Item 1. . Financial Statements

MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share amounts; unaudited)

ASSETS
			September 30,						March 31,
			2025						2025
Cash and cash equivalents			$	236.8					$	771.7
Accounts receivable, net			746.2						689.7
Inventories			1,095.3						1,293.5
Other current assets			272.0						236.4
Total current assets			2,350.3						2,991.3
Property, plant and equipment, net			1,153.5						1,183.7
Goodwill			6,695.5						6,684.8
Intangible assets, net			2,169.5						2,389.0
Long-term deferred tax assets			1,739.0						1,728.1
Other assets			361.9						397.7
Total assets			$	14,469.7					$	15,374.6
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable			$	170.0					$	160.6
Accrued liabilities			873.8						994.5
Total current liabilities			1,043.8						1,155.1
Long-term debt			5,375.9						5,630.4
Long-term income tax payable			561.1						633.4
Long-term deferred tax liability			35.2						33.8
Other long-term liabilities			758.2						843.6
Stockholders' equity:
Preferred stock, $0.001 par value per share; authorized 5,000,000 shares; 7.50% Series A mandatory convertible preferred stock, 1,485,000 shares issued and outstanding at September 30, 2025 and March 31, 2025, with a liquidation preference of $1,000 per share, or $1,485.0 million in the aggregate			—						—
Common stock, $0.001 par value per share; authorized 900,000,000 shares; 578,423,869 shares issued and 540,446,319 shares outstanding at September 30, 2025; 577,996,915 shares issued and 538,704,604 shares outstanding at March 31, 2025			0.6						0.6
Additional paid-in capital			4,028.5						3,909.9
Common stock held in treasury: 37,977,550 shares at September 30, 2025; 39,292,311 shares at March 31, 2025			(2,584.7)						(2,611.6)
Accumulated other comprehensive loss			(6.2)						(1.7)
Retained earnings			5,257.3						5,781.1
Total stockholders' equity			6,695.5						7,078.3
Total liabilities and stockholders' equity			$	14,469.7					$	15,374.6

See accompanying notes to condensed consolidated financial statements

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MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts; unaudited)

						Three Months Ended September 30,												Six Months Ended September 30,
																		2025						2024						2025						2024
Net sales																		$	1,140.4					$	1,163.8					$	2,215.9					$	2,405.1
Cost of sales																		502.5						495.3						1,001.3						999.7
Gross profit																		637.9						668.5						1,214.6						1,405.4
Research and development																		262.3						240.7						517.8						482.4
Selling, general and administrative																		172.3						157.0						331.6						307.5
Amortization of acquired intangible assets																		108.1						122.7						215.7						245.7
Special charges and other, net																		6.3						1.5						28.5						4.1
Operating expenses																		549.0						521.9						1,093.6						1,039.7
Operating income																		88.9						146.6						121.0						365.7
Interest income																		3.6						2.0						8.5						4.8
Interest expense																		(56.3)						(59.1)						(113.7)						(120.9)
Other (loss) income, net																		(4.4)						2.0						0.2						3.7
Income before income taxes																		31.8						91.5						16.0						253.3
Income tax (benefit) provision																		(9.9)						13.1						(7.1)						45.6
Net income																		41.7						78.4						23.1						207.7
Dividends on Series A Preferred Stock																		(27.8)						—						(55.6)						—
Net income (loss) attributable to common stockholders																		$	13.9					$	78.4					$	(32.5)					$	207.7
Basic net income (loss) per common share																		$	0.03					$	0.15					$	(0.06)					$	0.39
Diluted net income (loss) per common share																		$	0.03					$	0.14					$	(0.06)					$	0.38
Dividends declared per common share																		$	0.455					$	0.454					$	0.910					$	0.906
Basic common shares outstanding																		540.0						536.7						539.6						536.7
Diluted common shares outstanding																		545.0						542.0						539.6						542.4

See accompanying notes to condensed consolidated financial statements

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MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions; unaudited)

			Three Months Ended September 30,												Six Months Ended September 30,
			2025						2024						2025						2024
Net income			$	41.7					$	78.4					$	23.1					$	207.7
Components of other comprehensive income (loss):
Actuarial gains (losses) related to defined benefit pension plans, net of tax effect			0.2						(4.1)						(4.5)						(4.3)
Other comprehensive income (loss), net of tax effect			0.2						(4.1)						(4.5)						(4.3)
Comprehensive income			$	41.9					$	74.3					$	18.6					$	203.4

See accompanying notes to condensed consolidated financial statements

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MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions; unaudited)

			Six Months Ended September 30,
			2025						2024
Cash flows from operating activities:
Net income			$	23.1					$	207.7
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization			343.8						376.3
Deferred income taxes			2.3						(49.7)
Share-based compensation expense related to equity incentive plans			114.5						90.3
Amortization of debt discount			6.7						28.1
Amortization of debt issuance costs			2.7						4.3
Impairment of intangible assets			2.5						—
Other			4.2						(24.3)
Changes in operating assets and liabilities, excluding impact of acquisitions:
(Increase) decrease in accounts receivable			(55.9)						99.4
Decrease (increase) in inventories			201.0						(18.3)
Decrease in accounts payable and accrued liabilities			(26.0)						(182.3)
Change in other assets and liabilities			(75.8)						(50.0)
Change in income tax payable			(179.4)						(60.8)
Net cash provided by operating activities			363.7						420.7
Cash flows from investing activities:
Other investing			1.3						2.4
Proceeds from capital-related government incentives			5.1						0.1
Investments in other assets			(50.9)						(98.5)
Capital expenditures			(54.4)						(93.7)
Net cash used in investing activities			(98.9)						(189.7)
Cash flows from financing activities:
Proceeds from issuance of Commercial Paper			1,588.4						6,354.2
Repayments of Commercial Paper			(650.1)						(6,170.6)
Repayment of senior notes			(1,200.0)						(1,000.0)
Proceeds from issuance of convertible debt			—						1,250.0
Deferred financing costs			—						(16.5)
Purchase of capped call options			—						(105.0)
Proceeds from sale of common stock			30.3						33.6
Tax payments related to shares withheld for vested RSUs			(20.0)						(33.2)
Repurchase of common stock			—						(90.0)
Payment of cash dividends on Series A Preferred Stock			(52.9)						—
Payment of cash dividends on common stock			(491.3)						(486.3)
Capital lease payments			(0.8)						(0.8)
Other Financing			(3.3)						—
Net cash used in financing activities			(799.7)						(264.6)
Net decrease in cash and cash equivalents			(534.9)						(33.6)
Cash and cash equivalents, at beginning of period			771.7						319.7
Cash and cash equivalents, at end of period			$	236.8					$	286.1

See accompanying notes to condensed consolidated financial statements

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MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in millions; unaudited)

