v3.26.1
Debt
 9 Months Ended
Jul. 03, 2026
Debt Disclosure [Abstract]  
DEBT DEBT
The following represents the outstanding balances and effective interest rates of our borrowings as of July 3, 2026 and October 3, 2025, (in thousands, except percentages):
July 3, 2026October 3, 2025
Principal BalanceEffective Interest RatePrincipal BalanceEffective Interest Rate
0.25% convertible notes due March 2026
$— — $161,151 0.54 %
0.00% convertible notes due December 2029344,316 0.33 %344,316 0.33 %
Total principal amount outstanding344,316 505,467 
Less: Short-term debt340,465 160,946 
Unamortized discount on deferred financing costs(3,851)(4,891)
Total long-term debt$— $339,630 
2029 Convertible Notes
On December 19, 2024, we issued 0.00% convertible senior notes due in fiscal year 2030, pursuant to an indenture dated as of such date (the “2024 Indenture”), between the Company and U.S. Bank National Association, as trustee, with an aggregate principal amount of $344.3 million (the “2029 Convertible Notes”).
Holders of the 2029 Convertible Notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding September 15, 2029 in multiples of $1,000 principal amount, only under the following circumstances: (i) during any fiscal quarter commencing after the fiscal quarter ending on April 4, 2025 (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 (the “Stock Price Trigger”); (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 2024 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 redemption date; or (iv) upon the occurrence of specified corporate events described in the 2024 Indenture. On or after September 15, 2029 until the close of business on the second scheduled trading day immediately preceding the maturity date, the holders may convert their notes, in multiples of $1,000 principal amount, regardless of the foregoing circumstances.
The initial conversion rate for the 2029 Convertible Notes is 5.7463 shares of common stock (subject to adjustment as provided for in the 2024 Indenture) per $1,000 principal amount of the notes, which is equal to an initial conversion price of approximately $174.03 per share of common stock.
The 2029 Convertible Notes do not bear regular interest, and the principal amount of the notes does not accrete. The notes are senior unsecured obligations of the Company and will mature on December 15, 2029, unless earlier redeemed, repurchased or converted. Upon conversion of the 2029 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 2024 Indenture). We must notify the holders of the 2029 Convertible Notes of our settlement method for our conversion obligation in excess of the aggregate principal amount no later than September 15, 2029, for conversions occurring on or after that date. We may redeem for cash all or any portion of the notes, at our option, on or after December 20, 2027 and prior to September 15, 2029 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 thirty (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 2024 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.
During the fiscal quarter ended July 3, 2026, the Stock Price Trigger was satisfied, and as a result, holders of our 2029 Convertible Notes may convert their notes at their option at any time during our fourth fiscal quarter ending October 2, 2026, and the 2029 Convertible Notes balance of $340.5 million, net of deferred financing costs, is classified as short-term debt in our condensed consolidated balance sheet.
For the three and nine months ended July 3, 2026, total interest expense for the 2029 Convertible Notes was $0.3 million and $0.8 million, respectively, which represents amortization of issuance costs. For the three and nine months ended July 4, 2025, total interest expense for the 2029 Convertible Notes was $0.3 million and $0.6 million, respectively, which represents amortization of issuance costs.
The fair value of our 2029 Convertible Notes was $791.9 million and $353.3 million as of July 3, 2026 and October 3, 2025, respectively. The fair value was determined based on quoted prices in markets that are not active, which is considered a Level 2 valuation input.
The full principal amount of the 2029 Convertible Notes of $344.3 million is due on December 15, 2029.
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 “2021 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 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.
On December 12, 2024, we entered into separate, privately negotiated exchange and subscription agreements (the “Exchange and Subscription Agreements”) with a limited number of holders of the 2026 Convertible Notes. Under the terms of the Exchange and Subscription Agreements, the holders exchanged $288.8 million in aggregate principal amount of 2026 Convertible Notes held by them for $257.7 million of our 2029 Convertible Notes (defined above), 1,582,958 newly-issued shares of the Company’s common stock, par value $0.001 per share, issued at a fair value of $205.9 million, and $17.6 million in cash (collectively, the “Exchanges”). The Exchanges resulted in aggregate pre-tax debt extinguishment charges of $193.1 million. The Company also issued approximately $86.6 million in additional aggregate principal amount of the 2029 Convertible Notes in a private placement to certain investors (the “Subscription” and, together with the Exchanges, the “Transactions”). The Transactions closed on December 19, 2024. Following the closing of the Transactions, the aggregate principal balance of the 2026 Convertible Notes was $161.2 million and the terms of the 2021 Indenture were unchanged.
In September 2025, certain holders exercised their right to convert $0.5 million of the notes. The transaction settled during the first fiscal quarter of 2026 and we paid $0.5 million principal in cash and issued 2,610 shares of our common stock for the conversion premium, par value $0.001 per share, issued at a fair value of $0.5 million. On March 16, 2026, pursuant to the terms of the 2021 Indenture, we settled the remaining 2026 Convertible Notes and paid the total outstanding principal balance of $160.7 million in cash and issued 1,259,111 shares of our common stock for the conversion premium, par value $0.001 per share, issued at a fair value of $283.2 million. There was no gain or loss recognized for these transactions in our condensed consolidated statement of operations and there was an immaterial amount recognized in additional paid-in capital in our condensed consolidated balance sheets for these transactions.
For the nine months ended July 3, 2026, total interest expense for the 2026 Convertible Notes was $0.4 million of which $0.2 million was for coupon interest. For the three and nine months ended July 4, 2025, total interest expense for the 2026 Convertible Notes was $0.5 million and $1.6 million, respectively, of which $0.1 million and $0.5 million, respectively, was for coupon interest.
The fair value of our 2026 Convertible Notes was $251.6 million as of October 3, 2025 and was determined based on quoted prices in markets that are not active, which is considered a Level 2 valuation input.