What changed in Broadcom's 10-K for the fiscal year ended November 2, 2025

[added] Sustained uncertainty about, or worsening of, current global economic conditions, further tariffs and escalations of trade tensions between the U.S. and its trading partners, especially China, increased geopolitical volatility, and the decoupling of the global economies could result in a global economic slowdown and long-term changes to global trade. Such events may also (i) cause our customers and end-users to reduce, delay or forgo technology spending, (ii) result in customers sourcing products from other suppliers not subject to such restrictions or tariffs or to develop these products themselves, (iii) lead to the insolvency or consolidation of key suppliers and customers, and (iv) intensify pricing pressures. Any or all of these factors could negatively affect demand for our products and our business, financial condition and results of operations.

The industries in which we compete are characterized by rapid technological change, new technological developments such as AI and cloud computing, changes in customer requirements, frequent new product introductions and enhancements, short product cycles, evolving industry standards, and new delivery methods. In addition, to compete successfully in the semiconductor industry, we must continue to develop and respond to technological advancements and requirements, such as low-power consumption, higher bandwidth and large compute clusters, and we have, from time to time, evolved our business strategy and adopted new business models to address the needs and challenges of our customers. Failure to successfully develop increasingly advanced technologies, including our custom AI accelerators or XPUs, network switches and other AI-related products, or execute on new strategies or models such as the sale or leasing of AI racks or systems based on our XPUs could impair our competitive position. In order to remain competitive, we have made, and expect to continue to make, significant investments in research and development, expand our business strategy or adopt new business models. If we fail to timely develop new and enhanced products and technologies, if we focus on technologies that do not become widely [added] adopted, if new competitive technologies that we do not support become widely accepted, or if we are unable to successfully execute on new business strategies or models such as the sale or leasing of AI racks or systems based on our XPUs, demand for our products and solutions such as our custom AI accelerators or XPUs, network switches or other AI-related products may be reduced. Slow or unsuccessful investments in our research and development efforts or expansion or modification of our business strategies and models and incurring significant expenses for these actions, would have a negative impact on our business, financial condition and margins.

[added] Winning a product design does not guarantee sales to a customer. Customers could accelerate, delay or cancel plans, use their own products, purchase products from our competitors, fail to qualify our products, reduce or discontinue use of our products, or fail to successfully market and sell their products, which could reduce demand for our products and cause us to hold a material amount of excess inventory, materially adversely affecting our business, financial condition and results of operations. In addition, we may also be unable to materially recoup our costs or resell our products to other customers due to the custom nature of certain products.

[added] • the inability of our customers to pay for our products or services due to their constrained resources or capital;

[added] • the timing and extent of delivery of and payment for our semiconductor and semiconductor-based solutions, including AI racks or systems based on our XPUs;

[added] Provision for (benefit from) income taxes. On July 4, 2025, the United States enacted the One Big Beautiful Bill Act, which allows for the immediate expensing of domestic research and development costs and certain capital expenditures, and changes the United States taxation of profits derived from foreign operations. As a result, it is no longer more-likely-than-not that we are able to utilize our federal corporate alternative minimum tax ("CAMT") credits, and we established a $1,321 million valuation allowance against our CAMT credit carryforwards and CAMT credits generated in the current fiscal year. Our policy is to not consider the impact of future years' CAMT in our valuation allowance assessment for regular deferred tax assets. Most of the provisions are effective beginning in our fiscal years ending November 1, 2026 or October 31, 2027, with the exception of immediate expensing of qualifying property being effective in fiscal year 2025.

Each tax incentive and tax holiday is subject to our compliance with various operating and other conditions. If we cannot, or elect not to, comply with any such operating conditions specified, we could, in some instances, be required to refund previously realized material tax benefits, or if such tax incentive or tax holiday is terminated prior to its expiration absent a new incentive applying, we will lose the related tax benefits earlier than scheduled. We may elect to modify our [added] operational structure and tax strategy, which may not be as beneficial to us as the benefits provided under the present tax concession arrangements. Before taking into consideration the impacts of indirect taxes, the effect of these tax incentives and tax holiday decreased the provision for income taxes by approximately $2,709 million and $2,261 million for fiscal years 2025 and 2024, respectively.

