Basis of Presentation

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Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in the condensed consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 27, 2025, included in our Annual Report on Form 10-K filed with the SEC on March 19, 2026.

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In the opinion of management, all adjustments for the fair presentation of our condensed consolidated financial statements have been made. The adjustments are of a normal recurring nature except as otherwise noted. The results of operations for the interim periods are not necessarily indicative of the results to be expected for other periods or the full fiscal year. We have evaluated events occurring subsequent to September 26, 2026 through the filing date of this Quarterly Report on Form 10-Q and concluded that there were no events that required recognition and disclosures other than those discussed elsewhere in the notes hereto.

Fiscal Year

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Our fiscal year is the 52- or 53-week period that ends on the Saturday nearest to December 31. Our fiscal year 2026 will include 53 weeks and ends on January 2, 2027. All quarters, except the fourth quarter of fiscal year 2026, will be comprised of 13 weeks. The fourth quarter of fiscal year 2026 will be comprised of 14 weeks. Unless otherwise stated, references to particular years, quarters, months and periods refer to our fiscal years ended in January or December and the associated quarters, months and periods of those fiscal years.

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Revenue Recognition

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Our significant accounting policies remain consistent with those disclosed in our Annual Report on Form 10-K for the year ended December 27, 2025, except as described below.

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Intellectual Property License and Royalty Revenue

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During the third quarter of 2026, we entered into a five-year patent license agreement under which we granted Samsung Electronics a license to our patent portfolio. Under the Samsung License Agreement, we may receive total license fees of up to $750.0 million, consisting of a $200.0 million upfront license fee and quarterly license fees of up to $27.5 million per quarter for 20 quarters, subject to variable consideration described below. Including foreign withholding taxes paid by Samsung on our behalf, the total potential consideration is up to approximately $898.2 million. During the third quarter of 2026, we received $227.5 million ($272.5 million inclusive of foreign withholding taxes paid by Samsung on our behalf), consisting of the upfront license fee and the first quarterly license fee. License fee revenue is recognized inclusive of foreign withholding taxes paid by Samsung on our behalf, as described below.

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Our intellectual property license and royalty revenue is comprised of licenses which provide Samsung the right to access our portfolio of patents, including patents added to the portfolio during the license term, in exchange for license fees and sales-based royalties. License fee revenue is recognized on a straight-line basis over the license term. Royalty revenue is recognized in the fiscal quarter to which the royalty relates. License fees and royalties are recognized gross of foreign withholding taxes paid by Samsung on our behalf, which are recorded as an income tax asset until utilized.

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Performance Obligations

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Our intellectual property license and royalty revenue includes a single performance obligation to provide Samsung with the right to access our patent portfolio, including patents added to the portfolio during the license term, which is satisfied over time. We use a time-elapsed measure of progress because the licensing rights are made available to the customer evenly throughout the license term.

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Royalties are variable consideration based on Samsung’s reported revenue and are recognized in accordance with the sales-based royalty guidance under ASC Topic 606, Revenue from Contracts with Customers, in the calendar quarter to which the royalty relates. We have elected the optional exemption not to include sales-based royalties in the remaining performance obligation disclosed under Contract Assets and Liabilities below; these royalties will be determined quarterly over the remaining license term through July 2031. The remaining performance obligation also excludes variable consideration that is constrained, as described under Variable Consideration below.

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Variable Consideration

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Our licensing agreement includes variable consideration that is contingent upon events occurring in the later periods of the contract. We include variable consideration in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the related matters are resolved. We reassess the estimate of variable consideration at each reporting date. Changes to our estimate of variable consideration are accounted for as changes in the transaction price. Based on our current estimates, no variable consideration was excluded from the transaction price.

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Contract Assets and Liabilities

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We continually evaluate whether the revenue generating activities and advanced payment arrangements with customers result in the recognition of contract assets or liabilities. Generally, we do not have material amounts of contract assets since revenue is recognized as control of goods is transferred or as services are performed. Contract liabilities (deferred revenues) are comprised of payments received from our customers in advance of transferring products to customers and upfront license fees received in advance of satisfying our license performance obligation over the license term.

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As of September 26, 2026 and December 27, 2025, deferred revenue was $258.0 million and $30.6 million, respectively. Deferred revenue at September 26, 2026 included $227.5 million related to the unrecognized upfront license fee, of which $47.9 million is expected to be recognized within the next 12 months and the remainder through July 2031. The remaining $30.5 million related to advance payments received during the third quarter of 2026 on product orders shipped subsequent to the end of the quarter. Deferred revenue at December 27, 2025 was related to advance payments received during the quarter on product orders shipped subsequent to the end of the quarter.

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During the three and nine months ended September 26, 2026, we recognized $3.0 million and $30.6 million, respectively, of revenue included in deferred revenue at the beginning of each period, all related to product orders.

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We capitalize incremental costs of obtaining contracts with customers when such costs are expected to be recovered. These costs include contingent legal fees that would not have been incurred if the related contracts had not been obtained. Legal fees and other costs that do not qualify for capitalization are expensed as incurred.

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Capitalized contract acquisition costs are amortized on a systematic basis consistent with the transfer of the goods or services to which the costs relate and are evaluated for impairment in accordance with ASC 340-40.

In connection with our license agreement with Samsung, we capitalized contingent legal fees that represent incremental costs of obtaining the agreement and are expected to be recovered through the consideration received under the agreement. These costs are being amortized on a straight-line basis over the 20-quarter license term, consistent with the recognition of the related license revenue.

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As of September 26, 2026, capitalized contract acquisition costs totaled approximately $32.9 million, consisting of $7.2 million classified as current assets and $25.6 million classified as noncurrent assets in the accompanying condensed consolidated balance sheets. Amortization expense related to these costs was approximately $1.8 million for the three and nine months ended September 26, 2026.

Recently Issued Accounting Standards

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In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which updates expense disclosure requirements on an annual and interim basis. This ASU is effective for the annual periods beginning after December 15, 2026, and the interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of adopting this ASU.

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In May 2025, the Financial Accounting Standards Board issued ASU 2025-04, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer, which clarifies accounting for shares, warrants, and other share-based awards an entity grants to its customers. This ASU is effective for the annual periods beginning after December 15, 2026, including interim periods within those annual periods. Early adoption is permitted. We are currently evaluating the impact of adopting this ASU.