Cisco Systems (CSCO) risk factors: FY2026 10-K

1. Our operations can be difficult to predict because our results of operations may fluctuate in future periods.reworded
2. Our results of operations may be negatively impacted by unfavorable economic and market conditions and the uncertain geopolitical environment.reworded
3. Our revenue for a particular period is difficult to predict, and a shortfall in revenue may harm our results of operations.reworded
4. 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.reworded
5. We expect gross margin to vary over time, and our level of product gross margin may not be sustainable.
6. 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.rewordedAI
7. Disruption of or changes in our distribution model could harm our sales and margins.
8. The markets in which we compete are intensely competitive, which could negatively impact our achievement of revenue growth.
9. Inventory management relating to our sales to our two-tier distribution channel is complex, and excess inventory may harm our gross margins.
10. Issues related to the development and use of artificial intelligence (AI) could give rise to legal and/or regulatory action, damage our reputation or otherwise materially harm our business.AI
11. Our financial performance may be negatively impacted by demand for, and costs to deliver, our software subscription offerings; and interruptions or performance problems associated with these offerings, including interruptions or performance problems caused by third-party providers on which we rely, may negatively impact our business and financial results.
12. We depend upon the development of new products and services, and enhancements to existing products and services, and if we fail to predict and respond to emerging technological trends and customers’ changing needs, our results of operations and market share may suffer.reworded
13. Changes in industry structure and market conditions could lead to charges related to discontinuances of certain of our products or businesses, asset impairments and workforce reductions or restructurings.
14. Over the long term we intend to invest in engineering, sales, service and marketing activities, and in key priority areas, and these investments may achieve delayed, or lower than expected, benefits which could harm our results of operations.reworded
15. We have made and expect to continue to make acquisitions that could disrupt our operations and harm our results of operations.reworded
16. Entrance into new or developing markets exposes us to additional competition and will likely increase demands on our service and support operations.
17. If we do not successfully manage our strategic alliances, we may not realize the expected benefits from such alliances, and we may experience increased competition or delays in product development.
18. Product quality problems could lead to reduced revenue, gross margins, and net income.
19. Due to the global nature of our operations, political or economic changes or other factors in a specific country or region could harm our results of operations or financial condition.reworded
20. We are exposed to the credit risk of some of our customers and to credit exposures in weakened markets, which could result in material losses.
21. We are exposed to fluctuations in the market values of our portfolio investments and in interest rates; impairment of our investments could harm our earnings.Interest rates
22. We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows.
23. Failure to retain and recruit key personnel would harm our ability to meet key objectives.
24. Adverse resolution of claims, litigation or governmental investigations may harm our results of operations or financial condition.reworded
25. Our results of operations may be negatively impacted and damage to our reputation may occur due to the production and sale of counterfeit versions of our products.reworded
26. Changes in our provision for income taxes or adverse outcomes resulting from examination of our income tax returns could negatively impact our results.
27. Our business and operations are especially subject to the risks of earthquakes, floods, and other natural catastrophic events (including as a result of global climate change).
28. Terrorism, war, and other events may harm our business, results of operations or financial condition.reworded
29. There can be no assurance that our results of operations or financial condition will not be negatively impacted by our incurrence of debt.reworded
30. Our reputation and/or business could be negatively impacted by matters relating to environmental, social, and governance and/or our reporting of such matters.

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1. Our proprietary rights may prove difficult to enforce.
2. We may be found to infringe on intellectual property rights of others.
3. We rely on the availability of third-party licenses.

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1. Cyber attacks, data breaches or other incidents impacting our solutions and IT environment may disrupt our operations, harm our results of operations or financial condition, and damage our reputation or otherwise materially harm our business; and cyber attacks, data breaches or other incidents on our customers’ or third-party providers’ networks, or in third-party products we use, could result in claims of liability against us, give rise to legal and/or regulatory action, damage our reputation or otherwise materially harm our business.rewordedCybersecurity
2. Vulnerabilities and critical security defects, prioritization decisions regarding remedying vulnerabilities or security defects, failure of third-party providers to remedy vulnerabilities or security defects, or customers not deploying security updates in a timely manner or deciding not to upgrade our solutions to those with security updates or security enhancements applied could result in claims of liability against us, damage our reputation, or otherwise materially harm our business.
3. Our actual or perceived failure to adequately protect and appropriately use data could result in claims of legal and/or regulatory action against us, damage our reputation, or otherwise materially harm our business.
4. Our business, results of operations, or financial condition could be materially harmed by evolving regulatory uncertainty or obligations applicable to our products and services.reworded

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1. Our stock price may be volatile.

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