[added] • Cash and cash equivalents increased to $16,178 million at November 2, 2025 from $9,348 million at November 3, 2024 primarily due to $27,537 million in net cash provided by operating activities, partially offset by $11,142 million of dividend payments, $3,860 million of employee withholding tax payments related to net settled equity awards, $2,812 million of net repayments of borrowings, and $2,450 million of common stock repurchases.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

[added] When our semiconductor customers [added] agree to purchase specific quantities of [added] products or source an agreed portion of their product needs from us, such arrangements often include pricing schedules or methodologies that apply regardless of the volume of products purchased, and those customers [added] from time to time may not [added] or do not purchase the amount of product we expect. [added] Moreover, our top customers, including our AI customers, may make and have made greater demands on us with regards to pricing and contractual terms, such as seeking to lease AI racks or systems based on our XPUs instead of purchasing, as well as alternative financings for such leases or other novel or deferred payment models. As a result, we may not generate the amount of [added] revenue or free cash flow or achieve the level of profitability that we or investors expect under such arrangements, and/or such arrangements may increase our exposure to credit or customer default risks. The loss of, or any substantial reduction in sales to, any of our top customers, including our [added] customers for our custom AI accelerators or XPUs or AI racks or systems based on our XPUs, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The semiconductor industry is highly cyclical and is [added] subject to rapid price erosion, wide fluctuations in product supply and demand, constant and rapid technological change, evolving technical [added] standards and evolving product applications. The semiconductor industry is undergoing profound change due to the adoption and proliferation of AI and has experienced a significant [added] upturn, which may not be sustainable. [added] The growth of AI is creating pressure on the semiconductor industry to timely design, manufacture and deliver semiconductor products and solutions to meet customer demand for [added] computing power and AI infrastructure. Some of these AI customers may have constrained resources or capital and may be unable to pay for their required AI infrastructure and/or seek alternative financings or novel or deferred payment models from their vendors and suppliers. If our AI customers substantially reduce their expansion plans, cancel, reduce or delay their orders, are unable to generate the profit required to offset their spending or are otherwise unable to meet their obligations and we cannot offset the downturn in their business, it could have a material adverse effect on our business, operating results, financial condition and [added] stock price.

A general [added] weakening of the economy globally or in a particular region or industry, [added] uncertainty and volatility in financial markets, efforts of governments to stimulate or stabilize the economy or to achieve specific policy objectives such as onshoring of semiconductor manufacturing and other unfavorable changes in economic conditions, such as inflation, higher interest rates, tightening of the credit markets, recession or slowing growth, [added] as well as an increase in trade tensions [added] and related tariffs with U.S. trading [added] partners, could negatively impact our business, financial [added] condition, cash flows and liquidity. Adverse global economic conditions have from time to time caused or exacerbated significant slowdowns in the industries and markets in which we operate, which have adversely affected our business and results of operations. Macroeconomic weakness and uncertainty [added] may also make it more difficult to accurately forecast operating results, and [added] market volatility stemming from current macroeconomic events may materially impact our cash flow and our ability to [added] raise or refinance debt at favorable rates. An escalation of trade tensions between the U.S. and its trading [added] partners may continue to result in [added] trade restrictions and increased protectionism on both ends that harm our ability to participate in some markets or compete effectively.

Our products and operations are also subject to regulation by U.S. and non-U.S. regulatory agencies, such as the U.S. Federal Trade Commission. We have been, and may in the future be, involved or required to participate in regulatory investigations or [added] inquiries from regulatory authorities in Korea, Japan and the European Union into certain of our contracting and business practices, which have and may in the future evolve into legal or other administrative proceedings. [added] The technology industry is subject to intense media, political and regulatory scrutiny, which can increase our exposure to government investigations, regulations, legal actions and penalties. Involvement in regulatory investigations or inquiries can be costly, lengthy, complex and [added] time-consuming, diverting the attention and energies of our management and technical personnel. If any pending or future governmental investigations result in an unfavorable resolution, we could be required to cease the manufacture and sale of the subject products or technology, pay fines or disgorge profits or other payments, and/or cease certain conduct and/or modify our contracting or business practices, which could have a material adverse effect on our business, financial condition and results of operations.

Our business is subject to various domestic and international laws and other legal requirements, including antitrust and import/export regulations, such as the U.S. Export Administration Regulations, and applicable executive orders. These laws, [added] regulations, orders, tariffs, federal policies and other governmental actions are complex, [added] continue to evolve and change frequently with limited [added] notice and generally become more stringent over time. We may be required to incur significant [added] expenses to comply [added] with these legal requirements or respond to any governmental actions. In addition, if our [added] suppliers or customers fail [added] or choose not to comply with these [added] legal requirements or governmental actions, we may be required to suspend [added] purchasing from such suppliers or selling to such customers, which could damage our reputation and [added] have a material adverse impact on our results of operations. The U.S. government [added] continues to add companies to its restricted entity list and/or technologies to its list of prohibited exports to specific [added] countries and impose other restrictions or requirements, which have had and may in the future have an adverse effect on our [added] revenue, supply chain and our ability to [added] manufacture or sell our products. These restrictive governmental actions and any similar measures that may be imposed on U.S. companies by other governments, especially in light of ongoing trade tensions with [added] U.S. trading partners, will likely limit or prevent us from doing business with certain of our customers or suppliers and harm our ability to compete effectively or otherwise negatively affect our ability to sell our products. Furthermore, [added] foreign government authorities [added] have proposed and/or may take retaliatory actions, impose conditions for the supply of products or require the license or other transfer of IP, which could have a material adverse effect on our business. Uncertainty due to such evolving policies or actions also may disrupt our supply chain and if we are unable to effectively mitigate any adverse impacts from such measures, this could adversely affect our business, financial condition and results of operations.

