10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 29, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission File Number: 001-35451

MACOM Technology Solutions Holdings, Inc.

(Exact name of registrant as specified in its charter) 

Delaware	27-0306875
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

100 Chelmsford Street

Lowell, MA 01851

(Address of principal executive offices and zip code)

(978) 656-2500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, par value $0.001 per share	MTSI	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of January 29, 2024, there were 72,067,141 shares of the registrant’s common stock outstanding.

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

FORM 10-Q

TABLE OF CONTENTS

			Page No.
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)		1
		Condensed Consolidated Balance Sheets	1
		Condensed Consolidated Statements of Operations	2
		Condensed Consolidated Statements of Comprehensive Income	3
		Condensed Consolidated Statements of Stockholders’ Equity	4
		Condensed Consolidated Statements of Cash Flows	5
		Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		27
Item 4.	Controls and Procedures		27
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings		29
Item 1A.	Risk Factors		29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		29
Item 5.	Other Information		29
Item 6.	Exhibits		30
Signatures			31

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

	December 29, 2023		September 29, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	163,586	$	173,952
Short-term investments	299,705		340,574
Accounts receivable, net	101,075		91,253
Inventories	159,501		136,300
Prepaid and other current assets	21,084		19,114
Total current assets	744,951		761,193
Property and equipment, net	184,278		149,496
Goodwill	322,489		323,398
Intangible assets, net	119,527		66,994
Deferred income taxes	217,463		218,107
Other long-term assets	62,094		34,056
Total assets	$	1,650,802	$	1,553,244
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of finance lease obligations	$	1,052	$	1,162
Accounts payable	27,137		24,966
Accrued liabilities	74,680		57,397
Total current liabilities	102,869		83,525
Finance lease obligations, less current portion	31,624		31,776
Financing obligation	9,232		9,307
Long-term debt	447,421		447,134
Other long-term liabilities	35,565		33,902
Total liabilities	626,711		605,644
Commitments and contingencies (see Note 12)
Stockholders’ equity:
Common stock	72		71
Treasury stock, at cost	(330)		(330)
Accumulated other comprehensive loss	(396)		(3,635)
Additional paid-in capital	1,274,928		1,214,203
Accumulated deficit	(250,183)		(262,709)
Total stockholders’ equity	1,024,091		947,600
Total liabilities and stockholders' equity	$	1,650,802	$	1,553,244

See notes to condensed consolidated financial statements.

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MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

	Three Months Ended
	December 29, 2023		December 30, 2022
Revenue	$	157,148	$	180,104
Cost of revenue	69,838		69,749
Gross profit	87,310		110,355
Operating expenses:
Research and development	39,413		38,832
Selling, general and administrative	36,887		32,940
Total operating expenses	76,300		71,772
Income from operations	11,010		38,583
Other income (expense):
Interest income	5,556		3,684
Interest expense	(1,290)		(3,082)
Other expense, net	—		(55)
Total other income	4,266		547
Income before income taxes	15,276		39,130
Income tax expense	2,750		9,611
Net income	$	12,526	$	29,519
Net income per share:
Income per share - Basic	$	0.18	$	0.42
Income per share - Diluted	$	0.17	$	0.41
Weighted average shares used:
Basic	71,425		70,481
Diluted	72,286		71,374

See notes to condensed consolidated financial statements.

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MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, in thousands)

	Three Months Ended
	December 29, 2023		December 30, 2022
Net income	$	12,526	$	29,519
Unrealized gain on short term investments, net of tax	1,295		2,547
Foreign currency translation gain, net of tax	1,944		737
Other comprehensive income, net of tax	3,239		3,284
Total comprehensive income	$	15,765	$	32,803

See notes to condensed consolidated financial statements.

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MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands)

	Three Months Ended December 29, 2023
							Accumulated Other Comprehensive (Loss) Income		Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Common Stock			Treasury Stock
	Shares	Amount		Shares	Amount
Balance as of September 29, 2023	71,013	$	71	(23)	$	(330)	$	(3,635)	$	1,214,203	$	(262,709)	$	947,600
Stock option exercises	5	—		—	—		—		80		—		80
Vesting of restricted common stock and units	459	—		—	—		—		—		—		—
Issuance of common stock pursuant to employee stock purchase plan	59	—		—	—		—		2,769		—		2,769
Shares repurchased for tax withholdings on restricted stock awards	(160)	—		—	—		—		(11,552)		—		(11,552)
Share-based compensation	—	—		—	—		—		8,657		—		8,657
Issuance of common stock as consideration for acquisition	712	1		—	—		—		60,771		—		60,772
Other comprehensive income, net of tax	—	—		—	—		3,239		—		—		3,239
Net income	—	—		—	—		—		—		12,526		12,526
Balance as of December 29, 2023	72,088	$	72	(23)	$	(330)	$	(396)	$	1,274,928	$	(250,183)	$	1,024,091

See notes to condensed consolidated financial statements.

	Three Months Ended December 30, 2022
							Accumulated Other Comprehensive (Loss) Income		Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Common Stock			Treasury Stock
	Shares	Amount		Shares	Amount
Balance as of September 30, 2022	70,022	$	70	(23)	$	(330)	$	(5,851)	$	1,203,145	$	(354,286)	$	842,748
Vesting of restricted common stock and units	1,126	1		—	—		—		—		—		1
Issuance of common stock pursuant to employee stock purchase plan	52	—		—	—		—		2,320		—		2,320
Shares repurchased for tax withholdings on equity awards	(443)	—		—	—		—		(26,375)		—		(26,375)
Share-based compensation	—	—		—	—		—		11,047		—		11,047
Other comprehensive income, net of tax	—	—		—	—		3,284		—		—		3,284
Net income	—	—		—	—		—		—		29,519		29,519
Balance as of December 30, 2022	70,757	$	71	(23)	$	(330)	$	(2,567)	$	1,190,137	$	(324,767)	$	862,544

See notes to condensed consolidated financial statements.

4

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	Three Months Ended
	December 29, 2023		December 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	12,526	$	29,519
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and intangibles amortization	14,289		12,855
Share-based compensation	8,657		11,047
Deferred income taxes	294		9,067
Other adjustments, net	(1,755)		(381)
Change in operating assets and liabilities:
Accounts receivable	(12,180)		(10,489)
Inventories	1,555		(6,375)
Prepaid expenses and other assets	(510)		(556)
Accounts payable	2,122		3,689
Accrued and other liabilities	6,612		(10,349)
Income taxes	1,489		246
Net cash provided by operating activities	33,099		38,273
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of a business	(75,000)		—
Purchases of property and equipment	(4,652)		(9,616)
Proceeds from sales and maturities of short-term investments	100,265		146,966
Purchases of short-term investments	(55,387)		(145,300)
Net cash used in investing activities	(34,774)		(7,950)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on finance leases and other	(349)		(278)
Proceeds from stock option exercises and employee stock purchases	2,848		2,320
Repurchase of common stock - tax withholdings on equity awards	(11,552)		(26,375)
Net cash used in financing activities	(9,053)		(24,333)
Foreign currency effect on cash	362		213
NET CHANGE IN CASH AND CASH EQUIVALENTS	(10,366)		6,203
CASH AND CASH EQUIVALENTS — Beginning of period	173,952		119,952
CASH AND CASH EQUIVALENTS — End of period	$	163,586	$	126,155
Supplemental disclosure of non-cash activities
Issuance of common stock in connection with the RF Business Acquisition (See Note 3 - Acquisitions)	$	60,772	$	—

See notes to condensed consolidated financial statements.

5

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unaudited Interim Financial Information—The accompanying unaudited, condensed consolidated financial statements have been prepared according to the rules and regulations of the United States (the “U.S.”) Securities and Exchange Commission (the “SEC”) and, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the condensed consolidated balance sheets, condensed consolidated statements of operations, comprehensive income, stockholders' equity and cash flows of MACOM Technology Solutions Holdings, Inc. (“MACOM,” the “Company,” “us,” “we” or “our”) for the periods presented. We prepare our interim financial information using the same accounting principles we use for our annual audited consolidated financial statements. Certain information and note disclosures normally included in the annual audited consolidated financial statements have been condensed or omitted in accordance with prescribed SEC rules. We believe that the disclosures made in our condensed consolidated financial statements and the accompanying notes are adequate to make the information presented not misleading.

The condensed consolidated balance sheet as of September 29, 2023 is as reported in our audited consolidated financial statements as of that date. Our accounting policies are described in the notes to our September 29, 2023 consolidated financial statements, which were included in our Annual Report on Form 10-K for our fiscal year ended September 29, 2023 filed with the SEC on November 13, 2023 (the “2023 Annual Report on Form 10-K”). We recommend that the financial statements included in this Quarterly Report on Form 10-Q be read in conjunction with the consolidated financial statements and notes included in our 2023 Annual Report on Form 10-K.

Principles of Consolidation, Basis of Presentation and Reclassification—The accompanying condensed consolidated financial statements include our accounts and the accounts of our majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the condensed consolidated financial statements, Interest income has been reclassified to conform to the current year presentation.

We have a 52- or 53-week fiscal year ending on the Friday closest to the last day of September. Fiscal years 2024 and 2023 each include 52 weeks. To offset the effect of holidays, for fiscal years in which there are 53 weeks, we include the extra week arising in such fiscal years in the first fiscal quarter.

Use of Estimates—The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities during the reporting periods, the reported amounts of revenue and expenses during the reporting periods and the disclosure of contingent assets and liabilities at the date of the financial statements. On an ongoing basis, we base estimates and assumptions on historical experience, currently available information and various other factors that management believes to be reasonable under the circumstances. Actual results may differ materially from these estimates and assumptions. The accounting policies which our management believes involve the most significant application of judgment or involve complex estimation, are inventories and associated reserves; revenue reserves; business combinations; goodwill and intangible asset valuation; share-based compensation valuations and income taxes.

Recent Accounting Pronouncements—Our Recent Accounting Pronouncements are described in our 2023 Annual Report on Form 10-K.

Pronouncements for Adoption in Subsequent Periods

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures, which improves disclosures about a public entity’s reportable segments and addresses requests from investors and other allocators of capital for additional, more detail information about a reportable segment’s expenses. The amendments in this update improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. This ASU should be applied on a retrospective basis. The amendments in this update are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the future effect the adoption of this ASU will have on our consolidated financial statements and related disclosures.

6

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which require greater disaggregation of income tax disclosures. The amendments in this update improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. Other amendments in this update improve the effectiveness and comparability of disclosures by (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) and (2) removing disclosures that no longer are considered cost beneficial or relevant. This ASU should be applied on a prospective basis, with retrospective application permitted. The guidance in this update is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the potential effect of the adoption of this ASU will have on our consolidated financial statements and related disclosures.

2. REVENUE

Disaggregation of Revenue

We disaggregate revenue from contracts with customers by markets and geography, as we believe it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

The following tables present our revenue disaggregated by markets and geography (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Revenue by Market:
Industrial & Defense	$	76,998	$	77,169
Data Center	49,512		41,485
Telecom	30,638		61,450
Total	$	157,148	$	180,104

	Three Months Ended
	December 29, 2023		December 30, 2022
Revenue by Geographic Region:
United States	$	69,645	$	88,589
China	36,348		41,156
Asia Pacific, excluding China (1)	14,008		21,534
Cayman Islands	18,600		11,092
Other Countries (2)	18,547		17,733
Total	$	157,148	$	180,104

(1)Asia Pacific primarily represents Australia, Japan, Malaysia, Singapore, South Korea, Taiwan and Thailand.

(2)No country or region represented greater than 10% of our total revenue as of the dates presented, other than the United States, China, Asia Pacific region and Cayman Islands as presented above.

Revenue by geographic region is aggregated by customer billing address.

Contract Balances

We record contract assets or contract liabilities depending on the timing of revenue recognition, billings and cash collections on a contract-by-contract basis. Our contract liabilities primarily relate to deferred revenue, including advanced consideration received from customers for contracts prior to the transfer of control to the customer, and, therefore, revenue is subsequently recognized upon delivery of products and services.

The following table presents the changes in contract liabilities during the three months ended December 29, 2023 (in thousands, except percentage):

	December 29, 2023		September 29, 2023		$ Change		% Change
Contract liabilities	$	5,604	$	2,762	$	2,842	103	%

During the three months ended December 29, 2023, we recognized sales of $2.4 million that were included in the contract liabilities balance as of the beginning of the period. The increase in contract liabilities during the three months ended December 29, 2023 was primarily related to invoicing prior to when our customers obtain control of such products and or

7

services.

3. ACQUISITIONS

RF Business of Wolfspeed, Inc.— On December 2, 2023, we completed the acquisition of certain assets and specified liabilities of the radio frequency (“RF”) business of Wolfspeed, Inc. (“Wolfspeed”) (the “RF Business,”), which was accounted for as a business combination (the “RF Business Acquisition”). The RF Business includes a portfolio of gallium nitride (“GaN”) on Silicon Carbide (“SiC”) products used in high-performance RF and microwave applications. In connection with the RF Business Acquisition, we expect to assume control of a wafer fabrication facility in Research Triangle Park, North Carolina (the “RTP Fab”) approximately two years following the closing of the RF Business Acquisition (the “RTP Fab Transfer”). Prior to the RTP Fab Transfer, Wolfspeed will continue to operate the facility and supply wafer product and other fabrication services to us pursuant to various agreements entered into between the parties concurrently with the closing of the RF Business Acquisition.

The purchase price for the RF Business Acquisition consisted of $75.0 million payable in cash, subject to customary purchase price adjustments and 711,528 shares of our common stock, with a fair value of $60.8 million, which were issued at the closing of the RF Business Acquisition. The shares of our common stock issued in connection with the RF Business Acquisition are subject to restrictions on the sale of shares until transfer of the RTP Fab to the Company is complete. In addition, if the RTP Fab has not transferred by the fourth anniversary of the closing date of the RF Business Acquisition, Wolfspeed will forfeit 25% of the share consideration. We funded the cash purchase price for the RF Business Acquisition through cash-on-hand.

During the three months ended December 29, 2023, we incurred acquisition-related transaction costs of approximately $7.1 million, which are included in selling, general and administrative expense. We did not incur acquisition-related transaction costs associated with the RF Business Acquisition during the three months ended December 30, 2022.

The following table summarizes the preliminary estimate of the purchase price (in thousands, except shares and closing share price amount):

			At Acquisition Date as Reported December 29, 2023
Cash purchase consideration			$	75,000
Number of shares of MACOM common stock issued at closing	711,528
MACOM closing stock price on acquisition date	$	85.41
Equity purchase consideration			60,772
Total purchase consideration			$	135,772

The purchase price for the RF Business Acquisition has been allocated based on preliminary estimates of fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At Acquisition Date as Reported December 29, 2023
Current assets	$	160
Inventory	23,574
Property and equipment	35,415
Intangible assets	60,000
Prepayment for net assets associated with the RTP Fab Transfer	19,450
Other non-current assets	6,735
Total assets acquired	145,334
Current liabilities	6,474
Long-term liabilities	3,088
Total liabilities assumed	9,562
Purchase Price	$	135,772

8

Intangible assets consist of technology, customer relationships, a favorable contract and backlog with fair values of $22.0 million, $21.5 million, $15.0 million and $1.5 million, respectively, and useful lives of 4.8 years, 8.8 years, 2.0 years and 0.8 years, respectively. We used variations of income approaches with estimates and assumptions developed by us to determine the fair values of technology, customer relationships, the favorable contract and backlog. We valued technology by using the relief-from-royalty method, customer relationships and backlog by using the multi-period excess earnings method, and the favorable contract by using the discounted cash flow method. The process for estimating the fair values of identifiable intangible assets requires the use of significant estimates and assumptions, including revenue growth rates, royalty rates, operating margin, and discount rates. We used the cost and market approaches to determine the fair value of our property and equipment. We amortize definite-lived assets based on the pattern over which we expect to receive the economic benefit from these assets.

The prepayment of $19.5 million for the net assets associated with the RTP Fab Transfer, classified in Other long-term assets in our condensed consolidated balance sheet, relates to the estimated future fair value of property and equipment, inventory and liabilities that we will assume control of at the time of the RTP Fab Transfer. The cost and market approaches were used in determining the fair value of $14.1 million for property and equipment at the RTP Fab Transfer date.

The determination and allocation of purchase price consideration is based on preliminary estimates of fair value; such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). As of December 29, 2023, the purchase price allocation for the RF Business remains open as we gather additional information regarding the fair value of consideration transferred, the assets acquired and the liabilities assumed, primarily in relation to the valuation of intangibles, inventory, property and equipment, leases, the prepayment for the assets and liabilities to be conveyed with the RTP Fab Transfer and contingencies.

The RF Business has been included in our consolidated financial statements since the date of acquisition. During the fiscal quarter ended December 29, 2023, the RF Business contributed approximately $6.2 million of our total revenue. The net income associated with the RF Business did not materially impact our consolidated net income for the quarter ended December 29, 2023.

Consolidated estimated pro forma unaudited revenue for the fiscal quarters ended December 29, 2023 and December 30, 2022, as if the RF Business Acquisition had occurred on October 1, 2022, is $184.0 million and $222.4 million, respectively. Consolidated pro forma net loss for the fiscal quarters ended December 29, 2023 and December 30, 2022, as if the RF Business Acquisition had occurred on October 1, 2022, is $13.9 million and $31.3 million, respectively. Pro forma revenue and net loss was prepared for comparative purposes only and is not indicative of what would have occurred had the acquisition actually occurred on October 1, 2022, or of the results that may occur in the future. Pro forma net loss includes business combination accounting effects from the RF Business Acquisition, primarily amortization expense from acquired intangible assets, acquisition transaction costs and tax-related effects. Pro forma earnings for the three months ended December 29, 2023 was adjusted to exclude transaction costs of $15.5 million incurred during the quarter and pro forma earnings for the three months ended December 30, 2022 was adjusted to include $41.8 million of transaction costs incurred associated with the RF Business Acquisition.

MESC— On May 31, 2023, we completed the acquisition of the key manufacturing facilities, capabilities, technologies and other assets and certain specified liabilities of OMMIC SAS, a semiconductor manufacturer based in Limeil-Brévannes, France with expertise in wafer fabrication, epitaxial growth and monolithic microwave integrated circuit (“MMIC”) processing and design. We are referring to this acquisition as the MACOM European Semiconductor Center Acquisition (the “MESC Acquisition”) and it was accounted for as a business combination. We completed the MESC Acquisition to expand our European footprint and to enable us to offer higher frequency gallium arsenide (“GaAs”) and GaN MMICs. Total cash consideration paid for the MESC Acquisition was approximately $36.9 million and was funded with cash-on-hand. During the three months ended December 29, 2023 and December 30, 2022, we incurred acquisition-related transaction costs of approximately $0.3 million and $0.8 million, respectively, which are included in selling, general and administrative expense.

The purchase price for the MESC Acquisition has been allocated based on preliminary estimates of fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

9

	At Acquisition Date as Reported December 29, 2023
Current assets	$	297
Inventory	3,790
Property and equipment	30,538
Intangible assets	5,966
Total assets acquired	40,591
Current liabilities	3,734
Total liabilities assumed	3,734
Purchase Price	$	36,857

As part of the acquisition, we assumed a lease agreement for the manufacturing facilities in France that provides us with the option to purchase the real property for an immaterial price at the end of the lease term, in October 2024. We expect to exercise this bargain purchase option and have recorded a right-of-use-asset of $24.7 million in Property and equipment. The real property was valued using a market approach.

Intangible assets consist of technology and customer relationships of $4.9 million and $1.1 million, respectively, and both having useful lives of 8.3 years. We used the income approach to determine the fair value of the definite-lived intangible assets and the cost and market approaches to determine the fair value of our property, plant and equipment. We amortize definite-lived assets based on the pattern over which we expect to receive the economic benefit from these assets.

The determination and allocation of purchase price consideration is based on preliminary estimates of fair value; such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). As of December 29, 2023, the purchase price allocation for the MESC Acquisition remains open as we gather additional information regarding the assets acquired and the liabilities assumed, primarily in relation to the valuation of intangibles, inventory, property and equipment, leases, liabilities and contingencies. We did not recognize goodwill associated with this acquisition and there were no measurement period adjustments recognized during the quarter ended December 29, 2023.

Linearizer Technology, Inc.— On March 3, 2023, we completed the acquisition of Linearizer Technology, Inc. (“Linearizer”), a developer of modules and subsystems, including SSPAs, microwave predistortion linearizers and microwave photonics based in Hamilton, New Jersey (the “Linearizer Acquisition”), which was accounted for as a business combination. We acquired Linearizer to further strengthen our component and subsystem design expertise in our target markets. In connection with the Linearizer Acquisition, we acquired all of the outstanding shares of Linearizer for total cash consideration of approximately $51.6 million, subject to customary purchase price adjustments. We funded the Linearizer Acquisition with cash-on-hand. During the three months ended December 29, 2023, we incurred acquisition-related transaction costs of approximately less than $0.1 million which are included in selling, general and administrative expense. There were no transaction costs for the three months ended December 30, 2022. The Linearizer Acquisition was accounted for as a business combination and the operations of Linearizer have been included in our consolidated financial statements since the date of acquisition.

The purchase price for the Linearizer Acquisition has been allocated based on preliminary estimates of fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At Acquisition Date as Reported September 29, 2023		Measurement Period Adjustments		At Acquisition Date as Reported December 29, 2023
Current assets	$	2,819	$	—	$	2,819
Inventory	8,907		1,407		10,314
Property and equipment	5,485		—		5,485
Intangible assets	29,600		—		29,600
Goodwill	12,332		(1,407)		10,925
Total assets acquired	59,143		—		59,143
Current liabilities	7,544		—		7,544
Total liabilities assumed	7,544		—		7,544
Purchase Price	$	51,599	$	—	$	51,599

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Intangible assets consist of customer relationships, technology and trade name with fair values of $20.7 million, $7.1 million and $1.8 million, respectively, and useful lives of 8.6 years, 7.6 years and 7.6 years, respectively. We used the income approach to determine the fair value of the definite-lived intangible assets and the cost and market approaches to determine the fair value of our property, plant and equipment. We amortize definite-lived assets based on the pattern over which we expect to receive the economic benefit from these assets. The intangible assets and goodwill acquired will be amortizable for tax purposes due to the Internal Revenue Code of 1986 (IRC) Section 338 election filed.

The determination and allocation of purchase price consideration is based on preliminary estimates of fair value; such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). During the three months ended December 29, 2023, we increased the fair value of inventory by $1.4 million with an offsetting reduction to Goodwill. As of December 29, 2023, the purchase price allocation for Linearizer remains open as we gather additional information regarding the assets acquired and the liabilities assumed, primarily in relation to the valuation of contingencies.

