Cisco

“Our customers have three key priorities in this dynamic environment: i) to build modern infrastructure; ii) to protect against the cyber threats of today and tomorrow; and iii) to harness the power of AI and data. Cisco is at the forefront of this evolution, developing innovative solutions that leverage advanced AI to deliver more valuable outcomes for our customers. Modern Infrastructure As agentic AI and inference workloads fundamentally alter network traffic patterns, our customers are investing in resilient, adaptable infrastructure to quickly respond to market changes and the demands of their own customers.”

Annual report 2026A · The company itself

“The rise of AI agents is generating a huge increase in network traffic and driving the need for far greater network connectivity. We provide network infrastructure to power AI training and inference workloads for both hyperscalers and enterprises.”

Annual report 2026A · The company itself

“Our sales of AI infrastructure solutions to cloud and hyperscaler customers may similarly involve large and concentrated purchases, and demand may depend on a limited number of customers' capital spending levels, the timing and scale of AI infrastructure deployments, technology and network architecture decisions, and decisions regarding whether to purchase solutions from us or other vendors or develop certain technologies internally. These customers may delay, reduce or cancel planned deployments or purchases for a variety of reasons, including, among others, as a result of budgetary constraints, funding limitations or concerns and changes in anticipated demand for AI infrastructure, available capacity, technology requirements, competitive offerings or investment priorities.”

Annual report 2026A · The company itself

“For example, as products related to network programmability, such as software-defined networking (SDN) products, have become more prevalent, we have faced increased competition from companies that develop networking products based on commoditized hardware, referred to as “white box” hardware.”

Annual report 2026A · The company itself

“We have experienced, and may in the future experience, interruptions in service, storage failures, and other performance-related problems due to a variety of factors, such as infrastructure and software changes, human or software errors, capacity constraints, unauthorized access, denial of service or other cyber attacks, and our exposure to these risks is growing as increasingly powerful AI capabilities emerge and are widely disseminated among threat actors.”

Annual report 2026A · The company itself

“Developing new technologies, including more programmable, flexible and virtual networks, and technology related to other market transitions— such as AI, security, observability, and cloud— is complex and uncertain, and if we fail to deliver on our customers’ changing needs, including our hyperscaler and other customers’ performance, cost and power efficiency requirements, or accurately predict emerging technology trends our business could be harmed.”

Annual report 2026A · The company itself

“Entrance into new or developing markets exposes us to additional competition and will likely increase demands on our service and support operations. As we pursue new market opportunities and key priority areas, including AI, cloud, and cybersecurity, we compete with companies of all sizes, some of which may have greater resources than we do.”

Annual report 2026A · The company itself

“Rapidly accelerating advances in AI technology are enabling threat actors, or autonomous systems, to identify and exploit vulnerabilities across both software and hardware with little or no delay between discovery and exploitation, including so-called “zero-minute” vulnerabilities, increasing the likelihood and speed of successful cyber attacks. These advances also show AI technology can rapidly chain otherwise low-severity, unrelated vulnerabilities into more severe combined exploits, complicating prioritization of security updates.”

Annual report 2026A · The company itself

“While we intend to focus on managing our costs and expenses, over the long term, we also intend to invest in personnel and other resources related to our engineering, sales, service and marketing functions as we realign and dedicate resources on key priority areas, such as AI, cloud, and cybersecurity.”

Annual report 2026A · The company itself

“Business General Cisco designs and sells a broad range of technologies including hardware, software, and artificial intelligence (AI) powered digital infrastructure to power, help secure, and draw insights from the Internet.”

Annual report 2026A · The company itself

“We are incorporating AI into our product portfolios across networking, security, collaboration and observability, as well as integrating our products more tightly together into a platform.”

Annual report 2026A · The company itself

“Observability Observability consists of our observability suite and network assurance offerings. Our unified observability offerings connect insights across AI agents, applications, infrastructure, networks and digital experience to help improve service resilience, which is especially important in the AI era with concerns around “tokenomics.””

Annual report 2026A · The company itself

“We incorporate AI technology in certain of our commercial offerings and in our business operations. Our research and development of AI technology remains ongoing.”

Annual report 2026A · The company itself

“We commit significant resources, including investments in strategic priorities such as silicon (Cisco Silicon One) and optics, including for AI infrastructure, to develop new products and services before knowing whether our investments will result in products and services the market will accept.”