• Dependence on [added] a limited number of contract manufacturers and suppliers of critical [added] materials and components within our supply [added] chain, and potential failure to adjust such manufacturing and supply chain to meet customer demand, may adversely affect our ability to bring products to [added] market and our results of operations.

We make significant decisions, including determining the levels of business that we will seek and accept, [added] evolving our business strategy or adopting new business models such as the sale or leasing of AI racks or systems based on our XPUs, production schedules, levels of reliance on [added] CMs and outsourcing, internal fabrication utilization and other resource requirements, based on customer requirements or estimates thereof, which may not be [added] accurate and could result in reallocation of resources. Many factors could impact our estimates of customers' demands, including changes in product development cycles, competing technologies and product releases, new or unexpected end-user [added] products or applications, such as demand for AI-related [added] products and solutions, and changes in business and economic conditions. [added] Our customers may also underestimate the data center or related power or water capacity needed to address end-user demand, which may impact our ability to timely satisfy their requirements. In addition, where our products are part of larger infrastructure projects like data centers, any supply constraints or availability issues with respect to any one component may impact our revenue or our results of operations. The Creating Helpful Incentives to Produce Semiconductors for America Act could also result in an increase in supply leading to excess inventory and a decrease in average selling prices. If we are unable to timely respond to changes in customer [added] demand or execute on new business strategies or models, this could damage our customer relationships, harm our reputation, prevent us from taking advantage of opportunities and adversely impact our business, financial condition and results of operations.

A prolonged disruption at or shut-down of one or more of our manufacturing [added] or other facilities or those of our [added] CMs, suppliers or customers, including data centers, due to natural- or man-made disasters or other events outside of our control, such as climate change, [added] severe weather events, water or power shortages, political unrest, military conflicts, geopolitical turmoil, trade tensions, government orders, labor shortages, medical epidemics, economic instability, equipment failure or for any other reason, would limit our capacity to meet customer demands and delay new product development until a replacement facility and equipment, if necessary, were [added] found, and could destroy our hardware products, inventory or equipment. To date, such events have not had a material adverse effect on our business. However, such an event could disrupt our operations, forgo revenue opportunities, potentially lose market share, result in us being unable to timely satisfy customer demand, expose us to claims by our customers, result in significant expense to repair or replace our affected facilities, [added] products or equipment, and, in some[added] instances, could significantly curtail our research and development efforts in a particular product area or target market, any of which could materially and adversely affect our business. This disruption could also prevent our customers from resuming their own manufacturing or providing services, including through their AI data centers, following such an event, they may cancel or scale back their orders from us and this may in turn adversely affect our results of operations. We may not have any or sufficient insurance coverage to recoup the losses and such events could also result in increased fixed costs relative to the revenue we generate and adversely affect our results of operations.

In addition, certain aspects of effective cybersecurity are dependent upon our employees, contractors and other trusted partners reliably safeguarding secrets (e.g., application credentials) and adhering to our security policies and access control mechanisms. We have in the past experienced, and expect in the future to experience, security incidents arising from a failure to properly handle such secrets or adhere to such policies and, although no such events have had a material adverse effect on our business, there can be no assurance that an insider threat will not result in a material cyber incident. Our logging, alerting and cyber incident detection mechanisms [added] have technical limitations that, in some instances, have led, and may in the future lead, to gaps in visibility into events occurring on systems targeted by threat actors or other unauthorized activities, and [added] have not and may not [added] always capture or surface information sufficient to timely detect and take responsive action to insider or external threats.

From time to time, we may be subject to warranty or product liability claims that may lead to significant expense. Our customer contracts typically contain warranty and indemnification provisions, and in certain cases may also contain liquidated damages provisions. The potential liabilities associated with such provisions are significant, and in some cases, including in agreements with some of our largest customers, are potentially unlimited. Any such liabilities may greatly exceed any revenue we receive from the relevant products. Costs, payments or damages incurred or paid by us in connection with warranty and product liability claims and product recalls could materially adversely affect our financial condition and results of operations. We may also be exposed to such claims as a result of any acquisition we may undertake in the future. Although we maintain [added] self-insured retentions for reasonably estimable [added] liabilities, our reserves may be inadequate to cover such claims.

