental income discounted at a market rate and recorded an impairment charge which represented the excess carrying value of the asset group associated with the leased property over its estimated fair value. These assets are considered a Level 2 fair value measurement. See Note 5, Special Charges, Net, in these Notes to Condensed Consolidated Financial Statements for additional information.

Debt — The table below presents the estimated fair values of certain financial instruments not recorded at fair value on a recurring basis. Given the short tenure of the Company’s commercial paper notes, the carrying value of the outstanding commercial paper notes approximates the fair values, and therefore, are excluded from the table below ($550.2 million and $446.6 million as of May 2, 2026 and November 1, 2025, respectively). The fair values of the senior unsecured notes are obtained from broker prices and are classified as Level 1 measurements according to the fair value hierarchy.


	May 2, 2026				November 1, 2025
	Principal Amount Outstanding		Fair Value		Principal Amount Outstanding		Fair Value

2026 Notes, due December 2026	900,000		897,767		900,000		895,623
2027 Notes, due June 2027	440,212		437,241		440,212		436,916
2028 Notes, due June 2028	850,000		850,341		850,000		856,345
2028 Notes, due October 2028	750,000		707,652		750,000		704,186
2030 Notes, due June 2030	650,000		652,444		650,000		659,834
2031 Notes, due October 2031	1,000,000		884,422		1,000,000		884,390
2032 Notes, due October 2032	300,000		298,028		300,000		301,546
2034 Notes, due April 2034	550,000		561,447		550,000		571,370
2036 Notes, due December 2036	144,278		137,425		144,278		138,756
2041 Notes, due October 2041	750,000		546,296		750,000		555,925
2045 Notes, due December 2045	332,587		321,506		332,587		327,992
2051 Notes, due October 2051	1,000,000		641,436		1,000,000		662,609
2054 Notes, due April 2054	550,000		524,949		550,000		541,087
Total senior unsecured notes	$	8,217,077	$	7,460,954	$	8,217,077	$	7,536,579

Note 8 – Derivatives

Foreign Exchange Exposure Management — The total notional amounts of forward foreign currency derivative instruments designated as hedging instruments of cash flow hedges as of May 2, 2026 and November 1, 2025 were $343.2 million and $297.0 million, respectively, and the fair values of these instruments in the Company’s Condensed Consolidated Balance Sheets were as follows:


		Fair Value At
	Balance Sheet Location	May 2, 2026		November 1, 2025
Forward foreign currency exchange contracts	Prepaid expenses and other current assets	$	1,162	$	4,403
Forward foreign currency exchange contracts	Accrued liabilities	$	6,150	$	4,399

As of May 2, 2026 and November 1, 2025, the total notional amounts of undesignated hedges related to forward foreign currency exchange contracts were $319.0 million and $207.3 million, respectively, and the fair values of undesignated hedges in the Company’s Condensed Consolidated Balance Sheets were as follows:


		Fair Value At
	Balance Sheet Location	May 2, 2026		November 1, 2025
Undesignated hedges related to forward foreign currency exchange contracts	Prepaid expenses and other current assets	$	5,338	$	2,305
Undesignated hedges related to forward foreign currency exchange contracts	Accrued liabilities	$	3,870	$	3,576

Interest Rate Exposure Management — The Company does not consider the risk of counterparty default to be significant. The gain or loss on the Company’s interest rate swap transactions attributable to the hedged benchmark interest rate risk and the offsetting gain or loss on the related interest rate swaps were recorded as follows:


	May 2, 2026				November 1, 2025
Balance Sheet Location	Loss on Swaps		Gain on Note		Loss on Swaps		Gain on Note
Accrued liabilities	$	23,882	$	—	$	12,550	$	—
Long-term debt	$	—	$	23,882	$	—	$	12,550

For further information on the unrealized holding gains (losses) on derivatives included in and reclassified out of AOCI into the Condensed Consolidated Statements of Income related to forward foreign currency exchange contracts, see Note 3, Accumulated Other Comprehensive (Loss) Income, in these Notes to Condensed Consolidated Financial Statements.

Note 9 – Inventories

Inventories at May 2, 2026 and November 1, 2025 were as follows:


	May 2, 2026		November 1, 2025
Raw materials	$	68,165	$	70,183
Work in process	1,389,341		1,218,625
Finished goods	390,899		367,515
Total inventories	$	1,848,405	$	1,656,323

Note 10 – Income Taxes

The Company’s effective tax rates for the three- and six-month periods ended May 2, 2026 and May 3, 2025 were below the U.S. statutory tax rate of 21%, due to lower statutory tax rates applicable to the Company's operations in the foreign jurisdictions in which it earns income.

During fiscal 2025, the Company received an assessment from the U.S. Internal Revenue Service (IRS) for fiscal 2018 and fiscal 2019, totaling approximately $267.0 million. The assessment excludes any penalties and interest. The assessment pertains to transfer pricing arrangements between the Company and one of its wholly-owned foreign subsidiaries. The Company firmly disagrees with this assessment and maintains that its transfer pricing is appropriate. Consequently, the Company has not recorded any additional tax liability related to fiscal 2018 and fiscal 2019 in relation to this issue, nor to any other periods. The Company intends to vigorously defend its original tax return position and is currently preparing for an appeal with the IRS. Should the IRS ultimately prevail regarding its assessments for fiscal 2018 and fiscal 2019, such a resolution, along with any potential impact on subsequent fiscal years, could have a material adverse effect on the Company’s income tax expense and net earnings in future periods.

Note 11 – New Accounting Pronouncements

Standards Implemented

Income Taxes

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires the disaggregation of information in existing income tax disclosures related to the effective tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted this ASU in fiscal 2026 and will include required financial statement disclosures in its Annual Report on Form 10-K for fiscal 2026.

Standards to Be Implemented

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, requiring public companies to disaggregate key expense categories such as inventory purchases, employee compensation and depreciation in their financial statements. This aims to improve investor insights into company performance. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact adoption will have on its financial statement disclosures.

Note 12 – Subsequent Events

On May 19, 2026, the Board of Directors of the Company declared a cash dividend of $1.10 per outstanding share of common stock. The dividend will be paid on June 16, 2026 to all shareholders of record at the close of business on June 2, 2026 and is expected to total approximately $535.8 million.

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