Open the filing on EDGARMKS Inc. Reports Second Quarter 2026 Financial Results
Revenue of $1,248 million, above the high end of guidance
GAAP net income of $175 million and net income per diluted share of $2.41, each above the high end of guidance
Adjusted EBITDA of $358 million and Non-GAAP net earnings per diluted share of $3.30, each above the high end of guidance
Andover, MA, August 5, 2026 -- MKS Inc. (NASDAQ: MKSI), a global provider of enabling technologies that transform our world, today reported its financial results for the second quarter of 2026.
“MKS delivered accelerated double-digit year-over-year revenue growth across each of our end markets in the second quarter, demonstrating our foundational role as an enabler of advanced electronics,” said John T.C. Lee, President and Chief Executive Officer. “As AI-driven investment levels intensify across semiconductor and advanced packaging applications, our momentum is continuing to build, including rapidly growing order volumes. With the industry’s broadest technology capabilities, deep relationships in the electronics ecosystem, and enhanced capacity to deliver to customer demand, we are confident in MKS’ near- and long-term growth prospects.”
“Our second quarter revenue and key profitability metrics once again came in at or above the high end of our guided ranges, underscoring our strong execution and favorable position in a robust demand environment,” said Ram Mayampurath, Executive Vice President and Chief Financial Officer. “We are demonstrating our ability to drive profitable growth and healthy free cash flow as we further strengthen our balance sheet and invest for the future.”
Selected GAAP and Non-GAAP Financial Measures
(In millions, except per share data)
| Three Months Ended | Six Months Ended |
|---|
| Q2 2026 | Q1 2026 | Q2 2025 | Q2 2026 | Q2 2025 |
|---|
| Net Revenues | | | | | |
| Semiconductor | $554 | $466 | $432 | $1,019 | $846 |
| Electronics & Packaging | 381 | 321 | 266 | 703 | 519 |
| Specialty Industrial | 313 | 291 | 275 | 604 | 545 |
| Total net revenues | $1,248 | $1,078 | $973 | $2,326 | $1,910 |
| Gross Margin | 47.6% | 47.0% | 46.6% | 47.3% | 47.0% |
| GAAP Financial Measures | | | | | |
| Operating margin | 20.1% | 13.8% | 13.9% | 17.2% | 12.9% |
| Net income | $175 | $84 | $62 | $258 | $114 |
| Net income per diluted share | $2.41 | $1.18 | $0.92 | $3.60 | $1.69 |
| Non-GAAP Financial Measures | | | | | |
| Operating margin | 25.6% | 21.8% | 20.8% | 23.9% | 20.5% |
| Net earnings | $232 | $157 | $119 | $389 | $235 |
| Net earnings per diluted share | $3.30 | $2.30 | $1.77 | $5.61 | $3.48 |
Additional Financial Information
At June 30, 2026, the Company had $611 million in cash and cash equivalents, $1.5 billion of secured term loan principal outstanding, $1.4 billion of convertible senior notes outstanding, €1.0 billion of senior notes outstanding and up to $1.0 billion of additional borrowing capacity under a revolving credit facility, subject to certain leverage ratio requirements. The trading price of our common stock during the second quarter of 2026 resulted in the satisfaction of the stock price conversion condition under the indenture governing our convertible senior notes. As a result, the convertible senior notes are convertible, in whole or in part, at the option of the noteholders at any time during the third quarter of 2026, and were classified as short-term debt, net of issuances costs, at June 30, 2026.
In August 2026, the Company made a voluntary principal prepayment of $100 million on its USD term loan B.
Third Quarter 2026 Guidance
Revenue of $1,350 million, plus or minus $40 million
Gross margin of 47.0%, plus or minus 1.0%
GAAP operating expenses of $346 million, plus or minus $5 million and Non-GAAP operating expenses of $280 million, plus or minus $5 million
GAAP net income of $201 million, plus or minus $23 million and Non-GAAP net earnings of $257 million, plus or minus $22 million
GAAP net income per diluted share of $2.73, plus or minus $0.31 and Non-GAAP net earnings per diluted share of $3.58, plus or minus $0.31
Adjusted EBITDA of $395 million, plus or minus $28 million
The guidance for the third quarter is based on the current business environment, including the impact of U.S. import tariffs and the imposition of retaliatory actions taken by other countries up through but not including the date of this release. The Company will continue to monitor and adapt to changes in the business environment as needed.