Our business is subject to various domestic and international laws and other legal requirements, including antitrust and import/export regulations, such as the U.S. Export Administration Regulations, and applicable executive orders. These laws, regulations, orders, tariffs, federal policies and other governmental actions are complex, continue to evolve and change frequently with limited notice and generally become more stringent over time. We may be required to incur significant expenses to comply with these legal requirements or respond to any governmental actions. In addition, if our suppliers or customers fail or choose not to comply with these legal requirements or governmental actions, we may be required to suspend purchasing from such suppliers or selling to such customers, which could damage our reputation and have a material adverse impact on our results of operations. The U.S. government continues to add companies to its restricted entity list and/or technologies to its list of prohibited exports to specific countries and impose other restrictions or requirements, which have had and may in the future have an adverse effect on our revenue, supply chain and our ability to manufacture or sell our products. These restrictive governmental actions and any similar measures that may be imposed on U.S. companies by other governments, especially in light of ongoing trade tensions with U.S. trading partners, will likely limit or prevent us from doing business with certain of our customers or suppliers and harm our ability to compete effectively or otherwise negatively affect our ability to sell our products. Furthermore, foreign government authorities have proposed and/or may take retaliatory actions, impose conditions for the supply of products or require the license or other transfer of IP, which could have a material adverse effect on our business. [added] Uncertainty due to such evolving policies or actions also may disrupt our supply chain and if we are unable to effectively mitigate any adverse impacts from such measures, this could adversely affect our [added] business, financial condition and results of operations.

• [added] Corporate responsibility matters may adversely affect our relationships with customers and [added] investors and increase compliance costs.

In addition, various jurisdictions have adopted, or are developing, complex and lengthy [added] corporate responsibility-related laws or regulations that may be difficult to comply with and will increase our direct compliance costs, as well as indirect costs passed on to us from our customers and suppliers. If we fail to materially comply with or meet the evolving legal and regulatory requirements or expectations of our various stakeholders, we may be subject to enforcement actions, required to pay fines, face decreased customer demand or lose investors, which could harm our reputation, revenue and results of operations. Our actual or perceived failure to achieve our publicly disclosed [added] corporate responsibility initiatives could negatively impact our reputation, subject us to litigation or enforcement actions, or otherwise harm our business.

• The growth of our software business depends on [added] demand for our data center virtualization portfolio, as well as customer acceptance of our [added] software, services and business strategy.

The industries in which we operate are highly competitive and characterized by rapid technological changes, evolving industry standards, changes in customer requirements, often aggressive pricing practices and, in some cases, new delivery methods. We expect competition in these industries to continue to increase as existing competitors improve or expand their product offerings or as new [added] competitors, including our customers, enter our markets. [added] To remain competitive, we seek to evolve our business strategy or adopt new business models from time to time, such as the sale or leasing of AI racks or systems based on our XPUs, that require significant financial resources, which could have a material adverse effect on our results of operations. Moreover, we may offer and have offered alternative financings or other novel or deferred payment models for the leasing of AI racks or systems based on our XPUs to effectively complete, which could have a material adverse effect on our revenue, free cash flow and gross margin and expose us to credit or customer default risks.

[added] Various adopted or proposed regulations and customer requirements could also adversely affect the sourcing, availability and pricing of minerals [added] and materials used in [added] or for the manufacture of semiconductor products. As a result, we may face difficulties in satisfying our customers' demands, which may harm our [added] revenue and results of operations.

• Winning business in the semiconductor solutions industry is [added] an unpredictable process that often requires us to incur significant [added] expenses, evolve our business strategy or adopt a new business model, which may negatively impact our results of operations, gross margin or cash flows.

• We operate in [added] a highly cyclical semiconductor [added] industry that is undergoing profound change due to AI.

Our gross margin is highly dependent on [added] our product mix, as well as the timing and amount of our [added] revenue from our semiconductor solutions, software licensing and other products or solutions. In addition, increased competition and the existence of product alternatives, more complex engineering requirements, lower demand, [added] shifts in spending priorities, constrained resources or capital of our customers, unfavorable changes in economic conditions, industry oversupply or reductions in our technological lead compared to our competitors, and other factors have in the past and may in the future lead to further price erosion, lower revenue and lower [added] gross margin. The gross margin for our semiconductor solutions has typically been lower than our infrastructure software solutions. The sale or leasing of AI racks or systems based on our XPUs will likely increase our operating margin but compress or lower future gross margin, which would adversely impact our stock price.

• [added] A slow or the unsuccessful return on our investments in research and development, expansion of our [added] business strategy or adoption of new business models could adversely affect us.

• Failure of our software [added] portfolio to manage and secure IT infrastructures and environments [added] and our use of open source software in certain software and services could have a material adverse effect on our business.

[added] Our global income is subject to tax in the U.S. In addition, many countries are implementing anti-base-erosion legislation and guidance aimed at standardizing and modernizing global corporate tax policy, including changes to cross-border tax, transfer pricing documentation rules, and nexus-based tax incentive practices. Many countries have implemented or are in the process of implementing a global minimum tax, which [added] we expect to materially increase our effective tax rate and cash tax [added] costs for our fiscal year [added] ending November 1, 2026. Substantial changes in domestic or international corporate tax policies, regulations or guidance, [added] including the recently enacted One Big Beautiful Bill Act, as well as enforcement activities or legislative investigations and inquiries may materially adversely affect our business and impact our provision for income taxes, net income, cash flow and our results of operations generally.