4. INVESTMENTS

All investments are short-term in nature and are invested in corporate bonds, commercial paper, and U.S. Treasury securities and are classified as available-for-sale. These certificates of deposit, corporate bonds, commercial paper and U.S. Treasury securities are owned directly by the Company and are segregated in brokerage custody accounts. The amortized cost, gross unrealized holding gains or losses and fair value of our available-for-sale investments by major investment type are summarized in the tables below (in thousands):

	December 29, 2023
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Aggregate Fair Value
Certificates of deposit	$	10,980	$	3	$	—	$	10,983
Corporate bonds	157,136		85		(1,392)		155,829
Commercial paper	100,987		16		(19)		100,984
U.S. Treasury securities	31,864		107		(62)		31,909
Total short-term investments	$	300,967	$	211	$	(1,473)	$	299,705

	September 29, 2023
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Aggregate Fair Value
Corporate bonds	$	145,234	$	—	$	(2,845)	$	142,389
Commercial paper	176,405		—		(129)		176,276
U.S. Treasury securities	21,895		18		(4)		21,909
Total short-term investments	$	343,534	$	18	$	(2,978)	$	340,574

The contractual maturities of available-for-sale investments were as follows (in thousands):

	December 29, 2023		September 29, 2023
Less than one year	$	235,965	$	265,591
Over one year	63,740		74,983
Total available-for-sale investments	$	299,705	$	340,574

We have determined that the gross unrealized losses on available for sale securities as of December 29, 2023 and September 29, 2023 are temporary in nature and/or do not relate to credit loss, and therefore there is no expense for credit losses recorded in our condensed consolidated statements of operations. Unrealized gains and losses on available-for-sale investments are reported as a separate component of stockholders’ equity within accumulated other comprehensive income.

Other Investments—As of December 29, 2023, we held a non-marketable equity investment in Series B preferred stock of a privately held manufacturing corporation with preferred liquidation rights over other equity shares. As the equity securities do not have a readily determinable fair value and do not qualify for the practical expedient under Accounting Standards Codification 820, Fair Value Measurement, we have elected to account for this investment at cost less any impairment. We

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evaluate this investment for impairment at each balance sheet date. As of December 29, 2023 and September 29, 2023, the carrying value of this investment was $2.5 million and it was classified as a long-term investment.

5. FAIR VALUE

We group our financial assets and liabilities measured at fair value on a recurring basis in three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value. These levels are:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data.

Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by us.

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

We measure certain assets and liabilities at fair value on a recurring basis such as our financial instruments. There have been no transfers between Level 1, 2 or 3 assets or liabilities during the three months ended December 29, 2023.

Assets and liabilities measured at fair value on a recurring basis consist of the following (in thousands):

	December 29, 2023
	Fair Value		Active Markets for Identical Assets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets
Money market funds	$	80,852	$	80,852	$	—	$	—
U.S. Treasury securities	31,909		31,909		—		—
Certificates of deposit	10,983		10,983		—		—
Commercial paper	100,984		—		100,984		—
Corporate bonds	155,829		—		155,829		—
Total assets measured at fair value	$	380,557	$	123,744	$	256,813	$	—

	September 29, 2023
	Fair Value		Active Markets for Identical Assets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets
Money market funds	$	111,388	$	111,388	$	—	$	—
U.S. Treasury securities	21,910		21,910		—		—
Commercial paper	176,276		—		176,276		—
Corporate bonds	142,388		—		142,388		—
Total assets measured at fair value	$	451,962	$	133,298	$	318,664	$	—

6. INVENTORIES

Inventories consist of the following (in thousands):

	December 29, 2023		September 29, 2023
Raw materials	$	100,294	$	82,589
Work-in-process	14,250		14,280
Finished goods	44,957		39,431
Total inventory, net	$	159,501	$	136,300

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7. PROPERTY AND EQUIPMENT

Property and equipment consists of the following (in thousands):

	December 29, 2023		September 29, 2023
Construction in process	$	12,908	$	10,256
Machinery and equipment	272,513		238,037
Leasehold improvements	37,317		35,342
Furniture and fixtures	3,067		2,888
Computer equipment and software	19,617		18,824
Finance lease assets	65,522		64,126
Total property and equipment	410,944		369,473
Less accumulated depreciation and amortization	(226,666)		(219,977)
Property and equipment, net	$	184,278	$	149,496

Depreciation and amortization expense related to property and equipment for the three months ended December 29, 2023 and December 30, 2022 was $6.5 million and $6.0 million, respectively. Accumulated amortization on finance lease assets as of December 29, 2023 and September 29, 2023 was $8.4 million and $7.8 million, respectively.

8. INTANGIBLE ASSETS

Amortization expense related to intangible assets is as follows (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Cost of revenue	$	1,942	$	910
Research and development	1,044		—
Selling, general and administrative	4,798		5,903
Total	$	7,784	$	6,813

A summary of the activity in gross intangible assets as of December 29, 2023 and September 29, 2023 is as follows (in thousands):

	December 29, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired technology	$	213,646	$	(180,685)	$	32,961
Backlog	1,500		(129)		1,371
Customer relationships	289,181		(230,435)		58,746
Favorable contract	15,000		(831)		14,169
Internal-use software	8,350		(1,044)		7,306
Trade name (1)	5,200		(226)		4,974
Balance as of December 29, 2023 (2)	$	532,877	$	(413,350)	$	119,527

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	September 29, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired technology	$	191,369	$	(179,558)	$	11,811
Customer relationships	267,621		(225,827)		41,794
Internal-use software	8,350		—		8,350
Trade name (1)	5,200		(161)		5,039
Balance as of September 29, 2023 (2)	$	472,540	$	(405,546)	$	66,994

(1)     Includes an indefinite-lived trade name of $3.4 million that is not amortized.

(2) Foreign intangible asset carrying amounts were affected by foreign currency translation.

As of December 29, 2023, our estimated amortization of our intangible assets in future fiscal years was as follows (in thousands):

	2024 Remaining		2025	2026	2027	2028	Thereafter	Total
Amortization expense	$	32,372	26,595	15,170	12,787	9,919	19,284	$	116,127

A summary of the changes in goodwill as of December 29, 2023 and September 29, 2023 is as follows (in thousands):

	December 29, 2023
Balance as of September 29, 2023	$	323,398
Acquired (1)	(1,407)
Foreign currency translation adjustment	498
Balance as of December 29, 2023	$	322,489

(1)     The reduction of $1.4 million to goodwill is related to a measurement period adjustment for the Linearizer Acquisition. For additional information refer to Note 3 - Acquisitions.

9. DEBT

The following represents the outstanding balances and effective interest rates of our borrowings as of December 29, 2023 and September 29, 2023, (in thousands, except percentages):

	December 29, 2023				September 29, 2023
	Principal Balance		Effective Interest Rate		Principal Balance		Effective Interest Rate
0.25% convertible notes due March 2026	450,000		0.54	%	450,000		0.54	%
Unamortized discount on deferred financing costs	(2,579)				(2,866)
Total long-term debt, less current portion	$	447,421			$	447,134

2026 Convertible Notes

On March 25, 2021, we issued 0.25% convertible senior notes due in fiscal year 2026, pursuant to an indenture dated as of such date (the “Indenture”), between the Company and U.S. Bank National Association, as trustee, with an aggregate principal amount of $400.0 million (the “Initial Notes”), and on April 6, 2021, we issued an additional $50.0 million aggregate principal amount (the “Additional Notes”) (together, the “2026 Convertible Notes”). The aggregate principal balance of the 2026 Convertible Notes is $450.0 million. The 2026 Convertible Notes will mature on March 15, 2026, unless earlier converted, redeemed or repurchased.

The Additional Notes were issued and sold to the initial purchaser of the Initial Notes, pursuant to the option to purchase the Additional Notes granted by the Company to the initial purchaser and have the same terms as the Initial Notes.

Holders of the 2026 Convertible Notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding December 15, 2025 in multiples of $1,000 principal amount, only under the following circumstances: (i) during any fiscal quarter commencing after the fiscal quarter ending on July 2, 2021 (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive)

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during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price for the notes on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period (the “Measurement Period”) in which the “trading price” (as defined in the Indenture) per $1,000 principal amount of the notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the notes on each such trading day; (iii) if we call such notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the applicable redemption date; or (iv) upon the occurrence of specified corporate events described in the Indenture. On or after December 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes in multiples of $1,000 principal amount, regardless of the foregoing circumstances.

The initial conversion rate for the 2026 Convertible Notes is 12.1767 shares of common stock per $1,000 principal amount of the notes, equivalent to an initial conversion price of approximately $82.12 per share of common stock. The conversion rate will be subject to adjustment upon the occurrence of certain specified events in the Indenture.

In November 2021, we made an irrevocable election to pay cash for the aggregate principal amount of notes to be converted. Upon conversion of the 2026 Convertible Notes, we are required to pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the notes being converted (subject to, and in accordance with, the settlement provisions of the Indenture). We may not redeem the notes prior to March 20, 2024. We may redeem for cash all or any portion of the notes, at our option, on or after March 20, 2024 if the last reported sale price per share of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption, at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, to, but not including, the redemption date.

The Indenture does not contain any financial or operating covenants or restrictions on the payments of dividends, the making of investments, the incurrence of indebtedness or the purchase or prepayment of securities by us or any of our subsidiaries.

For the three months ended December 29, 2023 and December 30, 2022, total interest expense for the 2026 Convertible Notes was $0.3 million and $0.3 million, respectively.

The fair value of our 2026 Convertible Notes was $556.2 million and $512.5 million as of December 29, 2023 and September 29, 2023, respectively, and was determined based on quoted prices in markets that are not active, which is considered a Level 2 valuation input.

There are no future minimum principal payments under the notes as of December 29, 2023; the full amount of $450.0 million is due in fiscal year 2026.

Term Loans

As of December 30, 2022, we were party to a credit agreement, dated as of May 8, 2014, with a syndicate of lenders and Goldman Sachs Bank USA, as administrative agent (as amended on February 13, 2015, August 31, 2016, March 10, 2017, May 19, 2017, May 2, 2018 and May 9, 2018, the “Credit Agreement”).

On August 2, 2023, the Credit Agreement was terminated when we paid the total outstanding principal balance on our Term Loans of $120.8 million and accrued interest of less than $0.1 million with cash-on-hand.

There was no interest expense for the Term Loans for the three months ended December 29, 2023. For the three months ended December 30, 2022, total interest expense for the Term Loans was $1.8 million.

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10. FINANCING OBLIGATION

We are party to a power purchase agreement for the use of electric power and thermal energy producing systems at our fabrication facility in Lowell, Massachusetts. These systems are expected to reduce our consumption of energy while delivering sustainable, resilient energy for heating and cooling. We do not own these systems; however, we control the use of the assets during operation. As of December 29, 2023 and September 29, 2023, the net book value of the systems in Property and equipment, net was $8.7 million and $8.9 million, respectively, and the corresponding liability was $9.5 million and $9.6 million, respectively, primarily classified in Financing obligation on our condensed consolidated balance sheet. The initial financing obligation was calculated based on future fixed payments allocated to the power generator of $16.8 million over the 15-year term, discounted at an implied discount rate of 7.4%, and the remaining future minimum payments are for power purchases. As of December 29, 2023 and September 29, 2023, we have $25.3 million and $25.5 million, respectively, in remaining fixed payments over a 14-year term associated with the power purchase agreement, of which $15.7 million and $15.9 million, respectively, is included in our consolidated balance sheets on a discounted basis.

As of December 29, 2023, expected future minimum payments for the financing obligation were as follows (in thousands):

Fiscal year ending:	Amount
2024	$	718
2025	982
2026	1,007
2027	1,031
2028	1,057
Thereafter	10,857
Total payments	$	15,652
Less: interest	6,152
Present value of liabilities	$	9,500

11. EARNINGS PER SHARE

The following table sets forth the computation for basic and diluted net income per share of common stock (in thousands, except per share data):

	Three Months Ended
	December 29, 2023		December 30, 2022
Numerator:
Net income attributable to common stockholders	$	12,526	$	29,519
Denominator:
Weighted average common shares outstanding-basic	71,425		70,481
Dilutive effect of convertible debt, stock options, restricted stock and restricted stock units	861		893
Weighted average common shares outstanding-diluted	72,286		71,374
Net income to common stockholders per share-Basic:	$	0.18	$	0.42
Net income to common stockholders per share-Diluted:	$	0.17	$	0.41

The table above includes the dilutive effect of 7,404 potential common shares for the 2026 Convertible Notes for the three months ended December 29, 2023. The 2026 Convertible Notes did not have an impact on diluted net income per share for the three months ended December 30, 2022.

12. COMMITMENTS AND CONTINGENCIES

From time to time, we may be subject to commercial disputes, employment issues, claims by other companies in the industry that we have infringed their intellectual property rights and other similar claims and litigation. Any such claims may lead to future litigation and material damages and defense costs. We were not involved in any material pending legal proceedings during the three months ended December 29, 2023.

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13. STOCKHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

We have authorized 10 million shares of $0.001 par value preferred stock and 300 million shares of $0.001 par value common stock as of December 29, 2023.

Stock Plans

As of December 29, 2023, we had 3.9 million shares available for issuance under our 2021 Omnibus Incentive Plan (the “2021 Plan”), which replaced our 2012 Omnibus Incentive Plan (as amended and restated) (the “2012 Plan”), and 1.2 million shares available for issuance under our 2021 Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”), which replaced our 2012 Employee Stock Purchase Plan. We have outstanding awards under the 2021 Plan and the 2012 Plan. Following the adoption of the 2021 Plan, no additional awards have been or will be made under the 2012 Plan. Under the 2021 Plan, we have the ability to issue incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), unrestricted stock awards, stock units (including restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”)), performance awards, cash awards, and other share-based awards to employees, directors, consultants and advisors. The ISOs and NSOs must be granted at an exercise price, and the SARs must be granted at a base value, per share of not less than 100% of the closing price of a share of our common stock on the date of grant (or, if no closing price is reported on that date, the closing price on the immediately preceding date on which a closing price was reported) (110% in the case of certain ISOs). Options granted under the 2012 Plan primarily vested based on certain market-based and performance-based criteria and generally have a term of four years to seven years. Certain of the share-based awards granted and outstanding as of December 29, 2023 are subject to accelerated vesting upon a change in control of the Company.

Incentive Stock Units

Aside from the equity plans described above, we also grant incentive stock units (“ISUs”) to certain of our international employees which typically vest over three or four years and for which the fair value is determined by our underlying stock price, which are classified as liabilities and settled in cash upon vesting.

As of December 29, 2023 and September 29, 2023, the fair value of outstanding ISUs was $6.0 million and $5.0 million, respectively, and the associated accrued compensation liability was $2.3 million and $3.3 million, respectively. During the three months ended December 29, 2023 and December 30, 2022, we recorded expense for ISU awards of $0.5 million and $1.3 million, respectively. These expenses are not included in the share-based compensation expense totals below.

Share-Based Compensation

The following table shows a summary of share-based compensation expense included in the condensed consolidated statements of operations (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Cost of revenue	$	1,270	$	1,150
Research and development	2,765		4,232
Selling, general and administrative	4,622		5,665
Total share-based compensation expense	$	8,657	$	11,047

As of December 29, 2023, the total unrecognized compensation costs related to RSUs and PRSUs was $93.2 million, which we expect to recognize over a weighted-average period of 2.3 years. As of December 29, 2023, total unrecognized compensation cost related to our Employee Stock Purchase Plan was $0.9 million.

Restricted Stock Units and Performance-Based Restricted Stock Units

A summary of stock award activity for the three months ended December 29, 2023 is as follows:

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	Number of shares (in thousands)	Weighted- Average Grant Date Fair Value
Balance as of September 29, 2023	1,501	$	60.90
Granted	692	78.22
Performance-based adjustment (1)	62	35.43
Vested and released	(459)	48.46
Forfeited, canceled or expired	(87)	65.05
Balance as of December 29, 2023	1,709	$	70.12

(1) The amount shown represents performance adjustments for performance-based awards. These were granted in prior fiscal years and vested during the three months ended December 29, 2023 based on the Company’s achievement of adjusted earnings per share performance conditions.

Stock awards that vested during the three months ended December 29, 2023 and December 30, 2022 had combined fair values of $33.3 million and $66.8 million, respectively, as of the vesting date. RSUs granted generally vest over a period of three or four years.

Market-based PRSUs

We granted 132,247 market-based PRSUs during the three months ended December 29, 2023, at a weighted average grant date fair value of $88.88 per share. Recipients may earn between 0% and 200% of the target number of shares based on the Company’s achievement of total stockholder return in comparison to a peer group of companies in the PHLX Semiconductor Sector Index (^SOX) over a period of approximately three years. The fair value of the awards was estimated using a Monte Carlo simulation and compensation expense is recognized ratably over the service period based on the grant date fair value of the awards subject to the market condition. The expected volatility of the Company’s common stock was estimated based on the historical average volatility rate over the three-year period. The dividend yield assumption was based on historical and anticipated dividend payouts. The risk-free rate assumption was based on observed interest rates consistent with the three-year measurement period. The assumptions used to value the awards are as follows:

	Three Months Ended
	December 29, 2023
Grant date stock price	$	73.01
Average stock price at the start of the performance period	$	79.43
Risk free interest rate	4.6%
Years to maturity	2.9
Expected volatility rate	41.7%
Expected dividend yield	—

Stock Options

As of December 29, 2023 and September 29, 2023 there were 10,000 and 15,000 stock options outstanding, respectively, with a weighted-average exercise price per share of $16.06. As of December 29, 2023, the weighted-average remaining contractual term was 1.85 years and the aggregate intrinsic value was $0.8 million. Aggregate intrinsic value is calculated using the difference between our closing stock price on December 29, 2023 and the exercise price of outstanding, in-the-money options. The total intrinsic value of options exercised during the three months ended December 29, 2023 was $0.3 million. There were no options exercised during the three months ended December 30, 2022.

14. INCOME TAXES

We are subject to income tax in the U.S. as well as other tax jurisdictions in which we conduct business. Earnings from non-U.S. activities are subject to local country income tax and may also be subject to current U.S. income tax. For interim periods, we record a tax provision or benefit based upon the estimated effective tax rate expected for the full fiscal year, adjusted for material discrete taxation matters arising during the interim periods. Our quarterly tax provision or benefit, and its quarterly estimate of the annual effective tax rate, are subject to significant variation due to several factors. These factors include items such as: variability in accurately predicting pre-tax income/loss, the mix of jurisdictions in which we operate, intercompany transactions, changes in how we do business, tax law developments, the realizability of our deferred tax assets and related valuation allowance and relative changes in permanent tax benefits or expenses.

The provision for income taxes and effective income tax rate are as follows (in thousands, except percentages):

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	Three Months Ended
	December 29, 2023			December 30, 2022
Income tax expense	$	2,750		$	9,611
Effective income tax rate	18.0		%	24.6		%

The difference between the U.S. federal statutory income tax rate of 21% and our effective income tax rate for the three months ended December 29, 2023 was primarily driven by favorable stock based compensation and research and development (“R&D”) tax credits, partially offset by foreign withholding taxes and global intangible low taxed income (“GILTI”). The difference between the U.S. federal statutory income tax rate of 21% and our effective income tax rate for the three months ended December 30, 2022 was primarily driven by tax on GILTI and non-deductible compensation, partially offset by R&D tax credits.

During the three months ended December 29, 2023, we changed our position on having earnings permanently reinvested for one of our entities in India to no longer having its earnings permanently reinvested. The result of this change in position required us to record a foreign withholding tax expense of $1.0 million associated with undistributed earnings during the three months ended December 29, 2023.

We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making this determination, we consider available positive and negative evidence. We look at factors that may impact the valuation of our deferred tax assets including results of recent operations, future reversals of existing taxable temporary differences, projected future taxable income and tax-planning strategies.

There were no unrecognized tax benefits as of December 29, 2023 and September 29, 2023. It is our policy to recognize any interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the fiscal quarter ended December 29, 2023, we did not make any accrual or payment of interest or penalties.

15. SUPPLEMENTAL CASH FLOW INFORMATION

The following is a summary of supplemental cash flow information for the periods presented (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Cash paid for interest	$	722	$	2,258
Cash paid for income taxes	$	923	$	297
Non-cash activities:
Operating lease right-of-use assets obtained in exchange for new lease liabilities	$	6,321	$	1,305
Additions to property and equipment, net included in liabilities	$	379	$	1,364

Operating lease right-of-use assets obtained in exchange for new lease liabilities includes $5.6 million operating lease right-of-use assets acquired as part of the RF Business Acquisition. For additional information on the RF Business Acquisition, see Note 3 - Acquisitions.

16. GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION

We have one reportable operating segment that designs, develops, manufactures and markets semiconductors and modules. The determination of the number of reportable operating segments is based on the chief operating decision maker’s (“CODM”) use of financial information provided for the purposes of assessing performance and making operating decisions. The Company's CODM is its President and Chief Executive Officer. In evaluating financial performance and making operating decisions, the CODM primarily uses consolidated metrics. The Company assesses its determination of operating segments at least annually. We continue to evaluate our internal reporting structure and the potential impact of any changes on our segment reporting.

For information about our revenue in different geographic regions, based upon customer locations, see Note 2 - Revenue.

Information about net property and equipment in different geographic regions is presented below (in thousands):

19

	December 29, 2023		September 29, 2023
United States	$	131,486	$	111,865
France	32,995		31,142
Other Countries (1)	19,797		6,489
Total	$	184,278	$	149,496

(1)Other than the United States and France, no country or region represented greater than 10% of the total net property and equipment as of the dates presented.

The following is a summary of customer concentrations as a percentage of revenue and accounts receivable as of and for the periods presented:

	Three Months Ended
Revenue	December 29, 2023		December 30, 2022
Customer A	13	%	—

Accounts Receivable	December 29, 2023		September 29, 2023
Customer B	14	%	—
Customer C	12	%	—

Customer Concentration

Customer A did not represent more than 10% of our revenue in the three months ended December 30, 2022. Customer B and Customer C did not represent more than 10% of our revenue in the three months ended December 29, 2023 and December 30, 2022, respectively. No other customer represented more than 10% of revenue or accounts receivable in the periods presented in the accompanying condensed consolidated financial statements. For the three months ended December 29, 2023 and December 30, 2022, our top ten customers represented 57% and 52%, respectively, of total revenue.

ITEM 2.         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended September 29, 2023 filed with the United States Securities and Exchange Commission (“SEC”) on November 13, 2023 (the “2023 Annual Report on Form 10-K”).

In this document, the words “Company,” “we,” “our,” “us,” and similar terms refer only to MACOM Technology Solutions Holdings, Inc. and its consolidated subsidiaries, and not any other person or entity.

