Veeco Instruments Inc.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 4 November 2026: press release. Guidance figures: 1 raised, 3 lowered, 1 narrowed, 5 new. The quarter’s numbers.

Key takeaways

Net sales rose about 26%: Net sales were $209.4 million against $165.9 million a year earlier, up about 26%. Nine-month net sales were $561.2 million against $499.3 million. Source
GAAP and non-GAAP EPS compared: GAAP net income was $13.6 million, or $0.21 diluted EPS, against $10.6 million and $0.17. Non-GAAP net income was $24.1 million, or $0.36, against $21.8 million and $0.36. Source
AI investment accelerating technology transitions: Management said AI infrastructure investment is accelerating technology transitions in leading-edge logic and memory, advanced packaging and high-speed optical connectivity. Source
Fourth-quarter revenue and EPS guided: Fourth-quarter guidance is revenue of $230 million to $260 million, GAAP diluted EPS of $0.34 to $0.53, and non-GAAP diluted EPS of $0.50 to $0.70. Source
Full-year revenue range raised: Full-year 2026 revenue is now $790 million to $820 million, up from $780 million to $810 million in the second-quarter release. Source
Full-year EPS ranges lowered: Full-year GAAP diluted EPS is now $0.72 to $0.92, from $0.78 to $1.02. Non-GAAP diluted EPS is now $1.32 to $1.52, from $1.36 to $1.61. Source
Gross margin fell year on year: GAAP gross margin was 38.4% against 40.8%, and non-GAAP gross margin was 39.1% against 41.9%. Gross profit was $80.4 million against $67.7 million. Source
2027 revenue above $1 billion: Management said it believes Veeco is well positioned to exceed $1 billion in revenue for the full year 2027, citing greater visibility and investments to expand manufacturing capacity. Source

“Veeco’s third-quarter performance reflects solid execution and significant opportunities across our business”
Bill Miller, Ph.D., Veeco’s Chief Executive Officer

Guidance

Area	Period	Figure	Against last quarter
Revenue Source	Fourth quarter 2026 (three months ending December 31, 2026)	$230 million to $260 million	New
GAAP diluted EPS Source	Fourth quarter 2026	$0.34 to $0.53	New
Non-GAAP diluted EPS Source	Fourth quarter 2026	$0.50 to $0.70	New
Gross margin (GAAP 42% to 44%; non-GAAP 43% to 44%) Source	Fourth quarter 2026	GAAP 42% to 44%; non-GAAP 43% to 44%	New
Non-GAAP operating income Source	Fourth quarter 2026	$35 million to $50 million	New
Revenue Source	Fiscal year 2026	$790 million to $820 million	Raised from $780 million to $810 million
GAAP diluted EPS Source	Fiscal year 2026	$0.72 to $0.92	Lowered from $0.78 to $1.02
Non-GAAP diluted EPS Source	Fiscal year 2026	$1.32 to $1.52	Lowered from $1.36 to $1.61
Non-GAAP operating income Source	Fiscal year 2026	$93 million to $108 million	Lowered from $97 million to $115 million
Gross margin (GAAP) Source	Fiscal year 2026	39% to 40%	Narrowed, top end cut from 39% to 41%

What changed from last quarter

Guidance raised: Full-year 2026 revenue guidance raised to $790 million to $820 million from $780 million to $810 million. Source
Guidance lowered: Full-year 2026 GAAP diluted EPS guidance lowered to $0.72 to $0.92 from $0.78 to $1.02. Source
Guidance lowered: Full-year 2026 non-GAAP diluted EPS guidance lowered to $1.32 to $1.52 from $1.36 to $1.61. Source
Guidance lowered: Full-year 2026 non-GAAP operating income guidance lowered to $93 million to $108 million from $97 million to $115 million. Source
New guidance: Fourth-quarter 2026 revenue and EPS guidance was given for the first time in this release. Source
New: Management said it believes Veeco is well positioned to exceed $1 billion in revenue for the full year 2027. Source

Results and growth drivers

Net sales rose about 26%: Net sales were $209.4 million against $165.9 million a year earlier, up about 26%. Nine-month net sales were $561.2 million against $499.3 million. Source
GAAP and non-GAAP EPS compared: GAAP net income was $13.6 million, or $0.21 diluted EPS, against $10.6 million and $0.17. Non-GAAP net income was $24.1 million, or $0.36, against $21.8 million and $0.36. Source
Nine-month GAAP earnings were lower: For the nine months, GAAP net income was $25.2 million, or $0.39 diluted EPS, against $34.3 million and $0.57. Operating income was $23.3 million against $37.1 million. Source
Revenue rose from second quarter: Second-quarter revenue was $193.5 million and GAAP diluted EPS was $0.18. Third-quarter revenue rose $15.9 million and GAAP diluted EPS rose to $0.21.

