Sentences and paragraphs of CSCO's Risk Factors and MD&A, 10-K 2026-09-02 against 10-K 2025-09-03.
Each links to the text at sec.gov.
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AddedRisk Factors
•Assume liabilities, become subject to intellectual property or other litigation, and incur significant write-offs, restructuring charges, and related expenses
Read it in 10-K 2026-09-02 at sec.gov ↗
AddedRisk Factors
For additional information and a further discussion of impacts and risks related to cybersecurity matters, see the risk factors under the “Item 1A. Risk Factors— Risk Related to Cybersecurity, Privacy, and Regulatory Requirements” heading.
Read it in 10-K 2026-09-02 at sec.gov ↗
AddedRisk Factors
impacted by a variety of political, economic or other factors relating to our operations inside and outside the United States, any or all of which could materially harm our results of operations or financial condition, including the following:
Read it in 10-K 2026-09-02 at sec.gov ↗
AddedRisk Factors
•Challenging and uncertain global macroeconomic environments, central bank policies, currency exchange rates, and regional economic instability (including economic challenges in China and their resulting global ramifications)
Read it in 10-K 2026-09-02 at sec.gov ↗
RemovedRisk Factors
•Fluctuations in demand for our products and services, especially with respect to service providers and Internet businesses, in part due to changes in the global economic environment
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedRisk Factors
•The overall movement toward industry consolidation among both our competitors and our customers
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedRisk Factors
As a consequence, operating results for a particular future period are difficult to predict, and, therefore, prior results are not necessarily indicative of results to be expected in future periods. Any of the foregoing factors, or any other factors discussed elsewhere herein, could materially harm our business, results of operations, and financial condition.
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedRisk Factors
Our operating results in one or more segments may also be affected by uncertain or changing economic conditions particularly germane to that segment or to particular customer markets within that segment. In addition, previous reports of certain intelligence gathering methods of the U.S. government could affect customers’ perception of the products of IT companies which design and manufacture products in the United States.
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedRisk Factors
results in any future period. Finally, service provider and cloud customers typically have longer implementation cycles; require a broader range of services, including design services; demand that vendors take on a larger share of risks; often require acceptance provisions, which can lead to a delay in revenue recognition; and expect financing from vendors. All these factors can add further risk to business conducted with service providers.
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedRisk Factors
•Initial dependence on unfamiliar supply chains or relatively small supply partners
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedRisk Factors
•Significantly increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedRisk Factors
•Incur tax expenses related to the effect of acquisitions on our legal structure
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedRisk Factors
component suppliers and distribution partners. Our business in emerging countries in the aggregate experienced a decline in orders in certain prior periods. We continue to assess the sustainability of any improvements in our business in these countries and there can be no assurance that our investments in these countries will be successful. Our future results could be negatively impacted by a variety of political, economic or other factors relating to our operations inside and outside the United States, any or all of which could materially harm our operating results and financial condition, including the following: impacts from global central bank monetary policy; issues related to the political relationship between the United States and other countries that can affect regulatory matters, affect the willingness of customers in those countries to purchase products from companies headquartered in the United States or affect our ability to procure components if a government body were to deny us access to those components; government-related disruptions or shutdowns; the challenging and inconsistent global macroeconomic environment; foreign currency exchange rates; geopolitical tensions (including China-Taiwan relations); political or social unrest; economic instability or weakness or natural disasters in a specific country or region, including economic challenges in China and global economic ramifications of Chinese economic difficulties; environmental protection regulations (including new laws and regulations related to climate change); trade protection measures, such as tariffs; other legal and regulatory requirements, some of which may affect our ability to import our products to, export our products from, or sell our products in various countries or affect our ability to procure components; political considerations that affect service provider and government spending patterns; health or similar issues, including pandemics or epidemics; difficulties in staffing and managing international operations; and adverse tax consequences, including imposition of withholding or other taxes on our global operations.