“MACOM,” “MACOM Technology Solutions,” and related logos are trademarks of MACOM Technology Solutions Holdings, Inc. All other brands and names listed are trademarks of their respective owners.

Cautionary Note Regarding Forward-Looking Statements

This Item 2, “Management's Discussion and Analysis of Financial Condition and Results of Operations” and other sections of this Quarterly Report on Form 10-Q contain “forward-looking statements.” In addition, we may make other written and oral communications from time to time that contain such statements. Forward-looking statements include statements regarding our business outlook, strategic plans and priorities, expectations, anticipated drivers of future revenue growth, our ability to develop new products, achieve market acceptance of those products and better address certain markets, expand our capabilities and extend our product offerings through the Linearizer Acquisition, the MESC Acquisition and the RF Business Acquisition, industry trends, the potential impacts of COVID-19 on our future operations and results, our estimated annual effective tax rate, our plans for use of our cash and cash equivalents and short-term investments, interest rate and foreign currency risks, our ability to meet working capital requirements, estimates and objectives for future operations, our future results of operations and our financial position, including liquidity, and other matters that do not relate strictly to historical facts. Forward-looking statements generally may be identified by terms such as “anticipates,” “believes,” “could,” “continue,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “targets,” “will,” “would” or similar expressions or variations or the negatives of those terms. These statements are based on management's beliefs and assumptions as of the date of this Quarterly Report on Form 10-Q, based on information currently available to us. Such forward-looking

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statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks described in the section entitled “Risk Factors” in this Quarterly Report on Form 10-Q and the 2023 Annual Report on Form 10-K. We caution the reader to carefully consider such factors. Furthermore, such forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Overview

We design and manufacture semiconductor products for the Industrial and Defense (“I&D”), Data Center and Telecommunications (“Telecom”) industries. Headquartered in Lowell, Massachusetts, with operational facilities throughout North America, Europe and Asia, we design, develop and manufacture differentiated semiconductor products for customers who demand high performance, quality and reliability. We have more than 70 years of application expertise, combined with expertise in analog and mixed signal circuit design, compound semiconductor fabrication (including GaAs, GaN, indium phosphide (“InP”) and specialized silicon), advanced packaging and back-end assembly and test. We offer a broad portfolio of thousands of standard and custom devices, which include integrated circuits (“IC”), multi-chip modules (“MCM”), diodes, amplifiers, switches and switch limiters, passive and active components and radio frequency (“RF”) and optical subsystems, which make up dozens of product lines that service over 6,000 end customers in our three primary markets. Our products are electronic components that our customers generally incorporate into larger electronic systems, such as wireless basestations, high-capacity optical networks, data center networks, radar, medical systems and test and measurement applications. Our primary end markets are: (1) I&D, which includes military and commercial radar, RF jammers, electronic countermeasures, communication data links, satellite communications and multi-market applications, which include industrial, medical, test and measurement and scientific applications; (2) Data Center, which includes intra-Data Center, Data Center Interconnect (“DCI”) applications, at 100G, 200G, 400G, 800G and higher speeds, enabled by our broad portfolio of analog ICs and photonic components for high speed optical module customers; and (3) Telecom, which includes carrier infrastructure such as long-haul/metro, 5G satellite communications and Fiber-to-the-X (“FTTx”)/passive optical network (“PON”), among others.

Description of Our Revenue

Revenue. Our revenue is derived from sales of high-performance RF, microwave, millimeter wave, optical and photonic semiconductor products. We design, integrate, manufacture and package differentiated, semiconductor-based products that we sell to customers through our direct sales organization, our network of independent sales representatives and our distributors.

We believe the primary drivers of our future revenue growth will include:

•continued growth in the demand for high-performance analog, digital and optical semiconductors in our three primary markets;

•introducing new products using advanced technologies, added features, higher levels of integration and improved performance;

•increasing content of our semiconductor solutions in customers’ systems through cross-selling our product lines;

•leveraging our core strength and leadership position in standard, catalog products that service all of our end applications; and

•engaging early with our lead customers to develop custom and standard products.

Our core strategy is to develop and innovate high-performance products that address our customers’ most difficult technical challenges in our primary markets: I&D, Data Center and Telecom.

We expect our revenue in the I&D market to be driven by the expanding product portfolio that we offer which services applications such as test and measurement, satellite communications, civil and military radar, industrial, automotive, scientific and medical applications, further supported by growth in applications for our multi-market catalog products.

We expect our revenue in the Data Center market to be driven by the adoption of cloud-based services and the upgrade of data center architectures to 100G, 200G, 400G and 800G interconnects, which we expect will drive adoption of higher speed optical and photonic components.

We expect our revenue in the Telecom market to be driven by 5G deployments, with continued upgrades and expansion of communications equipment, satellite communications networks and increasing adoption of our high-performance RF, millimeter wave, optical and photonic components.

Critical Accounting Policies and Estimates

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Our discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements. The preparation of financial statements, in conformity with GAAP, requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the reported amounts of revenue and expenses during the reporting period and disclosure of contingent assets and liabilities at the date of the financial statements. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty and could be material if our actual or expected experience were to change unexpectedly. On an ongoing basis, we re-evaluate our estimates and judgments.

We base our estimates and judgments on our historical experience and on other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making the judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates and material effects on our operating results and financial position may result. The accounting policies which our management believes involve the most significant application of judgment or involve complex estimation, are inventories and associated reserves; revenue reserves; business combinations; goodwill and intangible asset valuation; share-based compensation valuations and income taxes.

Business combinations

We apply significant estimates and judgments in order to determine the fair value of the identified tangible and intangible assets acquired, liabilities assumed and goodwill recognized in business combinations. The value of all assets and liabilities are recognized at fair value as of the acquisition date using a market participant approach. In measuring the fair value, we utilize a number of valuation techniques. When determining the fair value of property and equipment acquired, generally we must estimate the cost to replace the asset with a new asset taking into consideration such factors as age, condition and the economic useful life of the asset. When determining the fair value of intangible assets acquired, typically determined using a discounted cash flow valuation method, we use assumptions such as the timing and amount of future cash flows, discount rates, weighted average cost of capital and estimated useful lives. These assessments can be significantly affected by our judgments.

Goodwill and intangible asset valuation

Significant management judgment is required in our valuation of goodwill and intangible assets, many of which are based on the creation of forecasts of future operating results that are used in the valuation, including (i) estimation of future cash flows, (ii) estimation of the long-term rate of growth for our business, (iii) estimation of the useful life over which cash flows will occur, (iv) terminal values, if applicable, and (v) the determination of our weighted average cost of capital, which helps determine the discount rate. It is possible that these forecasts may change, and our performance projections included in our forecasts of future results may prove to be inaccurate. The value of our goodwill and purchased intangible assets could also be impacted by future adverse changes, such as a decline in the valuation of technology company stocks, including the valuation of our common stock, or a significant slowdown in the worldwide economy or in the optical communications equipment or semiconductor industry.

For additional information related to these and other accounting policies refer to Note 2 - Summary of Significant Accounting Policies to our Consolidated Financial Statements included in Item 8 of Part II, “Financial Statements and Supplementary Data,” of the 2023 Annual Report on Form 10-K and Note 1 - Basis of Presentation and Summary of Significant Accounting Policies to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

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Results of Operations

The following table sets forth, for the periods indicated, our statements of operations data (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Revenue	$	157,148	$	180,104
Cost of revenue (1)	69,838		69,749
Gross profit	87,310		110,355
Operating expenses:
Research and development (1)	39,413		38,832
Selling, general and administrative (1) (2)	36,887		32,940
Total operating expenses	76,300		71,772
Income from operations	11,010		38,583
Other income (expense):
Interest income	5,556		3,684
Interest expense	(1,290)		(3,082)
Other expense, net	—		(55)
Total other income	4,266		547
Income before income taxes	15,276		39,130
Income tax expense	2,750		9,611
Net income	$	12,526	$	29,519

(1)     Includes (a) Amortization expense related to intangible assets arising from acquisitions and (b) Share-based compensation expense included in our condensed consolidated statements of operations as set forth below (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
(a) Intangible amortization expense:
Cost of revenue	$	1,942	$	910
Research and development	1,044		—
Selling, general and administrative	4,798		5,903
(b) Share-based compensation expense:
Cost of revenue	$	1,270	$	1,150
Research and development	2,765		4,232
Selling, general and administrative	4,622		5,665

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(2) The three months ended December 29, 2023 and December 30, 2022 include $8.4 million and $0.8 million, respectively, of acquisition-related professional fee and other expense.

The following table sets forth, for the periods indicated, our statements of operations data expressed as a percentage of our revenue: 

	Three Months Ended
	December 29, 2023		December 30, 2022
Revenue	100.0	%	100.0	%
Cost of revenue	44.4		38.7
Gross profit	55.6		61.3
Operating expenses:
Research and development	25.1		21.6
Selling, general and administrative	23.5		18.3
Total operating expenses	48.6		39.9
Income from operations	7.0		21.4
Other income (expense):
Interest income	3.5		2.0
Interest expense	(0.8)		(1.7)
Other expense, net	—		—
Total other income	2.7		0.3
Income before income taxes	9.7		21.7
Income tax expense	1.7		5.3
Net income	8.0	%	16.4	%

Comparison of the Three Months Ended December 29, 2023 to the Three Months Ended December 30, 2022

Revenue. Our revenue decreased by $23.0 million, or 12.7%, to $157.1 million for the three months ended December 29, 2023, from $180.1 million for the three months ended December 30, 2022. The decrease in revenue in the three months ended December 29, 2023 is described by end market in the following paragraphs.

Revenue from our primary markets, the percentage of change between the periods presented, and revenue by primary markets expressed as a percentage of total revenue in the periods presented were (in thousands, except percentages):

		Three Months Ended
		December 29, 2023			December 30, 2022		% Change
Industrial & Defense	$	76,998		$	77,169		(0.2)	%
Data Center		49,512			41,485		19.3	%
Telecom		30,638			61,450		(50.1)	%
Total	$	157,148		$	180,104		(12.7)	%
Industrial & Defense		49.0	%		42.9	%
Data Center		31.5	%		23.0	%
Telecom		19.5	%		34.1	%
Total		100.0	%		100.0	%

In the three months ended December 29, 2023, our I&D market revenue decreased by $0.2 million, or 0.2%, compared to the three months ended December 30, 2022. The decrease in the three months ended December 29, 2023 was primarily driven by lower sales of legacy products for industrial markets, partially offset by incremental revenue from recent acquisitions and an increase in defense program shipments.

In the three months ended December 29, 2023, our Data Center market revenue increased by $8.0 million, or 19.3%, compared to the three months ended December 30, 2022. The increase in the three months ended December 29, 2023 was

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primarily driven by an increase in sales of 400G and 800G high-performance analog Data Center products, partially offset by a decrease in sales of our legacy connectivity products.

In the three months ended December 29, 2023, our Telecom market revenue decreased by $30.8 million, or 50.1%, compared to the three months ended December 30, 2022. The decrease for the three months ended December 29, 2023 was primarily driven by a decrease in sales of carrier-based optical semiconductor products, a decrease in sales of RF and microwave products for broadband access and a decrease in sales of legacy products, partially offset by incremental revenue from recent acquisitions.

We continue to be negatively impacted by the current macroeconomic conditions, which we expect may result in weaker near-term demand for our products across all three of our primary markets.

Gross profit. Gross margin was 55.6% and 61.3% for the three months ended December 29, 2023 and December 30, 2022, respectively. Gross profit was $87.3 million and $110.4 million for the three months ended December 29, 2023 and December 30, 2022, respectively. Gross profit decreased for the three months ended December 29, 2023 as compared to the three months ended December 30, 2022 primarily as a result of lower sales, increases in employee headcount associated with acquisitions, higher intangible asset amortization and depreciation expense, partially offset by decreases in production supplies.

Research and development. Research and development expense increased by $0.6 million, or 1.5%, to $39.4 million, or 25.1% of our revenue, for the three months ended December 29, 2023, compared to $38.8 million, or 21.6% of our revenue, for the three months ended December 30, 2022. Research and development expense increased in the three months ended December 29, 2023 primarily as a result of increases in employee headcount due to acquisitions, design software costs and supplies expense, partially offset primarily by decreases in development foundry costs and share-based compensation expense.

Selling, general and administrative. Selling, general and administrative expense increased by $3.9 million, or 12.0%, to $36.9 million, or 23.5% of our revenue, for the three months ended December 29, 2023, compared to $32.9 million, or 18.3% of our revenue, for the three months ended December 30, 2022. Selling, general and administrative expense increased in the three months ended December 29, 2023 primarily due to an increase in acquisition-related costs and employee headcount due to acquisitions, partially offset primarily by lower intangible amortization and share-based compensation expense.

Interest income. In the three months ended December 29, 2023, interest income was $5.6 million, compared to $3.7 million for the three months ended December 30, 2022. The increase for the three months ended December 29, 2023 is primarily due to the general increase in interest rates on both our short-term investments and our money market balances.

Interest expense. In the three months ended December 29, 2023, interest expense was $1.3 million, compared to $3.1 million for the three months ended December 30, 2022. The decrease for the three months ended December 29, 2023 is primarily due to the August 2023 payment of the total outstanding principal balance of the Term Loans.

Provision for income taxes. In the three months ended December 29, 2023, income tax expense was $2.8 million, compared to $9.6 million for the three months ended December 30, 2022. In the three months ended December 29, 2023, the effective income tax rate was 18.0%, compared to 24.6% for the three months ended December 30, 2022. The difference between the U.S. federal statutory income tax rate of 21% and our effective income tax rate for the three months ended December 29, 2023 was primarily driven by favorable stock based compensation and R&D tax credits, partially offset by foreign withholding taxes and GILTI. The difference between the U.S. federal statutory income tax rate of 21% and our effective income tax rate for the three months ended December 30, 2022, was primarily driven by tax on GILTI and non-deductible compensation, partially offset by R&D tax credits. Our estimated annual effective tax rate for the year ending September 27, 2024 is expected to be approximately 23%, adjusted for discrete taxation matters arising during the interim periods.

For additional information refer to Note 14 - Income Taxes to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

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Liquidity and Capital Resources

The following table summarizes our cash flow activities (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Cash and cash equivalents, beginning of period	$	173,952	$	119,952
Net cash provided by operating activities	33,099		38,273
Net cash used in investing activities	(34,774)		(7,950)
Net cash used in financing activities	(9,053)		(24,333)
Foreign currency effect on cash	362		213
Cash and cash equivalents, end of period	$	163,586	$	126,155

Cash Flow from Operating Activities

Our cash flow from operating activities for the three months ended December 29, 2023 of $33.1 million consisted of a net income of $12.5 million plus adjustments of $21.5 million, to reconcile our net income to cash provided by operating activities, less cash used in operating assets and liabilities of $0.9 million. Adjustments to reconcile our net income to cash provided by operating activities primarily included depreciation and intangible amortization expense of $14.3 million and share-based compensation expense of $8.7 million. In addition, cash used in operating assets and liabilities was $0.9 million for the three months ended December 29, 2023, primarily driven by an increase in accounts receivables of $12.2 million, partially offset by an increase of $6.6 million in accrued and other liabilities, an increase of $2.1 million in accounts payable and a decrease in inventories of $1.6 million.

Our cash flow from operating activities for the three months ended December 30, 2022 of $38.3 million consisted of a net income of $29.5 million plus adjustments of $32.6 million, to reconcile our net income to cash provided by operating activities less cash used in operating assets and liabilities of $23.8 million. Adjustments to reconcile our net income to cash provided by operating activities primarily included depreciation and intangible amortization expense of $12.9 million, share-based compensation expense of $11.0 million, and deferred income tax expense of $9.1 million. In addition, cash used in operating assets and liabilities was $23.8 million for the three months ended December 30, 2022, primarily driven by an increase in accounts receivable of $10.5 million, an increase in inventories of $6.4 million and a decrease of $10.3 million in accrued and other liabilities, partially offset by an increase in accounts payable of $3.7 million.

Cash Flow from Investing Activities

Our cash flow used in investing activities for the three months ended December 29, 2023 of $34.8 million consisted primarily of $75.0 million for acquisitions, capital expenditures of $4.7 million and purchases of $55.4 million of short-term investments, offset by proceeds of $100.3 million for the sale and maturity of short-term investments. For additional information on the cash paid for our acquisitions, see Note 3 - Acquisitions to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Our cash flow used in investing activities for the three months ended December 30, 2022 of $8.0 million consisted primarily of purchases of $145.3 million of short-term investments and capital expenditures of $9.6 million, offset by proceeds of $147.0 million for the sale and maturity of short-term investments.

Cash Flow from Financing Activities

During the three months ended December 29, 2023, our cash used in financing activities of $9.1 million was primarily related to $11.6 million of repurchases of common stock associated with employee tax withholdings on vested equity awards, partially offset by $2.8 million of proceeds from stock option exercises and employee stock purchases.

During the three months ended December 30, 2022, our cash used in financing activities of $24.3 million was primarily related to $26.4 million of repurchases of common stock associated with employee tax withholdings on vested equity awards, partially offset by $2.3 million of proceeds from employee stock purchases.

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Liquidity

As of December 29, 2023, we held $163.6 million of cash and cash equivalents, primarily deposited with financial institutions, as well as $299.7 million of liquid short-term investments. The undistributed earnings of certain foreign subsidiaries are considered indefinitely reinvested for the periods presented and we do not intend to repatriate such earnings. We believe the decision to reinvest these earnings will not have a significant impact on our liquidity. As of December 29, 2023, cash held by our indefinitely reinvested foreign subsidiaries was $7.3 million, which, along with cash generated from foreign operations, is expected to be used in the support of international growth and working capital requirements as well as the repayment of certain intercompany loans.

We plan to use our remaining available cash and cash equivalents and short-term investments for general corporate purposes, including working capital, or for the acquisition of or investment in complementary technologies, design teams, products and businesses. We believe that our cash and cash equivalents, short-term investments and cash generated from operations will be sufficient to meet our working capital requirements for at least the next twelve months. We may need to raise additional capital from time to time through the issuance and sale of equity or debt securities, and there is no assurance that we will be able to do so on favorable terms or at all.

As of December 29, 2023, we had no off-balance sheet arrangements.

For additional information related to our Liquidity and Capital Resources, see Note 9 - Debt to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Recent Accounting Pronouncements

See Note 1 - Basis of Presentation and Summary of Significant Accounting Policies to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for information about recent accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk in the ordinary course of business, which consists primarily of interest rate risk associated with our cash and cash equivalents, short-term investments and our variable rate debt, as well as foreign exchange rate risk.

Interest rate risk. The primary objectives of our investment activity are to preserve principal, provide liquidity and invest excess cash for an average rate of return. To minimize market risk, we maintain our portfolio in cash and diversified investments, which may consist of corporate bonds, bank deposits, money market funds, commercial paper and U.S. Treasury securities. The interest rates are variable and fluctuate with current market conditions. The risk associated with fluctuating interest rates is limited to this investment portfolio. We believe that a 10% change in interest rates would not have a material impact on our financial position or results of operations. We do not enter into financial instruments for trading or speculative purposes.

On August 2, 2023, we paid the total outstanding principal balance on our Term Loans. The interest rates on our 2026 Convertible Notes are fixed and therefore not subject to interest rate risk. For additional information regarding our Term Loans and Convertible Notes, refer to Note 9 - Debt.

Foreign currency risk. To date, our international customer agreements have been denominated primarily in U.S. dollars. Accordingly, we have limited exposure to foreign currency exchange rates. The functional currency of a majority of our foreign operations continues to be in U.S. dollars with the remaining operations being local currency. Changes in the value of the U.S. dollar relative to other currencies could make our products more expensive, which could negatively impact demand in certain regions, reduce or delay customer orders, or otherwise negatively affect how customers do business with us. The effects of exchange rate fluctuations on the net assets of the majority of our operations are accounted for as transaction gains or losses. We believe that a change of 10% in such foreign currency exchange rates would not have a material impact on our financial position or results of operations. In the future, we may enter into foreign currency exchange hedging contracts to reduce our exposure to changes in exchange rates.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) were effective as of December 29, 2023.

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Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Controls

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 12 - Commitments and Contingencies to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for information about our legal proceedings.

ITEM 1A. RISK FACTORS

Our business involves a high degree of risk.  In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2023 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. As of the date of this Quarterly Report on Form 10-Q, there have been no material changes in any of the risk factors described in our 2023 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table presents information with respect to purchases of common stock we made during the fiscal quarter ended December 29, 2023. 

Period	Total Number of Shares (or Units) Purchased (1)	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
September 30, 2023-October 27, 2023	105,456	$	72.04	—	—
October 28, 2023-November 24, 2023	52,590	73.44		—	—
November 25, 2023-December 29, 2023	1,006	92.89		—	—
Total	159,052	$	72.63	—	—

(1)    We employ “withhold to cover” as a tax payment method for vesting of restricted stock awards for our employees, pursuant to which, we withheld from employees the shares noted in the table above to cover tax withholding related to the vesting of their awards. The average prices listed in the above table are averages of the fair market prices at which we valued shares withheld for purposes of calculating the number of shares to be withheld.

ITEM 5. OTHER INFORMATION

Insider Trading Arrangements

The following table describes actions by our directors and Section 16 officers with respect to plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) during the three months ended December 29, 2023. None of our directors or Section 16 officers terminated a Rule 10b5-1 trading arrangement or took actions with respect to a “non-Rule 10b5-1 trading arrangement,” as such term is defined in Item 408(c) of Regulation S-K, during the three months ended December 29, 2023.

Name and Title	Action	Date	Expiration of Plan (1)	Potential Number of Shares to be Sold
Charles Bland Director	Adoption	November 13, 2023	February 14, 2025	Sale of up to 10,000 shares

(1)     Date of plan termination or such earlier date upon which all transactions are completed or expire without execution.

