DEBT

12 Months Ended

Sep. 27, 2025

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Debt

Long-term debt consisted of the following:

	As of
	September 27, 2025		September 28, 2024
	(In thousands)
Term Loan Due 2027, net of issuance costs	$	300,474	$	317,323
Less: Current portion of Term Loan Due 2027	17,500		17,500
Long-term debt	$	282,974	$	299,823

Term Loan Due 2027 maturities by fiscal year are as follows:

	As of
	September 27, 2025
	(In thousands)
2026	21,875
2027	280,000
	$	301,875

Credit Facilities

Existing Credit Agreement

On September 27, 2022, the Company entered into a Fifth Amended and Restated Credit Agreement (the “Existing Credit Agreement”) that provides for a $800 million revolving credit facility and a $350 million secured term loan (the “Term Loan Due 2027”). Subject to the satisfaction of certain conditions, including obtaining additional commitments from existing and/or new lenders, the Company may increase the revolving commitment up to an additional $200 million. Costs incurred in connection with Existing Credit Agreement of $3 million are classified as long-term debt and are being amortized to interest expense over the life of the Term Loan Due 2027 using the effective interest method.

Loans under the Existing Credit Agreement bear interest, at the Company’s option, at either the SOFR or a base rate, in each case plus a spread determined based on the Company’s credit rating. Interest on the loans is payable quarterly in arrears with respect to base rate loans and at the end of an interest period (and at three month intervals if the interest period exceeds three months) in the case of SOFR loans. The outstanding principal amount of all loans under the Existing Credit Agreement, including the Term Loan Due 2027, together with accrued and unpaid interest, is due on September 27, 2027. The Company is required to repay a portion of the principal amount of the Term Loan Due 2027 equal to 1.25% of the principal in quarterly installments.

Certain of the Company’s domestic subsidiaries are guarantors in respect of the Existing Credit Agreement. The Company and the subsidiary guarantors’ obligations under the Existing Credit Agreement are secured by a lien on substantially all of their respective assets (excluding real property), including cash, accounts receivable and the shares of certain Company subsidiaries, subject to certain exceptions.

On June 6, 2025, the Company amended the Existing Credit Agreement to permit the acquisition of ZT Group Int’l, Inc. (“ZT Systems”) from AMD Design, LLC, a wholly owned subsidiary of Advanced Micro Devices, Inc. See Note 16 “Business Combination” of the notes to the Consolidated Financial Statements contained in this report for details.

As of September 27, 2025, no borrowings under the revolving credit facility and $9 million of letters of credit were outstanding under the Existing Credit Agreement, under which $791 million was available to borrow.

Bridge Loan Facility

On May 18, 2025, in connection with the acquisition of ZT Systems (the “ZT Acquisition”), the Company entered into a commitment letter with certain financial institutions that have agreed to provide the Company with, subject to satisfaction of customary conditions and covenants, a senior secured 364-day bridge loan facility in an aggregate principal amount of up to $2.5 billion (the “Bridge Loan Facility”) to fund a portion of the purchase consideration and to pay related fees and expenses. The commitment was intended to be drawn only to the extent that permanent financing was not obtained prior to the closing the ZT Acquisition.

On July 30, 2025, the Bridge Loan Facility was reduced from $2.5 billion to $800 million upon the Company entering into the New Credit Agreement (as defined below). As of September 27, 2025, $24 million of financing fees incurred in connection with the Bridge Loan Facility were recorded as acquisition and integration charges in the consolidated statements of income as the Bridge Loan Facility was not utilized and was terminated in its entirety upon the close of ZT acquisition.

New Credit Agreement

On July 29, 2025, the Company entered into a credit agreement (the “New Credit Agreement”) that provided for senior secured credit facilities in an aggregate of $3.5 billion (the “Credit Facilities”), consisting of a $1.5 billion revolving credit facility and a $2.0 billion term loan A facility. As of September 27, 2025, the commitments under the New Credit Agreement were completely unfunded, and the Existing Credit Agreement remained in effect until the Credit Facilities were drawn at the closing of the ZT Acquisition, as described below.