Demand and order activity

AI investment accelerating technology transitions: Management said AI infrastructure investment is accelerating technology transitions in leading-edge logic and memory, advanced packaging and high-speed optical connectivity. Source
Customer engagement and orders described: Management described unprecedented customer engagement and order activity across the company's differentiated portfolio. Source
Named technologies and their use: The company's standard description lists laser annealing, ion beam, MOCVD, single wafer etch and clean, and lithography technologies used in advanced semiconductor devices. Source

“AI infrastructure investment is accelerating technology transitions across leading-edge logic and memory, advanced packaging, and high-speed optical connectivity.”
Bill Miller, Ph.D., Veeco’s Chief Executive Officer

Guidance for fourth quarter and year

Fourth-quarter revenue and EPS guided: Fourth-quarter guidance is revenue of $230 million to $260 million, GAAP diluted EPS of $0.34 to $0.53, and non-GAAP diluted EPS of $0.50 to $0.70. Source
Fourth-quarter margin and operating income: Fourth-quarter GAAP gross margin is guided at 42% to 44% and non-GAAP at 43% to 44%. Non-GAAP operating income is guided at $35 million to $50 million. Source
Full-year revenue range raised: Full-year 2026 revenue is now $790 million to $820 million, up from $780 million to $810 million in the second-quarter release. Source
Full-year EPS ranges lowered: Full-year GAAP diluted EPS is now $0.72 to $0.92, from $0.78 to $1.02. Non-GAAP diluted EPS is now $1.32 to $1.52, from $1.36 to $1.61. Source
Full-year non-GAAP operating income lowered: Full-year non-GAAP operating income is guided at $93 million to $108 million, from $97 million to $115 million in the previous release. Source
Full-year gross margin range changed: Full-year GAAP gross margin guidance is 39% to 40%, previously 39% to 41%. Non-GAAP gross margin guidance is 40%, previously 40% to 42%. Source

Margins and costs

Gross margin fell year on year: GAAP gross margin was 38.4% against 40.8%, and non-GAAP gross margin was 39.1% against 41.9%. Gross profit was $80.4 million against $67.7 million. Source
Research and SG&A spending higher: Research and development expense was $35.1 million against $29.0 million. Selling, general and administrative expense was $28.5 million against $24.7 million. Source
Operating income higher on non-GAAP basis: GAAP operating income was $14.1 million against $10.6 million. Non-GAAP operating income was $25.2 million against $23.1 million. Source
Non-GAAP excludes share-based pay and amortization: Non-GAAP adjustments in the quarter were share-based compensation of $8.4 million and amortization of $0.4 million, along with merger related expenses. Source

“With greater visibility and strategic investments to expand our manufacturing capacity, we believe Veeco is well positioned to exceed one billion dollars in revenue for the full year 2027.”
Bill Miller, Ph.D., Veeco’s Chief Executive Officer

Balance sheet and cash

Cash and investments increased: Cash and equivalents of $205.3 million plus short-term investments of $277.2 million totaled $482.5 million at September 30, against $390.2 million at December 31, 2025. Source
Inventories and contract liabilities higher: Inventories were $308.3 million, up from $275.3 million at December 31. Contract liabilities were $132.4 million, up from $74.2 million. Source
Debt and equity at quarter end: Long-term debt was $226.8 million and total stockholders' equity was $923.9 million at September 30. Total liabilities were $581.7 million. Source

Share count and convertible notes

Diluted share count increased: Diluted weighted average shares were 66.2 million in the third quarter, against 61.0 million a year earlier. Basic shares were 61.1 million against 60.1 million. Source
2029 notes add diluted shares: The dilutive effect of the 2029 Convertible Senior Notes was 3.3 million shares in the third quarter, in both the GAAP and non-GAAP share counts. Source
Capped call sets non-GAAP conversion price: Non-GAAP share dilution uses an effective conversion price of $18.46 that reflects the capped call issued with the 2027 Notes. GAAP uses $13.98 without it. Source