Conference Call Details
A conference call with management will be held on Thursday, August 6, 2026 at 8:30 a.m. (Eastern Time). To participate in the call by phone, participants should visit the Investor Relations section of MKS’ website at investor.mks.com and click on Events & Presentations, where you will be able to register online and receive dial-in details. We encourage participants to register and dial in to the conference call at least 15 minutes before the start of the call to ensure a timely connection. A live and archived webcast and related presentation materials will be available on the Investor Relations section of the MKS website.
About MKS Inc.
MKS Inc. (NASDAQ: MKSI) enables technologies that transform our world. We deliver foundational technology solutions to leading edge semiconductor manufacturing, electronics and packaging, and specialty industrial applications. We apply our broad science and engineering capabilities to create instruments, subsystems, systems, process control solutions and specialty chemicals technology that improve process performance, optimize productivity and enable unique innovations for many of the world's leading technology and industrial companies. Our solutions are critical to addressing the challenges of miniaturization and complexity in advanced device manufacturing by enabling increased power, speed, feature enhancement, and optimized connectivity. Our solutions are also critical to addressing ever-increasing performance requirements across a wide array of specialty industrial applications. Additional information can be found at www.mks.com.
Use of Non-GAAP Financial Results
This press release includes financial measures that are not in accordance with U.S. generally accepted accounting principles (“Non-GAAP financial measures”). These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, MKS’ reported results under U.S. generally accepted accounting principles (“GAAP”), and may be different from Non-GAAP financial measures used by other companies. In addition, these Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. MKS management believes the presentation of these Non-GAAP financial measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. For further information regarding these Non-GAAP financial measures, please refer to the tables presenting reconciliations of our Non-GAAP results to our GAAP results and the “Notes on Our Non-GAAP Financial Information” at the end of this press release.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
Forward-looking statements notice
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding the future financial performance, business prospects and growth of MKS Inc. (“MKS,” the “Company,” “our,” or “we”). These statements are only predictions based on current assumptions and expectations. Any statements that are not statements of historical fact (including statements containing the words “will,” “projects,” “intends,” “believes,” “plans,” “anticipates,” “expects,” “estimates,” “forecasts,” “continues” and similar expressions) should be considered forward-looking statements. Actual events or results may differ materially from those in the forward-looking statements set forth herein. Among the important factors that could cause actual events to differ materially from those in the forward-looking statements that we make are the level and terms of our substantial indebtedness and our ability to service such debt; risks related to pursuing, completing, and/or failing to realize the benefits of acquisitions and other strategic transactions critical to our growth strategy; risks related to cybersecurity, data privacy and intellectual property; manufacturing and sourcing risks, including supply chain disruptions, component shortages and price increases, the use of limited, sole source and international suppliers, the relocation of manufacturing operations, and product defects; risks associated with doing business internationally, including geopolitical conflicts, trade compliance, trade protection measures, such as import tariffs by the United States and/or retaliatory actions taken by other countries, regulatory restrictions on our products, components or markets, particularly the semiconductor market, and unfavorable currency exchange and tax rate fluctuations; conditions affecting the markets in which we operate, including intense competition, rapid technological and market changes, dependence on new product development, the ability to anticipate and meet customer demand, fluctuations in capital spending in the semiconductor, electronics manufacturing and automotive industries, and fluctuations in sales to our major customers; disruptions or delays from third-party service providers upon which our operations may rely; risks associated with the attraction and retention of key personnel; potential fluctuations in quarterly results; volatility of stock price; risks associated with chemical manufacturing and environmental regulation compliance; risks associated with artificial intelligence (“AI”); financial and legal risk management; and the other important factors described under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission and any subsequent Quarterly Reports on Form 10-Q. MKS is under no obligation to, and expressly disclaims any obligation to, update or alter these forward-looking statements, whether as a result of new information, future events or otherwise, even if subsequent events cause our views to change, after the date of this press release. Amounts reported in this press release are preliminary and subject to finalization prior to the filing of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026.