Annual report 2026A · The company itself

“Our customers have three key priorities in this dynamic environment: i) to build modern infrastructure; ii) to protect against the cyber threats of today and tomorrow; and iii) to harness the power of AI and data. Cisco is at the forefront of this evolution, developing innovative solutions that leverage advanced AI to deliver more valuable outcomes for our customers. Modern Infrastructure As agentic AI and inference workloads fundamentally alter network traffic patterns, our customers are investing in resilient, adaptable infrastructure to quickly respond to market changes and the demands of their own customers.”

Annual report 2026A · The company itself

“The rise of AI agents is generating a huge increase in network traffic and driving the need for far greater network connectivity. We provide network infrastructure to power AI training and inference workloads for both hyperscalers and enterprises.”

Annual report 2026A · The company itself

“We also make significant investments to increase or maintain capacity and to develop and implement new technologies in our infrastructure and operations, including those provided by third-party providers on which we rely.”

Annual report 2026A · The company itself

“Entrance into new or developing markets exposes us to additional competition and will likely increase demands on our service and support operations. As we pursue new market opportunities and key priority areas, including AI, cloud, and cybersecurity, we compete with companies of all sizes, some of which may have greater resources than we do.”

Annual report 2026A · The company itself

“While we intend to focus on managing our costs and expenses, over the long term, we also intend to invest in personnel and other resources related to our engineering, sales, service and marketing functions as we realign and dedicate resources on key priority areas, such as AI, cloud, and cybersecurity.”

Annual report 2026A · The company itself

“Our switching portfolio encompasses campus switching as well as data center switching. Our switches offer enhanced security and reliability and are designed to scale efficiently as our customers grow.”

Annual report 2026A · The company itself

“Our data center switching offerings, led by the Nexus 9000 series, provide the foundation for mission-critical data centers, delivering high availability, scalability, and security across hybrid environments. Central to this portfolio is the integration of Cisco Silicon One architecture, establishing a unified silicon foundation that delivers high performance and energy efficiency.”

Annual report 2026A · The company itself

“Our service provider routing portfolio includes AI Infrastructure solutions for service provider customers, including our hyperscaler customers. We are focused on transforming connectivity to the Internet and the cloud environment by efficiently meeting the growing demand for low-latency and higher speeds.”

Annual report 2026A · The company itself

“Sales to the service provider and cloud market, including sales of AI infrastructure solutions to large cloud and hyperscaler customers, are especially volatile and may be concentrated among a limited number of customers, and weakness in orders from this industry may harm our results of operations or financial condition. Sales to the service provider and cloud market are often characterized by large and sporadic purchases.”

Annual report 2026A · The company itself

“Certain of our largest customers, including hyperscalers, have the technical and financial resources to design their own networking equipment, semiconductors and software, or to purchase directly from contract manufacturers, rather than purchase these technologies from us.”

Annual report 2026A · The company itself

“We produce highly complex hardware and software products that incorporate leading-edge technology. Software typically contains bugs or other quality or reliability issues that can unexpectedly disrupt the intended operations of the product or the systems in which it is installed.”

Annual report 2026A · The company itself

“Supply chain issues, including financial problems of contract manufacturers or component suppliers, or a shortage of adequate component supply or manufacturing capacity that increase our costs or cause a delay in our ability to fulfill orders, could have an adverse impact on our business and results of operations, and our failure to estimate customer demand properly or significant purchase commitments made in anticipation of such demand may result in excess or obsolete component supply or other charges, which could negatively impact our gross margins.”

Annual report 2026A · The company itself

“Financial problems of either contract manufacturers or component suppliers, reservation of manufacturing capacity at our contract manufacturers by other companies, and industry consolidation occurring within one or more component supplier markets, such as the semiconductor market, in each case, could either limit supply or increase costs.”

Annual report 2026A · The company itself

“Additionally, we may in the future experience a shortage of certain component parts as a result of our own manufacturing issues, manufacturing issues or capacity problems at our suppliers or contract manufacturers, including cost problems resulting from industry consolidation or otherwise, or strong demand for those parts.”

Annual report 2026A · The company itself

“Although in many cases we use standard parts and components for our products, certain components are presently available only from limited or single sources, and a global economic downturn and related market uncertainty could negatively impact the availability of components from one or more of these sources, especially during times when there are supplier constraints based on labor and other actions taken during economic downturns.”