[added] The timing of design wins is unpredictable and implementing production for a major design win or multiple design wins at the same time, such as our design wins for our custom AI accelerators or [added] XPUs, network switches and other AI-related products, may strain our resources and those of our CMs. [added] Some of our customers who have selected us may also have constrained resources or capital but require immediate availability of our custom XPUs. In such event, we may dedicate significant additional resources or execute on new business strategies or models such as the sale or leasing of AI racks or systems based on our XPUs to our customers with alternative financings or novel or deferred payment models, which could result in additional costs, expenses, credit or customer default risks, reduced gross margin and cash flows.

[added] From time to time, we require significant expenditures to support our growth and respond to business challenges. As of November [added] 2, 2025, the aggregate indebtedness was [added] $67,120 million. Our substantial indebtedness and the instruments governing our indebtedness could have important consequences including:

• A prolonged disruption of our or our [added] customers' or suppliers' facilities or other significant operations could have a material adverse effect on us.

• Failure to effectively manage our [added] software solutions and services lifecycles could harm our business.

U.S. and non-U.S. regulators, as well as customers and service providers, have also increased their focus on cybersecurity vulnerabilities and risks. Compliance with laws, regulations, and contractual provisions concerning privacy, cybersecurity, secure technology development, data governance, data protection, confidentiality and IP could result in significant expense, and any failure to comply could result in proceedings against us by regulatory authorities or other third parties and may also increase our overall compliance burden. See also "Failure of our software portfolio to manage and secure IT infrastructures and environments could have a material adverse effect on our business."

A successful [added] cyber-attack, or false reports thereof, involving our [added] software could cause customers and potential customers to believe our [added] software is ineffective or unreliable and result in, among other things, the loss of customers, unfavorable publicity, damage to our reputation, difficulty in marketing our [added] software, and allegations by our customers that we have not performed our contractual obligations, and [added] could give rise to significant costs, including costs related to developing solutions or indemnification obligations under our agreements. Any such event could adversely impact our revenue and results of operations. See also [added] "Cybersecurity threats or other security breaches, or any other impairment of the confidentiality, integrity or availability of our IT systems, or those of one or more of our corporate infrastructure vendors, could have a material adverse effect on our business."

• U.S. and non-U.S. regulatory approval may take longer than anticipated, not be forthcoming or contain burdensome [added] conditions, including due to U.S.-international relationships and other geopolitical events;

As part of the natural lifecycle of our [added] software solutions and services, customers are informed when [added] the software or services will be reaching their end of life or end of availability and will no longer be supported or receive updates and security patches. If these [added] software solutions or services remain subject to a service contract, the customer may transition to alternative [added] software or services. Failure to effectively manage our [added] software and services lifecycles [added] and communications thereof have previously led to, and may in the future lead to, customer dissatisfaction and [added] potential contractual liabilities, which could [added] materially adversely affect our business and operating results.

• unsubstantiated news reports or other inaccurate publicity regarding us or our [added] business, or that of our significant customers;

• restrictive [added] or retaliatory governmental actions, such as restrictions on the transfer or repatriation of funds and foreign investments, data privacy regulations, [added] sustainability-related regulations, trade protection measures, including increasing [added] protectionism and economic nationalism, import/export restrictions (including with regards to advanced technologies), import/export duties and quotas, trade [added] sanctions, and customs duties and tariffs, all of which have increased and may further increase;

We receive debt ratings from the major credit rating agencies in the U.S., and any downgrade in our credit rating or the ratings of our indebtedness, or adverse conditions in the debt capital markets, could materially adversely affect our business, financial condition and results of operations.[added] In addition, the current market volatility may adversely impact our ability to manage our debt, including through borrowing at favorable interest rates or due to reduced cash flows.

The industries in which we compete are characterized by rapid technological change, new technological [added] developments such as AI and cloud computing, changes in customer requirements, frequent new product introductions and enhancements, short product cycles, evolving industry [added] standards, and new delivery methods. In addition, to compete successfully in the semiconductor industry, we must continue to develop and respond to technological advancements and requirements, such as low-power consumption, higher bandwidth and [added] large compute clusters, and we have, from time to time, evolved our business strategy and adopted new business models to address the needs and challenges of our customers. Failure to successfully develop increasingly advanced technologies, including [added] our custom AI accelerators or [added] XPUs, network switches and other AI-related products, [added] or execute on new strategies or models such as the sale or leasing of AI racks or systems based on our XPUs could impair our competitive position. In order to remain competitive, we have made, and expect to continue to make, significant investments in research and [added] development, expand our business strategy or adopt new business models. If we fail to timely develop new and enhanced products and technologies, if we focus on technologies that do not become widely adopted, if new competitive technologies that we do not support become widely accepted, or if we are unable to successfully execute on new business strategies or models such as the sale or leasing of AI racks or systems based on our XPUs, demand for our products and solutions such as our custom AI accelerators or XPUs, network switches or other AI-related products may be reduced. Slow or unsuccessful investments in our research and development efforts or expansion or modification of our business strategies and models and incurring significant expenses for these actions, would have a negative impact on our business, financial condition and margins.