Company Contact:
Paretosh Misra
Vice President, Investor Relations
Telephone: (978) 284-4705
Email: paretosh.misra@mks.com
Unaudited Consolidated Statements of Operations
(In millions, except per share data)
| Three Months Ended | Six Months Ended |
|---|
| June 30, | March 31, | June 30, | June 30, | June 30, |
|---|
| 2026 | 2026 | 2025 | 2026 | 2025 |
|---|
| Net revenues: | | | | | |
| Products | $1,104 | $954 | $848 | $2,058 | $1,668 |
| Services | 144 | 124 | 125 | 268 | 242 |
| Total net revenues | 1,248 | 1,078 | 973 | 2,326 | 1,910 |
| Cost of revenues: | | | | | |
| Products | 582 | 514 | 463 | 1,096 | 900 |
| Services | 71 | 57 | 57 | 129 | 113 |
| Total cost of revenues (exclusive of amortization shown separately below) | 653 | 571 | 520 | 1,225 | 1,013 |
| Gross profit | 595 | 507 | 453 | 1,101 | 897 |
| Research and development | 76 | 81 | 76 | 157 | 145 |
| Selling, general and administrative | 200 | 190 | 175 | 389 | 361 |
| Restructuring and other | 6 | 3 | 5 | 9 | 21 |
| Legal settlement | - | 3 | - | 3 | - |
| Fees and expenses related to debt activities | - | 18 | - | 18 | 2 |
| Amortization of intangible assets | 62 | 63 | 62 | 125 | 122 |
| Income from operations | 251 | 149 | 135 | 400 | 246 |
| Interest income | (2) | (2) | (4) | (4) | (7) |
| Interest expense | 38 | 45 | 55 | 83 | 108 |
| Loss on extinguishment of debt | 4 | 5 | 2 | 9 | 5 |
| Other (income) expense, net | (2) | (1) | 10 | (2) | 9 |
| Income before income taxes | 213 | 102 | 72 | 314 | 131 |
| Provision for income taxes | 38 | 18 | 10 | 56 | 17 |
| Net income | $175 | $84 | $62 | $258 | $114 |
| Net income per common share: | | | | | |
| Basic | $2.59 | $1.24 | $0.92 | $3.83 | $1.69 |
| Diluted | $2.41 | $1.18 | $0.92 | $3.60 | $1.69 |
| Cash dividends per common share | $0.25 | $0.25 | $0.22 | $0.50 | $0.44 |
| Weighted average common shares outstanding: | | | | | |
| Basic | 67.6 | 67.4 | 67.2 | 67.5 | 67.3 |
| Diluted | 72.7 | 71.1 | 67.4 | 71.9 | 67.5 |
Unaudited Consolidated Balance Sheets
(In millions)
| June 30, | December 31, |
|---|
| 2026 | 2025 |
|---|
| ASSETS | | |
| Cash and cash equivalents | $611 | $675 |
| Trade accounts receivable, net | 830 | 651 |
| Inventories | 1,033 | 921 |
| Other current assets | 300 | 263 |
| Total current assets | 2,774 | 2,510 |
| Property, plant and equipment, net | 798 | 810 |
| Right-of-use assets | 265 | 270 |
| Goodwill | 2,580 | 2,574 |
| Intangible assets, net | 2,015 | 2,140 |
| Other assets | 509 | 492 |
| Total assets | $8,941 | $8,796 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | |
| Short-term debt | $1,399 | $51 |
| Accounts payable | 534 | 407 |
| Other current liabilities | 491 | 469 |
| Total current liabilities | 2,424 | 927 |
| Long-term debt, net | 2,544 | 4,150 |
| Non-current deferred taxes | 438 | 474 |
| Non-current accrued compensation | 147 | 149 |
| Non-current lease liabilities | 243 | 246 |
| Other non-current liabilities | 157 | 131 |
| Total liabilities | 5,953 | 6,077 |
| Stockholders' equity: | | |
| Common stock | - | - |
| Additional paid-in capital | 2,093 | 2,101 |
| Retained earnings | 936 | 711 |
| Accumulated other comprehensive loss | (41) | (93) |
| Total stockholders' equity | 2,988 | 2,719 |
| Total liabilities and stockholders' equity | $8,941 | $8,796 |
Unaudited Consolidated Statements of Cash Flows
(In millions)
| Three Months Ended | Six Months Ended |
|---|
| June 30, | March 31, | June 30, | June 30, | June 30, |
|---|
| 2026 | 2026 | 2025 | 2026 | 2025 |
|---|
| Cash flows from operating activities: | | | | | |
| Net income | $175 | $84 | $62 | $258 | $114 |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
| Depreciation and amortization | 85 | 85 | 87 | 171 | 172 |