Annual report 2026A · The company itself

“Manufacturing capacity and supply constraints, such as the memory shortages experienced in fiscal 2026, remain significant risks, and we expect to continue to be adversely impacted by the rising costs of currently constrained memory components.”

Annual report 2026A · The company itself

“Business General Cisco designs and sells a broad range of technologies including hardware, software, and artificial intelligence (AI) powered digital infrastructure to power, help secure, and draw insights from the Internet.”

Annual report 2026A · The company itself

“Products and Services Our products and services are grouped into the following categories: Networking Our networking business is built on a foundation of industry-leading technologies, including switching, routing, wireless, and servers, offered through a comprehensive suite of both hardware and software solutions. This portfolio, which features integrated systems built on Cisco Silicon along with software licenses and software-as-a-service (SaaS) offerings, empowers customers to build, secure, automate, modernize, and transform their network infrastructure to meet the demands of a rapidly evolving digital landscape.”

Annual report 2026A · The company itself

“The portfolio also includes Acacia Optics, whose high-speed coherent optical interconnect technologies enhance Cisco’s networking solutions by enabling scalable, energy-efficient, and simplified optical connectivity that supports the shift from chassis-based systems to pluggable coherent optics.”

Annual report 2026A · The company itself

“We commit significant resources, including investments in strategic priorities such as silicon (Cisco Silicon One) and optics, including for AI infrastructure, to develop new products and services before knowing whether our investments will result in products and services the market will accept.”

Annual report 2026A · The company itself

“Cybersecurity With the rapid growth in AI, modern applications, hyper-distributed architecture and increasingly sophisticated cyberattacks, cybersecurity is a top priority for customers.”

Annual report 2026A · The company itself

“Government Regulation We are subject to numerous regulations and laws in the United States and abroad that involve matters central to our business. Many of these regulations and laws are evolving and their applicability and scope, as interpreted by courts and regulators, remain uncertain. These regulations and laws involve a variety of matters including privacy, data protection and personal information, cybersecurity, operational resilience, AI, tax, trade, encryption technology, environmental sustainability (including climate change), human rights, product certification, and national security.”

Annual report 2026A · The company itself

“We have experienced, and may in the future experience, interruptions in service, storage failures, and other performance-related problems due to a variety of factors, such as infrastructure and software changes, human or software errors, capacity constraints, unauthorized access, denial of service or other cyber attacks, and our exposure to these risks is growing as increasingly powerful AI capabilities emerge and are widely disseminated among threat actors.”

Annual report 2026A · The company itself

“Entrance into new or developing markets exposes us to additional competition and will likely increase demands on our service and support operations. As we pursue new market opportunities and key priority areas, including AI, cloud, and cybersecurity, we compete with companies of all sizes, some of which may have greater resources than we do.”

Annual report 2026A · The company itself

“Rapidly accelerating advances in AI technology are enabling threat actors, or autonomous systems, to identify and exploit vulnerabilities across both software and hardware with little or no delay between discovery and exploitation, including so-called “zero-minute” vulnerabilities, increasing the likelihood and speed of successful cyber attacks. These advances also show AI technology can rapidly chain otherwise low-severity, unrelated vulnerabilities into more severe combined exploits, complicating prioritization of security updates.”

Annual report 2026A · The company itself

“Additional areas of uncertainty that could impact sales of our products and services include laws, regulations, or customer procurement requirements related to encryption technology, data, AI, privacy, cybersecurity, sovereignty, localization, operational resilience, environmental sustainability (including climate change), human rights, product certification, product and digital accessibility, country of origin, sourcing, national security, and other security controls applicable to our offerings and supply chain.”

Annual report 2026A · The company itself

“While we intend to focus on managing our costs and expenses, over the long term, we also intend to invest in personnel and other resources related to our engineering, sales, service and marketing functions as we realign and dedicate resources on key priority areas, such as AI, cloud, and cybersecurity.”

Annual report 2026A · The company itself

“Security Security is at the core of our business strategy, reflecting our commitment to address the evolving needs of organizations of every size across every industry. Our security portfolio spans Network Security, Identity and Access Management, Secure Access Service Edge (SASE), and Identity and Agentic Security solutions.”