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedRisk Factors
Our success has always depended in large part on our ability to attract and retain highly skilled technical, managerial, sales, and marketing personnel. Competition for such personnel is intense, especially in the Silicon Valley area of Northern California and
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedRisk Factors
We generally rely on patents, copyrights, trademarks, and trade secret laws to establish and maintain proprietary rights in our technology and products. Although we have been issued numerous patents and other patent applications are currently pending, there can be no assurance that any of these patents or other proprietary rights will not be challenged, invalidated, or
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedRisk Factors
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
Read it in 10-K 2025-09-03 at sec.gov ↗
RewordedRisk Factors
A reduction or interruption in supply, including disruptions on our global supply chain, caused in part by geopolitical tensions; public health emergencies, geopolitical tensions (including as a result of China-Taiwan relations, increasing tariffs or any other trade tensions) or a emergencies; significant natural disaster disasters (including as a result of climate change); tariffs or other trade barriers or disruptions; a significant increase in the price of one or more 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; 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, operating results, and financial condition and could materially damage customer relationships.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedRisk Factors
Although we are not dependent on any individual patents patent or group of patents for particular segments of the business in which we compete, patents, if we are unable to adequately protect our the proprietary rights to the totality of the features (including aspects of our products and technologies, including features protected by means other than by patent rights) in a market, patents, we may find ourselves be placed at a competitive disadvantage compared to others who need competitors that do not incur the substantial expense, time, same costs and effort required to create develop innovative products that have enabled us to be successful.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedRisk Factors
We believe that we future supply chain challenges may be faced with the following challenges include: rapid growth in the future: new markets in which we participate may grow quickly, participate, which may make it difficult to quickly obtain significant component capacity; as we acquire companies and new technologies, we may be dependent dependency on unfamiliar supply chains or relatively small supply partners; partners for the companies and new technologies we face acquire; and competition for certain components that are supply-constrained from existing competitors and companies in other markets.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedRisk Factors
While we We work diligently with law enforcement authorities in various countries to block prevent the manufacture and sale of counterfeit goods and to interdict their sale, and to products, detect counterfeit products in customer networks, and have succeeded in prosecuting pursue enforcement actions against counterfeiters and their distributors, resulting in fines, imprisonment and restitution to us, there can be no guarantee that such efforts will succeed. distributors.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedRisk Factors
Challenging global economic conditions, including tariffs or other trade barriers, barriers or disruptions, rising inflation, or other changes, have from time to time contributed, and may continue to contribute, to slowdowns in the communications and networking industries at large, as well as in specific segments and markets in which we operate, resulting in: reduced demand for our products as a result of continued constraints on due to constrained IT-related capital spending by our customers, particularly service provider and cloud as well as 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.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedRisk Factors
In addition, to the extent that manufacturing issues and any related component shortages result in delayed shipments in the future, and arising from manufacturing, component shortages, or any other issues, particularly in periods in which our contract manufacturers are operating at higher levels of capacity, it is possible that could negatively impact revenue for a quarter could be negatively impacted if such matters occur and are not remediated within the same quarter.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedRisk Factors
An increase in the value of the A stronger U.S. dollar could increase the real cost to our customers of our products in those markets outside the United States where we sell in dollars and dollars, while a weakened weaker dollar could increase the cost of local operating expenses and procurement the cost of components or raw materials to the extent that we must purchase components purchased in foreign currencies.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedRisk Factors
The loss of services of any of our key personnel; the inability to retain and attract personnel, difficulty attracting or retaining qualified personnel in the future; employees, or delays in hiring required personnel, hiring, particularly in engineering and sales fields, roles, could make it difficult impair our ability to meet key objectives, such as including timely and effective product introductions.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedRisk Factors
Our exposure to risks associated with the use of intellectual property may be increased increase as a result of acquisitions, as acquisitions because we may have a lower level of more limited visibility into the development process processes or infringement risk management practices associated with respect to such technology or the care taken to safeguard against infringement risks. acquired technologies.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedRisk Factors
For example, 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.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedRisk Factors
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 on-going 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 on-going ongoing Russia-Ukraine war) 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 further uncertainties or could otherwise negatively impact our business, operating results, and financial condition.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedRisk Factors
Also, We compete with numerous vendors across our product categories, and the identity number, identity, and composition of competitors our competitors, including those providing niche product solutions, may change as we increase our activity in expand into newer product areas, products, technologies, and in key priority areas.
Read it in 10-K 2026-09-02 at sec.gov ↗
Quiet changesRisk Factors
Additionally, a certain number some of our facilities are located near rivers that have experienced flooding in the past.