						Preferred Stock Par Value									Common Stock Par Value						Additional Paid-in-Capital												Common Stock Held in Treasury						Accumulated Other Comprehensive Loss						Retained Earnings						Total Equity
Balance at March 31, 2024						$	—								$	0.5					$	2,482.9											$	(2,581.6)					$	(3.5)					$	6,759.5					$	6,657.8
Net income						—									—						—												—						—						129.3						129.3
Other comprehensive loss						—									—						—												—						(0.2)						—						(0.2)
Proceeds from sales of common stock through employee equity incentive plans						—									—						13.1												—						—						—						13.1
RSU withholdings						—									—						(18.9)												—						—						—						(18.9)
Treasury stock used for new issuances						—									—						(13.0)												13.0						—						—						—
Repurchase of common stock						—									—						—												(72.7)						—						—						(72.7)
Purchase of capped call options						—									—						(105.0)												—						—						—						(105.0)
Share-based compensation						—									—						45.2												—						—						—						45.2
Dividends on common stock						—									—						—												—						—						(242.6)						(242.6)
Balance at June 30, 2024						—									0.5						2,404.3												(2,641.3)						(3.7)						6,646.2						6,406.0
Net income						—									—						—												—						—						78.4						78.4
Other comprehensive loss						—									—						—												—						(4.1)						—						(4.1)
Proceeds from sales of common stock through employee equity incentive plans						—									—						20.5												—						—						—						20.5
RSU withholdings						—									—						(14.3)												—						—						—						(14.3)
Treasury stock used for new issuances						—									—						(15.3)												15.3						—						—						—
Repurchase of common stock						—									—						—												(17.3)						—						—						(17.3)
Share-based compensation						—									—						50.4												—						—						—						50.4
Dividends on common stock						—									—						—												—						—						(243.7)						(243.7)
Balance at September 30, 2024						$	—								$	0.5					$	2,445.6											$	(2,643.3)					$	(7.8)					$	6,480.9					$	6,275.9
Balance at March 31, 2025						$	—								$	0.6					$	3,909.9											$	(2,611.6)					$	(1.7)					$	5,781.1					$	7,078.3
Net loss						—									—						—												—						—						(18.6)						(18.6)
Other comprehensive loss						—									—						—												—						(4.7)						—						(4.7)
Common stock issued for acquisition						—									—						19.1												—						—						—						19.1
Proceeds from sales of common stock through employee equity incentive plans						—									—						12.4												—						—						—						12.4
RSU withholdings						—									—						(8.4)												—						—						—						(8.4)
Treasury stock used for new issuances						—									—						(11.3)												11.3						—						—						—
Share-based compensation						—									—						52.3												—						—						—						52.3
Dividends on Series A Preferred Stock						—									—						—												—						—						(27.8)						(27.8)
Dividends on common stock						—									—						—												—						—						(245.5)						(245.5)
Balance at June 30, 2025						—									0.6						3,974.0												(2,600.3)						(6.4)						5,489.2						6,857.1
Net income						—									—						—												—						—						41.7						41.7
Other comprehensive income						—									—						—												—						0.2						—						0.2
Proceeds from sales of common stock through employee equity incentive plans						—									—						17.9												—						—						—						17.9
RSU withholdings						—									—						(11.6)												—						—						—						(11.6)

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						Preferred Stock Par Value									Common Stock Par Value						Additional Paid-in-Capital												Common Stock Held in Treasury						Accumulated Other Comprehensive Loss						Retained Earnings						Total Equity
Treasury stock used for new issuances						—									—						(15.6)												15.6						—						—						—
Share-based compensation						—									—						63.8												—						—						—						63.8
Dividends on Series A Preferred Stock						—									—						—												—						—						(27.8)						(27.8)
Dividends on common stock						—									—						—												—						—						(245.8)						(245.8)
Balance at September 30, 2025						$	—								$	0.6					$	4,028.5											$	(2,584.7)					$	(6.2)					$	5,257.3					$	6,695.5

See accompanying notes to condensed consolidated financial statements

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MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Note 1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Microchip Technology Incorporated and its majority-owned and controlled subsidiaries (the Company). All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar amounts in the financial statements and tables in these notes, except per share amounts, are stated in millions of U.S. dollars unless otherwise noted.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, pursuant to the rules and regulations of the SEC. The information furnished herein reflects all adjustments which are, in the opinion of management, of a normal recurring nature and necessary for a fair statement of the results for the interim periods reported. Certain information and footnote disclosures normally included in audited consolidated financial statements have been condensed or omitted pursuant to such SEC rules and regulations. It is suggested that these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025. The results of operations for the three and six months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2026 or for any other period.

Note 2. Recently Issued Accounting Pronouncements and Other Developments

Accounting Pronouncements Pending Adoption

In December 2023, the FASB issued ASU 2023-09-Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which modifies the rules on income tax disclosures to enhance the transparency and decision-usefulness of income tax disclosures, particularly in the rate reconciliation table and disclosures about income taxes paid. The amendments are intended to address investors’ requests for income tax disclosures that provide more information to help them better understand an entity’s exposure to potential changes in tax laws and the ensuing risks and opportunities and to assess income tax information that affects cash flow forecasts and capital allocation decisions. The guidance also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. ASU 2023-09 is effective for the Company for the fiscal period ending March 31, 2026. All entities should apply the guidance prospectively but have the option to apply it retrospectively. The new standard will result in enhanced disclosures in the Company's financial statements.

In November 2024, the FASB issued ASU 2024-03-Income Statement (Subtopic 220-40): Disaggregation of Income Statement Expenses requiring disaggregated disclosures of certain expense captions into specified categories in the notes to the financial statements. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted with updates to be applied prospectively with the option for retrospective application. The Company is currently evaluating the applicable disclosures.

Note 3**.** Geographic and Segment Information

The Company's business is made up of two operating segments, semiconductor products and technology licensing. These segments represent management's view of the business for which separate financial information is available and evaluated regularly by the Chief Operating Decision Maker (CODM), which is the Company’s Chief Executive Officer.

In the semiconductor products segment, the Company designs, develops, manufactures and markets mixed-signal microcontrollers, development tools and analog, interface, mixed-signal, timing, wired and wireless connectivity devices, and memory products. Under the leadership of the CODM, the Company is structured and organized around standardized roles and responsibilities based on product groups and functional activities. The Company's product groups are responsible for product research, design and development. The Company's functional activities include sales, marketing, manufacturing, information technology, human resources, legal and finance. The Company's product groups have similar products, production processes, types of customers and methods for distribution. In addition, the tools and technologies used in the design and manufacture of the Company's products are shared among the various product groups. The Company's product group leaders, under the direction of the CODM, define the product roadmaps and team with sales personnel to achieve design wins and revenue and other performance targets. Product group leaders also interact with manufacturing and

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operational personnel who are responsible for the production, prioritization and planning of the Company's manufacturing capabilities to help ensure the efficiency of the Company's operations and fulfillment of customer requirements.

The technology licensing segment includes sales and licensing of the Company's intellectual property.

The CODM uses segment gross profit for evaluating each segment's performance and allocating resources. The Company does not allocate operating expenses, interest income, interest expense, other income or expense, or provision for or benefit from income taxes to these segments for internal reporting purposes, as the Company does not believe that allocating these expenses is beneficial in evaluating segment performance. Additionally, the Company does not allocate assets to segments for internal reporting purposes as it does not manage its segments by such metrics.