Pending merger with Axcelis

Merger costs in quarter and year: Merger costs were $2.3 million in the third quarter, against $2.6 million a year earlier. Nine-month merger costs were $5.7 million, against $2.6 million. Source
Merger referenced in forward-looking statements: The forward-looking statements refer to the pending merger with Axcelis and to the timing, completion and expected benefits of the proposed transaction. Source
Fourth-quarter merger expense guided: Fourth-quarter merger related expense is guided at $1 million, with interest income guided at $2 million. Source

Strategy and 2027 ambition

2027 revenue above $1 billion: Management said it believes Veeco is well positioned to exceed $1 billion in revenue for the full year 2027, citing greater visibility and investments to expand manufacturing capacity. Source
Third-quarter revenue within prior range: Third-quarter net sales of $209.4 million fell within the $200 million to $220 million revenue range given in the second-quarter release.

Coming up, as management said on 4 November 2026

Fourth-quarter revenue guided: Fourth-quarter 2026 revenue is guided at $230 million to $260 million, with results to follow against that range. Source
Merger timing not given: The documents refer to the timing and completion of the proposed transaction without giving a date for either. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

VEECO REPORTS THIRD QUARTER 2026 FINANCIAL RESULTS

Third Quarter 2026 Highlights:

Revenue of $209.4 million, compared with $165.9 million in the same period last year
GAAP net income of $13.6 million, or $0.21 per diluted share, compared with $10.6 million, or $0.17 earnings per diluted share in the same period last year
Non-GAAP net income of $24.1 million, or $0.36 per diluted share, compared with $21.8 million, or $0.36 per diluted share in the same period last year

Plainview, N.Y., November 4, 2026 -- Veeco Instruments Inc. (Nasdaq: VECO) today announced financial results for its third quarter ended September 30, 2026. Results are reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and are also reported adjusting for certain items (“Non-GAAP”). A reconciliation between GAAP and Non-GAAP operating results is provided at the end of this press release.

U.S. Dollars in millions, except per share data

GAAP Results	Q3 '26	Q3 '25
Revenue	$209.4	$165.9
Net income	$13.6	$10.6
Diluted earnings per share	$0.21	$0.17

Non-GAAP Results	Q3 '26	Q3 '25
Operating income	$25.2	$23.1
Net income	$24.1	$21.8
Diluted earnings per share	$0.36	$0.36

“Veeco’s third-quarter performance reflects solid execution and significant opportunities across our business,” said Bill Miller, Ph.D., Veeco’s Chief Executive Officer. “AI infrastructure investment is accelerating technology transitions across leading-edge logic and memory, advanced packaging, and high-speed optical connectivity. This is driving unprecedented customer engagement and order activity across our differentiated portfolio. With greater visibility and strategic investments to expand our manufacturing capacity, we believe Veeco is well positioned to exceed one billion dollars in revenue for the full year 2027.”

Guidance and Outlook

The following guidance is provided for Veeco’s fourth quarter 2026:

Revenue is expected in the range of $230 million to $260 million
GAAP diluted earnings per share are expected in the range of $0.34 to $0.53
Non-GAAP diluted earnings per share are expected in the range of $0.50 to $0.70

The following revised guidance is provided for Veeco’s fiscal year 2026:

Revenue is expected in the range of $790 million to $820 million
GAAP diluted earnings per share are expected in the range of $0.72 to $0.92
Non-GAAP diluted earnings per share are expected in the range of $1.32 to $1.52

Conference Call Information

A conference call reviewing these results has been scheduled for today, November 4, 2026 starting at 5:00pm ET. To join the call, dial 1-877-407-8029 (toll-free) or 1-201-689-8029. Participants may also access a live webcast of the call by visiting the investor relations section of Veeco's website at ir.veeco.com. A replay of the webcast will be made available on the Veeco website that evening. We will post an accompanying slide presentation to our website prior to the beginning of the call.

About Veeco

Veeco (NASDAQ: VECO) is an innovative manufacturer of semiconductor process equipment. Our laser annealing, ion beam, metal organic chemical vapor deposition (MOCVD), single wafer etch & clean and lithography technologies play an integral role in the fabrication and packaging of advanced semiconductor devices. With equipment designed to optimize performance, yield and cost of ownership, Veeco holds leading technology positions in the markets we serve. To learn more about Veeco’s systems and service offerings, visit www.veeco.com.