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ITEM 6. EXHIBITS

Exhibit Number	Description
3.1	Fifth Amended and Restated Certificate of Incorporation, as amended by the Certificate of Amendment dated March 2, 2023 (incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K filed on November 13, 2023).
3.2	Fourth Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on January 6, 2023).
10.1*	MACOM Technology Solutions Holdings, Inc. Policy for Recoupment of Incentive Compensation, dated as of October 2, 2023.
19.1	MACOM Technology Solutions Holdings, Inc. Insider Trading Policy, dated as of January 17, 2024.
31.1	Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1	Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.
101	The following material from the Quarterly Report on Form 10-Q of MACOM Technology Solutions Holdings, Inc. for the fiscal quarter ended December 29, 2023, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements and (vii) document and entity information, tagged as blocks of text and including detailed tags.
104	The cover page for the Quarterly Report on Form 10-Q of MACOM Technology Solutions Holdings, Inc. for the fiscal quarter ended December 29, 2023, formatted in Inline XBRL and included as Exhibit 101.
*	Management compensation plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

	MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
Dated: February 1, 2024	By:	/s/ Stephen G. Daly
		Stephen G. Daly
		President and Chief Executive Officer (Principal Executive Officer)
Dated: February 1, 2024	By:	/s/ John F. Kober
		John F. Kober
		Senior Vice President and Chief Financial Officer (Principal Accounting and Principal Financial Officer)

EX-10.1

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

Policy for Recoupment of Incentive Compensation

1.Introduction

In accordance with Section 10D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the regulations thereunder, the Board of Directors (the “Board”) of MACOM Technology Solutions Holdings, Inc. (the “Company”) has adopted this policy (the “Policy”) providing for the Company’s recoupment of certain incentive-based compensation received by Covered Executives (as defined below) in the event that the Company is required to prepare an accounting restatement due to its material noncompliance with any financial reporting requirement under the securities laws. This Policy is designed to comply with, and shall be construed and interpreted to be consistent with, Section 10D of the Exchange Act, Rule 10D-1 promulgated under the Exchange Act and Listing Rule 5608 of the corporate governance rules of the Nasdaq Stock Market.

2.Administration

Administration and enforcement of this Policy is delegated to the Compensation Committee of the Board (as constituted from time to time, and including any successor committee, the “Committee”). The Committee shall make all determinations under this Policy in its sole discretion. Determinations of the Committee under this Policy need not be uniform with respect to any or all Covered Executives and will be final and binding.

3.Effective Date

This Policy shall be effective with respect to Covered Compensation (as defined below) that is received by Covered Executives on or after October 2, 2023 (the “Effective Date”).

4.Covered Executives

This Policy covers each current or former officer of the Company subject to Section 16 of the Exchange Act (each, a “Covered Executive”).

5.Covered Compensation

This Policy applies to any cash-based or equity-based incentive compensation, bonus, and/or award that is or was received by a Covered Executive and that is based, wholly or in part, upon the attainment of any financial reporting measure (“Covered Compensation”). For the avoidance of doubt, none of the following shall be deemed to be Covered Compensation: base salary, a bonus that is paid solely at the discretion of the Committee or Board and not paid from a bonus pool determined by satisfying a financial reporting measure performance goal, and cash or equity-based awards that are earned solely upon satisfaction of one or more subjective or strategic standards, including time-based equity awards. This Policy shall apply to any Covered Compensation received by an employee who served as a Covered Executive at any time during the performance period for that Covered Compensation.

6.Financial Restatements; Recoupment

In the event that the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (such an accounting restatement, a “Restatement”), the Committee shall review the Covered Compensation received by a Covered Executive during the three-fiscal year period preceding the Required Financial Restatement Date (as defined below) as well as any transition period that results from a change in the Company’s fiscal year within or immediately following those three completed fiscal years. Regardless of whether the Company files the restated financial statements, the Committee shall seek recoupment of any Covered Compensation, whether in the form of cash or equity, received by a Covered Executive (computed without regard to any taxes paid), if and to the extent:

a.the amount of the Covered Compensation was calculated based upon the achievement of certain financial results that were subsequently the subject of a Restatement; and

b.the amount of the Covered Compensation that would have been received by the Covered Executive had the financial results been properly reported would have been lower than the amount actually awarded (any such amount, “Erroneously-Awarded Compensation”).

To the extent Covered Compensation was based on the achievement of a financial reporting measure, but the amount of such Covered Compensation was not awarded or paid on a formulaic basis, the Committee shall determine the amount, if any, of such Covered Compensation that is deemed to be Erroneously-Awarded Compensation.

For purposes of this Policy, the “Required Financial Restatement Date” is the earlier to occur of:

a.the date the Board, a committee of the Board, or any officer or officers authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare a Restatement; or

b.the date a court, regulator, or other legally authorized body directs the Company to prepare a Restatement.

For the avoidance of doubt, a Covered Executive will be deemed to have received Covered Compensation in the Company’s fiscal period during which the financial reporting measure specified in the award is attained, even if the Covered Executive remains subject to additional payment conditions with respect to such award.

7.Method of Recoupment

The Committee will determine, in its sole discretion, the method for recouping Erroneously-Awarded Compensation, which may include, without limitation:

a.requiring reimbursement of cash incentive compensation previously paid;

b.cancelling or rescinding some or all outstanding vested or unvested equity (and/or equity-based) awards;

c.adjusting or withholding from unpaid compensation or other set-off to the extent permitted by applicable law; and/or

d.reducing or eliminating entitlements to future salary increases, cash-based or equity-based incentive compensation, bonuses, awards or severance.

8.Impracticability Exceptions

The Committee shall not seek recoupment of any Erroneously-Awarded Compensation to the extent it determines that:

a.the direct expense paid to a third party to assist in enforcing this Policy would exceed the amount of Erroneously-Awarded Compensation to be recovered;

b.recovery would violate home country law where that law was adopted prior to November 28, 2022; and/or

c.recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to Company employees, to fail to meet the requirements of Sections 401(a)(13) and 411(a) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

9.No Indemnification

For the avoidance of doubt, the Company shall not indemnify any Covered Executive against the loss of any Erroneously-Awarded Compensation or any Covered Compensation that is recouped pursuant to the terms of this Policy, or any claims relating to the Company’s enforcement of its rights under this Policy.

10.Severability

If any provision of this Policy or the application of any such provision to any Covered Executive shall be adjudicated to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Policy, and the invalid, illegal or unenforceable provisions shall be deemed amended to the minimum extent necessary to render any such provision or application enforceable.

11.Amendments

The Committee may amend, modify or terminate this Policy in whole or in part at any time and may adopt such rules and procedures that it deems necessary or appropriate to implement this Policy or to comply with applicable laws and regulations.

12.No Impairment of Other Remedies

The remedies under this Policy are in addition to, and not in lieu of, any legal and equitable claims the Company may have, the Company’s ability to enforce, without duplication, the recoupment provisions set forth in any separate Company policy or in any Company plan, program or agreement, including without limitation the Company’s Compensation Recoupment Policy, effective as of November 6, 2018, as may be amended from time to time (each, a “Separate Recoupment Policy” and collectively, the “Separate Recoupment Policies”), or any actions that may be imposed by law enforcement agencies, regulators or other authorities. Notwithstanding the foregoing, in the event that there is a conflict between the application of this Policy to a Covered Executive in the event of a Restatement and any additional recoupment provisions set forth in a Separate Recoupment Policy to which a Covered Executive is subject, the provisions of this Policy shall control. The Company may also adopt additional Separate Recoupment Policies in the future or amend existing requirements as required by law or regulation.

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CLAWBACK POLICY ACKNOWLEDGMENT

Reference is made to the MACOM Technology Solutions Holdings, Inc. Policy for Recoupment of Incentive Compensation, effective as of October 2, 2023 (the “Clawback Policy”). By signing in the space indicated below, you acknowledge and agree that you have received and understand the Clawback Policy and that effective as of [DATE] the Clawback Policy applies and will continue to apply to you during and after your employment or other service in accordance with its terms.

EXECUTIVE:

____________________________________

Name: [NAME]

DATE: [DATE], 2023

EX-19.1

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

INSIDER TRADING POLICY

January 17, 2024

Background

The board of directors of MACOM Technology Solutions Holdings, Inc. (the “Company”) has adopted this Insider Trading Policy for our directors, officers, employees and consultants with respect to the trading of the Company’s securities, as well as the securities of publicly traded companies with whom we have a business relationship.

Federal and state securities laws prohibit the purchase or sale of a company’s securities by persons who are aware of material information about that company that is not generally known or available to the public. These laws also prohibit persons who are aware of such material nonpublic information from disclosing this information to others who may trade. Companies and their controlling persons are also subject to liability if they fail to take reasonable steps to prevent insider trading by company personnel.

It is important that you understand the breadth of activities that constitute illegal insider trading and the consequences, which can be severe. Both the U.S. Securities and Exchange Commission (the “SEC”) and FINRA investigate and are very effective at detecting insider trading. The SEC, together with the U.S. Department of Justice, pursue insider trading violations vigorously. Cases have been successfully prosecuted against trading by employees through foreign accounts, trading by family members and friends, and trading involving only a small number of shares.

This policy is designed to prevent insider trading or allegations of insider trading, and to protect the Company’s reputation for integrity and ethical conduct. It is your obligation to understand and comply with this policy. Should you have any questions regarding this policy, please contact the Company’s General Counsel at ambra.roth@macom.com.

Penalties for Noncompliance

Civil and Criminal Penalties. Potential penalties for insider trading violations include

(1)imprisonment for up to 20 years, (2) criminal fines of up to $5 million and (3) civil fines of up to three times the profit gained or loss avoided.

Company Sanctions. Failure to comply with this policy may also subject you to Company-imposed sanctions, including dismissal for cause, whether or not your failure to comply with this policy results in a violation of law.

Controlling Person Liability. If the Company fails to take appropriate steps to prevent illegal insider trading, the Company may have “controlling person” liability for a trading violation.

The civil penalties can extend personal liability to the Company’s directors, officers and other supervisory personnel if they fail to take appropriate steps to prevent insider trading.

Scope of Policy

Persons Covered. As a director, officer, employee or consultant of the Company or its subsidiaries, this policy applies to you. The same restrictions that apply to you also apply to your family members who reside with you, anyone else who lives in your household and any family members who do not live in your household but whose transactions in Company securities are directed by you or are subject to your influence or control (such as parents or children who consult with you before they trade in Company securities). You are responsible for making sure that the purchase or sale of any security covered by this policy by any such person complies with this policy. The Company may also determine that other persons should be subject to this policy, such as contractors or consultants who have access to “inside information.” Any such other persons will be notified by the office of the Company’s General Counsel. Further, it is the policy of the Company to comply with all applicable securities laws when transacting in its own securities.

This policy also applies to any entities that you influence or control, including any corporations, partnerships or trusts (collectively referred to as “controlled entities”), and transactions by controlled entities should be treated for the purposes of this policy and applicable securities laws as if they were for your own account.

Companies Covered. The prohibition on insider trading in this policy is not limited to trading in the Company’s securities. It includes trading in the securities of other firms, such as customers or suppliers of the Company and those firms with which the Company may be negotiating major transactions, such as an acquisition, investment or sale. Information that is not material to the Company may nevertheless be material to one of those other firms.

Transactions Covered. Trading includes purchases and sales of stock, derivative securities (such as put and call options and convertible debentures or preferred stock), and debt securities (such as debentures, bonds and notes).

Trading also may include or exclude certain transactions under Company plans, as follows:

Stock Option Exercises. The policy does not apply to the exercise of an employee stock option, or to the exercise of a withholding right pursuant to which you elect to have the Company withhold shares subject to an option to satisfy tax withholding requirements and/or the exercise price. The policy does apply, however, to any sale of Company stock as part of a broker-assisted cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option.

Restricted and Restricted Stock Units. The policy does not apply to the vesting of restricted stock or restricted stock units, or the exercise of a tax withholding right pursuant to which you elect to have the Company withhold shares of stock to satisfy

tax withholding requirements upon the vesting of any restricted stock or restricted stock units. The policy does apply, however, to any market sale of shares acquired upon vesting of restricted stock or restricted stock units.

Rule 10b5-1 Plans. A “Rule 10b5-1 plan” provides a defense from insider trading liability by demonstrating that the purchase or sale in question was made pursuant to a binding contract, instruction or written plan, in accordance with the provisions outlined herein. You may not enter into, amend, suspend or terminate any Rule 10b5-1 plan except with the prior written approval of a compliance officer (as defined below). Once you establish a Rule 10b5-1 plan in accordance with the foregoing, you will not need to clear in advance transactions made pursuant to the terms of the Rule 10b5-1 plan.

Employee Stock Purchase Plan (ESPP). The policy does not apply to purchases of Company stock in the employee stock purchase plan resulting from your periodic contribution of money to the plan pursuant to the election you made at the time of your enrollment in the plan. The policy also does not apply to purchases of Company stock resulting from lump sum contributions to the plan, provided that you elected to participate by lump-sum payment at the beginning of the applicable enrollment period. The policy does apply to your election to participate in the plan, or an increase in your level of participation in the plan, and to your sales of Company stock purchased pursuant to the plan.

The policy does not apply to bona fide gifts of the Company’s securities, provided that you do not have reason to believe that the recipient intends to sell the Company’s securities while you are aware of material nonpublic information relating to the Company and, if you are a covered person (as defined below), you have complied with the requirements set forth below relating to pre-clearance procedures.

Statement of Policy

No Trading on Inside Information. You may not trade in the securities of the Company, directly or through family members or other persons or controlled entities, if you are aware of material nonpublic information relating to the Company. Similarly, you may not trade in the securities of any other company if you are aware of material nonpublic information about that company which you obtained in the course of your employment with the Company.

No Tipping. You may not pass material nonpublic information on to others or recommend to anyone the purchase or sale of any securities when you are aware of such information. This practice, known as “tipping,” also violates the securities laws and can result in the same civil and criminal penalties that apply to insider trading, even though you did not trade and did not gain any benefit from another’s trading.

No Exception for Hardship. The existence of a personal financial emergency does not excuse you from compliance with this policy.

Pre-clearance Procedures. The following pre-clearance procedures apply to directors, executive officers subject to Section 16 of the Securities Exchange Act of 1934 (“executive officers”) and certain designated employees and consultants of the Company and its subsidiaries who have access to material nonpublic information about the Company (collectively, “covered persons”). The names and positions of the covered persons subject to the pre-clearance procedures are listed on the attached Schedule I. The Company may from time to time designate other persons are subject to these procedures and will amend Schedule I from time to time as necessary to reflect such changes or the resignation or change of status of any individual.

Covered persons, together with their family members and other members of their household, as well as their controlled entities, may not engage in any transaction involving the Company’s securities (including a stock plan transaction such as an option exercise, or a gift, loan, pledge or hedge, contribution to a trust or any other transfer) without first obtaining pre-clearance of the transaction from either the Company’s Chief Executive Officer or General Counsel (each, a “compliance officer”). A request for pre-clearance should be submitted to a compliance officer at least two business days in advance of the proposed transaction. A compliance officer is under no obligation to approve a trade submitted for pre-clearance and may determine not to permit the trade. The General Counsel has the sole discretion to decide whether to clear transactions by the Chief Executive Officer or persons or entities subject to this policy as a result of their relationship with the Chief Executive Officer, and the Chief Executive Officer has the sole discretion to decide whether to clear transactions by the General Counsel or persons or entities subject to this policy as a result of their relationship with the General Counsel.

If, upon requesting pre-clearance, a covered person is advised that a transaction in the Company’s securities has been approved by the compliance officer, the covered person may enter into a transaction within two business days thereafter. If for any reason a transaction is not completed within the timeframe for which the pre-clearance is obtained, pre-clearance must be obtained again before a transaction may take place. Any person who has requested pre- clearance may not disclose the approval or denial of the request to any other person.

Even if you receive pre-clearance for a proposed transaction, for the avoidance of doubt, at no time may you trade in Company securities if you are aware of material nonpublic information about the Company.

Blackout Procedures. To help prevent inadvertent violations of the federal securities laws and to avoid even the appearance of trading on the basis of inside information, all directors and executive officers and certain employees, together with their family members and other members of their household, as well as their controlled entities, are subject to the following blackout procedures:

Quarterly Blackout Periods. The Company’s announcement of its quarterly financial results almost always has the potential to have a material effect on the market for the Company’s securities. Therefore, to avoid even the appearance of trading on the basis

of material nonpublic information, you may not trade in the Company’s securities during the period beginning on the first day of the last calendar month of each fiscal quarter of the Company and ending after the end of the first full business day following the release of the Company’s earnings for that quarter.

Interim Earnings Guidance and Event-Specific Blackouts. The Company may on occasion issue interim earnings guidance or other potentially material information by means of a press release, SEC filing of a current report on Form 8-K or other means designed to achieve widespread dissemination of the information. You should anticipate that trading will be blacked out while the Company is in the process of assembling the information to be released and until the information has been released to and fully absorbed by the market.

From time to time, an event may occur that is material to the Company and is known by only a few directors, executives and other employees. So long as the event remains material and nonpublic, the persons who are aware of the event, together with their family members and other members of their household, as well as their controlled entities, may not trade in the Company’s securities. The existence of an event-specific blackout will not be announced, other than to those who are aware of the event giving rise to the blackout. If, however, a person whose trades are subject to pre-clearance requests permission to trade in the Company’s securities during an event-specific blackout, the compliance officer will inform the requesting person of the existence of a blackout period, without disclosing the reason for the blackout. Any person made aware of the existence of an event-specific blackout should not disclose the existence of the blackout to any other person. The failure of the compliance officer to designate a person as being subject to an event-specific blackout will not relieve that person of the obligation not to trade while aware of material nonpublic information.

Even if a blackout period is not in effect, at no time may you trade in Company securities if you are aware of material nonpublic information about the Company.

Exception for Approved Rule 10b5-1 Trading Plans. Transactions by covered persons in the Company’s securities that are executed pursuant to an approved Rule 10b5-1 trading plan are not subject to the prohibition on trading on the basis of material nonpublic information contained in this policy or to the restrictions set forth above relating to pre-clearance procedures and blackout periods.

Rule 10b5-1 provides an affirmative defense from insider trading liability under the federal securities laws for trading plans that meet certain requirements. A Rule 10b5-1 trading plan must be entered into at a time when you are not aware of material nonpublic information. Once the Rule 10b5-1 trading plan is adopted, you must not exercise any influence over the amount of securities to be traded, the price at which they are to be traded or the date of the trade. The plan must either specify (including by formula) the amount, pricing and timing of transactions in advance or delegate discretion on those matters to an independent third party. You may only have one outstanding Rule 10b5-1 trading plan at any one time (subject to certain exceptions).

The Company requires that adoption, amendment, suspension or termination of all Rule 10b5-1 trading plans be approved in writing in advance by a compliance officer. Rule 10b5-1 trading plans generally may not be adopted during a blackout period and may only be adopted at a time when the person adopting the plan is not aware of material nonpublic information. All Rule 10b5-1 trading plans must have a “cooling off period,” the length of which will depend on the status of the covered person. For directors and executive officers, the applicable “cooling off period” is the later of (1) 90 days after adoption and (2) two business days following diclosure of the Company’s financial results in a Form 10-Q or Form 10-K for the fiscal quarter in which the plan was adopted, subject to a maximum of 120 days. For all other covered persons, the applicable “cooling off period” is at least 30 days from the time the trading plan is executed to the time of the first trade pursuant to the plan. In the event a Rule 10b5-1 trading plan is later amended, the amendment must provide for a new “cooling off period” of the applicable length noted above from the time the trading plan amendment is executed to the first trade pursuant to the amended plan.

Definition of Material Nonpublic Information

Note that inside information has two important elements – materiality and public availability.

Material Information. Information is material if there is a substantial likelihood that a reasonable investor would consider it important in deciding whether to buy, hold or sell a security. Any information that could reasonably be expected to affect the price of the security is material. Both positive and negative information can be material. Common examples of material information are:

•Projections of future earnings or losses or other earnings guidance;

•Earnings that are inconsistent with consensus expectations of the investment community;

•Financial results of a completed period;

•Acquisition or termination of a significant customer relationship;

•A pending or proposed merger, acquisition or tender offer or an acquisition or disposition of significant assets;

•A change in management or board of directors;

•Significant related party transactions;

•Major events regarding a company’s securities, including the declaration of a dividend, stock split or the offering of additional securities;

•Bank borrowings or other financing transactions out of the ordinary course;

•Severe financial liquidity problems;

•Actual or threatened major litigation, the resolution of such litigation, criminal indictments or government investigations;

•New major contracts, orders, suppliers, customers or finance sources or the loss thereof;

•Development of a significant new product, process or service;

•Expansion or curtailment of significant operations; and

•Cybersecurity incidents that materially affect a company’s products, services, relationships or competitive conditions.

Because trading that receives scrutiny will be evaluated after the fact with the benefit of hindsight, questions concerning the materiality of particular information should be resolved in favor of materiality, and trading should be avoided.

Nonpublic Information. Nonpublic information is information that is not generally known or available to the public. One common misconception is that material information loses its “nonpublic” status as soon as a press release is issued disclosing the information. In fact, information is considered to be available to the public only when it has been released broadly to the marketplace (such as by a press release or an SEC filing) and the investing public has had time to absorb the information fully. As a general rule, information is considered nonpublic until the end of the first full trading day after the information is released broadly to the marketplace. For example, if the Company announces financial earnings before tradingbegins on a Tuesday, the first time you can buy or sell Company securities is the opening of the market on Wednesday (assuming you are not aware of other material nonpublic information at that time). However, if the Company announces earnings after trading begins on that Tuesday, the first time you can buy or sell Company securities is the opening of the market on Thursday.

Additional Guidance

The Company considers it improper and inappropriate for those employed by or associated with the Company to engage in speculative transactions in the Company’s securities or in other transactions in the Company’s securities that may lead to inadvertent violations of the insider trading laws. Accordingly, your trading in Company securities is subject to the following additional guidance.

Short-Term Trading. Short-term trading of the Company’s securities may be distracting to the person engaging in such trades and may unduly focus such person on the Company’s short- term performance instead of the Company’s long-term objectives. For these reasons, and in accordance with Section 16(b) of the Securities Exchange Act of 1934, any director or executive officer of the Company who purchases Company securities may not sell any Company securities of the same class during the six months following the purchase (or vice versa).

Short Sales. You may not engage in short sales of the Company’s securities (sales of securities that are not then owned by you), including a “sale against the box” (a sale with delayed delivery). Short sales arising from certain types of hedging transactions are governed by the section below captioned “Hedging Transactions.”

Publicly Traded Options. You may not engage in transactions in publicly traded options, such as puts, calls and other derivative securities, on an exchange or in any other organized market.

Option positions arising from certain types of hedging transactions are governed by the section below captioned “Hedging Transactions.”

Standing Orders. A standing order placed with a broker to sell or purchase stock at a specified price leaves you with no control over the timing of the transaction. A standing order transaction executed by the broker when you are aware of material nonpublic information may result in unlawful insider trading and violation of this policy by you. You should avoid placing standing orders and place day orders only.

Margin Accounts and Pledges. Securities held in a margin account or pledged as collateral for a loan may be sold without your consent by the broker if you fail to meet a margin call or by the lender in foreclosure if you default on the loan. Because a margin or foreclosure sale may occur at a time when you are aware of material nonpublic information or otherwise are not permitted to trade in Company securities by this policy, you are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan.

Hedging Transactions. Certain forms of hedging or monetization transactions, such as zero- cost collars, prepaid variable forward sale contracts, equity swaps and exchange funds, allow an individual to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the individual to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the individual may no longer have the same objectives as the Company’s other shareholders. Therefore, the Company prohibits you from engaging in any hedging or monetization transactions.