The information that is regularly provided to the Company's CODM includes net sales, cost of sales and gross profit for each segment. The following tables include net sales, cost of sales and gross profit for each segment (in millions):

			Three Months Ended September 30, 2025																		Six Months Ended September 30, 2025
			Semiconductor products						Technology licensing						Total						Semiconductor products						Technology licensing						Total
Net sales			$	1,108.0					$	32.4					$	1,140.4					$	2,150.5					$	65.4					$	2,215.9
Cost of sales			502.5						—						502.5						1,001.3						—						1,001.3
Gross profit			$	605.5					$	32.4					$	637.9					$	1,149.2					$	65.4					$	1,214.6
			Three Months Ended September 30, 2024																		Six Months Ended September 30, 2024
			Semiconductor products						Technology licensing						Total						Semiconductor products						Technology licensing						Total
Net sales			$	1,125.0					$	38.8					$	1,163.8					$	2,344.1					$	61.0					$	2,405.1
Cost of sales			495.3						—						495.3						999.7						—						999.7
Gross profit			$	629.7					$	38.8					$	668.5					$	1,344.4					$	61.0					$	1,405.4

Note 4. Net Sales

The following table represents the Company's net sales by product line (in millions):

									Three Months Ended September 30,												Six Months Ended September 30,
																					2025						2024						2025						2024
Mixed-signal Microcontrollers																					$	584.5					$	594.6					$	1,117.1					$	1,239.3
Analog																					321.5						292.1						637.7						622.7
Other																					234.4						277.1						461.1						543.1
Total net sales																					$	1,140.4					$	1,163.8					$	2,215.9					$	2,405.1

The product lines listed above are included entirely in the Company's semiconductor product segment with the exception of the other product line, which includes products from both the semiconductor product and technology licensing segments.

The following table represents the Company's net sales by customer type (in millions):

									Three Months Ended September 30,												Six Months Ended September 30,
																					2025						2024						2025						2024
Distributors																					$	515.9					$	508.1					$	1,022.9					$	1,092.5
Direct customers																					592.1						616.9						1,127.6						1,251.6
Licensees																					32.4						38.8						65.4						61.0
Total net sales																					$	1,140.4					$	1,163.8					$	2,215.9					$	2,405.1

Distributors are customers that buy products with the intention of reselling them. Distributors generally have a distributor agreement with the Company to govern the terms of the relationship. Direct customers are non-distributor customers, which generally do not have a master sales agreement with the Company. The Company's direct customers primarily consist of OEMs and, to a lesser extent, contract manufacturers. Licensees are customers of the Company's technology licensing segment, which include purchasers of intellectual property and customers that have licensing agreements to use the Company's SuperFlash® embedded flash technology. All of the customer types listed in the table

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above are included in the Company's semiconductor product segment with the exception of licensees, which is included in the technology licensing segment. All of the Company's net sales are recognized from contracts with customers.

The consideration received from customers is fixed, with the exception of consideration from certain distributors and customers under LTSAs. Certain of the Company's distributors are granted price concessions and return rights, which result in variable consideration. The amount of revenue recognized for sales to these certain distributors is adjusted for estimates of the price concessions and return rights that are expected to be claimed. These estimates are based on the recent history of price concessions and stock rotations, which are recorded as refund liabilities within accrued liabilities on the Company's condensed consolidated balance sheets.

The Company collects amounts in advance for certain of its contracts with customers. These amounts are deferred until control of the product or service is transferred to the customer at which time it is recognized as revenue. As of September 30, 2025, the Company had approximately $385.8 million of deferred revenue, of which $160.0 million is included within accrued liabilities and the remaining $225.8 million is included within other long-term liabilities on the Company's condensed consolidated balance sheet. As of March 31, 2025, the Company had approximately $597.9 million of deferred revenue, of which $213.4 million is included within accrued liabilities and the remaining $384.5 million is included within other long-term liabilities on the Company's condensed consolidated balance sheets. Deferred revenue represents amounts that have been invoiced in advance which are expected to be recognized as revenue in future periods. Approximately $98.6 million of deferred revenue recorded on the Company's consolidated balance sheets as of March 31, 2025 was recognized as revenue during the six months ended September 30, 2025. Approximately $129.9 million of deferred revenue recorded on the Company's consolidated balance sheets as of March 31, 2024 was recognized as revenue during the six months ended September 30, 2024.

Of the $385.8 million of deferred revenue as of September 30, 2025, $291.5 million is cash collected from customers under LTSAs, of which $88.8 million is included within accrued liabilities and $202.7 million is included within other long-term liabilities. Under these LTSAs, the Company receives an upfront deposit from the customer in exchange for assured supply over the contract period, which typically ranges from three years to five years. If the customer does not meet the minimum purchase commitments defined in the contract, the Company may retain all, or portions of, the deposit as revenue. If the Company fails to assure supply as defined in the contract, the deposit, or portions of it, will be returned to the customer. The remaining $94.3 million of deferred revenue as of September 30, 2025 is related to other cash payments received from customers in advance of the Company’s performance obligations being satisfied. Most of the $94.3 million will be recognized as net sales within the next 12 months. The amount of other firmly committed orders with performance obligations in excess of 12 months at the time of order is immaterial.

Note 5**.** Net Income (Loss) Per Common Share

The following table sets forth the computation of basic and diluted net (loss) income per common share (in millions, except per share amounts):

									Three Months Ended September 30,												Six Months Ended September 30,
																					2025						2024						2025						2024
Net income																					$	41.7					$	78.4					$	23.1					$	207.7
Dividends on Series A Preferred Stock																					(27.8)						—						(55.6)						—
Net income (loss) attributable to common stockholders																					13.9						78.4						(32.5)						207.7
Basic weighted average common shares outstanding																					540.0						536.7						539.6						536.7
Dilutive effect of RSUs																					4.5						4.5						—						4.8
Dilutive effect of 2015 Senior Convertible Debt																					—						0.2						—						0.2
Dilutive effect of 2017 Senior Convertible Debt																					0.5						0.6						—						0.7
Dilutive effect of Series A Preferred Stock																					—						—						—						—
Diluted weighted average common shares outstanding																					545.0						542.0						539.6						542.4
Basic net income (loss) per common share																					$	0.03					$	0.15					$	(0.06)					$	0.39
Diluted net income (loss) per common share																					$	0.03					$	0.14					$	(0.06)					$	0.38

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The Company computed net income (loss) attributable to common stockholders by reducing net income by the dividends on Series A Preferred Stock accumulated during the period. The Company computed basic net income (loss) per common share based on the net income (loss) attributable to common stockholders divided by the basic weighted average number of common shares outstanding during the period. The Company computed diluted net income (loss) per common share based on the net income (loss) attributable to common stockholders divided by the basic weighted average number of common shares outstanding plus potentially dilutive common shares outstanding during the period.