Borrowings under the Credit Facilities have a maturity date of five years from the date when the Credit Facilities will be initially drawn (the “Initial Funding Date”), subject to extension as provided in the New Credit Agreement and will bear interest, at the Company’s option, at either a base or SOFR-based rate plus a margin that varies depending on the Company’s consolidated total net leverage ratio. The Company expects that, at the time of the Initial Funding Date, the applicable margin for base rate and term SOFR-based rate borrowing would be 0.75% and 1.75%, respectively. The Company is obligated to pay customary fees, including commitment fees on the unused portion of the revolving facility and letter of credit fees. Additionally, the Company will pay a ticking fee at an annual rate of 0.25% on the aggregate amount of the unfunded commitments regardless of whether the Initial Funding Date occurs.

As of the Initial Funding Date, the obligations under the New Credit Agreement are secured by first-priority liens on substantially all of the assets of the Company and the subsidiary guarantors, subject to certain exceptions and thresholds. The New Credit Agreement requires the Company to comply with certain financial covenants, namely consolidated leverage ratio and a minimum interest coverage ratio, in both cases measured on the basis of a trailing 12-month look-back period. In addition, the negative covenants limit the Company’s ability to incur additional debt, grant liens, make investments and other restricted payments, sell assets and pay dividends, subject to certain exceptions. The New Credit Agreement also includes covenants that require the Company to file quarterly and annual financial statements with the SEC on a timely basis.

Debt issuance costs incurred in connection with the New Credit Agreement were $5 million as of September 27, 2025 and were recorded in other assets in the consolidated balance sheets.

Subsequent to the year ended September 27, 2025, the Company entered into Amendment No. 1 to the New Credit Agreement on October 20, 2025 to permit and finance the ZT Acquisition, including adding necessary definitions, funding conditions, and providing a delayed draw term loan A of $600 million, which may be drawn by the Company in up to two separate drawings during the period commencing on the closing of the ZT Acquisition and ending on the one year anniversary of such closing.

On October 27, 2025 (the “Closing Date”), the Company completed the acquisition of ZT Systems for a purchase consideration of up to $1.6 billion (subject to adjustment for certain working capital and other items) consisting of $1.46 billion in cash consideration and a number of shares of the Company’s common stock valued at $150 million (at $130.32 market value representing 1.2 million shares). Pursuant to the acquisition agreement, the seller is also entitled up to $450 million in contingent cash consideration upon the achievement of certain financial metrics during the three-year period following the Closing Date. See Note 16 “Business Combination” of the notes to the Consolidated Financial Statements contained in this report for details. In addition, on October 27, 2025, the Company executed an amendment to increase the Credit Facilities to include an $800 million term loan B facility. Borrowings under the term loan B facility bears interest, at the Company’s option, at either SOFR plus 2.0% or base rate plus 1.0%.

To finance the cash portion of the acquisition and to settle all outstanding amounts under the Company’s Existing Credit Agreement, the Company simultaneously drew $1.4 billion under the term loan A facility and the full $800 million under the term loan B facility. Concurrently on the Closing Date, the Existing Credit Agreement was fully repaid and the Bridge Loan Facility was terminated in its entirety.

Short-term Borrowing Facilities

Certain foreign subsidiaries of the Company had a total of $71 million of uncommitted short-term borrowing facilities available, under which no borrowings were outstanding as of September 27, 2025. Some of these facilities expire at various dates through the first quarter of 2027 and are expected to be renewed.

Debt Covenants

The Existing Credit Agreement requires the Company to comply with certain financial covenants, namely a maximum consolidated leverage ratio and a minimum interest coverage ratio, in both cases measured on the basis of a trailing 12-month look-back period. In addition, the Company’s debt agreements contain a number of restrictive covenants, including restrictions on incurring additional debt, making investments and other restricted payments, selling assets and paying dividends, subject to certain exceptions. Finally, the agreements also include covenants that require us to file quarterly and annual financial statements with the SEC on a timely basis. The Company was in compliance with these covenants as of September 27, 2025.