| Unrealized (gain) loss on foreign currency and derivative instruments | (2) | - | 2 | (2) | 4 |
| Amortization of debt issuance costs and original issue discounts | 3 | 4 | 7 | 8 | 13 |
| Loss on extinguishment of debt | 4 | 5 | 2 | 9 | 5 |
| Stock-based compensation | 15 | 19 | 12 | 34 | 34 |
| Provision for excess and obsolete inventory | 5 | 13 | 10 | 17 | 27 |
| Deferred income taxes | (20) | (24) | (44) | (44) | (80) |
| Other | (4) | 1 | (1) | (4) | - |
| Changes in operating assets and liabilities | (18) | (134) | 28 | (151) | 17 |
| Net cash provided by operating activities | 243 | 53 | 165 | 296 | 306 |
| Cash flows from investing activities: | | | | | |
| Purchases of investments | - | - | - | (1) | - |
| Proceeds from sale of long-lived assets | - | - | 2 | - | 2 |
| Purchases of property, plant and equipment | (55) | (25) | (29) | (79) | (47) |
| Net cash used in investing activities | (55) | (25) | (27) | (80) | (45) |
| Cash flows from financing activities: | | | | | |
| Repurchase of common stock | - | - | - | - | (45) |
| Proceeds from borrowings | - | 1,192 | - | 1,192 | - |
| Payments of borrowings | (104) | (1,274) | (113) | (1,378) | (225) |
| Payments of deferred financing fees | - | (22) | - | (22) | - |
| Dividend payments | (17) | (17) | (15) | (34) | (30) |
| Net payments related to employee stock awards | (26) | (16) | - | (42) | (5) |
| Other financing activities | (1) | - | (1) | (1) | (4) |
| Net cash used in financing activities | (148) | (137) | (129) | (285) | (309) |
| Effect of exchange rate changes on cash and cash equivalents | 2 | 3 | 10 | 5 | 8 |
| Increase (decrease) in cash and cash equivalents | 42 | (106) | 19 | (64) | (40) |
| Cash and cash equivalents at beginning of period | 569 | 675 | 655 | 675 | 714 |
| Cash and cash equivalents at end of period | $611 | $569 | $674 | $611 | $674 |
The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’ operating results:
Schedule Reconciling Selected Non-GAAP Financial Measures
(In millions, except per share data)
| Three Months Ended | Six Months Ended |
|---|
| June 30, | March 31, | June 30, | June 30, | June 30, |
|---|
| 2026 | 2026 | 2025 | 2026 | 2025 |
|---|
| Net income | $175 | $84 | $62 | $258 | $114 |
| Restructuring and other | 6 | 3 | 5 | 9 | 21 |
| Legal settlement | - | 3 | - | 3 | - |
| Amortization of intangible assets | 62 | 63 | 62 | 125 | 122 |
| Loss on extinguishment of debt | 4 | 5 | 2 | 9 | 5 |
| Amortization of debt issuance costs | 3 | 4 | 5 | 7 | 9 |
| Loss from de-designation of interest rate hedges | - | 2 | - | 2 | - |
| Fees and expenses related to debt activities | - | 18 | - | 18 | 2 |
| Tax effect of Non-GAAP adjustments | (18) | (23) | (17) | (42) | (38) |
| Non-GAAP net earnings | $232 | $157 | $119 | $389 | $235 |
| Non-GAAP net earnings per diluted share | $3.30 | $2.30 | $1.77 | $5.61 | $3.48 |
| Weighted average diluted shares outstanding | 72.7 | 71.1 | 67.4 | 71.9 | 67.5 |
| Convertible debt capped calls | (2.4) | (2.9) | - | (2.7) | - |
| Non-GAAP weighted average diluted shares outstanding | 70.3 | 68.2 | 67.4 | 69.2 | 67.5 |
| Net cash provided by operating activities | $243 | $53 | $165 | $296 | $306 |
| Purchases of property, plant and equipment | (55) | (25) | (29) | (79) | (47) |
| Free cash flow | $188 | $29 | $136 | $217 | $259 |
| Operating expenses | $344 | $358 | $318 | $701 | $651 |
| Restructuring and other | 6 | 3 | 5 | 9 | 21 |
| Legal settlement | - | 3 | - | 3 | - |
| Amortization of intangible assets | 62 | 63 | 62 | 125 | 122 |
| Fees and expenses related to debt activities | - | 18 | - | 18 | 2 |
| Non-GAAP operating expenses | $275 | $271 | $251 | $547 | $505 |
| Income from operations | $251 | $149 | $135 | $400 | $246 |