Potentially dilutive common shares from employee equity incentive plans are determined by applying the treasury stock method to the assumed vesting of outstanding RSUs. Potentially dilutive common shares from the Series A Preferred Stock are determined by applying the if-converted method on the outstanding Series A Preferred Stock. Prior to conversion of its Convertible Debt, the Company will include, in the diluted net income per common share calculation, the effect of the additional shares that may be issued when the Company's common stock price exceeds the conversion price using the if-converted method. The Company's Convertible Debt has no impact on diluted net income per common share unless the average price of the Company's common stock exceeds the conversion price because the Company is required to settle the principal amount of the Convertible Debt in cash upon conversion. For the three months ended September 30, 2025, the calculation of diluted net income per common share excluded 23.8 million common shares issuable upon the exchange of the Company's Series A Preferred Stock as the related impact would have been anti-dilutive. For the six months ended September 30, 2025, the calculation of diluted net loss per common share excluded 3.8 million common shares from employee equity incentive plans, 0.4 million common shares issuable upon the exchange of the Company's 2017 Senior Convertible Debt, and 25.4 million common shares issuable upon the exchange of the Company's Series A Preferred Stock as the related impact would have been anti-dilutive.

The following is the weighted average conversion price per share used in calculating the dilutive effect (see Note 6 for details on the Convertible Debt):

									Three Months Ended September 30,												Six Months Ended September 30,
																					2025						2024						2025						2024
2015 Senior Convertible Debt(1)																					$	—					$	28.50					$	—					$	28.58
2017 Senior Convertible Debt																					$	43.17					$	44.44					$	43.32					$	44.57
2020 Senior Convertible Debt(2)																					$	—					$	90.93					$	—					$	91.08
2024 Senior Convertible Debt																					$	121.81					$	121.84					$	121.82					$	121.84

(1) The weighted average conversion price per share for the 2015 Senior Convertible Debt was prior to the settlement of the outstanding principal amount in February 2025.

(2) The weighted average conversion price per share for the 2020 Senior Convertible Debt was prior to the settlement of the outstanding principal amount in November 2024.

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Note 6**.** Debt

Debt obligations included in the condensed consolidated balance sheets consisted of the following (in millions)(1):

			Coupon Interest Rate						Effective Interest Rate
									September 30,						March 31,
									2025						2025
Commercial Paper																		$	1,118.0					$	175.0
4.250% 2025 Notes			4.250%						4.6%									—						1,200.0
4.900% 2028 Notes			4.900%						5.1%									1,000.0						1,000.0
5.050% 2029 Notes			5.050%						5.2%									1,000.0						1,000.0
5.050% 2030 Notes			5.050%						5.2%									1,000.0						1,000.0
Total Senior Indebtedness																		4,118.0						4,375.0
2017 Senior Convertible Debt			1.625%						1.8%									38.0						38.0
2024 Senior Convertible Debt			0.750%						1.0%									1,250.0						1,250.0
Total Convertible Debt																		1,288.0						1,288.0
Gross long-term debt including current maturities																		5,406.0						5,663.0
Less: Debt discount(2)																		(12.7)						(13.1)
Less: Debt issuance costs(3)																		(17.4)						(19.5)
Net long-term debt including current maturities																		5,375.9						5,630.4
Less: Current maturities(4)																		—						—
Net long-term debt																		$	5,375.9					$	5,630.4

(1) The Company had no outstanding borrowings under the Revolving Credit Facility at September 30, 2025 and at March 31, 2025.

(2) The unamortized discount consists of the following (in millions):

															September 30,						March 31,
															2025						2025
Commercial Paper															$	(2.5)					$	(0.1)
4.250% 2025 Notes															—						(1.3)
4.900% 2028 Notes															(2.7)						(3.3)
5.050% 2029 Notes															(3.8)						(4.3)
5.050% 2030 Notes															(3.7)						(4.1)
Total unamortized discount															$	(12.7)					$	(13.1)

(3) Debt issuance costs consist of the following (in millions):

			September 30,						March 31,
			2025						2025
4.250% 2025 Notes			$	—					$	(0.2)
4.900% 2028 Notes			(1.4)						(1.7)
5.050% 2029 Notes			(1.6)						(1.8)
5.050% 2030 Notes			(1.6)						(1.7)
2017 Senior Convertible Debt			(0.1)						(0.1)
2024 Senior Convertible Debt			(12.7)						(14.0)
Total debt issuance costs			$	(17.4)					$	(19.5)

(4) As of September 30, 2025, the outstanding Commercial Paper which matures within the three months ending December 31, 2025, and the 2017 Senior Convertible Debt which is convertible, were excluded from current maturities as the Company has the intent and ability to utilize proceeds from its Revolving Credit Facility to refinance such notes and settle the principal portion of its Convertible Debt upon conversion. As of March 31, 2025, the outstanding Commercial Paper which matured within the three months ending June 30, 2025, and the 4.250% 2025 Notes which matured on

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September 1, 2025, were excluded from current maturities as the Company had the intent and ability to utilize proceeds from its Revolving Credit Facility to refinance such notes on a long-term basis.

Expected maturities relating to the Company’s debt obligations based on the contractual maturity dates as of September 30, 2025, are as follows (in millions):

Fiscal year ending March 31,						Amount
2026						$	1,118.0
2027						38.0
2028						1,000.0
2029						1,000.0
2030						1,000.0
Thereafter						1,250.0
Total						$	5,406.0

Ranking of Convertible Debt - Each series of Convertible Debt is an unsecured obligation which is subordinated in right of payment to the amounts outstanding under the Company's Senior Indebtedness. The Convertible Debt is subordinated to the Senior Indebtedness; ranks senior to the Company's indebtedness that is expressly subordinated in right of payment to it; ranks equal in right of payment to any of the Company's unsubordinated indebtedness that does not provide that it is senior to the Convertible Debt; ranks junior in right of payment to any of the Company's secured and unsecured unsubordinated indebtedness to the extent of the value of the assets securing such indebtedness; and is structurally subordinated to all indebtedness and other liabilities of the Company's subsidiaries.

Summary of Conversion Features - Each series of Convertible Debt is convertible, subject to certain conditions, into cash, shares of the Company's common stock or a combination thereof, at the Company's election, at specified conversion rates (see table below), adjusted for certain events including the declaration of cash dividends. Except during the three-month period immediately preceding the maturity date of the applicable series of Convertible Debt, each series of Convertible Debt is convertible only upon the occurrence of (i) such time as the closing price of the Company's common stock exceeds the applicable conversion price (see table below) by 130% for 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter, (ii) during the 5 business day period after any 10 consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of notes of a given series for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the applicable conversion rate on each such trading day, or (iii) upon the occurrence of certain corporate events specified in the indenture of such series of Convertible Debt. In addition, for each series, with the exception of the 2024 Senior Convertible Debt, if at the time of conversion the applicable price of the Company's common stock exceeds the applicable conversion price at such time, the applicable conversion rate will be increased by up to an additional maximum incremental shares rate, as determined pursuant to a formula specified in the indenture for the applicable series of Convertible Debt, and as adjusted for cash dividends paid since the issuance of such series of Convertible Debt. However, in no event will the applicable conversion rate exceed the applicable maximum conversion rate specified in the indenture for the applicable series of Convertible Debt (see table below).

