Modified · Key Trends and Uncertainties Affecting Results of Operations

Tariffs, sanctions or other trade barriers imposed by the United States, or against the United States from countries in which we do business, could also adversely impact our supply chain costs, results of operations and our financial condition. Tariffs have adversely impacted our secondthird quarter fiscal year 2026 operating expense and we continue to monitor international trade policy-related developments, including developments regarding refunds of certain tariffs, to assess their potential future impacts to our operations. Based upon the latest published tariffs that are currently in effect, we expect a continued adverse impact to operating expense for fiscal year 2026 and potentially beyond, primarily relating to any products (or components) imported from countries across our global supply chain which have no exemption opportunities. The ultimate impact of any existing or new tariffs or other changes in international trade policies is subject to a number of factors including, but not limited to, the duration of such tariffs, changes in tariff rates, the amount, scope and nature of the tariffs, any countermeasures that target countries may take, or any mitigating actions that may become available. While sourcing optimization and tariff exemptions for qualifying products are key aspects of our mitigation strategy, the timing of such or the ultimate results we will realize from these efforts are uncertain. In addition, while we have received refunds of certain tariffs, our tariff mitigation strategies have been, and may be further challenged, rejected or eliminated through legislation or other challenges, or may otherwise not be effective, which may impact the collectability of the remaining receivable we have recorded for exemption claims.