Annual report 2026A · The company itself

“We experience cyber attacks and other attempts to gain unauthorized access on a regular basis to (i) our products and services (together, our “solutions”) and (ii) the servers, data centers, networks, systems, and cloud-based services operated or enabled by us, or by third parties upon which we rely, on or through which our and third-party data are stored, processed, or can be accessed (collectively, our “IT environment”).”

Annual report 2026A · The company itself

“We also intend to focus on maintaining leadership in core networking and services.”

Annual report 2026A · The company itself

“Our customers include businesses of all sizes, public institutions, governments, and service providers, including hyperscalers. These customers often look to us as a strategic partner to help them use technology to differentiate themselves and drive positive business outcomes.”

Annual report 2026A · The company itself

“Our customer base is not limited to any specific industry, geography, or market segment. Our customers primarily operate in the following markets: enterprise, public sector and service provider and cloud.”

Annual report 2026A · The company itself

“Enterprise Enterprise includes businesses that are large regional, national, or global organizations with multiple locations or branch offices, or mid-market and small businesses. Many enterprise businesses have unique IT, collaboration, and networking needs within a multi-vendor environment.”

Annual report 2026A · The company itself

“Our customers include businesses of all sizes, public institutions, governments, and service providers, including hyperscalers. These customers often look to us as a strategic partner to help them use technology to differentiate themselves and drive positive business outcomes.”

Annual report 2026A · The company itself

“Our customer base is not limited to any specific industry, geography, or market segment. Our customers primarily operate in the following markets: enterprise, public sector and service provider and cloud.”

Annual report 2026A · The company itself

“Public Sector Public Sector includes federal, state and local governments, as well as educational institution customers. Many public sector customers have unique IT, collaboration, and networking needs within a multi-vendor environment.”

Annual report 2026A · The company itself

“We maintain an investment portfolio with various holdings, investment types, and maturities, including available-for-sale debt and equity investments, the values of which are subject to market volatility.”

Annual report 2026A · The company itself

“Financing Arrangements We provide financing arrangements for certain qualified customers to build, maintain, and upgrade their networks. Cisco Capital, our financing arm, helps customers acquire the technology they need to achieve their business objectives and stay competitive.”

Annual report 2026A · The company itself

“Collaboration Our Collaboration portfolio consists of our Webex Suite, Collaboration Devices, Contact Center and Communication Platform as a Service (CPaaS) offerings. These offerings consist of software, including perpetual licenses and subscription arrangements, as well as hardware.”

Annual report 2026A · The company itself

“Service Provider and Cloud Service Provider and Cloud includes regional, national, and international wireline carriers and hyperscalers, as well as Internet, cable, and wireless providers. We also include media, broadcast, and content providers within this customer market, as the lines in the telecommunications industry continue to blur between traditional network-based, content-based and application-based services.”

Annual report 2026A · The company itself

“We are incorporating AI into our product portfolios across networking, security, collaboration and observability, as well as integrating our products more tightly together into a platform.”

Annual report 2026A · The company itself

“Our customer base is not limited to any specific industry, geography, or market segment. Our customers primarily operate in the following markets: enterprise, public sector and service provider and cloud.”

Annual report 2026A · The company itself

“Strategic Alliances We pursue strategic alliances with other companies in areas where collaboration can produce industry advancement and accelerate new markets. The objectives and goals of a strategic alliance can include one or more of the following: technology exchange, product development, joint sales and marketing, or new market creation.”

Annual report 2026A · The company itself

“If we fail to manage distribution of our products and services properly, or if our distributors’ financial condition or operations weaken, our revenue and gross margins could be negatively impacted.”

Annual report 2026A · The company itself

“In recent years, we have shifted our business model to deliver more recurring software and subscription offerings. This shift in our business model was accelerated by acquisitions, including our acquisition of Splunk.”

Annual report 2026A · The company itself

“Our results of operations have been in the past, and will continue to be, subject to quarterly and annual fluctuations as a result of numerous factors, some of which may contribute to more pronounced fluctuations in an uncertain global economic environment.”