The following table sets forth the applicable conversion rates adjusted for dividends declared since issuance of such series of Convertible Debt and the applicable incremental share factors and maximum conversion rates as adjusted for dividends paid since the applicable issuance date:

			Dividend adjusted rates as of September 30, 2025
			Conversion Rate						Approximate Conversion Price						Incremental Share Factor						Maximum Conversion Rate
2017 Senior Convertible Debt(1)			23.1616						$	43.17					11.5817						33.0053
2024 Senior Convertible Debt(1)			8.2094						$	121.81					—						10.4669

(1) As of September 30, 2025, the 2024 Senior Convertible Debt was not convertible. As of September 30, 2025, the holders of the 2017 Senior Convertible Debt have the right to convert their notes between October 1, 2025 and December 31, 2025 because the Company's common stock price has exceeded the applicable conversion price for such series by 130% for the specified period of time during the quarter ended September 30, 2025.

With the exception of the 2024 Senior Convertible Debt, which may be redeemed by the Company on or after June 5, 2027, the Company may not redeem any series of Convertible Debt prior to the relevant maturity date and no sinking fund is

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provided for any series of Convertible Debt. Under the terms of the applicable indenture, the Company may repurchase any series of Convertible Debt in the open market or through privately negotiated exchange offers. Upon the occurrence of a fundamental change, as defined in the applicable indenture of such series of Convertible Debt, holders of such series may require the Company to purchase all or a portion of their Convertible Debt for cash at a price equal to 100% of the principal amount plus any accrued and unpaid interest. Additionally, holders of the 2024 Senior Convertible Debt may require the Company to purchase all or a portion of their 2024 Senior Convertible Debt for cash at a price equal to 100% of the principal amount plus any accrued and unpaid interest if, prior to the close of business on the business day immediately preceding June 1, 2027, the last reported sale price of our common stock is less than the applicable conversion price of the 2024 Senior Convertible Debt.

Interest expense consists of the following (in millions):

									Three Months Ended September 30,												Six Months Ended September 30,
																					2025						2024						2025						2024
Debt issuance cost amortization																					$	0.6					$	0.9					$	1.3					$	1.8
Debt discount amortization																					5.3						11.5						6.7						28.1
Interest expense																					46.7						40.4						97.7						81.7
Total interest expense on Senior Indebtedness																					52.6						52.8						105.7						111.6
Debt issuance cost amortization																					0.7						1.4						1.4						2.5
Coupon interest expense																					2.5						2.7						5.0						3.8
Total interest expense on Convertible Debt																					3.2						4.1						6.4						6.3
Other interest expense																					0.5						2.2						1.6						3.0
Total interest expense																					$	56.3					$	59.1					$	113.7					$	120.9

The Company's debt settlement transactions consist of the following (in millions):

			Principal Amount Settled						Total Cash Consideration																																							Net Loss on Inducements and Settlements
September 2025*(1)*
4.250% 2025 Notes			$	1,200.0					$	1,200.0																																						$	—

(1) The Company used proceeds from the issuance of Commercial Paper and cash generated from operations to finance such settlement

Commercial Paper

In September 2023, the Company established a Commercial Paper program under which the Company may issue short-term unsecured promissory notes up to a maximum principal amount outstanding at any time of $2.75 billion with a maturity of up to 397 days from the date of issue. The Company's obligations with respect to the payment of the Commercial Paper are guaranteed by certain of its subsidiaries. The Commercial Paper will be sold at a discount from par or alternatively, will be sold at par and bear interest rates that will vary based on market conditions and the time of issuance. The Company's intention is to reduce the amounts that would otherwise be available to borrow under the Company's Revolving Credit Facility by the outstanding amount of Commercial Paper. As of September 30, 2025, the Company had $1.12 billion of Commercial Paper outstanding. The weighted-average interest rate of the Company's outstanding Commercial Paper was 4.47% as of September 30, 2025. Pursuant to the Credit Agreement, as amended and restated in March 2025, the maximum principal amount outstanding at any time under the Commercial Paper program is $2.25 billion.

Note 7**.** Fair Value of Financial Instruments

Fair value is an exit price, representing the amount that would be received to sell 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 liability. As a basis for considering such assumptions, the Company utilizes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1-Observable inputs such as quoted prices in active markets;

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Level 2-Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3-Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The carrying amount of cash equivalents, which include money market funds, approximates fair value because their maturity is less than three months. The amount of cash and cash equivalents held by the Company in the form of money-market funds as of March 31, 2025 was $491.1 million. The carrying amount of accounts receivable, accounts payable and accrued liabilities approximates fair value due to the short-term maturity of the amounts and are considered Level 2 in the fair value hierarchy.

The fair value of the Company's Commercial Paper is estimated using discounted cash flow analysis, based on the Company's current incremental borrowing rates for similar types of borrowing arrangements. The fair value of the Company's Commercial Paper approximates the carrying value excluding debt discounts and debt issuance costs and are considered Level 2 in the fair value hierarchy. The Company measures the fair value of its Convertible Debt and Senior Notes for disclosure purposes. These fair values are based on observable market prices for this debt, which is traded in less active markets and are therefore classified as a Level 2 fair value measurement.

The following table shows the carrying amounts and fair values of the Company's debt obligations (in millions):

			September 30, 2025												March 31, 2025
			Carrying Amount(1)						Fair Value						Carrying Amount(1)						Fair Value
Commercial Paper			$	1,115.5					$	1,118.0					$	174.9					$	175.0
4.250% 2025 Notes			—						—						1,198.5						1,196.9
4.900% 2028 Notes			995.9						1,014.5						995.0						1,002.5
5.050% 2029 Notes			994.6						1,021.1						993.9						1,005.8
5.050% 2030 Notes			994.7						1,021.2						994.2						996.9
2017 Senior Convertible Debt			37.9						67.2						37.9						57.7
2024 Senior Convertible Debt			1,237.3						1,210.6						1,236.0						1,173.4
Total			$	5,375.9					$	5,452.6					$	5,630.4					$	5,608.2

(1) The carrying amounts presented are net of debt discounts and debt issuance costs (see Note 6 for further information).