Post-Termination Transactions

This policy continues to apply to your transactions in Company securities even after you have terminated employment or other services to the Company or a subsidiary as follows: if you are aware of material nonpublic information when your employment or service relationship terminates, you may not trade in Company securities until that information has become public or is no longer material.

Unauthorized Disclosure

Maintaining the confidentiality of Company information is essential for competitive, security and other business reasons, as well as to comply with securities laws. You should treat all information you learn about the Company or its business plans in connection with your employment as confidential and proprietary to the Company. Inadvertent disclosure of confidential or inside information may expose the Company and you to significant risk of investigation and litigation.

The timing and nature of the Company’s disclosure of material information to outsiders is subject to legal rules, the breach of which could result in substantial liability to you, the

Company and its management. The Company has established procedures for releasing material information in a manner that is designed to achieve broad public dissemination of the information immediately upon its release. You may not, therefore, disclose information to anyone outside the Company, including but not limited to family members, friends, business associates, investors and consulting firms, unless any such disclosure is made in accordance with the Company’s policies regarding the protection or authorized external disclosure of information regarding the Company. You also may not discuss the Company or its business on social media. It is important that responses to inquiries about the Company by the press, investment analysts or others in the financial community be made on the Company’s behalf only through authorized individuals.

Please consult the Company’s corporate communications policy for more details regarding the Company’s policy on speaking to the media, financial analysts and investors.

Personal Responsibility

You should remember that the ultimate responsibility for adhering to this policy and avoiding improper trading rests with you. If you violate this policy, the Company may take disciplinary action, including dismissal for cause. Any action on the part of the Company, the General Counsel or any other employee or director (pursuant to this policy or otherwise) does not in any way constitute legal advice or insulate an individual from liability under applicable securities laws.

Company Assistance

Your compliance with this policy is of the utmost importance both for you and for the Company. If you have any questions about this policy or its application to any proposed transaction, you may obtain additional guidance from the Company’s General Counsel at ambra.roth@macom.com. Do not try to resolve uncertainties on your own, as the rules relating to insider trading are often complex, not always intuitive and carry severe consequences.

Modifications; Waivers

The Company reserves the right to amend or modify this policy, and the trading policies and procedures set forth herein, at any time. Waiver of any provision of this policy in a specific instance may be authorized in writing by the General Counsel, or her designee.

Certification

All employees must certify their understanding of, and intent to comply with, this policy. A copy of the certification that employees must sign is enclosed with this policy.

This policy is dated January 17, 2024.

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. INSIDER TRADING POLICY

CERTIFICATION

To MACOM Technology Solutions Holdings, Inc.:

I,, have received and read a copy of the MACOM Technology Solutions Holdings, Inc. Insider Trading Policy dated January 17, 2024. I hereby agree to comply with the specific requirements of the policy in all respects during my employment or other service relationship with MACOM Technology Solutions Holdings, Inc. or any of its subsidiaries. I understand that my failure to comply in all respects with the policy is a basis for termination for cause of my employment or other service relationship with MACOM Technology Solutions Holdings, Inc.

(Signature)

(Date)

Schedule I Covered Persons Attached

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE PRESIDENT AND CEO PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen G. Daly, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of MACOM Technology Solutions Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 1, 2024
	/s/ Stephen G. Daly
	Stephen G. Daly
	President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CFO PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John F. Kober, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of MACOM Technology Solutions Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 1, 2024
	/s/ John F. Kober
	John F. Kober
	SVP and Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

    In connection with the Quarterly Report of MACOM Technology Solutions Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended December 29, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Stephen G. Daly, as President and Chief Executive Officer of the Company, and John F. Kober, as SVP and Chief Financial Officer of the Company, each hereby certifies, pursuant to and solely for the purpose of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the period covered by the Report.

Date:	February 1, 2024
By:	/s/ Stephen G. Daly
	Stephen G. Daly
	President and Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ John F. Kober
	John F. Kober
	SVP and Chief Financial Officer
	(Principal Financial Officer)

XML

Cover Page - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2023	Jan. 29, 2024	Sep. 29, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 29, 2023
Document Transition Report	false
Entity File Number	001-35451
Entity Registrant Name	MACOM Technology Solutions Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-0306875
Entity Address, Address Line One	100 Chelmsford Street
Entity Address, City or Town	Lowell
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01851
City Area Code	978
Local Phone Number	656-2500
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	MTSI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		72,067,141
Entity Central Index Key	0001493594
Amendment Flag	false
Current Fiscal Year End Date	--09-27
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	$ (1,473)		$ (2,978)

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Dec. 29, 2023	Sep. 29, 2023
Assets, Current [Abstract]
Cash and cash equivalents	$ 163,586	$ 173,952
Short-term investments	299,705	340,574
Accounts Receivable, after Allowance for Credit Loss, Current	101,075	91,253
Inventories	159,501	136,300
Prepaid and other current assets	21,084	19,114
Total current assets	744,951	761,193
Property and equipment, net	184,278	149,496
Goodwill	322,489	323,398
Intangible assets, net	119,527	66,994
Deferred income taxes	217,463	218,107
Other long-term assets	62,094	34,056
Total assets	1,650,802	1,553,244
Current liabilities:
Finance lease liabilities	1,052	1,162
Accounts payable	27,137	24,966
Accrued liabilities	74,680	57,397
Total current liabilities	102,869	83,525
Finance lease liabilities	31,624	31,776
Financing obligation	9,232	9,307
Long-term debt	447,421	447,134
Other long-term liabilities	35,565	33,902
Total liabilities	626,711	605,644
Stockholders’ equity:
Common stock	72	71
Treasury stock, at cost	(330)	(330)
Accumulated other comprehensive loss	(396)	(3,635)
Additional paid-in capital	1,274,928	1,214,203
Accumulated deficit	(250,183)	(262,709)
Total stockholders’ equity	1,024,091	947,600
Total liabilities and stockholders' equity	$ 1,650,802	$ 1,553,244

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 29, 2023	Dec. 30, 2022
Income Statement [Abstract]
Revenue	$ 157,148	$ 180,104
Cost of revenue	69,838	69,749
Gross profit	87,310	110,355
Operating expenses:
Research and development	39,413	38,832
Selling, general and administrative	36,887	32,940
Total operating expenses	76,300	71,772
Income from operations	11,010	38,583
Other income (expense):
Interest income	5,556	3,684
Interest expense	(1,290)	(3,082)
Other expense, net	0	(55)
Total other income	4,266	547
Income before income taxes	15,276	39,130
Income tax expense	2,750	9,611
Net income	$ 12,526	$ 29,519
Net income per share:
Income (loss) per share - Basic (usd per share)	$ 0.18	$ 0.42
Income (loss) per share - Diluted (usd per share)	$ 0.17	$ 0.41
Weighted average shares used:
Basic (in shares)	71,425	70,481
Diluted (in shares)	72,286	71,374

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Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2023	Dec. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 12,526	$ 29,519
OCI, Debt Securities, Available-for-Sale, Unrealized Holding Gain (Loss), before Adjustment and Tax	1,295	2,547
Foreign currency translation gain, net of tax	1,944	737
Other comprehensive income, net of tax	3,239	3,284
Total comprehensive income	$ 15,765	$ 32,803

XML

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Treasury Stock	Accumulated Other Comprehensive Income	Additional Paid-in Capital	Accumulated Deficit
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at the beginning of the period, treasury stock (in shares)			23
Balance at beginning of period, (in shares) at Sep. 30, 2022		70,022
Balance at beginning of period at Sep. 30, 2022	$ 842,748	$ 70	$ (330)	$ (5,851)	$ 1,203,145	$ (354,286)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of restricted common stock and units (in shares)		1,126
Vesting of restricted common stock and units	1	$ 1
Issuance of common stock pursuant to employee stock purchase plan (in shares)		52
Issuance of common stock pursuant to employee stock purchase plan	2,320				2,320
Shares repurchased for stock withholdings on restricted stock awards (in shares)		(443)
Shares repurchased for tax withholdings on equity awards	(26,375)				(26,375)
Share-based compensation	11,047				11,047
Other comprehensive income, net of tax	3,284			3,284
Net income	29,519					29,519
Balance at end of period, (in shares) at Dec. 30, 2022		70,757
Balance at end of period at Dec. 30, 2022	862,544	$ 71	$ (330)	(2,567)	1,190,137	(324,767)
Balance at end of period, treasury stock (in shares) at Dec. 30, 2022			(23)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at the beginning of the period, treasury stock (in shares)			23
Balance at the beginning of the period, treasury stock (in shares)			23
Balance at beginning of period, (in shares) at Sep. 29, 2023		71,013
Balance at beginning of period at Sep. 29, 2023	947,600	$ 71	$ (330)	(3,635)	1,214,203	(262,709)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises (in shares)		5
Stock option exercises	80				80
Vesting of restricted common stock and units (in shares)		459
Vesting of restricted common stock and units	0	$ 0
Issuance of common stock pursuant to employee stock purchase plan (in shares)		59
Issuance of common stock pursuant to employee stock purchase plan	2,769				2,769
Shares repurchased for stock withholdings on restricted stock awards (in shares)		(160)
Shares repurchased for tax withholdings on equity awards	(11,552)				(11,552)
Share-based compensation	8,657				8,657
Issuance of common stock as consideration for acquisition (in shares)		712
Issuance of common stock as consideration for acquisition	60,772	$ 1			60,771
Other comprehensive income, net of tax	3,239			3,239
Net income	12,526					12,526
Balance at end of period, (in shares) at Dec. 29, 2023		72,088
Balance at end of period at Dec. 29, 2023	$ 1,024,091	$ 72	$ (330)	$ (396)	$ 1,274,928	$ (250,183)
Balance at end of period, treasury stock (in shares) at Dec. 29, 2023			(23)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at the beginning of the period, treasury stock (in shares)			23

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2023	Dec. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 12,526	$ 29,519
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and intangibles amortization	14,289	12,855
Share-based compensation	8,657	11,047
Deferred income taxes	294	9,067
Other adjustments, net	(1,755)	(381)
Change in operating assets and liabilities:
Accounts receivable	(12,180)	(10,489)
Inventories	1,555	(6,375)
Prepaid expenses and other assets	(510)	(556)
Accounts payable	2,122	3,689
Accrued and other liabilities	6,612	(10,349)
Income taxes	1,489	246
Net cash provided by operating activities	33,099	38,273
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of a business	(75,000)	0
Purchases of property and equipment	(4,652)	(9,616)
Proceeds from sales and maturities of short-term investments	100,265	146,966
Purchases of short-term investments	(55,387)	(145,300)
Net cash used in investing activities	(34,774)	(7,950)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on finance leases and other	(349)	(278)
Proceeds from stock option exercises and employee stock purchases	2,848	2,320
Repurchase of common stock - tax withholdings on equity awards	(11,552)	(26,375)
Net cash used in financing activities	(9,053)	(24,333)
Foreign currency effect on cash	362	213
NET CHANGE IN CASH AND CASH EQUIVALENTS	(10,366)	6,203
CASH AND CASH EQUIVALENTS — Beginning of period	173,952	119,952
CASH AND CASH EQUIVALENTS — End of period	163,586	126,155
Issuance of common stock in connection with the RF Business Acquisition (See Note 3 - Acquisitions)	$ 60,772	$ 0

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Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Dec. 29, 2023

Accounting Policies [Abstract]

Basis of Presentation Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unaudited Interim Financial Information—The accompanying unaudited, condensed consolidated financial statements have been prepared according to the rules and regulations of the United States (the “U.S.”) Securities and Exchange Commission (the “SEC”) and, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the condensed consolidated balance sheets, condensed consolidated statements of operations, comprehensive income, stockholders' equity and cash flows of MACOM Technology Solutions Holdings, Inc. (“MACOM,” the “Company,” “us,” “we” or “our”) for the periods presented. We prepare our interim financial information using the same accounting principles we use for our annual audited consolidated financial statements. Certain information and note disclosures normally included in the annual audited consolidated financial statements have been condensed or omitted in accordance with prescribed SEC rules. We believe that the disclosures made in our condensed consolidated financial statements and the accompanying notes are adequate to make the information presented not misleading.

The condensed consolidated balance sheet as of September 29, 2023 is as reported in our audited consolidated financial statements as of that date. Our accounting policies are described in the notes to our September 29, 2023 consolidated financial statements, which were included in our Annual Report on Form 10-K for our fiscal year ended September 29, 2023 filed with the SEC on November 13, 2023 (the “2023 Annual Report on Form 10-K”). We recommend that the financial statements included in this Quarterly Report on Form 10-Q be read in conjunction with the consolidated financial statements and notes included in our 2023 Annual Report on Form 10-K.

Principles of Consolidation, Basis of Presentation and Reclassification—The accompanying condensed consolidated financial statements include our accounts and the accounts of our majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the condensed consolidated financial statements, Interest income has been reclassified to conform to the current year presentation.

We have a 52- or 53-week fiscal year ending on the Friday closest to the last day of September. Fiscal years 2024 and 2023 each include 52 weeks. To offset the effect of holidays, for fiscal years in which there are 53 weeks, we include the extra week arising in such fiscal years in the first fiscal quarter.

Use of Estimates—The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities during the reporting periods, the reported amounts of revenue and expenses during the reporting periods and the disclosure of contingent assets and liabilities at the date of the financial statements. On an ongoing basis, we base estimates and assumptions on historical experience, currently available information and various other factors that management believes to be reasonable under the circumstances. Actual results may differ materially from these estimates and assumptions. The accounting policies which our management believes involve the most significant application of judgment or involve complex estimation, are inventories and associated reserves; revenue reserves; business combinations; goodwill and intangible asset valuation; share-based compensation valuations and income taxes.

Recent Accounting Pronouncements—Our Recent Accounting Pronouncements are described in our 2023 Annual Report on Form 10-K.

Pronouncements for Adoption in Subsequent Periods

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures, which improves disclosures about a public entity’s reportable segments and addresses requests from investors and other allocators of capital for additional, more detail information about a reportable segment’s expenses. The amendments in this update improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. This ASU should be applied on a retrospective basis. The amendments in this update are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the future effect the adoption of this ASU will have on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which require greater disaggregation of income tax disclosures. The amendments in this update improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. Other amendments in this update improve the effectiveness and comparability of disclosures by (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) and (2) removing disclosures that no longer are considered cost beneficial or relevant. This ASU should be applied on a prospective basis, with retrospective application permitted. The guidance in this update is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the potential effect of the adoption of this ASU will have on our consolidated financial statements and related disclosures.

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Revenue

3 Months Ended

Dec. 29, 2023

Revenue [Abstract]

Revenue

REVENUE

Disaggregation of Revenue

We disaggregate revenue from contracts with customers by markets and geography, as we believe it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

The following tables present our revenue disaggregated by markets and geography (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Revenue by Market:
Industrial & Defense	$	76,998	$	77,169
Data Center	49,512		41,485
Telecom	30,638		61,450
Total	$	157,148	$	180,104

	Three Months Ended
	December 29, 2023		December 30, 2022
Revenue by Geographic Region:
United States	$	69,645	$	88,589
China	36,348		41,156
Asia Pacific, excluding China (1)	14,008		21,534
Cayman Islands	18,600		11,092
Other Countries (2)	18,547		17,733
Total	$	157,148	$	180,104

(1)Asia Pacific primarily represents Australia, Japan, Malaysia, Singapore, South Korea, Taiwan and Thailand.

(2)No country or region represented greater than 10% of our total revenue as of the dates presented, other than the United States, China, Asia Pacific region and Cayman Islands as presented above.

Revenue by geographic region is aggregated by customer billing address.

Contract Balances

We record contract assets or contract liabilities depending on the timing of revenue recognition, billings and cash collections on a contract-by-contract basis. Our contract liabilities primarily relate to deferred revenue, including advanced consideration received from customers for contracts prior to the transfer of control to the customer, and, therefore, revenue is subsequently recognized upon delivery of products and services.

The following table presents the changes in contract liabilities during the three months ended December 29, 2023 (in thousands, except percentage):

	December 29, 2023		September 29, 2023		$ Change		% Change
Contract liabilities	$	5,604	$	2,762	$	2,842	103	%

During the three months ended December 29, 2023, we recognized sales of $2.4 million that were included in the contract liabilities balance as of the beginning of the period. The increase in contract liabilities during the three months ended December 29, 2023 was primarily related to invoicing prior to when our customers obtain control of such products and or

services.

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Acquisitions

3 Months Ended

Dec. 29, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisitions

ACQUISITIONS

RF Business of Wolfspeed, Inc.— On December 2, 2023, we completed the acquisition of certain assets and specified liabilities of the radio frequency (“RF”) business of Wolfspeed, Inc. (“Wolfspeed”) (the “RF Business,”), which was accounted for as a business combination (the “RF Business Acquisition”). The RF Business includes a portfolio of gallium nitride (“GaN”) on Silicon Carbide (“SiC”) products used in high-performance RF and microwave applications. In connection with the RF Business Acquisition, we expect to assume control of a wafer fabrication facility in Research Triangle Park, North Carolina (the “RTP Fab”) approximately two years following the closing of the RF Business Acquisition (the “RTP Fab Transfer”). Prior to the RTP Fab Transfer, Wolfspeed will continue to operate the facility and supply wafer product and other fabrication services to us pursuant to various agreements entered into between the parties concurrently with the closing of the RF Business Acquisition.

The purchase price for the RF Business Acquisition consisted of $75.0 million payable in cash, subject to customary purchase price adjustments and 711,528 shares of our common stock, with a fair value of $60.8 million, which were issued at the closing of the RF Business Acquisition. The shares of our common stock issued in connection with the RF Business Acquisition are subject to restrictions on the sale of shares until transfer of the RTP Fab to the Company is complete. In addition, if the RTP Fab has not transferred by the fourth anniversary of the closing date of the RF Business Acquisition, Wolfspeed will forfeit 25% of the share consideration. We funded the cash purchase price for the RF Business Acquisition through cash-on-hand.

During the three months ended December 29, 2023, we incurred acquisition-related transaction costs of approximately $7.1 million, which are included in selling, general and administrative expense. We did not incur acquisition-related transaction costs associated with the RF Business Acquisition during the three months ended December 30, 2022.

The following table summarizes the preliminary estimate of the purchase price (in thousands, except shares and closing share price amount):

			At Acquisition Date as Reported December 29, 2023
Cash purchase consideration			$	75,000
Number of shares of MACOM common stock issued at closing	711,528
MACOM closing stock price on acquisition date	$	85.41
Equity purchase consideration			60,772
Total purchase consideration			$	135,772

The purchase price for the RF Business Acquisition has been allocated based on preliminary estimates of fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At Acquisition Date as Reported December 29, 2023
Current assets	$	160
Inventory	23,574
Property and equipment	35,415
Intangible assets	60,000
Prepayment for net assets associated with the RTP Fab Transfer	19,450
Other non-current assets	6,735
Total assets acquired	145,334
Current liabilities	6,474
Long-term liabilities	3,088
Total liabilities assumed	9,562
Purchase Price	$	135,772

Intangible assets consist of technology, customer relationships, a favorable contract and backlog with fair values of $22.0 million, $21.5 million, $15.0 million and $1.5 million, respectively, and useful lives of 4.8 years, 8.8 years, 2.0 years and 0.8 years, respectively. We used variations of income approaches with estimates and assumptions developed by us to determine the fair values of technology, customer relationships, the favorable contract and backlog. We valued technology by using the relief-from-royalty method, customer relationships and backlog by using the multi-period excess earnings method, and the favorable contract by using the discounted cash flow method. The process for estimating the fair values of identifiable intangible assets requires the use of significant estimates and assumptions, including revenue growth rates, royalty rates, operating margin, and discount rates. We used the cost and market approaches to determine the fair value of our property and equipment. We amortize definite-lived assets based on the pattern over which we expect to receive the economic benefit from these assets.

The prepayment of $19.5 million for the net assets associated with the RTP Fab Transfer, classified in Other long-term assets in our condensed consolidated balance sheet, relates to the estimated future fair value of property and equipment, inventory and liabilities that we will assume control of at the time of the RTP Fab Transfer. The cost and market approaches were used in determining the fair value of $14.1 million for property and equipment at the RTP Fab Transfer date.

The determination and allocation of purchase price consideration is based on preliminary estimates of fair value; such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). As of December 29, 2023, the purchase price allocation for the RF Business remains open as we gather additional information regarding the fair value of consideration transferred, the assets acquired and the liabilities assumed, primarily in relation to the valuation of intangibles, inventory, property and equipment, leases, the prepayment for the assets and liabilities to be conveyed with the RTP Fab Transfer and contingencies.

The RF Business has been included in our consolidated financial statements since the date of acquisition. During the fiscal quarter ended December 29, 2023, the RF Business contributed approximately $6.2 million of our total revenue. The net income associated with the RF Business did not materially impact our consolidated net income for the quarter ended December 29, 2023.

Consolidated estimated pro forma unaudited revenue for the fiscal quarters ended December 29, 2023 and December 30, 2022, as if the RF Business Acquisition had occurred on October 1, 2022, is $184.0 million and $222.4 million, respectively. Consolidated pro forma net loss for the fiscal quarters ended December 29, 2023 and December 30, 2022, as if the RF Business Acquisition had occurred on October 1, 2022, is $13.9 million and $31.3 million, respectively. Pro forma revenue and net loss was prepared for comparative purposes only and is not indicative of what would have occurred had the acquisition actually occurred on October 1, 2022, or of the results that may occur in the future. Pro forma net loss includes business combination accounting effects from the RF Business Acquisition, primarily amortization expense from acquired intangible assets, acquisition transaction costs and tax-related effects. Pro forma earnings for the three months ended December 29, 2023 was adjusted to exclude transaction costs of $15.5 million incurred during the quarter and pro forma earnings for the three months ended December 30, 2022 was adjusted to include $41.8 million of transaction costs incurred associated with the RF Business Acquisition.

MESC— On May 31, 2023, we completed the acquisition of the key manufacturing facilities, capabilities, technologies and other assets and certain specified liabilities of OMMIC SAS, a semiconductor manufacturer based in Limeil-Brévannes, France with expertise in wafer fabrication, epitaxial growth and monolithic microwave integrated circuit (“MMIC”) processing and design. We are referring to this acquisition as the MACOM European Semiconductor Center Acquisition (the “MESC Acquisition”) and it was accounted for as a business combination. We completed the MESC Acquisition to expand our European footprint and to enable us to offer higher frequency gallium arsenide (“GaAs”) and GaN MMICs. Total cash consideration paid for the MESC Acquisition was approximately $36.9 million and was funded with cash-on-hand. During the three months ended December 29, 2023 and December 30, 2022, we incurred acquisition-related transaction costs of approximately $0.3 million and $0.8 million, respectively, which are included in selling, general and administrative expense.