| Operating margin | 20.1% | 13.8% | 13.9% | 17.2% | 12.9% |
| Restructuring and other | 6 | 3 | 5 | 9 | 21 |
| Legal settlement | - | 3 | - | 3 | - |
| Amortization of intangible assets | 62 | 63 | 62 | 125 | 122 |
| Fees and expenses related to debt activities | - | 18 | - | 18 | 2 |
| Non-GAAP income from operations | $320 | $235 | $202 | $555 | $392 |
| Non-GAAP operating margin | 25.6% | 21.8% | 20.8% | 23.9% | 20.5% |
| Interest expense, net | $36 | $43 | $51 | $79 | $101 |
| Amortization of debt issuance costs | 3 | 4 | 5 | 7 | 9 |
| Loss from de-designation of interest rate hedges | - | 2 | - | 2 | - |
| Non-GAAP interest expense, net | $33 | $37 | $46 | $71 | $92 |
| Net income | $175 | $84 | $62 | $258 | $114 |
| Interest expense, net | 36 | 43 | 51 | 79 | 101 |
| Other (income) expense, net | (2) | (1) | 10 | (2) | 9 |
| Provision for income taxes | 38 | 18 | 10 | 56 | 17 |
| Depreciation | 23 | 22 | 26 | 46 | 51 |
| Amortization of intangible assets | 62 | 63 | 62 | 125 | 122 |
| Stock-based compensation | 15 | 19 | 12 | 34 | 34 |
| Restructuring and other | 6 | 3 | 5 | 9 | 21 |
| Legal settlement | - | 3 | - | 3 | - |
| Loss on extinguishment of debt | 4 | 5 | 2 | 9 | 5 |
| Fees and expenses related to debt activities | - | 18 | - | 18 | 2 |
| Adjusted EBITDA | $358 | $277 | $240 | $635 | $476 |
| Adjusted EBITDA margin | 28.6% | 25.7% | 24.7% | 27.3% | 24.9% |
Schedule Reconciling Selected Non-GAAP Financial Measures
(In millions, except per share data)
| Three Months Ended June 30, 2026 | Three Months Ended March 31, 2026 |
|---|
| Income Before Income Taxes | Provision for Income Taxes | Effective Tax Rate | Income Before Income Taxes | Provision for Income Taxes | Effective Tax Rate |
|---|
| GAAP | $213 | $38 | 17.8% | $102 | $18 | 17.7% |
| Restructuring and other | 6 | - | | 3 | - | |
| Legal settlement | - | - | | 3 | - | |
| Amortization of intangible assets | 62 | - | | 63 | - | |
| Loss on extinguishment of debt | 4 | - | | 5 | - | |
| Amortization of debt issuance costs | 3 | - | | 4 | - | |
| Loss from de-designation of interest rate hedges | - | - | | 2 | - | |
| Fees and expenses related to debt activities | - | - | | 18 | - | |
| Tax effect of Non-GAAP adjustments | - | 18 | | - | 23 | |
| Non-GAAP | $288 | $56 | 19.6% | $198 | $41 | 20.9% |
| Three Months Ended June 30, 2025 |
|---|
| Income Before Income Taxes | Provision for Income Taxes | Effective Tax Rate |
|---|
| GAAP | $72 | $10 | 13.6% |
| Restructuring and other | 5 | - | |
| Amortization of intangible assets | 62 | - | |
| Loss on extinguishment of debt | 2 | - | |
| Amortization of debt issuance costs | 5 | - | |
| Fees and expenses related to debt activities | - | - | |
| Tax effect of Non-GAAP adjustments | - | 17 | |
| Non-GAAP | $146 | $27 | 18.2% |
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 |
|---|
| Income Before Income Taxes | Provision for Income Taxes | Effective Tax Rate | Income Before Income Taxes | Provision for Income Taxes | Effective Tax Rate |
|---|
| GAAP | $314 | $56 | 17.8% | $131 | $17 | 13.0% |
| Restructuring and other | 9 | - | | 21 | - | |
| Legal settlement | 3 | - | | - | - | |
| Amortization of intangible assets | 125 | - | | 122 | - | |
| Loss on extinguishment of debt | 9 | - | | 5 | - | |
| Amortization of debt issuance costs | 7 | - | | 9 | - | |
| Loss from de-designation of interest rate hedges | 2 | - | | - | - | |
| Fees and expenses related to debt activities | 18 | - | | 2 | - | |
| Tax effect of Non-GAAP adjustments | - | 42 | | - | 38 | |
| Non-GAAP | $486 | $98 | 20.1% | $290 | $55 | 19.1% |
Schedule Reconciling Selected Non-GAAP Financial Measures - Q3’26 Guidance
(In millions, except per share data)
| Three Months Ending September 30, 2026 |