Annual report 2026A · The company itself

“Challenging global economic conditions, including tariffs or other trade barriers or disruptions, rising inflation, or other changes, have contributed, and may continue to contribute, to slowdowns in the markets in which we operate, resulting in: reduced demand for our products due to constrained IT-related spending by customers, particularly service provider, cloud, enterprise and other customer markets; increased price competition for our products, not only from our competitors but also as a consequence of customers disposing of unutilized products; risk of excess and obsolete inventories; risk of supply constraints; risk of excess facilities and manufacturing capacity; and higher overhead costs as a percentage of revenue and higher interest expense.”

Annual report 2026A · The company itself

“Our quarterly revenue is difficult to predict, which can be exacerbated during challenging global macroenvironments and resulting market uncertainty. As in prior periods, we may experience a decline or slower revenue growth rate on a year-over-year basis.”

Annual report 2026A · The company itself

“Growth in the economy is likely to create greater pressures on us and our suppliers to accurately project component demand and optimize component levels and manufacturing capacity, especially for labor-intensive components, components for which we purchase a substantial portion of the supply, or the re-ramping of manufacturing capacity for highly complex products.”

Annual report 2026A · The company itself

“Weakness in orders from this industry, including as a result of any slowdown in capital expenditures by service providers (which may be more prevalent during a global economic downturn, or periods of economic, political or regulatory uncertainty), could materially harm our business, results of operations, or financial condition.”

Annual report 2026A · The company itself

“Our exposure to credit risks relating to our financing activities may increase if our customers are negatively impacted by global economic downturn or uncertainty.”

Annual report 2026A · The company itself

“In particular, we have experienced price-focused competition from competitors in Asia, especially from China, and we anticipate this will continue.”

Annual report 2026A · The company itself

“Furthermore, the impact of uncertainty regarding global central bank monetary policy, the instability in the geopolitical environment in many parts of the world (including as a result of the ongoing Russia and Ukraine war, Middle East conflicts and wars, and China-Taiwan relations), government-related disruptions or shutdowns, and other disruptions may continue to put pressure on global economic conditions.”

Annual report 2026A · The company itself

“A reduction or interruption in supply, including disruptions on our global supply chain, caused in part by geopolitical tensions; public health emergencies; significant natural disasters (including as a result of climate change); tariffs or other trade barriers or disruptions; a significant increase in the price of components (including as a result of inflation); a failure to adequately authorize procurement of inventory by our contract manufacturers; a failure by suppliers to deliver on our contracts; IT-related failure or disruption; a failure to appropriately cancel, reschedule, or adjust our requirements based on our business needs; or a decrease in demand for our products could materially harm our business, results of operations, or financial condition and could materially damage customer relationships.”

Annual report 2026A · The company itself

“Terrorism, war, and other events may harm our business, results of operations or financial condition. The continued threat of terrorism and heightened security and military action in response thereto, or any other current or future acts of terrorism, war (such as the ongoing Russia-Ukraine war and Middle East conflicts and wars), and other events (such as economic sanctions, trade restrictions or disruptions and reactions of the governments, markets and the general public, including the sanctions and restrictions related to the ongoing Russia-Ukraine war or arising out of the current conflicts and wars in the Middle East) may cause further disruptions to the economies of the United States and other countries and create 21 Table of Contents further uncertainties or could otherwise negatively impact our business, results of operations, or financial condition.”

Annual report 2026A · The company itself

“Additionally, nation-state actors or their agents have in the past successfully attacked our solutions and IT environment and have also exploited vulnerabilities in our solutions to carry out attacks, and we anticipate that these attacks and the exploitation of vulnerabilities in our solutions will continue and may intensify during periods of diplomatic or armed conflict or other geopolitical tensions.”

Annual report 2026A · The company itself

“Furthermore, as a result of binding price or purchase commitments with suppliers, we may be obligated to purchase components at prices that are higher than those available in the current market or in quantities that exceed our actual requirements if customer demand is lower than anticipated, delayed or shifts to different products or technologies. If we are committed to purchase components at prices in excess of the current market price when the components are actually used, or in quantities in excess of our needs, our gross margins could decrease and we could incur excess or obsolete inventory, losses on purchase commitments or other charges.”

Annual report 2026A · The company itself

“In recent periods, we have increased our efforts in procuring components to meet customer expectations, as we have historically done due to supply constraints, which has contributed to an increase in inventory and purchase commitments. For example, in fiscal 2025 and 2026, we entered into additional purchase commitments with contract manufacturers and suppliers related to manufacturing Cisco Silicon One, memory components and other products to meet expected demand from hyperscalers and other customers.”