Note 8**.** Intangible Assets and Goodwill

Net amounts excluding fully amortized intangible assets, consist of the following (in millions):

						September 30, 2025
						Gross Amount						Accumulated Amortization						Net Amount
Core and developed technology						$	7,199.9					$	(5,172.1)					$	2,027.8
Customer-related						202.5						(159.0)						43.5
Software licenses						258.1						(159.9)						98.2
Total						$	7,660.5					$	(5,491.0)					$	2,169.5

						March 31, 2025
						Gross Amount						Accumulated Amortization						Net Amount
Core and developed technology						$	7,149.9					$	(4,981.6)					$	2,168.3
Customer-related						199.5						(152.8)						46.7
In-process research and development						50.8						—						50.8
Software licenses						259.3						(136.1)						123.2
Total						$	7,659.5					$	(5,270.5)					$	2,389.0

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The following is an expected amortization schedule for the intangible assets for the remainder of fiscal 2026 through fiscal 2030, absent any future acquisitions or impairment charges (in millions):

Fiscal Year Ending March 31,						Amortization Expense
2026						$	262.0
2027						$	424.6
2028						$	317.9
2029						$	243.2
2030						$	238.0

The Company amortizes intangible assets over their expected useful lives, which range between 1 and 15 years. Amortization expense attributed to intangible assets are assigned to cost of sales and operating expenses as follows (in millions):

									Three Months Ended September 30,												Six Months Ended September 30,
																					2025						2024						2025						2024
Amortization expense charged to cost of sales																					$	5.0					$	3.9					$	10.2					$	7.6
Amortization expense charged to operating expense																					128.7						142.5						255.1						284.5
Total amortization expense																					$	133.7					$	146.4					$	265.3					$	292.1

The Company recognized impairment charges of $0.3 million and $2.5 million, in the three and six months ended September 30, 2025, respectively. There were no impairment charges in the three and six months ended September 30, 2024.

Goodwill activity by segment was as follows (in millions):

			Semiconductor Products Reporting Unit						Technology Licensing Reporting Unit
Balance at March 31, 2025			$	6,665.6					$	19.2
Additions due to acquisition			10.7						—
Balance at September 30, 2025			$	6,676.3					$	19.2

At March 31, 2025, the Company applied a qualitative goodwill impairment test to its two reporting units, and concluded that goodwill was not impaired. Through September 30, 2025, the Company has never recorded a goodwill impairment charge.

Note 9**.** Other Financial Statement Details

Accounts Receivable

Accounts receivable consists of the following (in millions):

			September 30,						March 31,
			2025						2025
Trade accounts receivable			$	737.0					$	684.1
Other			14.8						11.5
Total accounts receivable, gross			751.8						695.6
Less: allowance for expected credit losses			5.6						5.9
Total accounts receivable, net			$	746.2					$	689.7

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Inventories

The components of inventories consist of the following (in millions):

			September 30,						March 31,
			2025						2025
Raw materials			$	140.4					$	174.8
Work in process			760.2						857.6
Finished goods			194.7						261.1
Total inventories			$	1,095.3					$	1,293.5

Property, Plant and Equipment

Property, plant and equipment consists of the following (in millions):

			September 30,						March 31,
			2025						2025
Land			$	99.6					$	84.8
Building and building improvements			710.8						705.9
Machinery and equipment			2,431.3						2,311.3
Projects in process			428.8						424.1
Total property, plant and equipment, gross			3,670.5						3,526.1
Less: accumulated depreciation and amortization			2,517.0						2,342.4
Total property, plant and equipment, net			$	1,153.5					$	1,183.7

Depreciation expense attributed to property, plant and equipment was $39.0 million and $78.5 million for the three and six months ended September 30, 2025, respectively, compared to $41.2 million and $84.2 million for the three and six months ended September 30, 2024, respectively.

The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amount of such assets may not be recoverable. For each of the three and six months ended September 30, 2025 and 2024, the Company’s evaluation of its property, plant and equipment did not result in any material impairments.

Accrued Liabilities

Accrued liabilities consists of the following (in millions):

			September 30,						March 31,
			2025						2025
Accrued compensation and benefits			$	117.0					$	108.1
Income taxes payable			—						99.1
Deferred revenue			160.0						213.4
Sales related reserves			349.0						329.7
Current portion of lease liabilities			36.8						35.7
Accrued expenses and other liabilities			211.0						208.5
Total accrued liabilities			$	873.8					$	994.5

Note 10**.** Commitments and Contingencies

Purchase Commitments

The Company's purchase commitments primarily consist of agreements for the purchase of goods and services including wafer purchase obligations with the Company's wafer foundries, and manufacturing supply capacity reservation commitments.

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Total purchase commitments as of September 30, 2025, are as follows (in millions):

Fiscal Year Ending March 31,						Purchase Commitments
2026						$	195.4
2027						80.3
2028						71.0
2029						16.7
2030						9.6
Thereafter						36.1
Total						$	409.1

Indemnification Contingencies

The Company's technology license agreements generally include an indemnification clause that indemnifies the licensee against liability and damages (including legal defense costs) arising from any claims of patent, copyright, trademark or trade secret infringement by the Company's proprietary technology. The terms of these indemnification provisions approximate the terms of the outgoing technology license agreements, which are typically perpetual unless terminated by either party for breach. The possible amount of future payments the Company could be required to make based on agreements that specify indemnification limits, if such indemnifications were required on all of these agreements, is approximately $197.0 million. There are some licensing agreements in place that do not specify indemnification limits. As of September 30, 2025, the Company had not recorded any liabilities related to these indemnification obligations and the Company believes that any amounts that it may be required to pay under these agreements in the future will not have a material adverse effect on its financial position, cash flows or results of operations.

Warranty Costs and Product Liabilities

The Company accrues for known product-related claims if a loss is probable and can be reasonably estimated. During the periods presented, there have been no material accruals or payments regarding product warranty or product liability. Historically, the Company has experienced a low rate of payments on product claims. Although the Company cannot predict the likelihood or amount of any future claims, the Company does not believe these claims will have a material adverse effect on its financial condition, results of operations or liquidity.

Legal Matters

In the ordinary course of the Company's business, it is exposed to various legal actions as a result of contracts, product liability, customer claims, pricing or royalty disputes with customers and licensees, governmental investigations and other matters. The Company is involved in a limited number of these legal actions, both as plaintiff and defendant, with respect to the foregoing types of matters. Consequently, the Company could incur uninsured liability in any of these legal actions. The Company also periodically receives notifications from various third parties alleging infringement of patents or other intellectual property rights, or from customers requesting reimbursement for various costs. With respect to pending legal actions to which the Company is a party and other claims, although the outcomes are generally not determinable, the Company believes that the ultimate resolution of these matters (other than certain tax matters in the U.S., Germany, and Malaysia as described in Note 11 below) will not have a material adverse effect on its financial position, cash flows or results of operations. Litigation, governmental investigations and disputes relating to the semiconductor industry are not uncommon, and the Company is, from time to time, subject to such litigation, governmental investigations and disputes. As a result, no assurances can be given with respect to the extent or outcome of any such litigation, governmental investigations or disputes in the future.

The Company accrues for claims and contingencies when losses become probable and reasonably estimable. As of the end of each applicable reporting period, the Company reviews each of its matters and, where it is probable that a liability has been or will be incurred, the Company accrues for all probable and reasonably estimable losses. Where the Company can reasonably estimate a range of losses it may incur regarding such a matter, the Company records an accrual for the amount within the range that constitutes its best estimate. If the Company can reasonably estimate a range but no amount within the range appears to be a better estimate than any other, the Company uses the amount that is the low end of such range. As of September 30, 2025, the Company's estimate of the aggregate potential liability for legal matters that is possible but not probable is approximately $25.0 million in excess of amounts accrued.