Read it in 10-K 2026-09-02 at sec.gov ↗
AddedMD&A
We saw demand in fiscal 2026 for AI infrastructure from our hyperscaler customers, which represented approximately 6% of total revenue in fiscal 2026 compared with less than 2% in fiscal 2025. We expect this demand to remain a significant driver of our results in fiscal 2027, and we discuss the associated customer concentration and supply considerations in Part I, Item 1A. Risk Factors.
Read it in 10-K 2026-09-02 at sec.gov ↗
AddedMD&A
As of July 25, 2026, our gross unrecognized tax benefits were $2.5 billion, reflecting a $0.2 billion increase during fiscal 2026. Of this amount, $1.7 billion would impact our effective tax rate if recognized. Our accrual for related interest and penalties was $539 million as of July 25, 2026. As of the same date, we had gross deferred tax assets of $11.2 billion. The valuation allowance against these deferred tax assets was $1.4 billion, representing a $0.5 billion increase during fiscal 2026, primarily due to the expectation that our future California taxable income will be insufficient to fully utilize our accumulated California tax credits and net operating loss carryforwards.
Read it in 10-K 2026-09-02 at sec.gov ↗
AddedMD&A
Services revenue was flat compared to fiscal 2025, reflecting lower revenue from support services offset by higher revenue from professional services. Services revenue increased in the EMEA segment offset by a decline in the Americas segment. Services revenue in the APJC segment was flat compared to fiscal 2025.
Read it in 10-K 2026-09-02 at sec.gov ↗
AddedMD&A
We regularly enter into purchase commitments with contract manufacturers and suppliers and in recent periods have increased such commitments related to manufacturing Cisco Silicon One and other products to meet demand from hyperscalers and other customers. We expect to continue entering into these additional purchase commitments in future periods, including purchase commitments to secure supply and pricing for memory and certain components. We have also increased inventory deposits and prepayments with certain suppliers in connection with these arrangements. These purchase commitments and prepayments have in turn significantly increased our supply chain exposure.
Read it in 10-K 2026-09-02 at sec.gov ↗
AddedMD&A
This exposure includes potential material excess and obsolete or other charges if product demand significantly decreases, if customers cancel or reschedule orders or change product architecture, design specifications, or qualification requirements, if we are unable to generate demand for certain products, or if we are otherwise unable to mitigate this exposure. Because we commit to purchasing components based on our current demand forecasts, hyperscalers or other large customers may change their orders or buying patterns with us with limited advance notice, which could result in amounts that we have prepaid or deposited with contract manufacturers and suppliers for such commitments being not fully recoverable if the related orders are not fulfilled.
Read it in 10-K 2026-09-02 at sec.gov ↗
AddedMD&A
Additionally, while we are exposed to new and proposed tariffs and other trade policies, the extent of such exposure is uncertain but could be significant if the exposure remains and we are unable to mitigate it.
Read it in 10-K 2026-09-02 at sec.gov ↗
AddedMD&A
We expect to reinvest substantially all of the cost savings from these restructuring plans in our key growth opportunities and key priority areas. As a result, the overall cost savings from these restructuring plans are not expected to be material.
Read it in 10-K 2026-09-02 at sec.gov ↗
AddedMD&A
Our accounts receivable net, as of July 25, 2026 increased by approximately 11% year over year primarily due to higher revenue compared with fiscal 2025.
Read it in 10-K 2026-09-02 at sec.gov ↗
AddedMD&A
July 25, 2026 July 26, 2025 Increase (Decrease) Inventories $5,694 $3,164 $2,530 Inventory purchase commitments $17,165 $7,599 $9,566 Inventory deposits and prepayments $1,104 $825 $279
Read it in 10-K 2026-09-02 at sec.gov ↗
AddedMD&A
Inventory deposits and prepayments represent amounts paid to suppliers in advance of delivery, principally under arrangements to secure supply and pricing for memory and certain components. These amounts are included in other current assets and other assets on our Consolidated Balance Sheets, and are assessed for recoverability.
Read it in 10-K 2026-09-02 at sec.gov ↗
RemovedMD&A
Third parties, including customers, have in the past and may in the future assert claims or initiate litigation related to exclusive patent, copyright, trademark, and other intellectual property rights to technologies and related standards that are relevant to us. These assertions have increased over time as a result of our growth and the general increase in the pace of patent claims assertions, particularly in the United States. If any infringement or other intellectual property claim made against us by any third party is successful, or if we fail to develop non-infringing technology or license the proprietary rights on commercially reasonable terms and conditions, our business, operating results, and financial condition could be materially and adversely affected.