Annual report 2026A · The company itself

“These supply chain exposures include potential material excess and obsolete inventory, losses on purchase commitments or other charges if product demand significantly decreases or is delayed for a sustained duration, we are unable to generate demand for certain products planned for development, customer requirements or technology architectures change or we are otherwise unable to mitigate these supply chain exposures.”

Annual report 2026A · The company itself

“Challenging global economic conditions, including tariffs or other trade barriers or disruptions, rising inflation, or other changes, have contributed, and may continue to contribute, to slowdowns in the markets in which we operate, resulting in: reduced demand for our products due to constrained IT-related spending by customers, particularly service provider, cloud, enterprise and other customer markets; increased price competition for our products, not only from our competitors but also as a consequence of customers disposing of unutilized products; risk of excess and obsolete inventories; risk of supply constraints; risk of excess facilities and manufacturing capacity; and higher overhead costs as a percentage of revenue and higher interest expense.”

Annual report 2026A · The company itself

“A reduction or interruption in supply, including disruptions on our global supply chain, caused in part by geopolitical tensions; public health emergencies; significant natural disasters (including as a result of climate change); tariffs or other trade barriers or disruptions; a significant increase in the price of components (including as a result of inflation); a failure to adequately authorize procurement of inventory by our contract manufacturers; a failure by suppliers to deliver on our contracts; IT-related failure or disruption; a failure to appropriately cancel, reschedule, or adjust our requirements based on our business needs; or a decrease in demand for our products could materially harm our business, results of operations, or financial condition and could materially damage customer relationships.”

Annual report 2026A · The company itself

“In particular, economic sanctions and changes to export and import control requirements have impacted and may continue to impact our ability to sell and support our products and services in certain jurisdictions. In addition, changes in telecommunications regulations could impact our service provider customers’ purchase and use of our products and services, and they could also impact sales of our own regulated offerings.”

Annual report 2026A · The company itself

“Challenging global economic conditions, including tariffs or other trade barriers or disruptions, rising inflation, or other changes, have contributed, and may continue to contribute, to slowdowns in the markets in which we operate, resulting in: reduced demand for our products due to constrained IT-related spending by customers, particularly service provider, cloud, enterprise and other customer markets; increased price competition for our products, not only from our competitors but also as a consequence of customers disposing of unutilized products; risk of excess and obsolete inventories; risk of supply constraints; risk of excess facilities and manufacturing capacity; and higher overhead costs as a percentage of revenue and higher interest expense.”

Annual report 2026A · The company itself

“A reduction or interruption in supply, including disruptions on our global supply chain, caused in part by geopolitical tensions; public health emergencies; significant natural disasters (including as a result of climate change); tariffs or other trade barriers or disruptions; a significant increase in the price of components (including as a result of inflation); a failure to adequately authorize procurement of inventory by our contract manufacturers; a failure by suppliers to deliver on our contracts; IT-related failure or disruption; a failure to appropriately cancel, reschedule, or adjust our requirements based on our business needs; or a decrease in demand for our products could materially harm our business, results of operations, or financial condition and could materially damage customer relationships.”

Annual report 2026A · The company itself

“The loss of key personnel, difficulty attracting or retaining qualified employees, or delays in hiring, particularly in engineering and sales roles, could impair our ability to meet key objectives, including timely and effective product introductions.”

Annual report 2026A · The company itself

“Our success depends in large part on our ability to attract and retain highly skilled technical, managerial, sales, and marketing personnel.”

Annual report 2026A · The company itself

“Challenging global economic conditions, including tariffs or other trade barriers or disruptions, rising inflation, or other changes, have contributed, and may continue to contribute, to slowdowns in the markets in which we operate, resulting in: reduced demand for our products due to constrained IT-related spending by customers, particularly service provider, cloud, enterprise and other customer markets; increased price competition for our products, not only from our competitors but also as a consequence of customers disposing of unutilized products; risk of excess and obsolete inventories; risk of supply constraints; risk of excess facilities and manufacturing capacity; and higher overhead costs as a percentage of revenue and higher interest expense.”

Annual report 2026A · The company itself

“Table of Contents Manufacturing We rely on contract manufacturers for our manufacturing needs. We presently use a variety of independent third-party companies to provide services related to printed-circuit board assembly, in-circuit test, product repair, and product assembly.”