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Note 11. Income Taxes

The Company accounts for income taxes in accordance with ASC 740. The provision for income taxes is attributable to U.S. federal, state, and foreign income taxes. The Company’s tax benefit for the six months ended September 30, 2025 resulted in a negative effective tax rate of 44.4% and is based on an estimated annual effective tax rate including the tax effect of items required to be recorded discretely in the interim periods in which those items occur. A comparison of the Company’s effective tax rates for the six months ended September 30, 2025 and September 30, 2024 is not meaningful due to changes in the amount of pre-tax income earned, changes in the mix of jurisdictions in which income is earned, and the impact of discrete items relative to the amount of income earned.

The Company's effective tax rate is different than the statutory rates in the U.S. due to foreign income taxed at different rates than the U.S., changes in uncertain tax benefit positions, changes to valuation allowances, generation of tax credits, and the impact of Global Intangible Low Tax Income (GILTI) in the U.S. In addition, the Company has numerous tax holidays it receives related to its Thailand manufacturing operations based on its investment in property, plant and equipment in Thailand. The Company's tax holiday periods in Thailand expire at various times in the future, however, the Company actively seeks to obtain new tax holidays. The material components of foreign income taxed at a rate lower than the U.S. are earnings accrued in Thailand, Malta, and Ireland.

The following table summarizes the activity related to the Company's gross unrecognized tax benefits for the six months ended September 30, 2025 and the year ended March 31, 2025 (in millions):

			September 30,						March 31,
			2025						2025
Beginning gross unrecognized tax benefit			$	821.2					$	792.4
Decreases related to settlements with tax authorities			(50.4)						(0.7)
Decreases related to statute of limitation expirations			(5.1)						(6.9)
Increases related to current year tax positions			8.8						27.1
Increases (decreases) related to prior year tax positions			(83.2)						9.3
Ending gross unrecognized tax benefits			$	691.3					$	821.2

As of September 30, 2025 and March 31, 2025, the Company had accrued interest and penalties related to tax contingencies of $103.2 million and $135.8 million, respectively, included within long-term income tax payable on the consolidated balance sheets. During the six months ended September 30, 2025, the Company released previously accrued interest and penalties of $32.6 million, compared to the charges in interest and penalties to operations of $31.2 million in the fiscal year ended March 31, 2025.

The Company is currently under income tax examination in various tax jurisdictions in which it operates. The years under examination range from fiscal 2007 through fiscal 2024. In some jurisdictions, the Company has received tax assessments in excess of established reserves. The Company is contesting these tax assessments, and will continue to do so, including pursuing all available remedies such as appeals and litigation, if necessary. During fiscal 2026, additional assessments were received for these issues and the Company’s position remains unchanged.

The total amount of gross unrecognized tax benefits was $691.3 million and $821.2 million as of September 30, 2025, and March 31, 2025, respectively, of which $613.5 million and $706.4 million is estimated to impact the Company's effective tax rate, if recognized. Unrecognized tax benefits may change in the next 12 months due to expiration of statutes of limitation, changes in the Company’s judgment about the level of uncertainty arising from new information, status of tax examinations, tax litigation, and legislative changes. The Company is unable to reasonably estimate the change in the unrecognized tax benefits in the next 12 months. Positions that may be resolved include various U.S. and non-U.S. matters.

The Company reviews its unrecognized tax positions at each interim period. In the quarter ending September 30, 2025, due to settlements reached with tax authorities, the Company determined that certain unrecognized tax positions should be remeasured, including the indirect tax effects, penalties, and interest associated with these unrecognized tax positions. The effect of this change in estimate was to record an income tax benefit of $24.4 million, which increased basic net income per common share by $0.05 for each of the three and six months ended September 30, 2025, and increased diluted net income per common share by $0.04 and $0.05 for the three and six months ended September 30, 2025, respectively, and which are a component of income tax provision from continuing operations.

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The Company files U.S. federal, U.S. state, and foreign income tax returns. For U.S. federal, and in general for U.S. state tax returns, the fiscal 2007 and later tax years remain open for examination by tax authorities. For foreign tax returns, the Company is generally no longer subject to income tax examinations for years prior to fiscal 2007.

In September 2021, the Company received a Statutory Notice of Deficiency (2007 to 2012 Notice) from the United States Internal Revenue Service (IRS) for fiscal 2007 through fiscal 2012. The disputed amounts largely relate to transfer pricing matters. In December 2021, the Company filed a petition in the U.S. Tax Court challenging the 2007 to 2012 Notice. In September 2023, the Company received a Revenue Agent Report (RAR) from the IRS for fiscal 2013 and fiscal 2016. In October 2023, the Company received a Statutory Notice of Deficiency (2014 to 2015 Notice) from the IRS for fiscal 2014 and fiscal 2015. The disputed amounts for fiscal 2013 to fiscal 2016 largely relate to transfer pricing matters. In December 2023, the Company filed a petition in the U.S. Tax Court challenging the 2014 to 2015 Notice. In September 2025, the Company reached a settlement with the IRS for fiscal years 2007 through 2015.

In May 2023, the Company received a proposed income adjustment from the Malaysian Inland Revenue Board (IRB) for fiscal 2020. In December 2023, the Company received a Notice of Assessment from the IRB asserting the same proposed income adjustment. In March 2025, the Company entered into a Consent Judgment before the High Court, agreeing that the dispute will be heard before the Special Commissioners of Income Tax (SCIT). It was also agreed that the payment on the taxes assessed is stayed and the IRB will pause all enforcement and proceedings against the collection of the taxes assessed until the appeal before the SCIT is concluded. If the adjustment is upheld by the highest court that has jurisdiction over this matter in Malaysia, it could result in income taxes and penalties up to $410.0 million. The disputed amounts largely relate to the characterization of certain assets. The timing of adjudicating this matter is uncertain but could commence in the next 12 months.

In January 2025, the Company received several assessments from the German Tax Authorities (GTA) regarding the German extraterritorial taxation of royalty payments between nonresidents (referred to as offshore receipts in respect of intangible property or ORIP) and intellectual property transfers by nonresidents (referred to as extraterritorial capital gains taxation or ETT). If the assessment is upheld, it could result in income taxes and penalties up to $92.0 million. The timing of adjudicating this matter is uncertain but could occur in the next 12 months.

The Company firmly believes that the IRB and GTA assessments are without merit and plans to pursue all available administrative and judicial remedies necessary to resolve these matters. The Company intends to vigorously defend its positions and the Company is confident in its ability to prevail on the merits. The Company regularly assesses the likelihood of adverse outcomes resulting from examinations such as these to determine the adequacy of the Company's tax reserves. The ultimate outcome of disputes of this nature is uncertain, and if the IRB or GTA were to prevail on their assertions, the assessed tax, penalties, and deficiency interest could have a material adverse impact on the Company's financial position, results of operations or cash flows.