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedMD&A
We make judgments about the recoverability of purchased intangible assets with finite lives whenever events or changes in circumstances indicate that an impairment may exist. Recoverability of purchased intangible assets with finite lives is measured
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedMD&A
Subsequent to the issuance of our earnings release on August 13, 2025, we settled a legal dispute with a supplier, resulting in a GAAP charge to product cost of sales, which is described in Note 21 to the Consolidated Financial Statements. The information in this Annual Report on Form 10-K supersedes the information contained in our earnings release.
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedMD&A
In past periods, we took multiple actions in order to mitigate component shortages and address significant supply constraints, which resulted in the need to secure long-term supply and increased our inventory supply chain balances compared to historical levels. In fiscal 2025, we entered into additional purchase commitments with contract manufacturers and suppliers related to manufacturing Cisco Silicon One and other products to meet demand from webscale and other customers. We expect to continue entering into these additional purchase commitments in fiscal 2026. These actions and additional purchase commitments have in turn significantly increased our supply chain exposure, which has resulted in negative impacts to our product gross margin in recent periods and may result in further negative impacts in future periods. In addition, on August 26, 2025, we settled a legal dispute with a supplier relating to purchase obligations arising under long-term supply arrangements, which resulted in a charge to product cost of sales, which is described in Note 21 to the Consolidated Financial Statements. The remaining and new supply chain exposures include potential material excess and obsolete or other charges if product demand significantly decreases for a sustained duration, we are unable to generate demand for certain products planned for development, or we are otherwise unable to mitigate these supply chain exposures. Additionally, while we are exposed to new and proposed tariffs and other trade policies, the extent of such exposure is uncertain but could be significant if the exposure remains and we are unable to mitigate it.
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedMD&A
Years Ended July 26, 2025 July 27, 2024 July 29, 2023 Amortization of purchased intangible assets: Cost of sales $1,174 $955 $649 Operating expenses 1,028 698 282 Total $2,202 $1,653 $931
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedMD&A
We consider free cash flow to be a liquidity measure that provides useful information to management and investors because of our intent to return a stated percentage of free cash flow to stockholders in the form of dividends and stock repurchases. We
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedMD&A
Our accounts receivable net, as of July 26, 2025 was flat year over year as the increase in the amount of product and service billings was substantially offset by improved shipment linearity in the fourth quarter of fiscal 2025.
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedMD&A
(1) The purchase commitments with contract manufacturers and suppliers as of July 26, 2025 has been reduced to give effect to the settlement of a legal dispute with a supplier over purchase obligations arising under certain long-term supply arrangements. See Note 21 to the Consolidated Financial Statements.
Read it in 10-K 2025-09-03 at sec.gov ↗
RemovedMD&A
In February 2025, we issued senior notes for an aggregate principal amount of $5.0 billion.