Annual report 2026A · The company itself

“Government Regulation We are subject to numerous regulations and laws in the United States and abroad that involve matters central to our business. Many of these regulations and laws are evolving and their applicability and scope, as interpreted by courts and regulators, remain uncertain. These regulations and laws involve a variety of matters including privacy, data protection and personal information, cybersecurity, operational resilience, AI, tax, trade, encryption technology, environmental sustainability (including climate change), human rights, product certification, and national security.”

Annual report 2026A · The company itself

“The AI-related legal and regulatory landscape is complex and constantly evolving and therefore remains uncertain and may be inconsistent from jurisdiction to jurisdiction. Our obligations to comply with this complex and evolving legal and regulatory landscape could entail significant compliance or other costs or limit our ability to incorporate certain AI capabilities into our offerings.”

Annual report 2026A · The company itself

“Additional areas of uncertainty that could impact sales of our products and services include laws, regulations, or customer procurement requirements related to encryption technology, data, AI, privacy, cybersecurity, sovereignty, localization, operational resilience, environmental sustainability (including climate change), human rights, product certification, product and digital accessibility, country of origin, sourcing, national security, and other security controls applicable to our offerings and supply chain.”

Annual report 2026A · The company itself

“In particular, we have experienced price-focused competition from competitors in Asia, especially from China, and we anticipate this will continue.”

Annual report 2026A · The company itself

“In particular, economic sanctions and changes to export and import control requirements have impacted and may continue to impact our ability to sell and support our products and services in certain jurisdictions. In addition, changes in telecommunications regulations could impact our service provider customers’ purchase and use of our products and services, and they could also impact sales of our own regulated offerings.”

Annual report 2026A · The company itself

“Furthermore, the impact of uncertainty regarding global central bank monetary policy, the instability in the geopolitical environment in many parts of the world (including as a result of the ongoing Russia and Ukraine war, Middle East conflicts and wars, and China-Taiwan relations), government-related disruptions or shutdowns, and other disruptions may continue to put pressure on global economic conditions.”

Annual report 2026A · The company itself

“We maintain an investment portfolio with various holdings, investment types, and maturities, including available-for-sale debt and equity investments, the values of which are subject to market volatility.”

Annual report 2026A · The company itself

“We also depend on non-U.S. operations of our contract manufacturers, component suppliers and distribution partners.”

Annual report 2026A · The company itself

“For example, in September 2021, we announced our goal to achieve net zero across all scopes of greenhouse gas emissions by 2040, the achievement of which relies, in large part, on the accuracy of our estimates and assumptions around the energy consumption and efficiency of our products, the integration of clean energy into electric grids globally, and the procurement of certain products and services by our customers.”

Annual report 2026A · The company itself

“For example, in September 2021, we announced our goal to achieve net zero across all scopes of greenhouse gas emissions by 2040, the achievement of which relies, in large part, on the accuracy of our estimates and assumptions around the energy consumption and efficiency of our products, the integration of clean energy into electric grids globally, and the procurement of certain products and services by our customers.”

Annual report 2026A · The company itself

“We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows. Because a significant portion of our business is conducted outside the United States, we are exposed to adverse movements in foreign currency exchange rates, including in emerging markets where currencies may be extremely volatile.”

Annual report 2026A · The company itself

“We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows. Because a significant portion of our business is conducted outside the United States, we are exposed to adverse movements in foreign currency exchange rates, including in emerging markets where currencies may be extremely volatile.”

Annual report 2026A · The company itself

“We conduct significant sales and customer support operations in countries around the world. As such, our growth depends in part on our increasing sales into emerging countries.”

Annual report 2026A · The company itself

“A reduction or interruption in supply, including disruptions on our global supply chain, caused in part by geopolitical tensions; public health emergencies; significant natural disasters (including as a result of climate change); tariffs or other trade barriers or disruptions; a significant increase in the price of components (including as a result of inflation); a failure to adequately authorize procurement of inventory by our contract manufacturers; a failure by suppliers to deliver on our contracts; IT-related failure or disruption; a failure to appropriately cancel, reschedule, or adjust our requirements based on our business needs; or a decrease in demand for our products could materially harm our business, results of operations, or financial condition and could materially damage customer relationships.”

Annual report 2026A · The company itself