The purchase price for the MESC Acquisition has been allocated based on preliminary estimates of fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At Acquisition Date as Reported December 29, 2023
Current assets	$	297
Inventory	3,790
Property and equipment	30,538
Intangible assets	5,966
Total assets acquired	40,591
Current liabilities	3,734
Total liabilities assumed	3,734
Purchase Price	$	36,857

As part of the acquisition, we assumed a lease agreement for the manufacturing facilities in France that provides us with the option to purchase the real property for an immaterial price at the end of the lease term, in October 2024. We expect to exercise this bargain purchase option and have recorded a right-of-use-asset of $24.7 million in Property and equipment. The real property was valued using a market approach.

Intangible assets consist of technology and customer relationships of $4.9 million and $1.1 million, respectively, and both having useful lives of 8.3 years. We used the income approach to determine the fair value of the definite-lived intangible assets and the cost and market approaches to determine the fair value of our property, plant and equipment. We amortize definite-lived assets based on the pattern over which we expect to receive the economic benefit from these assets.

The determination and allocation of purchase price consideration is based on preliminary estimates of fair value; such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). As of December 29, 2023, the purchase price allocation for the MESC Acquisition remains open as we gather additional information regarding the assets acquired and the liabilities assumed, primarily in relation to the valuation of intangibles, inventory, property and equipment, leases, liabilities and contingencies. We did not recognize goodwill associated with this acquisition and there were no measurement period adjustments recognized during the quarter ended December 29, 2023.

Linearizer Technology, Inc.— On March 3, 2023, we completed the acquisition of Linearizer Technology, Inc. (“Linearizer”), a developer of modules and subsystems, including SSPAs, microwave predistortion linearizers and microwave photonics based in Hamilton, New Jersey (the “Linearizer Acquisition”), which was accounted for as a business combination. We acquired Linearizer to further strengthen our component and subsystem design expertise in our target markets. In connection with the Linearizer Acquisition, we acquired all of the outstanding shares of Linearizer for total cash consideration of approximately $51.6 million, subject to customary purchase price adjustments. We funded the Linearizer Acquisition with cash-on-hand. During the three months ended December 29, 2023, we incurred acquisition-related transaction costs of approximately less than $0.1 million which are included in selling, general and administrative expense. There were no transaction costs for the three months ended December 30, 2022. The Linearizer Acquisition was accounted for as a business combination and the operations of Linearizer have been included in our consolidated financial statements since the date of acquisition.

The purchase price for the Linearizer Acquisition has been allocated based on preliminary estimates of fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At Acquisition Date as Reported September 29, 2023		Measurement Period Adjustments		At Acquisition Date as Reported December 29, 2023
Current assets	$	2,819	$	—	$	2,819
Inventory	8,907		1,407		10,314
Property and equipment	5,485		—		5,485
Intangible assets	29,600		—		29,600
Goodwill	12,332		(1,407)		10,925
Total assets acquired	59,143		—		59,143
Current liabilities	7,544		—		7,544
Total liabilities assumed	7,544		—		7,544
Purchase Price	$	51,599	$	—	$	51,599

Intangible assets consist of customer relationships, technology and trade name with fair values of $20.7 million, $7.1 million and $1.8 million, respectively, and useful lives of 8.6 years, 7.6 years and 7.6 years, respectively. We used the income approach to determine the fair value of the definite-lived intangible assets and the cost and market approaches to determine the fair value of our property, plant and equipment. We amortize definite-lived assets based on the pattern over which we expect to receive the economic benefit from these assets. The intangible assets and goodwill acquired will be amortizable for tax purposes due to the Internal Revenue Code of 1986 (IRC) Section 338 election filed.

The determination and allocation of purchase price consideration is based on preliminary estimates of fair value; such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). During the three months ended December 29, 2023, we increased the fair value of inventory by $1.4 million with an offsetting reduction to Goodwill. As of December 29, 2023, the purchase price allocation for Linearizer remains open as we gather additional information regarding the assets acquired and the liabilities assumed, primarily in relation to the valuation of contingencies.

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Investments

3 Months Ended

Dec. 29, 2023

Investments, Debt and Equity Securities [Abstract]

Investments

INVESTMENTS

All investments are short-term in nature and are invested in corporate bonds, commercial paper, and U.S. Treasury securities and are classified as available-for-sale. These certificates of deposit, corporate bonds, commercial paper and U.S. Treasury securities are owned directly by the Company and are segregated in brokerage custody accounts. The amortized cost, gross unrealized holding gains or losses and fair value of our available-for-sale investments by major investment type are summarized in the tables below (in thousands):

	December 29, 2023
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Aggregate Fair Value
Certificates of deposit	$	10,980	$	3	$	—	$	10,983
Corporate bonds	157,136		85		(1,392)		155,829
Commercial paper	100,987		16		(19)		100,984
U.S. Treasury securities	31,864		107		(62)		31,909
Total short-term investments	$	300,967	$	211	$	(1,473)	$	299,705

	September 29, 2023
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Aggregate Fair Value
Corporate bonds	$	145,234	$	—	$	(2,845)	$	142,389
Commercial paper	176,405		—		(129)		176,276
U.S. Treasury securities	21,895		18		(4)		21,909
Total short-term investments	$	343,534	$	18	$	(2,978)	$	340,574

The contractual maturities of available-for-sale investments were as follows (in thousands):

	December 29, 2023		September 29, 2023
Less than one year	$	235,965	$	265,591
Over one year	63,740		74,983
Total available-for-sale investments	$	299,705	$	340,574

We have determined that the gross unrealized losses on available for sale securities as of December 29, 2023 and September 29, 2023 are temporary in nature and/or do not relate to credit loss, and therefore there is no expense for credit losses recorded in our condensed consolidated statements of operations. Unrealized gains and losses on available-for-sale investments are reported as a separate component of stockholders’ equity within accumulated other comprehensive income.

Other Investments—As of December 29, 2023, we held a non-marketable equity investment in Series B preferred stock of a privately held manufacturing corporation with preferred liquidation rights over other equity shares. As the equity securities do not have a readily determinable fair value and do not qualify for the practical expedient under Accounting Standards Codification 820, Fair Value Measurement, we have elected to account for this investment at cost less any impairment. We

evaluate this investment for impairment at each balance sheet date. As of December 29, 2023 and September 29, 2023, the carrying value of this investment was $2.5 million and it was classified as a long-term investment.

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Fair Value

3 Months Ended

Dec. 29, 2023

Fair Value Disclosures [Abstract]

Fair Value

FAIR VALUE

We group our financial assets and liabilities measured at fair value on a recurring basis in three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value. These levels are:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data.

Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by us.

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

We measure certain assets and liabilities at fair value on a recurring basis such as our financial instruments. There have been no transfers between Level 1, 2 or 3 assets or liabilities during the three months ended December 29, 2023.

Assets and liabilities measured at fair value on a recurring basis consist of the following (in thousands):

	December 29, 2023
	Fair Value		Active Markets for Identical Assets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets
Money market funds	$	80,852	$	80,852	$	—	$	—
U.S. Treasury securities	31,909		31,909		—		—
Certificates of deposit	10,983		10,983		—		—
Commercial paper	100,984		—		100,984		—
Corporate bonds	155,829		—		155,829		—
Total assets measured at fair value	$	380,557	$	123,744	$	256,813	$	—

	September 29, 2023
	Fair Value		Active Markets for Identical Assets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets
Money market funds	$	111,388	$	111,388	$	—	$	—
U.S. Treasury securities	21,910		21,910		—		—
Commercial paper	176,276		—		176,276		—
Corporate bonds	142,388		—		142,388		—
Total assets measured at fair value	$	451,962	$	133,298	$	318,664	$	—

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Inventories

3 Months Ended

Dec. 29, 2023

Inventory Disclosure [Abstract]

Inventories

INVENTORIES

Inventories consist of the following (in thousands):

	December 29, 2023		September 29, 2023
Raw materials	$	100,294	$	82,589
Work-in-process	14,250		14,280
Finished goods	44,957		39,431
Total inventory, net	$	159,501	$	136,300

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Property, Plant and Equipment

3 Months Ended

Dec. 29, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

PROPERTY AND EQUIPMENT

Property and equipment consists of the following (in thousands):

	December 29, 2023		September 29, 2023
Construction in process	$	12,908	$	10,256
Machinery and equipment	272,513		238,037
Leasehold improvements	37,317		35,342
Furniture and fixtures	3,067		2,888
Computer equipment and software	19,617		18,824
Finance lease assets	65,522		64,126
Total property and equipment	410,944		369,473
Less accumulated depreciation and amortization	(226,666)		(219,977)
Property and equipment, net	$	184,278	$	149,496

Depreciation and amortization expense related to property and equipment for the three months ended December 29, 2023 and December 30, 2022 was $6.5 million and $6.0 million, respectively. Accumulated amortization on finance lease assets as of December 29, 2023 and September 29, 2023 was $8.4 million and $7.8 million, respectively.

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Intangible Assets

3 Months Ended

Dec. 29, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

INTANGIBLE ASSETS

Amortization expense related to intangible assets is as follows (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Cost of revenue	$	1,942	$	910
Research and development	1,044		—
Selling, general and administrative	4,798		5,903
Total	$	7,784	$	6,813

A summary of the activity in gross intangible assets as of December 29, 2023 and September 29, 2023 is as follows (in thousands):

	December 29, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired technology	$	213,646	$	(180,685)	$	32,961
Backlog	1,500		(129)		1,371
Customer relationships	289,181		(230,435)		58,746
Favorable contract	15,000		(831)		14,169
Internal-use software	8,350		(1,044)		7,306
Trade name (1)	5,200		(226)		4,974
Balance as of December 29, 2023 (2)	$	532,877	$	(413,350)	$	119,527

	September 29, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired technology	$	191,369	$	(179,558)	$	11,811
Customer relationships	267,621		(225,827)		41,794
Internal-use software	8,350		—		8,350
Trade name (1)	5,200		(161)		5,039
Balance as of September 29, 2023 (2)	$	472,540	$	(405,546)	$	66,994

(1)     Includes an indefinite-lived trade name of $3.4 million that is not amortized.

(2) Foreign intangible asset carrying amounts were affected by foreign currency translation.

As of December 29, 2023, our estimated amortization of our intangible assets in future fiscal years was as follows (in thousands):

	2024 Remaining		2025	2026	2027	2028	Thereafter	Total
Amortization expense	$	32,372	26,595	15,170	12,787	9,919	19,284	$	116,127

A summary of the changes in goodwill as of December 29, 2023 and September 29, 2023 is as follows (in thousands):

	December 29, 2023
Balance as of September 29, 2023	$	323,398
Acquired (1)	(1,407)
Foreign currency translation adjustment	498
Balance as of December 29, 2023	$	322,489

(1)     The reduction of $1.4 million to goodwill is related to a measurement period adjustment for the Linearizer Acquisition. For additional information refer to Note 3 - Acquisitions.

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Debt

3 Months Ended

Dec. 29, 2023

Debt Disclosure [Abstract]

Debt

DEBT

The following represents the outstanding balances and effective interest rates of our borrowings as of December 29, 2023 and September 29, 2023, (in thousands, except percentages):

	December 29, 2023				September 29, 2023
	Principal Balance		Effective Interest Rate		Principal Balance		Effective Interest Rate
0.25% convertible notes due March 2026	450,000		0.54	%	450,000		0.54	%
Unamortized discount on deferred financing costs	(2,579)				(2,866)
Total long-term debt, less current portion	$	447,421			$	447,134

2026 Convertible Notes

On March 25, 2021, we issued 0.25% convertible senior notes due in fiscal year 2026, pursuant to an indenture dated as of such date (the “Indenture”), between the Company and U.S. Bank National Association, as trustee, with an aggregate principal amount of $400.0 million (the “Initial Notes”), and on April 6, 2021, we issued an additional $50.0 million aggregate principal amount (the “Additional Notes”) (together, the “2026 Convertible Notes”). The aggregate principal balance of the 2026 Convertible Notes is $450.0 million. The 2026 Convertible Notes will mature on March 15, 2026, unless earlier converted, redeemed or repurchased.

The Additional Notes were issued and sold to the initial purchaser of the Initial Notes, pursuant to the option to purchase the Additional Notes granted by the Company to the initial purchaser and have the same terms as the Initial Notes.

Holders of the 2026 Convertible Notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding December 15, 2025 in multiples of $1,000 principal amount, only under the following circumstances: (i) during any fiscal quarter commencing after the fiscal quarter ending on July 2, 2021 (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 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 is greater than or equal to 130% of the conversion price for the notes on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period (the “Measurement Period”) in which the “trading price” (as defined in the Indenture) per $1,000 principal amount of the notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the notes on each such trading day; (iii) if we call such notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the applicable redemption date; or (iv) upon the occurrence of specified corporate events described in the Indenture. On or after December 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes in multiples of $1,000 principal amount, regardless of the foregoing circumstances.

The initial conversion rate for the 2026 Convertible Notes is 12.1767 shares of common stock per $1,000 principal amount of the notes, equivalent to an initial conversion price of approximately $82.12 per share of common stock. The conversion rate will be subject to adjustment upon the occurrence of certain specified events in the Indenture.

In November 2021, we made an irrevocable election to pay cash for the aggregate principal amount of notes to be converted. Upon conversion of the 2026 Convertible Notes, we are required to pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the notes being converted (subject to, and in accordance with, the settlement provisions of the Indenture). We may not redeem the notes prior to March 20, 2024. We may redeem for cash all or any portion of the notes, at our option, on or after March 20, 2024 if the last reported sale price per share of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption, at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, to, but not including, the redemption date.

The Indenture does not contain any financial or operating covenants or restrictions on the payments of dividends, the making of investments, the incurrence of indebtedness or the purchase or prepayment of securities by us or any of our subsidiaries.

For the three months ended December 29, 2023 and December 30, 2022, total interest expense for the 2026 Convertible Notes was $0.3 million and $0.3 million, respectively.

The fair value of our 2026 Convertible Notes was $556.2 million and $512.5 million as of December 29, 2023 and September 29, 2023, respectively, and was determined based on quoted prices in markets that are not active, which is considered a Level 2 valuation input.

There are no future minimum principal payments under the notes as of December 29, 2023; the full amount of $450.0 million is due in fiscal year 2026.

Term Loans

As of December 30, 2022, we were party to a credit agreement, dated as of May 8, 2014, with a syndicate of lenders and Goldman Sachs Bank USA, as administrative agent (as amended on February 13, 2015, August 31, 2016, March 10, 2017, May 19, 2017, May 2, 2018 and May 9, 2018, the “Credit Agreement”).

On August 2, 2023, the Credit Agreement was terminated when we paid the total outstanding principal balance on our Term Loans of $120.8 million and accrued interest of less than $0.1 million with cash-on-hand.

There was no interest expense for the Term Loans for the three months ended December 29, 2023. For the three months ended December 30, 2022, total interest expense for the Term Loans was $1.8 million.

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Financing Obligation

3 Months Ended

Dec. 29, 2023

Debt Disclosure [Abstract]

Financing Obligation

FINANCING OBLIGATION

We are party to a power purchase agreement for the use of electric power and thermal energy producing systems at our fabrication facility in Lowell, Massachusetts. These systems are expected to reduce our consumption of energy while delivering sustainable, resilient energy for heating and cooling. We do not own these systems; however, we control the use of the assets during operation. As of December 29, 2023 and September 29, 2023, the net book value of the systems in Property and equipment, net was $8.7 million and $8.9 million, respectively, and the corresponding liability was $9.5 million and $9.6 million, respectively, primarily classified in Financing obligation on our condensed consolidated balance sheet. The initial financing obligation was calculated based on future fixed payments allocated to the power generator of $16.8 million over the 15-year term, discounted at an implied discount rate of 7.4%, and the remaining future minimum payments are for power purchases. As of December 29, 2023 and September 29, 2023, we have $25.3 million and $25.5 million, respectively, in remaining fixed payments over a 14-year term associated with the power purchase agreement, of which $15.7 million and $15.9 million, respectively, is included in our consolidated balance sheets on a discounted basis.

As of December 29, 2023, expected future minimum payments for the financing obligation were as follows (in thousands):

Fiscal year ending:	Amount
2024	$	718
2025	982
2026	1,007
2027	1,031
2028	1,057
Thereafter	10,857
Total payments	$	15,652
Less: interest	6,152
Present value of liabilities	$	9,500

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Earnings (Loss) Per Share

3 Months Ended

Dec. 29, 2023

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

EARNINGS PER SHARE

The following table sets forth the computation for basic and diluted net income per share of common stock (in thousands, except per share data):

	Three Months Ended
	December 29, 2023		December 30, 2022
Numerator:
Net income attributable to common stockholders	$	12,526	$	29,519
Denominator:
Weighted average common shares outstanding-basic	71,425		70,481
Dilutive effect of convertible debt, stock options, restricted stock and restricted stock units	861		893
Weighted average common shares outstanding-diluted	72,286		71,374
Net income to common stockholders per share-Basic:	$	0.18	$	0.42
Net income to common stockholders per share-Diluted:	$	0.17	$	0.41

The table above includes the dilutive effect of 7,404 potential common shares for the 2026 Convertible Notes for the three months ended December 29, 2023. The 2026 Convertible Notes did not have an impact on diluted net income per share for the three months ended December 30, 2022.

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Commitments and Contingencies

3 Months Ended

Dec. 29, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

From time to time, we may be subject to commercial disputes, employment issues, claims by other companies in the industry that we have infringed their intellectual property rights and other similar claims and litigation. Any such claims may lead to future litigation and material damages and defense costs. We were not involved in any material pending legal proceedings during the three months ended December 29, 2023.

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Share-Based Compensation

3 Months Ended

Dec. 29, 2023

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

SHARE-BASED COMPENSATION

We have authorized 10 million shares of $0.001 par value preferred stock and 300 million shares of $0.001 par value common stock as of December 29, 2023.

Stock Plans

As of December 29, 2023, we had 3.9 million shares available for issuance under our 2021 Omnibus Incentive Plan (the “2021 Plan”), which replaced our 2012 Omnibus Incentive Plan (as amended and restated) (the “2012 Plan”), and 1.2 million shares available for issuance under our 2021 Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”), which replaced our 2012 Employee Stock Purchase Plan. We have outstanding awards under the 2021 Plan and the 2012 Plan. Following the adoption of the 2021 Plan, no additional awards have been or will be made under the 2012 Plan. Under the 2021 Plan, we have the ability to issue incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), unrestricted stock awards, stock units (including restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”)), performance awards, cash awards, and other share-based awards to employees, directors, consultants and advisors. The ISOs and NSOs must be granted at an exercise price, and the SARs must be granted at a base value, per share of not less than 100% of the closing price of a share of our common stock on the date of grant (or, if no closing price is reported on that date, the closing price on the immediately preceding date on which a closing price was reported) (110% in the case of certain ISOs). Options granted under the 2012 Plan primarily vested based on certain market-based and performance-based criteria and generally have a term of four years to seven years. Certain of the share-based awards granted and outstanding as of December 29, 2023 are subject to accelerated vesting upon a change in control of the Company.

Incentive Stock Units

Aside from the equity plans described above, we also grant incentive stock units (“ISUs”) to certain of our international employees which typically vest over three or four years and for which the fair value is determined by our underlying stock price, which are classified as liabilities and settled in cash upon vesting.

As of December 29, 2023 and September 29, 2023, the fair value of outstanding ISUs was $6.0 million and $5.0 million, respectively, and the associated accrued compensation liability was $2.3 million and $3.3 million, respectively. During the three months ended December 29, 2023 and December 30, 2022, we recorded expense for ISU awards of $0.5 million and $1.3 million, respectively. These expenses are not included in the share-based compensation expense totals below.

Share-Based Compensation

The following table shows a summary of share-based compensation expense included in the condensed consolidated statements of operations (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Cost of revenue	$	1,270	$	1,150
Research and development	2,765		4,232
Selling, general and administrative	4,622		5,665
Total share-based compensation expense	$	8,657	$	11,047

As of December 29, 2023, the total unrecognized compensation costs related to RSUs and PRSUs was $93.2 million, which we expect to recognize over a weighted-average period of 2.3 years. As of December 29, 2023, total unrecognized compensation cost related to our Employee Stock Purchase Plan was $0.9 million.

Restricted Stock Units and Performance-Based Restricted Stock Units

A summary of stock award activity for the three months ended December 29, 2023 is as follows:

	Number of shares (in thousands)	Weighted- Average Grant Date Fair Value
Balance as of September 29, 2023	1,501	$	60.90
Granted	692	78.22
Performance-based adjustment (1)	62	35.43
Vested and released	(459)	48.46
Forfeited, canceled or expired	(87)	65.05
Balance as of December 29, 2023	1,709	$	70.12

(1) The amount shown represents performance adjustments for performance-based awards. These were granted in prior fiscal years and vested during the three months ended December 29, 2023 based on the Company’s achievement of adjusted earnings per share performance conditions.

Stock awards that vested during the three months ended December 29, 2023 and December 30, 2022 had combined fair values of $33.3 million and $66.8 million, respectively, as of the vesting date. RSUs granted generally vest over a period of three or four years.

Market-based PRSUs

We granted 132,247 market-based PRSUs during the three months ended December 29, 2023, at a weighted average grant date fair value of $88.88 per share. Recipients may earn between 0% and 200% of the target number of shares based on the Company’s achievement of total stockholder return in comparison to a peer group of companies in the PHLX Semiconductor Sector Index (^SOX) over a period of approximately three years. The fair value of the awards was estimated using a Monte Carlo simulation and compensation expense is recognized ratably over the service period based on the grant date fair value of the awards subject to the market condition. The expected volatility of the Company’s common stock was estimated based on the historical average volatility rate over the three-year period. The dividend yield assumption was based on historical and anticipated dividend payouts. The risk-free rate assumption was based on observed interest rates consistent with the three-year measurement period. The assumptions used to value the awards are as follows:

	Three Months Ended
	December 29, 2023
Grant date stock price	$	73.01
Average stock price at the start of the performance period	$	79.43
Risk free interest rate	4.6%
Years to maturity	2.9
Expected volatility rate	41.7%
Expected dividend yield	—

Stock Options

As of December 29, 2023 and September 29, 2023 there were 10,000 and 15,000 stock options outstanding, respectively, with a weighted-average exercise price per share of $16.06. As of December 29, 2023, the weighted-average remaining contractual term was 1.85 years and the aggregate intrinsic value was $0.8 million. Aggregate intrinsic value is calculated using the difference between our closing stock price on December 29, 2023 and the exercise price of outstanding, in-the-money options. The total intrinsic value of options exercised during the three months ended December 29, 2023 was $0.3 million. There were no options exercised during the three months ended December 30, 2022

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Income Taxes

3 Months Ended

Dec. 29, 2023

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

We are subject to income tax in the U.S. as well as other tax jurisdictions in which we conduct business. Earnings from non-U.S. activities are subject to local country income tax and may also be subject to current U.S. income tax. For interim periods, we record a tax provision or benefit based upon the estimated effective tax rate expected for the full fiscal year, adjusted for material discrete taxation matters arising during the interim periods. Our quarterly tax provision or benefit, and its quarterly estimate of the annual effective tax rate, are subject to significant variation due to several factors. These factors include items such as: variability in accurately predicting pre-tax income/loss, the mix of jurisdictions in which we operate, intercompany transactions, changes in how we do business, tax law developments, the realizability of our deferred tax assets and related valuation allowance and relative changes in permanent tax benefits or expenses.