|---|
| $ Amount | Per Share |
|---|
| GAAP net income and net income per share | $201 | $2.73 |
| Restructuring and other | 5 | |
| Amortization of intangible assets | 61 | |
| Loss on extinguishment of debt | 6 | |
| Amortization of debt issuance costs | 3 | |
| Tax effect of Non-GAAP adjustments | (19) | |
| Non-GAAP net earnings and net earnings per share | $257 | $3.58 |
| Weighted average diluted shares | 73.6 | |
| Convertible debt capped calls | (1.8) | |
| Non-GAAP weighted average diluted shares | 71.8 | |
| GAAP operating expenses | $346 | |
| Restructuring and other | (5) | |
| Amortization of intangible assets | (61) | |
| Non-GAAP operating expenses | $280 | |
| GAAP net income | 201 | |
| Interest expense, net | 36 | |
| Provision for income taxes | 46 | |
| Depreciation | 25 | |
| Restructuring and other | 5 | |
| Amortization of intangible assets | 61 | |
| Stock-based compensation | 15 | |
| Loss on extinguishment of debt | 6 | |
| Adjusted EBITDA | $395 | |
Notes on Our Non-GAAP Financial Information
Non-GAAP financial measures adjust GAAP financial measures for the items listed below. These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, MKS’ reported GAAP results, and may be different from Non-GAAP financial measures used by other companies. In addition, these Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. MKS management believes the presentation of these Non-GAAP financial measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. Totals presented may not sum and percentages may not recalculate using figures presented due to rounding.
Restructuring and other includes incremental expenses incurred in connection with restructuring programs and other strategic initiatives, primarily related to changes in business and/or cost structure. Such costs may include third-party services, one-time termination benefits, facility-related costs, contract termination fees and other items that have no direct correlation to our future business operations.
Legal settlement includes charges related to the resolution of legal matters.
Amortization of intangible assets includes non-cash amortization expense associated with intangible assets acquired in acquisitions.
Loss on extinguishment of debt includes the non-cash write-off of unamortized debt issuance costs and original issue discount costs incurred from voluntary prepayments, refinancings and/or repricings of our term loan facility.
Amortization of debt issuance costs includes non-cash additional interest expense related to the amortization of debt issuance costs associated with our debt.
Loss from de-designation of interest rate hedges includes a cash loss from the de-designation of certain interest rate hedges in connection with the voluntary prepayment of the USD term loan B.
Fees and expenses related to debt activities includes direct third-party costs related to repricings or refinancings of our term loan facility and the issuance of our €1.0 billion of senior notes due 2034 in February 2026.
Convertible debt capped calls includes the antidilutive impact of the capped call transactions entered into in connection with the issuance of $1.4 billion of convertible senior notes in May 2024. The capped calls are designed to reduce potential dilution to the Company’s common stock and/or offset cash payments in excess of the principal upon conversion of the notes, subject to a cap. Because the capped calls are excluded from GAAP diluted share calculations, GAAP and Non‑GAAP diluted share counts will differ.
Tax effect of Non-GAAP adjustments includes the impact of Non-GAAP adjustments that are tax effected at applicable statutory rates resulting in a difference between the GAAP and Non-GAAP tax rates.