Note 12. Share-Based Compensation

The following table presents the details of the Company's share-based compensation expense (in millions):

									Three Months Ended September 30,												Six Months Ended September 30,
																					2025						2024						2025						2024
Cost of sales(1)																					$	8.3					$	4.3					$	16.0					$	10.9
Research and development																					33.2						26.9						62.3						50.2
Selling, general and administrative																					20.1						15.1						36.2						29.2
Pre-tax effect of share-based compensation																					61.6						46.3						114.5						90.3
Income tax benefit																					12.8						9.7						23.7						18.9
Net income effect of share-based compensation																					$	48.8					$	36.6					$	90.8					$	71.4

(1) During the three and six months ended September 30, 2025, $5.9 million and $9.5 million, respectively, of share-based compensation expense was capitalized to inventory and $8.3 million and $16.0 million, respectively, of previously capitalized share-based compensation expense in inventory was sold. During the three and six months ended September 30, 2024, $5.0 million and $10.0 million, respectively, of share-based compensation expense was capitalized to inventory and $4.3 million and $10.9 million, respectively, of previously capitalized share-based compensation expense in inventory was sold.

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Note 13**.** Stockholders' Equity

Changes in Share Balances

The following table shows the changes in each class of shares (in millions):

			Series A Preferred Stock						Common Stock						Treasury Stock
Balance at March 31, 2024			—						577.8						41.1
Repurchase of common stock			—						—						0.8
Common stock issued under employee equity incentive plans			—						0.8						—
Common stock withheld for tax withholdings on employee equity awards			—						(0.2)						—
Treasury stock used for new issuances			—						(0.6)						(0.6)
Balance at June 30, 2024			—						577.8						41.3
Repurchase of common stock			—						—						0.2
Common stock issued under employee equity incentive plans			—						0.9						—
Common stock withheld for tax withholdings on employee equity awards			—						(0.2)						—
Treasury stock used for new issuances			—						(0.7)						(0.7)
Balance at September 30, 2024			—						577.8						40.8
Balance at March 31, 2025			1.5						578.0						39.3
Common stock issued for acquisition			—						0.4						—
Common stock issued under employee equity incentive plans			—						0.7						—
Common stock withheld for tax withholdings on employee equity awards			—						(0.1)						—
Treasury stock used for new issuances			—						(0.6)						(0.6)
Balance at June 30, 2025			1.5						578.4						38.7
Common stock issued under employee equity incentive plans			—						0.9						—
Common stock withheld for tax withholdings on employee equity awards			—						(0.2)						—
Treasury stock used for new issuances			—						(0.7)						(0.7)
Balance at September 30, 2025			1.5						578.4						38.0

Treasury Stock

In November 2021, the Company's Board of Directors approved a stock repurchase program to repurchase up to $4.00 billion of the Company's common stock in the open market or in privately negotiated transactions. There is no expiration date associated with the repurchase program. There were no repurchases of common stock in the three and six months ended September 30, 2025. As of September 30, 2025, approximately $1.56 billion remained available for repurchases under the program. Shares repurchased are recorded as treasury shares and are used to fund share issuance requirements under the Company's equity incentive plans. As of September 30, 2025, the Company had approximately 38.0 million treasury shares.

Series A Mandatory Convertible Preferred Stock

In March 2025, the Company issued 29.7 million Depositary Shares, representing approximately 1.5 million shares of its Series A Preferred Stock. The Series A Preferred Stock has a $1,000.00 per share liquidation preference and a $0.001 per share par value. As a result of the transaction, the Company received cash proceeds of $1.45 billion, net of underwriting fees and other issuance costs.

Dividends are cumulative at an annual rate of 7.50% on the liquidation preference of $1,000.00 per share of Series A Preferred Stock and may be paid in cash, shares of the Company's common stock or a combination of cash and shares of common stock. Dividends that are declared will be payable on the 15th of March, June, September and December to holders of record on the 1st of each month of the relevant dividend payment date. Dividends are recorded as a reduction to retained earnings and are reflected in accrued liabilities within the condensed consolidated balance sheets until paid. A quarterly cash dividend of $18.750 per share of Series A Preferred Stock was paid to the holders of Series A Preferred Stock on September 15, 2025 in the aggregate amount of $27.8 million. Dividends paid on Series A Preferred Stock in the six months ended September 30, 2025 were an aggregate of $52.9 million. A quarterly cash dividend of $18.750 per share of Series A

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Preferred Stock was declared on November 6, 2025 and will be paid on December 15, 2025 to the holders of Series A Preferred Stock of record as of December 1, 2025.

The following table provides the conversion rate per share of our Series A Preferred Stock, subject to certain anti-dilution adjustments:

Applicable Market Value of Common Stock						Conversion Rate per share of Series A Preferred Stock
Greater than $62.4766						16.0060 shares of common stock
Equal to or less than $62.4766 but greater than or equal to $50.9996						Between 16.0060 and 19.6080 shares of common stock, determined by dividing $1,000 by the applicable market value
Less than $50.9996						19.6080 shares of common stock

Unless earlier converted, each share of Series A Preferred Stock will automatically convert on March 15, 2028, into between 16.0060 shares and 19.6080 shares of the Company's common stock, depending on the applicable market value of the common stock and subject to certain anti-dilution adjustments described in the certificate of designations governing the Series A Preferred Stock (Certificate of Designations). The applicable market value of the Company's common stock will be determined based on the average volume-weighted average price per share of the common stock over the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately prior to March 15, 2028.

If a fundamental change, as defined in the Certificate of Designations, occurs on or prior to March 15, 2028, then holders of the Series A Preferred Stock will be entitled to convert all or any portion of their shares into shares of the Company's common stock at the fundamental change conversion rate, as defined in the Certificate of Designations, for a specified period of time and also to receive an amount to compensate such holders for unpaid accumulated dividends and any remaining future scheduled dividend payments. Other than during a fundamental change conversion period, at any time prior to March 15, 2028, holders of Series A Preferred Stock may elect to convert all or any portion of their shares at a conversion rate of 16.0060 shares of common stock per share of Series A Preferred Stock, subject to certain anti-dilution and other adjustments as described in the Certificate of Designations.

In connection with the issuance of the 29.7 million Depositary Shares, representing approximately 1.5 million shares of its Series A Preferred Stock, the Company entered into capped call option transactions with several financial institutions at a cost of $55.1 million. Upon conversion of the Series A Preferred Stock, the Company may exercise the capped call options subject to a cap price of $71.40 per share, subject to certain adjustments under the terms of the capped call options, which are generally expected to reduce the potential dilution to the Company's common stock upon conversion of the Series A Preferred Stock and/or offset any cash payments the Company is required to make. As these transactions meet certain accounting criteria, the capped call options are recorded as a reduction of stockholders' equity and are not accounted for as derivatives.

Common Stock Dividends

A quarterly cash dividend of $0.455 per share of common stock was paid on September 5, 2025 in the aggregate amount of $245.8 million. A quarterly cash dividend of $0.455 per share of common stock was declared on November 6, 2025 and will be paid on December 9, 2025 to stockholders of record as of November 24, 2025. The Company expects the December 2025 payment of its quarterly cash dividend on its common stock to be approximately $246.1 million.

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