The provision for income taxes and effective income tax rate are as follows (in thousands, except percentages):

	Three Months Ended
	December 29, 2023			December 30, 2022
Income tax expense	$	2,750		$	9,611
Effective income tax rate	18.0		%	24.6		%

The difference between the U.S. federal statutory income tax rate of 21% and our effective income tax rate for the three months ended December 29, 2023 was primarily driven by favorable stock based compensation and research and development (“R&D”) tax credits, partially offset by foreign withholding taxes and global intangible low taxed income (“GILTI”). The difference between the U.S. federal statutory income tax rate of 21% and our effective income tax rate for the three months ended December 30, 2022 was primarily driven by tax on GILTI and non-deductible compensation, partially offset by R&D tax credits.

During the three months ended December 29, 2023, we changed our position on having earnings permanently reinvested for one of our entities in India to no longer having its earnings permanently reinvested. The result of this change in position required us to record a foreign withholding tax expense of $1.0 million associated with undistributed earnings during the three months ended December 29, 2023.

We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making this determination, we consider available positive and negative evidence. We look at factors that may impact the valuation of our deferred tax assets including results of recent operations, future reversals of existing taxable temporary differences, projected future taxable income and tax-planning strategies.

There were no unrecognized tax benefits as of December 29, 2023 and September 29, 2023. It is our policy to recognize any interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the fiscal quarter ended December 29, 2023, we did not make any accrual or payment of interest or penalties.

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Supplemental Cash Flow Information

3 Months Ended

Dec. 29, 2023

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

SUPPLEMENTAL CASH FLOW INFORMATION

The following is a summary of supplemental cash flow information for the periods presented (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Cash paid for interest	$	722	$	2,258
Cash paid for income taxes	$	923	$	297
Non-cash activities:
Operating lease right-of-use assets obtained in exchange for new lease liabilities	$	6,321	$	1,305
Additions to property and equipment, net included in liabilities	$	379	$	1,364

Operating lease right-of-use assets obtained in exchange for new lease liabilities includes $5.6 million operating lease right-of-use assets acquired as part of the RF Business Acquisition. For additional information on the RF Business Acquisition, see Note 3 - Acquisitions.

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Geographic and Significant Customer Information

3 Months Ended

Dec. 29, 2023

Segment Reporting [Abstract]

Geographic and Significant Customer Information

GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION

We have one reportable operating segment that designs, develops, manufactures and markets semiconductors and modules. The determination of the number of reportable operating segments is based on the chief operating decision maker’s (“CODM”) use of financial information provided for the purposes of assessing performance and making operating decisions. The Company's CODM is its President and Chief Executive Officer. In evaluating financial performance and making operating decisions, the CODM primarily uses consolidated metrics. The Company assesses its determination of operating segments at least annually. We continue to evaluate our internal reporting structure and the potential impact of any changes on our segment reporting.

For information about our revenue in different geographic regions, based upon customer locations, see Note 2 - Revenue.

Information about net property and equipment in different geographic regions is presented below (in thousands):

	December 29, 2023		September 29, 2023
United States	$	131,486	$	111,865
France	32,995		31,142
Other Countries (1)	19,797		6,489
Total	$	184,278	$	149,496

(1)Other than the United States and France, no country or region represented greater than 10% of the total net property and equipment as of the dates presented.

The following is a summary of customer concentrations as a percentage of revenue and accounts receivable as of and for the periods presented:

	Three Months Ended
Revenue	December 29, 2023		December 30, 2022
Customer A	13	%	—

Accounts Receivable	December 29, 2023		September 29, 2023
Customer B	14	%	—
Customer C	12	%	—

Customer Concentration

Customer A did not represent more than 10% of our revenue in the three months ended December 30, 2022. Customer B and Customer C did not represent more than 10% of our revenue in the three months ended December 29, 2023 and December 30, 2022, respectively. No other customer represented more than 10% of revenue or accounts receivable in the periods presented in the accompanying condensed consolidated financial statements. For the three months ended December 29, 2023 and December 30, 2022, our top ten customers represented 57% and 52%, respectively, of total revenue

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2023	Dec. 30, 2022
Pay vs Performance Disclosure
Net income	$ 12,526	$ 29,519

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Insider Trading Arrangements

3 Months Ended

Dec. 29, 2023

shares

Trading Arrangements, by Individual

Material Terms of Trading Arrangement

Name and Title	Action	Date	Expiration of Plan (1)	Potential Number of Shares to be Sold
Charles Bland Director	Adoption	November 13, 2023	February 14, 2025	Sale of up to 10,000 shares

Non-Rule 10b5-1 Arrangement Adopted

false

Rule 10b5-1 Arrangement Terminated

false

Non-Rule 10b5-1 Arrangement Terminated

false

Charles Bland [Member]

Trading Arrangements, by Individual

Name

Charles Bland

Title

Director

Rule 10b5-1 Arrangement Adopted

true

Adoption Date

November 13, 2023

Termination Date

February 14, 2025

Arrangement Duration

459 days

Aggregate Available

10,000

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Dec. 29, 2023

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation, Basis of Presentation and Reclassification—The accompanying condensed consolidated financial statements include our accounts and the accounts of our majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the condensed consolidated financial statements, Interest income has been reclassified to conform to the current year presentation.

Fiscal Period

We have a 52- or 53-week fiscal year ending on the Friday closest to the last day of September. Fiscal years 2024 and 2023 each include 52 weeks. To offset the effect of holidays, for fiscal years in which there are 53 weeks, we include the extra week arising in such fiscal years in the first fiscal quarter.

Use of Estimates

Use of Estimates—The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities during the reporting periods, the reported amounts of revenue and expenses during the reporting periods and the disclosure of contingent assets and liabilities at the date of the financial statements. On an ongoing basis, we base estimates and assumptions on historical experience, currently available information and various other factors that management believes to be reasonable under the circumstances. Actual results may differ materially from these estimates and assumptions. The accounting policies which our management believes involve the most significant application of judgment or involve complex estimation, are inventories and associated reserves; revenue reserves; business combinations; goodwill and intangible asset valuation; share-based compensation valuations and income taxes.

Recent Accounting Pronouncements and Pronouncements for Adoption in Subsequent Periods

Recent Accounting Pronouncements—Our Recent Accounting Pronouncements are described in our 2023 Annual Report on Form 10-K.

Pronouncements for Adoption in Subsequent Periods

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures, which improves disclosures about a public entity’s reportable segments and addresses requests from investors and other allocators of capital for additional, more detail information about a reportable segment’s expenses. The amendments in this update improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. This ASU should be applied on a retrospective basis. The amendments in this update are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the future effect the adoption of this ASU will have on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which require greater disaggregation of income tax disclosures. The amendments in this update improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. Other amendments in this update improve the effectiveness and comparability of disclosures by (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) and (2) removing disclosures that no longer are considered cost beneficial or relevant. This ASU should be applied on a prospective basis, with retrospective application permitted. The guidance in this update is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the potential effect of the adoption of this ASU will have on our consolidated financial statements and related disclosures.

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Revenue (Tables)

3 Months Ended

Dec. 29, 2023

Revenue [Abstract]

Disaggregation of Revenue

The following tables present our revenue disaggregated by markets and geography (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Revenue by Market:
Industrial & Defense	$	76,998	$	77,169
Data Center	49,512		41,485
Telecom	30,638		61,450
Total	$	157,148	$	180,104

	Three Months Ended
	December 29, 2023		December 30, 2022
Revenue by Geographic Region:
United States	$	69,645	$	88,589
China	36,348		41,156
Asia Pacific, excluding China (1)	14,008		21,534
Cayman Islands	18,600		11,092
Other Countries (2)	18,547		17,733
Total	$	157,148	$	180,104

(1)Asia Pacific primarily represents Australia, Japan, Malaysia, Singapore, South Korea, Taiwan and Thailand.

(2)No country or region represented greater than 10% of our total revenue as of the dates presented, other than the United States, China, Asia Pacific region and Cayman Islands as presented above.

Revenue by geographic region is aggregated by customer billing address.

Contract with Customer, Asset and Liability

The following table presents the changes in contract liabilities during the three months ended December 29, 2023 (in thousands, except percentage):

	December 29, 2023		September 29, 2023		$ Change		% Change
Contract liabilities	$	5,604	$	2,762	$	2,842	103	%

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Acquisitions (Tables)

3 Months Ended

Dec. 29, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions, by Acquisition

The following table summarizes the preliminary estimate of the purchase price (in thousands, except shares and closing share price amount):

			At Acquisition Date as Reported December 29, 2023
Cash purchase consideration			$	75,000
Number of shares of MACOM common stock issued at closing	711,528
MACOM closing stock price on acquisition date	$	85.41
Equity purchase consideration			60,772
Total purchase consideration			$	135,772

The purchase price for the RF Business Acquisition has been allocated based on preliminary estimates of fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At Acquisition Date as Reported December 29, 2023
Current assets	$	160
Inventory	23,574
Property and equipment	35,415
Intangible assets	60,000
Prepayment for net assets associated with the RTP Fab Transfer	19,450
Other non-current assets	6,735
Total assets acquired	145,334
Current liabilities	6,474
Long-term liabilities	3,088
Total liabilities assumed	9,562
Purchase Price	$	135,772

The purchase price for the MESC Acquisition has been allocated based on preliminary estimates of fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At Acquisition Date as Reported December 29, 2023
Current assets	$	297
Inventory	3,790
Property and equipment	30,538
Intangible assets	5,966
Total assets acquired	40,591
Current liabilities	3,734
Total liabilities assumed	3,734
Purchase Price	$	36,857

The purchase price for the Linearizer Acquisition has been allocated based on preliminary estimates of fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At Acquisition Date as Reported September 29, 2023		Measurement Period Adjustments		At Acquisition Date as Reported December 29, 2023
Current assets	$	2,819	$	—	$	2,819
Inventory	8,907		1,407		10,314
Property and equipment	5,485		—		5,485
Intangible assets	29,600		—		29,600
Goodwill	12,332		(1,407)		10,925
Total assets acquired	59,143		—		59,143
Current liabilities	7,544		—		7,544
Total liabilities assumed	7,544		—		7,544
Purchase Price	$	51,599	$	—	$	51,599

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Investments (Tables)

3 Months Ended

Dec. 29, 2023

Investments, Debt and Equity Securities [Abstract]

Summary of Contractual Maturities of Investments

The contractual maturities of available-for-sale investments were as follows (in thousands):

	December 29, 2023		September 29, 2023
Less than one year	$	235,965	$	265,591
Over one year	63,740		74,983
Total available-for-sale investments	$	299,705	$	340,574

Debt Securities, Available-for-sale

The amortized cost, gross unrealized holding gains or losses and fair value of our available-for-sale investments by major investment type are summarized in the tables below (in thousands):

	December 29, 2023
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Aggregate Fair Value
Certificates of deposit	$	10,980	$	3	$	—	$	10,983
Corporate bonds	157,136		85		(1,392)		155,829
Commercial paper	100,987		16		(19)		100,984
U.S. Treasury securities	31,864		107		(62)		31,909
Total short-term investments	$	300,967	$	211	$	(1,473)	$	299,705

	September 29, 2023
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Aggregate Fair Value
Corporate bonds	$	145,234	$	—	$	(2,845)	$	142,389
Commercial paper	176,405		—		(129)		176,276
U.S. Treasury securities	21,895		18		(4)		21,909
Total short-term investments	$	343,534	$	18	$	(2,978)	$	340,574

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Fair Value (Tables)

3 Months Ended

Dec. 29, 2023

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis consist of the following (in thousands):

	December 29, 2023
	Fair Value		Active Markets for Identical Assets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets
Money market funds	$	80,852	$	80,852	$	—	$	—
U.S. Treasury securities	31,909		31,909		—		—
Certificates of deposit	10,983		10,983		—		—
Commercial paper	100,984		—		100,984		—
Corporate bonds	155,829		—		155,829		—
Total assets measured at fair value	$	380,557	$	123,744	$	256,813	$	—

	September 29, 2023
	Fair Value		Active Markets for Identical Assets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets
Money market funds	$	111,388	$	111,388	$	—	$	—
U.S. Treasury securities	21,910		21,910		—		—
Commercial paper	176,276		—		176,276		—
Corporate bonds	142,388		—		142,388		—
Total assets measured at fair value	$	451,962	$	133,298	$	318,664	$	—

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Inventories (Tables)

3 Months Ended

Dec. 29, 2023

Inventory Disclosure [Abstract]

Components of Inventories

Inventories consist of the following (in thousands):

	December 29, 2023		September 29, 2023
Raw materials	$	100,294	$	82,589
Work-in-process	14,250		14,280
Finished goods	44,957		39,431
Total inventory, net	$	159,501	$	136,300

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Property, Plant and Equipment (Tables)

3 Months Ended

Dec. 29, 2023

Property, Plant and Equipment [Abstract]

Components of Property, Plant and Equipment

Property and equipment consists of the following (in thousands):

	December 29, 2023		September 29, 2023
Construction in process	$	12,908	$	10,256
Machinery and equipment	272,513		238,037
Leasehold improvements	37,317		35,342
Furniture and fixtures	3,067		2,888
Computer equipment and software	19,617		18,824
Finance lease assets	65,522		64,126
Total property and equipment	410,944		369,473
Less accumulated depreciation and amortization	(226,666)		(219,977)
Property and equipment, net	$	184,278	$	149,496

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Intangible Assets (Tables)

3 Months Ended

Dec. 29, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Amortization Expense of Intangible Assets

Amortization expense related to intangible assets is as follows (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Cost of revenue	$	1,942	$	910
Research and development	1,044		—
Selling, general and administrative	4,798		5,903
Total	$	7,784	$	6,813

Summary of Activity in Intangible Assets and Goodwill

A summary of the activity in gross intangible assets as of December 29, 2023 and September 29, 2023 is as follows (in thousands):

	December 29, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired technology	$	213,646	$	(180,685)	$	32,961
Backlog	1,500		(129)		1,371
Customer relationships	289,181		(230,435)		58,746
Favorable contract	15,000		(831)		14,169
Internal-use software	8,350		(1,044)		7,306
Trade name (1)	5,200		(226)		4,974
Balance as of December 29, 2023 (2)	$	532,877	$	(413,350)	$	119,527

	September 29, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired technology	$	191,369	$	(179,558)	$	11,811
Customer relationships	267,621		(225,827)		41,794
Internal-use software	8,350		—		8,350
Trade name (1)	5,200		(161)		5,039
Balance as of September 29, 2023 (2)	$	472,540	$	(405,546)	$	66,994

(1)     Includes an indefinite-lived trade name of $3.4 million that is not amortized.

(2) Foreign intangible asset carrying amounts were affected by foreign currency translation.

Summary of Estimated Amortization of Intangible Assets in Future Fiscal Years

As of December 29, 2023, our estimated amortization of our intangible assets in future fiscal years was as follows (in thousands):

	2024 Remaining		2025	2026	2027	2028	Thereafter	Total
Amortization expense	$	32,372	26,595	15,170	12,787	9,919	19,284	$	116,127

Schedule of Goodwill

A summary of the changes in goodwill as of December 29, 2023 and September 29, 2023 is as follows (in thousands):

	December 29, 2023
Balance as of September 29, 2023	$	323,398
Acquired (1)	(1,407)
Foreign currency translation adjustment	498
Balance as of December 29, 2023	$	322,489

(1)     The reduction of $1.4 million to goodwill is related to a measurement period adjustment for the Linearizer Acquisition. For additional information refer to Note 3 - Acquisitions.

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Debt (Tables)

3 Months Ended

Dec. 29, 2023

Debt Disclosure [Abstract]

Schedule of Remained Outstanding on Term Loans

The following represents the outstanding balances and effective interest rates of our borrowings as of December 29, 2023 and September 29, 2023, (in thousands, except percentages):

	December 29, 2023				September 29, 2023
	Principal Balance		Effective Interest Rate		Principal Balance		Effective Interest Rate
0.25% convertible notes due March 2026	450,000		0.54	%	450,000		0.54	%
Unamortized discount on deferred financing costs	(2,579)				(2,866)
Total long-term debt, less current portion	$	447,421			$	447,134

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Financing Obligations (Tables)

3 Months Ended

Dec. 29, 2023

Debt Disclosure [Abstract]

Financing Obligation, Liability, Fiscal Year Maturity

As of December 29, 2023, expected future minimum payments for the financing obligation were as follows (in thousands):

Fiscal year ending:	Amount
2024	$	718
2025	982
2026	1,007
2027	1,031
2028	1,057
Thereafter	10,857
Total payments	$	15,652
Less: interest	6,152
Present value of liabilities	$	9,500

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Earnings (Loss) Per Share (Tables)

3 Months Ended

Dec. 29, 2023

Earnings Per Share [Abstract]

Computation for Basic and Diluted Net Loss Per Share of Common Stock

The following table sets forth the computation for basic and diluted net income per share of common stock (in thousands, except per share data):

	Three Months Ended
	December 29, 2023		December 30, 2022
Numerator:
Net income attributable to common stockholders	$	12,526	$	29,519
Denominator:
Weighted average common shares outstanding-basic	71,425		70,481
Dilutive effect of convertible debt, stock options, restricted stock and restricted stock units	861		893
Weighted average common shares outstanding-diluted	72,286		71,374
Net income to common stockholders per share-Basic:	$	0.18	$	0.42
Net income to common stockholders per share-Diluted:	$	0.17	$	0.41

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Share-Based Compensation (Tables)

3 Months Ended

Dec. 29, 2023

Share-Based Payment Arrangement [Abstract]

Effects of Stock-Based Compensation Expense Related to Stock-Based Awards to Employees and Nonemployees

The following table shows a summary of share-based compensation expense included in the condensed consolidated statements of operations (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Cost of revenue	$	1,270	$	1,150
Research and development	2,765		4,232
Selling, general and administrative	4,622		5,665
Total share-based compensation expense	$	8,657	$	11,047

Summary of Restricted Stock, Restricted Stock Unit and Performance-based Restricted Stock Unit Activity

A summary of stock award activity for the three months ended December 29, 2023 is as follows:

	Number of shares (in thousands)	Weighted- Average Grant Date Fair Value
Balance as of September 29, 2023	1,501	$	60.90
Granted	692	78.22
Performance-based adjustment (1)	62	35.43
Vested and released	(459)	48.46
Forfeited, canceled or expired	(87)	65.05
Balance as of December 29, 2023	1,709	$	70.12

(1) The amount shown represents performance adjustments for performance-based awards. These were granted in prior fiscal years and vested during the three months ended December 29, 2023 based on the Company’s achievement of adjusted earnings per share performance conditions.

Schedule of Share-Based Payment Award, Market Based Restricted Stock Awards, Valuation Assumptions

The assumptions used to value the awards are as follows:

	Three Months Ended
	December 29, 2023
Grant date stock price	$	73.01
Average stock price at the start of the performance period	$	79.43
Risk free interest rate	4.6%
Years to maturity	2.9
Expected volatility rate	41.7%
Expected dividend yield	—

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Income Taxes (Tables)

3 Months Ended

Dec. 29, 2023

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes and Effective Income Tax Rate

The provision for income taxes and effective income tax rate are as follows (in thousands, except percentages):

	Three Months Ended
	December 29, 2023			December 30, 2022
Income tax expense	$	2,750		$	9,611
Effective income tax rate	18.0		%	24.6		%

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Supplemental Cash Flow Information (Tables)

3 Months Ended

Dec. 29, 2023

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Cash Flow Information Regarding Non-cash Investing and Financing Activities

The following is a summary of supplemental cash flow information for the periods presented (in thousands):

	Three Months Ended
	December 29, 2023		December 30, 2022
Cash paid for interest	$	722	$	2,258
Cash paid for income taxes	$	923	$	297
Non-cash activities:
Operating lease right-of-use assets obtained in exchange for new lease liabilities	$	6,321	$	1,305
Additions to property and equipment, net included in liabilities	$	379	$	1,364

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Geographic and Significant Customer Information (Tables)

3 Months Ended

Dec. 29, 2023

Segment Reporting [Abstract]

Long-lived Assets by Geographic Areas

Information about net property and equipment in different geographic regions is presented below (in thousands):

	December 29, 2023		September 29, 2023
United States	$	131,486	$	111,865
France	32,995		31,142
Other Countries (1)	19,797		6,489
Total	$	184,278	$	149,496

(1)Other than the United States and France, no country or region represented greater than 10% of the total net property and equipment as of the dates presented

Schedule of Revenue by Major Customers by Reporting Segments

The following is a summary of customer concentrations as a percentage of revenue and accounts receivable as of and for the periods presented:

	Three Months Ended
Revenue	December 29, 2023		December 30, 2022
Customer A	13	%	—

Accounts Receivable	December 29, 2023		September 29, 2023
Customer B	14	%	—
Customer C	12	%	—

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Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2023	Dec. 30, 2022	Sep. 29, 2023
Disaggregation of Revenue [Line Items]
Revenue	$ 157,148	$ 180,104
Contract liabilities	5,604		$ 2,762
Increase (decrease) in contract with customer liability	2,842
Amounts included in contract liabilities at the beginning of the period	$ 2,400
Net change in contract liabilities (percentage)	103.00%
Industrial & Defense
Disaggregation of Revenue [Line Items]
Revenue	$ 49,512	41,485
Data Center
Disaggregation of Revenue [Line Items]
Revenue	30,638	61,450
Telecom
Disaggregation of Revenue [Line Items]
Revenue	76,998	77,169
United States
Disaggregation of Revenue [Line Items]
Revenue	69,645	88,589
China
Disaggregation of Revenue [Line Items]
Revenue	36,348	41,156
Asia Pacific, excluding China
Disaggregation of Revenue [Line Items]
Revenue	14,008	21,534
Cayman Islands
Disaggregation of Revenue [Line Items]
Revenue	18,600	11,092
Other Countries
Disaggregation of Revenue [Line Items]
Revenue	$ 18,547	$ 17,733

