DERIVATIVES FINANCIAL INSTRUMENTS (Notes)

12 Months Ended

Oct. 04, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

. DERIVATIVE FINANCIAL INSTRUMENTS

The Company’s international operations are exposed to changes in foreign exchange rates due to transactions denominated in currencies other than U.S. dollars. Most of the Company’s revenue and cost of materials are transacted in U.S. dollars. However, a significant amount of the Company’s operating expenses is denominated in local currencies, primarily in Singapore.

The foreign currency exposure of our operating expenses is generally hedged with foreign exchange forward contracts. The Company’s foreign exchange risk management programs include using foreign exchange forward contracts with cash flow hedge accounting designation to hedge exposures to the variability in the U.S. dollar equivalent of forecasted non-U.S. dollar-denominated operating expenses. These instruments generally mature within twelve months. For these derivatives, we report the after-tax gain or loss from the effective portion of the hedge as a component of accumulated other comprehensive (loss) / income, and we reclassify it into earnings in the same period or periods in which the hedged transaction affects earnings and in the same line item on the Consolidated Statements of Comprehensive Income as the impact of the hedged transaction.

The fair value of derivative instruments on our Consolidated Balance Sheets as of October 4, 2025 and September 28, 2024 were as follows:


	As of
	October 4, 2025					September 28, 2024
(in thousands)	Notional Amount		Fair Value Asset Derivatives		(1)	Notional Amount		Fair Value Asset Derivatives		(1)
Derivatives designated as hedging instruments:
Foreign exchange forward contracts (2)	$	49,974	$	85		$	46,234	$	1,521
Total derivatives	$	49,974	$	85		$	46,234	$	1,521

(1)The fair value of derivative assets is measured using level 2 fair value inputs and is included in prepaid expenses and other current assets on our Consolidated Balance Sheets.

(2)Hedged amounts expected to be recognized to income within the next twelve months.

The effects of derivative instruments designated as cash flow hedges in our Consolidated Statements of Comprehensive Income for the fiscal years ended October 4, 2025 and September 28, 2024 were as follows:



		Fiscal
(in thousands)			2025		2024		2023
Foreign exchange forward contract in cash flow hedging relationships:
Net (loss)/gain recognized in OCI, net of tax	(1)		$	(1,022)	$	1,799	$	2,381
Net (loss)/gain reclassified from accumulated OCI into income, net of tax	(2)		$	414	$	(445)	$	870

(1)Net change in the fair value of the effective portion classified in OCI.

(2)Effective portion classified as selling, general and administrative expense.

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

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+ Details

KULICKE & SOFFA INDUSTRIES INC 10-K