Although we continually seek to improve our countermeasures to prevent such incidents, we may be unable to anticipate every scenario [added] and, as a result, certain cyber threats or vulnerabilities [added] have in the past been and may in the future be undetected or unmitigated in time to prevent [added] harm to us or our customers. Additionally, efforts by malicious cyber actors or others could cause interruptions, delays or cessation of our [added] software delivery, or modification of our software, which could cause us to lose existing or potential customers.

A significant legal risk associated with conducting business internationally is compliance with the various and differing laws and regulations of the many countries in which we do business. Although our policies [added] and procedures prohibit us, our employees and our agents from engaging in unethical business [added] practices and are designed to satisfy regulatory requirements, there can be no assurance that all of [added] these measures will be effective in preventing violations or claims of violations. Any such violation [added] or perceived violation could have a material adverse effect on our business.

Many of our software [added] solutions and services are based on data center virtualization and related hybrid-cloud technologies used to manage distributed computing architectures, which form the foundation for [added] private and hybrid cloud computing. Enabling businesses to modernize applications and efficiently implement their [added] private and hybrid cloud services presents new and difficult technological, operational and compliance challenges. If businesses build new or shift existing compute workloads off-premises to public cloud providers, this could limit the market for on-premises deployments of our data center virtualization [added] portfolio. Current and future customers may not [added] accept our perpetual licensing model or perceive benefits associated with adopting our enterprise-grade private [added] and hybrid cloud platform or our simplified product [added] portfolios, including new version releases. If demand, adoption and continued usage of our software is significantly less than anticipated or we fail to realize the expected returns on our business strategy, [added] the investments we have made to implement our strategy may be of no or limited value, we may lose significant customers and our business, financial condition, results of operations and cash flows may be adversely affected.

Many of our existing software customers have multi-year enterprise software license agreements, some of which involve substantial aggregate fee amounts. These customers often do not have a contractual obligation to purchase additional solutions and [added] may have the right to terminate. The failure or inability to renew customer agreements of similar scope, on terms that are commercially attractive to us, could materially adversely affect our business, financial [added] condition, operating results and cash [added] flow. In addition, software license agreements [added] under which customers do not have the right to terminate could cause [added] variations in revenue recognized in each period and our operating results [added] fluctuate from time to time.

Certain aspects of our software [added] portfolio are intended to manage and secure IT infrastructures and environments, and as a result, we expect these products to be ongoing targets of cyber-attacks. Open source code or other third-party software used in these products could also be targeted and may make our [added] software vulnerable to additional security risks not posed by purely proprietary [added] software. Our software portfolio is complex and, when deployed, [added] has contained in the past and may contain [added] in the future errors, defects or security vulnerabilities, some of which [added] were undiscovered before the [added] software was released, installed and used by customers. The complexity and breadth of our technical and production environments, which involve globally dispersed development and engineering teams, increases the risk that errors, defects or vulnerabilities will be introduced and may delay our ability to detect, mitigate or remediate such incidents.

[added] During fiscal year 2025, approximately 95% of the wafers manufactured by our CMs [added] were produced by TSMC. We believe our wafer requirements represent a meaningful portion of TSMC's total production capacity. However, TSMC also fabricates wafers for other companies, including some of our competitors, and could choose or be required to [added] materially prioritize capacity for other customers or reduce or eliminate deliveries to us on short notice. In addition, TSMC [added] has raised, and may in the [added] future raise, their prices to [added] manufacture our wafers.

Some of our competitors have longer operating histories, greater name recognition or presence in key markets, a larger installed customer base, larger technical staff, a more comprehensive IP portfolio or better patent protection, more established relationships with vendors or suppliers, or greater manufacturing, distribution, financial, research and development, technical and marketing resources than us. We face competition from companies that receive financial and other support from their home country government, customers who develop competing products, public cloud providers, numerous smaller companies that specialize in specific aspects of the highly fragmented software industry, open source authors who provide software and IP for free, and competitors who offer their products through try-and-buy or freemium models.[added] In addition, the trend toward consolidation is also changing the competitive landscape. We expect this trend to continue, which may result in combined competitors having greater resources than we do.