No Offer or Solicitation

This communication is not intended to and shall not constitute an offer to purchase or the solicitation of an offer to buy or sell any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Forward-looking Statements

Forward-looking statements notice

This press release contains “forward-looking statements”, within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended, that are based on management’s expectations, estimates, projections and assumptions. Words such as “expects,” “anticipates,” “plans,” “believes,” “scheduled,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, but are not limited to, those regarding anticipated growth and trends in our businesses and markets, including trends related to artificial intelligence and high-performance computing, industry outlooks and demand drivers, statements regarding the pending merger with Axcelis, the timing of shipments, deliveries and revenue recognition, statements regarding shipments currently being held by U.S. Customs, our investment and growth strategies, our development of new products and technologies, our business outlook for current and future periods, our ongoing transformation initiative and the effects thereof on our operations and financial results, the timing, completion and expected benefits of the proposed transaction and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products; global economic and industry conditions; global trade issues, including the effects of foreign and domestic tariffs and the ongoing trade disputes between the U.S. and China, and changes in trade and export license policies; our dependency on third-party suppliers and outsourcing partners; the timing of customer orders; our ability to develop, deliver and support new products and technologies; our ability to expand our current markets, increase market share and develop new markets; the concentrated nature of our customer base; cybersecurity attacks and our ability to safeguard sensitive information and protect our intellectual property rights in key technologies; the effects of regional or global health epidemics; delays in or failure to complete the proposed transaction, whether due to an inability by either party to satisfy one or more conditions to closing, including an inability to obtain regulatory approval in China, the occurrence of events or changes in circumstances that give rise to the termination of the applicable merger agreement by either party, or otherwise; risks related to the pendency of the proposed transaction and its effect on our business, financial condition, results of operations, cash flows and stock price; our ability to achieve the objectives of operational and strategic initiatives and attract, motivate and retain key employees, including as a result of the proposed transaction; diversion of management time and attention from ordinary course business operations to the proposed transaction and other potential disruptions to our business relating thereto; the variability of results among products and end-markets, and our ability to accurately forecast future results, market conditions, and customer requirements; the impact of our indebtedness, including our convertible senior notes and our capped call transactions; and other risks and uncertainties described in our SEC filings on Forms 10-K, 10-Q and 8-K, and from time-to-time in our other SEC reports. All forward-looking statements speak only to management’s expectations, estimates, projections and assumptions as of the date of this press release. The Company does not undertake any obligation to update or publicly revise any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.

-financial tables attached-

Veeco Contacts:

Investor Relations: Alex Delacroix (516) 528-1020adelacroix@veeco.com

Media: Brenden Wright (410) 984-2610bwright@veeco.com

Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

	Three months ended September 30,		Nine months ended September 30,
	2026	2025	2026	2025
Net sales	$209,384	$165,881	$561,206	$499,277
Cost of sales	128,995	98,178	350,157	294,380
Gross profit	80,389	67,703	211,049	204,897
Operating expenses, net:
Research and development	35,059	28,988	98,277	89,062
Selling, general, and administrative	28,534	24,654	82,179	73,609
Amortization of intangible assets	411	771	1,723	2,413
Merger costs	2,260	2,609	5,736	2,609
Other operating expense (income), net	26	127	(160)	132
Total operating expenses, net	66,290	57,149	187,755	167,825
Operating income	14,099	10,554	23,294	37,072
Interest income (expense), net	1,785	1,321	4,131	3,062
Other income (expense), net	-	-	-	(653)
Income before income taxes	15,884	11,875	27,425	39,481
Income tax expense	2,249	1,279	2,257	5,205
Net income	$13,635	$10,596	$25,168	$34,276
Income per common share:
Basic	$0.22	$0.18	$0.41	$0.58
Diluted	$0.21	$0.17	$0.39	$0.57
Weighted average number of shares:
Basic	61,109	60,077	60,889	58,993
Diluted	66,154	60,950	65,207	60,436

Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

	September 30,	December 31,
	2026	2025
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$205,321	$163,466
Short-term investments	277,184	226,763
Accounts receivable, net	154,064	110,685
Contract assets	26,884	34,838
Inventories	308,265	275,298
Prepaid expenses and other current assets	43,875	34,286
Total current assets	1,015,593	845,336
Property, plant and equipment, net	116,163	108,646
Operating lease right-of-use assets	24,715	24,606
Intangible assets, net	3,973	5,696
Goodwill	214,964	214,964
Deferred income taxes	123,538	122,935
Other assets	6,714	3,612
Total assets	$1,505,660	$1,325,795
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$68,474	$55,345
Accrued expenses and other current liabilities	60,628	45,503
Contract liabilities	132,351	74,161
Income taxes payable	1,041	3,048
Total current liabilities	262,494	178,057
Deferred income taxes	458	532
Long-term debt	226,835	226,009
Long-term operating lease liabilities	31,480	31,837
Other liabilities	60,471	3,852
Total liabilities	581,738	440,287
Total stockholders’ equity	923,922	885,508
Total liabilities and stockholders’ equity	$1,505,660	$1,325,795

Note on Reconciliation Tables

The below tables include financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with GAAP. These Non-GAAP financial measures exclude items such as: share-based compensation expense; charges relating to restructuring initiatives; non-cash asset impairments; certain other non-operating gains and losses; and acquisition-related items such as transaction costs, non-cash amortization of acquired intangible assets, and certain integration costs.

These Non-GAAP financial measures may be different from Non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, Non-GAAP financial measures are intended to facilitate meaningful comparisons to historical operating results, competitors’ operating results, and estimates made by securities analysts. Management is evaluated on key performance metrics including Non-GAAP Operating income (loss), which is used to determine management incentive compensation as well as to forecast future periods. These Non-GAAP financial measures may be useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, similar Non-GAAP financial measures have historically been reported to investors; the inclusion of comparable numbers provides consistency in financial reporting. Investors are encouraged to review the reconciliation of the Non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures.

Reconciliation of GAAP to Non-GAAP Financial Data (Q3 2026)

		Non-GAAP Adjustments
		Share-Based
Three months ended September 30, 2026	GAAP	Compensation	Amortization	Other		Non-GAAP
Net sales	$209,384					$209,384
Gross profit	80,389	1,411				81,800
Gross margin	38.4%					39.1%
Operating expenses	66,290	(7,003)	(411)	(2,260)		56,616
Operating income	14,099	8,414	411	2,260	^	25,184
Net income	13,635	8,414	411	1,643	^	24,103

See table below for additional details.

Other Non-GAAP Adjustments (Q3 2026)

Three months ended September 30, 2026
Merger related expenses	$2,260
Subtotal	2,260
Non-cash interest expense	292
Non-GAAP tax adjustment *	(909)
Total Other	$1,643

* The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.

Net Income per Common Share (Q3 2026)

	Three months ended September 30, 2026
	GAAP	Non-GAAP
Numerator:
Net income available to common shareholders	$13,635	$24,103
Denominator:
Basic weighted average shares outstanding	61,109	61,109
Effect of potentially dilutive share-based awards	1,756	1,756
Dilutive effect of 2029 Convertible Senior Notes	3,289	3,289
Diluted weighted average shares outstanding	66,154	66,154
Net income per common share:
Basic	$0.22	$0.39
Diluted	$0.21	$0.36

Reconciliation of GAAP to Non-GAAP Financial Data (Q3 2025)

		Non-GAAP Adjustments
		Share-based
Three months ended September 30, 2025	GAAP	Compensation	Amortization	Other		Non-GAAP
Net sales	$165,881					$165,881
Gross profit	67,703	1,771				69,474
Gross margin	40.8%					41.9%
Operating expenses	57,149	(7,374)	(771)	(2,663)		46,341
Operating income	10,554	9,145	771	2,663	^	23,133
Net income	10,596	9,145	771	1,261	^	21,773

See table below for additional details.

Other Non-GAAP Adjustments (Q3 2025)

Three months ended September 30, 2025
Merger related expenses	2,609
Other	$54
Subtotal	2,663
Non-cash interest expense	283
Non-GAAP tax adjustment *	(1,685)
Total Other	$1,261

* The ‘with or without’ method is utilized to determine the income tax effect of all Non-GAAP adjustments.

Net Income per Common Share (Q3 2025)

	Three months ended September 30, 2025
	GAAP	Non-GAAP
Numerator:
Net income available to common shareholders	$10,596	$21,773
Denominator:
Basic weighted average shares outstanding	60,077	60,077
Effect of potentially dilutive share-based awards	873	873
Diluted weighted average shares outstanding	60,950	60,950
Net income per common share:
Basic	$0.18	$0.36
Diluted	$0.17	$0.36

- The non-GAAP incremental dilutive shares includes the impact of the Company’s capped call transaction issued concurrently with our 2027 Notes, and as such, an effective conversion price of $18.46 is used when determining incremental shares to add to the dilutive share count. The GAAP incremental dilutive shares does not include the impact of the Company’s capped call transaction, and as such, an effective conversion price of $13.98 is used when determining incremental shares to add to the dilutive share count.

Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q3 2026 and 2025)

	Three months ended	Three months ended
	September 30, 2026	September 30, 2025
GAAP Net income	$13,635	$10,596
Share-based compensation	8,414	9,145
Amortization	411	771
Merger related expenses	2,260	2,609
Interest (income) expense, net	(1,785)	(1,321)
Other	-	54
Income tax expense (benefit)	2,249	1,279
Non-GAAP Operating income	$25,184	$23,133

Reconciliation of GAAP to Non-GAAP Financial Data (Q4 2026)

				Non-GAAP Adjustments
Guidance for the three months ending				Share-based
December 31, 2026	GAAP			Compensation	Amortization	Other	Non-GAAP
Net sales	$230	-	$260				$230	-	$260
Gross profit	97	-	114	2	-	-	99	-	116
Gross margin	42%	-	44%				43%	-	44%
Operating expenses	73	-	75	(8)	-	(1)	64	-	66
Operating income	24	-	39	10		1	35	-	50
Net income	$23	-	$36	10	-	1	$34	-	$47
Income per diluted common share	$0.34	-	$0.53				$0.50	-	$0.70

Income per Diluted Common Share (Q4 2026)

Guidance for the three months ending December 31, 2026	GAAP			Non-GAAP
Numerator:
Net income available to common shareholders	$23	-	$36	$34	-	$47
Denominator:
Basic weighted average shares outstanding	61	-	61	61	-	61
Effect of potentially dilutive share-based awards	2	-	2	2	-	2
Dilutive effect of 2029 Convertible Senior Notes	3	-	3	3	-	3
Diluted weighted average shares outstanding	66	-	66	66	-	66
Net income per common share:
Income per diluted common share	$0.34	-	$0.53	$0.50	-	$0.70

Reconciliation of GAAP Net Income to Non-GAAP Operating Income (Q4 2026)

(in millions) (unaudited)

Guidance for the three months ending December 31, 2026
GAAP Net income	$23	-	$36
Share-based compensation	10	-	10
Merger related expense	1	-	1
Interest expense (income)	(2)	-	(2)
Income tax expense	3	-	5
Non-GAAP Operating income	$35	-	$50

Note: Amounts may not calculate precisely due to rounding.

Reconciliation of GAAP to Non-GAAP Financial Data (FY 2026)

				Non-GAAP Adjustments
Guidance for the year ending				Share-based
December 31, 2026	GAAP			Compensation	Amortization	Other	Non-GAAP
Net sales	$790	-	$820				$790	-	$820
Gross profit	309	-	325	6	-	-	315	-	331
Gross margin	39%	-	40%				40%	-	40%
Operating expenses	261	-	262	(30)	(2)	(7)	222	-	224
Operating income	48	-	63	36	2	7	93	-	108
Net income	$48	-	$62	36	2	2	$89	-	$102
Income per diluted common share	$0.72	-	$0.92				$1.32	-	$1.52

Income per Diluted Common Share (FY 2026)

Guidance for the year ending December 31, 2026	GAAP			Non-GAAP
Numerator:
Net income available to common shareholders	$48	-	$62	$89	-	$102
Denominator:
Basic weighted average shares outstanding	61	-	61	61	-	61
Effect of potentially dilutive share-based awards	2	-	2	2	-	2
Dilutive effect of 2029 Convertible Senior Notes	3	-	3	3	-	3
Diluted weighted average shares outstanding	66	-	66	66	-	66
Net income per common share:
Income per diluted common share	$0.72	-	$0.92	$1.32	-	$1.52

Reconciliation of GAAP Net Income to Non-GAAP Operating Income (FY 2026)

(in millions) (unaudited)

Guidance for the year ending December 31, 2026
GAAP Net income	$48	-	$62
Share-based compensation	36	-	36
Amortization	2	-	2
Merger related expense	7	-	7
Interest expense (income)	(6)	-	(6)
Income tax expense	6	-	7
Non-GAAP Operating income	$93	-	$108