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Acquisitions - Narrative (Details) $ / shares in Units, $ in Thousands					3 Months Ended
	Dec. 29, 2023 USD ($)	Dec. 02, 2023 USD ($) $ / shares shares	May 31, 2023 USD ($)	Mar. 03, 2023 USD ($)	Dec. 29, 2023 USD ($)	Dec. 30, 2022 USD ($)	Sep. 29, 2023 USD ($)
RF Business of Wolfspeed, Inc
Business Acquisition [Line Items]
Payments to acquire business	$ 75,000	$ 75,000
Acquisition, number of shares issued (in shares) | shares		711,528
Value of equity transferred	60,772	$ 60,800
Percent of share consideration forfeited (as a percent)		0.25
Transaction costs					$ 7,100
Share price of common stock (in dollars per share) | $ / shares		$ 85.41
Cash consideration	135,772
Intangible assets	60,000				60,000
Prepayment for net assets associated with the RTP Fab Transfer	19,450				19,450
Upfront payment for net assets assumed, fair value	14,100				14,100
Acquisition revenue recognized					6,200
Pro forma revenue					184,000	$ 222,400
Pro forma net loss					13,900	31,300
RF Business of Wolfspeed, Inc | Acquisition-related Costs
Business Acquisition [Line Items]
Pro forma net loss					15,500	(41,800)
RF Business of Wolfspeed, Inc | Technology
Business Acquisition [Line Items]
Intangible assets	$ 22,000				$ 22,000
Useful life of intangible assets (in years)	4 years 9 months 18 days				4 years 9 months 18 days
RF Business of Wolfspeed, Inc | Customer relationships
Business Acquisition [Line Items]
Intangible assets	$ 21,500				$ 21,500
Useful life of intangible assets (in years)	8 years 9 months 18 days				8 years 9 months 18 days
RF Business of Wolfspeed, Inc | Favorable Contracts
Business Acquisition [Line Items]
Intangible assets	$ 15,000				$ 15,000
Useful life of intangible assets (in years)	2 years				2 years
RF Business of Wolfspeed, Inc | Backlog
Business Acquisition [Line Items]
Intangible assets	$ 1,500				$ 1,500
Useful life of intangible assets (in years)	9 months 18 days				9 months 18 days
OMMIC SAS
Business Acquisition [Line Items]
Transaction costs					$ 300	$ 800
Cash consideration			$ 36,900
Intangible assets	$ 5,966				5,966
Financing lease assets obtained in exchange for new lease liabilities					24,700
OMMIC SAS | Technology
Business Acquisition [Line Items]
Intangible assets	4,900				4,900
OMMIC SAS | Customer relationships
Business Acquisition [Line Items]
Intangible assets	$ 1,100				$ 1,100
Useful life of intangible assets (in years)	8 years 3 months 18 days				8 years 3 months 18 days
Linearizer Technology, Inc.
Business Acquisition [Line Items]
Transaction costs					$ 100
Cash consideration				$ 51,600
Intangible assets	$ 29,600				29,600		$ 29,600
Linearizer Technology, Inc. | Technology
Business Acquisition [Line Items]
Intangible assets	$ 7,100				$ 7,100
Useful life of intangible assets (in years)	7 years 7 months 6 days				7 years 7 months 6 days
Linearizer Technology, Inc. | Customer relationships
Business Acquisition [Line Items]
Intangible assets	$ 20,700				$ 20,700
Useful life of intangible assets (in years)	8 years 7 months 6 days				8 years 7 months 6 days
Linearizer Technology, Inc. | Trade Names
Business Acquisition [Line Items]
Intangible assets	$ 1,800				$ 1,800
Useful life of intangible assets (in years)	7 years 7 months 6 days				7 years 7 months 6 days

XML

Acquisitions - Summary of Purchase Price For Acquisition, Allocations (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2023	Sep. 29, 2023
Business Acquisition [Line Items]
Goodwill	$ 322,489	$ 323,398
Measurement adjustment, goodwill	(1,407)
RF Business of Wolfspeed, Inc
Business Acquisition [Line Items]
Current assets	160
Inventory	23,574
Property and equipment	35,415
Intangible assets	60,000
Prepayment for net assets associated with the RTP Fab Transfer	19,450
Other non-current assets	6,735
Total assets acquired	145,334
Current liabilities	6,474
Long-term liabilities	3,088
Total liabilities assumed	9,562
Purchase Price	135,772
Linearizer Technology, Inc.
Business Acquisition [Line Items]
Current assets	2,819	2,819
Inventory	10,314	8,907
Property and equipment	5,485	5,485
Intangible assets	29,600	29,600
Goodwill	10,925	12,332
Total assets acquired	59,143	59,143
Current liabilities	7,544	7,544
Total liabilities assumed	7,544	7,544
Purchase Price	51,599	$ 51,599
Measurement adjustment, inventory	1,407
Measurement adjustment, goodwill	(1,407)
OMMIC SAS
Business Acquisition [Line Items]
Current assets	297
Inventory	3,790
Property and equipment	30,538
Intangible assets	5,966
Total assets acquired	40,591
Current liabilities	3,734
Total liabilities assumed	3,734
Purchase Price	36,857
EFG Company
Business Acquisition [Line Items]
Measurement adjustment, consideration transferred	$ 0

XML

Investments - Summary of Available for Sale Investments (Details) - USD ($) $ in Thousands	Dec. 29, 2023	Sep. 29, 2023
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 300,967	$ 343,534
Gross Unrealized Holding Gains	211	18
Gross Unrealized Holding Losses	1,473	2,978
Aggregate Fair Value	299,705	340,574
Certificates of deposit
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	10,980
Gross Unrealized Holding Gains	3
Gross Unrealized Holding Losses	0
Aggregate Fair Value	10,983
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	157,136	145,234
Gross Unrealized Holding Gains	85	0
Gross Unrealized Holding Losses	1,392	2,845
Aggregate Fair Value	155,829	142,389
Commercial paper
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	100,987	176,405
Gross Unrealized Holding Gains	16	0
Gross Unrealized Holding Losses	19	129
Aggregate Fair Value	100,984	176,276
US Treasury Securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	31,864	21,895
Gross Unrealized Holding Gains	107	18
Gross Unrealized Holding Losses	62	4
Aggregate Fair Value	$ 31,909	$ 21,909

XML

Investments - Summary of Contractual Maturities of Investments (Details) - USD ($) $ in Thousands	Dec. 29, 2023	Sep. 29, 2023
Investments, Debt and Equity Securities [Abstract]
Less than one year	$ 235,965	$ 265,591
Over one year	63,740	74,983
Total available-for-sale investments	$ 299,705	$ 340,574

XML

Investments - Other Investments (Details) - USD ($) $ in Millions	Dec. 29, 2023	Sep. 29, 2023
Privately Held Manufacturing Company
Debt Securities, Available-for-sale [Line Items]
Investment without readily determinable fair value	$ 2.5	$ 2.5

XML

Fair Value - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Dec. 29, 2023	Sep. 29, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	$ 380,557	$ 451,962
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	155,829	142,388
US Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	31,909	21,910
Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	10,983
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	80,852	111,388
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	100,984	176,276
Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	123,744	133,298
Active Markets for Identical Assets (Level 1) | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	0	0
Active Markets for Identical Assets (Level 1) | US Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	31,909	21,910
Active Markets for Identical Assets (Level 1) | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	10,983
Active Markets for Identical Assets (Level 1) | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	80,852	111,388
Active Markets for Identical Assets (Level 1) | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	0	0
Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	256,813	318,664
Observable Inputs (Level 2) | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	155,829	142,388
Observable Inputs (Level 2) | US Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	0	0
Observable Inputs (Level 2) | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	0
Observable Inputs (Level 2) | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	0	0
Observable Inputs (Level 2) | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	100,984	176,276
Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	0	0
Unobservable Inputs (Level 3) | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	0	0
Unobservable Inputs (Level 3) | US Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	0	0
Unobservable Inputs (Level 3) | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	0
Unobservable Inputs (Level 3) | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	0	0
Unobservable Inputs (Level 3) | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets measured at fair value	$ 0	$ 0

XML

Inventories (Details) - USD ($) $ in Thousands	Dec. 29, 2023	Sep. 29, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 100,294	$ 82,589
Work-in-process	14,250	14,280
Finished goods	44,957	39,431
Total inventory, net	$ 159,501	$ 136,300

XML

Property Plant and Equipment - Components of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Dec. 29, 2023	Sep. 29, 2023
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 410,944	$ 369,473
Less accumulated depreciation and amortization	(226,666)	(219,977)
Property and equipment, net	184,278	149,496
Finance Lease, Right-of-Use Asset, Accumulated Amortization	8,400	7,800
Construction in process
Property, Plant and Equipment [Line Items]
Total property and equipment	12,908	10,256
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	272,513	238,037
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	37,317	35,342
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	3,067	2,888
Computer equipment and software
Property, Plant and Equipment [Line Items]
Total property and equipment	19,617	18,824
Assets Held Under Finance Leases [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 65,522	$ 64,126

XML

Property Plant and Equipment - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2023	Dec. 30, 2022	Sep. 29, 2023
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 6,500	$ 6,000
Accumulated depreciation	$ 226,666		$ 219,977

XML

Intangible Assets - Summary of Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2023	Dec. 30, 2022
Finite-Lived Intangible Assets [Line Items]
Total	$ 7,784	$ 6,813
Net Carrying Amount	116,127
Cost of Revenue
Finite-Lived Intangible Assets [Line Items]
Total	1,942	910
Research and Development
Finite-Lived Intangible Assets [Line Items]
Total	1,044	0
Selling, General and Administrative
Finite-Lived Intangible Assets [Line Items]
Total	$ 4,798	$ 5,903

XML

Intangible Assets - Summary of Activity in Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands	Dec. 29, 2023	Sep. 29, 2023
Indefinite-lived Intangible Assets [Line Items]
Accumulated Amortization	$ (413,350)	$ (405,546)
Total	116,127
Intangible assets	532,877	472,540
Intangible assets, total	119,527	66,994
Trade Names
Indefinite-lived Intangible Assets [Line Items]
Accumulated Amortization	(226)	(161)
Intangible assets	5,200	5,200
Intangible assets, total	4,974	5,039
Indefinite lived intangible assets	3,400	3,400
Developed technology
Indefinite-lived Intangible Assets [Line Items]
Gross Carrying Amount	213,646	191,369
Accumulated Amortization	(180,685)	(179,558)
Total	32,961	11,811
Backlog
Indefinite-lived Intangible Assets [Line Items]
Gross Carrying Amount	1,500
Accumulated Amortization	(129)
Total	1,371
Customer relationships
Indefinite-lived Intangible Assets [Line Items]
Gross Carrying Amount	289,181	267,621
Accumulated Amortization	(230,435)	(225,827)
Total	58,746	41,794
Favorable Contracts
Indefinite-lived Intangible Assets [Line Items]
Gross Carrying Amount	15,000
Accumulated Amortization	(831)
Total	14,169
Internal Use Software
Indefinite-lived Intangible Assets [Line Items]
Gross Carrying Amount	8,350	8,350
Accumulated Amortization	(1,044)	0
Total	$ 7,306	$ 8,350

XML

Intangible Assets - Summary of Estimated Amortization of Intangible Assets (Details) $ in Thousands	Dec. 29, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2024 Remaining	$ 32,372
2022	26,595
2023	15,170
2024	12,787
2025	9,919
Thereafter	19,284
Total	$ 116,127

XML

Intangible Assets - Goodwill (Details) $ in Thousands	3 Months Ended
	Dec. 29, 2023 USD ($)
Goodwill [Roll Forward]
Balance at beginning of period	$ 323,398
Measurement adjustment, goodwill reduction	1,407
Foreign currency translation adjustment	498
Balance at end of period	$ 322,489

XML

Debt - Schedule of Remaining Outstanding Balances on Term Loans (Details) - USD ($) $ in Thousands	Dec. 29, 2023	Sep. 29, 2023	Aug. 02, 2023
Principal Balance
Long-term debt	$ 447,421	$ 447,134
Long-term Debt
Principal Balance
Long-term debt			$ 120,800
Unamortized discount on deferred financing costs	(2,579)	(2,866)
Convertible Debt
Principal Balance
Long-term debt	$ 450,000	$ 450,000
Effective Interest Rate
Effective interest rate	0.54%	0.54%

XML

Debt - Additional Information (Details) $ / shares in Units, $ in Thousands		3 Months Ended
	Mar. 25, 2021 USD ($) d renewal_option $ / shares	Dec. 29, 2023 USD ($)	Dec. 30, 2022 USD ($)	Sep. 29, 2023 USD ($)	Aug. 02, 2023 USD ($)	Apr. 06, 2021 USD ($)
Debt Instrument [Line Items]
Interest payable, current					$ 100
Long-term Debt
Debt Instrument [Line Items]
Long-term debt, remaining balance					$ 120,800
Convertible Notes Green Shoe
Debt Instrument [Line Items]
Principle amount						$ 50,000
Convertible Debt
Debt Instrument [Line Items]
Long-term debt, remaining balance		$ 450,000		$ 450,000
Convertible Senior Notes Due 2026
Debt Instrument [Line Items]
Principle amount	$ 400,000	450,000
Conversion price (in USD per share) | $ / shares	$ 82,120,000
Redemption price percentage	100.00%
Interest expense debt		300	$ 300
Future minimum principal payments		0
Convertible Senior Notes Due 2026 | Conversion Period One
Debt Instrument [Line Items]
Convertible threshold trading days | renewal_option	20,000,000
Threshold consecutive trading days | renewal_option	30,000,000
Convertible Senior Notes Due 2026 | Conversion Period Two
Debt Instrument [Line Items]
Convertible threshold trading days | d	5
Threshold consecutive trading days | d	5
Convertible Senior Notes Due 2026 | Conversion Price | Conversion Period One
Debt Instrument [Line Items]
Convertible threshold percentage of stock price trigger	130.00%
Convertible Senior Notes Due 2026 | Principal Trading Price | Conversion Period Two
Debt Instrument [Line Items]
Convertible threshold percentage of stock price trigger	98.00%
Convertible Senior Notes Due 2026 | Convertible Notes Payable
Debt Instrument [Line Items]
Basis spread on variable rate	0.25%
Estimated fair value of Term Loans		$ 556,200		$ 512,500
Term Loans
Debt Instrument [Line Items]
Interest expense debt			$ 1,800

XML

Financing Obligation (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Dec. 29, 2023	Sep. 29, 2023
Long-term Purchase Commitment [Line Items]
Property and equipment, net capitalized	$ 8.7	$ 8.9
Financing obligation for property, plant and equipment	9.5	9.6
Future fixed payment	$ 16.8
Power generator life term	15 years
Implied discount rate	7.40%
Purchase commitment period	14 years
Purchase Commitment
Long-term Purchase Commitment [Line Items]
Fixed payments	$ 25.3	$ 25.5

XML

Financing Obligations - Summary of Expected Future Minimum Payments (Details) - USD ($) $ in Thousands	Dec. 29, 2023	Sep. 29, 2023
Debt Disclosure [Abstract]
2024	$ 718
2025	982
2026	1,007
2027	1,031
2028	1,057
Thereafter	10,857
Total payments	15,652	$ 15,900
Less: interest	6,152
Present value of liabilities	$ 9,500

XML

Stockholders' Equity - Additional Information (Details)	Dec. 29, 2023 $ / shares shares
Equity [Abstract]
Preferred stock, shares authorized | shares	10,000,000
Preferred stock, par value (in usd per share) | $ / shares	$ 0.001
Common stock, shares authorized | shares	300,000,000
Common stock, par value (in usd per share) | $ / shares	$ 0.001

XML

Earnings (Loss) Per Share (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2023	Dec. 30, 2022
Numerator:
Net income	$ 12,526	$ 29,519
Net income attributable to common stockholders	$ 12,526	$ 29,519
Denominator:
Weighted average common shares outstanding-basic	71,425,000	70,481,000
Dilutive effect of options and warrants (in shares)	861,000	893,000
Weighted average common shares outstanding-diluted	72,286,000	71,374,000
Convertible Senior Notes Due 2026
Denominator:
Dilutive effect, potential common shares (in shares)	7,404

XML

Share-Based Compensation - Additional Information (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 29, 2023 USD ($) $ / shares shares	Dec. 30, 2022 USD ($)	Sep. 29, 2023 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 8,657	$ 11,047
Compensation cost not yet recognized	$ 93,200
Unrecognized compensation cost period for recognition	2 years 3 months 18 days
Share-based compensation expense	$ 8,657	11,047
Intrinsic value of options exercised	$ 300
Years to maturity	3 years
Aggregate intrinsic value stock options outstanding	$ 800
Number of stock options outstanding (in shares) | shares	10,000		15,000
Weighted average exercise price per share (in dollars per share) | $ / shares	$ 16.06
Weighted average remaining contractual term options outstanding	1 year 10 months 6 days
Incentive Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of outstanding awards	$ 6,000		$ 5,000
Employee-related Liabilities	2,300		$ 3,300
Share-based compensation	$ 500	1,300
Restricted Stock Restricted Stock Units And Performance Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards vested (in shares) | shares	459,000
Vested in period fair value	$ 33,300	$ 66,800
Granted (in shares) | shares	692,000
Granted (in usd per share) | $ / shares	$ 78.22
Shares forfeited (in shares) | shares	87,000
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Years to maturity	2 years 10 months 24 days
Market Based Performance Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares) | shares	132,247
Granted (in usd per share) | $ / shares	$ 88.88
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of options granted	4 years
Percentage of number of shares earned by recipients (as a percent)	0
Minimum | Incentive Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Minimum | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of options granted	7 years
Percentage of number of shares earned by recipients (as a percent)	2
Maximum | Incentive Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Maximum | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
2012 Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Available for grant (in shares) | shares	3,900,000
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Available for grant (in shares) | shares	1,200,000
Unrecognized compensation cost	$ 900

XML

Share-Based Compensation - Effects of Stock-Based Compensation Expense Related to Stock-Based Awards to Employees and Non-Employees (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2023	Dec. 30, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	$ 8,657	$ 11,047
Cost of Revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	1,270	1,150
Research and Development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	2,765	4,232
Selling, General and Administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	$ 4,622	$ 5,665

XML

Share-Based Compensation - Summary of Restricted Stock, Restricted Stock Unit and Performance-based Restricted Stock Unit Activity (Details) - Restricted Stock Restricted Stock Units And Performance Based Restricted Stock Units shares in Thousands	3 Months Ended
	Dec. 29, 2023 $ / shares shares
Number of shares (in thousands)
Balance at beginning of period (in shares) | shares	1,501
Granted (in shares) | shares	692
Vested and released (in shares) | shares	(459)
Performance-based adjustment (in shares) | shares	62
Forfeited, canceled or expired (in shares) | shares	(87)
Balance at end of period (in shares) | shares	1,709
Weighted- Average Grant Date Fair Value
Balance at beginning of period (in usd per share) | $ / shares	$ 60.90
Granted (in usd per share) | $ / shares	78.22
Vested and released (in usd per share) | $ / shares	48.46
Performance-based adjustment (in usd per share) | $ / shares	35.43
Forfeited, canceled or expired (in usd per share) | $ / shares	65.05
Balance at end of period (in usd per share) | $ / shares	$ 70.12

XML

Share-Based Compensation - Fair Value of Market-Based PRSUs (Details)	3 Months Ended
	Dec. 29, 2023 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Years to maturity	3 years
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant date stock price	$ 73.01
Average stock price at the start of the performance period	$ 79.43
Risk free interest rate	4.60%
Years to maturity	2 years 10 months 24 days
Expected volatility rate	41.70%
Expected dividend yield	0.00%

XML

Share-Based Compensation Share-Based Compensation Plans - Summary of Stock Option Activity (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 29, 2023 USD ($) $ / shares shares
Number of Shares
Beginning Blance Stock options outstanding (in shares)	15,000
Ending Balance Stock options outstanding (in shares)	10,000
Weighted-Average Exercise Price per Share
Ending Balance weighted-average exercise price per share (in usd per share) | $ / shares	$ 16.06
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted average remaining contractual term options outstanding	1 year 10 months 6 days
Aggregate intrinsic value stock options outstanding | $	$ 800

XML

Income Taxes (Details) - USD ($)	3 Months Ended
	Dec. 29, 2023	Dec. 30, 2022	Sep. 29, 2023
Income Tax Disclosure [Abstract]
Income tax expense	$ 2,750,000	$ 9,611,000
Effective income tax rate	18.00%	24.60%
Effective tax rate	21.00%
Foreign withholding tax expense	$ 1,000,000
Unrecognized tax benefit	$ 0		$ 0

XML

Supplemental Cash Flow Information - Schedule of Supplemental Cash Flow Information Regarding Non-cash Investing and Financing Activities (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2023	Dec. 30, 2022
Business Acquisition [Line Items]
Cash paid for interest	$ 722	$ 2,258
Cash paid for income taxes	923	297
Operating lease right-of-use assets obtained in exchange for new lease liabilities	6,321	1,305
Additions to property and equipment, net included in liabilities	379	$ 1,364
RF Business of Wolfspeed, Inc
Business Acquisition [Line Items]
Operating lease right-of-use assets obtained in exchange for new lease liabilities	$ 5,600

XML

Geographic and Significant Customer Information - Additional Information (Details)	3 Months Ended
	Dec. 29, 2023 segment customer	Dec. 30, 2022 customer
Revenue from External Customer [Line Items]
Number of reportable operating segment | segment	1
Revenue Benchmark [Member] | Customer Concentration Risk
Revenue from External Customer [Line Items]
Number of major customers | customer	10	10
Top Ten Customers | Revenue Benchmark [Member] | Customer Concentration Risk
Revenue from External Customer [Line Items]
Concentration risk, percentage	57.00%	52.00%
Customer A | Revenue Benchmark [Member] | Customer Concentration Risk
Revenue from External Customer [Line Items]
Concentration risk, percentage	13.00%	0.00%

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Geographic and Significant Customer Information - Summary of Different Geographic Regions (Details) - USD ($) $ in Thousands	Dec. 29, 2023	Sep. 29, 2023
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-Lived Assets	$ 184,278	$ 149,496
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-Lived Assets	131,486	111,865
Other Countries
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-Lived Assets	19,797	6,489
FRANCE
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-Lived Assets	$ 32,995	$ 31,142

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Geographic and Significant Customer Information - Summary of Customer Concentrations as Percentage of Revenue and Accounts Receivable (Details) - Customer Concentration Risk	3 Months Ended
	Dec. 29, 2023	Dec. 30, 2022
Revenue Benchmark [Member] | Customer A
Revenue from External Customer [Line Items]
Concentration risk, percentage	13.00%	0.00%
Accounts Receivable | Customer B
Revenue from External Customer [Line Items]
Concentration risk, percentage	14.00%	0.00%
Accounts Receivable | Customer C
Revenue from External Customer [Line Items]
Concentration risk, percentage	12.00%	0.00%