Highly complex products, such as those we offer, [added] have in the past contained, and may in the future contain, defects and bugs when they are first introduced or as new versions, software documentation or enhancements are released, or their release may be delayed due to unforeseen difficulties during product development. If any of our products or third-party components used in our products, contain defects or bugs, or have reliability, quality or compatibility problems, we may not be able to successfully design workarounds. Furthermore, if any of these problems are not discovered until after we have commenced commercial production or deployment, we may be required to incur additional development costs and product recall, repair or replacement costs. Significant technical challenges also arise with our software [added] portfolio because our customers [added] are managing more complex, larger cloud infrastructures for more complex computing environments, license and deploy our [added] portfolio across a variety of computer platforms and integrate them with a number of third-party software [added] applications, databases and environments. As a result, if there is system-wide failure or an actual or perceived breach of information integrity, security or availability occurs in one of our end-user customer's system, it can be difficult to determine which product is at fault and we could ultimately be harmed by the failure of another supplier's product. Consequently, our reputation may be [added] damaged, customers may be reluctant to buy our [added] products, and we may have to invest significant capital and other resources, which could materially and adversely affect our ability to retain existing customers [added] or attract new customers. As a result, our financial results could be materially adversely affected.

Although we operate a primarily outsourced manufacturing business model, we also rely on our own manufacturing facilities, in particular in Fort Collins, Colorado, Singapore, and Breinigsville, Pennsylvania. Our Fort Collins and Breinigsville facilities are the sole sources for the FBAR [added] filters used in many of our wireless devices and for the InP-based wafers used in our fibre optics products, respectively. Many of our facilities, and those of our CMs and suppliers, are concentrated in the same geographic regions of California and the Pacific Rim, which have above average [added] seismic, wildfire, and severe weather activity, and increases the risk of natural disasters impacting multiple suppliers. In addition, a significant majority of our research and development personnel are located in the [added] U.S. and India, and our primary warehouse is in Malaysia.

Our manufacturing processes and those of our CMs rely on many materials, including silicon, [added] gallium arsenide and indium phosphide ("InP") wafers, copper lead frames, precious and rare earth metals, mold compound, ceramic packages and various chemicals and gases. During fiscal year [added] 2025, we purchased approximately two-thirds of our manufacturing materials from five materials suppliers, some of which are single source suppliers. The lead time needed to identify and qualify a new supplier is typically lengthy and there is often no readily available alternative source. We do not generally have long-term contracts with our materials suppliers and substantially all of our purchases are on a purchase order basis. Suppliers [added] have previously, and may in the future, extend lead times, limit supplies, place products on allocation or increase prices, any of which could disrupt supply or increase demand in the industry. Additionally, the supply of these materials [added] has been, from time to time, impacted by increased trade tensions between the U.S. and its trading partners, particularly [added] China, and the uncertainty due to evolving trade restrictions. Any such supply constraints could result in loss of revenue opportunities and adversely impact our business, financial condition and results of operations.

We collect, use and store (collectively referred to as "process" in this paragraph) certain personal information in connection with the operation of our business. This creates various levels of privacy risks across different parts of our business, depending on the type of personal information, the jurisdiction in question and the purpose of their processing. The personal information we process is subject to an increasing number of federal, state, local, and foreign laws and regulations regarding privacy and data security, as well as contractual commitments. Privacy legislation and other data protection regulations, enforcement and policy activity in this area are expanding rapidly in many jurisdictions and creating a complex regulatory compliance environment. Sectoral legislation, certification requirements and technical standards applying to certain categories of our customers, such as those in the financial services or public sector, have exacerbated this trend. The cost of complying with and implementing these privacy-related and data governance measures could increase depending on any additional burdensome security, business processes, or business record or data localization requirements. [added] Additionally, concerns about government [added] interference and digital sovereignty, as well as expanding privacy, cybersecurity and data governance [added] legislation, particularly in cloud computing and AI, could adversely affect our [added] customers, our products and [added] services and our own data management practices. The theft, loss or misuse of personal data collected, used, stored or transferred by us to run our business could result in significantly increased business and security costs or costs related to defending legal claims. Any inadvertent failure or perceived failure by us to comply with privacy, data governance or cybersecurity obligations may result in governmental enforcement actions, litigation, substantial fines and damages, and could cause our customers to lose trust in us, which could have an adverse effect on our reputation and business.

We have historically depended on a small number of end customers, OEMs, their respective contract manufacturers ("CMs") and certain distributors for a majority of our business and revenue. For fiscal year [added] 2025, sales to distributors accounted for 48% of our net revenue. We believe aggregate sales, through all channels, to our top five end customers accounted for approximately 40% of our net revenue for fiscal year [added] 2025. This customer concentration increases the risk of quarterly fluctuations in our operating results and our sensitivity to any material adverse developments experienced by these customers.[added] In addition, some customers may reduce the amount of products or decline to purchase from us due to reduced capital expenditure spending, lack of access to sufficient capital, downturn in their business, purchases from our competitors or their internal development of the products.