Read it in 10-K 2025-09-03 at sec.gov ↗
RewordedMD&A
PAYMENTS DUE BY PERIOD July 26, 2025 25, 2026 Total Less than 1 Year 1 to 3 Years 3 to 5 Years More than 5 Years Operating leases $ 1,748 1,874 $ 429 461 $ 569 601 $ 381 401 $ 369 411 Purchase commitments with contract manufacturers and suppliers 7,599 7,202 320 77 17,165 14,341 2,558 266 — Other purchase obligations 8,136 2,399 3,247 2,383 107 7,044 2,460 3,461 956 167 Long-term debt 24,753 1,751 4,502 23,002 3,502 3,500 15,000 Transition tax payable 1,595 1,595 — — — 3,500 12,500 Other long-term liabilities 1,745 1,990 — 298 221 1,226 323 266 1,401 Total by period $ 45,576 51,075 $ 13,376 20,764 $ 8,936 10,443 $ 6,562 5,389 $ 16,702 14,479 Other long-term liabilities (uncertainty in the timing of future payments) 2,240 2,424 Total $ 47,816 53,499
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedMD&A
Operating income as a Total gross margin increased by 0.9 percentage points, primarily driven by the absence in the fourth quarter of revenue decreased by 1.8 percentage points primarily due to increases in amortization fiscal 2026 of purchased intangible assets and share-based compensation expense in fiscal 2025, and a charge recorded in the fourth quarter of fiscal 2025 as a result of a legal dispute with a supplier. supplier, and by favorable pricing.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedMD&A
The net decrease in cash and cash equivalents and investments from fiscal 2024 2025 to fiscal 2025 2026 was primarily driven by cash returned to stockholders in the form of cash dividends of $6.4 $6.6 billion and repurchases of common stock of $6.0 $6.1 billion, net repayments shares repurchased for tax withholdings on vesting of restricted stock units of $1.9 billion, repayment of debt and short-term borrowing of $2.8 $1.8 billion, and capital expenditures of $0.9 $1.4 billion and net cash paid for acquisitions of $0.5 billion.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedMD&A
The increase decrease in amortization of purchased intangible assets was primarily due to the acquisition of Splunk and other recent acquisitions, partially offset by certain purchased intangible assets that became fully amortized in larger part from our fiscal 2021 acquisition of Acacia, and lower impairment charges in fiscal 2025. 2025, partially offset by amortization of purchased intangibles from our recent acquisitions.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedMD&A
Product revenue in the Americas segment increased by 6%, 17%, with growth in across each of our customer markets, led by the enterprise Service Provider and Cloud customer market and the service provider and cloud market. which was largely driven by revenue from our AI Infrastructure solutions.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedMD&A
Tax Court opinion issued during the first quarter of fiscal 2025 regarding the U.S. taxation of deemed foreign dividends in the transition year of the Tax Cut Cuts and Job Jobs Act ("Tax Act") (“Tax Act”) (our fiscal 2018) and an increase in stock-based compensation windfall. state taxes due to a valuation allowance adjustment for California deferred tax assets in fiscal 2026.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedMD&A
The following table presents our operating income and our operating income as a percentage of revenue (in millions, except percentages):Years Ended July 26, 2025 July 27, 2024 July 29, 2023 Operating income $ 11,760 $ 12,181 $ 15,031 Operating income as a percentage of revenue 20.8 % 22.6 % 26.4 % percentages):
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedMD&A
The increases during fiscal 2026 were primarily due to arrangements to secure supply and pricing for certain product components components, including memory, and commitments with contract manufacturers to meet customer demand and to address extended help manage lead times, as well as advance payments with suppliers to secure future supply, as a result of the supply constraints. times.
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RewordedMD&A
Product Gross Margin Percentage Fiscal 2024 63.5% 2025 63.7% Productivity (1) 2.0% 1.1% Product pricing (1.6)% 0.2% Mix of products sold 1.1% Legal dispute with supplier (0.8)% (3.6)% Amortization of purchased intangible assets (0.4)% Others (0.1)% 0.9% Legal dispute with supplier 0.8% Other 0.1% Fiscal 2025 63.7% 2026 63.2%
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedMD&A
The APJC segment had a gross margin percentage decrease increase driven primarily by pricing erosion and lower services gross margin, partially offset by positive impacts from productivity improvements improvements, favorable services gross margin and favorable to a lesser extent, pricing, partially offset by negative impacts from product mix.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedMD&A
We expect that cash provided by operating activities may fluctuate in future periods as a result of a number of factors, including fluctuations in our operating results, the rate at which products are shipped during the quarter (which we refer to as shipment linearity), the timing and collection of accounts receivable and financing receivables, inventory and supply chain management, deferred revenue and the timing and amount of tax and other payments.
Read it in 10-K 2026-09-02 at sec.gov ↗
RewordedMD&A
In terms of With regard to our geographic segments, segment performance, on a year-over-year basis, revenue from the Americas increased by $1.7 billion, 18%, EMEA revenue increased by $0.7 billion 19% and revenue in our APJC segment increased by $0.5 billion. 14%.
Read it in 10-K 2026-09-02 at sec.gov ↗
Quiet changesMD&A
While our estimates of fair value are based on assumptions that are believed to be reasonable, these assumptions are inherently uncertain and unpredictable and would may not reflect unanticipated events and circumstances that may occur.
Read it in 10-K 2026-09-02 at sec.gov ↗