We depend on our CMs to allocate sufficient manufacturing capacity [added] and critical components to meet our needs, to produce products of acceptable quality at acceptable [added] yields and prices, and to deliver those products to us on a timely basis. We do not generally have long-term capacity commitments with our CMs and substantially all of our manufacturing services are on a purchase order basis with no minimum quantities. Further, our CMs may fail to timely develop or successfully implement new, advanced manufacturing processes, including transitions to smaller geometry process technologies. From time to time, our CMs may also cease to, or become unable to, manufacture a component for [added] us, and have had capacity constraints in times of unprecedented demand.

These fluctuations are often unrelated or disproportionate to our operating performance. Broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate [added] changes, market corrections or currency fluctuations, may negatively impact the market price of our common stock. You may not realize any return on your investment in us and may lose some or all of your investment. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. In addition, we have been, and in the future we may be, subject to lawsuits stemming from our acquisitions. Securities litigation against us, including the lawsuits related to such acquisitions, could result in substantial costs and divert our management's attention from other business concerns, which could seriously harm our business.

Our contracts signed with the U.S. federal, state and local government and non-U.S. government agencies are generally subject to annual fiscal funding approval and may be renegotiated or terminated at the discretion of the government. Termination, renegotiation or the lack of funding approval for a contract could adversely affect our sales, revenue and reputation. [added] If personnel critical to our performance of these contracts are unable to obtain or maintain their security clearances, we may be unable to perform these contracts or compete for other projects of this nature, which could adversely affect our results of operations. Additionally, our government contracts and our arrangements with channel partners who may sell directly to government customers are generally subject to requirements that may generally not be present in[added] commercial contracts and/or may be complex, as well as audits and investigations. Failure to meet contractual requirements could result in various civil and criminal actions and penalties, and administrative sanctions, including termination of contracts, refund of a portion of fees received, forfeiture of profits, suspension of payments, fines and suspensions or debarment from doing business with the government, which could materially adversely affect our business, financial condition, operating results and cash flow.

Our business depends on a wide variety of complex IT systems and services, including cloud-based and other critical corporate services relating to, among other things, product research and development, financial reporting, product orders[added] and fulfillment, HR, benefit plan administration, IT network management, and electronic communication and collaboration services. These systems and services are both internally managed and outsourced, and in many cases we rely upon third-party data centers. Any failure of these internal or third-party systems and services to operate effectively could disrupt our operations and could have a material adverse effect on our business, financial condition and results of operations. Our operations are dependent upon our ability to protect our IT infrastructure against damage from business continuity events that could have a significant disruptive effect. Although these systems are designed to protect and secure our customers', suppliers' and employees' confidential information, as well as our own proprietary information, we are, out of necessity, dependent on our vendors [added] and third-party data centers to adequately address cybersecurity threats to their own [added] systems and infrastructure, and timely deploy necessary mitigations. In addition, software products we use and technologies produced by us have occasionally had in the past and may have in the future, vulnerabilities that, if left unmitigated, could reduce the overall level of security of the systems on which the software is installed.

Cyber-attacks are increasing in number and sophistication, are well-financed, in some cases supported by state actors, and are designed to not only attack, but also to evade detection. Since the techniques used to obtain unauthorized access to systems, or to otherwise sabotage them, change frequently and are often not recognized until launched against a target, we[added] have in the past been, and may in the future be, unable to anticipate these techniques or to implement adequate preventative measures. The emergence and maturation of AI capabilities may also lead to new and/or more sophisticated methods of attack, including fraud that relies upon "deep fake" impersonation technology or other forms of generative automation that may scale up the efficiency or effectiveness of cyber threat activity.

[added] Many countries have enacted or are in the process of enacting a global minimum tax, some of which became effective for us starting in our fiscal year 2025 and, more importantly, the enactment in Singapore will become effective in our fiscal year ending November 1, 2026 ("fiscal year 2026"). While the tax did not have a [added] material impact on our fiscal year 2025 consolidated results of operations, we expect a material impact from the enactment of these laws on our consolidated results of operations and cash flows for our fiscal year 2026.

Our short-term and long-term liquidity requirements primarily arise from: (i) working capital requirements, [added] (ii) research and development and capital expenditure needs, [added] (iii) cash dividend payments (if and when declared by our Board of Directors), [added] (iv) interest and principal payments related to our [added] $67,120 million of outstanding [added] indebtedness with $3,152 million principal amounts payable within 12 months, (v) payment of income [added] taxes, (vi) business acquisitions and investments we may make from time to time, and (vii) discretionary share repurchases. Our ability to fund these requirements will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing global macroeconomic conditions and financial, business and other factors, some of which are beyond our control. We expect capital expenditures to be higher in fiscal year [added] 2026 as compared to fiscal year [added] 2025.